U.S.
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-Q
 
 QUARTERLY
REPORT UNDER SECTION 13 OR 15(d)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 For the
quarterly period ended: October 31, 2010
 
 File No.
000-52522
 
 North American Energy
Resources, Inc.
 (Name of
small business issuer in our charter)
 
 Nevada
                  98-0550352(State
      or other jurisdiction of
                  (IRS
      Employerincorporation
      or organization)
                  Identification
      No.)
 
 6914 So Yorktown Ave., Suite
130, Tulsa, OK 74136
 (Address
of principal executive offices) (Zip Code)
 
 11005 Anderson Mill Road,
Austin, Texas78750
 (Former
address of principal executive offices) (Zip Code)
 
 Registrant's
telephone number: (918) 712-7774
 
 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 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes
x
No  ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes  ̈ No
 ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
 
 Large
accelerated filer  ̈
Accelerated filer  ̈
Non-accelerated filer  ̈
Smaller reporting company x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act) Yes  ̈
No x
 
 State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: 17,375,539 shares of common stock outstanding
as of November 30, 2010.
  
 
 The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial reporting
and pursuant to the rules and regulations of the Securities and Exchange
Commission ("Commission"). While these statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for fair
presentation of the results of the interim period, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the financial statements and footnotes thereto, contained in North American
Energy Resources, Inc.’s Form 10-K dated April 30, 2010.
 
 TABLE OF
CONTENTS
 
 PagePART
      I – FINANCIAL INFORMATION (Unaudited)
                    3Item
      1:
                    Condensed
      Consolidated Financial Statements
                    3Item 2:
                    Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                    17Item
      3:
                    Quantitative
      and Qualitative Disclosures About Market Risk
                    21Item 4T:
                    Controls
      and Procedures
                    21PART
      II - OTHER INFORMATION
                    22Item 1:
                    Legal
      Proceedings
                    22Item
      1A:
                    Risk
      Factors
                    22Item 2:
                    Unregistered
      Sales of Equity Securities and Use of Proceeds
                    22Item 3:
                    Defaults
      upon Senior Securities
                    22Item 4:
                    Submission
      of Matters to a Vote of Security Holders
                    22Item 5:
                    Other
      Information
                    22Item 6:
                    Exhibits
                    22
  2
  PART I - FINANCIAL INFORMATION
 ITEM 1: FINANCIAL STATEMENTS
 
 NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Balance
Sheets
 October
31, 2010 (Unaudited) and April 30, 2010
 
 October 31,
                      
                      
                      April 30,2010
                      
                      
                      2010ASSETSCurrent
      assets:Cash
      and cash equivalents
                      
                      $
                      1,993
                      
                      
                      $
                      3,026Accounts
      receivable, net of allowance of $10,000 at 4/30/10
                      
                      
                      15,000
                      
                      
                      
                      13,150Prepaid
      expenses
                      
                      
                      45,500
                      
                      
                      
                      250,733Total
      current assets
                      
                      
                      62,493
                      
                      
                      
                      266,909Properties
      and equipment, at cost:Proved
      oil and natural gas properties and equipment
                      
                      
                      2,358
                      
                      
                      
                      68,424Accumulated
      depreciation and amortization
                      
                      
                      -
                      
                      
                      
                      (16,174
                      )Total
      properties and equipment
                      
                      
                      2,358
                      
                      
                      
                      52,250Deposits
      and other assets
                      
                      
                      -
                      
                      
                      
                      5,864Total
      assets
                      
                      $
                      64,851
                      
                      
                      $
                      325,023LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accounts
      payableTrade
                      
                      $
                      55,254
                      
                      
                      $
                      13,554Oil
      and gas proceeds due others
                      
                      
                      6,868
                      
                      
                      
                      4,990Advances
      received from joint interest participants
                      
                      
                      -
                      
                      
                      
                      33,056Accrued
      expenses
                      
                      
                      358
                      
                      
                      
                      -Accrued
      interest - related parties
                      
                      
                      80,799
                      
                      
                      
                      49,618Convertible
      notes payable - principally related parties
                      
                      
                      527,976
                      
                      
                      
                      510,476Total
      current liabilities
                      
                      
                      671,255
                      
                      
                      
                      611,694Commitments
      and contingenciesStockholders'
      deficit:Preferred
      stock:  $0.001 par value; 100,000,000 sharesauthorized;
      no shares issued and outstanding
                      
                      
                      -
                      
                      
                      
                      -Common
      stock: $0.001 par value; 100,000,000 sharesauthorized;
      17,375,539 shares issued and outstandingat
      October 31, 2010 and April 30, 2010, respectively
                      
                      
                      17,376
                      
                      
                      
                      17,376Additional
      paid in capital
                      
                      
                      2,219,708
                      
                      
                      
                      2,219,708Prepaid
      officer compensation
                      
                      
                      -
                      
                      
                      
                      (12,129
                      )Other
      comprehensive loss
                      
                      
                      -
                      
                      
                      
                      (1,000
                      )Deficit
      accumulated during the exploration stage
                      
                      
                      (2,843,488
                      )
                      
                      
                      (2,510,626
                      )Total
      stockholders' deficit
                      
                      
                      (606,404
                      )
                      
                      
                      (286,671
                      )Total
      liabilities and stockholders' deficit
                      
                      $
                      64,851
                      
                      
                      $
                      325,023
 
 See
accompanying notes to financial statements
  3
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Statements
of Condensed Consolidated Operations
 For
the three months ended October 31, 2010 and 2009
 (Unaudited)
 
 2010
                                                
                                                
                                                2009Oil
      and natural gas sales
                                                
                                                $
                                                2,139
                                                
                                                
                                                $
                                                1,974Pipeline
      fees
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Total
      revenues
                                                
                                                
                                                2,139
                                                
                                                
                                                
                                                1,974Costs
      and expensesOil
      and natural gas production taxes
                                                
                                                
                                                152
                                                
                                                
                                                
                                                142Oil
      and natural gas production expenses
                                                
                                                
                                                5,753
                                                
                                                
                                                
                                                4,115Depreciation
      and amortization
                                                
                                                
                                                764
                                                
                                                
                                                
                                                1,641Asset
      impairment
                                                
                                                
                                                46,894
                                                
                                                
                                                
                                                108,000Non-cash
      compensation
                                                
                                                
                                                88,875
                                                
                                                
                                                
                                                106,326Bad
      debt expense
                                                
                                                
                                                7,828
                                                
                                                
                                                
                                                -General
      and administrative expense, net ofoperator's
      overhead fees
                                                
                                                
                                                4,918
                                                
                                                
                                                
                                                59,716155,184
                                                
                                                
                                                
                                                279,940Loss
      from operations
                                                
                                                
                                                (153,045
                                                )
                                                
                                                
                                                (277,966
                                                )Other
      income (expense):Interest
      income
                                                
                                                
                                                -
                                                
                                                
                                                
                                                300Interest
      expense
                                                
                                                
                                                (15,740
                                                )
                                                
                                                
                                                (12,079
                                                )Total
      other income (expense)
                                                
                                                
                                                (15,740
                                                )
                                                
                                                
                                                (11,779
                                                )Net
      loss
                                                
                                                
                                                (168,785
                                                )
                                                
                                                
                                                (289,745
                                                )Other
      comprehensive lossUnrealized
      loss on available for sale securities
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Net
      comprehensive loss
                                                
                                                $
                                                (168,785
                                                )
                                                
                                                $
                                                (289,745
                                                )Net
      loss per common share, basic and diluted
                                                
                                                $
                                                (0.01
                                                )
                                                
                                                $
                                                (0.02
                                                )Weighted
      average common shares outstanding
                                                
                                                
                                                17,375,539
                                                
                                                
                                                
                                                15,659,887
 
 See
accompanying notes to condensed consolidated financial
statements.
  4
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Statements
of Condensed Consolidated Operations
 For
the six months ended October 31, 2010 and 2009
 and
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 Inception(August 18, 2006)throughOctober 31,2010
                        
                        
                        2009
                        
                        
                        2010Oil
      and natural gas sales
                        
                        $
                        4,044
                        
                        
                        $
                        3,588
                        
                        
                        $
                        43,059Pipeline
      fees
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        2,450Total
      revenues
                        
                        
                        4,044
                        
                        
                        
                        3,588
                        
                        
                        
                        45,509Costs
      and expensesOil
      and natural gas production taxes
                        
                        
                        289
                        
                        
                        
                        258
                        
                        
                        
                        3,099Oil
      and natural gas production expenses
                        
                        
                        8,397
                        
                        
                        
                        8,966
                        
                        
                        
                        106,700Depreciation
      and amortization
                        
                        
                        1,478
                        
                        
                        
                        3,240
                        
                        
                        
                        16,064Asset
      impairment
                        
                        
                        46,894
                        
                        
                        
                        108,000
                        
                        
                        
                        910,714Non-cash
      compensation
                        
                        
                        212,754
                        
                        
                        
                        235,027
                        
                        
                        
                        1,360,291Bad
      debt expense
                        
                        
                        7,828
                        
                        
                        
                        10,000
                        
                        
                        
                        93,828General
      and administrative expense, net ofoperator's
      overhead fees
                        
                        
                        28,085
                        
                        
                        
                        86,486
                        
                        
                        
                        316,912305,725
                        
                        
                        
                        451,977
                        
                        
                        
                        2,807,608Loss
      from operations
                        
                        
                        (301,681
                        )
                        
                        
                        (448,389
                        )
                        
                        
                        (2,762,099
                        )Other
      income (expense):Other
      income
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        320Interest
      income
                        
                        
                        -
                        
                        
                        
                        600
                        
                        
                        
                        900Interest
      expense
                        
                        
                        (31,181
                        )
                        
                        
                        (24,154
                        )
                        
                        
                        (82,609
                        )Total
      other income (expense)
                        
                        
                        (31,181
                        )
                        
                        
                        (23,554
                        )
                        
                        
                        (81,389
                        )Net
      loss
                        
                        
                        (332,862
                        )
                        
                        
                        (471,943
                        )
                        
                        
                        (2,843,488
                        )Other
      comprehensive lossUnrealized
      loss on available for sale securities
                        
                        
                        1,000
                        
                        
                        
                        -
                        
                        
                        
                        -Net
      comprehensive loss
                        
                        $
                        (331,862
                        )
                        
                        $
                        (471,943
                        )
                        
                        $
                        (2,843,488
                        )Net
      loss per common share, basic and diluted
                        
                        $
                        (0.02
                        )
                        
                        $
                        (0.03
                        )Weighted
      average common shares outstanding
                        
                        
                        17,375,539
                        
                        
                        
                        15,343,800
 
 See
accompanying notes to condensed consolidated financial
statements.
  5
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Consolidated
Statements of Stockholders' Deficit
 For
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 
 IntrinsicAdditional
                                        
                                        
                                        Value ofCommon stock
                                        
                                        
                                        Paid in
                                        
                                        
                                        CommonDate
                                        
                                        Shares
                                        
                                        
                                        Amount
                                        
                                        
                                        Capital
                                        
                                        
                                        Stock OptionsBALANCE
      August 18, 2006
                                        
                                        
                                        
                                        
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -Common
      stock issued for net assets
                                        
                                        9/1/2006
                                        
                                        
                                        11,264,485
                                        
                                        
                                        
                                        11,265
                                        
                                        
                                        
                                        88,735
                                        
                                        
                                        
                                        -Common
      stock issued for cash
                                        
                                        9/7/2006
                                        
                                        
                                        1,126,448
                                        
                                        
                                        
                                        1,126
                                        
                                        
                                        
                                        8,874
                                        
                                        
                                        
                                        -Common
      stock issued for cash
                                        
                                        9/11/2006
                                        
                                        
                                        1,126,448
                                        
                                        
                                        
                                        1,126
                                        
                                        
                                        
                                        8,874
                                        
                                        
                                        
                                        -Net
      loss
                                        
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -BALANCE
      April 30, 2007
                                        
                                        
                                        
                                        
                                        13,517,381
                                        
                                        
                                        
                                        13,517
                                        
                                        
                                        
                                        106,483
                                        
                                        
                                        
                                        -Net
      loss
                                        
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        -BALANCE
      April 30, 2008
                                        
                                        
                                        
                                        
                                        13,517,381
                                        
                                        
                                        
                                        13,517
                                        
                                        
                                        
                                        106,483
                                        
                                        
                                        
                                        -Acquisition
      of North American Energy Resources, Inc.
                                        
                                        7/28/2008
                                        
                                        
                                        177,000
                                        
                                        
                                        
                                        177
                                        
                                        
                                        
                                        119,653
                                        
                                        
                                        
                                        -Conversion
      of note payable and accrued interest for common stock
                                        
                                        7/31/2008
                                        
                                        
                                        153,000
                                        
                                        
                                        
                                        153
                                        
                                        
                                        
                                        35,377
                                        
                                        
                                        
                                        -Common
      stock options granted for:350,000
      shares at $1.00 per share
                                        
                                        8/1/2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        178,000
                                        
                                        
                                        
                                        (178,000
                                        )50,000
      shares at $1.25 per share
                                        
                                        8/1/2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        27,096
                                        
                                        
                                        
                                        (27,096
                                        )Exercise
      common stock options:for
      $1.25 per share
                                        
                                        9/22/2008
                                        
                                        
                                        100
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        6,250
                                        
                                        
                                        
                                        -for
      $1.00 per share
                                        
                                        9/22/2008
                                        
                                        
                                        1,000
                                        
                                        
                                        
                                        1
                                        
                                        
                                        
                                        49,999
                                        
                                        
                                        
                                        -for
      $1.25 per share
                                        
                                        10/13/2008
                                        
                                        
                                        100
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        6,250
                                        
                                        
                                        
                                        -for
      $1.00 per share
                                        
                                        10/13/2008
                                        
                                        
                                        70
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,500
                                        
                                        
                                        
                                        -Accounts
      payable paid with common stock
                                        
                                        10/14/2008
                                        
                                        
                                        90
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        9,016
                                        
                                        
                                        
                                        -Amortize
      intrinsic value of options
                                        
                                        10/31/2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        17,091Cancel
      common stock options
                                        
                                        11/5/2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (188,005
                                        )
                                        
                                        
                                        188,005Common
      stock issued for compensation
                                        
                                        11/7/2008
                                        
                                        
                                        100
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        6,250
                                        
                                        
                                        
                                        -Common
      stock issued for accounts payable
                                        
                                        11/7/2008
                                        
                                        
                                        60
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,000
                                        
                                        
                                        
                                        -Common
      stock issued for consulting service
                                        
                                        11/12/2008
                                        
                                        
                                        3,000
                                        
                                        
                                        
                                        3
                                        
                                        
                                        
                                        310,497
                                        
                                        
                                        
                                        -Common
      stock issued for accounts payable
                                        
                                        11/17/2008
                                        
                                        
                                        400
                                        
                                        
                                        
                                        1
                                        
                                        
                                        
                                        24,999
                                        
                                        
                                        
                                        -Capital
      contribution by shareholder in cash
                                        
                                        11/30/2008
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        50,000
                                        
                                        
                                        
                                        -Common
      stock issued for:Compensation
                                        
                                        12/9/2008
                                        
                                        
                                        338
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        5,000
                                        
                                        
                                        
                                        -Accounts
      payable
                                        
                                        12/9/2008
                                        
                                        
                                        300
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        1,200
                                        
                                        
                                        
                                        -Accounts
      payable
                                        
                                        12/9/2008
                                        
                                        
                                        400
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        6,000
                                        
                                        
                                        
                                        -Compensation
                                        
                                        1/5/2009
                                        
                                        
                                        500
                                        
                                        
                                        
                                        1
                                        
                                        
                                        
                                        4,999
                                        
                                        
                                        
                                        -Accounts
      payable
                                        
                                        1/5/2009
                                        
                                        
                                        800
                                        
                                        
                                        
                                        1
                                        
                                        
                                        
                                        3,199
                                        
                                        
                                        
                                        -Accounts
      payable
                                        
                                        1/5/2009
                                        
                                        
                                        400
                                        
                                        
                                        
                                        1
                                        
                                        
                                        
                                        3,999
                                        
                                        
                                        
                                        -Accounts
      payable
                                        
                                        1/19/2009
                                        
                                        
                                        4,000
                                        
                                        
                                        
                                        4
                                        
                                        
                                        
                                        14,996
                                        
                                        
                                        
                                        -Compensation
                                        
                                        1/26/2009
                                        
                                        
                                        1,500
                                        
                                        
                                        
                                        2
                                        
                                        
                                        
                                        4,998
                                        
                                        
                                        
                                        -Accounts
      payable
                                        
                                        2/24/2009
                                        
                                        
                                        6,000
                                        
                                        
                                        
                                        6
                                        
                                        
                                        
                                        9,761
                                        
                                        
                                        
                                        -Compensation
                                        
                                        2/24/2009
                                        
                                        
                                        1,000
                                        
                                        
                                        
                                        1
                                        
                                        
                                        
                                        1,999
                                        
                                        
                                        
                                        -Compensation
                                        
                                        3/4/2009
                                        
                                        
                                        4,000
                                        
                                        
                                        
                                        4
                                        
                                        
                                        
                                        4,996
                                        
                                        
                                        
                                        -Compensation
                                        
                                        4/6/2009
                                        
                                        
                                        4,000
                                        
                                        
                                        
                                        4
                                        
                                        
                                        
                                        5,996
                                        
                                        
                                        
                                        -Officer
      compensation
                                        
                                        4/21/2009
                                        
                                        
                                        160,000
                                        
                                        
                                        
                                        160
                                        
                                        
                                        
                                        145,440
                                        
                                        
                                        
                                        -Net
      loss
                                        
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -BALANCE
      April 30, 2009
                                        
                                        
                                        
                                        
                                        14,035,539
                                        
                                        
                                        $
                                        14,036
                                        
                                        
                                        
                                        960,948
                                        
                                        
                                        
                                        -
 (Continued)
 See
accompanying notes to consolidated financial statements.
  6
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Consolidated
Statements of Stockholders' Deficit, continued
 For
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 
 DeficitAccumulated
                              
                              
                              AccumulatedPrepaid
                              
                              
                              Other
                              
                              
                              During theOfficer
                              
                              
                              Comprehensive
                              
                              
                              DevelopmentCompensation
                              
                              
                              Loss
                              
                              
                              Stage
                              
                              
                              TotalBALANCE
      August 18, 2006
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Common
      stock issued for net assets
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              100,000Common
      stock issued for cash
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              10,000Common
      stock issued for cash
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              10,000Net
      loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (5,379
                              )
                              
                              
                              (5,379
                              )BALANCE
      April 30, 2007
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (5,379
                              )
                              
                              
                              114,621Net
      loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (24,805
                              )
                              
                              
                              (24,805
                              )BALANCE
      April 30, 2008
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (30,184
                              )
                              
                              
                              89,816Acquisition
      of North American Energy Resources, Inc.
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              119,830Conversion
      of note payable and accrued interest for common stock
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              35,530Common
      stock options granted for:350,000
      shares at $1.00 per share
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -50,000
      shares at $1.25 per share
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Exercise
      common stock options:for
      $1.25 per share
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,250for
      $1.00 per share
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              50,000for
      $1.25 per share
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,250for
      $1.00 per share
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,500Accounts
      payable paid with common stock
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              9,016Amortize
      intrinsic value of options
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              17,091Cancel
      common stock options
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Common
      stock issued for compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,250Common
      stock issued for accounts payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,000Common
      stock issued for consulting service
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              310,500Common
      stock issued for accounts payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              25,000Capital
      contribution by shareholder in cash
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              50,000Common
      stock issued for:Compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              5,000Accounts
      payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,200Accounts
      payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,000Compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              5,000Accounts
      payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              3,200Accounts
      payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              4,000Accounts
      payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              15,000Compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              5,000Accounts
      payable
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              9,767Compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              2,000Compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              5,000Compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              6,000Officer
      compensation
                              
                              
                              (84,933
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              60,667Net
      loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (1,097,468
                              )
                              
                              
                              (1,097,468
                              )BALANCE
      April 30, 2009
                              
                              
                              (84,933
                              )
                              
                              
                              -
                              
                              
                              
                              (1,127,652
                              )
                              
                              $
                              (237,601
                              )
 (Continued)
 See
accompanying notes to consolidated financial statements.
  7
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Consolidated
Statements of Stockholders' Deficit, continued
 For
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 
 IntrinsicAdditional
                                    
                                    
                                    Value ofCommon stock
                                    
                                    
                                    Paid in
                                    
                                    
                                    CommonDate
                                    
                                    Shares
                                    
                                    
                                    Amount
                                    
                                    
                                    Capital
                                    
                                    
                                    Stock OptionsBALANCE
      April 30, 2009
                                    
                                    
                                    
                                    
                                    14,035,539
                                    
                                    
                                    $
                                    14,036
                                    
                                    
                                    $
                                    960,948
                                    
                                    
                                    $
                                    -Common
      stock issued for:consulting
      agreement
                                    
                                    5/1/2009
                                    
                                    
                                    400,000
                                    
                                    
                                    
                                    400
                                    
                                    
                                    
                                    419,600
                                    
                                    
                                    
                                    -consulting
      agreement
                                    
                                    5/1/2009
                                    
                                    
                                    200,000
                                    
                                    
                                    
                                    200
                                    
                                    
                                    
                                    209,800
                                    
                                    
                                    
                                    -oil
      and gas non-producing property
                                    
                                    6/9/2009
                                    
                                    
                                    700,000
                                    
                                    
                                    
                                    700
                                    
                                    
                                    
                                    125,300
                                    
                                    
                                    
                                    -accounts
      payable
                                    
                                    7/27/2009
                                    
                                    
                                    10,000
                                    
                                    
                                    
                                    10
                                    
                                    
                                    
                                    4,990
                                    
                                    
                                    
                                    -consulting
      agreement
                                    
                                    7/27/2009
                                    
                                    
                                    30,000
                                    
                                    
                                    
                                    30
                                    
                                    
                                    
                                    14,970
                                    
                                    
                                    
                                    -consulting
      agreement
                                    
                                    7/27/2009
                                    
                                    
                                    30,000
                                    
                                    
                                    
                                    30
                                    
                                    
                                    
                                    14,970
                                    
                                    
                                    
                                    -oil
      and gas producing property
                                    
                                    9/25/2009
                                    
                                    
                                    350,000
                                    
                                    
                                    
                                    350
                                    
                                    
                                    
                                    192,150
                                    
                                    
                                    
                                    -consulting
      contract
                                    
                                    9/25/2009
                                    
                                    
                                    300,000
                                    
                                    
                                    
                                    300
                                    
                                    
                                    
                                    182,700
                                    
                                    
                                    
                                    -cash
                                    
                                    2/23/2010
                                    
                                    
                                    200,000
                                    
                                    
                                    
                                    200
                                    
                                    
                                    
                                    5,800
                                    
                                    
                                    
                                    -consulting
      agreement
                                    
                                    2/24/2010
                                    
                                    
                                    400,000
                                    
                                    
                                    
                                    400
                                    
                                    
                                    
                                    31,600
                                    
                                    
                                    
                                    -consulting
      agreement - director fees
                                    
                                    2/24/2010
                                    
                                    
                                    450,000
                                    
                                    
                                    
                                    450
                                    
                                    
                                    
                                    35,550
                                    
                                    
                                    
                                    -consulting
      agreement - director fees
                                    
                                    2/24/2010
                                    
                                    
                                    150,000
                                    
                                    
                                    
                                    150
                                    
                                    
                                    
                                    11,850
                                    
                                    
                                    
                                    -officer
      compensation - director fees
                                    
                                    2/24/2010
                                    
                                    
                                    120,000
                                    
                                    
                                    
                                    120
                                    
                                    
                                    
                                    9,480
                                    
                                    
                                    
                                    -Other
      comprehensive loss on available-for-sale securities
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Amortize
      officer compensation
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Net
      loss
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -BALANCE
      April 30, 2010
                                    
                                    
                                    
                                    
                                    17,375,539
                                    
                                    
                                    
                                    17,376
                                    
                                    
                                    
                                    2,219,708
                                    
                                    
                                    
                                    -Recission
      of available-for-sale securities transaction
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Amortize
      officer compensation
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Net
      loss
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -BALANCE
      October 31, 2010
                                    
                                    
                                    
                                    
                                    17,375,539
                                    
                                    
                                    $
                                    17,376
                                    
                                    
                                    $
                                    2,219,708
                                    
                                    
                                    $
                                    -
 
 (Continued)
 See
accompanying notes to consolidated financial statements.
  8
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Consolidated
Statements of Stockholders' Deficit, continued
 For
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 DeficitAccumulated
                        
                        
                        AccumulatedPrepaid
                        
                        
                        Other
                        
                        
                        During
      theOfficer
                        
                        
                        Comprehensive
                        
                        
                        DevelopmentCompensation
                        
                        
                        Loss
                        
                        
                        Stage
                        
                        
                        TotalBALANCE
      April 30, 2009
                        
                        $
                        (84,933
                        )
                        
                        $
                        -
                        
                        
                        $
                        (1,127,652
                        )
                        
                        $
                        (237,601
                        )Common
      stock issued for:consulting
      agreement
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        420,000consulting
      agreement
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        210,000oil
      and gas non-producing property
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        126,000accounts
      payable
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        5,000consulting
      agreement
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        15,000consulting
      agreement
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        15,000oil
      and gas producing property
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        192,500consulting
      contract
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        183,000cash
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        6,000consulting
      agreement
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        32,000consulting
      agreement - director fees
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        36,000consulting
      agreement - director fees
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        12,000officer
      compensation - director fees
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        9,600Other
      comprehensive loss on available-for-sale securities
                        
                        
                        -
                        
                        
                        
                        (1,000
                        )
                        
                        
                        -
                        
                        
                        
                        (1,000
                        )Amortize
      officer compensation
                        
                        
                        72,804
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        72,804Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (1,382,974
                        )
                        
                        
                        (1,382,974
                        )BALANCE
      April 30, 2010
                        
                        
                        (12,129
                        )
                        
                        
                        (1,000
                        )
                        
                        
                        (2,510,626
                        )
                        
                        
                        (286,671
                        )Recission
      of available-for-sale securities transaction
                        
                        
                        -
                        
                        
                        
                        1,000
                        
                        
                        
                        -
                        
                        
                        
                        1,000Amortize
      officer compensation
                        
                        
                        12,129
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        12,129Net
      loss
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (332,862
                        )
                        
                        
                        (332,862
                        )BALANCE
      October 31, 2010
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        (2,843,488
                        )
                        
                        $
                        (606,404
                        )
 
 See
accompanying notes to consolidated financial statements.
  9
  NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Statements
of Condensed Consolidated Cash Flows
 For
the six months ended October 31, 2010 and 2009
 and
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 Inception(August 18, 2006)throughOctober 31,2010
                          
                          
                          2009
                          
                          
                          2010Operating
      activitiesNet
      loss
                          
                          $
                          (332,862
                          )
                          
                          $
                          (471,943
                          )
                          
                          $
                          (2,843,488
                          )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Depreciation
      and amortization
                          
                          
                          1,478
                          
                          
                          
                          3,240
                          
                          
                          
                          16,064Non-cash
      compensation
                          
                          
                          212,754
                          
                          
                          
                          235,027
                          
                          
                          
                          1,360,291Bad
      debt expense
                          
                          
                          7,828
                          
                          
                          
                          10,000
                          
                          
                          
                          99,243Asset
      impairment
                          
                          
                          46,894
                          
                          
                          
                          108,000
                          
                          
                          
                          910,714Changes
      in operating assets and liabilities:Accounts
      receivable
                          
                          
                          (9,679
                          )
                          
                          
                          (17,584
                          )
                          
                          
                          (106,057
                          )Interest
      accrued on loan to related party
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (900
                          )Prepaid
      expenses and other assets
                          
                          
                          5,472
                          
                          
                          
                          (837
                          )
                          
                          
                          -Accounts
      payable
                          
                          
                          22,642
                          
                          
                          
                          60,801
                          
                          
                          
                          296,696Accrued
      interest - related parties
                          
                          
                          31,181
                          
                          
                          
                          24,154
                          
                          
                          
                          81,079Accrued
      expenses
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -Related
      party advances for working capital
                          
                          
                          -
                          
                          
                          
                          9,700
                          
                          
                          
                          2,000Oil
      and gas proceeds due others
                          
                          
                          1,878
                          
                          
                          
                          -
                          
                          
                          
                          6,868Advances
      from joint interest owners
                          
                          
                          (1,226
                          )
                          
                          
                          17,652
                          
                          
                          
                          (9,643
                          )Net
      cash from (used in) operating activities
                          
                          
                          (13,640
                          )
                          
                          
                          (21,790
                          )
                          
                          
                          (187,133
                          )Investing
      activitiesPayments
      for oil and natural gas properties and equipment
                          
                          
                          (4,893
                          )
                          
                          
                          (95
                          )
                          
                          
                          (166,311
                          )Cash
      received in excess of cash paid in reverse acquisition of North American
      Energy Resources, Inc.
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          119,830Loan
      to related party
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (19,993
                          )Proceeds
      from sale of oil and gas properties
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          7,500Payments
      for pipeline
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (7,500
                          )Net
      cash used in investing activities
                          
                          
                          (4,893
                          )
                          
                          
                          (95
                          )
                          
                          
                          (66,474
                          )Financing
      activitiesLoan
      proceeds
                          
                          
                          17,500
                          
                          
                          
                          -
                          
                          
                          
                          66,250Shareholder
      contribution
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          50,000Loans
      from related parties
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          113,350Sale
      of common stock
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          26,000Net
      cash provided by financing activities
                          
                          
                          17,500
                          
                          
                          
                          -
                          
                          
                          
                          255,600Net
      increase in cash and cash equivalents
                          
                          
                          (1,033
                          )
                          
                          
                          (21,885
                          )
                          
                          
                          1,993Cash
      and cash equivalents, beginning of period
                          
                          
                          3,026
                          
                          
                          
                          27,966
                          
                          
                          
                          -Cash
      and cash equivalents, end of period
                          
                          $
                          1,993
                          
                          
                          $
                          6,081
                          
                          
                          $
                          1,993
 (Continued)
 See
accompanying notes to condensed consolidated financial statements.
  10
 NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Statements
of Condensed Consolidated Cash Flows, Continued
 For
the six months ended October 31, 2010 and 2009
 and
the period from inception (August 18, 2006) through October 31,
2010
 (Unaudited)
 
 Inception(August 18, 2006)throughOctober 31,2010
                            
                            
                            2009
                            
                            
                            2010Supplemental
      cash flow informationCash
      paid for interest and income taxes:Interest
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            1,094Income
      taxes
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -Non-cash
      investing and financing activities:Common
      stock issued for:Notes
      receivable
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            $
                            76,000Oil
      and gas properties
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            303,670Interest
      in pipeline
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            100,000Loans
      to shareholders assumed
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (371,000
                            )Advance
      from joint interest participant assumed
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (8,670
                            )$
                            100,000Acquisition
      of North American Energy Resources, Inc. in reverse
      acquisition:Assets
      acquired, other than cash
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            $
                            -Liabilities
      assumed
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (30,170
                            )(30,170
                            )Common
      stock issued
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            150,000Cash
      received in excess of cash paid
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            $
                            119,830Exchange
      of joint interest receivable for oil and natural gas
      properties
                            
                            $
                            -
                            
                            
                            
                            -
                            
                            
                            $
                            53,068Convertible
      note payable and accrued interest exchanged for 1,000 shares of North
      American Exploration, Inc. common stock
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            35,530Common
      stock options granted
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            205,096Common
      stock options cancelled
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            188,005Common
      stock issued for:Consulting
      agreements
                            
                            
                            -
                            
                            
                            
                            630,000
                            
                            
                            
                            902,600Unevaluated
      oil and natural gas properties
                            
                            
                            -
                            
                            
                            
                            126,000
                            
                            
                            
                            126,000Proven
      oil and natural gas properties
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            192,500Accounts
      payable
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            106,183Chief
      executive officer compensation
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            155,200Credit
      balance transferred from accounts receivable to accounts
      payable
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            1,068Accounts
      receivable applied as payment on note payable to related
    party
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            4,572Option
      exercises paid by reducing note payable related party
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            75,250Advance
      from shareholder converted to note
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            2,000Participant
      advance converted to accounts payable
                            
                            
                            31,829
                            
                            
                            
                            -
                            
                            
                            
                            31,829
 
 See
accompanying notes to condensed consolidated financial
statements.
  11
 NORTH
AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY
 (An
Exploration Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 
 NOTE
      1:
              ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
 
 Organization
  The
consolidated financial statements include the accounts of North American Energy
Resources, Inc. (“NAER”) and its wholly owned subsidiary, North American
Exploration, Inc. (“NAE”) (collectively the “Company”).
 
 NAER was
incorporated in Nevada on August 22, 2006 as Mar Ked Mineral Exploration, Inc.
and changed its name to North American Energy Resources, Inc. on August 11,
2008.  NAE was incorporated in Nevada on August 18, 2006 as Signature
Energy, Inc. and changed its name to North American Exploration, Inc. on June 2,
2008.
 
 The
condensed consolidated financial statements included in this report have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission for interim reporting and include all adjustments
(consisting only of normal recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation.  These condensed
consolidated financial statements have not been audited.
 
 Certain
information and footnote disclosures normally included in consolidated financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to such rules and
regulations for interim reporting.  The Company believes that the
disclosures contained herein are adequate to make the information presented not
misleading.  However, these consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company’s Annual Report for the year ended April 30,
2010, which is included in the Company’s Form 10-K dated April 30,
2010.  The financial data for the interim periods presented may not
necessarily reflect the results to be anticipated for the complete
year.
 
 Acquisition
  On July
28, 2008, the shareholders of NAE entered into a stock purchase agreement with
NAER.  NAER issued 420,000 restricted shares of its common stock to
the shareholders of NAE in exchange for 100% of the issued and outstanding stock
of NAE.  Completion of the stock purchase agreement resulted in the
shareholders of NAE having control of NAER.  Accordingly, the
transaction was recorded for accounting purposes as the acquisition of NAE by
NAER with NAE as the acquirer (reverse acquisition).  The financial
statements of the Company prior to July 28, 2008 are those of
NAE.
  12
 
 Business
  NAE is an
independent oil and natural gas company engaged in the acquisition, exploration
and development of oil and natural gas properties and the production of oil and
natural gas.  The Company operates in the upstream segment of the oil
and gas industry with activities, including the drilling, completion and
operation of oil and gas wells in Oklahoma.  The Company also has an
interest in a pipeline in its area of operations which could be used for
gathering gas production.  The Company's gas production has been
shut-in due to low prices since February 2009 in Washington County, Oklahoma and
was sold effective October 1, 2010.  The Company has acquired a
non-operated interest in a gas well in Texas County, Oklahoma and is seeking to
acquire other non-operated interests when funds are available.
 
 Exploration
stage
 The
Company is in the exploration stage and has realized only nominal revenue to
date.  The decline in gas prices has placed the Company's original gas
development plans  in Washington County, Oklahoma on
hold.  The Company has plans to raise funds in order to develop or
acquire additional oil leases.  Accordingly, the operation of the
Company is presented as those of a development stage enterprise, from its
inception (August 18, 2006).
 
 Going
concern
 The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern.  The Company commenced
operations in September 2006.
 
 At
October 31, 2010 and April 30, 2010 the Company had a working capital deficit of
$608,762 and $344,785, respectively.  The Company has an accumulated
deficit of $2,843,488  which includes a loss of $332,862 during the
six months ended October 31, 2010, which includes stock compensation in the
amount of $212,754.  The Company's note payable to a shareholder with
a balance of $384,428 at July 31, 2010, was due May 1, 2010 and remains
unpaid.  The Company expects to extend the note or convert it to
common stock.
 
 Effective
October 1, 2010, the Company sold all of its shut-in gas properties and its
producing oil properties in Washington County, Oklahoma.  The Company
invested in its first non-operated gas well in October 2010 and plans to
continue this course as funds become available.
 
 These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  The financial statements do not include any
adjustments that may result from the outcome of these
uncertainties.
 
 Fiscal
year
 2011
refers to periods ending during the fiscal year ending April 30, 2011 and 2010
refers to periods ended during the fiscal year ended April 30,
2010.
  13
 
 Reclassification
 Certain
reclassifications have been made in the financial statements at October 31, 2009
and for the periods then ended to conform to the October 31, 2010
presentation.  The reclassifications had no effect on net
loss.
 
 Recent
adopted and pending accounting pronouncements
 Below
is a listing of the most recent accounting standards and their effect on the
Company, as issued by the Financial Accounting Standards Board ("FASB") in the
form of Accounting Standards Updates ("ASU").  We have evaluated all
recent accounting pronouncements through November 30, 2010 and find none that
would have a material impact on the financial statements of the Company, except
for those detailed below.
 
 In August
2010, the FASB issued Accounting Standards Update 2010-21 (ASU 2010-21),
"Accounting for Technical Amendments to Various SEC Rules and Schedules —
Amendments to SEC Paragraphs Pursuant to Release No. 33-9026; Technical
Amendments to Rules, Forms, Schedules and Codification of Financial Reporting
Policies" and ASU 2010-22, "Accounting for Various Topics — Technical
Corrections to SEC Paragraphs - An announcement made by the staff of the U.S.
Securities and Exchange Commission." Both corrections have been adopted by the
Company and had no effect on the financial position, results of operations or
cash flows of the Company.
 
 NOTE
2:                RELATED
PARTY TRANSACTIONS
 
 The
Company previously sold its gas pursuant to a contract with a gathering system
principally owned by a related party.  The Company received a price
equal to 70% of the posted price, which is the same rate charged to third
parties.  The related party retained the other 30% of the posted price
for gathering fees and marketing fees.  The gathering system has been
shut-in due to low gas prices since February 2009.  The Company sold
all of its interest in these gas wells effective October 1, 2010.
 
 Convertible
notes payable includes convertible notes payable to shareholders and others in
the total amount of $527,976 and $510,476 at October 31, 2010 and April 30,
2010, respectively.  One note with a balance of $384,428 at October
31, 2010 and April 30, 2010 was due May 1, 2010 and remains past
due.  This note is convertible into the Company's common stock at a
price of $1.50 per share.  The remaining notes in the total amount of
$143,548 are due, $126,048 in March and April 2011 and $17,500 in September
2011, including interest at 12% and are convertible into the Company's common
stock at a price ranging from $0.03 to $1.00 per share.
 
 NOTE
3:                STOCKHOLDER’S
EQUITY
 
 PREFERRED
STOCK
 
 The
Company has 100,000,000 shares of its $0.001 par value preferred stock
authorized.  At October 31, 2010 and April 30, 2010, the Company had
no shares issued and outstanding.
  14
 
 COMMON
STOCK
 
 The
Company has 100,000,000 shares of its $0.001 par value common stock
authorized.  At October 31, 2010 and April 30, 2010 the Company has
17,375,539 shares issued and outstanding.
 
 REVERSE
SPLIT
 
 At a
special meeting of shareholders held on April 23, 2009, 63% of our shareholders,
either in person or by proxy, voted to approve a 1:50 reverse split of the
Company's common stock.  This amendment to the Company's Articles of
Incorporation was filed with the Nevada Secretary of State and became effective
on April 27, 2009.  Accordingly, all references to shares of our
common stock included herein have been retroactively restated to give effect to
the reverse split.
 
 CONTINGENT
SHARES
 
 On July
28, 2008, the Company acquired 100% of the outstanding stock of NAE for 420,000
shares of our common stock pursuant to a Stock Purchase Agreement
("SPA").  Completion of the SPA resulted in the shareholders of NAE
having control of NAEY.
 
 The SPA
provided that NAEY was to have $1,500,000 in cash and no liabilities at
closing.  At July 28, 2008, the closing date, NAEY had $150,000 of the
required cash and on August 28, 2008, the parties to the SPA entered into a
Modification Agreement ("MA") which provided an extension until January 27, 2009
for the additional cash to be contributed to the Company.  At January
27, 2009, the Company had received an additional $50,000 and was still short
$1,300,000 of the agreed amount.  The MA provided that the Buyer would
make contingent issuances of shares to the Seller equal to 95% of all the
outstanding stock after issuance.  Accordingly, effective April 30,
2009, an additional 13,250,381 shares were issued to the Sellers.
 
 COMMON
STOCK OPTIONS
 
 The North
American Energy Resources, Inc. 2008 Stock Option Plan ("Plan") was filed on
September 11, 2008 and reserves 2,500,000 shares for awards under the
Plan.  The Company's Board of Directors is designated to administer
the Plan and may form a Compensation Committee for this purpose.  The
Plan terminates on July 23, 2013.
 
 Options
granted under the Plan may be either "incentive stock options" intended to
qualify as such under the Internal Revenue Code, or "non-qualified stock
options."  Options outstanding under the Plan have a maximum term of
up to ten years, as designated in the option agreements.  No options
are outstanding at October 31, 2010.  At October 31, 2010, there are
1,242,333 shares available for grant.
  15
  NOTE
4:                PREPAID
EXPENSES
  The
Company recorded prepaid expenses from the issue of its common stock for
consulting services.  The cost, based on the trading price of the
stock at the time of the transaction, is amortized to expense over the term of
the contracts.  The unamortized balances at October 31, 2010 and April
30, 2010 are as follows:
 
 October 31,
                        
                        
                        April 30,2010
                        
                        
                        2009Current
      assetStockholder
      relations firm
                        
                        $
                        42,000
                        
                        
                        $
                        168,000Consulting
      firm assisting with listing common stock onthe
      Frankfort Exchange
                        
                        
                        -
                        
                        
                        
                        68,625Administrative
      management
                        
                        
                        3,500
                        
                        
                        
                        9,500Other
      prepaid expense
                        
                        
                        -
                        
                        
                        
                        4,608$
                        45,500
                        
                        
                        $
                        250,733Component
      of stockholders' deficitChief
      executive officer compensation
                        
                        $
                        -
                        
                        
                        $
                        12,129
  16
 
 ITEM
      2:
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
 
 This
statement contains forward-looking statements within the meaning of the
Securities Act.  Discussions containing such forward-looking
statements may be found throughout this statement.  Actual events or
results may differ materially from those discussed in the forward-looking
statements as a result of various factors, including the matters set forth in
this statement.
 
 Our plan
of operation for the next twelve months is to obtain funding from private
placements of our common stock and acquire additional leases.
 
 COMPARISON
OF THREE MONTHS ENDED OCTOBER 31, 2010 AND 2009
 
 Revenues
during the three months ended October 31, 2010 and 2009 were as
follows:
 
 2010
                      
                      
                      2009Oil
      production
                      
                      $
                      2,139
                      
                      
                      $
                      1,974
 
 Oil
revenues included 32 net barrels sold in 2010 and in 2009.  Due to low
prices, the Company shut-in its gas production during January
2009.  The Company's oil prices per barrel averaged $66.84 during 2010
and $61.69 during 2009.
 
 Costs
and expenses during the three months ended October 31, 2010 and 2009 were as
follows:
 
 2010
                      
                      
                      2009Oil
      and natural gas production taxes
                      
                      $
                      152
                      
                      
                      $
                      142Oil
      and natural gas production expenses
                      
                      
                      5,753
                      
                      
                      
                      4,115Depreciation
      and amortization
                      
                      
                      764
                      
                      
                      
                      1,641Asset
      impairment
                      
                      
                      46,894
                      
                      
                      
                      108,000Non-cash
      compensation
                      
                      
                      88,875
                      
                      
                      
                      106,326Bad
      debt expense
                      
                      
                      7,828
                      
                      
                      
                      -Other
      general and administrative expense,net
      of operator's overhead fee
                      
                      
                      4,918
                      
                      
                      
                      59,716Total
                      
                      $
                      155,184
                      
                      
                      $
                      279,940
 
 The
Company recorded asset impairment charges in 2010 and 2009.  The
charge in 2010 was as a result of the sale of its remaining shut-in gas
properties and its producing oil properties in Washington County, Oklahoma
during October 2010.  The 2009 impairment was a result of an
acquisition made with common stock being higher than the value of the discounted
reserves at the time of the acquisition.
  17
 
 Non-cash
compensation in 2010 and 2009 represents the current period charge for stock
which has been issued for consulting contracts.
 
 Other
general and administrative expense, net of operator's overhead fee declined from
$59,716 to $4,918.  The majority of the decline is due to lower legal
costs of $34,161 and lower accounting and auditing costs.
 
 Other
income (expense) during the three months ended October 31, 2010 and 2009 is as
follows:
 
 2010
                    
                    
                    2009Interest
      income
                    
                    $
                    -
                    
                    
                    $
                    300Interest
      expense
                    
                    
                    (15,740
                    )
                    
                    
                    (12,079
                    )Total
                    
                    $
                    (15,740
                    )
                    
                    $
                    (11,779
                    )
 
 
 The
interest bearing debt increased during the 2010 period as compared to the 2009
period.
 
 COMPARISON
OF SIX MONTHS ENDED OCTOBER 31, 2010 AND 2009
 
 Revenues
during the six months ended October 31, 2010 and 2009 were as
follows:
 
 2010
                    
                    
                    2009Oil
      production
                    
                    $
                    4,044
                    
                    
                    $
                    3,588
 
 
 Oil
revenues included 64 net barrels sold in 2010 and 66 net barrels sold in
2009.  Due to low prices, the Company shut-in its gas production
during January 2009.  The Company's oil prices per barrel averaged
$63.19 during 2010 and $54.36 during 2009.  The Company sold this
production effective October 1, 2010.
 
 Costs
and expenses during the six months ended October 31, 2010 and 2009 were as
follows:
  18
 
 2010
                      
                      
                      2009Oil
      and natural gas production taxes
                      
                      $
                      289
                      
                      
                      $
                      258Oil
      and natural gas production expenses
                      
                      
                      8,397
                      
                      
                      
                      8,966Depreciation
      and amortization
                      
                      
                      1,478
                      
                      
                      
                      3,240Asset
      impairment
                      
                      
                      46,894
                      
                      
                      
                      108,000Non-cash
      compensation
                      
                      
                      212,754
                      
                      
                      
                      235,027Bad
      debt expense
                      
                      
                      7,828
                      
                      
                      
                      10,000Other
      general and administrative expense,net
      of operator's overhead fee
                      
                      
                      28,085
                      
                      
                      
                      86,486Total
                      
                      $
                      305,725
                      
                      
                      $
                      451,977
 
 The
Company recorded asset impairment charges in 2010 and 2009.  The
charge in 2010 was as a result of the sale of its remaining shut-in gas
properties and its producing oil properties in Washington County, Oklahoma
during October 2010.  The 2009 impairment was a result of an
acquisition made with common stock being higher than the value of the discounted
reserves at the time of the acquisition.
 
 Non-cash
compensation in 2010 and 2009 represents the current period charge for stock
which has been issued for consulting contracts.
 
 Other
general and administrative expense, net of operator's overhead fee declined from
$86,486 to $28,085.  The majority of the decline is due to lower legal
costs of $34,161 and lower accounting and auditing costs.
 
 Other
income (expense) during the six months ended October 31, 2010 and 2009 is as
follows:
 
 2010
                    
                    
                    2009Interest
      income
                    
                    $
                    -
                    
                    
                    $
                    600Interest
      expense
                    
                    
                    (31,181
                    )
                    
                    
                    (24,154
                    )Total
                    
                    $
                    (31,181
                    )
                    
                    $
                    (23,554
                    )
 
 The
interest bearing debt increased during the 2010 period as compared to the 2009
period.
 
 LIQUIDITY,
CAPITAL RESOURCES AND PLAN OF OPERATIONS
 
 At
October 31, 2010, we had $1,993 in cash and a working capital deficit of
$608,762.  Comparatively, we had cash of $3,026 and a working capital
deficit of $344,785 at April 30, 2010.  The principal element of the
change in working capital was a decrease in prepaid consulting contracts of
$205,233 and other losses incurred during the period which caused higher current
liabilities.
  19
 
 We
estimate that our total planned cash expenditures over the next twelve months
will be approximately $36,000 for basic corporate overhead, assuming no
increased operations.  We expect to utilize excess funds, when
available, to acquire additional acreage for future drilling operations and plan
to issue our common stock for certain services when possible.  The
Company's note payable to a shareholder with a balance of $384,428 at October
31, 2010, was due May 1, 2010 and remains unpaid.  The Company expects
to extend the note or convert it to common stock.
 
 The
Company will plan to meet its capital requirements for the next year with
private placements of its common stock or advances from related
parties.
 
 These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  The financial statements do not include any
adjustments that may result from the outcome of these
uncertainties.
 
 CASH
FROM OPERATING ACTIVITIES
 
 Cash used
in operating activities was $13,640 for the six-month period ended October 31,
2010 and cash used in operations was $21,790 for the comparable 2009
period.  There has been only nominal activity with a significant
portion of the operating loss being paid with common stock.
 
 CASH
USED IN FINANCING ACTIVITIES
 
 We
incurred capital costs of $4,893 and $95 in the six months ended October 31,
2010 and 2009, respectively.
 
 CASH
FROM FINANCING ACTIVITIES
 
 Received
loan proceeds of $17,500 during the three months ended October 31, 2010 and had
no activity during the six months ended October 31, 2009.
 
 GOING
CONCERN
 
 We have
not attained profitable operations and are dependent upon obtaining a
replacement for the shareholder contributions to pursue our business
plan.  For these reasons, there is substantial doubt we will be able
to continue as a going concern, since we are dependent upon an as yet unknown
source to provide sufficient funds to finance future operations until our
revenues are adequate to fund our cost of operations.
 
 OFF-BALANCE
SHEET ARRANGEMENTS
 
 None.
  20
  ITEM
      3:
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
 
 Not
applicable.
 
 ITEM 4T:
              CONTROLS
      AND PROCEDURES
  (a) Evaluation of Disclosure
Controls and Procedures
 
 The
Company’s Chief Executive Officer and Chief Financial Officer have reviewed and
evaluated the effectiveness of the Company’s disclosure controls and procedures
(as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the
Securities Exchange Act of 1934) as of October 31, 2010.  Based on
that review and evaluation, which included inquiries made to certain other
consultants of the Company, the CEO and CFO concluded that the Company’s current
disclosure controls and procedures, as designed and implemented, are not
effective, due to a lack of segregation of duties, in ensuring that information
relating to the Company required to be disclosed in the reports the Company
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms, including insuring that
such information is accumulated and communicated to the Company’s management,
including the CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure.
 
 (b)  Changes in
Internal Controls
 
 There
have been no significant changes in internal controls or in other factors that
could significantly affect these controls subsequent to the date of the
evaluation described above, including any corrective actions with regard to
significant deficiencies and material weaknesses.
  21
  PART
II - OTHER INFORMATION
 
 ITEM
1:                 LEGAL
PROCEEDINGS
 
 None
 
 ITEM
1A:              RISK
FACTORS
 
 Not
applicable.
 
 ITEM
2: UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 None
during the quarter ended October 31, 2010.
 
 ITEM
3:                 DEFAULTS
UPON SENIOR SECURITIES.
 
 None
 
 ITEM
4:                 SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
 None
 
 ITEM
5:                 OTHER
INFORMATION.
 
 None
 
 ITEM
6:                 EXHIBITS
  Exhibit
      31
              
              Certification
      pursuant to 18 U.S.C. Section 1350 Section
      302 of the Sarbanes-Oxley Act of 2002Exhibit
      32
              
              Certification
      pursuant to 18 U.S.C. Section 1350 Section
      906 of the Sarbanes-Oxley Act of
2002
  22
  SIGNATURE
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
 
 NORTH
      AMERICAN ENERGY RESOURCES, INC.Date:  December
      7, 2010By:
                      /s/
      Ross E. SilveyPresident, Chief Executive Officer andActing Chief Financial Officer
  23