| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C.  20549

** **               | ** **                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** **                                                                                                   | **FORM 10-Q**

** **                                                                     | ** ** | ** ** |
| (Mark One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** **                                                                                                   | ** **                                                                                    | ** ** | ** ** |
| [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT OF 1934 

For the quarterly  period ended September 30, 2008

** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** **                                                                                                   | OR

** **                                                                                | ** ** | ** ** |
| [  ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE 

ACT OF 1934  For the transition period from __________ to  ___________ 

** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** **                                                                                                   | **Commission File Number 333-141993**

** **                                             | ** ** | ** ** |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** **                                                                                                   | **PETROCORP INC.**

(Name of small  business issuer in its charter)                           | ** ** | ** ** |
| **Delaware**

** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | ** **                                                                                                   | **20-5134664**

** **                                                                    |
| (State or other jurisdiction of 

incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | (I.R.S. Employer  Identification No.)                                                                        |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | **1065 Dobbs Ferry Road**

**White Plains, New York  10607**

(Address of  principal executive offices) | ** **                                                                                    |
| ** **                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | ** **                                                                                                   | ** **

**(914) 674-4373**

(Issuer's telephone  number, including area code)

** ** | ** ** | ** ** |
|  

Indicate by check mark whether  the issuer (1) filed all reports required to be filed by Section 13 or 15(d)  of the Exchange Act during the past 12 months (or for such shorter period  that the registrant was required to file such reports), and (2) has been  subject to such filing requirements for the past 90 days.  Yes x  No o 

 

Indicate by check mark whether the registrant is a large  accelerated filer, an accelerated filer, a non-accelerated filer or a smaller  reporting company filer.  See the definitions of “large accelerated filer,”  “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the  Exchange Act.

 

          Large accelerated filer o  Accelerated filer o  Non-accelerated Filer o   Smaller reporting company x

 

Indicate by check mark whether  the registrant is a shell company (as defined in Rule 12b-2 of the Exchange  Act).  Yes o  No x 

** ** |
| State the number of shares outstanding of each of the  issuer’s classes of common equity, as of the latest practicable date:  22,680,000 shares of common stock, par value $.0001 per share, as of October  31, 2008. 

 

 

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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                              |                                                                                               |  |  |  |  |  |

1

----

 

 

**PETROCORP INC.**

**REPORT ON FORM 10-Q**

**FOR THE QUARTERLY PERIODENDED SEPTEMBER 30, 2008**

 

 

**CONTENTS**

 

| PART I – FINANCIAL INFORMATION                                                  |   | 3  |
|--------------------------------------------------------------------------------------|--------|----|
|   Item 1 – Financial Statements                                            |   | 3  |
|   Item 2 – Management’s Discussion and Analysis or Plan of  Operation |   | 8  |
|   Item 3 – Controls and Procedures                                         |   | 12 |
| PART II – OTHER INFORMATION                                                     |   | 12 |
|   Item 1 – Legal Proceedings                                               |   | 12 |
|   Item 2 – Unregistered Sales of Equity Securities and Use  of Proceeds    |   | 12 |
|   Item 3 – Defaults Upon Senior Securities                                 |   | 12 |
|   Item 4 – Submission of Matters to a Vote of Security  Holders            |   | 12 |
|   Item 5 – Other Information                                               |   | 13 |
|   Item 6 – Exhibits                                                        |   | 13 |

 

 

 

2

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**PART I – FINANCIAL INFORMATION**

## Item 1 – Financial Statements

** **

**PETROCORP INC.**

**(An Exploration Stage Company)**

**Consolidated Balance Sheets**

 

     

| **ASSETS**                                                                                |
|-------------------------------------------------------------------------------------------|
|                                                                                      |   |   |   |   |   |   |
|                                                                                      |   | September 30, |   |   December 31, |
|                                                                                      |   | 2008 |   | 2007 |
|                                                                                      |   |     (Unaudited) |   |   |   |
| Current assets:                                                                           |   |   |   |   |   |   |
|    Cash                                                                         |   | $ | 680,605 |   | $ | 827,755 |
|    Accounts receivable                                                          |   |   | 6,720 |   |   | -- |
|                                                                                      |   |   | 687,325 |   |   | 827,755 |
|                                                                                      |   |   |   |   |   |   |
| Property and equipment -  successful efforts method:                                      |   |   |   |   |   |   |
|    Proved oil and gas  properties                                               |   |   | 106,326 |   |   | -- |
|    Unproved oil and gas  properties                                             |   |   | 1,028,463 |   |   | 385,286 |
|    Wells in progress                                                            |   |   | 185,042 |   |   | -- |
|                                                                                      |   |   | 1,319,831 |   |   | 385,286 |
|                                                                                      |   |   |   |   |   |   |
| Total assets                                                                              |   | $ | 2,007,156 |   | $ | 1,213,041 |
| ** **                                                                                | ** ** |   |   |   |   |   |
| ** **                                                                                | ** ** |   |   |   |   |   |
| **LIABILITIES AND  STOCKHOLDERS’ EQUITY**                                            |
| ** **                                                                                | ** ** |   |   |   |   |   |
| ** **                                                                                | ** ** |   |   |   |   |   |
| Current liabilities:                                                                      |   |   |   |   |   |   |
|    Accrued expenses                                                             |   | $ | 81,683 |   | $ | 18,886 |
|    State of Alaska payable                                                      |   |   | -- |   |   | 279,500 |
|    Notes to an  officer/stockholder                                             |   |   | 560,917 |   |   | 440,000 |
|                                                                                      |   |   | 642,600 |   |   | 738,386 |
|                                                                                      |   |   |   |   |   |   |
| Stockholders’ equity:                                                                |   |   |   |   |   |   |
|    Preferred stock; $.0001 par  value; 1,000,000 shares                         |   |   |   |   |   |   |
|   authorized; shares issued or  outstanding - none                                   |   |   | -- |   |   | -- |
|    Common stock; $.0001 par  value; 100,000,000 shares                          |   |   |   |   |   |   |
|        authorized; 22,680,000  and 21,880,000 shares issued |   |   |   |   |   |   |
|        and outstanding,  respectively                       |   |   | 2,268 |   |   | 2,188 |
|    Additional paid-in capital                                                   |   |   | 1,671,817 |   |   | 560,988 |
|    Deficit accumulated during  exploration stage                                |   |   | (309,529) |   |   | (88,521) |
|                                                                                      |   |   | 1,364,556 |   |   | 474,655 |
| ** **                                                                                | ** ** |   |   |   |   |   |
| Total liabilities and  stockholders’ equity                                          |   | $ | 2,007,156 |   | $ | 1,213,041 |

 

 

 

See notes to the consolidated financial statements.

3

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****

**PETROCORP INC.**

**(An Exploration Stage Company)**

## Consolidated Statements ofOperations (Unaudited)

 

 

**               **

|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   | June 19, 2006 |
|----------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|--------|-----------------------------------------|--------|--------|------------|--------|--------|-----------------------------------------------------------------------------------------|--------|---------------|
|                                         |   |           Three  Months Ended                                                                                       |       | Nine Months Ended |   |  (inception) to                    |
|                                         |   |                  September 30,           |       | September 30,     |   |   Sept. 30,                        |
|                                         |   | 2008                                                                                                                                                                  |       | 2007              |   | 2008                                    |   | 2007   |       | 2008   |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Revenues:                                    |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Oil and gas                                  |   | $                                                                                                                                                                     | 7,241      |              | $      |                                    |   | $      | 7,241      |   | $      |                                                                                    |   | $             | 7,241 |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Expenses:                                    |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Oil and gas                                  |   |                                                                                                                                                                  | 5,205      |              |   |                                    |   |   | 5,205      |   |   |                                                                                    |   |          | 5,205 |
| Depreciation                                 |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          | 1,071 |
| Exploration                                  |   |                                                                                                                                                                  | 964        |              |   |                                    |   |   | 964        |   |   |                                                                                    |   |          | 964 |
| Impairment of equipment                      |   |                                                                                                                                                                  |       |              |   | 16,929                                  |   |   |       |   |   | 16,929                                                                                  |   |          | 16,929 |
| General and administrative                   |   |                                                                                                                                                                  | 67,270     |              |   | 2,618                                   |   |   | 195,698    |   |   | 15,438                                                                                  |   |          | 258,543 |
| Franchise taxes                              |   |                                                                                                                                                                  | (364)      |              |   |                                    |   |   | 5,386      |   |   |                                                                                    |   |          | 6,986 |
|                                         |   |                                                                                                                                                                  | 73,075     |              |   | 19,547                                  |   |   | 207,253    |   |   | 33,367                                                                                  |   |          | 289,698 |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Loss from operations                         |   |                                                                                                                                                                  | (65,834)   |              |   | (19,547)                                |   |   | (200,012)  |   |   | (33,367)                                                                                |   |          | (282,457) |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Other income (expense):                      |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Interest income                              |   |                                                                                                                                                                  | 272        |              |   |                                    |   |   | 272        |   |   |                                                                                    |   |          | 272 |
| Interest expense                             |   |                                                                                                                                                                  | (8,032)    |              |   |                                    |   |   | (21,268)   |   |   |                                                                                    |   |          | (27,344) |
|                                         |   |                                                                                                                                                                  | (7,760)    |              |   | --                                      |   |   | (20,996)   |   |   | --                                                                                      |   |          | (27,072) |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Net loss                                     |   | $                                                                                                                                                                     | (73,594)   |              | $      | (19,547)                                |   | $      | (221,008)  |   | $      | (32,367)                                                                                |   | $             | (309,529) |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Net loss per common share -                  |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
|     basic and diluted         |   | $                                                                                                                                                                     | **         |              | $      |        ** |   | $      | (0.01)     |   | $      |                ** |   |          |   |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| Weighted average number of                   |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
|     common shares outstanding |   |                                                                                                                                                                  | 22,680,000 |              |   | 21,080,000                              |   |   | 22,337,144 |   |   | 21,003,716                                                                              |   |          |   |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
|                                         |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |
| ** less than $.01 per share                  |   |                                                                                                                                                                  |       |              |   |                                    |   |   |       |   |   |                                                                                    |   |          |   |

 

 

 

See notes to the consolidated financial statements.

4

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**PETROCORP INC.**

**(An Exploration Stage Company)**

##                  Consolidated Statements of CashFlows (Unaudited)                        

|                                              |   |                                 |         |           |         |         |   |  June19, 2006 |
|---------------------------------------------------|--------|--------------------------------------|--------------|----------------|--------------|--------------|--------|--------------------|
|                                              |   | Nine Months Ended                    |         | (Inception) to |
|                                              |   | September 30,                        |         | Sept. 30,      |
|                                              |   | 2008                                 |         | 2007           |         | 2008         |
|                                              |   |                                 |         |           |         |         |   |               |   |
| Cash flows from operating activities:             |   |                                 |         |           |         |         |   |               |   |
| Net loss                                          |   | $                                    | (221,008)    |           | $            | (32,367)     |   | $                  | (309,529) |
| Adjustments to reconcile net loss to net          |   |                                 |         |           |         |         |   |               |   |
| cash (used in) operating activities:              |   |                                 |         |           |         |         |   |               |   |
| Capital contribution                              |   |                                 |         |           |         |         |   |               | 3,000 |
| Depreciation                                      |   |                                 |         |           |         | 1,071        |   |               | 1,071 |
| Impairment of equipment                           |   |                                 |         |           |         | 16,929       |   |               | 16,929 |
| Interest contribution                             |   |                                 | 20,909       |           |         |         |   |               | 26,985 |
| Salary contribution                               |   |                                 | 90,000       |           |         |         |   |               | 90,000 |
| Changes in operating assets and liabilities:      |   |                                 |         |           |         |         |   |               |   |
| Accounts receivable                               |   |                                 | (6,720)      |           |         |    |   |               | (6,720) |
| Accrued expenses                                  |   |                                 | 62,797       |           |         | (16,829)     |   |               | 81,683 |
| State of Alaska payable                           |   |                                 | (279,500)    |           |    |         |   |          |   |
| Net cash (used in) operating activities           |   |                                 | (333,522)    |           |         | (31,196)     |   |               | (96,581) |
|                                              |   |                                 |         |           |         |         |   |               |   |
| Cash flows from investing activities:             |   |                                 |         |           |         |         |   |               |   |
| Purchase of oil and gas properties                |   |        | (934,545)    |           |         |         |   |               | (1,319,831) |
| Purchase of equipment                             |   |                                 |    |           |    | (18,000)     |   |          | (18,000) |
| Net cash (used in) investing activities           |   |                                 | (934,545)    |           |         | (18,000)     |   |               | (1,337,831) |
|                                              |   |                                 |         |           |         |         |   |               |   |
| Cash flows from financing activities:             |   |                                 |         |           |         |         |   |               |   |
| Notes to an officer/stockholder                   |   |                                 | 210,917      |           |         | 353,000      |   |               | 650,917 |
| Repayment of notes to an officer/stockholder      |   |                                 | (90,000)     |           |         |         |   |               | (90,000) |
| Proceeds from sale of common stock                |   |                                 | 1,000,000    |           |    | 24,000       |   |          | 1,554,100 |
| Net cash provided by financing activities         |   |                                 | 1,120,917    |           |    | 377,000      |   |          | 2,115,017 |
|                                              |   |                                 |         |           |         |         |   |               |   |
| Net increase (decrease) in cash                   |   |                                 | (147,150)    |           |         | 327,804      |   |               | 680,605 |
| Cash at beginning of period                       |   |                                 | 827,755      |           |    | 22,532       |   |          | -- |
| Cash at end of period                             |   | $                                    | 680,605      |           |  $      | 350,336      |   |  $            | 680,605 |
|                                              |   |                                 |         |           |         |         |   |               |   |
| Supplemental disclosure of cash flow information: |   |                                 |         |           |         |         |   |               |   |
| Cash paid for interest                            |   |                                 |         |           |         |         |   | $                  | -- |
| Cash paid for taxes                               |   |                                 |         |           |         |         |   | $                  | -- |
| Supplemental disclosure of noncash investing and  |   |                                 |         |           |         |         |   |               |   |
| financing activities:                             |   |                                 |         |           |         |         |   |               |   |
| Capital contribution                              |   |                                 |         |           |         |         |   | $                  | 3,000 |
| Interest contribution                             |   | $                                    | 20,909       |           |         |         |   |  $            | 26,985 |
| Salary contribution                               |   | $                                    | 90,000       |           |         |         |   |  $            | 90,000 |

 

See notes to the consolidated financial statements.

5

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**PETROCORP INC.**

**(An Exploration Stage Company)**

** **

**Notes to theConsolidated Financial Statements (Unaudited)**

** **

** **

**1.  Basis of Presentation**

 

The accompanying unauditedconsolidated financial statements have been prepared in accordance with theaccounting principles generally accepted in the United States of America forinterim financial information and with the instructions to Form 10-Q andArticle 10 of Regulation S-X.  Accordingly, they do not include all of theinformation and footnotes required by accounting principles generally acceptedin the United States of America for annual financial statements.  In the opinionof management, all adjustments, consisting of normal recurring accrualsconsidered necessary for a fair presentation, have been included.  Operatingresults for the three and nine months ended September 30, 2008 are notnecessarily indicative of the results that may be expected for the year endingDecember 31, 2008.  These financial statements shouldbe read in conjunction with the financial statements of the Company for theyear ended December 31, 2007 and notes thereto contained in the Reporton Form 10-KSB of the Company as filed with the United States Securities andExchange Commission (the “SEC”) on April 11, 2008.

 

**2.  Exploration Stage Company**

 

The Company is an exploration stage companyas defined by SFAS No 7 “*Accounting and Reporting by Development StageEnterprises”*.  The Company is devoting substantially all of its efforts onestablishing the business and its planned principal operations have not yetcommenced.  All losses since inception have been considered part of theCompany’s exploration stage activities.

** **

**3. Related Party Transactions**

** **

InAugust 2008, the Company acquired from its President, James Fitzsimons, a 50%working interest (41.25% net revenue interest) in the Snake Creek prospect, a3,200 gross (3,022 net) acre gas development project located in northernOkmulgee County, Oklahoma.  The first well on this acreage, the Snake Creek #1,spaced on 160 acres, has been successfully drilled and completed.  The MiddleDutcher zone was fracture stimulated on August 8 and is in production.  TheCompany reimbursed Mr. Fitzsimons for his historic costs (acreage and drilling)by issuing a secured, non-interest bearing note, payable on demand for $210,917and will assume responsibility for all further costs.

** **

AtSeptember 30, 2008, the Company has $560,917 in unsecured, non-interest bearingnotes (two), payable on demand with its President and major stockholder JamesFitzsimons.  In June 2008, the Company repaid a $90,000 unsecured, non-interestbearing note with Mr. Fitzsimons.  During the three and nine month period endedSeptember 30, 2008 the Company recorded interest expense of $8,032 and $20,909,respectively.  Interest is computed at an implied rate of 6% and this amountwas recorded as a capital contribution by the Company.

** **

**4.  Common Stock**

 

InMarch 2008, the Company sold 800,000 shares of its common stock to one investorat $1.25 per share (an aggregate of $1,000,000).

 

 

6

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**PETROCORP INC.**

**(An Exploration Stage Company)**

** **

**Notes to theConsolidated Financial Statements (Unaudited)**

** **

** **

OnAugust 13, 2008, the Company’s Board of Directors approved a stock dividend onits outstanding shares of common stock.  The ratio for the stock dividend wasfour shares to each share owned (4:1).  Each shareholder holding one share ofcommon stock received an additional three shares of the Company’s commonstock.  The Company’s issued and outstanding common stock post stock dividendis 22,680,000 shares.  All share and per share amounts have been restated toreflect this stock dividend.

 

 

 

 

7

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# Item 2 – Management’s Discussion and Analysis orPlan of Operation

 

References to “Company”, “we”or “us” refer to Petrocorp Inc., unless the context requires otherwise.

 

Forward Looking Statements

 

Thefollowing is provided to supplement, and should be read in conjunction with, ourfinancial statements and the accompanying notes included in our Form 10-KSB asof December 31, 2007.  This report contains forward-looking statements andinformation relating to us that is based on the beliefs of our management aswell as assumptions made by, and information currently available to, ourmanagement. When used in this report, the words “anticipate”, “believe”,“estimate”, “expect”, “intend”, “plan” and similar expressions, as they relateto us or our management, are intended to identify forward-looking statements.These statements reflect management’s current view of us concerning futureevents and are subject to certain risks, uncertainties and assumptions,including among many others: 

 

|   | ● | the  quality of our properties with regard to, among other things, the existence  of reserves in economic quantities; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------|
|   | ● | uncertainties  about the estimates of reserves;                                                                       |

|   | ● | our  ability to increase our production and oil and natural gas income through exploration  and development; |
|--------|---------|--------------------------------------------------------------------------------------------------------------|
|   | ● | the  number of well locations to be drilled and the time frame within which they  will be drilled;           |

|   | ● | the  timing and extent of changes in commodity prices for natural gas and crude  oil; |
|--------|---------|---------------------------------------------------------------------------------------|
|   | ● | domestic  demand for oil and natural gas;                                             |

|   | ● | drilling  and operating risks;                                                       |
|--------|---------|--------------------------------------------------------------------------------------|
|   | ● | the  availability of equipment, such as drilling rigs and transportation  pipelines; |

|   | ● | changes  in our drilling plans and related budgets;                                                                               |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------|
|   | ● | the  adequacy of our capital resources and liquidity including, but not limited  to, access to additional borrowing capacity; and |

|   | ● | risks  and uncertainties described in the Risk Factors section or elsewhere in our  Annual Report on Form 10-KSB. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------|

 

Shouldone or more of these risks or uncertainties materialize or should theunderlying assumptions prove incorrect, actual outcomes and results coulddiffer materially from those indicated in the forward-looking statements.

 

Anyforward-looking statement speaks only as of the date on which such statement ismade, and we undertake no obligation to update any forward-looking statement orstatements to reflect events or circumstances after the date on which suchstatement is made or to reflect the occurrence of unanticipated events. Newfactors emerge from time to time and it is not possible for management topredict all of such factors, nor can it assess the impact of each factor on thebusiness or the extent to which any factor, or combination of factors, maycause actual results to differ materially from those contained in any forward-lookingstatements.

 

 

 

BusinessOverview

 

Petrocorp Inc. (formerly GD ConferenceCenter, Inc.), was incorporated on June 19, 2006 under the laws of the State ofDelaware.  Prior to September 2007, the Company’s business model providedtelephonic conferencing services to businesses, organizations and individualsin North America.  Due to capital constraints and because its executives couldno longer serve the Company without compensation, the Company decided to changeits business directions.

8

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We are an exploration stage Companyengaged in the acquisition, exploration and production, if warranted,development of prospective oil and gas properties.  The Company has significantlease holdings on the North Slope of Alaska, the Canadian Provinces of Albertaand Quebec, permit applications pending in Italy and production in Oklahoma.

 

Our office is located at 1065 Dobbs FerryRoad, White Plains, NY 10607 and our telephone number is (914) 674-4373.  Ourweb-site address is http://petrocorp.us.

** **

Planof Operation

*** ***

Our plan of operation is to conductexploration work on each of our current and future properties in order toascertain whether any of them possess commercially exploitable quantities ofoil and gas reserves. There is no assurance that a commercially viable oil andgas reserve exists on any of our current and future properties, and a greatdeal of further exploration will be required before a final evaluation as tothe economic feasibility for our future exploration is determined. To date, wedo not know if any economically viable oil and gas reserves exist on any of ourcurrent or future properties and there is no assurance that we will discoverany.

 

*United States*

 

            Alaska

 

The Alaska leases are in areas which theCompany believes, based upon current available geological data and maps withinthe public domain, are promising for gas production although the Company doesnot make any representations as to their future production, if any. Furthermore, any gas recovered from our Alaska leases will not be salableunless or until a proposed North Slope gas pipeline is completed.

 

On October 25, 2007, Union Energy (Alaska)LLC (“UEA”), a wholly owned subsidiary, was the winning bidder for tracts 254,258 and 259 in the North Slope Areawide 2007 Competitive Oil and Gas LeaseSale.  The leases, covering 14,680 net acres, were issued on August 1, 2008,with a term of seven years and subject to a12.5% royalty interest in favor of the State of Alaska. UEA paid a total of $380,021 to the State of Alaska in respect of the leases. Tracts 254, 258 and 259 are contiguous and are believed by the Company, basedupon current available geological data and maps within the public domain, tocontain the Kavik gas field, discovered in 1969, which has been evaluated indetail by the U.S. Department of the Interior, U.S Geological Survey("USGS").  While the USGS evaluation is encouraging, the Company cannot assure that gas in commercial paying quantities will be recovered.

 

On February 27, 2008, UEA was the winningbidder for tracts 922, 923, 927, 988, 989, 990, 991, 992 and 925 in the Stateof Alaska North Slope Foothills Areawide 2008 Competitive Oil and Gas LeaseSale. UEA paid a total of $59,565 to the State of Alaska and the Companyexpects that the leases, covering 9,600 net acres, will be issued on September1, 2008, with a term of 10 years and subject to a 12.5% royalty interest in favor of the State of Alaska.  Tracts 922, 923, 927, 988, 989, 990, 991, 992 and 925are contiguous and are believed by the Company, based upon current availablegeological data and maps within the public domain, to contain the East Kurupagas field, discovered by Texaco in 1976.  The USGS has been studying thepotential for unconventional over-pressured, continuous gas deposits in theColville basin that contains the Kurupa anticline and is now interpreting theEast Kurupa well to have encountered a thick section of over-pressured gas inBrookian strata.  The Company intends to conduct a detailed geologicalevaluation of the Kurupa anticline, acquiring seismic data where available.

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In Alaska we have retained Frontier LandInc. (an established land firm and a member of the American Association ofProfessional Landmen) to conduct negotiations with other leaseholders inrespect of their acreage and to acquire other land interests within thevicinity of various tracts.

 

            Oklahoma

 

InAugust 2008, the Company acquired from its President, James Fitzsimons, a 50%working interest (41.25% net revenue interest) in the Snake Creek prospect, a3,200 gross (3,022 net) acre gas development project located in northernOkmulgee County.  The first well on this acreage, the Snake Creek #1, spaced on160 acres, has been successfully drilled and completed.  The Middle Dutcherzone was fracture stimulated on August 8 and is in production.  The Companyreimbursed Mr. Fitzsimons for his historic costs (acreage and drilling) byissuing a secured, non-interest bearing note, payable on demand for $210,917and will assume responsibility for all further costs.

 

The Company’s three Okfuskee County oiland gas farm out agreements are near oil and gas fields with proved developedproduction and within the general area of the "Woodford shale play". The Company has not yet finalized geological mapping of the leases and does notmake any representations as to their future production, if any.

 

In Oklahoma we have retained Keith Summar(a member of the American Association of Petroleum Geologists) as a consultantto assist us in our operations.

 

*Internationally*

* *

            Alberta, Canada

 

On May 14, 2008, the Company was thewinning bidder in a Crown Land sale for eight contiguous sections (totaling5,120 acres) of oil sands leases in the Peace River Oil Sands Area of northernAlberta, Canada.  The bids totaled $250,000 and the leases were issued byAlberta Energy on May 15, 2008, with a term of 15 years.

 

            Quebec, Canada

 

On June 23, 2008, the Company receivednotification from the Province of Quebec that it was the successful applicantfor seven oil and gas exploration permits (totaling 121,297 hectares; 299,728acres) in the Montreal area of the St. Lawrence Lowlands.  The Company paidadvance rentals totaling $12,000 to the Province of Quebec and expects that thepermits will be formally issued in the fall of 2008 with an initial term of fiveyears.  The Company has committed to a five-year work program following theformal issue of the permits with minimum expenditures of (expressed in Canadiandollars): $0.50 per hectare in the first year; $1.00 per hectare in the secondyear; $1.50 per hectare in the third year; $2.00 per hectare in the fourthyear; and $2.50 per hectare in the fifth year.

 

 

            Italy

 

TheCompany via its wholly-owned Italian subsidiaries, Mac Oil SRL and PetrocorpItalia SRL, currently has ten pending oil and gas exploration permitapplications in Italy with a total area of 249,540 hectares (616,620 acres).

 

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Internationally,we have retained Daniele Albisetti and Christian Ceppi (members of the SwissGeological Society, the Società Geologica Italiana (Italian Geological Society)and the Geological Association of Canada) as consultants to assist us in ouroperations.

 

Resultsof Operations

 

ThreeMonths Ended September 30, 2008 Compared to Three Months Ended September 30,2007

 

Duringthe quarter ended June 30, 2008, we incurred a net loss of $73,594 compared toa net loss of $19,547 for the 2007 quarter.  During the 2008 quarter, theCompany paid compensation to its President of $30,000 which was recorded as acapital contribution by the Company and professional fees of $26,300, whichrelated primarily to the development of the Company’s business plan and costsassociated with being a public company, as compared to $-0- for the 2007quarter.  Also during the 2008 quarter, the Company paid general andadministrative expenses of $10,970, which included rent, telephone and otheroffice costs, as compared to $318 for the 2007 quarter.  Interest expense of$8,032 was computed on the officer/stockholder loans at an implied rate of 6%and this amount was recorded as a capital contribution by the Company duringthe quarter.

 

NineMonths Ended September 30, 2008 Compared to Nine Months Ended September 30,2007

 

Duringthe nine months ended September 30, 2008, we incurred a net loss of $221,008compared to a net loss of $32,367 for the 2007 period.  The $188,641 net lossincrease is due to the fact that the Company had very limited operations during2007 and paid no rent or salaries.  During the nine months ended September 30,2008, the Company paid compensation and professional fees of $172,200, whichrelated primarily to the development of the Company’s business plan and costsassociated with being a public company, as compared to $10,000 for the 2007period.  Also during the nine months ended September30, 2008, the Company paidgeneral and administrative expenses of $23,498, which included rent, telephoneand other office costs, as compared to $5,438 for the 2007 period.  During thenine months ended September 30, 2008 interest expense of $20,909 was computedon the officer/stockholder loans at an implied rate of 6% and this amount wasrecorded as a capital contribution by the Company during the period.

 

Liquidityand Capital Resources

 

OurCompany's principal cash requirements are for exploration expenses which weanticipate will rise as we proceed to determine the feasibility of developingour current or future property interests.  As of September 30, 2008, we hadcash of $680,605 and working capital of $605,642.  Our net cash provided byfinancing activities during the period from our inception to September 30, 2008was $2,115,017.

 

InMarch 2008 we raised $1,000,000 from the sale of 800,000 shares of our commonstock at $1.25 per share.  These sales were to unaffiliated parties, completedpursuant to the exemption from registration under the Securities Act of 1933,as amended, by Regulation S issued thereunder.

 

Critical Accounting Policies

Financial Reporting Release No. 60 of the SEC encouragesall companies to include a discussion of critical accounting policies ormethods used in the preparation of the financial statements.  There are nocurrent revenue generating activities that give rise to significant assumptionsor estimates.  Our most critical accounting policies relate to the accountingand disclosure of related party transactions.  Our financial statements filedas part of our December 31, 2007 Annual Report include a summary of thesignificant accounting policies and methods used in the preparation of ourfinancial statements.

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Off-BalanceSheet Arrangements

 

Wehave never entered into any off-balance sheet financing arrangements and havenot formed any special purpose entities. We have not guaranteed any debt orcommitments of other entities or entered into any options on non-financialassets.

** **

**Item3.  Controls and Procedures**

 

Anevaluation was carried out under the supervision and with the participation ofour management, including our Chief Financial Officer and President, of theeffectiveness of our disclosure controls and procedures as of the end of theperiod covered by this report on Form 10-Q.  Disclosure controls and proceduresare procedures that are designed with the objective of ensuring thatinformation required to be disclosed in our reports filed under the SecuritiesExchange Act of 1934, such as this Form 10-Q, is recorded, processed,summarized and reported, within the time period specified in the Securities andExchange Commission’s rules and forms, and that such information is accumulatedand is communicated to our management, including our principal executive and principalfinancial officers, or persons performing similar functions, as appropriate, toallow timely decisions regarding required disclosure. Based on that evaluation,our management concluded that, as of September 30, 2008, our disclosurecontrols and procedures are effective to satisfy the objectives for which theyare intended.

 

Therewere no changes in our internal control over financial reporting identified inconnection with the evaluation performed that occurred during the fiscalquarter covered by this report that has materially affected or is reasonablylikely to materially affect, our internal control over financial reporting.

 
PART II –OTHER INFORMATION
 
Item 1 – LegalProceedings
 

TheCompany is not currently a party to any legal proceedings.

 
Item 2 – Unregistered Sales of Equity Securities andUse of Proceeds
 

None.

 
Item 3 – Defaults UponSenior Securities
 

None.

 
Item 4 – Submission ofMatters to a Vote of Security Holders
 

None.

 
Item 5 – OtherInformation
 

None.

 
Item 6 – Exhibits
 

Thefollowing documents are filed as part of this Report.

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**Exhibit Number**

**Exhibit Description**

31.1

Rule 13a-14(a)/15d-14(a)  Certification by the Principal Executive Officer and Principal Financial  Officer.**

32.2

Section 1350 Certification by the  Principal Executive Officer and Principal Financial Officer.**

 

** Filed herewith

 

 

**SIGNATURE**

 

In accordance with the requirements of the SecuritiesExchange Act of 1934, as amended, the registrant caused this Report on Form10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

 

                                                                                           **PETROCORP INC.**

 

 

Date:November 12, 2008                                           By:                                                                   

        James Fitzsimons, President and CFO
****
 

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