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, 2008





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.)





11005 Anderson Mill Road,
Austin, Texas  78750


(Address
of principal executive offices) (Zip Code)





Registrant's
telephone number:  (512) 944-9115





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 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.  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 o
              Accelerated
      filer o
              Non-accelerated
      filer o
              Smaller
      reporting company x


(Do not
check if a smaller reporting company)





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: 29,946,000 shares of common stock outstanding
as of November 24, 2008.





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 Mar Ked Mineral
Exploration, Inc.’s Form 10-KSB dated November 30, 2007 and the Form 8-K dated
July 28, 2008 covering the acquisition of North American Exploration, Inc. by
the Company.











TABLE OF
CONTENTS







PagePART
      I – FINANCIAL INFORMATIONItem
      1:
                                                                              Financial
      Statements
                                                                              3Item
      2:
                                                                              Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                                                              13Item
      3:
                                                                              Quantitative
      and Qualitative Disclosures About Market Risk
                                                                              16Item 4T:
                                                                              Controls
      and Procedures
                                                                              16PART
      II - OTHER INFORMATION
                                                                              18Item 1:
                                                                              Legal
      ProceedingsItem
      1A:
                                                                              Risk
      FactorsItem 2:
                                                                              Unregistered
      Sales of Equity Securities and Use of ProceedsItem 3:
                                                                              Defaults
      upon Senior SecuritiesItem 4:
                                                                              Submission
      of Matters to a Vote of Security HoldersItem 5:
                                                                              Other
      InformationItem 6:
                                                                              Exhibits





2





PART I - FINANCIAL INFORMATION





ITEM 1:  FINANCIAL STATEMENTS




NORTH
      AMERICAN ENERGY RESOURCES, INC.(An
      Exploration Stage Company)Condensed
      Consolidated Balance SheetsOctober
      31, 2008 (unaudited) and April 30, 2008October
      31,
                                  
                                  
                                  April
      30,2008
                                  
                                  
                                  2008ASSETSCurrent
      assets:Cash
      and cash equivalents
                                  
                                  $
                                  31,797
                                  
                                  
                                  $
                                  185,023Accounts
      receivable, net
                                  
                                  
                                  52,224
                                  
                                  
                                  
                                  56,745Loan
      to affiliate
                                  
                                  
                                  8,519
                                  
                                  
                                  
                                  -Total
      current assets
                                  
                                  
                                  92,540
                                  
                                  
                                  
                                  241,768Properties
      and equipment, at cost, net
                                  
                                  
                                  595,907
                                  
                                  
                                  
                                  523,008Note
      receivable
                                  
                                  
                                  76,000
                                  
                                  
                                  
                                  76,000Total
      assets
                                  
                                  $
                                  764,447
                                  
                                  
                                  $
                                  840,776LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payableTrade
                                  
                                  $
                                  29,967
                                  
                                  
                                  $
                                  23,294Oil
      and gas proceeds due others
                                  
                                  
                                  141
                                  
                                  
                                  
                                  571Loans
      from related parties
                                  
                                  
                                  435,000
                                  
                                  
                                  
                                  501,000Advances
      received from joint interest participants
                                  
                                  
                                  64,243
                                  
                                  
                                  
                                  189,471Accrued
      expenses
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,374Notes
      payable
                                  
                                  
                                  -
                                  
                                  
                                  
                                  35,250Total
      current liabilities
                                  
                                  
                                  529,351
                                  
                                  
                                  
                                  750,960Commitments
      and contingenciesStockholders'
      equity:Preferred
      stock: $0.001 par value; authorized 100,000,000shares;
      no shares issued and outstanding
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Common
      stock: $0.001 par value; 100,000,000 shares authorized;29,918,000
      shares and 21,000,000 issued and outstandingat
      October 31, 2008 and April 30, 2008, respectively
                                  
                                  
                                  29,918
                                  
                                  
                                  
                                  21,000Additional
      paid in capital
                                  
                                  
                                  525,558
                                  
                                  
                                  
                                  99,000Intrinsic
      value of common stock options
                                  
                                  
                                  (188,005
                                  )
                                  
                                  
                                  -Deficit
      accumulated during the exploration stage
                                  
                                  
                                  (132,375
                                  )
                                  
                                  
                                  (30,184
                                  )Total
      stockholders' equity
                                  
                                  
                                  235,096
                                  
                                  
                                  
                                  89,816Total
      liabilities and stockholders' equity
                                  
                                  $
                                  764,447
                                  
                                  
                                  $
                                  840,776See
      accompanying notes to condensed consolidated financial
      statements




3




NORTH
      AMERICAN ENERGY RESOURCES, INC.(An
      Exploration Stage Company)Statements
      of Condensed Consolidated Operations(Unaudited)For
      the three months ended October 31, 2008 and 20072008
                                            
                                            
                                            2007Oil
      and natural gas sales
                                            
                                            $
                                            1,705
                                            
                                            
                                            $
                                            2,430Costs
      and expensesOil
      and natural gas production taxes
                                            
                                            
                                            123
                                            
                                            
                                            
                                            175Oil
      and natural gas production expenses
                                            
                                            
                                            11,716
                                            
                                            
                                            
                                            9,108Depreciation
      and amortization
                                            
                                            
                                            1,536
                                            
                                            
                                            
                                            -Non-cash
      compensation
                                            
                                            
                                            17,091
                                            
                                            
                                            
                                            -General
      and administrative expense, net ofoperator's
      overhead fees
                                            
                                            
                                            48,107
                                            
                                            
                                            
                                            (1,820
                                            )78,573
                                            
                                            
                                            
                                            7,463Loss
      from operations
                                            
                                            
                                            (76,868
                                            )
                                            
                                            
                                            (5,033
                                            )Other
      income (expense):Other
      income
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -Interest
      expense
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (293
                                            )Total
      other income (expense)
                                            
                                            
                                            -
                                            
                                            
                                            
                                            (293
                                            )Loss
      before income taxes
                                            
                                            
                                            (76,868
                                            )
                                            
                                            
                                            (5,326
                                            )Provision
      for income taxes
                                            
                                            
                                            -
                                            
                                            
                                            
                                            -Net
      loss
                                            
                                            $
                                            (76,868
                                            )
                                            
                                            $
                                            (5,326
                                            )Net
      loss per common share, basic and diluted
                                            
                                            $
                                            (0.00
                                            )
                                            
                                            $
                                            (0.00
                                            )Weighted
      average common shares outstanding
                                            
                                            
                                            29,875,810
                                            
                                            
                                            
                                            21,000,000See
      accompanying notes to condensed consolidated financial
      statements.
 
 4




NORTH
      AMERICAN ENERGY RESOURCES, INC.(An
      Exploration Stage Company)Statements
      of Condensed Consolidated Operations(Unaudited)For
      the six months ended October 31, 2008 and 2007and
      the period from inception (August 18, 2006) through October 31,
      2008Inception(August
      18, 2006)throughOctober
      31,2008
                                      
                                      
                                      2007
                                      
                                      
                                      2008Oil
      and natural gas sales
                                      
                                      $
                                      2,972
                                      
                                      
                                      $
                                      2,430
                                      
                                      
                                      $
                                      21,084Costs
      and expensesOil
      and natural gas production taxes
                                      
                                      
                                      214
                                      
                                      
                                      
                                      175
                                      
                                      
                                      
                                      1,519Oil
      and natural gas production expenses
                                      
                                      
                                      20,862
                                      
                                      
                                      
                                      14,213
                                      
                                      
                                      
                                      59,703Depreciation
      and amortization
                                      
                                      
                                      2,659
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      4,503Non-cash
      compensation
                                      
                                      
                                      17,091
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      17,091General
      and administrative expense, net ofoperator's
      overhead fees
                                      
                                      
                                      63,912
                                      
                                      
                                      
                                      (1,300
                                      )
                                      
                                      
                                      68,899104,738
                                      
                                      
                                      
                                      13,088
                                      
                                      
                                      
                                      151,715Loss
      from operations
                                      
                                      
                                      (101,766
                                      )
                                      
                                      
                                      (10,658
                                      )
                                      
                                      
                                      (130,631
                                      )Other
      income (expense):Other
      income
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      54Interest
      expense
                                      
                                      
                                      (425
                                      )
                                      
                                      
                                      (293
                                      )
                                      
                                      
                                      (1,798
                                      )Total
      other income (expense)
                                      
                                      
                                      (425
                                      )
                                      
                                      
                                      (293
                                      )
                                      
                                      
                                      (1,744
                                      )Loss
      before income taxes
                                      
                                      
                                      (102,191
                                      )
                                      
                                      
                                      (10,951
                                      )
                                      
                                      
                                      (132,375
                                      )Provision
      for income taxes
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Net
      loss
                                      
                                      $
                                      (102,191
                                      )
                                      
                                      $
                                      (10,951
                                      )
                                      
                                      $
                                      (132,375
                                      )Net
      loss per common share, basic and diluted
                                      
                                      $
                                      (0.00
                                      )
                                      
                                      $
                                      (0.00
                                      )
                                      
                                      $
                                      (0.01
                                      )Weighted
      average common shares outstanding
                                      
                                      
                                      25,582,198
                                      
                                      
                                      
                                      21,000,000
                                      
                                      
                                      
                                      22,047,360See
      accompanying notes to condensed consolidated financial
      statements.
 
 5




NORTH
      AMERICAN ENERGY RESOURCES, INC.(An
      Exploration Stage Company)Statements
      of Condensed Consolidated Cash Flows(Unaudited)For
      the six months ended October 31, 2008 and 2007and
      the period from inception (August 18, 2006) through October 31,
      2008Inception(August
      18, 2006)throughOctober
      31,2008
                                                          
                                                          
                                                          2007
                                                          
                                                          
                                                          2008Operating
      activitiesNet
      loss
                                                          
                                                          $
                                                          (102,191
                                                          )
                                                          
                                                          $
                                                          (10,951
                                                          )
                                                          
                                                          $
                                                          (132,375
                                                          )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Depreciation
      and amortization
                                                          
                                                          
                                                          2,659
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          4,503Non-cash
      compensation
                                                          
                                                          
                                                          17,091
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          17,091Increase
      (decrease) in:Accounts
      receivable
                                                          
                                                          
                                                          (32,795
                                                          )
                                                          
                                                          
                                                          (7,548
                                                          )
                                                          
                                                          
                                                          (89,540
                                                          )Accounts
      payable
                                                          
                                                          
                                                          15,263
                                                          
                                                          
                                                          
                                                          622
                                                          
                                                          
                                                          
                                                          38,557Accrued
      expenses
                                                          
                                                          
                                                          (1,094
                                                          )
                                                          
                                                          
                                                          293
                                                          
                                                          
                                                          
                                                          280Oil
      and gas proceeds due others
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          571Loan
      to affiliate
                                                          
                                                          
                                                          (8,519
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (8,519
                                                          )Advances
      from joint interest owners
                                                          
                                                          
                                                          (125,228
                                                          )
                                                          
                                                          
                                                          (8,359
                                                          )
                                                          
                                                          
                                                          55,573Net
      cash used in operating activities
                                                          
                                                          
                                                          (234,814
                                                          )
                                                          
                                                          
                                                          (25,943
                                                          )
                                                          
                                                          
                                                          (113,859
                                                          )Investing
      activitiesPayments
      for oil and natural gas properties andequipment
                                                          
                                                          
                                                          (38,242
                                                          )
                                                          
                                                          
                                                          (33,157
                                                          )
                                                          
                                                          
                                                          (166,924
                                                          )Cash
      received in excess of cash paid in reverseacquisition
      of North American Energy Resources, Inc.
                                                          
                                                          
                                                          119,830
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          119,830Proceeds
      from sale of oil and gas properties
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          7,500Net
      cash used in investing activities
                                                          
                                                          
                                                          81,588
                                                          
                                                          
                                                          
                                                          (33,157
                                                          )
                                                          
                                                          
                                                          (39,594
                                                          )Financing
      activitiesLoan
      proceeds
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          13,000
                                                          
                                                          
                                                          
                                                          35,250Loans
      from related parties
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          46,000
                                                          
                                                          
                                                          
                                                          130,000Sale
      of common stock
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          20,000Net
      cash provided by financing activities
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          59,000
                                                          
                                                          
                                                          
                                                          185,250Net
      increase in cash and cash equivalents
                                                          
                                                          
                                                          (153,226
                                                          )
                                                          
                                                          
                                                          (100
                                                          )
                                                          
                                                          
                                                          31,797Cash
      and cash equivalents, beginning of period
                                                          
                                                          
                                                          185,023
                                                          
                                                          
                                                          
                                                          765
                                                          
                                                          
                                                          
                                                          -Cash
      and cash equivalents, end of period
                                                          
                                                          $
                                                          31,797
                                                          
                                                          
                                                          $
                                                          665
                                                          
                                                          
                                                          $
                                                          31,797


See
accompanying notes to condensed consolidated financial statements.
  6
  NORTH
      AMERICAN ENERGY RESOURCES, INC.(An
      Exploration Stage Company)Statements
      of Condensed Consolidated Cash Flows, Continued(Unaudited)For
      the six months ended October 31, 2008 and 2007and
      the period from inception (August 18, 2006) through October 31,
      2008Inception(August
      18, 2006)throughOctober
      31,2008
                                    
                                    
                                    2007
                                    
                                    
                                    2008Supplemental
      cash flow informationCash
      paid for interest and income taxes:Interest
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Income
      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
                                    
                                    
                                    (150,000
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Cash
      received in excess of cash paid
                                    
                                    $
                                    119,830Exchange
      of joint interest receivable for oil andnatural
      gas properties
                                    
                                    $
                                    37,316
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Convertible
      note payable and accrued interestexchanged
      for 1,000 shares of North AmericanExploration,
      Inc. common stock
                                    
                                    
                                    35,530
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
  See
accompanying notes to condensed consolidated financial
statements.
  7




NORTH
AMERICAN ENERGY RESOURCES, INC.
 (An Exploration Stage
Company)


Notes
to Condensed Consolidated Financial Statements







NOTE
      1:
            ORGANIZATION
      AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES





Organization




The
financial statements include the accounts of North American Energy Resources,
Inc. (formerly Mar Ked Mineral Exploration, Inc.) (“NAEN”) and its wholly owned
subsidiary, North American Exploration, Inc. (“NAE”) (formerly Signature Energy,
Inc.) (collectively the “Company”).





NAEN 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 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,
2008, which is included in the Company’s Form 8-K/A dated July 28, 2008 and
filed on September 12, 2008.  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 21,000,000 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 is 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.  Formerly, NAER used a November 30 year-end.  As a
result of the reverse acquisition, the Company will utilize the April 30
year-end of NAE in the future.




8





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 is used for gathering its
gas and the gas production of other producers.





Exploration
stage




The
Company is in the exploration stage and has realized only nominal revenue to
date.  The Company is now beginning to develop leasehold which it owns
in Washington County, Oklahoma.  Accordingly, the operation of the
Company is presented as those of a development stage enterprise, from its
inception (August 18, 2006) as prescribed by Statement of Financial Accounting
Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage
Enterprises.”





Going
concern




The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern.  The Company commenced operations in
September 2006.





At
October 31, 2008 and April 30, 2008 the Company had negative working capital of
$436,811 and $509,192, respectively, which includes $435,000 and $501,000 in
non-interest bearing loans from related parties, respectively.  The
Company expects to meet its capital requirements for the next year with the
$1,350,000 in remaining capital contributions due from
shareholders.





In
addition, the Company expects to sell all of its interest in its existing
developmental drilling prospects on a 1/3 for 1/4 basis and be carried to the
tanks, thus having no additional up-front capital costs on existing
properties.  This method of operations allows the company to
participate in a larger number of prospects with a relatively low capital
outlay.





These
conditions raise doubt about the Company’s ability to continue as a going
concern without the agreed capital contributions by shareholders.  The
financial statements do not include any adjustments that may result from the
outcome of these uncertainties.





Stock
option plans




Until
June 30, 2005, the Company accounted for stock-based employee compensation
arrangements in accordance with the provisions of Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" and complied
with the disclosure provisions of SFAS No.123, "Accounting for Stock-Based
Compensation."  Under APB No. 25, employee compensation cost was
recognized over the vesting period based on the excess, if any, on the date of
grant of the fair value of the Company's shares over the employee's exercise
price. When the exercise price of the employee share options was less than the
fair value price of the underlying shares on the grant date, deferred stock
compensation was recognized and amortized to expense in accordance with
Financial Accounting Standards Board (“FASB”) Interpretation No. 44 over the
vesting period of the individual options.  Accordingly, if the
exercise price of the Company's employee options equaled or exceeded the market
price of the underlying shares on the date of grant, no compensation expense was
recognized. Options or shares awards issued to non-employees are valued using
the fair value method and expensed over the period services are
provided.





9


In
December 2004, the FASB issued SFAS 123(R), “Share-Based Payment,” which
requires that the compensation cost relating to share-based payment transactions
(including the cost of all employee stock options) be recognized in the
financial statements.  That cost will be measured based on the
estimated fair value of the equity or liability instruments issued. SFAS 123(R)
covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights, and employee share purchase plans.  SFAS 123(R) replaces SFAS
123, “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No.
25, “Accounting for Stock Issued to Employees.”  As originally issued,
SFAS 123 established as preferable a fair-value-based method of accounting for
share-based payment transactions with employees.  However, that
pronouncement permitted entities to continue applying the intrinsic-value model
of APB Opinion 25, provided that the financial statements disclosed the pro
forma net income or loss based on the preferable fair-value
method.  This statement is effective as of the first reporting period
that begins after December 15, 2005.  Accordingly, the Company adopted
SFAS 123(R) on January 1, 2006.  Thus, the Company’s financial
statements will reflect an expense for (a) all share-based compensation
arrangements granted on or after January 1, 2006 and for any such arrangements
that are modified, cancelled, or repurchased after that date, and (b) the
portion of previous share-based awards for which the requisite service has not
been rendered as of that date, based on the grant-date estimated fair value. The
Company had no unvested options outstanding on January 1, 2006.  The
Company first granted options during the quarter ended October 31,
2008.




The
Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company’s options have characteristics significantly different from those of
traded options, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management’s opinion the existing
models may not necessarily provide a reliable single measure of the fair value
of the Company’s options.





Prior
operations




Prior to
the acquisition of NAE, NAER was an exploration stage company engaged in the
acquisition, exploration and development of resource properties, principally
gold, in the Province of British Columbia, Canada.  Since the
acquisition of NAE, NAER has abandoned its plans to develop gold leases and will
concentrate future resources in acquiring, exploring and developing oil and
natural gas properties.





10





NOTE
2:                 RELATED
PARTY TRANSACTIONS





The
Company has non-interest bearing obligations to related parties at October 31,
2008 and April 30, 2008, as follows:





October
      31,
                          
                          
                          April
      30,2008
                          
                          
                          2008Assets
      acquired from shareholders
                          
                          $
                          371,000
                          
                          
                          $
                          371,000Cash
      received
                          
                          
                          130,000
                          
                          
                          
                          130,000Options
      exercised with amounts due shareholders
                          
                          
                          (66,000
                          )
                          
                          
                          -$
                          435,000
                          
                          
                          $
                          501,000





The
Company acquired the following assets from its shareholders and assumed the
liability to its shareholders in August 2006:




2007Note
      receivable
                    
                    $
                    76,000Oil
      and gas properties
                    
                    
                    303,670Interest
      in pipeline
                    
                    
                    100,000Assets
      acquired
                    
                    
                    479,670Advance
      from joint interest participant assumed
                    
                    
                    (8,670
                    )Common
      stock issued
                    
                    
                    (100,000
                    )Liability
      to shareholders
                    
                    $
                    371,000


The
Company sells its gas pursuant to a contract with a gathering system principally
owned by a related party.  The Company receives a price equal to 70%
of the posted price.  The related party retains the other 30% of the
posted price for gathering fees and marketing fees.





During
the three months ended October 31, 2008, options to acquire 400,000 shares of
common stock were granted to two shareholders at prices ranging from $1.00 to
$1.25 per share.  A total of 63,500 shares were exercised during the
quarter and paid with a $66,000 reduction in the amount due
shareholders.





During
the three months ended October 31, 2008, the Company loaned an affiliate $8,519
as an advance of consulting fees.








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, 2008 and April 30, 2008, the Company had
no shares issued and outstanding.





11





COMMON
STOCK





The
Company has 100,000,000 shares of its $0.001 par value common stock
authorized.  At October 31, 2008 and April 30, 2008 the Company has
29,918,000 and 21,000,000 shares issued and outstanding,
respectively.





During
the three months ended October 31, 2008, options to acquire 404,500 shares of
common stock were granted to two shareholders and one consultant at prices
ranging from $1.00 to $2.00 per share.  A total of 66,000 shares were
exercised during the quarter and paid with a $66,000 reduction in the amount due
shareholders and a reduction in accounts payable of $9,020.








NOTE
4:                 COMMITMENTS
AND CONTINGENCIES





The
Company currently maintains its corporate office in the office of its accountant
at no charge.





The
shareholders of NAER before the acquisition of NAE have agreed to contribute a
total of $1,500,000 to NAER.  Of this amount, $150,000 was contributed
prior to July 31, 2008 and $50,000 was contributed in November
2008.





12





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 the committed funding from
our shareholders of $1,350,000, continue to develop our existing leases and
acquire additional leases.





COMPARISON
OF THREE MONTHS ENDED OCTOBER 31, 2008 AND 2007





During
the three-month periods ended October 31, 2008 and 2007, we had natural gas
sales of $1,705 and $2,430, respectively.  In the 2007 period, the
Company’s field came back on line after being shut-in due to flooding
experienced earlier in the year.  Sales re-commenced after substantial
repairs had been completed.  In the 2008 period, the Company had
several wells which were scheduled for work-over to commence in November
2008.





Non-cash
compensation represents the amortization of the intrinsic value of common stock
options which began in the October 2008 quarter.





During
the three-month periods ended October 31, 2008 and 2007, general and
administrative expenses, amounted to $48,107 and ($1,820), respectively, and are
summarized below:




2008
                      
                      
                      2007Accounting
                      
                      $
                      14,990
                      
                      
                      $
                      -Software
                      
                      
                      3,000
                      
                      
                      
                      -Consulting
      and professional services
                      
                      
                      21,137
                      
                      
                      
                      1,351Field
      supervision
                      
                      
                      4,000
                      
                      
                      
                      -Other
                      
                      
                      7,680
                      
                      
                      
                      2950,807
                      
                      
                      
                      1,380Less
      overhead income
                      
                      
                      (2,700
                      )
                      
                      
                      (3,200
                      )$
                      48,107
                      
                      
                      $
                      (1,820
                      )


Consulting
and professional services, accounting, field supervision and software costs in
2008 account for the majority of the increase.  The accounting was
brought up to date during the 2008 period, an audit was completed and new oil
and gas software was used for the first time.





COMPARISON
OF SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007





During
the six-month periods ended October 31, 2008 and 2007, we had natural gas sales
of $2,972 and $2,430, respectively.  In the 2007 period, the Company’s
field was shut-in due to flooding experienced earlier in the year until August
2007.  During 2008, several wells are being re-completed commencing in
November 2008.





13


Non-cash
compensation represents the amortization of the intrinsic value of common stock
options which began in the October 2008 quarter.





During
the six-month periods ended October 31, 2008 and 2007, general and
administrative expenses, amounted to $63,912 and ($1,300), respectively, and are
summarized below:





2008
                      
                      
                      2007Accounting
                      
                      $
                      26,420
                      
                      
                      $
                      -Software
                      
                      
                      6,000
                      
                      
                      
                      -Consulting
      and professional services
                      
                      
                      22,572
                      
                      
                      
                      3,463Field
      supervision
                      
                      
                      4,000
                      
                      
                      
                      -Other
                      
                      
                      11,220
                      
                      
                      
                      3770,212
                      
                      
                      
                      3,500Less
      overhead income
                      
                      
                      (6,300
                      )
                      
                      
                      (4,800
                      )$
                      63,912
                      
                      
                      $
                      (1,300
                      )


Consulting
and professional services, accounting and software costs in 2008 account for the
majority of the increase.  The accounting was brought up to date
during the 2008 period, an audit was completed and new oil and gas software was
used for the first time.





LIQUIDITY,
CAPITAL RESOURCES AND PLAN OF OPERATIONS





At
October 31, 2008, we had $31,797 in cash and a working capital deficit of
$436,811.  Comparatively, we had cash of $185,023 and a working
capital deficit of $509,192 at April 30, 2008.





Pursuant
to the stock purchase agreement between NAER and the shareholders of NAE, the
shareholders of NAER prior to the acquisition of NAE have agreed to contribute
$1,500,000 for the working capital needs of NAER.  As of October 31,
2008, the Company had received $150,000 from the shareholders.  In
November 2008, the Company received an additional $50,000.





We
estimate that our total planned expenditures over the next twelve months will be
approximately $120,000 for corporate overhead.  We expect to utilize
excess funds to acquire additional acreage for future drilling
operations.





CASH
USED IN OPERATING ACTIVITIES





Cash used
for operating activities was $234,814 for the six-month period ended October 31,
2008 and $25,943 for the six-month period ended October 31, 2007.  The
majority of the increase is attributed to using the funds received from joint
interest participants to pay drilling and development costs incurred during the
period.  The majority of the funds required for drilling and
developing existing acreage will come from prepayments from joint interest
participants.  Aside from overhead, we expect to utilize the majority
of our excess capital, if any, to acquire additional leases.





14




CASH
FROM FINANCING ACTIVITIES





We
received $150,000 in cash from shareholder contributions during the six-month
period ended October 31, 2008 and expect to continue to receive additional
shareholder contributions as needed to complete our business plan.  It
is anticipated that shareholder contributions will fund the Company while
revenue from operations grows from its existing levels.  The Company
received $50,000 in additional shareholder contributions in November
2008.





GOING
CONCERN





We have
not attained profitable operations and are dependent upon obtaining the
shareholder contributions discussed above to pursue our business
plan.  For these reasons, there is doubt we will be able to continue
as a going concern, since we are dependent upon our shareholders to contribute
sufficient funds to finance future operations until our revenues are adequate to
fund our cost of operations.





OFF-BALANCE
SHEET ARRANGEMENTS





None.




15





ITEM 3:
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.








ITEM
4T:               CONTROLS
AND PROCEDURES





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting.  Internal control over financial
reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934 as a process designed by, or under the
supervision of, the company’s principal executive and principal financial
officers and effected by the company’s board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures
that:





·
            Pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of the assets of the
      company;





·
            Provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with accounting
      principles generally accepted in the United States of America and that
      receipts and expenditures of the company are being made only in accordance
      with authorizations of management and directors of the company;
      and





·
            Provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of the company’s assets that
      could have a material effect on the financial
  statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.  All internal control
systems, no matter how well designed, have inherent
limitations.  Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparation and presentation.  Because of the inherent limitations of
internal control, there is a risk that material misstatements may not be
prevented or detected on a timely basis by internal control over financial
reporting. However, these inherent limitations are known features of the
financial reporting process.  Therefore, it is possible to design into
the process safeguards to reduce, though not eliminate, this risk.





As of
October 31, 2008 management assessed the effectiveness of our internal control
over financial reporting based on the criteria for effective internal control
over financial reporting established in Internal Control--Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
("COSO") and SEC guidance on conducting such assessments.  Based on
that evaluation, they concluded that, during the period covered by this report,
such internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described
below.  This was due to deficiencies that existed in the design or
operation of our internal controls over financial reporting that adversely
affected our internal controls and that may be considered to be material
weaknesses.





16




The
matters involving internal controls and procedures that our management
considered to be material weaknesses under the standards of the Public Company
Accounting Oversight Board were: (1) lack of a functioning audit committee due
to a lack of a majority of independent members and a lack of a majority of
outside directors on our board of directors, resulting in ineffective oversight
in the establishment and monitoring of required internal controls and
procedures; and (2) inadequate segregation of duties consistent with control
objectives.  The aforementioned material weaknesses were identified by
our Chief Executive Officer in connection with the review of our financial
statements as of October 31, 2008.





Management
believes that the material weaknesses set forth in item (2) above did not have
an effect on our financial results.  However, management believes that
the lack of a functioning audit committee and the lack of a majority of outside
directors on our board of directors results in ineffective oversight in the
establishment and monitoring of required internal controls and procedures, which
could result in a material misstatement in our financial statements in future
periods.





This
annual report does not include an attestation report of the Corporation's
registered public accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by the
Corporation's registered public accounting firm pursuant to temporary rules of
the SEC that permit the Corporation to provide only the management's report in
this annual report.








Management’s Remediation
Initiatives


In an
effort to remediate the identified material weaknesses and other deficiencies
and enhance our internal controls, we have initiated, or plan to initiate, the
following series of measures:





We will
create a position to segregate duties consistent with control objectives and
will increase our personnel resources and technical accounting expertise within
the accounting function when funds are available to us.  And, we plan
to appoint one or more outside directors to our board of directors who shall be
appointed to an audit committee resulting in a fully functioning audit committee
who will undertake the oversight in the establishment and monitoring of required
internal controls and procedures such as reviewing and approving estimates and
assumptions made by management when funds are available to us.





Management
believes that the appointment of one or more outside directors, who shall be
appointed to a fully functioning audit committee, will remedy the lack of a
functioning audit committee and a lack of a majority of outside directors on our
Board.





We
anticipate that these initiatives will be at least partially, if not fully,
implemented by April 30, 2009.  Additionally, we plan to test our
updated controls and remediate our deficiencies by April 30, 2009.





Changes in internal controls
over financial reporting


There was
no change in our internal controls over financial reporting that occurred during
the period covered by this report that has materially affected, or is reasonably
likely to materially affect, our internal controls over financial
reporting.




17





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





The
Company issued 68,000 shares of its common stock for exercise of common stock
options pursuant to an S-8 registration statement, with total proceeds of
$75,020.








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 1350Section
      302 of the Sarbanes-Oxley Act of 2002Exhibit
      32
                      Certification
      pursuant to 18 U.S.C. Section 1350Section
      906 of the Sarbanes-Oxley Act of 2002




18





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 11, 2008
                    By:
                    /s/ Ross
      E. SilveyPresident, Chief
      Executive Officer andActing
      Chief Financial Officer







19