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: January 31, 2010





File No.
000-52522





North American Energy
Resources, Inc.


(Name
of small business issuer in our charter)





Nevada
                98-0550352(State
      or other jurisdiction of
                (IRS
      Employerincorporation
      or organization)
                Identification
      No.)





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  ̈





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of
this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).  Yes  ̈ No
 ̈





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





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





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





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date: 16,055,539 shares of common stock outstanding
as of February 22, 2010.








The
accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial reporting
and pursuant to the rules and regulations of the Securities and Exchange
Commission ("Commission"). While these statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for fair
presentation of the results of the interim period, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer to
the financial statements and footnotes thereto, contained in North American
Energy Resources, Inc.’s Form 10-K dated April 30, 2009.





TABLE OF
CONTENTS




PagePART I – FINANCIAL INFORMATION (Unaudited)
                      3Item 1:
                      Condensed
      Consolidated Financial Statements
                      3Item 2:
                      Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                      17Item 3:
                      Quantitative
      and Qualitative Disclosures About Market Risk
                      22Item 4T:
                      Controls
      and Procedures
                      22PART II - OTHER INFORMATION
                      23Item 1:
                      Legal
      Proceedings
                      23Item 1A:
                      Risk
      Factors
                      23Item 2:
                      Unregistered
      Sales of Equity Securities and Use of Proceeds
                      23Item 3:
                      Defaults
      upon Senior Securities
                      23Item 4:
                      Submission
      of Matters to a Vote of Security Holders
                      23Item 5:
                      Other
      Information
                      23Item 6:
                      Exhibits
                      23


2


PART I - FINANCIAL INFORMATION


ITEM 1:  FINANCIAL STATEMENTS





NORTH
AMERICAN ENERGY RESOURCES, INC.


(An
Exploration Stage Company)


Balance
Sheets


January
31, 2010 (Unaudited) and April 30, 2009





January 31,
                
                
                April 30,2010
                
                
                2009ASSETSCurrent
      assets:Cash
      and cash equivalents
                
                $
                493
                
                
                $
                27,966Accounts
      receivable, net of allowance of $10,000 at 1/31/10
                
                
                8,976
                
                
                
                20,826Due
      from related party
                
                
                20,893
                
                
                
                19,993Prepaid
      expenses
                
                
                445,705
                
                
                
                84,933Total
      current assets
                
                
                476,067
                
                
                
                153,718Properties
      and equipment, at cost:Proved
      oil and natural gas properties and equipment
                
                
                147,134
                
                
                
                47,394Unevaluated
      properties, at cost
                
                
                126,607
                
                
                
                -Pipeline
                
                
                144,575
                
                
                
                144,575418,316
                
                
                
                191,969Accumulated
      depreciation and amortization
                
                
                (20,003
                )
                
                
                (15,143
                )Total
      properties and equipment
                
                
                398,313
                
                
                
                176,826Prepaid
      expenses
                
                
                87,500
                
                
                
                -Deposits
                
                
                864
                
                
                
                -Total
      assets
                
                $
                962,744
                
                
                $
                330,544LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      liabilities:Accounts
      payableTrade
                
                $
                103,206
                
                
                $
                47,756Oil
      and gas proceeds due others
                
                
                1,050
                
                
                
                956Advances
      from related parties
                
                
                18,100
                
                
                
                2,000Advances
      received from joint interest participants
                
                
                40,133
                
                
                
                30,000Accrued
      interest - related parties
                
                
                36,190
                
                
                
                -Current
      portion of long-term debt - related parties
                
                
                384,428
                
                
                
                -Total
      current liabilities
                
                
                583,107
                
                
                
                80,712Long-term
      debt, less current portion - related parties
                
                
                13,500
                
                
                
                402,500Total
      liabilities
                
                
                596,607
                
                
                
                483,212Commitments
      and contingenciesStockholders'
      equity (deficit):Preferred
      stock: $0.001 par value; 100,000,000 shares authorized; no shares
      issued and outstanding
                
                
                -
                
                
                
                -Common
      stock: $0.001 par value; 100,000,000 shares authorized; 16,055,539 and
      14,035,539 shares issued and outstanding at January 31, 2010 and April 30,
      2009,respectively
                
                
                16,056
                
                
                
                14,036Additional
      paid in capital
                
                
                2,125,428
                
                
                
                960,948Deficit
      accumulated during the exploration stage
                
                
                (1,775,347
                )
                
                
                (1,127,652
                )Total
      stockholders' equity (deficit)
                
                
                366,137
                
                
                
                (152,668
                )Total
      liabilities and stockholders' equity (deficit)
                
                $
                962,744
                
                
                $
                330,544





See
accompanying notes to financial statements


3





NORTH
AMERICAN ENERGY RESOURCES, INC.


(An
Exploration Stage Company)


Statements
of Condensed Consolidated Operations


For
the three months ended January 31, 2010 and 2009





(Unaudited)





2010
                
                
                2009Oil
      and natural gas sales
                
                $
                2,263
                
                
                $
                1,740Total
      revenues
                
                
                2,263
                
                
                
                1,740Costs
      and expensesOil
      and natural gas production taxes
                
                
                163
                
                
                
                125Oil
      and natural gas production expenses
                
                
                2,138
                
                
                
                11,176Depreciation
      and amortization
                
                
                1,620
                
                
                
                1,541Non-cash
      compensation
                
                
                152,076
                
                
                
                310,500Bad
      debt expense
                
                
                -
                
                
                
                76,000General
      and administrative expense, net of operator's overhead
fees
                
                
                2,656
                
                
                
                62,033158,653
                
                
                
                461,375Loss
      from operations
                
                
                (156,390
                )
                
                
                (459,635
                )Other
      income (expense):Interest
      income
                
                
                300
                
                
                
                -Interest
      expense
                
                
                (12,036
                )
                
                
                -Total
      other income (expense)
                
                
                (11,736
                )
                
                
                -Net
      loss
                
                $
                (168,126
                )
                
                $
                (459,635
                )Net
      loss per common share, basic and diluted
                
                $
                (0.01
                )
                
                $
                (0.03
                )Weighted
      average common shares outstanding
                
                
                16,055,539
                
                
                
                13,853,503





See
accompanying notes to condensed consolidated financial
statements.


4





NORTH
AMERICAN ENERGY RESOURCES, INC.


(An
Exploration Stage Company)


Statements
of Condensed Consolidated Operations


For
the nine months ended January 31, 2010 and 2009


and
the period from inception (August 18, 2006) through January 31,
2010


(Unaudited)





Inception(August 18, 2006)throughJanuary 31,2010
                
                
                2009
                
                
                2010Oil
      and natural gas sales
                
                $
                5,851
                
                
                $
                4,712
                
                
                $
                30,523Pipeline
      fees
                
                
                -
                
                
                
                -
                
                
                
                2,450Total
      revenues
                
                
                5,851
                
                
                
                4,712
                
                
                
                32,973Costs
      and expensesOil
      and natural gas production taxes
                
                
                421
                
                
                
                339
                
                
                
                2,198Oil
      and natural gas production expenses
                
                
                11,105
                
                
                
                32,038
                
                
                
                86,828Depreciation
      and amortization
                
                
                4,860
                
                
                
                4,200
                
                
                
                12,503Asset
      impairment
                
                
                108,000
                
                
                
                -
                
                
                
                525,840Non-cash
      compensation
                
                
                394,728
                
                
                
                327,591
                
                
                
                782,986Bad
      debt expense
                
                
                10,000
                
                
                
                76,000
                
                
                
                86,000General
      and administrative expense, net of operator's overhead
fees
                
                
                89,142
                
                
                
                125,945
                
                
                
                275,185618,256
                
                
                
                566,113
                
                
                
                1,771,540Loss
      from operations
                
                
                (612,405
                )
                
                
                (561,401
                )
                
                
                (1,738,567
                )Other
      income (expense):Other
      income
                
                
                -
                
                
                
                -
                
                
                
                320Interest
      income
                
                
                900
                
                
                
                -
                
                
                
                900Interest
      expense
                
                
                (36,190
                )
                
                
                (425
                )
                
                
                (38,000
                )Total
      other income (expense)
                
                
                (35,290
                )
                
                
                (425
                )
                
                
                (36,780
                )Net
      loss
                
                $
                (647,695
                )
                
                $
                (561,826
                )
                
                $
                (1,775,347
                )Net
      loss per common share, basic and diluted
                
                $
                (0.04
                )
                
                $
                (0.04
                )Weighted
      average common shares outstanding
                
                
                15,530,956
                
                
                
                12,792,518





See
accompanying notes to condensed consolidated financial
statements.


5





NORTH
AMERICAN ENERGY RESOURCES, INC.


(An
Exploration Stage Company)


Statements
of Condensed Consolidated Cash Flows


For
the nine months ended January 31, 2010 and 2009


and
the period from inception (August 18, 2006) through January 31,
2010


(Unaudited)





Inception(August 18, 2006)throughJanuary 31,2010
                      
                      
                      2009
                      
                      
                      2010Operating
      activitiesNet
      loss
                      
                      $
                      (647,695
                      )
                      
                      $
                      (561,826
                      )
                      
                      $
                      (1,775,347
                      )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
                      
                      
                      4,860
                      
                      
                      
                      4,200
                      
                      
                      
                      12,503Non-cash
      compensation
                      
                      
                      394,728
                      
                      
                      
                      327,591
                      
                      
                      
                      782,986Bad
      debt expense
                      
                      
                      10,000
                      
                      
                      
                      76,000
                      
                      
                      
                      86,000Asset
      impairment
                      
                      
                      108,000
                      
                      
                      
                      -
                      
                      
                      
                      525,840Increase
      (decrease) in:Accounts
      receivable
                      
                      
                      (17,406
                      )
                      
                      
                      4,743
                      
                      
                      
                      (75,548
                      )Interest
      accrued on loan to related party
                      
                      
                      (900
                      )
                      
                      
                      -
                      
                      
                      
                      (900
                      )Deposits
                      
                      
                      (864
                      )
                      
                      
                      -
                      
                      
                      
                      (864
                      )Accounts
      payable
                      
                      
                      59,476
                      
                      
                      
                      73,317
                      
                      
                      
                      209,371Accrued
      interest - related parties
                      
                      
                      36,190
                      
                      
                      
                      -
                      
                      
                      
                      36,190Accrued
      expenses
                      
                      
                      -
                      
                      
                      
                      (1,094
                      )
                      
                      
                      280Advances
      from related parties for working capital
                      
                      
                      16,100
                      
                      
                      
                      -
                      
                      
                      
                      18,100Advances
      from joint interest owners
                      
                      
                      10,133
                      
                      
                      
                      (189,471
                      )
                      
                      
                      31,463Net
      cash from (used in) operating activities
                      
                      
                      (27,378
                      )
                      
                      
                      (266,540
                      )
                      
                      
                      (149,926
                      )Investing
      activitiesPayments
      for oil and natural gas properties and equipment
                      
                      
                      (95
                      )
                      
                      
                      (38,275
                      )
                      
                      
                      (161,418
                      )Cash
      received in excess of cash paid in reverse acquisition of North American
      Energy Resources, Inc.
                      
                      
                      -
                      
                      
                      
                      119,830
                      
                      
                      
                      119,830Loan
      to related party
                      
                      
                      -
                      
                      
                      
                      (8,519
                      )
                      
                      
                      (19,993
                      )Proceeds
      from sale of oil and gas properties
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      7,500Payments
      for pipeline
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (7,500
                      )Net
      cash used in investing activities
                      
                      
                      (95
                      )
                      
                      
                      73,036
                      
                      
                      
                      (61,581
                      )Financing
      activitiesLoan
      proceeds
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      48,750Shareholder
      contribution
                      
                      
                      -
                      
                      
                      
                      50,000
                      
                      
                      
                      50,000Loans
      from related parties
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      130,000Repay
      loans from related parties
                      
                      
                      -
                      
                      
                      
                      (36,750
                      )
                      
                      
                      (36,750
                      )Sale
      of common stock
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      20,000Net
      cash provided by financing activities
                      
                      
                      -
                      
                      
                      
                      13,250
                      
                      
                      
                      212,000Net
      increase in cash and cash equivalents
                      
                      
                      (27,473
                      )
                      
                      
                      (180,254
                      )
                      
                      
                      493Cash
      and cash equivalents, beginning of period
                      
                      
                      27,966
                      
                      
                      
                      185,023
                      
                      
                      
                      -Cash
      and cash equivalents, end of period
                      
                      $
                      493
                      
                      
                      $
                      4,769
                      
                      
                      $
                      493(Continued)


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


For
the nine months ended January 31, 2010 and 2009


and
the period from inception (August 18, 2006) through January 31,
2010


(Unaudited)





Inception(August 18, 2006)throughJanuary 31,2010
                
                
                2009
                
                
                2010Supplemental
      cash flow informationCash
      paid for interest and income taxes:Interest
                
                $
                -
                
                
                $
                -
                
                
                $
                -Income
      taxes
                
                
                -
                
                
                
                -
                
                
                
                -Non-cash
      investing and financing activities:Common
      stock issued for:Notes
      receivable
                
                
                
                
                
                $
                76,000
                
                
                $
                76,000Oil
      and gas properties
                
                
                
                
                
                
                303,670
                
                
                
                303,670Interest
      in pipeline
                
                
                
                
                
                
                100,000
                
                
                
                100,000Loans
      to shareholders assumed
                
                
                
                
                
                
                (371,000
                )
                
                
                (371,000
                )Advance
      from joint interest participant assumed
                
                
                
                
                
                
                (8,670
                )
                
                
                (8,670
                )$
                100,000
                
                
                $
                100,000Acquisition
      of North American Energy Resources, Inc. in reverse
      acquisition:Assets
      acquired, other than cash
                
                
                
                
                
                $
                -
                
                
                $
                -Liabilities
      assumed
                
                
                
                
                
                
                (30,170
                )
                
                
                (30,170
                )(30,170
                )
                
                
                (30,170
                )Common
      stock issued
                
                
                
                
                
                
                150,000
                
                
                
                150,000Cash
      received in excess of cash paid
                
                
                
                
                
                $
                119,830
                
                
                $
                119,830Exchange
      of joint interest receivable for oil and natural gas
      properties
                
                $
                15,752
                
                
                
                37,316
                
                
                $
                53,068Convertible
      note payable and accrued interest exchanged for 1,000 shares of North
      American Exploration, Inc. common stock
                
                
                -
                
                
                
                35,530
                
                
                
                35,530Common
      stock options granted
                
                
                -
                
                
                
                -
                
                
                
                205,096Common
      stock options cancelled
                
                
                -
                
                
                
                -
                
                
                
                188,005Common
      stock issued for:Consulting
      agreements
                
                
                813,000
                
                
                
                -
                
                
                
                813,000Unevaluated
      oil and natural gas properties
                
                
                126,000
                
                
                
                -
                
                
                
                126,000Proven
      oil and natural gas properties
                
                
                192,500
                
                
                
                -
                
                
                
                192,500Accounts
      payable
                
                
                5,000
                
                
                
                -
                
                
                
                106,183Chief
      executive officer compensation
                
                
                -
                
                
                
                -
                
                
                
                145,600Credit
      balance transferred from accounts receivable to accounts
      payable
                
                
                1,068
                
                
                
                -
                
                
                
                1,068Accounts
      receivable applied as payment on note payable to related
      party
                
                
                4,572
                
                
                
                -
                
                
                
                4,572Option
      exercises paid by reducing note payable related party
                
                
                -
                
                
                
                -
                
                
                
                75,250





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.) (“NAER”) and its wholly owned
subsidiary, North American Exploration, Inc. (“NAE”) (formerly Signature Energy,
Inc.) (collectively the “Company”).





NAER was
incorporated in Nevada on August 22, 2006 as Mar Ked Mineral Exploration, Inc.
and changed its name to North American Energy Resources, Inc. on August 11,
2008.  NAE was incorporated in Nevada on August 18, 2006 as Signature
Energy, Inc. and changed its name to North American Exploration, Inc. on June 2,
2008.





The
condensed consolidated financial statements included in this report have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission for interim reporting and include all adjustments
(consisting only of normal recurring adjustments) that are, in the opinion of
management, necessary for a fair presentation.  These condensed
consolidated financial statements have not been audited.





Certain
information and footnote disclosures normally included in 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,
2009, which is included in the Company’s Form 10-K dated April 30,
2009.  The financial data for the interim periods presented may not
necessarily reflect the results to be anticipated for the complete
year.





In
preparing the accompanying unaudited condensed consolidated financial
statements, the Company has reviewed, as determined necessary by the Company's
management, events that have occurred after January 31, 2010, up until the
issuance of the financial statements, which occurred on March 15,
2010.





Acquisition




On July
28, 2008, the shareholders of NAE entered into a stock purchase agreement with
NAER.  NAER issued 420,000 restricted shares of its common stock to
the shareholders of NAE in exchange for 100% of the issued and outstanding stock
of NAE.  Completion of the stock purchase agreement resulted in the
shareholders of NAE having control of NAER.  Accordingly, the
transaction was recorded for accounting purposes as the acquisition of NAE by
NAER with NAE as the acquirer (reverse acquisition).  The financial
statements of the Company prior to July 28, 2008 are those of
NAE.  Formerly, NAER used a November 30 year-end.  As a
result of the reverse acquisition, the Company now utilizes the April 30
year-end of NAE.


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 decline in gas prices has placed the Company's original gas
development plans  in Washington County, Oklahoma on
hold.  The Company has plans to raise funds in order to develop
additional oil leases.  Accordingly, the operation of the Company is
presented as those of a development stage enterprise, from its inception (August
18, 2006).





Going
concern


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





At
January 31, 2010 and April 30, 2009 the Company had a working capital deficit of
$107,040 and working capital of $73,006, respectively.  The Company
has an accumulated deficit of $1,775,347 which includes a loss of $647,695
during the nine months ended January 31, 2010.





The
Company had relied on receiving an additional $1,300,000 from the prior
shareholders to fund its planned drilling and development program.  As
discussed in Note 3, the prior shareholders decided to default on their
agreement.  Accordingly, the Company will plan to meet its capital
requirements for the next year with private placements of its common stock or
advances from related parties.





In
addition, the Company expects to sell the majority 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 limited additional up-front capital costs on existing
properties.  This method of operation allows the company to
participate in a larger number of prospects with a relatively low capital
outlay.





These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  The financial statements do not include any
adjustments that may result from the outcome of these
uncertainties.


9





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.





Fiscal
year


2010
refers to periods ending during the fiscal year ending April 30, 2010 and 2009
refers to periods ended during the fiscal year ended April 30,
2009.





Reclassification


Certain
reclassifications have been made in the financial statements at January 31, 2009
and for the periods then ended to conform to the January 31, 2010
presentation.  The reclassifications had no effect on net
loss.





Recent
accounting pronouncements




Below is
a listing of the most recent accounting standards and their effect on the
Company.





In
February 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-08 (ASU 2010-08), Technical Corrections to Various
Topics.  This amendment eliminated inconsistencies and outdated
provisions and provided the needed clarifications to various topics within Topic
815.  The amendments are effective for the first reporting period
(including interim periods) beginning after issuance (February 2, 2010), except
for certain amendments.  The amendments to the guidance on accounting
for income taxes in a reorganization (Subtopic 852-740) should be applied to
reorganizations for which the date of the reorganization is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008.  For those reorganizations reflected in interim financial
statements issued before the amendments in this Update are effective,
retrospective application is required.  The clarifications of the
guidance on the embedded derivates and hedging (Subtopic 815-15) are effective
for fiscal years beginning after December 15, 2009, and should be applied to
existing contracts (hybrid instruments) containing embedded derivative features
at the date of adoption.  The Company does not expect the provisions
of ASU 2010-08 to have a material effect on the financial position, results of
operations or cash flows of the Company.





In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-07 (ASU 2010-07), Not-for-Profit Entities (Topic 958):
Not-for-Profit Entities: Mergers and Acquisitions.  This amendment to
Topic 958 has occurred as a result of the issuance of FAS 164.  The
Company does not expect the provisions of ASU 2010-07 to have a material effect
on the financial position, results of operations or cash flows of the
Company.


10





In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-06 (ASU 2010-06), Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value
Measurements.  This amendment to Topic 820 has improved disclosures
about fair value measurements on the basis of input received from the users of
financial statements.  This is effective for interim and annual
reporting periods beginning after December 15, 2009, except for the disclosures
about purchases, sales, issuances, and settlements in the roll forward of
activity in Level 3 fair value measurements.  Those disclosures are
effective for fiscal years beginning after December 15, 2010, and for interim
periods within those fiscal years.  Early adoption is
permitted.  The Company does not expect the provisions of ASU 2010-06
to have a material effect on the financial position, results of operations or
cash flows of the Company.





In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-05 (ASU 2010-05), Compensation – Stock Compensation (Topic
718).  This standard codifies EITF Topic D-110 Escrowed Share
Arrangements and the Presumption of Compensation.





In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-04 (ASU 2010-04), Accounting for Various Topics—Technical
Corrections to SEC Paragraphs.





In
January 2010, the FASB (Financial Accounting Standards Board) issued Accounting
Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic
932): Oil and Gas Reserve Estimation and Disclosures.  This amendment
to Topic 932 has improved the reserve estimation and disclosure requirements by
(1) updating the reserve estimation requirements for changes in practice and
technology that have occurred over the last several decades and (2) expanding
the disclosure requirements for equity method investments.  This is
effective for annual reporting periods ending on or after December 31,
2009.  However, an entity that becomes subject to the disclosures
because of the change to the definition oil- and gas- producing activities may
elect to provide those disclosures in annual periods beginning after December
31, 2009.  Early adoption is not permitted.  The Company
does not expect the provisions of ASU 2010-03 to have a material effect on the
financial position, results of operations or cash flows of the
Company.





In
January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation
(Topic 810): Accounting and Reporting for Decreases in Ownership of a
Subsidiary.  This amendment to Topic 810 clarifies, but does not
change, the scope of current US GAAP.  It clarifies the decrease in
ownership provisions of Subtopic 810-10 and removes the potential conflict
between guidance in that Subtopic and asset derecognition and gain or loss
recognition guidance that may exist in other US GAAP.  An entity will
be required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10).  For those entities
that have already adopted FAS 160, the amendments are effective at the beginning
of the first interim or annual reporting period ending on or after December 15,
2009. The amendments should be applied retrospectively to the first period that
an entity adopted FAS 160.  The Company adopted the provisions of ASU
2010-02 on January 31, 2010, with no effect on the financial position, results
of operations or cash flows of the Company.


11





In
January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic
505): Accounting for Distributions to Shareholders with Components of Stock and
Cash (A Consensus of the FASB Emerging Issues Task Force).  This
amendment to Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with a limit on
the amount of cash that will be distributed is not a stock dividend for purposes
of applying Topics 505 and 260. Effective for interim and annual periods ending
on or after December 15, 2009, and would be applied on a retrospective
basis.  The Company adopted the provisions of ASU 2010-01 on January
31, 2010 with no effect on the financial position, results of operations or cash
flows of the Company.





In
December 2009, the FASB issued Accounting Standards Update 2009-17,
Consolidations (Topic 810): Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities.  This Accounting Standards
Update amends the FASB Accounting Standards Codification for Statement
167.  In June 2009, the FASB issued SFAS No. 167 (ASC Topic 810),
“Amendments to FASB Interpretation No. 46(R) (“SFAS 167”).   SFAS
167 amends the consolidation guidance applicable to variable interest entities.
The provisions of SFAS 167 significantly affect the overall consolidation
analysis under FASB Interpretation No. 46(R).  SFAS 167 is effective
as of the beginning of the first fiscal year that begins after November 15,
2009. SFAS 167 will be effective for the Company on May 1, 2010. The Company
does not expect the provisions of SFAS 167 to have a material effect on the
financial position, results of operations or cash flows of the
Company.





In
December 2009, the FASB issued Accounting Standards Update 2009-16, Transfers
and Servicing (Topic 860): Accounting for Transfers of Financial
Assets.  This Accounting Standards Update amends the FASB Accounting
Standards Codification for Statement 166. In June 2009, the FASB issued SFAS No.
166, (ASC Topic 860) “Accounting for Transfers of Financial Assets—an amendment
of FASB Statement No. 140” (“SFAS 166”). The provisions of SFAS 166, in part,
amend the derecognition guidance in FASB Statement No. 140, eliminate the
exemption from consolidation for qualifying special-purpose entities and require
additional disclosures. SFAS 166 is effective for financial asset transfers
occurring after the beginning of an entity’s first fiscal year that begins after
November 15, 2009. The Company does not expect the provisions of SFAS 166 to
have a material effect on the financial position, results of operations or cash
flows of the Company.


12





In
October 2009, the FASB issued Accounting Standards Update 2009-15, Accounting
for Own-Share Lending Arrangements in Contemplation of Convertible Debt Issuance
or Other Financing.  This Accounting Standards Update amends the FASB
Accounting Standard Codification for EITF 09-1.  In July 2009, the
FASB ratified the consensus reached by EITF (Emerging Issues Task Force) issued
EITF No. 09-1, (ASC Topic 470) “Accounting for Own-Share Lending Arrangements in
Contemplation of Convertible Debt Issuance” (“EITF 09-1”).  The
provisions of EITF 09-1, clarifies the accounting treatment and disclosure of
share-lending arrangements that are classified as equity in the financial
statements of the share lender.  An example of a share-lending
arrangement is an agreement between the Company (share lender) and an investment
bank (share borrower) which allows the investment bank to use the loaned shares
to enter into equity derivative contracts with investors.  EITF 09-1
is effective for fiscal years beginning on or after December 15, 2009 and
requires retrospective application for all arrangements outstanding as of the
beginning of fiscal years beginning on or after December 15,
2009.   Share-lending arrangements that have been terminated as a
result of counterparty default prior to December 15, 2009, but for which the
entity has not reached a final settlement as of December 15, 2009 are within the
scope.  Effective for share-lending arrangements entered into on or
after the beginning of the first reporting period that begins on or after June
15, 2009.  The Company does not expect the provisions of EITF 09-1 to
have a material effect on the financial position, results of operations or cash
flows of the Company.





In
October 2009, the FASB issued Accounting Standards Update 2009-14, Software
(Topic 985): Certain Revenue Arrangements That Include Software
Elements.  This update changed the accounting model for revenue
arrangements that include both tangible products and software
elements.  Effective prospectively for revenue arrangements entered
into or materially modified in fiscal years beginning on or after June 15,
2010.  Early adoption is permitted.  The Company does not
expect the provisions of ASU 2009-14 to have a material effect on the financial
position, results of operations or cash flows of the Company.





In
October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue
Recognition (Topic 605): Multiple-Deliverable Revenue
Arrangements.  This update addressed the accounting for
multiple-deliverable arrangements to enable vendors to account for products or
services (deliverables) separately rather than a combined unit and will be
separated in more circumstances than under existing US GAAP.  This
amendment has eliminated the residual method of allocation.  Effective
prospectively for revenue arrangements entered into or materially modified in
fiscal years beginning on or after June 15, 2010.  Early adoption is
permitted. The Company does not expect the provisions of ASU 2009-13 to have a
material effect on the financial position, results of operations or cash flows
of the Company.





In
September 2009, the FASB issued Accounting Standards Update 2009-12, Fair Value
Measurements and Disclosures (Topic 820): Investments in Certain Entities That
Calculate Net Asset Value per Share (or Its Equivalent).  This update
provides amendments to Topic 820 for the fair value measurement of investments
in certain entities that calculate net asset value per share (or its
equivalent).  It is effective for interim and annual periods ending
after December 15, 2009.  Early application is permitted in financial
statements for earlier interim and annual periods that have not been issued. The
Company adopted the provisions of ASU 2009-12 on January 31, 2010, with no
effect on the financial position, results of operations or cash flows of the
Company.


13




In June
2009, the FASB issued SFAS No. 168 (ASC Topic 105), “The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles – a replacement of FASB Statement No. 162” (“SFAS No. 168”).  Under
SFAS No. 168 the “FASB Accounting Standards Codification” (“Codification”) will
become the source of authoritative US GAAP to be applied by nongovernmental
entities.  Rules and interpretive releases of the Securities and
Exchange Commission (“SEC”) under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009.  On the effective date, the Codification will
supersede all then-existing non-SEC accounting and reporting standards. All
other non-grandfathered non-SEC accounting literature not included in the
Codification will become non-authoritative. SFAS No. 168 was effective for the
Company’s interim quarterly period beginning August 1, 2009. The adoption of
SFAS No. 168 did not have an impact on the financial position, results of
operations or cash flows of the Company.





In April
2009, the FASB issued SFAS No. 164, (ASC Topic 810) “Not-for-Profit Entities:
Mergers and Acquisitions – including an amendment of FASB Statement No. 142”
(“SFAS 164”). The provisions of SFAS 164 provide guidance on accounting for a
combination of not-for-profit entities either via merger or
acquisition.  SFAS 164 is effective for mergers occurring on or after
the beginning of an initial reporting period beginning on or after December 15,
2009 and acquisitions occurring on or after the beginning of the first annual
reporting period beginning on or after December 15, 2009. The Company does not
expect the provisions of SFAS 164 to have a material effect on the financial
position, results of operations or cash flows of the Company.





In
September 2008, the FASB issued exposure drafts that eliminate qualifying
special purpose entities from the guidance of SFAS No. 140(ASC Topic 860),
“Accounting for Transfers and Servicing of Financial  Assets and 
Extinguishments of Liabilities,” and  FASB  Interpretation 46 (ASC
Topic 810) (revised December 2003), “Consolidation of  Variable 
Interest Entities − an interpretation of ARB  No. 51 (ASC Topic 810),”
as well as other modifications.  While the proposed revised
pronouncements have not been finalized and the proposals are subject to further
public comment, the Company anticipates the changes will not have a significant
impact on the Company’s financial statements.  The changes would be
effective May 1, 2010, on a prospective basis.





NOTE
      2:
            RELATED
      PARTY TRANSACTIONS





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, which is the same rate charged to third
parties.  The related party retains the other 30% of the posted price
for gathering fees and marketing fees.  The gathering system is
currently inactive due to low gas prices.





At
January 31, 2010 and April 30, 2009, the Company owed the President of NAE
$2,000 in compensation.  In addition, during the nine months ended
January 31, 2010, the Company received non-interest bearing advances from
related parties of $16,100, resulting in a balance due related parties of
$18,100.





At
January 31, 2010 and April 30, 2009, the Company had a note receivable from a
shareholder in the amount of $19,993 which bears interest at 6% per
annum.  Accrued interest in the amount of $900 is included in the
balance at January 31, 2010.


14





Long-term
debt includes two convertible notes payable to shareholders in the total amount
of $397,928 and $402,500 at January 31, 2010 and April 30, 2009,
respectively.  One note with a balance of $384,428 and $389,000 at
January 31, 2010 and April 30, 2009, respectively, is due May 1, 2010, including
interest at 12% and is convertible into the Company's common stock at a price of
$1.50 per share.  The second note in the amount of $13,500 is due
April 27, 2011, including interest at 12% and is convertible into the Company's
common stock at a price of $1.00 per share.





NOTE
      3:
            STOCKHOLDER’S
      EQUITY





PREFERRED
STOCK





The
Company has 100,000,000 shares of its $0.001 par value preferred stock
authorized.  At January 31, 2010 and April 30, 2009, the Company had
no shares issued and outstanding.





COMMON
STOCK





The
Company has 100,000,000 shares of its $0.001 par value common stock
authorized.  At January 31, 2010 and April 30, 2009 the Company has
16,055,539 and 14,035,539 shares issued and outstanding,
respectively.





During
the nine months ended January 31, 2010, options to acquire 70,000 shares of
common stock were granted to three consultants at $0.50 per
share.  All of the shares were exercised during the period and paid
with $30,000 in consulting contracts and a reduction in accounts payable of
$5,000.  In addition, 700,000 common shares were issued to acquire
undeveloped oil and gas properties valued at $126,000; 350,000 common shares
were issued to acquire proved oil and gas properties valued at $192,500 and
900,000 common shares were issued for consulting agreements valued at
$813,000.





REVERSE
SPLIT





At a
special meeting of shareholders held on April 23, 2009, 63% of our shareholders,
either in person or by proxy, voted to approve a 1:50 reverse split of the
Company's common stock.  This amendment to the Company's Articles of
Incorporation was filed with the Nevada Secretary of State and became effective
on April 27, 2009.  Accordingly, all references to shares of our
common stock included herein have been retroactively restated to give effect to
the reverse split.





CONTINGENT
SHARES





On July
28, 2008, the Company acquired 100% of the outstanding stock of NAE for 420,000
shares of our common stock pursuant to a Stock Purchase Agreement
("SPA").  Completion of the SPA resulted in the shareholders of NAE
having control of NAEY.




15


The SPA
provided that NAEY was to have $1,500,000 in cash and no liabilities at
closing.  At July 28, 2008, the closing date, NAEY had $150,000 of the
required cash and on August 28, 2008, the parties to the SPA entered into a
Modification Agreement ("MA") which provided an extension until January 27, 2009
for the additional cash to be contributed to the Company.  At January
27, 2009, the Company had received an additional $50,000 and was still short
$1,300,000 of the agreed amount.  The MA provided that the Buyer would
make contingent issuances of shares to the Seller equal to 95% of all the
outstanding stock after issuance.  Accordingly, effective April 30,
2009, an additional 13,250,381 shares were issued to the Sellers.





COMMON
STOCK OPTIONS





The North
American Energy Resources, Inc. 2008 Stock Option Plan ("Plan") was filed on
September 11, 2008 and reserves 2,500,000 shares for awards under the
Plan.  The Company's Board of Directors is designated to administer
the Plan and may form a Compensation Committee for this purpose.  The
Plan terminates on July 23, 2013.





Options
granted under the Plan may be either "incentive stock options" intended to
qualify as such under the Internal Revenue Code, or "non-qualified stock
options."  Options outstanding under the Plan have a maximum term of
up to ten years, as designated in the option agreements.  No options
are outstanding at January 31, 2010.





NOTE
      4:
            COMMITMENTS
      AND CONTINGENCIES





The CEO
provides the Company's corporate office at no charge.





NOTE
      5:
            PROPERTIES
      AND EQUIPMENT





The
Company prepared an evaluation of its proven oil and natural gas properties at
October 31, 2009 and determined that an asset impairment charge of $108,000 was
required.





NOTE
      6:
            PREPAID
      EXPENSES





The
Company has issued common stock in exchange for consulting agreements which are
for periods up to three years.  At January 31, 2010, there is a
prepaid balance of $533,205 which is being amortized over the remaining life of
the agreements.  Of this amount, $445,705 is classified as a current
asset and $87,500 is classified as a non-current asset at January 31,
2010.




16


ITEM
      2:
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





This
statement contains forward-looking statements within the meaning of the
Securities Act.  Discussions containing such forward-looking
statements may be found throughout this statement.  Actual events or
results may differ materially from those discussed in the forward-looking
statements as a result of various factors, including the matters set forth in
this statement.





Our plan
of operation for the next twelve months is to obtain funding from private
placements of our common stock, continue to develop our existing leases, and
acquire additional leases.





COMPARISON
OF THREE MONTHS ENDED JANUARY 31, 2010 AND 2009





Revenues
during the three months ended January 31, 2010 and 2009 were as
follows:





2010
                    
                    
                    2009Oil
      production
                    
                    $
                    2,263
                    
                    
                    $
                    688Gas
      production
                    
                    
                    -
                    
                    
                    
                    1,052Total
                    
                    $
                    2,263
                    
                    
                    $
                    1,740




Oil and
gas revenues included 33 net barrels sold in 2010 and 15 net barrels of oil and
364 MCF of gas sold in 2009.  Due to low prices, the Company shut-in
its gas production during January 2009.  The Company's oil prices per
barrel averaged $68.37 during 2010 and $45.71 during 2009.





Costs
and expenses during the three months ended January 31, 2010 and 2009 were as
follows:





2010
                        
                        
                        2009Oil
      and natural gas production taxes
                        
                        $
                        163
                        
                        
                        $
                        125Oil
      and natural gas production expenses
                        
                        
                        2,138
                        
                        
                        
                        11,176Depreciation
      and amortization
                        
                        
                        1,620
                        
                        
                        
                        1,541Non-cash
      compensation
                        
                        
                        152,076
                        
                        
                        
                        310,500Bad
      debt expense
                        
                        
                        -
                        
                        
                        
                        76,000Other
      general and administrative expense,net
      of operator's overhead fee
                        
                        
                        2,656
                        
                        
                        
                        62,033Total
                        
                        $
                        158,653
                        
                        
                        $
                        461,375




Oil and
natural gas production expenses were $2,138 in 2010, principally on the
Company's producing oil wells.  In 2009, the cost was $11,176 and
included workover costs on several gas wells which were shut-in during January
2009.


17




Non-cash
compensation represents the current period charge for stock which has been
issued for consulting contracts.  The 2010 expense is primarily the
amortization of contracts with a period ranging from one to three
years.  The 2009 expense is primarily from one agreement which was
expensed at inception.





During
the 2009 period, the Company wrote off the remaining balance of a note
receivable as uncollectible.





Other
general and administrative expense was higher in 2009 primarily due to higher
consulting costs, software costs and field supervision costs.





Other
income (expense) during the three months ended January 31, 2010 and 2009 is as
follows:





2010
                    
                    
                    2009Interest
      income
                    
                    $
                    300
                    
                    
                    $
                    -Interest
      expense
                    
                    
                    (12,036
                    )
                    
                    
                    -Total
                    
                    $
                    (11,736
                    )
                    
                    $
                    -




A
shareholder converted a non-interest bearing advance into a note in the amount
of $389,000 on May 1, 2009.  The note bears interest at 12% per annum,
which accounts for the majority of the interest expense during the 2010
period.





COMPARISON
OF NINE MONTHS ENDED JANUARY 31, 2010 AND 2009





Revenues
during the nine months ended January 31, 2010 and 2009 were as
follows:





2010
                    
                    
                    2009Oil
      production
                    
                    $
                    5,851
                    
                    
                    $
                    688Gas
      production
                    
                    
                    -
                    
                    
                    
                    4,024Total
                    
                    $
                    5,851
                    
                    
                    $
                    4,712




Oil and
gas revenues included 99 net barrels sold in 2010 and 15 net barrels of oil and
899 MCF of gas sold in 2009.  Due to low prices, the Company shut-in
its gas production during January 2009.  The Company's oil prices per
barrel averaged $59 during 2010 and $46 during 2009.




18





Costs
and expenses during the nine months ended January 31, 2010 and 2009 were as
follows:





2010
                      
                      
                      2009Oil
      and natural gas production taxes
                      
                      $
                      421
                      
                      
                      $
                      339Oil
      and natural gas production expenses
                      
                      
                      11,105
                      
                      
                      
                      32,038Depreciation
      and amortization
                      
                      
                      4,860
                      
                      
                      
                      4,200Asset
      impairment
                      
                      
                      108,000
                      
                      
                      
                      -Non-cash
      compensation
                      
                      
                      394,728
                      
                      
                      
                      327,591Bad
      debt expense
                      
                      
                      10,000
                      
                      
                      
                      76,000Other
      general and administrative expense,net
      of operator's overhead fee
                      
                      
                      89,142
                      
                      
                      
                      125,945Total
                      
                      $
                      618,256
                      
                      
                      $
                      566,113





Oil and
natural gas production expenses were $11,105 in 2010 and $32,038 in
2009.  The majority of the difference is the expenses associated with
gas wells which were producing in 2009 and shut-in during January 2009
($20,728).





During
2010, the Company impaired its producing reserves by $108,000 based on reserve
estimates updated to October 31, 2009.





Non-cash
compensation represents the current period charge for stock which has been
issued for consulting contracts.  The 2010 expense is primarily the
amortization of contracts with a period ranging from one to three
years.  The 2009 expense is primarily from one agreement which was
expensed at inception.





The
Company recorded an allowance for bad debts of $10,000 in 2010 on its joint
interest receivables.  During the 2009 period, the Company wrote off
the remaining balance of a note receivable as uncollectible.





Other
general and administrative expense was higher in 2009 primarily due to higher
cash consulting costs.





Other
income (expense) during the nine months ended January 31, 2010 and 2009 is as
follows:





2010
                    
                    
                    2009Interest
      income
                    
                    $
                    900
                    
                    
                    $
                    -Interest
      expense
                    
                    
                    (36,190
                    )
                    
                    
                    -Total
                    
                    $
                    (35,290
                    )
                    
                    $
                    -




19


A
shareholder converted a non-interest bearing advance into a note in the amount
of $389,000 on May 1, 2009.  The note bears interest at 12% per annum,
which accounts for the majority of the interest expense during the 2010
period.




LIQUIDITY,
CAPITAL RESOURCES AND PLAN OF OPERATIONS





At
January 31, 2010, we had $493 in cash and a working capital deficit of
$107,040.  Comparatively, we had cash of $27,966 and working capital
of $73,006 at April 30, 2009.  The principal elements of the change in
working capital were an increase in prepaid consulting contracts of $360,772 and
an increase in current liabilities of $384,428 for the current note payable to a
related party which was included as non-current at April 30, 2009 and the
related accrued interest of $36,190.





On July
28, 2008, the Company acquired 100% of the outstanding stock of NAE for 420,000
shares of our common stock pursuant to a Stock Purchase Agreement
("SPA").  Completion of the SPA resulted in the shareholders of NAE
having control of NAEY.





The SPA
provided that NAEY was to have $1,500,000 in cash and no liabilities at
closing.  At July 28, 2008, the closing date, NAEY had $150,000 of the
required cash and on August 28, 2008, the parties to the SPA entered into a
Modification Agreement ("MA") which provided an extension until January 27, 2009
for the additional cash to be contributed to the Company.  At January
27, 2009, the Company had received an additional $50,000 and was still short
$1,300,000 of the agreed amount.  The MA provided that the Buyer would
make contingent issuances of shares to the Seller equal to 95% of all the
outstanding stock after issuance.  Accordingly, effective April 30,
2009, an additional 13,250,381 shares were issued to the Sellers.





We
estimate that our total planned cash expenditures over the next twelve months
will be approximately $120,000 for corporate overhead.  We expect to
utilize excess funds, when available, to acquire additional acreage for future
drilling operations and plan to issue our common stock for certain services when
possible.





The
Company had relied on receiving an additional $1,300,000 from the prior
shareholders to fund its planned drilling and development program.  As
discussed in Note 3, the prior shareholders decided to default on their
agreement.  Accordingly, the Company will plan to meet its capital
requirements for the next year with private placements of its common stock or
advances from related parties.





In
addition, the Company expects to sell the majority 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 limited additional up-front capital costs on existing
properties.  This method of operation allows the company to
participate in a larger number of prospects with a relatively low capital
outlay.





These
conditions raise substantial doubt about the Company’s ability to continue as a
going concern.  The financial statements do not include any
adjustments that may result from the outcome of these
uncertainties.


20





CASH
USED IN OPERATING ACTIVITIES





Cash used
in operating activities was $27,378 for the nine-month period ended January 31,
2010 and cash used in operations was $266,540 for the comparable 2009
period.  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 2009 period.  There was only very limited activity
in the 2010 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.





CASH
FROM FINANCING ACTIVITIES





We
received $119,830 in cash from the acquisition of NAE by NAEN during the nine
months ended January 31, 2009.  In addition, we incurred $95 and
$38,275 in expenditures for oil and gas properties and equipment in 2010 and
2009, respectively.  The 2009 amount was primarily for costs for a
salt water disposal well.  In 2009, we loaned a shareholder
$8,519.





CASH
FROM FINANCING ACTIVITIES





During
2009 we received $50,000 as the final shareholder contribution, discussed above,
and repaid related party loans in the amount of $36,750.





GOING
CONCERN





We have
not attained profitable operations and are dependent upon obtaining a
replacement for 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 an as yet unknown
source to provide sufficient funds to finance future operations until our
revenues are adequate to fund our cost of operations.





OFF-BALANCE
SHEET ARRANGEMENTS





None.




21


ITEM
      3:
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.




ITEM
      4T:
            CONTROLS
      AND PROCEDURES




(a) Evaluation of Disclosure
Controls and Procedures





The
Company’s Chief Executive Officer and Chief Financial Officer have reviewed and
evaluated the effectiveness of the Company’s disclosure controls and procedures
(as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the
Securities Exchange Act of 1934) as of January 31, 2010.  Based on
that review and evaluation, which included inquiries made to certain other
consultants of the Company, the CEO and CFO concluded that the Company’s current
disclosure controls and procedures, as designed and implemented, are not
effective, due to a lack of segregation of duties, in ensuring that information
relating to the Company required to be disclosed in the reports the Company
files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission’s rules and forms, including insuring that
such information is accumulated and communicated to the Company’s management,
including the CEO and CFO, as appropriate to allow timely decisions regarding
required disclosure.





(b)  Changes in
Internal Controls





There
have been no significant changes in internal controls or in other factors that
could significantly affect these controls subsequent to the date of the
evaluation described above, including any corrective actions with regard to
significant deficiencies and material weaknesses.




22


PART
II - OTHER INFORMATION





ITEM 1:
            LEGAL
      PROCEEDINGS





None





ITEM 1A:
            RISK
      FACTORS





Not
applicable.





ITEM 2:
            UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





None
during the quarter ended January 31, 2010.




ITEM 3:
            DEFAULTS
      UPON SENIOR SECURITIES.





None





ITEM 4:
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
HOLDERS.





None





ITEM 5:
            OTHER
      INFORMATION.





None





ITEM 6:
            EXHIBITS




Exhibit
      31
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350 Section
      302 of the Sarbanes-Oxley Act of
  2002Exhibit
      32
                  
                  Certification
      pursuant to 18 U.S.C. Section 1350 Section
      906 of the Sarbanes-Oxley Act of
  2002




23


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:  March
      9, 2010By:
                        /s/
                        Ross
      E. SilveyPresident, Chief
      Executive Officer andActing
      Chief Financial
Officer




24