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

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

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

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

For the quarterly  period ended June 30, 2008

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

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

ACT OF 1934  For the transition period from __________ to  ___________ 

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

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

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

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

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

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

**White Plains****, New York  10607**

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

**(914) 674-4373**

(Issuer's telephone  number, including area code)

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

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

 

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

 

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

 

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

** ** |
| State the number of shares outstanding of each of the  issuer’s classes of common equity, as of the latest practicable date: 5,670,000  shares of common stock, par value $.0001 per share, as of July 31, 2008. 

 

Transitional Small Business  Disclosure Format (Check one).  Yes o  No x

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                  |                                                                                               |  |  |  |  |  |

 

1

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**PETROCORP INC.**

**REPORT ON FORM 10-Q**

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

 

 

**CONTENTS**

 

| PART I – FINANCIAL INFORMATION                                                  | 3  |
|--------------------------------------------------------------------------------------|----|
|   Item 1 – Financial Statements                                            | 3  |
|   Item 2 – Management’s  Discussion and Analysis or Plan of Operation | 7  |
|   Item 3 – Controls and  Procedures                                        | 7  |
| PART II – OTHER INFORMATION                                                     | 12 |
|   Item 1 – Legal Proceedings                                               | 12 |
|   Item 2 – Unregistered Sales  of Equity Securities and Use of Proceeds    | 12 |
|   Item 3 – Defaults Upon Senior  Securities                                | 12 |
|   Item 4 – Submission of  Matters to a Vote of Security Holders            | 12 |
|   Item 5 – Other Information                                               | 13 |
|   Item 6 – Exhibits                                                        | 14 |

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

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**PART I – FINANCIAL INFORMATION**

## Item 1 – FinancialStatements

** **

**PETROCORP INC.**

**(An Exploration Stage Company)**

** **

**Consolidated Balance Sheets**

 

     

| **ASSETS**                                                                   |
|------------------------------------------------------------------------------|
|                                                                         |   |   |   |   |   |   |
|                                                                         |   |  June 30, |   |   December 31, |
|                                                                         |   | 2008 |   | 2007 |
|                                                                         |   |     (Unaudited) |   |   |
| Current assets:                                                              |   |   |   |   |   |   |
|    Cash                                                            |   | $ | 1,168,736 |   | $ | 827,755 |
|                                                                         |   |   |   |   |   |   |
| Undeveloped oil and gas properties                                           |   |   | 963,246  |   |     | 385,286 |
|                                                                         |   |   |   |   |   |   |
| Total assets                                                                 |   | $ | 2,131,982 |   | $ | 1,213,041 |
| ** **                                                                   | ** ** |   |   |   |   |   |
| ** **                                                                   | ** ** |   |   |   |   |   |
| **LIABILITIES AND  STOCKHOLDERS’ EQUITY**                               |
| ** **                                                                   | ** ** |   |   |   |   |   |
| ** **                                                                   | ** ** |   |   |   |   |   |
| Current liabilities:                                                         |   |   |   |   |   |   |
|    Accrued expenses                                                |   | $ | 43,919 |   | $ | 18,886 |
|    State of Alaska payable                                         |   |   | 337,945 |   |   | 279,500 |
|    Notes to an officer/stockholder                                 |   |   | 350,000 |   |   | 440,000 |
|                                                                         |   |   | 731,864 |   |   | 738,386 |
|                                                                         |   |   |   |   |   |   |
| Stockholders’ equity:                                                   |   |   |   |   |   |   |
|    Preferred stock; $.0001 par value; 1,000,000 shares             |   |   |   |   |   |   |
|   authorized; shares issued or outstanding - none                       |   |   | -- |   |   | -- |
|    Common stock; $.0001 par value; 100,000,000 shares  authorized; |   |   |   |   |   |   |
|   5,670,000 and 5,470,000 shares issued and outstanding,  respectively  |   |   | 567 |   |   | 547 |
|    Additional paid-in capital                                      |   |   | 1,635,486 |   |   | 562,629 |
|    Deficit accumulated during exploration stage                    |   |   | (235,935) |   |   | (88,521) |
|                                                                         |   |   | 1,400,118 |   |   | 474,655 |
| ** **                                                                   | ** ** |   |   |   |   |   |
| Total liabilities and  stockholders’ equity                             |   | $ | 2,131,982 |   | $ | 1,213,041 |

** **

** **

See notes to the consolidated financial statements(unaudited).

** **

** **

** **

3

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******PETROCORP INC.**

**(An Exploration Stage Company)**

##  

## Consolidated Statements ofOperations (Unaudited)

 

 

 

 

|                                         |   |           Three  Months Ended                                                                                                                                        |                                          | Six Months Ended |   |  (inception) to                                     |
|----------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|------------------|--------|----------------------------------------------------------|
|                                         |   |                       June 30,               |                                          | June 30,         |   |   June 30,                                          |
|                                         |   |   2008                                                                                                                                                                                                            |                                          | 2007             |   |        2008                |   | 2007 |   | 2008 |
|                                         |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
| Costs and expenses:                          |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
| General and administrative                   |   | $                                                                                                                                                                                                                      | 68,192                                        |             | $      | 3,152                                                    |   | $ | 128,428 |   | $ | 12,820 |   | $ | 191,273 |
| Depreciation                                 |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   | 1,071 |
| Impairment of equipment                      |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   | 16,929 |
| Interest                                     |   |                                                                                                                                                                                                                   | 6,672                                         |             |   |                                                     |   |   | 13,236 |   |   |   |   |   | 19,312 |
| Franchise taxes                              |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   | 5,750 |   |   |   |   |   | 7,350 |
| Net loss applicable to                       |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
|     common stockholders       |   | $                                                                                                                                                                                                                      |        (74,864) |             | $      |          (3,152) |   | $ |      (147,414) |   | $ |         (12,820) |   | $ |      (235,935) |
|                                         |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
| Net loss per common share -                  |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
|     basic and diluted         |   | $                                                                                                                                                          | (.01)                                         |             | $      |        **                  |   | $ |              (.03) |   | $ | ** |   |   |   |
|                                         |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
| Weighted average number of                   |   |                                                                                                                                                                                                                   |                                          |             |   |                                                     |   |   |   |   |   |   |   |   |   |
|     common shares outstanding |   |                                                                                                                                                                                                                   | 5,670,000                                     |             |   |  4,216,000                                          |   |   | 5,584,286 |   |   | 4,192,688 |   |   |   |

 

 

** less than $.01 per share

 

 

 

 

See notes to the consolidated financial statements(unaudited).

 

4

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**PETROCORP INC.**

**(An Exploration Stage Company)**

##  

## Consolidated Statements of CashFlows (Unaudited)

 

|                                                                                            |   |                                 |                                                      |           |         |                                                                  |   |  June19, 2006 |
|-------------------------------------------------------------------------------------------------|--------|--------------------------------------|-----------------------------------------------------------|----------------|--------------|-----------------------------------------------------------------------|--------|--------------------|
|                                                                                            |   | Six Months Ended                     |                                                      | (Inception) to |
|                                                                                            |   | June 30,                             |                                                      | June 30,       |
|                                                                                            |   |      2008        |                                                      |  2007     |         | 2008                                                                  |
|                                                                                            |   |                                 |                                                      |           |         |                                                                  |   |               |   |
| Cash  flows from operating activities:                                                          |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|    Net loss                                                                                |   | $                                    |       (147,414)                  |           | $            |        (12,820)                         |   | $                  |     (235,935) |
|    Adjustments to reconcile net loss to net cash                                           |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|       provided by (used in) operating activities:                           |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|       Capital contribution                                                  |   |                                 |                                                      |           |         |                                                                  |   |               | 3,000 |
|       Depreciation                                                          |   |                                 |                                                 |           |         | 1,071                                                            |   |               | 1,071 |
|      Impairment of equipment                                                     |   |                                 |                                                      |           |         |                                                                  |   |               | 16,929 |
|       Interest contribution                                                 |   |                                 | 12,877                                               |           |         |                                                                  |   |               | 18,953 |
|      Salary contribution                                                         |   |                                 | 60,000                                               |           |         |                                                                  |   |               | 60,000 |
|       Changes in operating assets and liabilities:                          |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|           Accrued expenses                              |   |                                 | 25,033                                               |           |         |           (15,829)  |   |               | 43,919 |
|           State of Alaska payable                       |   |                                 | 58,445                                               |           |    |                                                                  |   |          | 337,945 |
|          Net cash provided by (used in) operating activities |   |                                 | 8,941                                                |           |         | (27,578)                                                              |   |               | 245,882 |
|                                                                                            |   |                                 |                                                      |           |         |                                                                  |   |               |   |
| Cash  flows from investing activities:                                                          |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|    Purchase of undeveloped oil and gas properties                                          |   |        |  (577,960)                                      |           |         |                                                                  |   |               |       (963,246) |
|    Purchase of equipment                                                                   |   |                                 |                                                 |           |    |        (18,000)                    |   |          |        (18,000) |
|        Net cash (used in) investing activities                         |   |                                 |       (577,960)             |           |         |        (18,000)                    |   |               |      (981,246) |
|                                                                                            |   |                                 |                                                      |           |         |                                                                  |   |               |   |
| Cash  flows from financing activities:                                                          |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|    Notes to an officer/stockholder                                                         |   |                                 |                                                      |           |         |                                                                  |   |               | 440,000 |
|    Repayment of notes to an officer/stockholder                                            |   |                                 |         (90,000)  |           |         |                                                                  |   |               |         (90,000) |
|    Proceeds from sale of common stock                                                      |   |                                 | 1,000,000                                            |           |    | 24,000                                                           |   |          | 1,554,100 |
|          Net cash provided by financing activities           |   |                                 | 910,000                                              |           |    | 24,000                                                           |   |          | 1,904,100 |
|                                                                                            |   |                                 |                                                      |           |         |                                                                  |   |               |   |
| Net  increase (decrease) in cash                                                                |   |                                 | 340,981                                              |           |         | (21,578)                                                              |   |               | 1,168,736 |
| Cash  at beginning of period                                                                    |   |                                 | 827,755                                              |           |    | 22,532                                                           |   |          | -- |
| Cash  at end of period                                                                          |   | $                                    | 1,168,736                                                 |           |  $      | 954                                                                   |   |  $            | 1,168,736 |
|                                                                                            |   |                                 |                                                      |           |         |                                                                  |   |               |   |
| Supplemental  disclosure of cash flow information:                                              |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|    Cash paid for interest                                                                  |   |                                 |                                                      |           |         |                                                                  |   | $                  | -- |
|    Cash paid for taxes                                                                     |   |                                 |                                                      |           |         |                                                                  |   | $                  | -- |
| Supplemental  disclosure of noncash investing and                                               |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|    financing activities:                                                                   |   |                                 |                                                      |           |         |                                                                  |   |               |   |
|    Capital contribution                                                                    |   |                                 |                                                      |           |         |                                                                  |   | $                  | 3,000 |
|    Interest contribution                                                                   |   | $                                    | 12,877                                                    |           |         |                                                                  |   |  $            | 18,953 |
|    Salary contribution                                                                     |   | $                                    | 60,000                                                    |           |         |                                                                  |   |  $            | 60,000 |

 

 

 

See notes to the consolidated financial statements(unaudited).

 

 

5

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**PETROCORP INC.**

**(An Exploration Stage Company)**

** **

**Notes to the ConsolidatedFinancial Statements (Unaudited)**

** **

**1.  Basisof Presentation**

 

The accompanying unaudited consolidatedfinancial statements have been prepared in accordance with the accountingprinciples generally accepted in the United States of America for interimfinancial information and with the instructions to Form 10-Q and Article 10 ofRegulation S-X.  Accordingly, they do not include all of the information andfootnotes required by accounting principles generally accepted in the United States of America for annual financial statements.  In the opinion of management,all adjustments, consisting of normal recurring accruals considered necessaryfor a fair presentation, have been included.  Operating results for the three andsix months ended June 30, 2008 are not necessarily indicative of the resultsthat may be expected for the year ending December 31, 2008.  These financial statements should be read in conjunctionwith the financial statements of the Company for the year ended December 31,2007 and notes thereto contained in the Report on Form 10-KSB of theCompany as filed with the United States Securities and Exchange Commission (the“SEC”) on April 11, 2008.

 

**2.  Exploration****S****tage C****ompany**

 

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

** **

**3. Notes to an Officer/Stockholder**

** **

TheCompany has a $350,000 unsecured, non-interest bearing note, payable on demandwith its President and major stockholder James Fitzsimons.  In June 2008, theCompany repaid a $90,000 unsecured, non-interest bearing note with Mr.Fitzsimons.  During the three and six-month period ended June 30, 2008 theCompany recorded interest expense of $6,313 and $12,877, respectively.  Interestis computed at an implied rate of 6% and this amount was recorded as a capitalcontribution by the Company.

** **

**4.  Common Stock**

 

OnMarch 18, 2008, the Company sold 200,000 shares of its common stock to one investorat $5.00 per share (an aggregate of $1,000,000).

 

**5. Subsequent Events**

 

OnAugust 13, 2008, the Company’s Board of Directors approved a stock dividend onits outstanding shares of common stock.  The ratio for the stock dividend is fourshares to each share owned (4:1).  Each shareholder holding one share of commonstock will be entitled to receive an additional three shares of the Company’s commonstock.  The shares will be mailed to the Company’s shareholders on or about August31, 2008.  The Company’s issued and outstanding common stock post stock dividendwill be 22,680,000 shares.

 

 

6

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**PETROCORP INC.**

**(An Exploration Stage Company)**

** **

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

** **

** **

OnAugust 13, 2008, the Company acquired from its President, James Fitzsimons, a50% working interest (41.25% net revenue interest) in the Snake Creek prospect,a 3,200 gross (3,022 net) acre gas development project located in northernOkmulgee County, Oklahoma.  The first well on this acreage, the Snake Creek #1,spaced on 160 acres, has been successfully drilled and completed.  Productionequipment, electric power and gas sales meter were connected the first week of August. The Upper Dutcher zone was fracture stimulated on August 8.  The Company will reimburseMr. Fitzsimons for his historic costs (acreage and drilling) by issuing asecured, non-interest bearing note, payable on demand for $221,665 and will assumeresponsibility for all further costs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

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

 

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

 

Forward Looking Statements

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

 

 

8

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BusinessOverview

 

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

 

We are an exploration stage Companyengaged in the acquisition, exploration and, if warranted, development ofprospective oil and gas properties.  The Company has significant lease holdingson the North Slope of Alaska, the Canadian Provinces of Alberta and Quebec and permit applications pending in Italy.

 

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

** **

Planof Operation

*** ***

Our plan of operation is to conduct explorationwork on each of our current and future properties in order to ascertain whetherany of them possess commercially exploitable quantities of oil and gasreserves. There is no assurance that a commercially viable oil and gas reserveexists on any of our current and future properties, and a great deal of furtherexploration will be required before a final evaluation as to the economicfeasibility for our future exploration is determined. To date, we do not knowif any economically viable oil and gas reserves exist on any of our current orfuture properties and there is no assurance that we will discover any.

 

*United States*

 

            Alaska

 

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

 

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

 

On February 27, 2008, UEA was the winningbidder for tracts 922, 923, 927, 988, 989, 990, 991, 992 and 925 in the Stateof Alaska North Slope Foothills Areawide 2008 Competitive Oil and Gas LeaseSale. UEA paid a total of $59,565 to the State of Alaska and the Companyexpects that the leases, covering 9,600 net acres, will be issued on September1, 2008, with a term of 10 years and subject to a 12.5% 

 

9

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royalty interest in favor of the State of Alaska.  Tracts 922, 923, 927, 988, 989, 990, 991, 992 and 925are contiguous and are believed by the Company, based upon current availablegeological data and maps within the public domain, to contain the East Kurupa gas field, discovered by Texaco in 1976.  The USGS has been studying thepotential for unconventional over-pressured, continuous gas deposits in theColville basin that contains the Kurupa anticline and is now interpreting the East Kurupa well to have encountered a thick section of over-pressured gas in Brookianstrata.  The Company intends to conduct a detailed geological evaluation of theKurupa anticline, acquiring seismic data where available.

 

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

 

            Oklahoma

 

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

 

We must commence an oil and gas test wellon any legal location within any drilling and spacing unit established by theOklahoma Corporation Commission which includes all or part of the leaseholdacreage that is the subject of each farm out agreement by December 31, 2008.

 

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

 

*Internationally*

* *

            Alberta, Canada

 

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

 

            Quebec, Canada

 

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

 

            

 

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            Italy

 

TheCompany via its wholly-owned Italian subsidiaries, Mac Oil SRL and PetrocorpItalia SRL, currently has eight pending oil and gas exploration permit applicationsin Italy with a total area of 222,300 hectares (549,309 acres).

 

 

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

 

 

Resultsof Operations

 

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

 

Duringthe quarter ended June 30, 2008, we incurred a net loss of $74,864 compared toa net loss of $3,152 for the 2007 quarter.  During the 2008 quarter, theCompany paid compensation to its President of $30,000 which was recorded as acapital contribution by the Company and professional fees of $30,300, whichrelated primarily to the development of the Company’s business plan and costsassociated with being a public company, as compared to $1,000 for the 2007quarter.  Also during the 2008 quarter, the Company paid general andadministrative expenses of $7,892, which included rent, telephone and otheroffice costs, as compared to $2,152 for the 2007 quarter.  Interest expense of$6,313 was computed on the officer/stockholder loans at an implied rate of 6%and this amount was recorded as a capital contribution by the Company duringthe quarter.

 

SixMonths Ended June 30, 2008 Compared to Six Months Ended June 30, 2007

 

Duringthe six months ended June 30, 2008, we incurred a net loss of $147,414 comparedto a net loss of $12,820 for the 2007 period.  The $134,594 net loss increase isdue to the fact that the Company had very limited operations during 2007 andpaid no rent or salaries.  During the six months ended June 30, 2008, theCompany paid compensation and professional fees of $115,900, which relatedprimarily to the development of the Company’s business plan and costsassociated with being a public company, as compared to $10,000 for the 2007period.  Also during the six months ended June 30, 2008, the Company paidgeneral and administrative expenses of $12,528, which included rent, telephoneand other office costs, as compared to $2,820 for the 2007 period.  During thesix months ended June 30, 2008 interest expense of $12,877 was computed on theofficer/stockholder loans at an implied rate of 6% and this amount was recordedas a capital contribution by the Company during the period.

 

Liquidityand Capital Resources

 

OurCompany's principal cash requirements are for exploration expenses which weanticipate will rise as we proceed to determine the feasibility of developingour current or future property interests.  As of June 30, 2008, we had cash of$1,168,736 and working capital of $786,872.  Our net cash provided by financingactivities during the period from our inception to June 30, 2008 was $1,904,100.

 

InMarch 2008 we raised $1,000,000 from the sale of 200,000 shares of our commonstock at $5.00 per share.  These sales were to unaffiliated parties, completedpursuant to the exemption from registration under the Securities Act of 1933,as amended, by Regulation S issued thereunder.

 

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Critical Accounting Policies

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

 

Off-BalanceSheet Arrangements

 

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

** **

**Item3.  Controls and Procedures**

 

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

 

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

 

# PART II –OTHER INFORMATION

 

## Item 1 – LegalProceedings

 

TheCompany is not currently a party to any legal proceedings.

 

## Item 2 – Unregistered Sales of Equity Securities andUse of Proceeds

 

None.

 

## Item 3 – Defaults UponSenior Securities

 

None.

 

## Item 4 – Submission ofMatters to a Vote of Security Holders

 

None.

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## Item 5 – OtherInformation

 

None.

 

## Item 6 – Exhibits

 
| **Exhibit Number** | **Exhibit Description**                                                                                                                                                                                                                          |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                | Certificate of  Incorporation - Incorporated by reference to like numbered exhibit to the  Company’s Registration Statement on Form SB-2 File Number 333-141993.                                                                            |
| 3.2                | Bylaws - Incorporated  by reference to like numbered exhibit to the Company’s Registration Statement  on Form SB-2 File Number 333-141993.                                                                                                  |
| 3.3                | Certificate of  Amendment to Certificate of Incorporation - Incorporated by reference to like  numbered exhibit to the Company’s Current Report on Form 8-K filed November  5, 2007.                                                        |
| 4.1                | Specimen Stock Certificate - Incorporated by  reference to like numbered exhibit to the Company’s Annual Report on Form  10-KSB filed on April 11, 2008, File Number 333-141993.                                                            |
| 10.1               | Consulting Agreement, dated March 12, 2008,  between the Company and Keith G. Summary - Incorporated by reference to like  numbered exhibit to the Company’s Annual Report on Form 10-KSB filed on April  11, 2008, File Number 333-141993. |
| 21                 | Description of Subsidiaries.**                                                                                                                                                                                                                   |
| 31.1               | Rule 13a-14(a)/15d-14(a)  Certification by the Principal Executive Officer and Principal Financial  Officer.**                                                                                                                                   |
| 32.2               | Section 1350 Certification by the  Principal Executive Officer and Principal Financial Officer.**                                                                                                                                                |

 

** Filed herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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**SIGNATURE**

 

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

 

                                                                                           **PETROCORP INC.**

 

 

Date:August 14, 2008                                                          By: /s/ James Fitzsimons

        James Fitzsimons, President and CFO

 

 

 

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**Exhibit Index**

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| **Exhibit Number** | **Exhibit Description**                                                                                                                                                                                                                          |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                | Certificate of  Incorporation - Incorporated by reference to like numbered exhibit to the  Company’s Registration Statement on Form SB-2 File Number 333-141993.                                                                            |
| 3.2                | Bylaws - Incorporated  by reference to like numbered exhibit to the Company’s Registration Statement  on Form SB-2 File Number 333-141993.                                                                                                  |
| 3.3                | Certificate of  Amendment to Certificate of Incorporation - Incorporated by reference to like  numbered exhibit to the Company’s Current Report on Form 8-K filed November  5, 2007.                                                        |
| 4.1                | Specimen Stock Certificate - Incorporated by  reference to like numbered exhibit to the Company’s Annual Report on Form  10-KSB filed on April 11, 2008, File Number 333-141993.                                                            |
| 10.1               | Consulting Agreement, dated March 12, 2008,  between the Company and Keith G. Summary - Incorporated by reference to like  numbered exhibit to the Company’s Annual Report on Form 10-KSB filed on April  11, 2008, File Number 333-141993. |
| 21                 | Description of Subsidiaries.**                                                                                                                                                                                                                   |
| 31.1               | Rule 13a-14(a)/15d-14(a)  Certification by the Principal Executive Officer and Principal Financial  Officer.**                                                                                                                                   |
| 32.2               | Section 1350 Certification by the  Principal Executive Officer and Principal Financial Officer.**                                                                                                                                                |

 

** Filed herewith

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