U.S. 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 quarter ended August 31, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934


        For the transition period from ______ to _______


                          COMMISSION FILE NO. 000-52782


                            MAINLAND RESOURCES, INC.
                 ______________________________________________
                 (Name of small business issuer in its charter)


            NEVADA                                               90-0335743
_______________________________                              ___________________
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                       20333 STATE HIGHWAY 249, SUITE 200
                              HOUSTON, TEXAS 77070
                    ________________________________________
                    (Address of principal executive offices)


                                 (281) 469-5990
                          ___________________________
                          (Issuer's telephone number)


Securities registered pursuant to Section         Name of each exchange on which
            12(b) of the Act:                              registered:
                  NONE


          Securities registered pursuant to Section 12(g) of the Act:

                              COMMON STOCK, $0.001
                              ____________________
                                (Title of Class)


Indicate by checkmark whether the issuer:  (1) has 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[ ]


<PAGE>

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
229.405 of this  chapter)  during the  preceding  12 months (or for such shorter
period that the registrant was required to submit and post such files.

Indicate by check mark whether the registrant is a large  accelerated  filed, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer [ ]                                Accelerated filer [X]

Non-accelerated filer   [ ]                        Smaller reporting company [ ]

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Applicable  Only  to  Issuer  Involved  in  Bankruptcy  Proceedings  During  the
Preceding Five Years.

                                       N/A

Indicate by  checkmark  whether the issuer has filed all  documents  and reports
required to be filed by Section 12, 13 and 15(d) of the Securities  Exchange Act
of 1934 after the  distribution of securities under a plan confirmed by a court.
Yes[ ] No[ ]

                    Applicable Only to Corporate Registrants

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the most practicable date:

Class                                         Outstanding as of  October 7, 2009
Common Stock, $0.0001                         80,969,502*

*Increased from 40,484,751 shares of common stock to 80,969,502 shares of common
stock based upon the June 16, 2009 Forward Stock Split.


                                       2


<PAGE>


                            MAINLAND RESOURCES, INC.

                                    Form 10-Q


Part 1.   FINANCIAL INFORMATION                                                4

Item 1.   FINANCIAL STATEMENTS
             Balance Sheets                                                    5
             Statements of Operations                                          6
             Statements of Cash Flows                                          7
             Notes to Financial Statements                                     8

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                           18

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          30

Item 4.   Controls and Procedures                                             31

Part II.  OTHER INFORMATION                                                   32

Item 1.   Legal Proceedings                                                   32

Item 1A.  Risk Factors                                                        33

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds         33

Item 3.   Defaults Upon Senior Securities                                     33

Item 4.   Submission of Matters to a Vote of Security Holders                 33

Item 5.   Other Information                                                   34

Item 6.   Exhibits                                                            37


                                       3


<PAGE>


PART I

ITEM 1. FINANCIAL STATEMENTS




                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                              FINANCIAL STATEMENTS

                                 AUGUST 31, 2009
                                   (UNAUDITED)

























                                       4

<PAGE>

<TABLE>
<CAPTION>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                                 BALANCE SHEETS
                                 (U.S. Dollars)

                                                                                              August 31,        February 28,
                                                                                                 2009               2009
______________________________________________________________________________________________________________________________
                                                                                              (unaudited)         (audited)

                                     ASSETS

<S>                                                                                           <C>                <C>
   CURRENT ASSETS
      Cash                                                                                    $    107,242       $    150,276
      Accounts receivable                                                                          316,910            373,045
      Deposit on properties (Note 3)                                                             1,600,000          1,100,000
      Financing costs; net of accumulated amortization of $82,953                                  332,647                  -
______________________________________________________________________________________________________________________________

     Total current assets                                                                        2,356,799          1,623,321
______________________________________________________________________________________________________________________________

   OIL AND GAS PROPERTIES, (Note 3)
      Proved, net of accumulated depletion $130,397 (2009 -12,000)                               3,347,988            775,011
      Unproved                                                                                     414,575                  -
______________________________________________________________________________________________________________________________

     Total Oil and Gas Properties                                                                3,762,563            775,011
______________________________________________________________________________________________________________________________

   TOTAL ASSETS                                                                               $  6,119,362       $  2,398,332
==============================================================================================================================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

   CURRENT LIABILITIES
      Accounts payable and accrued liabilities                                                $    310,223       $     70,230
      Promissory note (Note 4)                                                                   2,000,000                  -
______________________________________________________________________________________________________________________________

   TOTAL CURRENT LIABILITIES                                                                     2,310,223             70,230

   CONTINGENCIES (Note 9)

   STOCKHOLDERS' EQUITY (Note 5)
   Common stock, 400,000,000 shares authorized with $0.0001 par value
   Issued and outstanding - 80,969,502 common shares                                                 8,097              3,962
      (February 28, 2009 - 79,230,002)
   Additional paid-in-capital                                                                   18,368,062         16,056,099
   Deficit accumulated during exploration stage                                                (14,567,020)       (13,731,959)
______________________________________________________________________________________________________________________________

   TOTAL STOCKHOLDERS' EQUITY                                                                    3,809,139          2,328,102
______________________________________________________________________________________________________________________________

   TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                                                   $  6,119,362       $  2,398,332
==============================================================================================================================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                                                                                   May 12, 2006
                                                                                                                    (inception)
                                                  Three months ended August 31,     Six months ended August 31,    to August 31,
                                                      2009             2008            2009            2008             2009
_________________________________________________________________________________________________________________________________
<S>                                               <C>             <C>             <C>             <C>             <C>
REVENUES
   Oil and gas revenue                            $   575,233     $         -     $ 1,484,353     $          -    $  2,000,932
_________________________________________________________________________________________________________________________________

GENERAL AND ADMINISTRATIVE EXPENSES
   Operating costs and taxes                          195,486               -         410,609                -         559,932
   Depletion allowance                                 93,479               -         118,397                -         130,397
   Consulting fees (Note 6)                            52,847         174,577         203,981          492,357         799,355
   Management fees - related party (Note 7)            49,000          40,500          84,372           56,000         225,192
   Marketing expenses                                  44,508         745,490          62,003          896,827         983,110
   Mineral property costs                                   -               -               -                -          14,510
   Office and general                                  45,556          25,867          88,935           47,334         230,982
   Professional fees                                   63,296          81,129         109,701          112,696         421,011
   Salary expense (Note 6)                          1,148,000       7,157,685       1,148,000        9,614,685      13,150,685
_________________________________________________________________________________________________________________________________

                                                   (1,692,172)     (8,225,248)     (2,225,998)     (11,219,899)    (16,515,174)
_________________________________________________________________________________________________________________________________

NET OPERATING LOSS                                 (1,116,939)     (8,225,248)       (741,645)     (11,219,899)    (14,514,242)

OTHER ITEMS
   Gain on settlement of debt                               -               -               -           33,239          33,239
   Interest income                                        198           3,967             468            6,027           7,867
   Interest expense                                   (11,958)              -         (11,958)               -         (11,958)
   Financing costs (Note 4)                           (82,953)              -         (82,953)               -         (82,953)
_________________________________________________________________________________________________________________________________

NET LOSS                                           (1,211,652)     (8,221,281)       (836,088)     (11,180,633)    (14,568,047)
_________________________________________________________________________________________________________________________________

Foreign currency translation adjustment                     -               -               -              422               -
_________________________________________________________________________________________________________________________________

COMPREHENSIVE LOSS                                $(1,211,652)    $(8,221,281)    $  (836,088)    $(11,180,211)   $(14,568,047)
=================================================================================================================================

BASIC LOSS
   PER COMMON SHARE                               $     (0.02)    $     (0.10)    $     (0.01)    $      (0.15)
===============================================================================================================

WEIGHTED AVERAGE NUMBER OF                         80,969,500      78,838,696      80,175,160       74,959,098
COMMON SHARES OUTSTANDING-BASIC
===============================================================================================================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       6
<PAGE>
<TABLE>
<CAPTION>


                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                                                                               May 12, 2006
                                                                                                              (inception) to
                                                                            Six months ended August 31,          August 31,
                                                                              2009               2008               2009
______________________________________________________________________________________________________________________________
<S>                                                                          <C>               <C>                <C>

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                                   $  (836,088)      $(11,180,633)      $(14,568,047)
  Adjustments to reconcile net loss to net cash used in operating
   activities:
     - Non-cash mineral property expenditures (recoveries)                             -            (33,239)           (28,799)
     - Depletion                                                                 118,397                  -            130,397
     - Stock-based compensation (Note 6)                                       1,148,000          9,614,685         13,150,685
     - Non-cash consulting fees (Note 5)                                          16,125                  -             16,125
     - Amortized financing cost                                                   82,953                  -             82,953
     - Donated services and expenses                                                   -                  -             14,420
CHANGES IN OPERATING ASSETS AND LIABILITIES
     - Accounts receivable                                                        56,135            (24,280)          (316,910)
     - Accounts payable - related parties                                              -             (6,138)                 -
     - Accounts payable and accrued liabilities                                  234,459              9,174            304,689
______________________________________________________________________________________________________________________________

NET CASH FROM (USED IN) OPERATING ACTIVITIES                                     819,981         (1,620,431)        (1,214,487)
______________________________________________________________________________________________________________________________

CASH FLOWS FROM INVESTING ACTIVITIES
   Investment in oil and gas property                                         (3,100,415)        (1,041,863)        (3,887,426)
   Deposit on properties                                                        (500,000)                 -         (1,600,000)
______________________________________________________________________________________________________________________________

NET CASH FLOWS USED IN INVESTING ACTIVITIES                                   (3,600,415)        (1,041,863)        (5,487,426)
______________________________________________________________________________________________________________________________

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds on sale of common stock                                                   -          3,950,000          3,988,516
    Proceeds from exercised warrants                                           1,153,000                  -          1,153,000
    Promissory note payable                                                    2,000,000                  -          2,000,000
    Payment of financing cost                                                   (415,600)                 -           (415,600)
    Advances from related party                                                        -                  -             83,239
______________________________________________________________________________________________________________________________

NET CASH PROVIDED BY FINANCING ACTIVITIES                                      2,737,400          3,950,000          6,809,155
______________________________________________________________________________________________________________________________

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                                -                422                  -
______________________________________________________________________________________________________________________________

INCREASE (DECREASE) IN CASH                                                      (43,034)         1,288,128            107,242

CASH, BEGINNING OF PERIOD                                                        150,276             19,495                  -
______________________________________________________________________________________________________________________________

CASH, END OF PERIOD                                                          $   107,242       $  1,307,623       $    107,242
==============================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION AND
  NONCASH INVESTING AND FINANCING ACTIVITIES:
     Cash paid for interest                                                  $    11,958       $          -       $     11,958
     Cash paid for income taxes                                              $         -       $          -       $          -
     Common stock issued for acquisition of mineral property                 $         -       $          -       $      4,440
     Common stock issued for satisfaction of liability                       $         -       $     50,000       $     50,000
     Common stock issued for consulting fees                                 $    16,125       $          -       $     16,125
     Donated services and rent                                               $         -       $          -       $     14,420

</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       7
<PAGE>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________

Mainland Resources Inc. (the "Company") is an exploration stage company that was
incorporated  May 12,  2006 in the State of Nevada  for the  purpose  of mineral
exploration.  During  2008,  the Company  entered  into an option  agreement  on
certain oil and gas leaseholds in the state of Louisiana  (refer to Note 3). The
Company  now  intends  to  locate,  explore,  acquire  and  develop  oil and gas
properties in the United  States.  The Company began  drilling its first well in
October 2008.  The first well was completed at the end of January 2009 and is in
production.  The Company  began  drilling  its second well in April 2009.  It is
expected to be completed by the end of December 2009. The Company began drilling
its third well in May 2009. The third well was completed and began  producing in
the middle of August 2009.

GOING CONCERN
The Company  commenced  operations  on May 12,  2006.  Although  the Company has
realized revenues, as of August 31, 2009, the Company has an accumulated deficit
of  $14,567,020.  The ability of the  Company to continue as a going  concern is
dependent  on  raising  capital  to fund  ongoing  operations  and carry out its
business plan and ultimately to attain profitable operations. Accordingly, these
factors raise  substantial  doubt as to the  Company's  ability to continue as a
going concern.  These financials do not include any adjustments  relating to the
recoverability  and  classification  of  recorded  asset  amounts or amounts and
classification of liabilities that might result from this uncertainty.  To date,
the Company has funded its initial  operations  by way of private  placements of
common stock,  advances from related parties and bridge loan  financing.  During
fiscal 2009,  the Company  completed a private  placement of $4,000,000 at $0.33
per unit with each unit  consisting  of one common share and one half warrant at
$0.67 per share  exercisable  for a period of one year from  issuance  (refer to
Note 5). In addition,  during the six months  ended  August 31, 2009,  1,729,500
warrants were  exercised at $0.67 for net proceeds to the company of $1,153,000.
On August 10, 2009,  the Company  closed a $3,500,000  bridge loan  financing of
which  $2,000,000  has been advanced to the Company as of August 31, 2009 (refer
to Note 4).

UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying  unaudited interim consolidated  financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and  with the  instructions  to Form  10-Q.  They do not
include  all  information  and  footnotes  required by United  States  generally
accepted  accounting  principles  for complete  financial  statements.  However,
except  as  disclosed  herein,  there  have  been  no  material  changes  in the
information  disclosed  in the notes to the  financial  statements  for the year
ended  February 28, 2009  included in the  Company's  Annual Report on Form 10-K
filed  with the  Securities  and  Exchange  Commission.  The  interim  unaudited
financial  statements  should  be  read  in  conjunction  with  those  financial
statements  included  in the  Form  10-K.  In the  opinion  of  Management,  all
adjustments  considered necessary for a fair presentation,  consisting solely of
normal  recurring  adjustments,  have been made.  Operating  results for the six
months ended August 31, 2009 are not necessarily  indicative of the results that
may be expected for the year ending February 28, 2010.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________

ORGANIZATION
The  Company  was  incorporated  on May 12,  2006 in the  State of  Nevada.  The
Company's fiscal year end is February 28.

BASIS OF PRESENTATION
These financial  statements are presented in United States dollars and have been
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles.

OIL AND GAS PROPERTIES
The  Company  follows  the full cost  method of  accounting  for its oil and gas
operations  whereby all costs related to the acquisition of methane,  petroleum,
and natural gas interests are capitalized. Under this method, all productive and
non-productive  costs  incurred  in  connection  with  the  exploration  for and
development of oil and gas reserves are capitalized. Such costs include land and
lease acquisition  costs,  annual carrying charges of non-producing  properties,
geological and geophysical costs, costs of drilling and equipping productive and
non-productive  wells,  and direct  exploration  salaries and related  benefits.
Proceeds from the disposal of oil and gas properties are recorded as a reduction
of the related  capitalized  costs without  recognition of a gain or loss unless
the  disposal  would  result in a change of 20 percent or more in the  depletion
rate. The Company currently operates solely in the U.S.

                                       8
<PAGE>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

OIL AND GAS PROPERTIES (CONTINUED)
Depreciation  and depletion of proved oil and gas  properties is computed on the
units-of-production   method  based  upon  estimates  of  proved  reserves,   as
determined by  independent  consultants,  with oil and gas being  converted to a
common unit of measure based on their relative energy content.

The costs of acquisition  and  exploration  of unproved oil and gas  properties,
including  any  related  capitalized   interest  expense,  are  not  subject  to
depletion,  but  are  assessed  for  impairment  either  individually  or  on an
aggregated  basis. The costs of certain  unevaluated  leasehold acreage are also
not  subject to  depletion.  Costs not  subject to  depletion  are  periodically
assessed for possible  impairment  or  reductions  in  recoverable  value.  If a
reduction in  recoverable  value has  occurred,  costs  subject to depletion are
increased or a charge is made  against  earnings  for those  operations  where a
reserve base is not yet established.

Estimated future removal and site  restoration  costs are provided over the life
of  proven  reserves  on  a  units-of-production  basis.  Costs,  which  include
production equipment removal and environmental  remediation,  are estimated each
period by management based on current regulations, actual expenses incurred, and
technology and industry  standards.  The charge is included in the provision for
depletion and depreciation and the actual  restoration  expenditures are charged
to the accumulated provision amounts as incurred.

The Company applies a ceiling test to capitalized  costs which limits such costs
to the aggregate of the estimated  present value,  using a ten percent  discount
rate of the estimated  future net revenues from production of proven reserves at
year end at market  prices less future  production,  administrative,  financing,
site  restoration,  and  income  tax costs  plus the lower of cost or  estimated
market value of unproved  properties.  If  capitalized  costs are  determined to
exceed estimated future net revenues,  a write-down of carrying value is charged
to depletion in the period.

ASSET RETIREMENT OBLIGATIONS
The Company has adopted the  provisions of SFAS No. 143,  "Accounting  for Asset
Retirement Obligations." SFAS No. 143 requires the fair value of a liability for
an asset  retirement  obligation  to be  recognized in the period in which it is
incurred  if a  reasonable  estimate of fair value can be made.  The  associated
asset  retirement  costs are  capitalized as part of the carrying  amount of the
related oil and gas properties.  As of August 31, 2009,  there has been no asset
retirement obligations rendered.

USE OF ESTIMATES
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the period.  Actual results
could differ from those  estimates.  Significant  areas  requiring  management's
estimates  and  assumptions  are  the   determination   of  the  fair  value  of
transactions  involving  common  stock,  stock  based  compensation,   financial
instruments  as well as  deferred  tax  balances  and  asset  impairment  tests.
Further, depreciation,  depletion and amortization of oil and gas properties and
the impairment of oil and gas properties are determined  using  estimates of oil
and gas reserves. There are numerous uncertainties in estimating the quantity of
reserves  and in  projecting  the  future  rates of  production  and  timing  of
development  expenditures,  including future costs to dismantle,  dispose, plug,
and restore the Company's  properties.  Oil and gas reserve  engineering must be
recognized as a subjective  process of estimating  underground  accumulations of
oil and gas that cannot be measured in an exact way.  Proved reserves of oil and
natural gas are  estimated  quantities  that  geological  and  engineering  data
demonstrate with reasonable certainty to be recoverable in the future from known
reservoirs under existing conditions.

FINANCIAL INSTRUMENTS
The fair  value of the  Company's  financial  assets and  financial  liabilities
approximate their carrying values due to the immediate or short-term maturity of
these financial instruments.

CONCENTRATIONS OF CREDIT RISK
Financial  instruments that potentially subject the Company to concentrations of
credit  risk  consist  principally  of cash  and  cash  equivalent  accounts  in
financial  institutions.  As of August 31,  2009,  the  Company's  cash and cash
equivalents do not exceed federally insured limits.

                                       9
<PAGE>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

EARNINGS (LOSS) PER COMMON SHARE
Basic earnings (loss) per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of common
shares  outstanding for the period.  Dilutive  earnings (loss) per share reflect
the  potential  dilution of  securities  that could share in the earnings of the
Company.  Where  applicable,  dilutive  loss per share is equal to that of basic
loss per share as the effects of stock  options and warrants  have been excluded
as they are anti-dilutive.

REVENUE RECOGNITION
Oil and natural gas revenues are recorded  using the sales  method,  whereby the
Company  recognizes  oil and natural gas revenue  based on the amount of oil and
gas sold to  purchasers,  when  title  passes,  the amount is  determinable  and
collection is reasonably assured. Actual sales of gas are based on sales, net of
the associated  volume charges for processing fees and for costs associated with
delivery,  transportation,  marketing, and royalties in accordance with industry
standards.  Operating costs and taxes are recognized in the same period in which
revenue is earned.

INCOME TAXES
The Company follows the liability  method of accounting for income taxes.  Under
this method,  deferred tax assets and  liabilities are recognized for the future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
balances.  Deferred tax assets and  liabilities  are measured  using  enacted or
substantially  enacted tax rates  expected to apply to the taxable income in the
years in which those  differences  are expected to be recovered or settled.  The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized  in income in the  period  that  includes  the date of  enactment  or
substantive enactment. As at August 31, 2009, the Company had net operating loss
carryforwards,  however, due to the uncertainty of realization,  the Company has
provided a full valuation  allowance for the deferred tax assets  resulting from
these loss carryforwards.

STOCK-BASED COMPENSATION
The Company has adopted SFAS No. 123(R),  "SHARE-BASED  PAYMENT," which requires
the compensation cost related to share-based payments, such as stock options and
employee stock purchase plans, be recognized in the financial  statements  based
on the grant-date fair value of the award.

The Company accounts for equity  instruments  issued in exchange for the receipt
of goods or  services  from other than  employees  in  accordance  with SFAS No.
123(R) and the conclusions reached by the Emerging Issues Task Force ("EITF") in
Issue No. 96-18.  Costs are measured at the  estimated  fair market value of the
consideration  received or the  estimated  fair value of the equity  instruments
issued,  whichever is more reliably measurable.  The value of equity instruments
issued for  consideration  other than  employee  services is  determined  on the
earliest  of a  performance  commitment  or  completion  of  performance  by the
provider of goods or services as defined by EITF 96-18.

RECENT ACCOUNTING PRONOUNCEMENTS
In May 2009, the FASB issued SFAS No. 165,  SUBSEQUENT EVENTS ("SFAS 165"). SFAS
165  provides   authoritative   accounting   literature  related  to  evaluating
subsequent events that was previously addressed only in the auditing literature,
and is largely similar to the current  guidance in the auditing  literature with
some  exceptions  that are not  intended  to result in  significant  changes  in
practice. SFAS 165 defines subsequent events and also requires the disclosure of
the date through which an entity has evaluated  subsequent  events and the basis
for that date.  SFAS 165 is  effective  on a  prospective  basis for  interim or
annual financial periods ending after June 15, 2009. The adoption of SFAS 165 in
the  second  quarter  of  Fiscal  2010 did not  have a  material  impact  on our
consolidated financial statements.

In June 2009, the FASB issued  Statement of Financial  Accounting  Standards No.
166,  "Accounting  for Transfers of Financial  Assets,  an amendment to SFAS No.
140,"  ("SFAS  166").   SFAS  166   eliminates  the  concept  of  a  "qualifying
special-purpose  entity," changes the requirements for  derecognizing  financial
assets,  and requires  additional  disclosures  in order to enhance  information
reported to users of  financial  statements  by providing  greater  transparency
about transfers of financial assets, including securitization transactions,  and
an entity's  continuing  involvement  in and  exposure  to the risks  related to
transferred  financial assets.  SFAS 166 is effective for fiscal years beginning
after  November  15, 2009.  The Company will adopt SFAS 166 in fiscal 2010.  The
Company  does not  expect  that the  adoption  of SFAS 166 will have a  material
impact on the financial statements.

                                       10
<PAGE>


                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In June 2009, the FASB issued  Statement of Financial  Accounting  Standards No.
167, "Amendments to FASB Interpretation No. 46(R)," ("SFAS 167"). The amendments
include:  (1) the  elimination of the exemption for qualifying  special  purpose
entities,   (2)  a  new  approach  for  determining  who  should  consolidate  a
variable-interest  entity,  and (3) changes to when it is  necessary to reassess
who should consolidate a variable-interest entity. SFAS 167 is effective for the
first annual  reporting period beginning after November 15, 2009 and for interim
periods within that first annual reporting  period.  The Company will adopt SFAS
167 in fiscal  2010.  The Company  does not expect that the adoption of SFAS 167
will have a material impact on the financial statements.

In June 2009, the FASB issued  Statement of Financial  Accounting  Standards No.
168, "The FASB Accounting Standards  Codification and the Hierarchy of Generally
Accepted Accounting  Principles," ("SFAS 168"). SFAS 168 replaces FASB Statement
No. 162,  "The  Hierarchy  of Generally  Accepted  Accounting  Principles",  and
establishes the FASB Accounting Standards  Codification  ("Codification") as the
source  of  authoritative  accounting  principles  recognized  by the FASB to be
applied by nongovernmental  entities in the preparation of financial  statements
in conformity with generally accepted accounting  principles ("GAAP").  SFAS 168
is effective for interim and annual periods ending after September 15, 2009. The
Company  will begin to use the new  Codification  when  referring to GAAP in its
annual  report on Form 10-K for the fiscal year ending  February 28, 2010.  This
will not have an impact on the results of the Company.

NOTE 3 - OIL AND GAS PROPERTIES
________________________________________________________________________________

EAST HOLLY PROSPECT
On February 27, 2008, the Company entered into an option  agreement (the "Option
Agreement") with Kingsley Resources,  Inc.  ("Kingsley"),  pursuant to which the
Company  acquired  all the  right,  title and  interest  Kingsley  has in and to
certain  leasehold  estates in the state of Louisiana  ("the Leases") which were
the subject of a purchase  agreement  dated  December  11,  2007,  and  modified
February 1, 2008  (collectively,  the "Leasehold  Purchase  Agreement")  between
Kingsley  and Permian  Basin  Acquisition  Fund  ("Permian"),  pursuant to which
Kingsley  had the right to acquire the  sub-surface  rights  provided for in the
Leases.  In order to  complete  the  acquisition  of the Leases the  Company was
required  to pay  $100,000  on April  2,  2008 to  Kingsley  and  assume  all of
Kingsley's  obligations  under the Leasehold  Purchase  Agreement.  On March 14,
2008,  the Company  completed the Option  agreement  and the Leasehold  Purchase
Agreement at a total cost of $687,596, which includes the $100,000 that was paid
on April 2, 2008, for approximately 2,551 net acres.

COTTON VALLEY/ HAYNESVILLE
The Company has leased various other properties totalling  approximately 144 net
acres,  consisting of  approximately 84 net acres leased as of February 29, 2008
and added 60 net acres  leased  during  the year  ended  February  28,  2009 for
additional  consideration of $22,753.  These additional property leases,  within
the Cotton  Valley/Haynesville  trend in the state of  Louisiana,  are for three
year terms.  The Company has a 100%  Working  Interest  and a 75% N.R.I.  in the
leases comprising a total of 2,695 net acres.

PETROHAWK VENTURE AGREEMENT
On July 14, 2008,  The Company  entered into a binding  venture  agreement  with
Petrohawk  Energy  Corporation  ("Petrohawk")  for the joint  development of the
Haynesville Shale on the Company's  properties ("the Leases") in De Soto Parish,
Louisiana.  Effective  August 4, 2008,  the Company  entered  into a  definitive
binding agreement with Petrohawk consummating the transaction on July 14, 2008.

Under the terms of the Agreement,  Petrohawk has agreed to pay 100% of the costs
of  development  associated  with the first well drilled below the Cotton Valley
Formation,  including drilling,  completing and fracture stimulating, as well as
costs up to and including pipeline connection.  Petrohawk has also agreed to pay
80% of all costs of the second well  drilled on the Leases below the base of the
Cotton Valley with the Company  paying the  remaining 20% of the costs.  For the
third and all  subsequent  wells  drilled  on the  Leases  below the base of the
Cotton Valley Formation, Petrohawk will pay 60% and the Company will pay 40%.

The Company  will  transfer  60% of its De Soto Parish  leases to  Petrohawk  at
closing,  but only as the  Leases  relate  to all  depths  below the base of the
Cotton Valley  Formation,  and  specifically  the Haynesville  Shale.  Petrohawk
agrees to gather and market the Company's  production from above the base of the
Cotton Valley Formation, pursuant to a mutually acceptable agreement.

                                       11
<PAGE>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 3 - OIL AND GAS PROPERTIES (CONTINUED)
________________________________________________________________________________

GRIFFITHS 11- #1
The first  well under the  Petrohawk  Agreement,  the  Griffiths  11- #1,  began
drilling in October 2008.  The well  commenced  production at the end of January
2009.

STEVENSON DOUGLAS LLC. 16 - #1
The second well under the Petrohawk  Agreement,  the Steven Douglas LLC 16 - #1,
began  drilling in April 2009.  The Company  expects the well to be completed by
the end of December 2009.

DEHAN 15 - #1-H
The third well under the Petrohawk  Agreement,  the Steven  Douglas LLC 16 - #1,
began  drilling  in May 2009.  The well  commenced  production  in the middle of
August 2009.

MISSISSIPPI PROSPECT
On September 3, 2008, the Company signed an Option  Agreement with Westrock Land
Corp to  acquire  5,000 net acres in mineral  oil and gas leases  located in the
State of Mississippi.  In accordance with the terms and provisions of the Option
Agreement;  (i ) the Company will acquire a 100% working  interest and a 75% net
revenue  interest  in the  Leases;  (ii) the  Company  has agreed to pay certain
acquisition  costs per net  mineral  acres and also paid a  $500,000  deposit on
September  3, 2008 to secure  the  Option  Agreement;  (iii) the  balance of the
acquisition  costs totalling  $2,275,000 will be due and payable upon completion
of the due  diligence,  to be completed by the Company no later than October 15,
2008.  The Option  Agreement  was  subsequently  extended on each of October 15,
2008,  November  30,  2008,  April 16, 2009 and June 1, 2009  whereby the option
period has been  extended  until  December  31,  2009.  Additional  deposits  of
$250,000,  $100,000,  $250,000,  $100,000 and $100,000  were paid on October 17,
2008,  December 1, 2008, December 29, 2008, April 27, 2009, May 6, 2009 and June
5, 2009 for a total  deposit to date of  $1,300,000  (May 31, 2009 - $1,300,000;
February 28, 2009 - $1,100,000).

MISSISSIPPI HAYNESVILLE/BOSSIER PROSPECT
On June 23, 2009, the Company signed an Option Agreement with Westrock Land Corp
to acquire  approximately  8,000 net acres in mineral oil and gas leases located
in the State of Mississippi.  In accordance with the terms and provisions of the
Option  Agreement;  (i ) the Company will acquire a 100% working  interest and a
minimum 75% net revenue  interest in the Leases;  (ii) the Company has agreed to
pay certain  acquisition  costs per net  mineral  acres by August 31,  2009.  On
August 28, 2009, the Company amended the Option  Agreement to expand the acreage
to include an additional 500 acres thus aggregating 8,500 net acreage subject to
the  Option  Agreement.  The  Company  further  agreed to  advance a payment  of
$300,000  towards  the total  purchase  price of the  acreage  under the  Option
Agreement with the closing date being extended to October 15, 2009.

The Company's Oil and Gas properties are made up as follows:

                                           August 31,         February 29,
                                              2009                 2009
____________________________________________________________________________
Oil and Gas Properties:
  Proved, subject to depletion             $  3,478,385         $   787,011
  Unproved, not subject to depletion            414,575                   -
____________________________________________________________________________

                                              3,892,960             787,011
  Accumulated depletion                        (130,397)            (12,000)
____________________________________________________________________________

Total Oil and Gas Properties               $  3,762,563         $   775,011
============================================================================

                                       12
<PAGE>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 3 - OIL AND GAS PROPERTIES (CONTINUED)
________________________________________________________________________________

The following is a summary of the transactions  involving the Company's unproven
properties not subject to depletion:

<TABLE>
<CAPTION>


                                                        Acquisition         Development
                                                           Costs               Costs                Total
                                                    _________________________________________________________

<S>                                                     <C>                <C>                  <C>
Balance, February 28, 2008                              $     9,176        $          -         $      9,176

Incurred during the year                                    702,923              74,912              777,835
Reallocated to proven and subject to depletion             (712,099)            (74,912)            (787,011)
                                                    _________________________________________________________

Balance, February 29, 2008                                        -                   -                    -

Incurred during the period                                        -           3,105,949            3,105,949
Reallocated to proven and subject to depletion                    -          (2,691,347)          (2,691,347)
                                                    _________________________________________________________
Balance, August 31, 2009                                 $        -        $    414,575         $    414,575
                                                    =========================================================
</TABLE>


Depletion  of proved oil and gas  properties  during the period ended August 31,
2009 was computed on the units-of-production  method based upon estimated proved
reserves of 13.169 Bcf,  reserves  produced during the period of 448,246 Mcf and
net  capitalized  costs  to be  amortized  totaling  $3,478,385  resulting  in a
depletion cost of $118,397 for the period and total accumulated  depletion costs
as of August 31, 2009 of $130,397.

NOTE 4 - PROMISSORY NOTE
________________________________________________________________________________

Effective  July 21, 2009,  the Board of Directors of the Company  authorized the
execution of a $3,500,000  senior secured bridge loan with Guggenheim  Corporate
Funding LLC ("Guggenheim")  (the "Loan Agreement").  The Company closed the Loan
Agreement effective August 10, 2009 with a maturity date of December 1, 2009. As
of August  31,  2009;  $2,000,000  had been  advanced  to the  Company  with the
remaining  $1,500,000 to be advanced after certain  conditions are met. The term
financing also proposes non-binding  conditions for a $10,000,000 senior secured
advancing line of credit to be negotiated between the Company and Guggenheim.

The bridge loan bears interest at bank prime rate plus 7.00% calculated and paid
on a monthly  basis,  of which  $11,958 was paid through  August 31,  2009.  The
bridge  loan is secured by way of a charge  over the  Company's  interest in the
East Holly  Prospect in the State of Louisiana.  The Company paid financing fees
in connection with the Loan Agreement of $415,600 which are being amortized over
the life of the loan.  In  addition,  the  Company  agreed to assign  15% of its
interest in an  overriding  royalty in Section 15, T23N,  R14W,  Desoto  Parish,
Louisiana (includes the Dehan 15- #1H well).

NOTE 5 - STOCKHOLDERS' EQUITY
________________________________________________________________________________
(A)      SHARE CAPITAL

The Company's  capitalization  is 400,000,000  common shares with a par value of
$0.0001 per share.

On February 25, 2008, the directors of the Company approved a special resolution
to undertake a forward split of the common stock of the Company on a basis of 20
new shares for 1 old share which was effective  March 11, 2008. On May 12, 2008,
the  directors  of the Company  approved a special  resolution,  to  undertake a
forward  split of the common stock of the Company on the basis of 1.5 new shares
for 1 old  share  which  was  effective  May 29,  2008.  On June 12,  2009,  the
directors of the Company approved a special  resolution,  to undertake a forward
split of the  common  stock of the  Company on a basis of 2 new shares for 1 old
share which was effective on July 15, 2009.

All references in these financial  statements to number of common shares,  price
per share and weighted average number of common shares  outstanding prior to the
20:1 forward stock split on March 11, 2008, the 1.5:1 forward stock split on

                                       13
<PAGE>


                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 5 - STOCKHOLDERS' EQUITY (CONTINUED)
________________________________________________________________________________

(A)      SHARE CAPITAL (CONTINUED)

May 29, 2008 and the 2:1 forward stock split on July 15, 2009 have been adjusted
to reflect these stock splits on a retroactive basis , unless otherwise noted.

(B)      PRIVATE PLACEMENTS
On June 15, 2006, the Company issued  12,000,000  unregistered  shares of common
stock at $0.0000143 per share for proceeds of $172.

On October 6, 2006, the Company issued 25,020,000  unregistered shares of common
stock at a price of $0.000715 per share for proceeds of $17,892.

On October 15, 2007, the Company issued 24,000,000 unregistered shares of common
stock at a price of $0.00085 per share for proceeds of $20,452.

Between May 1, 2008 and July 22, 2008, the Company completed a private placement
of 12,000,000  unregistered  units at $0.33 per unit for proceeds of $4,000,000.
Of this  amount,  $50,000 was by way of a settlement  of debt and the  remaining
$3,950,000  was  received in cash.  Each unit  consists of one common  share and
one-half  non-transferable  share purchase warrant;  one whole  non-transferable
purchase warrant is exercisable at $0.67 per share for a period of one year from
the date of issuance ending on May 1, 2009.

(C)      OTHER ISSUANCES
On July 15, 2006, the Company issued 6,210,000 shares of common stock at a price
of $0.00071 per share on settlement of $4,440 for mineral property acquisition.

On March 17,  2009,  the  Company  issued  5,000  shares  of common  stock at an
estimated  fair  value  of $1.78  per  share  as per the  terms of a  consulting
agreement that became effective March 1, 2009.

On June 15,  2009,  the  Company  issued  5,000  shares  of  common  stock at an
estimated  fair  value  of $1.45  per  share  as per the  terms of a  consulting
agreement that became effective March 1, 2009.

(D)      SHARE PURCHASE WARRANTS
On April 29, 2009,  the Company  extended  expiration of the 6,000,000  warrants
from May 1, 2009 to June 1, 2009.

During the period,  a total of 1,729,500  warrants  were  exercised at $0.67 per
share with net proceeds of $1,153,000 to the Company and the remaining 4,270,500
warrants expired unexercised.

The Company's share purchase  warrants  activity for the period ended August 31,
2009 is summarized as follows:

<TABLE>
<CAPTION>


                                                                 Weighted average exercise        Weighted average remaining
                                         Number of Warrants           Price per share           In contractual life (in years)
______________________________________________________________________________________________________________________________
<S>                                         <C>                                <C>                                  <C>
Balance, February 29, 2008                           -                         $     -                                 -
Issued                                       6,000,000                            0.67                                 -
Expired                                              -                               -                                 -
Exercised                                            -                               -                                 -
______________________________________________________________________________________________________________________________

Balance,  February 29, 2008                  6,000,000                            0.67                              0.17
Issued                                               -                               -                                 -
Expired                                    (4,270,500)                            0.67                                 -
Exercised                                  (1,729,500)                            0.67                                 -
______________________________________________________________________________________________________________________________

Balance, August 31, 2009                             -                         $     -                                 -
==============================================================================================================================
</TABLE>


                                       14
<PAGE>

                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 6 - STOCK OPTION PLAN
________________________________________________________________________________

On April 7, 2008, the Board of Directors of the Company  ratified,  approved and
adopted a Stock  Option  Plan for the  Company  allowing  for the grant of up to
4,400,000 options to acquire common shares with terms of up to 10 years. On July
9, 2008,  the Board of Directors of the Company  ratified,  approved and amended
the Stock  Option  Plan for the  Company  increasing  the  allowable  grant from
4,400,000  options to 7,600,000  options.  On September  22, 2009,  the Board of
Directors  of the Company  ratified,  approved and amended the Stock Option Plan
for the  Company  increasing  the  allowable  grant  from  7,600,000  options to
12,000,000  options.  In the event an  optionee  ceases to be  employed by or to
provide  services to the Company for reasons other than cause,  any Stock Option
that is vested and held by such optionee may be exercisable  within up to ninety
calendar days after the effective date that his position ceases. No Stock Option
granted under the Stock Option Plan is transferable. Any Stock Option held by an
optionee at the time of his death may be exercised by his estate within one year
of his death or such longer period as the Board of Directors may determine.

As approved by the Board of  Directors,  on April 7, 2008,  the Company  granted
4,200,000  fully  vested  stock  options  to  certain  officers,  directors  and
management  of the Company at $0.59 per share for terms of ten years.  The total
fair value of these  options at the date of grant was estimated to be $2,457,000
and was determined using the Black-Scholes option pricing model with an expected
life of 5 years,  a risk free interest rate of 2.75%, a dividend yield of 0% and
expected  volatility  of 260% and was  recorded  as a stock  based  compensation
expense in 2009.

As approved by the Board of Directors, between July 9, 2008 and August 19, 2008,
the Company  granted a total of 2,700,000  fully vested stock options to certain
officers and directors of the Company at prices  ranging from $2.10 per share to
$3.18 per share for terms of ten years. The total fair value of these options at
the date of grant was estimated to be $7,157,685  and was  determined  using the
Black-Scholes  option  pricing  model with the following  assumptions;  expected
lives of 5 years, risk free interest rates ranging from 3.07% - 3.12%,  dividend
yields of 0% and expected  volatility  of 260% and was recorded as a stock based
compensation expense in 2009.

As approved by the Board of Directors, on November 18, 2008, the Company granted
a total of 500,000  fully vested  stock  options to a director of the Company at
$2.50 per share for terms of ten years. The total fair value of these options at
the date of grant was estimated to be $1,182,500  and was  determined  using the
Black-Scholes option pricing model with the following  assumptions;  an expected
life of 5 years,  a risk free interest rate of 2.22%, a dividend yield of 0% and
expected  volatility  of 260% and was  recorded  as a stock  based  compensation
expense in 2009.

As approved by the Board of Directors,  on February 4, 2009, the Company granted
a total of 600,000 fully vested stock options to two directors of the Company at
$1.50 per share for terms of ten years. The total fair value of these options at
the  date of  grant  was  estimated  at  $1,197,000  and  determined  using  the
Black-Scholes option pricing model with the following  assumptions;  an expected
life of 5 years,  a risk free interest rate of 1.91%, a dividend yield of 0% and
expected  volatility  of 260% and was  recorded  as a stock  based  compensation
expense in 2009.

Also effective  February 4, 2009,  the Company  cancelled  1,800,000  previously
granted  and fully  vested  options to a former  director at $0.59 per share and
re-priced  to $1.50 per share,  3,200,000  previously  granted and fully  vested
options with original  exercise prices ranging from $2.10 per share to $3.18 per
share with all other terms remaining unchanged from the original issuances.  The
estimated  incremental  fair  value  resulting  from the  modification  of these
options of $8,500 was recorded as a stock based compensation expense in 2009.

As approved by the Board of Directors, on August 14, 2009, the Company granted a
total of 800,000  fully vested stock  options to two directors of the Company at
$1.50 per share for terms of ten years. The total fair value of these options at
the  date of  grant  was  estimated  at  $1,148,000  and  determined  using  the
Black-Scholes option pricing model with the following  assumptions;  an expected
life of 5 years,  a risk free interest rate of 2.51%, a dividend yield of 0% and
expected  volatility  of 260% and was  recorded  as a stock  based  compensation
expense in 2009.

                                       15
<PAGE>


                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 6 - STOCK OPTION PLAN (CONTINUED)
________________________________________________________________________________

The Company's  stock option activity for the six months ended August 31, 2009 is
summarized as follows:

<TABLE>
<CAPTION>


                                                                 Weighted average exercise        Weighted average remaining
                                         Number of Options            Price per share           In contractual life (in years)
______________________________________________________________________________________________________________________________

<S>                                        <C>                                <C>                                   <C>
Balance, February 29, 2008                          -                         $      -                                 -
Granted                                     8,000,000                             1.41                                 -
Exercised                                           -                                -                                 -
Expired / cancelled                        (1,800,000)                            0.59
______________________________________________________________________________________________________________________________

Balance, February 28, 2009                  6,200,000                             1.15                              9.36
Granted                                       800,000                             1.50                                 -
Exercised                                           -                                -                                 -
Expired / cancelled                                 -                                -
______________________________________________________________________________________________________________________________

Balance, August 31, 2009                    7,000,000                         $   1.19                              8.98
==============================================================================================================================
</TABLE>


NOTE 7 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________

The Company paid a total of $84,372 in management fees to officers and directors
of the Company for the period ended August 31, 2009 (August 31, 2008 - $56,000).

NOTE 8 - SUBSEQUENT EVENTS
________________________________________________________________________________

Effective on September 17, 2009,  the Board of Directors of Mainland  Resources,
Inc., a Nevada corporation (the "Company"), authorized the execution of a letter
agreement (the "Letter  Agreement")  with American  Exploration  Corporation,  a
Nevada  corporation  ("American  Exploration")  to  jointly  develop  contiguous
acreage  known as the Buena  Vista  Area  located  in  Mississippi  (the  "Joint
Development Project"). In accordance with the terms and provisions of the Letter
Agreement: (i) American Exploration has agreed to commit approximately 5,000 net
acres and the Company has agreed to commit  approximately 5,000 net acres to the
Joint Development  Project;  (ii) the Company shall be the operator of the Joint
Development Project; (iii) the Company has agreed to pay 80% of the initial well
drilling and completion costs to earn a 51% working interest in the well and the
total Joint Development Project; and (iv)American  Exploration has agreed to pay
20% of the initial  well  drilling  and  completion  costs to earn a 49% working
interest  in the  well and the  total  Joint  Development  Project.  In  further
accordance  with the terms and  provisions  of the  Joint  Development  Project,
future costs, including drilling and completions,  for oil and gas activities of
the net  acreage  in the Joint  Development  Project  will be split of a 51%/49%
basis between the Company and American Exploration, respectively.

The Company must acquire the acreage committed to the Joint Development  Project
from an  unrelated  third  party on or before  October  15, 2009 when the Letter
Agreement terminates and is no longer in force and effect.

Effective September 22, 2009, the Board of Directors authorized the execution of
a two-year  executive  service  agreement  with Michael J. Newport,  the current
President/Chief  Executive Officer and a director of the Company (the "Executive
Service  Agreement").  In  accordance  with  the  terms  and  provisions  of the
Executive Service Agreement: (i) the Company shall continue to pay Mr. Newport a
monthly  salary  of  $15,000;  (ii) the  Company  shall  grant an  aggregate  of
1,500,000  stock  options (the "Stock  Options") to Mr.  Newport  under its 2008
Stock Option Plan,  as amended (the "Stock  Option  Plan"),  with such terms and
provisions  of the  grant of the Stock  Options,  including  exercise  price and
duration of exercise period,  to be determined at the time of grant of the Stock
Options as follows: (a) 500,000 Stock Options when the Company has completed its
listing and  commences  trading of its shares of common  stock with a designated
trading symbol (the "Trading Date") with the NYSE Amex Equities,  formerly known
as the American Stock Exchange ("NYSE Amex Equities"); (b) 500,000 Stock Options
at the one  year  anniversary  date of the  Trading  Date  (the  "First  Trading
Anniversary Date"); and (c) 500,000 Stock Options at the second year anniversary
date of the Trading Date (the "Second Trading  Anniversary Date"); and (iii) Mr.
Newport shall continue to provide

                                       16

<PAGE>


                             MAINLAND RESOURCES INC.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                 AUGUST 31, 2009
                                   (UNAUDITED)
________________________________________________________________________________

NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)
________________________________________________________________________________

services to the Company in the capacity as the President/Chief Executive Officer
and a director and further provide consulting advise on exploration  strategies,
management and operational service considerations.

Effective September 22, 2009, the Board of Directors authorized the execution of
a two-year  executive service  agreement with Mark Witt (the "Executive  Service
Agreement").  In  accordance  with the terms  and  provisions  of the  Executive
Service  Agreement:  (i) the  Company  shall pay Mr.  Witt a  monthly  salary of
$10,000;  (ii) the Company  shall grant an aggregate of 3,000,000  stock options
(the "Stock  Options") to Mr. Witt under its 2008 Stock Option Plan,  as amended
(the "Stock Option  Plan"),  with such terms and  provisions of the grant of the
Stock Options,  including  exercise price and duration of exercise period, to be
determined at the time of grant of the Stock  Options as follows:  (a) 1,500,000
Stock Options when the Company has  successfully  raised  equity  funding in the
amount  of  $10,000,000  and (b)  500,000  Stock  Option  when the  Company  has
completed its listing and commences trading of its shares of common stock with a
designated  trading  symbol (the  "Trading  Date") with the NYSE Amex  Equities,
formerly  known as the  American  Stock  Exchange  ("NYSE Amex  Equities");  (c)
500,000 Stock Options at the one year  anniversary date of the Trading Date (the
"First Trading  Anniversary  Date"); and (d) 500,000 Stock Options at the second
year  anniversary  date of the Trading  Date (the  "Second  Trading  Anniversary
Date"); and (iii) Mr. Witt shall provide services to the Company in the capacity
as the  Treasurer/Chief  Financial  Officer and a director  and further  provide
consulting advise on exploration strategies,  management and operational service
considerations.

On September  22, 2009,  the Board of  Directors  approved the  amendment to the
Stock Option Plan, which authorizes an increase in share options to 12,000,000.

NOTE 9 -CONTINGENCIES
________________________________________________________________________________

During  August  2009,  the  Company was  included in a third party  lawsuit by a
former  director of the Company.  The former  Director  has made  certain  false
allegations  against the Company,  as specifically  described in the body of the
Company's  August 31, 2009  filing on Form 10-Q.  Although  the Company  refutes
these allegations and believes it should not be included in this action and that
the claims  contained  within the lawsuit are without merit, it is possible that
the Company may be exposed to a loss  contingency.  However,  the amount of such
loss, if any, cannot be reasonably  estimated at this time and  accordingly,  no
amount has been recorded to date.






                                       17
<PAGE>


                           FORWARD LOOKING STATEMENTS

Statements  made in this Form 10-Q that are not  historical or current facts are
"forward-looking  statements"  made  pursuant to the safe harbor  provisions  of
Section  27A of the  Securities  Act of 1933 (the  "Act") and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use  of  terms  such  as  "may,"  "will,"  "expect,"  "believe,"   "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. We intend that
such  forward-looking  statements  be  subject  to the  safe  harbors  for  such
statements.  We wish to caution  readers not to place undue reliance on any such
forward-looking  statements,   which  speak  only  as  of  the  date  made.  Any
forward-looking  statements represent  management's best judgment as to what may
occur in the future. However,  forward-looking  statements are subject to risks,
uncertainties  and important  factors beyond our control that could cause actual
results and events to differ  materially from  historical  results of operations
and events  and those  presently  anticipated  or  projected.  We  disclaim  any
obligation  subsequently  to revise any  forward-looking  statements  to reflect
events or  circumstances  after the date of such  statement  or to  reflect  the
occurrence of anticipated or unanticipated events.

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

GENERAL

Mainland Resources,  Inc. was incorporated under the laws of the State of Nevada
on May 12, 2006 and has been engaged in the business of acquisition, exploration
and development of mineral  properties in the United States since its inception.
Our shares of common stock trade on the  Over-the-Counter  Bulletin  Board under
the symbol  "MNLU:OB."  We are a natural  resource  exploration  and  production
company currently engaged in the exploration, acquisition and development of oil
and gas  properties in the United States and within North  America.  Our primary
activity and focus is our lease in East Holly Field, De Soto Parish in northwest
Louisiana (the "De Soto Parish") as more fully described below. To date, we have
acquired  approximately  2,695 net acres within the De Soto Parish. We have also
leased various other properties totaling  approximately 144 net acres within the
Cotton  Valley/Haynesville  trend  in the  State  of  Louisiana  as  more  fully
described below.

Please note that throughout this Quarterly  Report,  and unless otherwise noted,
the words "we," "our," "us," the "Company," or "Mainland  Resources,"  refers to
Mainland Resources, Inc.

RECENT DEVELOPMENTS

AUGUST 3, 2009 FORWARD STOCK SPLIT

On July 12,  2009,  our  Board of  Directors  pursuant  to a Board of  Directors
meeting  authorized  and  approved a forward  stock  split of two for one of our
total issued and outstanding shares of common stock (the "Forward Stock Split").

The Forward Stock Split was  effectuated  based on market  conditions and upon a
determination  by our Board of Directors that the Forward Stock Split was in our
best interests and of the shareholders. Certain factors were discussed among the

                                       18
<PAGE>

members of the Board of  Directors  concerning  the need for the  Forward  Stock
Split,  including  the  increased  potential  for  financing.  The intent of the
Forward Stock Split is to increase the marketability of our common stock.

The  Forward  Stock  Split was  effectuated  on June 16,  2009 upon  filing  the
appropriate  documentation  with NASDAQ.  The Forward Stock Split  increased our
total issued and outstanding  shares of common stock from  40,484,751  shares to
approximately  80,969,502 shares of common stock. The common stock will continue
to be $0.0001 par value.

Commensurate  with the Forward  Stock Split,  the  authorized  share capital was
increased  from  200,000,000  shares of common  stock to  400,000,000  shares of
common stock with a par value of $0.0001 per share. An amendment to our Articles
of  Incorporation  was filed with the Nevada Secretary of State on July 15, 2009
affecting the increase in our authorized capital.

CURRENT BUSINESS OPERATIONS

We are a natural resource  exploration and production  company currently engaged
in the exploration, acquisition and development of oil and gas properties in the
United States and within North  America.  Our primary  activity and focus is our
lease in the De Soto Parish. To date, we have acquired  approximately  2,695 net
acres within the De Soto Parish.  We have also leased  various other  properties
totaling approximately 144 net acres within the Cotton  Valley/Haynesville trend
in the State of Louisiana as more fully described below.

EAST HOLLY FIELD, DE SOTO PARISH, LOUISIANA

On  February  27,  2008,  we  entered  into an  option  agreement  (the  "Option
Agreement") with Kingsley  Resources,  Inc.,  Nevada  corporation  ("Kingsley"),
pursuant to which we acquired all the right,  title and interest Kingsley has in
and to certain  leasehold  estates (the "Leases") located in East Holly Field of
the De Soto  Parish.  The  Leases  create a  contiguous  block of acreage on the
southeast  flank of the East  Holly  Field.  The  Leases  were the  subject of a
certain purchase agreement dated December 11, 2007 and modified February 1, 2008
(collectively,  the "Leasehold Purchase Agreement") between Kingsley and Permian
Basin  Acquisition  Fund  ("Permian"),  pursuant to which Kingsley  acquired the
sub-surface rights provided for in the Leases.

In  accordance  with the terms  and  provisions  of the  Option  Agreement:  (i)
Kingsley granted to us all of its right, title and interest in and to the Leases
and we  assumed  all  rights,  duties  and  obligations  of  Kingsley  under the
Leasehold Purchase Agreement;  (ii) we agreed to pay to Kingsley $100,000, which
is payable as a reimbursement of a deposit paid by Kingsley to Permian under the
Leasehold  Purchase  Agreement;  and (iii) on or about  March 15, 2008 or at the
time we pay the $100,000 to Kingsley  under the Option  Agreement and such other
amounts  to  Permian  as  required  of  Kingsley  under the  Leasehold  Purchase
Agreement,  the right,  title and interest of Permian and Kingsley in the Leases
will be transferred and delivered to us, subject to residual royalty payment and
other rights  reserved  under the  Leasehold  Purchase  Agreement and the Option
Agreement by Permian and Kingsley.

                                       19
<PAGE>


On March 14, 2008,  we paid to Permian the aggregate  amount of $587,596,  which
amount did not include the $100,000  required to be paid by us to Kingsley under
the terms of the Option Agreement, the $100,000 was paid to Kingsley on April 2,
2008.  In  accordance  thereof,  the right,  title and  interest  of Permian and
Kingsley in the Leases were transferred to us effective March 14, 2008 by way of
assignment.  As of the date of this  Quarterly  Report,  we have  completed  the
Option  Agreement  and the  Leasehold  Purchase  Agreement  at a  total  cost of
$687,596 for approximately 2,551 net acres.

COTTON VALLEY/HAYNESVILLE

As of the date of this Quarterly Report, we have leased various other properties
totaling  approximately  144 net acres  consisting of approximately 84 net acres
leased as of  February  29,  2008 and an  additional  60 net acres  leased as of
February  28, 2009 for payment of  additional  consideration  of $22,753.  These
additional  property  leases within the Cotton  Valley/Haynesville  trend in the
State of  Louisiana  are for a three-year  term  period.  We have a 100% working
interest and a 75% net revenue interest in the leases.

DRILLING  INITIATIVES.  As of the date of this Quarterly  Report, in conjunction
with our joint venture partner, Petrohawk Energy Corporation ("Petrohawk"),  our
technical team (guided by management),  will determine our drilling initiatives.
These  initiatives are based on project  priority,  leasehold  requirements  and
availability  of resources,  access,  costs and a number of factors that go into
strategic planning.  With regards to the East Holly Field, management intends to
drill its initial well to a depth similar to that of other area  participants in
the  Cotton  Valley  and  Hosston  formations  and the  Haynesville  Shale.  The
technical team in conjunction  with our joint venture partner expects that other
wells drilled in this region will be based on the detailed  data gained  through
the initial well drilling process.

PETROHAWK AGREEMENT.  Effective on July 14, 2008, our Board of Directors entered
into a  binding  venture  agreement  (the  "Letter  Agreement")  with  Petrohawk
relating to the joint  development of acreage of the Company's  leases in DeSoto
Parish,  Louisiana.  In accordance  with the terms and  provisions of the Letter
Agreement:  (i)  Petrohawk  agreed  to pay  100%  of the  costs  of  development
associated  with the first  well  drilled  below the  Cotton  Valley  Formation,
including drilling,  completing and fracture stimulating, as well as costs up to
and  including  pipeline  connection;  (ii)  Petrohawk  agreed to pay 80% and we
agreed to pay 20% of all costs of the second well drilled  below the base of the
Cotton Valley Formation;  and (iii) Petrohawk agreed to pay 60% and we agreed to
pay 40% of all  costs of the third  well  drilled  below the base of the  Cotton
Valley  Formation.  In accordance  with the further terms and  provisions of the
Letter  Agreement,  we agreed to transfer 60% of our leases in the DeSoto Parish
to Petrohawk at closing, but only as such leases related to all depths below the
base of the Cotton Valley  Formation and  specifically  the  Haynesville  Shale.
Petrohawk further agreed to gather and market our production from above the base
of the Cotton Valley Formation pursuant to a mutually acceptable agreement.  The
Letter Agreement was subject to due diligence.

Effective  August 4, 2008, we entered into a definitive  binding  agreement with
Petrohawk   consummating   the  transaction   described  above  (the  "Peotrhawk
Agreement"),  together with associated  assignment,  conveyance and bill of sale
(the  "Assignment").  In  accordance  with  the  terms  and  provisions  of  the

                                       20
<PAGE>

Assignment,  we have  effectively  transferred  and conveyed to Petrohawk  sixty
percent (60%) of our 100% right,  title and interest in and to the leases in the
DeSoto Parish.  Petrohawk has been designated as the operator on all development
relating to the leases.

GRIFFITHS  11-#1  WELL.  On October  20,  2008,  the  Griffith  Well No. 10H was
spudded.  The Griffiths  11-#1 well  commenced  production at the end of January
2009. We believe that the  recoverable  reserves for the Griffith 11-#1 well may
ultimately be from 7.5 BCF to 15.81 BCF. The 15.81 BCF rate was  determined by a
preliminary  reserve  report  prepared by T.W.  McQuire &  Associates,  Inc. The
ultimate recovery was determined by suing a type curve that uses 80% decline for
the first year  followed by a 30% decline for the second  year,  15% decline for
the third year, and a 10% decline over the remaining expected life of the well.

STEPHENSON DOUGLAS LLC 16-#1. The second well under the Petrohawk Agreement, the
Stevenson  Douglas LLC 16-#1 well,  began drilling in April 2009. As of the date
of this Quarterly Report,  the Stephenson Douglas LLC 16-#1 well has spud and we
cemented  surface  casing at about 1800 feet.  As of the date of this  Quarterly
Report,  the  Stephenson  Douglas LLC 16-#1 has been  successfully  drilled to a
depth of 10,700 feet and 7 5/8 inch intermediate casing has been run on the well
to this  depth.  The rig has now been  released.  Management  believes  that the
Stephenson Douglas LLC 16-#1 well shows similar potentially  productive sands in
the Hosston and Cotton Valley  formations  to those  discovered in the Griffiths
11-#1Well. We are awaiting the scheduled arrival of a larger rig capable of whip
stocking the well and drilling the lateral  portion of the  wellbore.  We expect
the well to be completed by the end of December 2009.

DEHAN 15 -#1-H.  The third  well  under the  Petrohawk  Agreement,  the Dehan 15
#1-well, began drilling in May 2009. The well commenced production in the middle
of August 2009.

MISSISSIPPI PROSPECT/WESTROCK LAND CORP.

Effective on September 4, 2008, our Board of Directors  authorized the execution
of an option  agreement (the "2008 Option  Agreement")  with Westrock Land Corp.
("Westrock") to acquire 5,000 net acres in mineral oil and gas leases located in
the  State of  Mississippi  (the  "Leases").  In  accordance  with the terms and
provisions  of the 2008 Option  Agreement:  (i) we will  acquire a 100%  working
interest  and a 75% net revenue  interest in the Leases;  (ii) we have agreed to
pay  certain  acquisition  costs per net  mineral  acre and also paid a $500,000
deposit  to  secure  the  2008  Option  Agreement;  (iii)  the  balance  of  the
acquisition  costs will be due and payable upon completion of the due diligence,
which 2008  Option  Agreement  is  subject to the  completion  of  standard  due
diligence  review by us to be completed no later than October 15, 2008; and (iv)
upon closing scheduled no later than October 15, 2008,  Westrock shall assign to
us all of its right,  title and  interest in and to the Leases free and clear of
all  liens  and  encumbrances.  On  October  15,  2008,  November  30,  2008 and
subsequently  on April 16, 2009, and June 1, 2009 the 2008 Option  Agreement was
extended  pursuant  to which the  option  period  is  currently  extended  until
December 31, 2009. Additional deposits of $250,000, $100,000, $250,000, $100,000
and $100,000 were paid on October 17, 2008,  December 1, 2008, December 29, 2008
and April 27,  2009,  May 6,  2009 and June 5,  2009  respectively,  for a total
deposit to date of $1,300,000  (May 31, 2009 -  $1,300,000,  February 28, 2009 -
$1,100,000) in connection with these extensions.

                                       21
<PAGE>


MISSISSIPPI HAYNESVILLE/BOSSIER PROSPECT

On June 23,  2009,  we signed an Option  Agreement  with  Westrock  Land Corp to
acquire  approximately  8,000 net acres in mineral oil and gas leases located in
the State of  Mississippi.  In accordance  with the terms and  provisions of the
Option Agreement; (i ) we will acquire a 100% working interest and a minimum 75%
net  revenue  interest  in the  Leases;  (ii)  we  have  agreed  to pay  certain
acquisition  costs per net mineral acres by August 31, 2009. On August 28, 2009,
we amended the Option  Agreement to expand the acreage to include an  additional
500 acres thus aggregating 8,500 net acreage subject to the Option Agreement. We
further agreed to advance a payment of $300,000 towards the total purchase price
of the acreage under the Option  Agreement  with the closing date being extended
to October 15, 2009.

BUENA VISTA AREA

Effective on September 17, 2009, our Board of Directors authorized the execution
of a  letter  agreement  (the  "Letter  Agreement")  with  American  Exploration
Corporation,  a Nevada corporation  ("American  Exploration") to jointly develop
contiguous  acreage  known as the Buena Vista Area located in  Mississippi  (the
"Joint Development Project"). In accordance with the terms and provisions of the
Letter Agreement:  (i) American  Exploration has agreed to commit  approximately
5,000 net acres and we have  agreed to commit  approximately  8,200 net acres to
the  Joint  Development  Project;  (ii) we shall be the  operator  of the  Joint
Development  Project;  (iii)  we  have  agreed  to pay 80% of the  initial  well
drilling and completion costs to earn a 51% working interest in the well and the
total Joint Development  Project; and (iv) American Exploration has agreed to to
pay 20% of the initial well drilling and completion  costs to earn a 49% working
interest  in the  well and the  total  Joint  Development  Project.  In  further
accordance  with the terms and  provisions  of the  Joint  Development  Project,
future costs, including drilling and completions,  for oil and gas activities of
the net  acreage  in the Joint  Development  Project  will be split of a 51%/49%
basis  between us and American  Exploration,  respectively.  We must acquire the
acreage committed to the Joint Development Project from an unrelated third party
on or before  October 15, 2009 when the Letter  Agreement  terminates  and is no
longer in force and effect.

RESULTS OF OPERATION

We are an exploration stage company and although we have realized  revenues,  we
have  incurred  recurring  losses to date.  Our financial  statements  have been
prepared assuming that we will continue as a going concern and, accordingly,  do
not include adjustments relating to the recoverability and realization of assets
and classification of liabilities that might be necessary should we be unable to
continue in operation.  We expect we will require additional capital to meet our
long term operating requirements. We expect to raise additional capital through,
among other things, the sale of equity or debt securities.

The  summarized  financial data set forth in the table below is derived from and
should be read in conjunction  with our unaudited  financial  statements for the
six month periods ended August 31, 2009 and August 31, 2008, including the notes

                                       22
<PAGE>

to those financial  statements which are included in this Quarterly Report.  The
following discussion contains forward-looking statements that reflect our plans,
estimates and beliefs.  Our actual  results could differ  materially  from those
discussed in the forward looking  statements.  Our audited financial  statements
are stated in United States  Dollars and are prepared in accordance  with United
States Generally Accepted Accounting Principles.






























                                       23
<PAGE>


The following  table sets forth selected  financial  information for the periods
indicated.

RESULTS OF OPERATION
The following  table sets forth selected  financial  information for the periods
indicated.

<TABLE>
<CAPTION>

RESULTS OF OPERATION

                                                                         SIX MONTH                               FOR THE PERIOD
                                                                        PERIOD ENDED                           FROM MAY 12, 2006
                                                                       AUGUST 31, 2009                          (INCEPTION) TO
                                                                     AND AUGUST 31, 2008                         AUGUST 31, 2009
_________________________________________________________________________________________________________________________________

<S>                                                             <C>               <C>                                 <C>
REVENUES
      Oil and gas revenue                                       $1,484,353                   -                        $ 2,000,932

GENERAL AND ADMINISTRATIVE EXPENSES
    Operating costs and taxes                                      410,609                   -                            559,932
    Depletion allowance                                            118,397                   -                            130,397
    Consulting fees                                                203,981             492,357                            799,355
    Management fees and rent fees -related party                    84,372              56,000                            225,192
    Marketing expenses                                              62,003             896,827                            983,110
    Mineral property costs                                               -                   -                             14,510
    Office and general                                              88,935              47,334                            230,982
    Professional fees                                              109,701             112,696                            421,011
    Salary expense                                               1,148,000           9,614,685                         13,150,685
                                                               ___________________________________________________________________
Net operating loss                                                (741,645)        (11,219,899)                       (14,514,242)
Other income
   Gain on settlement of debt                                            -              33,239                             33,239
   Interest income                                                     468               6,027                              7,867
   Interest expense                                                (11,958)                  -                            (11,958)
   Financing costs                                                 (82,953)                  -                            (82,953)
                                                               ___________________________________________________________________
Net loss                                                         (836,088)        (11,180,633)                       (14,568,047)
   Foreign currency translation adjustment
                                                                         -                 422                                  -
                                                               ___________________________________________________________________
Comprehensive loss                                              $ (836,088)       $(11,180,211)                      $(14,568,047)

</TABLE>

We have incurred  recurring  losses to date. Our financial  statements have been
prepared assuming that we will continue as a going concern and, accordingly,  do
not include adjustments relating to the recoverability and realization of assets
and classification of liabilities that might be necessary should we be unable to
continue in operation.

We expect we will  require  additional  capital to meet our long term  operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.

                                       24
<PAGE>


SIX MONTH PERIOD ENDED AUGUST 31, 2009 COMPARED TO SIX MONTH PERIOD ENDED AUGUST
31, 2008.

Our  comprehensive  loss for the six month  period  ended  August  31,  2009 was
$836,088  compared to a comprehensive  loss of $11,180,211  during the six month
period ended August 31, 2008 (a decrease in comprehensive  loss of $10,344,123).
During the six month period ended August 31, 2009,  we generated  $1,484,353  in
oil and gas revenue compared to $-0- generated during the six month period ended
August 31, 2008.

During the six month  period  ended  August 31,  2009,  we incurred  general and
administrative  expenses of $2,225,998  compared to $11,219,899  incurred during
the six month ended August 31, 2008 (a decrease of  $8,993,901).  These  general
and  administrative  expenses  incurred during the six month period ended August
31, 2009 consisted of: (i) operating costs and taxes of $410,609  (2008:  $-0-);
(ii) depletion  allowance of $118,397  (2008:  $-0-);  (iii)  consulting fees of
$203,981  (2008:  $492,357);  (iv)  management  and rent  fees-related  party of
$84,372 (2008:  $56,000);  (v) marketing  expenses of $62,003 (2008:  $896,827);
(vi) office and general of $88,935 (2008:  $47,334);  (vii) professional fees of
$109,701  (2008:  $112,696);  and (viii)  salary  expense of  $1,148,000  (2008:
$9,614,685).

Of the $2,225,998 incurred as general and administrative expenses during the six
month  period  ended August 31,  2009,  we incurred  management  fees of $84,372
payable to our officers and directors.

General and  administrative  expenses incurred during the six month period ended
August 31, 2009 compared to the six month period ended August 31, 2008 decreased
primarily due to the decrease in salary  expense to $1,148,000  from  $9,614,685
during the six month period ended August 31, 2008  relating to the  valuation of
stock based  compensation,  the  decrease in  consulting  fees to $203,981  from
$492,357  during the six month period ended August 31, 2008, and the decrease in
marketing  expenses to $62,003 from  $896,827  during the six month period ended
August 31, 2008. General and administrative expenses generally include corporate
overhead,  financial and  administrative  contracted  services,  marketing,  and
consulting costs.

Our net  operating  loss during the six month  period  ended August 31, 2009 was
$741,645  compared to a net operating loss of  $11,219,899  during the six month
period ended August 31, 2008.

During the six month period ended August 31, 2009,  other income and loss in the
amount of $-0-  (2008:  $33,239) in gain on  settlement  of debt and $468 (2008:
$6,027)  in  interest  income,  interest  expense of  $11,958  (2008:  $-0-) and
financing costs of $82,953 (2008: $-0-). This resulted in net loss of ($836,088)
for the six  month  period  ended  August  31,  2009  compared  to a net loss of
($11,180,633) for the six month period ended August 31, 2008.

Our net loss of  ($836,088)  for the six month  period ended August 31, 2009 was
offset for foreign  currency  translation  adjustment of $-0- (2008:  $422) This
resulted in comprehensive loss of $836,088 for the six month period ended August
31, 2009 as compared to a comprehensive  loss of ($11,180,211) for the six month
period ended August 31, 2008. The weighted average number of shares  outstanding

                                       25
<PAGE>

was  80,175,160  for the six month  period  ended  August 31,  2009  compared to
74,959,098 for the six month period ended August 31, 2008.

THREE MONTH PERIOD  ENDED  AUGUST 31, 2009  COMPARED TO THREE MONTH PERIOD ENDED
AUGUST 31, 2008.

Our  comprehensive  loss for the three month  period  ended  August 31, 2009 was
$1,211,652 compared to a comprehensive loss of $8,221,281 during the three month
period ended August 31, 2008 (a decrease in  comprehensive  loss of $7,009,629).
During the three month period ended  August 31, 2009,  we generated  $575,233 in
oil and gas revenue  compared to $-0-  generated  during the three month  period
ended August 31, 2008.

During the three month period ended  August 31,  2009,  we incurred  general and
administrative expenses of $1,692,172 compared to $8,225,248 incurred during the
three month ended August 31, 2008 (a decrease of $6,533,076).  These general and
administrative  expenses incurred during the three month period ended August 31,
2009 consisted of: (i) operating costs and taxes of $195,486 (2008:  $-0-); (ii)
depletion  allowance of $93,479 (2008:  $-0-);  (iii) consulting fees of $52,847
(2008: $174,577);  (iv) management and rent fees-related party of $49,000 (2008:
$40,500);  (v) marketing expenses of $44,508 (2008:  $745,490);  (vi) office and
general of $45,556 (2008:  $25,867);  (vii)  professional fees of $63,296 (2008:
$81,129); and (viii) salary expense of $1,148,000 (2008: $7,157,685).

Of the $1,692,172  incurred as general and  administrative  expenses  during the
three month period ended August 31, 2009, we incurred management fees of $49,000
payable to our officers and directors.

General and administrative expenses incurred during the three month period ended
August 31,  2009  compared  to the three  month  period  ended  August 31,  2008
decreased  primarily due to the decrease in salary  expense to  $1,148,000  from
$7,157,685  during the three month period ended August 31, 2008  relating to the
valuation  of stock  based  compensation,  the  decrease in  consulting  fees to
$52,847 from $174,577  during the three month period ended August 31, 2008,  and
the decrease in marketing  expenses to $44,508  from  $745,490  during the three
month  period  ended  August  31,  2008.  General  and  administrative  expenses
generally include corporate  overhead,  financial and administrative  contracted
services, marketing, and consulting costs.

Our net  operating  loss during the three month period ended August 31, 2009 was
$1,116,939 compared to a net operating loss of $8,225,248 during the three month
period ended August 31, 2008.

During the three month period ended  August 31, 2009,  we recorded  other income
and loss in the amount of $-0- (2008: $33,239) in gain on settlement of debt and
$198 (2008: $3,967) in interest income, interest expense of $11,958 (2008: $-0-)
and  financing  fees of  $82,953  (2008:  $-0-).  This  resulted  in net loss of
$1,211,652  for the three month period  ended August 31, 2009  compared to a net
loss of $8,221,281 for the three month period ended August 31, 2008.

The weighted  average number of shares  outstanding was 80,969,500 for the three
month period ended August 31, 2009  compared to  78,838,696  for the three month
period ended August 31, 2008.

                                       26
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

SIX MONTH PERIOD ENDED AUGUST 31, 2009

As at the six month  period  ended  August 31,  2009,  our  current  assets were
$2,356,799  and our current  liabilities  were  $2,310,223,  which resulted in a
working  capital of $46,576.  As at the six month  period ended August 31, 2009,
current  assets  were  comprised  of: (i)  $107,242  in cash;  (ii)  $316,910 in
accounts  receivable;  and (iii)  $1,600,000  in  deposit  on  properties;  (iv)
$332,647 in amortized  financing  costs. As at the six month period ended August
31, 2009, current liabilities were comprised of $310,233 in accounts payable and
accrued liabilities and $2,000,000 in a promissory note.

As at the six  month  period  ended  August  31,  2009,  our total  assets  were
$6,119,362  comprised of: (i) current assets in the amount of  $2,356,799;  (ii)
valuation  of proved oil and gas  properties,  net of  accumulated  depletion of
$3,347,988;  and (iii) valuation of unproved oil and gas properties of $414,575.
The increase in total  assets  during the six month period ended August 31, 2009
from fiscal year ended  February 29, 2009 was  primarily  due to the increase in
cash and the valuation of the proved oil and gas properties of $2,572,977.

As at the six month period ended August 31,  2009,  our total  liabilities  were
$2,310,223   comprised  entirely  of  current   liabilities.   The  increase  in
liabilities  during the six month  period ended August 31, 2009 from fiscal year
ended  February  29,  2008 was  primarily  due to the  Company  entering  into a
promissory note of $2,000,000.

Stockholders'  equity  increased from  $2,328,102 for fiscal year ended February
29, 2009 to $3,809,139 for the six month period ended August 31, 2009.

CASH FLOWS FROM OPERATING ACTIVITIES

We have  generated  positive  cash flows from  operating  activities  during the
period.  For the six month period  ended  August 31,  2009,  net cash flows from
operating   activities  was  $819,981  consisting   primarily  of  net  loss  of
($836,088). Net cash flows from operating activities was adjusted by $118,397 in
depletion,   $1,148,000  in  stock  based  compensation,   $16,125  in  non-cash
consulting fees and $82,953 in amortized  financing  costs.  Net cash flows from
operating  activities  was further  changed by $234,459 in accounts  payable and
accrued liabilities and $56,135 in accounts receivable.

For the six month period ended August 31, 2008, net cash flows used in operating
activities was ($1,620,431) consisting primarily of a net loss of ($11,180,633).
Net cash flows used in operating  activities was adjusted by $9,614,685 in stock
based  compensation and ($33,239) in non-cash mineral property  recoveries.  Net
cash  flows  used in  operating  activities  was  further  changed  by $9,174 in
accounts  payable and accrued  liabilities  and  ($6,138) in accounts  payable -
related parties and ($24,280) in accounts receivable.

                                       27
<PAGE>


CASH FLOWS FROM INVESTING ACTIVITIES

For the six month period ended August 31, 2009, net cash flows used in investing
activities was ($3,600,415)  consisting of investment in oil and gas property of
($3,100,415) and deposit on properties of ($500,000)  compared to net cash flows
used in investing  activities  during the six month period ended August 31, 2008
of ($1,041,863) consisting of investment in oil and gas property.

CASH FLOWS FROM FINANCING ACTIVITIES

We have  financed  our  operations  primarily  from either  advancements  or the
issuance of equity and debt  instruments.  For the six month period ended August
31, 2009,  net cash flows  provided from  financing  activities  was  $2,737,400
compared to  $3,950,000  for the six month period  ended  August 31, 2008.  Cash
flows from  financing  activities for the six month period ended August 31, 2009
consisted of $1,153,000 in proceeds from the exercise of warrants and $2,000,000
from a promissory  note.  Net cash flow provided from  financing  activities was
further  changed by  ($415,600) in payment of financing  costs.  Cash flows from
financing activities for the six month period ended August 31, 2008 consisted of
$3,950,000 in proceeds on sale of common stock.

We expect that working capital requirements will continue to be funded through a
combination  of our  existing  funds,  cash flow,  debt  financing  and  further
issuances  of  securities.  Our working  capital  requirements  are  expected to
increase in line with the growth of our business.

PLAN OF OPERATION AND FUNDING

Existing working capital, further advances and debt instruments, and anticipated
cash flow are expected to be adequate to fund our  operations  over the next six
months.  We have no  lines  of  credit  or other  bank  financing  arrangements.
Generally,  we have  financed  operations  to date  through the  proceeds of the
private  placement  of  equity  and debt  instruments.  In  connection  with our
business plan, management anticipates additional increases in operating expenses
and capital expenditures relating to: (i) oil and gas operating properties; (ii)
possible drilling  initiatives on current properties and future properties;  and
(iii) future  property  acquisitions.  We intend to finance these  expenses with
further  issuances of securities and debt  issuances.  Thereafter,  we expect we
will need to raise  additional  capital and generate  revenues to meet long-term
operating  requirements.  Additional  issuances  of equity or  convertible  debt
securities will result in dilution to our current  shareholders.  Further,  such
securities  might have rights,  preferences  or privileges  senior to our common
stock.  Additional  financing may not be available upon acceptable  terms, or at
all. If adequate  funds are not  available or are not  available  on  acceptable
terms,  we may not be  able  to  take  advantage  of  prospective  new  business
endeavors or opportunities,  which could  significantly and materially  restrict
our business operations.

During  fiscal year ended  February  28,  2009,  we engaged in the 2008  Private
Placement  Offering pursuant to which we raised $4,000,000 under Regulation S of
the Securities Act.

                                       28
<PAGE>


MATERIAL COMMITMENTS

As of the date of this  Quarterly  Report,  and in addition  to our  obligations
under  the  Option  Agreement  as  incurred,  we  have  the  following  material
commitments:

PROMISSORY NOTE

Effective  July 21, 2009,  our Board of Directors  authorized the execution of a
$3,500,000  senior secured bridge loan (the "Loan  Agreement")  with  Guggenheim
Corporate Funding LLC ("Guggenheim").  As of August 10, 2009, we closed the Loan
Agreement  with a maturity  date of  December  1, 2009.  As of August 31,  2009,
$2,000,000  had been advance to us with the remaining  $1,500,000 to be advanced
after certain  conditions are met. The term financing also proposes  non-binding
conditions  for a  $10,000,000  senior  secured  advancing  line of credit to be
negotiated between us and Guggenheim.

We secured the bridge loan financing based upon our  participation  as a working
interest  partner in the drilling and  completion  of the Griffith No. 1 well in
our East Holly project located in DeSoto Parish,  Louisana. The proceeds will be
generally used to fund near-term  drilling and completion  capital  requirements
associated  with the two  additional  Haynesville  shale wells in our East Holly
project area and to acquire oil and gas leases related to our recently announced
Mississippi prospect.

The first  advance to be made by  Guggenheim  to the Company under the terms and
provisions of the Loan  Agreement is in the amount of  $2,500,000  (the "Initial
Advance"), of which we have received $2,000,000, to: (i) fund cash calls related
for our Dehan  15-1 well in an amount not to exceed  $1,500,000;  (ii) fund cash
calls related to the Stevenson-Douglas  16-1 well and general and administrative
expenses in an aggregate amount not to exceed $900,000; and (iii) pay our out of
pocket legal  expenses and closing fees related to the bridge loan  financing in
an amount not to exceed  $100,000.  The second  advance shall be made subject to
certain  conditions in the amount of $1,000,000 to fund expenses  related to the
acquisition of acreage in the Buena Vista Prospect. In the event we determine to
pursue  the  $10,000,000  line of credit  facility,  Guggenheim  shall  have the
opportunity to participate in the  Mississippi  project with up to a 10% working
interest.

The bridge loan bears interest at bank prime rate plus 7.00% calculated and paid
on a monthly  basis,  of which  $11,958 was paid through  August 31,  2009.  The
bridge  loan is secured by way of a charge  over our  interest in the East Holly
Prospect in the State of Louisiana.  We paid financing  fees in connection  with
the Loan  Agreement  of $415,600.  In  addition,  we agreed to assign 15% of our
interest in an  overriding  royalty in Section 15, T23N,  R14W,  Desoto  Parish,
Louisiana (includes the Dehan 15- #1H well).

MANAGEMENT CONTRACTS

Effective September 22, 2009, our Board of Directors authorized the execution of
a two-year  executive  service  agreement  with Michael J. Newport,  the current
President/Chief  Executive  Officer and a director of the Company (the  "Newport

                                       29
<PAGE>

Executive  Service  Agreement").  In accordance with the terms and provisions of
the Newport Executive Service Agreement,  we shall continue to pay Mr. Newport a
monthly salary of $15,000. See "Item 5. Other Information"

Effective September 22, 2009, our Board of Directors authorized the execution of
a two-year  executive  service  agreement  with Mark Witt (the  "Witt  Executive
Service  Agreement").  In accordance  with the terms and  provisions of the Witt
Executive Service Agreement, we shall pay Mr. Witt a monthly salary of $10,000.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any  significant  equipment  during the next twelve
months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly  Report,  we do not have any off-balance  sheet
arrangements  that have or are  reasonably  likely  to have a current  or future
effect on our financial condition,  changes in financial condition,  revenues or
expenses,  results of operations,  liquidity,  capital  expenditures  or capital
resources that are material to investors.

GOING CONCERN

The independent auditors' report accompanying our February 28, 2009 and February
29, 2008  financial  statements  contains an  explanatory  paragraph  expressing
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
financial  statements  have been prepared  "assuming  that we will continue as a
going concern," which  contemplates  that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business.

ITEM III. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk represents the risk of loss that may impact our financial  position,
results of  operations or cash flows due to adverse  change in foreign  currency
and interest rates.

EXCHANGE RATE

Our reporting currency is United States Dollars ("USD"). In the event we acquire
any properties  outside of the United States,  the fluctuation of exchange rates
may have  positive or negative  impacts on our results of  operations.  However,
since all of our properties are currently located within the United States,  any
potential revenue and expenses will be denominated in U.S. Dollars,  and the net
income effect of appreciation  and devaluation of the currency  against the U.S.
Dollar would be limited to our costs of the acquisition of property.

                                       30
<PAGE>


INTEREST RATE

Interest  rates in the United  States are  generally  controlled.  Any potential
future loans will relate mainly to  acquisition of properties and will be mainly
short-term.  However our debt may be likely to rise in connection with expansion
and if  interest  rates  were  to rise  at the  same  time,  this  could  have a
significant  impact  on our  operating  and  financing  activities.  We have not
entered  into  derivative  contracts  to hedge  existing  risks for  speculative
purposes.

ITEM IV. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We have performed an evaluation under the supervision and with the participation
of our  management,  including our Chief  Executive  Officer and Chief Financial
Officer,  of the  effectiveness of our disclosure  controls and procedures,  (as
defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act).  Based on that
evaluation,  our  management,  including our Chief  Executive  Officer and Chief
Financial  Officer,  concluded that our disclosure  controls and procedures were
effective as of August 31, 2009 to provide reasonable assurance that information
required to be disclosed by us in the reports filed or submitted by us under the
Exchange Act is recorded,  processed,  summarized  and reported  within the time
periods specified in the SEC's rules and forms.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal
control  over  financial  reporting  (as  defined  in Rule  13a-15(f)  under the
Exchange  Act).  Under  the  supervision  and  with  the  participation  of  our
management,  including the chief executive officer and chief financial  officer,
we evaluated the effectiveness of our internal control over financial  reporting
as of August 31, 2009. In making this  assessment,  management used the criteria
set  forth  by  the  Committee  of  Sponsoring  Organizations  of  the  Treadway
Commission ("COSO") in Internal Control-Integrated Framework.

This Quarterly  Report does not include an attestation  report of our registered
public  accounting  firm De Joya  Griffith &  Company,  LLC.,  Certified  Public
Accountants  regarding internal control over financial  reporting.  Management's
report was not subject to attestation by our registered  public  accounting firm
pursuant  to  temporary  rules  of  the  SEC  that  permit  us to  provide  only
management's report in this Quarterly Report on Form 10-Q.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

We believe that a control  system,  no matter how well  designed  and  operated,
cannot provide absolute assurance that the objectives of the controls system are
met, and no  evaluation  of controls  can provide  absolute  assurance  that all
control  issues  and  instances  of fraud,  if any,  within a company  have been
detected.  Our  disclosure  controls  and  procedures  are  designed  to provide
reasonable  assurance of achieving  their  objectives,  and our Chief  Executive
Officer and our Chief  Financial  Officer have concluded that these controls and
procedures are effective at the "reasonable assurance" level.

                                       31
<PAGE>

CHANGES IN INTERNAL CONTROLS

No significant  changes were implemented in our internal controls over financial
reporting  during  the  period  covered  by this  report  that  have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.

AUDIT COMMITTEE REPORT

The Board of Directors has  established an audit  committee.  The members of the
audit committee are Mr. Robert Fedun,  Mr. Ernest Sorochan and Mr. Angelo Viard.
All of the members of the audit committee are  "independent"  within the meaning
of Rule 10A-3 under the Exchange Act. The current audit  committee was organized
on February 4, 2009 and operates under a written charter adopted by our Board of
Directors.

The audit  committee has received and reviewed the written  disclosures  and the
letter  from De Joya  Griffith & Company,  LLC.,  Certified  Public  Accountants
required  by  Independence   Standards   Board  Standard  No.  1,   Independence
Discussions with Audit Committees, as amended.

Based on the reviews and discussions  referred to above, the audit committee has
recommended to the Board of Directors that the financial  statements referred to
above be included in our Quarterly  Report on Form 10-Q for the six month period
ended August 31, 2009 filed with the Securities and Exchange Commission.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

During  August 2009,  we were included in a third party lawsuit filed by Abigail
Investments  LLC against David Urquhart in the United States  District Court for
the State of Nevada,  Case No. 09-CV-1174.  The lawsuit includes a counter-claim
by David Urquhart against us and others.  Our management is of the position that
the former director has made certain false allegations against us including, but
not  limited  to,  issuance  of  shares of our  common  stock and grant of stock
options.

Although we refute these  allegations and believe that we should not be included
in this action and that the claims  contained  within the  complaint are without
merit, it is possible that we may be exposed to a loss contingency. However, the
amount of such loss,  if any,  cannot be  reasonably  estimated at this time and
accordingly, no amount has been recorded to date.

As of the date of this Quarterly Report, the former director has filed an answer
to the complaint with counter-claims.

                                       32
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ITEM 1A. RISK FACTORS

No report required.

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

CONSULTING AGREEMENT

Effective on June 15, 2009,  we issued  5,000  shares of our  restricted  common
stock at a per share price of $1.45 in accordance  with the terms and provisions
of a consulting  services  agreement.  The shares of common stock were issued in
reliance on Regulation S  promulgated  under the  Securities  Act. The per share
price of the shares  were  valued at the fair  market  value of our stock at the
date of issuance. See "Item 5. Other Information."

JULY 2008 PRIVATE PLACEMENT OFFERING

Effective May 2008, we completed a private placement offering (the "2008 Private
Placement")  with  certain  non-United  States  residents   (collectively,   the
"Investors").  In accordance  with the terms and  provisions of the 2008 Private
Placement,  we issued to the Investors an aggregate of 6,000,000  units at a per
unit price of $0.67 (the  "Unit")  in our  capital  for  aggregate  proceeds  of
$4,000,000.  Of the amount of $4,000,000 received,  $50,000 was as settlement of
debt and the remaining  $3,950,000 was received in cash. Each Unit was comprised
of one share of restricted  common stock and one-half  non-transferable  warrant
(the "Warrant").  Each Warrant is exercisable at $1.33 per share for a period of
one  year  from  the date of  issuance  ending  on May 1,  2009  (the  "Exercise
Period").

On  April  29,  2009,  our  Board  of  Directors  pursuant  to  written  consent
resolutions  approved a thirty-day  extension to the Exercise  Period to June 1,
2009  based on  current  market  conditions.  As of the  date of this  Quarterly
Report,  an aggregate of 1,729,500  Warrants  were  exercised at $0.67 per share
with net proceeds of  $1,153,000.  Therefore,  we issued an aggregate of 432,375
shares of our restricted common stock. The remaining  4,270,500 Warrants expired
unexercised.

STOCK OPTION PLAN

Effective  September 22, 2009, our Board of Directors approved and authorized an
amendment  to our 2008 Stock  Option Plan  increasing  the number of  authorized
shares underlying the stock options to an aggregate of 12,000,000 shares.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

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

No report required.

                                       33
<PAGE>

ITEM 5. OTHER INFORMATION

DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT
OF PRINCIPAL OFFICERS

Effective on September 22, 2009, our Board of Directors accepted the resignation
of  William   Thomas  as  our   Treasurer/Chief   Financial   Officer/Secretary.
Subsequently, on September 22, 2009, our Board of Directors accepted the consent
of Mark Witt as our Treasurer/Chief  Financial  Officer/Secretary and a director
and the  consent of  William  Thomas as a member of our Board of  Directors.  In
accordance  with the unanimous vote of all the members of the Board of Directors
at the Special  Meeting,  Mr.  Witt was duly  appointed  as our  Treasurer/Chief
Financial  Officer  and a member of our Board of  Directors  and Mr.  Thomas was
appointed as a member of our Board of  Directors.  Therefore,  as of the date of
this  Quarterly  Report,  our Board of Directors  is comprised of the  following
individuals:  Michael J. Newport, Ernest G. Sorochan, Simeon King Horton, Robert
Fedun, Angelo Viard,  Charles A. Morrison,  J. Jack Cox, William Thomas and Mark
Witt.

BIOGRAPHY

WILLIAM  THOMAS.  Mr.  Thomas has over thirty years of experience in the finance
and accounting areas for the natural resource sector.  Currently,  Mr. Thomas is
the chief financial  officer of Morgan Creek Energy,  Nevada  corporations  that
trades  on  the  OTC  Bulletin,   and  Uranium  International  Corp.,  a  Nevada
corporation that trades on the OTC Bulletin Board, as well as Mira Resources,  a
Canadian public company traded on the TSX Venture Exchange.  Mr. Thomas has held
various  successive  management  positions with Kerr McGee  Corporation's  China
operations  based in Beijing,  China,  ending in 2004 with his final position as
director of business services.  For a brief period after leaving Kerr McGee, Mr.
Thomas acted as a self-practitioner in the accounting and finance field. In July
2007,  he took on the role of chief  financial  officer for two public  resource
companies;  Hana Mining Inc. and NWT Uranium Corp. Recently, Mr. Thomas resigned
from NWT Uranium  Corp.  in July,  2008 but  continues  to serve as CFO for Hana
Mining. Mr. Thomas was previously general manager  (1999-2002),  and finance and
administration  manager  (1996-1999) of Kerr McGee's China operations.  While in
China,  Mr.  Thomas  was  responsible  for  finance  including   Sarbanes  Oxley
reporting, budgeting, treasury, procurement,  taxation, marketing, insurance and
business  development,   including  commercial  negotiations  with  the  Chinese
partner,  China  National  Offshore  Oil Co (CNOOC) and other  Chinese and joint
venture  partners.  Mr. Thomas  focused  heavily on supporting  exploration  and
development  operations  for  three  operated  blocks in Bohai  Bay,  as well as
evaluation and negotiation of new venture blocks in East China Sea and the South
China Sea. He was also  responsible for the liaison with CNOOC and other Chinese
oil companies,  Kerr McGee US management and joint venture  partners,  where his
main  focus was to ensure  cost  effective  and  timely  achievement  of various
approved work programs and budgets.  He was also Chief  Representative  for Kerr
McGee on the Joint Management  Committee (JMC). Mr. Thomas  previously worked as
manager of fixed asset  accounting  for Kerr McGee  Corporation's  US operations
(1996),   as  finance   director  of  Kerr  McGee's  UK   operations   based  in
London/Aberdeen  (1992-1996),  and Kerr McGee's Canadian  operations in Calgary,
Alberta,  Canada (1984-1992),  including the predecessor  company,  Maxus Canada
Ltd, which was acquired by Kerr McGee Ltd. Over the course of his career, he has
been involved in all aspects of managing accounting, budgeting, human resources,
administration,   insurance,   taxation  and  other  business   support  aspects

                                       34
<PAGE>

surrounding gas properties for Kerr McGee.  Mr. Thomas was responsible to ensure
compliance with COPAS, SEC, FASB and international  accounting  regulations.  He
participated on a team that developed the Oracle accounting  system  application
to the Kerr McGee's  worldwide  operations.  He was most notably involved in the
company's  initial  entry  into  both  China and the UK North Sea - start ups of
local and expatriate  personnel that eventually  developed into core areas (over
$1 Billion in value) for Kerr McGee,  including  the  company's  first  operated
offshore oil fields in China (CFD 1-1) and the UK (Gryphon).

In his early  career Mr.  Thomas also held senior  management  positions  in the
finance divisions of Norcen Energy Ltd of Calgary, Alberta (1981-1984),  Denison
Mines Ltd of Ontario Canada  (1978-1981)  and Algoma Steel  Corporation of Sault
Ste  Marie,  Ontario,  Canada  (1977).  He was  also a  Senior  Auditor  for the
accounting firm, Coopers & Lybrand in Toronto, Canada (1975-1977).

Mr. Thomas attained his Chartered  Accountant (CA) designation from the Canadian
Institute  of  Chartered  Accountants  in 1977.  He holds an Honors  Bachelor of
Commerce and Finance from the University of Toronto, Ontario, Canada.

MARK WITT. During the past twenty-seven years, Mr. Witt has worked in the energy
industry  including  management  positions  with major energy  companies and has
served as CFO for three public energy companies.  From approximately  March 2003
to the present,  Mr. Witt has been the president of Commercial  Energy  Services
LLC,  which is an energy and  financial  consulting  firm  founded by Mr.  Witt.
During this time, from  approximately May 2005 to February 2007, Mr. Witt served
as CFO for GFI Oil & Gas Corporation, an internationally focused exploration and
production company which was listed on the TSX Venture Exchange.

From  approximately  February  2002  through  March 2003,  Mr. Witt was the vice
president of energy  commodities risk management with Goldman Sachs & Company in
New York City.  Mr. Witt  originated  risk  management  products and  structured
solutions for power and natural gas companies  including power purchase and sale
agreements and financial hedges, swaps and options.

From approximately June 1999 through February 2002, Mr. Witt was the senior vice
president for GDF Suez (Tractebel)  Energy Marketing,  Inc. where he founded and
managed the North  American  power and gas  origination  business which included
executing power and natural gas purchase and sale  contracts,  and marketing LNG
imports.  From  approximately  November 1997 through June 1999, Mr. Witt was the
director of Northeast  origination  with Enron  Capital & Trade  Resources  Inc.
where he worked  closely  with  trading  desks to price  various  components  of
complex financing and structured derivative transactions.

From approximately June 1994 through November 1997, Mr. Witt was a director, CFO
and vice president of Virginia Gas Company where he was  responsible for raising
capital  through  initial and  secondary  public  offerings  on the NASDAQ stock
exchange  and  management  of natural  gas  pipeline  and  storage,  and propane
operations.  From  approximately  November 1984 through June 1994,  Mr. Witt was
employed with British Petroleum Company PLC in Houston and London, where he held
progressively  responsible  financial positions in various businesses  including
crude and products trading,  drilling, and natural gas development and strategic
planning.

                                       35
<PAGE>


Mr. Witt earned a BBA in accounting from the University of Texas at Austin.

WITT EXECUTIVE SERVICE AGREEMENT

Effective September 22, 2009, our Board of Directors authorized the execution of
a two-year  executive  service  agreement  with Mark Witt (the  "Witt  Executive
Service  Agreement").  In accordance  with the terms and  provisions of the Witt
Executive  Service  Agreement:  (i) we shall pay Mr.  Witt a  monthly  salary of
$10,000;  and (ii) we shall grant an aggregate of 2,500,000  stock  options (the
"Stock  Options") to Mr. Witt under its 2008 Stock Option Plan,  as amended (the
"Stock  Option  Plan").  The Stock  Options shall expire ten (10) years from the
Effective Date and shall vest in incremental  periods as reflected  below (each,
hereinafter the "Vesting  Date").  The exercise price at each Vesting Date shall
be the lesser of: (a) the  thirty-day  weighted  average  price of our shares of
common stock prior to each of the  respective  Vesting  Date;  or (ii) the issue
price as  established by the Board of Directors of our shares of common stock at
each of the equity  fundings  referenced  below in (i).  The Vesting Date of the
Stock Options is as follows:  (i) 1,500,000 Stock Options shall vest on the date
we close equity funding(s) aggregating  $10,000,000;  (ii) 500,000 Stock Options
shall vest when we have successfully completed its listing and commences trading
of its shares of common stock with a  designated  trading  symbol (the  "Trading
Date")  with the NYSE  Amex  Equities,  formerly  known  as the  American  Stock
Exchange  ("NYSE Amex  Equities") or comparable  major  exchange;  (iii) 500,000
Stock  Options shall vest at the one year  anniversary  date of the Trading Date
(the "First  Trading  Anniversary  Date");  and (iv) 500,000 Stock Options shall
vest at the one year anniversary date of the First Trading Anniversary Date (the
"Second Trading Anniversary Date").

NEWPORT EXECUTIVE SERVICE AGREEMENT

Effective September 22, 2009, our Board of Directors authorized the execution of
a two-year  executive  service  agreement  with Michael J. Newport,  our current
President/Chief Executive Officer and a director (the "Newport Executive Service
Agreement").  In  accordance  with  the  terms  and  provisions  of the  Newport
Executive Service Agreement:  (i) we shall continue to pay Mr. Newport a monthly
salary of $15,000;  (ii) we shall grant an aggregate of 1,500,000  stock options
(the "Stock  Options")  to Mr.  Newport  under our 2008 Stock  Option  Plan,  as
amended (the "Stock Option Plan"). The Stock Options shall expire ten (10) years
from the Effective Date and shall vest in incremental periods as reflected below
(each  hereinafter the "Vesting Date").  The exercise price at each Vesting Date
shall be the lesser of: (a) the thirty day weighted  average price of our shares
of common stock prior to each of the  respective  Vesting Date; or (b) the issue
price as  established by the Board of Directors of our shares of common stock at
each of the equity  fundings  referenced  below in (i).  The Vesting Date of the
Stock Options is as follows:  (a) 500,000  Stock Options when we have  completed
our  listing  and  commences  trading  of our  shares  of  common  stock  with a
designated  trading  symbol (the  "Trading  Date") with the NYSE Amex  Equities,
formerly  known  as the  American  Stock  Exchange  ("NYSE  Amex  Equities")  or
comparable exchange;  (b) 500,000 Stock Options at the one year anniversary date
of the Trading  Date (the "First  Trading  Anniversary  Date");  and (c) 500,000
Stock  Options at the second  year  anniversary  date of the  Trading  Date (the
"Second  Trading  Anniversary  Date");  and (iii) Mr.  Newport shall continue to
provide services to us in the capacity as our President/Chief  Executive Officer
and a director and further provide consulting advise on exploration  strategies,
management and operational service considerations.

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<PAGE>

ITEM 6. EXHIBITS

         Exhibits:

         10.1     Executive Service  Agreement  between Mainland  Resources Inc.
                  and Michael J. Newport dated September 22, 2009. (1)

         10.2     Executive Service  Agreement  between Mainland  Resources Inc.
                  and Mark Witt dated September 22, 2009. (2)

         31.1     Certification of the registrant's  Principal Executive Officer
                  under the  Exchange  Act Rules,  12a-14(a)  or  15d-14(a),  as
                  adopted  pursuant  to Section  302 of the  Sarbanes-Oxley  Act
                  2002.

         31.2     Certification of the registrant's  Principal Financial Officer
                  under the  Exchange  Act Rules,  12a-14(a)  or  15d-14(a),  as
                  adopted  pursuant  to Section  302 of the  Sarbanes-Oxley  Act
                  2002.

         32.1     Certifications of the registrant's Principal Executive Officer
                  and Principal Financial Officer under 18 U.S.C.  Section 1350,
                  as adopted pursuant to Section 906 of the  Sarbanes-Oxley  Act
                  of 2002.

         (1)  Incorporated herein by reference to the Current Report on Form 8-K
              filed with the  Securities  and Exchange  Commission on October 2,
              2009.
         (2)  Incorporated herein by reference to the Current Report on Form 8-K
              filed with the  Securities  and Exchange  Commission on October 2,
              2009.


SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                            MAINLAND RESOURCES, INC.

Dated: October 12, 2009                    By: /s/ MICHAEL J. NEWPORT
                                           __________________________________
                                           Michael J. Newport, President and
                                           Chief Executive Officer


Dated: October 12, 2009                    By: /s/ MARK WITT
                                           __________________________________
                                           Mark Witt, Chief Financial Officer


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