UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 ___________________  FORM 10-Q ___________________  X.QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2010  OR  .TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  FOR THE TRANSITION PERIOD FROM   TO .  COMMISSION FILE NUMBER: 000-27693  SAVANNA EAST AFRICA, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)  NEVADA98-0211769(STATE OR OTHER JURISDICTION OF(I.R.S. EMPLOYER IDENTIFICATION NO.)INCORPORATION OR ORGANIZATION)  2520 SOUTH THIRD STREET #206, LOUISVILLE, KY  40208 (ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)  REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (502) 636-2807  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No .  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes . No .  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):  Large accelerated filer.Accelerated filer.Non-accelerated filer. (Do not check if a smaller reporting company)Smaller reporting companyX.  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X.  Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.  Class:Outstanding at November 8, 2010:Common Stock, $0.001 par value per share3,529,971 shares      SAVANNA EAST AFRICA, INC.  INDEX  PART I. FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTS3ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS14ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK17ITEM 4. CONTROLS AND PROCEDURES17PART II. OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGS18ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS18ITEM 3. DEFAULTS UPON SENIOR SECURITIES18ITEM 4. [REMOVED AND RESERVED]18ITEM 5. OTHER INFORMATION18ITEM 6. EXHIBITS18SIGNATURES19   2     Part I  FINANCIAL INFORMATION  Item 1. Financial Statements   SAVANNA EAST AFRICA, INC.(A DEVELOPMENT STAGE COMPANY)BALANCE SHEETSSeptember 30,June 30,20102010(unaudited)ASSETSCurrent assets:Cash$94,742$145,930Total Current Assets94,742145,930Equipment397,500397,500Total Assets$492,242$543,430LIABILITIES AND STOCKHOLDERS' DEFICITLiabilitiesCurrent LiabilitiesAccounts payable$8,800$-Accrued interest70,20232,286Accrued salaries60,00030,000Advance payable - related party100,000100,000Due to related parties3,0001,500Derivative liabilities2,562,6071,894,453Promissory note payable200,000200,000Convertible notes payable, current, net of discounts of $252,055 and $377,695257,945122,305Convertible notes - related parties net of discounts of $22,500 and $26,8211,054,8591,049,038Total Current Liabilities4,317,4133,429,582Long Term LiabilitiesPromissory note payable, related party297,500297,500Convertible notes payable, non-current, net of discounts of $95,524 and $111,445130,976115,055Total Long Term Liabilities428,476412,555Total Liabilities4,745,8893,842,137Stockholders' DeficitPreferred stock, authorized 10,000,000, par value $0.001,0 issued and outstanding--Common stock, authorized 2,000,000,000 shares, par value $0.001,3,529,971 and 3,772,400 issued and outstanding3,5303,772Paid-in capital131,040627,298Treasury stock at cost (0 and 742,429 shares)-(500,000)Accumulated deficit during development stage(4,388,217)(3,429,777)Total Stockholders' Deficit(4,253,647)(3,298,707)Total Liabilities and Stockholders' Deficit$492,242$543,430  The accompanying notes are an integral part of these financial statements.  3      SAVANNA EAST AFRICA, INC.(A DEVELOPMENT STAGE COMPANY)STATEMENTS OF OPERATIONS(UNAUDITED)December31, 2002ThreeThree(Inception)Months EndedMonths EndedthroughSeptember 30,September 30,September 30,201020092010Revenue$-$-$276,599Cost of Revenue--99,383Gross profit--177,216Operating expenses:General and administrative56,83028,3181,128,121Professional fees19,8504,450174,454Consulting fees30,000-94,825Well re-development expense--72,478Total operating expenses106,68032,7681,469,878Loss from Operations(106,680)(32,768)(1,292,662)Other Income (Expense):Gain (loss) on sale of assets--(495,875)Change in fair value of derivative liabilities(653,154)-2,567,023Interest income192-1,883Interest and finance costs(198,798)(14,465)(5,168,586)Total non-operating expenses(851,760)(14,465)(3,095,555)Loss before income tax(958,440)(47,233)(4,388,217)Provision for income taxes---Net loss$(958,440)$(47,233)$(4,388,217)Basic and DilutedLoss per share$(0.29)$(0.01)Weighted AverageNumber of shares3,297,9383,422,400  The accompanying notes are an integral part of these financial statements.  4     SAVANNA EAST AFRICA, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENTS OF STOCKHOLDERS' DEFICIT


|                                            |              |   |         |   |            |   |             |   |                            |   |            
|------------------------------------------- | ------------ | - | ------- | - | ---------- | - | ----------- | - | -------------------------- | - | -----------
|                                            |              |   |         |   | Additional |   |             |   | Accumulated
Deficit during |   | Total      
|                                            | Common stock |   | Paid-in |   | Treasury   |   | Development |   | Stockholders'             
|                                            | Shares       |   | Amount  |   | Capital    |   | Stock       |   | stage                      |   | Deficit    
|Balance, December 31, 2002                  | 8,034        | $ | 8       | $ | -          | $ | -           | $ | (201,575)                  | $ | (201,567)  
|Balance, June 30, 2003                      | 8,034        | $ | 8       | $ | -          | $ | -           | $ | (201,575)                  | $ | (201,567)  
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Shares of common stock issued for services  | 8,966        |   | 9       |   | 153        |   | -           |   | -                          |   | 162        
|Balance, June 30, 2004                      | 17,000       | $ | 17      | $ | 153        | $ | -           | $ | (201,575)                  | $ | (201,405)  
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Shares of common stock issued for services  | 3,010,000    |   | 3,010   |   | 27,090     |   | -           |   | -                          |   | 30,100     
|Shares issued for debt settlement           | 300,000      |   | 300     |   | 2,700      |   | -           |   | -                          |   | 3,000      
|Net loss                                    | -            |   | -       |   | -          |   | -           |   | (69,323)                   |   | (69,323)   
|Balance, June 30, 2005                      | 3,327,000    | $ | 3,327   | $ | 29,943     | $ | -           | $ | (270,898)                  | $ | (237,628)  
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Net loss                                    | -            |   | -       |   | -          |   | -           |   | (82,953)                   |   | (82,953)   
|Balance, June 30, 2006                      | 3,327,000    | $ | 3,327   | $ | 29,943     | $ | -           | $ | (353,851)                  | $ | (320,581)  
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|July 2006 shares issued                     | 50,000       |   | 50      |   | 374,950    |   | -           |   | -                          |   | 375,000    
|September 2006 shares issued                | 56,450       |   | 57      |   | 564,443    |   | -           |   | -                          |   | 564,500    
|Convertible note payable - related party    | -            |   | -       |   | (458,100)  |   | -           |   | -                          |   | (458,100)  
|Adjustment to agree to stock agent          | (149)        |   | (1)     |   | 1          |   | -           |   | -                          |   | -          
|January 2007 stock adjustment               | -            |   | -       |   | (66)       |   | -           |   | -                          |   | (66)       
|Net loss                                    | -            |   | -       |   | -          |   | -           |   | (190,201)                  |   | (190,201)  
|Balance, June 30, 2007                      | 3,433,301    | $ | 3,433   | $ | 511,171    | $ | -           | $ | (544,052)                  | $ | (29,448)   
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Stock adjustment                            | (10,901)     |   | (11)    |   | 11         |   | -           |   | -                          |   | -          
|Net loss                                    | -            |   | -       |   | -          |   | -           |   | (762,654)                  |   | (762,654)  
|Balance, June 30, 2008                      | 3,422,400    | $ | 3,422   | $ | 511,182    | $ | -           | $ | (1,306,706)                | $ | (792,102)  
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Net loss - As Restated                      | -            |   | -       |   | -          |   | -           |   | (209,773)                  |   | (209,773)  
|Balance, June 30, 2009                      | 3,422,400    | $ | 3,422   | $ | 511,182    | $ | -           | $ | (1,516,479)                | $ | (1,001,875)
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Shares of common stock issued for services  | 250,000      |   | 250     |   | 62,250     |   | -           |   | -                          |   | 62,500     
|Conversion of debt                          | 100,000      |   | 100     |   | 4,900      |   | -           |   | -                          |   | 5,000      
|Fulfillment of derivative liability         | -            |   | -       |   | 5,000      |   | -           |   | -                          |   | 5,000      
|Stock repurchased at cost                   | (955,184)    |   | -       |   | -          |   | (500,000)   |   | -                          |   | (500,000)  
|Contributed capital through debt assignment | -            |   | -       |   | 43,966     |   | -           |   | -                          |   | 43,966     
|Net loss                                    | -            |   | -       |   | -          |   | -           |   | (1,913,298)                |   | (1,913,298)
|Balance, June 30, 2010                      | 2,817,216    | $ | 3,772   | $ | 627,298    | $ | (500,000)   | $ | (3,429,777)                | $ | (3,298,707)
|                                            |              |   |         |   |            |   |             |   |                            |   |            
|Conversion of debt                          | 500,000      |   | 500     |   | 3,000      |   | -           |   | -                          |   | 3,500      
|Shares retired                              |              |   | (742)   |   | (499,258)  |   | 500,000     |   |                            |   | -          
|Adjustment to shares retired                | 212,755      |   |         |   |            |   |             |   |                            |   | -          
|Net loss                                    | -            |   | -       |   | -          |   | -           |   | (958,440)                  |   | (958,440)  
|Balance, September 30, 2010 (unaudited)     | 3,529,971    | $ | 3,530   | $ | 131,040    | $ | -           | $ | (4,388,217)                | $ | (4,253,647)

The accompanying notes are an integral part of these financial statements  5     SAVANNA EAST AFRICA, INC. (A DEVELOPMENT STATE COMPANY) STATEMENTS OF CASH FLOWS (UNAUDITED)


|                                                         |                                                                       |                                                         |                      |          |               |             |              |             |                 
|-------------------------------------------------------- | --------------------------------------------------------------------- | ------------------------------------------------------- | -------------------- | -------- | ------------- | ----------- | ------------ | ----------- | ----------------
|                                                         |                                                                       |                                                         |                      |          | Three         |             | Three        |             |                 
|                                                         |                                                                       |                                                         |                      |          | Months        |             | Months       |             | December 31,    
|                                                         |                                                                       |                                                         |                      |          | Ended         |             | Ended        |             | 2002 (Inception)
|                                                         |                                                                       |                                                         |                      |          | September 30, |             | September30, |             | to September 30,
|                                                         |                                                                       |                                                         |                      |          | 2010          |             | 2009         |             | 2010            
|Operating Activities:                                    |                                                                       |                                                         |                      |          |               |            
|                                                         | Net Loss                                                              | $                                                       | (958,440)            | $        | (47,233)      | $           | (4,425,017) 
|                                                         | Adjustments to reconcile net loss to net cash                         |                                                         |                      |          |               |             |             
|                                                         | used in operating activities                                          |                                                         |                      |          |               |             |             
|                                                         |                                                                       | Depreciation                                            |                      | -        |               | 4,246       |              | 69,355     
|                                                         |                                                                       | Bad debt expense                                        |                      | -        |               | -           |              | 105,000    
|                                                         |                                                                       | Amortization of debt discounts                          |                      | 160,882  |               | -           |              | 1,352,280  
|                                                         |                                                                       | Non-cash finance cost                                   |                      | -        |               | -           |              | 3,542,967  
|                                                         |                                                                       | Change in fair value of derivative liability            |                      | 653,154  |               | -           |              | (2,045,485)
|                                                         |                                                                       | Shares of common stock issued for professional services |                      | -        |               | -           |              | 62,500     
|                                                         |                                                                       | Write off of fixed assets                               |                      | -        |               | -           |              | 36,801     
|                                                         |                                                                       | Increase / (decrease) in current liabilities:           |                      |          |               |             |              |            
|                                                         |                                                                       |                                                         | Accounts payable     |          | -             |             | 6,914        |             | (4,195)         
|                                                         |                                                                       |                                                         | Accrued expenses     |          | 93,216        |             | 29,465       |             | 189,542         
|                                                         |                                                                       |                                                         | Shareholder payable  |          | -             |             | (4,205)      |             | (74,610)        
|                                                         |                                                                       |                                                         | Due to related party |          | -             |             |              |             | 1,500           
|Net Cash used in Operating Activities                    |                                                                       | (51,188)                                                |                      | (10,813) |               | (1,189,362)
|Investing Activities:                                    |                                                                       |                                                         |                      |          |               |            
|                                                         | Cash advanced towards investment                                      |                                                         | -                    |          | -             |             | (105,000)   
|                                                         | Capital expenditures                                                  |                                                         | -                    |          | -             |             | (100,000)   
|Net Cash used in Investing Activities                    |                                                                       | -                                                       |                      | -        |               | (205,000)  
|Financing activities:                                    |                                                                       |                                                         |                      |          |               |            
|                                                         | Proceeds from advance                                                 |                                                         | -                    |          | -             |             | 100,000     
|                                                         | Proceeds from notes payable                                           |                                                         | -                    |          | -             |             | 874,500     
|                                                         | Proceeds from contributed capital                                     |                                                         | -                    |          | -             |             | 480,271     
|                                                         | Proceeds from sale of common Stock                                    |                                                         | -                    |          | -             |             | 34,333      
|Net Cash provided by Financing Activities                |                                                                       | -                                                       |                      | -        |               | 1,489,104  
|                                                         |                                                                       |                                                         |                      |          |               |            
|Net Increase (Decrease) in Cash                          |                                                                       | (51,188)                                                |                      | (10,813) |               | 94,742     
|                                                         |                                                                       |                                                         |                      |          |               |            
|Cash -- Beginning of Period                              |                                                                       | 145,930                                                 |                      | 13,706   |               | -          
|Cash -- End of Period                                    | $                                                                     | 94,742                                                  | $                    | 2,893    | $             | 94,742     
|                                                         |                                                                       |                                                         |                      |          |               |             |              |             |                 
|Cash paid for:                                           |                                                                       |                                                         |                      |          |               |            
|                                                         | Interest                                                              | $                                                       | -                    | $        | -             | $           | -           
|                                                         | Income taxes                                                          | $                                                       | -                    | $        | -             | $           | -           
|                                                         |                                                                       |                                                         |                      |          |               |             |              |             |                 
|Supplemental disclosure of non-cash financing activities |                                                                       |                                                         |                      |          |               |            
|                                                         | Accrued compensation converted to note payable                        | $                                                       | 15,000               | $        | -             | $           | 45,000      
|                                                         | Advance of cash by related party on behalf of the Company             | $                                                       | -                    | $        | -             | $           | 175,000     
|                                                         | Purchase of equipment with note payable                               | $                                                       | -                    | $        | -             | $           | 397,500     
|                                                         | Conversion of debt into 600,000, 0 and 600,000 shares of common stock | $                                                       | 3,500                | $        | -             | $           | 8,500       
|                                                         | Repurchase of 742,429, 0 and 742,429 shares of the Company's          |                                                         |                      |          |               |             |             
|                                                         | Common stock for note payable                                         | $                                                       | -                    | $        | -             | $           | 500,000     
|                                                         | Contribution of capital through debt assignment                       | $                                                       | -                    | $        | -             | $           | 43,967      

The accompanying notes are an integral part of these financial statements.   6     NOTES TO FINANCIAL STATEMENTS OF SAVANNA EAST AFRICA, INC. (A DEVELOPMENT STAGE COMPANY) FOR THE QUARTER ENDED SEPTEMBER 30, 2010  NOTE 1 - GENERAL ORGANIZATION AND BUSINESS  Savanna East Africa, Inc. (f/k/a Nova Energy, Inc.) was incorporated in Nevada in 1995, and is a publicly traded company presently listed on www.pinksheets.com, symbol NVAE. The Company is focused on the recovery of oil and gas reserves through acquisition and project development, specializing in mature and marginal field enhancement, developmental exploration drilling and low risk exploration opportunities in Texas and North Dakota regions. On January 25, 2010, Daymon Bodard, the then sole director, officer and principal stockholder of the Company, effected a transfer of control of the Company.  The Company's newly updated and expanded business plan is centered around a number of diverse opportunities in East Africa, initially centered in Kenya. The Company also intends to continue oil and gas exploration, and on April 26, 2010, the Company purchased oil drilling equipment in Texas from Norris Harris for purposes of engaging in such oil and gas exploration.  In connection with the Companys new business plan, on June 11, 2010, the Company amended its certificate of incorporation to change its name from Nova Energy, Inc. to Savanna East Africa, Inc.  NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Basis of Presentation - The Company follows accounting standards set by the Financial Accounting Standards Board (FASB). The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards CodificationTM sometimes referred to as the Codification or ASC. The FASB finalized the Codification effective for periods ending on or after September 15, 2009. Prior FASB standards are no longer being issued by the FASB.  Development Stage Company - The Company is a development stage company as defined by Statement of Financial Accounting Standards No. 7, Accounting and Reporting by Development Stage Enterprises (ASC 915). The Company is still devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced. All losses accumulated since inception have been considered as part of the Company' development stage activities.  Management's Use of Estimates - These financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  Cash and cash equivalents - Cash and cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased.  Equipment - The Company records its equipment at historical cost. The Company expenses maintenance and repairs as incurred. Upon disposition of equipment, the gross cost and accumulated depreciation are written off and the difference between the proceeds and the net book value is recorded as a gain or loss on sale of assets. The Company provides for a five-year useful life for depreciation of its equipment, and depreciation begins upon the Companys placing the fixed assets into service.  Intangible and Long-Lived Assets - The Company follows FASB ASC 360-10, Property, Plant, and Equipment, which established a primary asset approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. Through September 30, 2010, the Company had not experienced impairment losses on its long-lived assets. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.  Fair Value of Financial Instruments - For certain financial instruments, including accounts payable, accrued expenses and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.  7     On January 1, 2008, the Company adopted ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:  · Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.  · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.  The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, Distinguishing Liabilities From Equity and ASC 815, Derivatives and Hedging. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant derivatives are valued using the Black-Scholes model.  The Companys derivative liabilities are carried at fair value totaling $2,562,607 and $1,894,453, as of September 30, 2010 and June 30, 2010, respectively. The Companys derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as change to fair value of derivative liability.  At September 30, 2010, the Company identified the following liability that is required to be presented on the balance sheet at fair value:  Fair Value
As of
September 30,Fair Value Measurements at
September 30, 2010
Using Fair Value HierarchyLiabilities2010Level 1Level 2Level 3Derivative Liabilities2,562,607-2,562,607-$2,562,607$-$2,562,607$-  For the three months ended September 30, 2010 and 2009, the Company recognized a gain of $653,154 and $0, respectively, for the changes in the valuation of the aforementioned derivative liabilities.  The Company did not identify any other non-recurring assets and liabilities that are required to be presented in the balance sheets at fair value in accordance with ASC 815.  Income Taxes - Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.  When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.  8     Applicable interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statements of operations.  Net Loss Per Share - Earnings per share is calculated in accordance with the ASC 260-10, Earnings Per Share. Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.  At September 30, 2010 and 2009, 194,377,871 and 0 potentially dilutive shares, respectively, were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.  Revenue Recognition - Revenue is recognized in the period that services are provided. For revenue from oil and gas production, the Company recognizes revenue in accordance with Staff Accounting Bulletin (SAB) Topic 13. SAB Topic 13 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the fixed nature of the selling prices of the service provided and the collectability of those amounts. Oil and gas revenue is received on a monthly basis subject to oil production and sales to refineries. Revenue can be affected by weather conditions and/or market deliveries.  Segment Reporting - FASB ASC 280, Segment Reporting requires use of the management approach model for segment reporting. The management approach model is based on the way a companys management organizes segments within the company for making operating decisions and assessing performance. The Company determined it has one operating segment as of September 30, 2010.  Recent Accounting Pronouncements  In October 2009, the FASB issued Accounting Standards Update 2009-15 ("ASU 2009-15") regarding accounting for own-share lending arrangements in contemplation of convertible debt issuance or other financing.  This ASU requires that at the date of issuance of the shares in a share-lending arrangement entered into in contemplation of a convertible debt offering or other financing, the shares issued shall be measured at fair value and be recognized as an issuance cost, with an offset to additional paid-in capital. Further, loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation.  This ASU is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. The adoption of this ASU did not have a significant impact on the Companys financial statements.  In January 2010, the FASB issued ASU No. 2010-03 regarding oil and gas reserve estimation and disclosures. This ASU mandates several new disclosures of information related to oil and gas reserves. The objective of the amendments included in this update is to align the oil and gas reserve estimation and disclosure requirements of ASC No. 932 Extractive Activities  Oil and Gas with the requirements of the Securities and Exchange Commission (SEC). Under the new ASU, entities must also consider their equity method investments when considering whether they have significant oil and gas producing activities. This ASU is effective for fiscal years ending on or after December 31, 2009. The adoption of this ASU did not have a significant impact on the Companys financial statements.  In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements (ASU No. 2010-06). The new standard addresses, among other things, guidance regarding activity in Level 3 fair value measurements. Portions of ASU No. 2010-06 that relate to the Level 3 activity disclosures are effective for the annual reporting period beginning after December 15, 2010. The Company will provide the required disclosures beginning with the Companys Annual Report on Form 10-K for the year ending June 30, 2012. Based on the initial evaluation, the Company does not anticipate a material impact to the Companys financial position, results of operations or cash flows as a result of this change.  On February 25, 2010, the FASB issued ASU 2010-09 Subsequent Events Topic 855 Amendments to Certain Recognition and Disclosure Requirements, effective immediately. The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The FASB believes these amendments remove potential conflicts with the SECs literature. The adoption of this ASU did not have a material impact on the Companys financial statements.  9     On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic 815 Scope Exception Related to Embedded Credit Derivatives. This ASU clarifies the guidance within the derivative literature that exempts certain credit related features from analysis as potential embedded derivatives requiring separate accounting. The ASU specifies that an embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging  Embedded Derivatives  Recognition. All other embedded credit derivative features should be analyzed to determine whether their economic characteristics and risks are clearly and closely related to the economic characteristics and risks of the host contract and whether bifurcation is required. The ASU is effective for the Company on July 1, 2010. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Companys financial statements.  NOTE 3  GOING CONCERN  The Company has suffered recurring losses from operations and has a working capital deficit and stockholders' deficit, and in all likelihood will be required to make significant future expenditures in connection with continuing business development efforts along with general administrative expenses. These conditions raise substantial doubt about the Companys ability to continue as a going concern. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Companys activities have been primarily supported by loans from various parties and the acquisition of working interest in one of its wells. The Company has sustained losses in all previous reporting periods, with an inception to date loss of $4,388,217 through September 30, 2010. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan. The Company continues to seek viable drilling opportunities and highly verified fields for re-development.  The Company continues to seek funding for all of the projects and operational requirements for the continuing fiscal year.  To assist its funding efforts on April 22, 2008, the Company effected a 10-for-1 reverse stock split.  NOTE 4 EQUIPMENT  Equipment consisted primarily of oil drilling equipment at September 30, 2010. On April 26, 2010, the Company purchased oil drilling equipment for $397,500. Through September 30, 2010, the equipment has not been placed into service and no revenue has been generated from the equipment. Accordingly, no depreciation has been recorded on the equipment through September 30, 2010.  NOTE 5  ACCRUED SALARIES  During 2010, Hugh Robinson and subsequently Philip Verges replaced Daymon Bodard as the Companys President and Chief Executive Officer. Beginning April 1, 2010, Mr. Verges is earning $10,000 per month in accrued salary. Beginning January 2010, $60,000 per year is being accrued as salary to the Companys Chief Operating Officer, James Tilton. During 2009, the Company converted the salary accrued to Mr. Bodard of $387,600 into a convertible promissory note. Further, during the three months ended September 30, 2010, the Company converted the salary accrued to Mr. Tilton of $15,000 into a convertible promissory note. See Note 7. As of September 30, 2010 and June 30, 2010, accrued salaries amounted to $60,000 and $30,000, respectively.  NOTE 6  CONVERTIBLE NOTES PAYABLE  Share Repurchase  On April 2, 2010, the Company repurchased and subsequently retired 742,429 shares of its common stock from various investors in exchange for convertible notes payable in the aggregate principal amount of $500,000. The notes bear interest at 8% per annum and mature on April 2, 2011. The notes plus accrued and unpaid interest are convertible into restricted shares of the Companys common stock at the lower of (a) $0.025 per share and (b) the average market price of the Companys common stock for the ten trading days immediately prior to the conversion date, less 50%.  The fair value of the embedded conversion option was re-measured using the Black-Scholes model at September 30, 2010, resulting in a fair value of $1,004,652. The increase in fair value of $245,040 was recorded through the results of operations as an change in fair value of derivative liabilities during the three months ended September 30, 2010. The assumptions used in the Black-Scholes option pricing model at September 30, 2010 are as follows: (1) dividend yield of 0%; (2) expected volatility of 300%, (3) risk-free interest rate of 0.19%, and (4) expected life of 0.50 years. As of September 30, 2010, the notes were convertible at the option of the holders into 61,176,471 shares of common stock. At September 30, 2010, the entire principal balance of $500,000 was outstanding.  10     $10,000 Convertible Note  On February 25, 2010, the Company issued an 8% convertible note in the amount of $10,000. The holder may convert the principal plus accrued interest into shares of the Companys common stock at a price per share equal to 50% of the closing bid price of the common stock on the date that the Company receives notice of conversion. All unpaid principal, together with the accrued but unpaid interest, are due and payable on September 30, 2010.  At September 30, 2010 the note was convertible at the option of the holder into a total of 1,047,500 shares. The fair value of the embedded conversion option was $10,475 at September 30, 2010. The fair value was measured at 50% of the value of the closing price of the Companys common stock on September 30, 2010. The decrease in the fair value of this liability was $3,811 during the three months ended September 30, 2010, which was recorded through the results of operations as a change in fair value of derivative liabilities.  Tonaquint Convertible Note  On April 5, 2010, the Company entered into a Note and Warrant Purchase Agreement pursuant to which the Company issued and sold to Tonaquint, Inc., (Tonaquint), a secured convertible note (the convertible note) in the aggregate principal amount of $1,226,500 and a warrant to purchase up to 1,000,000 shares of common stock of the Company. The convertible note is due on April 4, 2012 and interest on the outstanding principal balance of the convertible note is 6% per annum and interest is due payable in full by April 4, 2012. The convertible note is secured by certain mortgage notes issued by Tonaquint to the Company in the aggregate amount of $1,000,000. The Company also received initial proceeds of $100,000. Tonaquint has the right to convert the note to shares of common stock in tranches in certain specified amounts, which conversions are conditioned upon payment in full of the amounts owed under the mortgage notes. The number of shares of common stock to be issued upon a conversion is determined by dividing (a) the conversion amount by (b) 70% of the average volume-weighted average price (the VWAP) for the three (3) trading days with the lowest VWAP during the twenty (20) trading days immediately preceding the date set forth on the conversion notice. The warrant has an exercise price of $1.00 per share, subject to adjustment as provided in the warrant and terminates on April 5, 2015. If at any time one year from the date of issuance the shares issuable upon exercise of the warrants are not registered pursuant to an effective registration statement the holder may make a cashless exercise of the warrants.  The fair value of the embedded conversion option was measured using the Black-Scholes model at September 30, 2010, resulting in a fair value of $449,237. The increase in fair value of $280,919 was recorded through the results of operations as a change in fair value of derivative liabilities during the three months ended September 30, 2010. The assumptions used in the Black-Scholes option pricing model on September 30, 2010 are as follows: (1) dividend yield of 0%; (2) expected volatility of 300%, (3) risk-free interest rate of 0.42%, and (4) expected life of 1.52 years. As of September 30, 2010, the notes were convertible at the option of the holders into 23,328,000 shares of common stock. At September 30, 2010, the entire principal balance of $126,500 was outstanding.  The Company recorded the fair value of the warrants issued in connection with this convertible note. The fair value of the warrants was valued using the Black-Scholes model at September 30, 2010, resulting in a fair value of $19,984. The decrease in fair value of $19,828 was recorded through the results of operations as a change in fair value of derivative liabilities during the three months ended September 30, 2010. The assumptions used in the Black-Scholes option pricing model on September 30, 2010 are as follows: (1) dividend yield of 0%; (2) expected volatility of 300%, (3) risk-free interest rate of 1.27%, and (4) expected life of 4.52 years.  Interest expense accrued and from amortization of debt discounts on these notes for the three months ended September 30, 2010 was $145,800.  11     NOTE 7  CONVERTIBLE NOTES  RELATED PARTY  Debt Settlement Agreement  On May 3, 2010, the Company settled certain past-due amounts with its former President, Daymon Bodard. Amounts settled included a promissory note due to Mr. Bodard in the amount of $564,500, accrued interest on the promissory note in the amount of $207,333, a promissory note to Mr. Bodard in the amount of $387,600, and a receivable from Mr. Bodard in the amount of $74,607. These debts were converted into a single instrument, classified as a component of convertible notes payable in the accompanying balance sheets at September 30, 2010 and June 30, 2010, in the principal amount of $1,040,859, which had been assigned on December 8, 2009 to Senita Investments, Ltd., a 7% shareholder. The $387,600 promissory note was convertible at the Holders option at no less than the Companys par value of $0.0001 per share. The Company recorded a capital contribution in the amount of $43,967 in its accompanying statement of stockholders deficit, representing the difference between amounts converted and the principal of the new instrument. The new note is due upon demand and is non-interest bearing. Principal is convertible into restricted shares of the Companys common stock at 50% of the value of the closing bid price of the Companys common stock on the date of notice of conversion. Through September 30, 2010, the holder has converted $5,000 of this note into 600,000 shares of the Companys common stock, including 500,000 shares during the three months ended September 30, 2010. The notes principal balance at June 30, 2010 was $1,032,359.  The fair value of the embedded conversion option was measured at September 30, 2010 at a fair value of $1,032,359. The decrease in fair value of $3,500 was recorded through the results of operations as change in fair value of derivative liabilities during the three months ended September 30, 2010. The fair value was measured at 50% of the value of the closing price of the Companys common stock on September 30, 2010. As of September 30, 2010, the note was convertible at the option of the holder into 102,235,900 shares of common stock.  On April 1, 2010, June 30, 2010 and September 30, 2010, the Company converted a total of $45,000 in accrued salaries due to Jim Tilton, the Companys Chief Operating Officer for convertible notes in the same principal amount, due on September 30, 2010, December 31, 2010 and March 31, 2011, respectively. The notes accrue interest at 8% per annum. Principal and accrued and unpaid interest on the notes are convertible into shares of common stock at a conversion price of 50% of the closing bid price of common stock on the date of the notice of conversion.  The fair value was measured at 50% of the value of the closing price of the Companys common stock on September 30, 2010, resulting in a fair value of $45,900. As of September 30, 2010, the notes were convertible at the option of the holders into 4,590,000 shares of common stock. At September 30, 2010, the entire principal balance of $45,000 was outstanding.  Interest expense accrued and from amortization of debt discounts on these notes for the three months ended September 30, 2010 was $15,082.  NOTE 8  PROMISSORY NOTES PAYABLE AND PROMISSORY NOTES PAYABLE, RELATED PARTY  On April 26, 2010, the Company purchased certain oil drilling equipment for $397,500, financed by issuing a promissory note payable. Of this balance, $175,000 was assumed by Phillip Verges, the Companys Chief Executive Officer. The note bears interest at 5% per annum and mature on April 26, 2013. Any unpaid amounts after the maturity date will accrue interest at 21% per annum. The entire $397,500 was outstanding at September 30, 2010.  On May 25, 2010, the Company  issued and sold a promissory note in the principal amount of $200,000, to JDF Capital Corp. Principal and unpaid interest on the note are due six months from the date of issuance. The note bears interest at the rate of 10% per annum, payable upon maturity. The entire $200,000 balance was outstanding at September, 30, 2010.  Salaries were accrued for Daymon Bodard, the Companys former President, at $60,000 per year in the form of a promissory note, accruing since the effective date of the note on January 1, 2003. The conversion price of the promissory note was no less than $0.0001 per share. The balance of the promissory note at June 30, 2009 was $357,600. On May 3, 2010, the Company settled the promissory note, together with other amounts owed to the Holder for a new convertible note in the principal amount of $1,040,859. See Note 7.  Interest expense on these notes for the three months ended September 30, 2010 was $8,719.  12     NOTE 9  STATEMENT OF STOCKHOLDERS EQUITY  Common Stock  Effective June 11, 2010, the total number of shares of stock which the Company has authority to issue is 2,010,000,000, which consists of 2,000,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share.  Since December 31, 2002 the Company has received on-going capital contributions as necessary from its founder.  On May 13, 2005, the Company issued 3,010,000 post-split shares of its $0.001 par value restricted common stock in return for services to the founders of the Company.  On May 13, 2005, the Company issued 300,000 shares for a debt settlement of $30,000.  On July 1, 2006, pursuant to a convertible promissory note, the Company issued 50,000 common stock shares. In July 2006, the Company received $375,000 in a private transaction in return for a working interest in the oil well known as the Inglish 1H.  On August 31, 2006, pursuant to a convertible promissory note, the Company issued 56,450 shares of common stock. On September 1, 2006, Daymon Bodard, the Companys President loaned the Company $564,500.  On April 22, 2008 the company effected a 1 for 10 reverse stock split. The Stockholders Deficit has been restated since inception to reflect the stock split. On May 12, 2005, there was a 300 to 1 Stock Split.  On April 22, 2008, due to the stock split, the transfer agent did a stock adjustment of less than a 100 shares.  On March 26, 2010, the Company issued 250,000 shares of its common stock in payment for legal services received during the quarter. The Company recognized professional fees in the amount of $62,500 during the year ended June 30, 2010 related to these services.  During the year ended June 30, 2010, the Company converted $5,000 of a convertible note into 100,000 shares of the Companys common stock.  On April 2, 2010, the Company repurchased 955,184 shares of its common stock from various investors in exchange for convertible notes payable in the aggregate principal amount of $500,000.On September 8, 2010, that number of shares repurchased was adjusted by 212,755 shares to the new number repurchased of 742,429 common stock shares in exchange for the $500,000 aggregate amount of convertible notes payable. These shares were retired during the three months ended September 30, 2010.  During the three months ended September 30, 2010, the Company issued 500,000 shares of common stock upon conversion of $3,500 of a convertible note.  NOTE 10 - RELATED PARTY TRANSACTIONS  On September 30, 2010, the Company converted a total of $15,000 in accrued salary due to Jim Tilton, the Companys Chief Operating Officer for a convertible note in the same principal amount, due on March 31, 2011. See Note 7.  On June 3, 2010, the Company received $100,000 from Isthmus Holdings, a company majority-owned by Phillip Verges, the Companys CEO. The amount has been classified as an advance payable  related party in the accompanying balance sheets at September 30, 2010 and June 30, 2010, until such time that the advance is memorialized into a note. The Company received the advance to fund its working capital. The advance currently bears no interest, does not mature, and is unsecured.  The Company currently shares office space with a company whose Chief Executive Officer is Jim Tilton, the Companys Chief Operating Officer. The affiliated company pays rent for the space on behalf of the Company. Rent expense to related parties was $1,500, $1,800 and $57,000 for the three months ended September 30, 2010 and 2009 and for the period from December 31, 2002 (inception) through September 30, 2010.    NOTE 11  SUBSEQUENT EVENTS  The Company has evaluated subsequent events through the time of filing these financial statements.   13     CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS  This Quarterly Report on Form 10-Q and the materials incorporated herein by reference contain forward-looking statements that involve risks and uncertainties. We use words such as may, assumes, forecasts, positions, predicts, strategy, will, expects, estimates, anticipates, believes, projects, intends, plans, budgets, potential, continue and variations thereof, and other statements contained in quarterly report, and the exhibits hereto, regarding matters that are not historical facts and are forward-looking statements. Because these statements involve risks and uncertainties, as well as certain assumptions, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to risks inherent in:  our early stage of development, including a lack of operating history, lack of profitable operations and the need for additional capital; the development and commercialization of largely novel and unproven technologies and products; our ability to protect, maintain and defend our intellectual property rights; uncertainties regarding our ability to obtain the capital resources needed to continue research and development operations and to conduct research, preclinical development and clinical trials necessary for regulatory approvals; uncertainty regarding the outcome of clinical trials and our overall ability to compete effectively in a highly complex, rapidly developing, capital intensive and competitive industry. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date that they are made. Except as may be required under applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Forward-looking statements include our plans and objectives for future operations, including plans and objectives relating to our products and our future economic performance. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development and commercialization of our technologies, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, we cannot assure you that the results contemplated in any of the forward-looking statements contained herein will be realized. Based on the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of any such statement should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.   ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  OVERVIEW  The Company previously had a working operating interest in oil and gas wells in Central Texas that essentially stopped producing oil and gas. On December 9, 2009, Daymon Bodard, the then sole director, officer and principal stockholder of the Company, entered into an agreement to transfer control of the Company. On January 25, 2010, the agreement became effective.  The Company's newly updated and expanded business plan is centered around a number of diverse opportunities in East Africa, initially centered in Kenya.  Management has been working for two years to prepare for operations in East Africa.  Letters of Intent have been signed, meetings with local government in Nairobi have taken place and investors to finance the first project opportunities have been identified. Further, on April 26, 2010, we purchased oil drilling equipment in Texas from Norris Harris for purposes of engaging in oil and gas exploration.  CRITICAL ACCOUNTING POLICIES  Revenue Recognition - Revenue is recognized in the period that services are provided. For revenue from oil and gas production, the Company recognizes revenue in accordance with Staff Accounting Bulletin (SAB) Topic 13. SAB Topic 13 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on managements judgments regarding the fixed nature of the selling prices of the service provided and the collectability of those amounts. Oil and gas revenue is received on a monthly basis subject to oil production and sales to refinery. Revenue can be affected by weather conditions and/or market deliveries.  Fair Value of Financial Instruments - For certain financial instruments, including accounts payable, accrued expenses and notes payable, the carrying amounts approximate fair value due to their relatively short maturities.  14     On January 1, 2008, we adopted ASC 820-10, Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:  · Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.  · Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.  · Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.  We analyze all financial instruments with features of both liabilities and equity under ASC 480, Distinguishing Liabilities From Equity and ASC 815, Derivatives and Hedging. Derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. The effects of interactions between embedded derivatives are calculated and accounted for in arriving at the overall fair value of the financial instruments. In addition, the fair values of freestanding derivative instruments such as warrant derivatives are valued using the Black-Scholes model.  Recent Accounting Pronouncements   In October 2009, the FASB issued Accounting Standards Update 2009-15 ("ASU 2009-15") regarding accounting for own-share lending arrangements in contemplation of convertible debt issuance or other financing.  This ASU requires that at the date of issuance of the shares in a share-lending arrangement entered into in contemplation of a convertible debt offering or other financing, the shares issued shall be measured at fair value and be recognized as an issuance cost, with an offset to additional paid-in capital. Further, loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation.  This ASU is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. The adoption of this ASU did not have a significant impact on our financial statements.  In January 2010, the FASB issued ASU No. 2010-03 regarding oil and gas reserve estimation and disclosures. This ASU mandates several new disclosures of information related to oil and gas reserves. The objective of the amendments included in this update is to align the oil and gas reserve estimation and disclosure requirements of ASC No. 932 Extractive Activities  Oil and Gas with the requirements of the Securities and Exchange Commission (SEC). Under the new ASU, entities must also consider their equity method investments when considering whether they have significant oil and gas producing activities. This ASU is effective for fiscal years ending on or after December 31, 2009. The adoption of this ASU did not have a significant impact on our financial statements.   In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2010-06, Improving Disclosures about Fair Value Measurements (ASU No. 2010-06). The new standard addresses, among other things, guidance regarding activity in Level 3 fair value measurements. Portions of ASU No. 2010-06 that relate to the Level 3 activity disclosures are effective for the annual reporting period beginning after December 15, 2010. The Company will provide the required disclosures beginning with the Companys Annual Report on Form 10-K for the year ending June 30, 2012. Based on the initial evaluation, we do not anticipate a material impact to our financial position, results of operations or cash flows as a result of this change.  On February 25, 2010, the FASB issued ASU 2010-09 Subsequent Events Topic 855 Amendments to Certain Recognition and Disclosure Requirements, effective immediately. The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The FASB believes these amendments remove potential conflicts with the SECs literature. The adoption of this ASU did not have a material impact on our financial statements.  15     On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic 815 Scope Exception Related to Embedded Credit Derivatives. This ASU clarifies the guidance within the derivative literature that exempts certain credit related features from analysis as potential embedded derivatives requiring separate accounting. The ASU specifies that an embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging  Embedded Derivatives  Recognition. All other embedded credit derivative features should be analyzed to determine whether their economic characteristics and risks are clearly and closely related to the economic characteristics and risks of the host contract and whether bifurcation is required. The ASU is effective for the Company on July 1, 2010. Early adoption is permitted. The adoption of this ASU did not have a material impact on our financial statements.  RESULTS OF OPERATIONS  The Companys ability to continue as a going concern is dependent upon raising additional capital to fund operations until profitability can be achieved. Management is currently contemplating several financing sources to fund potential acquisitions. While there is no assurance the financings will be obtained, the Company does expect the financings to result in significant dilution in ownership of the Companys common stock.    As stated in the Overview section herein, the Company's newly updated and expanded business plan is centered around a number of diverse opportunities in East Africa, initially centered in Kenya. Management has been working for two years to prepare for operations in East Africa. Non-binding letters of intent have been signed, meetings with local government in Nairobi have taken place and investors to finance the first project opportunities have been identified. Such operations have not yet commenced and there is no assurance definitive agreements allowing such operations to commence will be reached. In addition, the Company intends to continue oil and gas exploration. On April 26, 2010, we purchased oil drilling equipment in Texas from Norris Harris for purposes of engaging in oil and gas exploration.  Results of Operations for the Three Months Ended September 30, 2010 and September 30, 2009  Revenue. During the three months ended September 30, 2010 and 2009, we did not generate revenue. We are still in development stage.  Cost of Revenue. We incurred no production expenses for the three months ended September 30, 2010 and 2009. Production expenses are automatically deducted by the well operators prior to any monies received by the company as a result of our working interest agreement.  Operating Expenses. Our general and administrative expenses for the three months ended September 30, 2010 were $106,680 as opposed to $32,768 for the year 2009. The increase in 2010 is attributable to increased officer compensation expense, consulting expense and professional fees. Professional fees were $19,850 in the three months ended September 30, 2010 and $4,450 in the same period in 2009, which represents a $15,400, or 346% increase. Consulting expense was $30,000 for the three months ended September 30, 2010, compared to $0 for the same period in 2009. Consulting expense in 2010 is attributed to a company providing management and business advisory services. The Company incurred increased legal fees in 2010 in connection with hiring a law firm to assist in preparing the Companys required periodic SEC filings.  Non-Operating Expenses. Our non-operating expenses were $851,760 for the three months ended September 30, 2010 compared to $14,465 for the same period in 2009. The increase is primarily due to the fair value of the beneficial conversion features and warrants associated with the additional debt that was issued.  We had a charge for the change in fair value of derivative liability of $653,154 for the three months ended September 30, 2010 compared to $0 for the same period 2009.  Changes are due to the changes in the share price of our common stock from the date the derivative liabilities were first recognized. During the three months ended September 30, 2010, we recognized interest and finance costs of $198,798 compared to $14,465 for the same period in 2009.  The accompanying financial statements have been prepared assuming that we will continue as a going concern. Our activities have been primarily supported by loans from various parties and the acquisition of working interest in one of our wells. We have experienced sustained losses in all previous reporting periods, with an inception to date loss of $4,388,217 through September 30, 2010. We continue to seek viable drilling opportunities and highly verified fields for re-development. Our operator has repurchased its Cooke County, Illinois interests. Management continues to seek funding from its shareholders and other qualified investors to pursue its business plan. To that end, we continue to have ongoing meetings with venture capital firms and private equity investors. We expect to continue to incur substantial losses to explore the concession, and do not expect to attain profitability in the near future.  The Company's financial statements have been prepared assuming that it 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 the Company be unable to continue in operation.  16     As used in Item 303 paragraph (a)(4) of Regulation S-K, the Company has undertaken no transactions, agreements or other contractual arrangements to which an entity unconsolidated with the registrant is a party.  Liquidity and Capital Resources  Cash used in operating activities changed from $10,813 in the three months ended September 30, 2009 to $51,188 in the same period in 2010. The change is primarily attributable to increases in our operating expenses during the three months ended September 30, 2010.  No cash was used or generated by investment or financing activities during the three months ended September 30, 2010 or 2009.  Contractual Obligations  At September 30, 2010, we had no contractual obligations.  Off-Balance Sheet Arrangements  We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.   ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Not applicable.  ITEM 4. CONTROLS AND PROCEDURES   Managements Responsibility for Financial Statements  Our management is responsible for the integrity and objectivity of all information presented in this report. The financial statements included in this report have been amended and prepared in accordance with U.S. GAAP and reflect managements judgments and estimates on the effect of the reported events and transactions.  Disclosure Controls and Procedures  The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Companys Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.  An evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule13a-14(c) under the Securities Exchange Act of 1934) as of September 30, 2010. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective.  Changes in Internal Control over Financial Reporting  No change in the Companys internal control over financial reporting occurred during the quarter ended September 30, 2010, that materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.  17     PART II. OTHER INFORMATION  ITEM 1. LEGAL PROCEEDINGS  The Company knows of no material, existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of the Companys directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to the company.   ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS  During the three months ended September 30, 2010, the Company issued 500,000 shares of common stock upon conversion of a convertible note.  In connection with the foregoing, the Company relied upon the exemption from securities registration afforded by  Section 4(2) of the Securities Act of the Securities Act of 1933, as amended for transactions not involving a public offering. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, and transfer was restricted by the Company in accordance with the requirements of the Securities Act of 1933.   ITEM 3. DEFAULTS UPON SENIOR SECURITIES  None.  ITEM 4. [REMOVED AND RESERVED]  ITEM 5. OTHER INFORMATION   None.  ITEM 6. EXHIBITS    Exhibit Description  31.1Section 302 Certification of Principal Executive Officer.*31.2Section 302 Certification of Principal Financial Officer.*32.1Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*32.2Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.**Filed herewith   18     SIGNATURE  Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  SAVANNA EAST AFRICA, INC.By:/s/ James TiltonJames TiltonChief Operating Officer (Principal Financial Officer)Dated: November 12, 2010   19