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** **

 

** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-Q**

 
| **(Mark One)**                                         |
|--------------------------------------------------------|
| ** **                                             | ** ** | ** ** |
| **x**                                                  | ** ** | **QUARTERLY REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |
|                                                   |   |   |
| **For the quarterly period ended  June 30, 2010** |
|                                                   |   |   |
| **OR**                                                 |
|                                                   |   |   |
| **o**                                                  | ** ** | **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. 0-50848**

 

**Voyager Oil & Gas, Inc.**

**(formerly known as ante4, Inc.)**

(Exact name of registrant as specified in its charter)

 

| **Delaware**                      | ** ** | **77-0639000**      |
|-----------------------------------|------------|---------------------|
| (State or other jurisdiction      |       | (I.R.S. Employer    |
| of incorporation or organization) |       | Identification No.) |

 

| **2812 1st Avenue North, Suite 506** | ** ** | ** ** |
|------------------------------------------------|------------|------------|
| **Billings, Montana**                          | ** ** | **59101**  |
| (Address of principal executive offices)       |       | (Zip Code) |

 

Registrant’s telephone number, including area code:**(406) 245-4902**

 

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days.  Yes x  No o

 

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T during thepreceding 12 months (or for such shorter period that the registrant wasrequired to submit and post such files).  Yes o  No o

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, or a smaller reporting company. Seedefinitions of “large accelerated filer,” “accelerated filer,” and “smallerreporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

| Large accelerated filer o                |   | Accelerated filer o         |
|-----------------------------------------------|--------|----------------------------------|
|                                          |   |                             |
| Non-accelerated filer o                  |   | Smaller reporting company x |
| (Do not check if a smaller reporting company) |   |                             |

 

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

 

Asof August 11, 2010, there were 45,344,431 shares of Common Stock, $0.001par value per share outstanding.

 

 

 

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**VOYAGER OIL & GAS, INC.**

 

**INDEX**

 
| ** **    | ** **            | ** **                                                                                                                 | **Page of**   |
|---------------|-----------------------|----------------------------------------------------------------------------------------------------------------------------|--------------------|
| ** **    | ** **            | ** **                                                                                                                 | **Form 10-Q** |
| PART I.  | FINANCIAL INFORMATION |
|          |                  |                                                                                                                       |               |
|          | ITEM 1.               | FINANCIAL STATEMENTS                                                                                                       |               |
|          |                  |                                                                                                                       |               |
|          |                  | Condensed  Consolidated Balance Sheets as of June 30, 2010 (unaudited) and  December 31, 2009                    | 1                  |
|          |                  |                                                                                                                       |               |
|          |                  | Unaudited Condensed  Consolidated Statements of Operations for the three and six months ended  June 30, 2010 and 2009 | 2                  |
|          |                  |                                                                                                                       |               |
|          |                  | Unaudited Condensed  Consolidated Statements of Cash Flows for the six months ended June 30,  2010 and 2009           | 3                  |
|          |                  |                                                                                                                       |               |
|          |                  | Notes to Unaudited Condensed Consolidated Financial  Statements                                                            | 4                  |
|          |                  |                                                                                                                       |               |
|          | ITEM 2.               | MANAGEMENT’S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                | 17                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 3.               | QUANTITATIVE  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 4.               | CONTROLS AND  PROCEDURES                                                                                                   | 22                 |
|          |                  |                                                                                                                       |               |
| PART II. | OTHER INFORMATION     | 22                                                                                                                         |
|          |                  |                                                                                                                       |               |
|          | ITEM 1.               | LEGAL PROCEEDINGS                                                                                                          | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 1A.              | RISK FACTORS                                                                                                               | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 2                | UNREGISTERED  SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                                               | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 3                | DEFAULTS  UPON SENIOR SECURITIES                                                                                           | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 4.               | (REMOVED AND  RESERVED)                                                                                                    | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 5.               | OTHER INFORMATION                                                                                                          | 22                 |
|          |                  |                                                                                                                       |               |
|          | ITEM 6.               | EXHIBITS                                                                                                                   | 23                 |
|          |                  |                                                                                                                       |               |
| SIGNATURES    | 24                    |

 

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**PART 1 — FINANCIALINFORMATION**

 

**ITEM 1. FINANCIAL STATEMENTS**

 

**VOYAGER OIL & GAS, INC.**

**CONDENSED CONSOLIDATED BALANCESHEETS**

**AS OF JUNE 30, 2010 (UNAUDITED) AND DECEMBER 31, 2009**

 
| ** **                                                                                                                            | ** ** | **June 30,** | ** ** | **December 31,** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|------------|-----------------------|------------|
| ** **                                                                                                                            | ** ** | **2010**          | ** ** | **2009**              | ** ** |
| ** **                                                                                                                            | ** ** | **(Unaudited)**   | ** ** | **(Audited)**         | ** ** |
| **ASSETS**                                                                                                                            |       |              |       |                  |       |
| **CURRENT ASSETS**                                                                                                                    |       |              |       |                  |       |
| Cash and Cash Equivalents                                                                                                             |       | $                 | 12,395,413 |                  | $          | 691,263 |   |
| Restricted Cash                                                                                                                       |       | 99,061            |       | —                |       |
| Trade Receivables                                                                                                                     |       | 179,207           |       | —                |       |
| Short Term Investments                                                                                                                |       | 4,396,743         |       | 275,151               |       |
| Prepaid Drilling Costs                                                                                                                |       | 1,044,642         |       |                  |       |
| Note Receivable                                                                                                                       |       | 500,000           |       | —                |       |
| Prepaid Expenses                                                                                                                      |       | 186,870           |       | —                |       |
| Other Current Assets                                                                                                                  |       | 151,952           |       | 7,781                 |       |
| Total Current Assets                                                                                                                  |       | 18,953,888        |       | 974,195               |       |
|                                                                                                                                  |       |              |       |                  |       |
| **PROPERTY AND EQUIPMENT**                                                                                                            |       |              |       |                  |       |
| Oil and Gas Properties, Full Cost Method  (including unevaluated cost of $23,996,882 at 6/30/10 and $4,477,236 at  12/31/2009)        |       | 24,329,008        |       | 4,477,236             |       |
| Office Equipment and Furniture                                                                                                        |       | 22,346            |       | 17,748                |       |
| Total Property and Equipment                                                                                                          |       | 24,351,354        |       | 4,494,984             |       |
| Less - Accumulated Depreciation and Depletion                                                                                         |       | 71,995            |       | 30                    |       |
| Total Property and Equipment Net                                                                                                      |       | 24,295,359        |       | 4,494,954             |       |
|                                                                                                                                  |       |              |       |                  |       |
| **RESTRICTED CASH**                                                                                                                   |       | 50,992            |       | —                |       |
|                                                                                                                                  |       |              |       |                  |       |
| Total Assets                                                                                                                          |       | $                 | 43,284,239 |                  | $          | 5,469,149 |   |
|                                                                                                                                  |       |              |       |                  |       |
| **LIABILITIES  AND STOCKHOLDERS’ EQUITY**                                                                                        |       |              |       |                  |       |
| **CURRENT LIABILITIES**                                                                                                               |       |              |       |                  |       |
| Accounts Payable                                                                                                                      |       | $                 | 7,543,083  |                  | $          | 30,712 |   |
| Accrued Expenses                                                                                                                      |       | 61,798            |       | 5,833                 |       |
| Operating Lease Reserve                                                                                                               |       | 401,516           |       | —                |       |
| Total Current Liabilities                                                                                                             |       | 8,006,397         |       | 36,545                |       |
|                                                                                                                                  |       |              |       |                  |       |
| **LONG-TERM LIABILITIES**                                                                                                             |       |              |       |                  |       |
| Other Noncurrent Liabilities                                                                                                          |       | 1,256             |       | —                |       |
|                                                                                                                                  |       |              |       |                  |       |
| Total Liabilities                                                                                                                     |       | 8,007,653         |       | 36,545                |       |
|                                                                                                                                  |       |              |       |                  |       |
| **STOCKHOLDER’S EQUITY**                                                                                                         |       |              |       |                  |       |
| Preferred Stock; Par Value $.001; 20,000,000  Shares Authorized; none Issued or Outstanding                                           |       | —            |       | —                |       |
| Common Stock - Par Value $.001; 100,000,000 Shares  Authorized; 45,344,431 Shares Outstanding (2009 - 21,119,505 Shares  Outstanding) |       | 45,344            |       | 21,120                |       |
| Additional Paid-in Capital                                                                                                            |       | 38,847,644        |       | 7,665,456             |       |
| Accumulated Deficit                                                                                                                   |       | (3,609,077        | )          | (2,260,458            | )          |
| Accumulated Other Comprehensive Income (Loss)                                                                                         |       | (7,325            | )          | 6,486                 |       |
| Total Stockholders’ Equity                                                                                                       |       | 35,276,586        |       | 5,432,604             |       |
|                                                                                                                                  |       |              |       |                  |       |
| Total Liabilities and Stockholders’ Equity  (Deficit)                                                                            |       | $                 | 43,284,239 |                  | $          | 5,469,149 |   |

 

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

 

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**VOYAGER OIL & GAS, INC.**

**UNAUDITED CONDENSED CONSOLIDATEDSTATEMENTS OF OPERATIONS**

**FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009**

 
| ** **                                             | ** ** | **Three Months Ended June 30,** | ** ** | **Six Months Ended June 30,** | ** ** |
|--------------------------------------------------------|------------|--------------------------------------|------------|------------------------------------|------------|
| ** **                                             | ** ** | **2010**                             | ** ** | **2009**                           | ** ** | **2010** | ** ** | **2009** | ** ** |
| **REVENUES**                                           |       |                                 |       |                               |       |   |   |   |   |
| Oil and Gas Sales                                      |       | $                                    | 162,548    |                               | $          | — |   | $ | 185,045 |   | $ | — |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| **OPERATING EXPENSES**                                 |       |                                 |       |                               |       |   |   |   |   |
| Production Expenses                                    |       | 696                                  |       | —                             |       | 696 |   | — |   |
| Production Taxes                                       |       | 3,251                                |       | —                             |       | 5,838 |   | — |   |
| General and Administrative Expense                     |       | 440,000                              |       | 430                                |       | 695,710 |   | 1,073 |   |
| Depletion of Oil and Gas Properties                    |       | 62,000                               |       | —                             |       | 70,500 |   | — |   |
| Depreciation and Amortization                          |       | 733                                  |       | —                             |       | 1,465 |   | — |   |
| Accretion of Discount on Asset Retirement  Obligations |       | 41                                   |       | —                             |       | 41 |   | — |   |
| Total Expenses                                         |       | 506,721                              |       | 430                                |       | 774,250 |   | 1,073 |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| **LOSS FROM OPERATIONS**                               |       | (344,173                             | )          | (430                               | )          | (589,205 | ) | (1,073 | ) |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| **OTHER INCOME (EXPENSE)**                             |       |                                 |       |                               |       |   |   |   |   |
| Merger Costs                                           |       | (732,924                             | )          | —                             |       | (732,924 | ) | — |   |
| Other Income (Expense)                                 |       | (4,860                               | )          | 812                                |       | 6,131 |   | 2,021 |   |
| Total Income (Expense)                                 |       | (737,784                             | )          | 812                                |       | (726,793 | ) | 2,021 |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| **INCOME (LOSS) BEFORE INCOME TAXES**                  |       | (1,081,957                           | )          | 382                                |       | (1,315,998 | ) | 948 |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| **INCOME TAX PROVISION**                               |       | 32,620                               |       | —                             |       | 32,620 |   | — |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| **NET INCOME (LOSS)**                                  |       | $                                    | (1,114,577 | )                                  | $          | 382 |   | $ | (1,348,618 | ) | $ | 948 |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| Net Income Per Common Share - Basic and Diluted        |       | $                                    | (0.03      | )                                  | $          | 0.00 |   | $ | (0.04 | ) | $ | 0.00 |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| Weighted Average Shares Outstanding — Basic       |       | 41,201,235                           |       | 4,914,035                          |       | 30,611,659 |   | 4,887,131 |   |
|                                                   |       |                                 |       |                               |       |   |   |   |   |
| Weighted Average Shares Outstanding - Diluted          |       | 41,210,235                           |       | 4,914,035                          |       | 30,611,659 |   | 4,887,131 |   |

 

Theaccompanying notes are an integral part of these condensed consolidatedfinancial statements

 

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**VOYAGER OIL & GAS, INC.**

**UNAUDITED CONDENSED CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009**

 
| ** **                                                                                | ** ** | **Six Months Ended June 30,** | ** ** |
|-------------------------------------------------------------------------------------------|------------|------------------------------------|------------|
| ** **                                                                                | ** ** | **2010**                           | ** ** | **2009** | ** ** |
| **CASH FLOWS FROM OPERATING  ACTIVITIES**                                                 |       |                               |       |   |   |
| Net Income (Loss)                                                                         |       | $                                  | (1,348,618 | ) | $ | 948 |   |
| Adjustments to Reconcile Net Income (Loss) to Net  Cash Provided by Operating Activities: |       |                               |       |   |   |
| Depletion of Oil and Gas Properties                                                       |       | 70,500                             |       | — |   |
| Depreciation and Amortization                                                             |       | 1,465                              |       | — |   |
| Amortization of Premium on Bonds                                                          |       | 37,776                             |       | — |   |
| Loss on Disposal of Property and Equipment                                                |       | 34,305                             |       | — |   |
| Accretion of Discount on Asset Retirement  Obligations                                    |       | 41                                 |       | — |   |
| Gain on Sale of Available for Sale Securities                                             |       | (10,138                            | )          | — |   |
| Share - Based Compensation Expense                                                        |       | 407,204                            |       | — |   |
| Changes in Working Capital and Other Items:                                               |       |                               |       |   |   |
| Increase in Trade Receivables                                                             |       | (179,207                           | )          | — |   |
| Increase in Restricted Cash                                                               |       | (53                                | )          | — |   |
| Increase in Prepaid Expenses                                                              |       | (91,061                            | )          | — |   |
| Decrease in Other Current Assets                                                          |       | 56,752                             |       | — |   |
| Increase in Accounts Payable                                                              |       | 7,512,371                          |       | — |   |
| Decrease in Accrued Expenses                                                              |       | (7,128                             | )          | — |   |
| Decrease in Operating Lease Reserve                                                       |       | (83,650                            | )          | — |   |
| Net Cash Provided By Operating Activities                                                 |       | 6,400,559                          |       | 948 |   |
|                                                                                      |       |                               |       |   |   |
| **CASH FLOWS FROM INVESTING  ACTIVITIES**                                                 |       |                               |       |   |   |
| Cash Received from Merger Agreement                                                       |       | 17,413,845                         |       | — |   |
| Purchases of Office Equipment and Furniture                                               |       | (4,598                             | )          | — |   |
| Increase in Prepaid Drilling Costs                                                        |       | (1,044,642                         | )          | — |   |
| Proceeds from Sale of Available for Sale  Securities                                      |       | 5,626,523                          |       | — |   |
| Increase in Oil and Gas Properties                                                        |       | (17,491,657                        | )          | (830,369 | ) |
| Net Cash Provided By (Used For) Investing  Activities                                     |       | 4,499,471                          |       | (830,369 | ) |
|                                                                                      |       |                               |       |   |   |
| **CASH FLOWS FROM FINANCING  ACTIVITIES**                                                 |       |                               |       |   |   |
| Proceeds from Issuance of Common Stock - Net of  Issuance Costs                           |       | 779,240                            |       | 688,500 |   |
| Proceeds from Exercise of Options                                                         |       | 24,880                             |       | — |   |
| Net Cash Provided by Financing Activities                                                 |       | 804,120                            |       | 688,500 |   |
|                                                                                      |       |                               |       |   |   |
| **NET INCREASE (DECREASE) IN CASH  AND CASH EQUIVALENTS**                                 |       | 11,704,150                         |       | (140,921 | ) |
|                                                                                      |       |                               |       |   |   |
| **CASH AND CASH EQUIVALENTS —  BEGINNING OF PERIOD**                                 |       | 691,263                            |       | 1,775,423 |   |
|                                                                                      |       |                               |       |   |   |
| **CASH AND CASH EQUIVALENTS — END  OF PERIOD**                                       |       | $                                  | 12,395,413 |   | $ | 1,634,502 |   |
|                                                                                      |       |                               |       |   |   |
| **Supplemental Disclosure of Cash  Flow Information**                                     |       |                               |       |   |   |
| Cash Paid During the Period for Interest                                                  |       | $                                  | —     |   | $ | — |   |
| Cash Paid During the Period for Income Taxes                                              |       | $                                  | —     |   | $ | — |   |
|                                                                                      |       |                               |       |   |   |
| Non-Cash Financing and Investing Activities:                                              |       |                               |       |   |   |
| Purchase of Oil and Gas Properties through  Issuance of Common Stock                      |       | $                                  | 2,358,900  |   | $ | — |   |
|                                                                                      |       |                               |       |   |   |
| Payment of Compensation through Issuance of Common  Stock                                 |       | $                                  | 114,752    |   | $ | — |   |
|                                                                                      |       |                               |       |   |   |
| Fair Value of Warrants and Options Granted as  Compensation                               |       | $                                  | 292,452    |   | $ | — |   |
|                                                                                      |       |                               |       |   |   |
| Capitalized Asset Retirement Obligations                                                  |       | $                                  | 1,215      |   | $ | — |   |
|                                                                                      |       |                               |       |   |   |
| Payment of Capital Raise Costs with Issuance of  Common Stock                             |       | $                                  | 186,340    |   | $ | — |   |

 

The accompanying notes are an integral part of these condensed consolidatedfinancial statements.

 

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**VOYAGEROIL & GAS, INC.**

**(Formerlyante4, Inc.)**

**Notes to Unaudited Condensed Consolidated FinancialStatements**

 

**NOTE 1     ORGANIZATION AND NATUREOF BUSINESS**

 

On April 16, 2010, Voyager Oil &Gas, Inc. (formerly ante4, Inc.) (the “Company” or “Voyager”), PlainsEnergy Acquisition, Inc. (“Acquisition Sub”) and Plains EnergyInvestments, Inc. (“the Target Company”) entered into an Agreement andPlan of Merger (the “Merger Agreement”).  Under the Merger Agreement,Acquisition Sub merged with and into the Target Company, with the TargetCompany remaining as the surviving corporation and a wholly-owned subsidiary ofthe Company (the “Merger”).  On the Closing Date, the Company filed aCertificate of Amendment with the State of Delaware to change its name fromante4, Inc. to Voyager Oil & Gas, Inc.  Going forward,the Company will be a holding company parent of the Target Company, and theCompany’s business operations following the Merger will be those of the TargetCompany. Further details of the Merger are provided in Note 14 in the footnotesto the condensed consolidated financial statements.

 

On June 14, 2010 the Companycompleted the spin-off of ante5, Inc. (“ante5”). ante5 was previously awholly-owned subsidiary of Voyager and holds certain assets principally relatedto Voyager’s prior entertainment and consumer products business. ante5 hasbecome a separate publicly reporting U.S. company.  The spin-off was completed through thedistribution of one share of ante5 common stock for each share of Voyagercommon stock held by stockholders as of the record date, June 24, 2010.The terms of the spin-off and the assets, liabilities and business ofante5 are described in further detail in Note 15 in the footnotes to theconsolidated financial statements.

 

Voyageris an independent energy company engaged in the business of acquiring acreagein prospective natural resource plays in the states of Montana and North Dakotawithin the Williston Basin of the United States and the states of Colorado andWyoming within the Denver-Julesberg Basin of the United States.  The Company seeks to accumulate acreageblocks and build net asset value via the production of hydrocarbons inrepeatable and scalable opportunities. In 2010, Voyager is no longer considered a development stage company. Inprior years 2007-2009, the pre-merger Target Company was considered adevelopment stage company.

 

TheCompany is governed by a board of directors and managed by its officers.  The affairs of the Company are governed byDelaware law and the Company’s Bylaws.

 

Managementhas determined that the Company should focus on projects in the oil and gasindustry primarily based in the Rocky Mountains and specifically the WillistonBasin Bakken Shale formation and Denver Julesburg Basin Niobrara formation.This is based upon a belief that the Company is able to create value viastrategic acreage acquisitions and convert the value or portion thereof intoproduction by utilizing experienced industry partners specializing in thespecific areas of interest.  The Company has targeted specificprospects and has engaged in the drilling for oil and gas.

 

TheCompany has two employees as of June 30, 2010. The Company will seek toretain independent contractors to assist in operating and managing theprospects as well as to carry out the principal and necessary functionsincidental to the oil and gas business.  With the continuedacquisition of oil and gas properties, the Company intends to continue toestablish itself with industry partners best suited to the areas ofoperation.  As the Company continues to establish a revenue base withcash flow, it may seek opportunities more aggressive in nature.

 

Asan independent oil and gas producer, the Company’s revenue, profitability andfuture rate of growth are substantially dependent on prevailing prices ofnatural gas and crude oil.  Historically, the energy markets havebeen very volatile and it is likely that oil and gas prices will continue to besubject to wide fluctuations in the future.  A substantial orextended decline in natural gas and oil prices could have a material adverseeffect on the Company’s financial position, results of operations, cash flowsand access to capital, and on the quantities of natural gas and oil reservesthat can be economically produced.

 

**NOTE 2     SIGNIFICANT ACCOUNTINGPOLICIES**

 

Thefinancial information included herein is unaudited, except the balance sheet asof December 31, 2009, which was derived from our audited financialstatements as of December 31, 2009. However, such information includes all adjustments (consisting solely ofnormal recurring adjustments), which are in the opinion of management,necessary for a fair presentation of financial position, results of operationsand cash flows for the periods presented. The results of operations for interim periods are not necessarilyindicative of the results to be expected for an entire year.

 

Certaininformation, accounting policies, and footnote disclosures normally included inthe financial statements prepared in accordance with generally acceptedaccounting principles (“GAAP”) in the United States of America have beencondensed or omitted

 

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pursuantto certain rules and regulations of the Securities and ExchangeCommission.  The financial statementsshould be read in conjunction with the audited financial statements and notesfor the year ended December 31, 2009.

 

Asa result of the reverse acquisition discussed in Note 1 the historicalfinancial statements presented for the periods prior to the acquisition dateare the financial statements of Plains Energy Investments, Inc.  The operations of Voyager Oil & Gas, Inc.(formerly ante4, Inc.) have been included in the financial statements fromthe date of acquisition.

 

Cashand Cash Equivalents

 

TheCompany considers highly liquid investments with insignificant interest raterisk and original maturities to the Company of three months or less to be cashequivalents.  Cash equivalents consist primarily of interest-bearingbank accounts and money market funds.  The Company’s cash positionsrepresent assets held in checking and money market accounts.  Theseassets are generally available to the Company on a daily or weekly basis andare highly liquid in nature.  Due to the balances being greater than$250,000, the Company does not have FDIC coverage on the entire amount of bankdeposits.  The Company believes this risk is minimal.

 

Restricted Cash

 

At June 30, 2010, the Company has $150,053 ofrestricted cash of which $50,992 is classified as a noncurrent asset. Therestricted cash serves as collateral for an irrevocable standby letter ofcredit that provides financial assurance that the Company will fulfill itsobligations with respect to an office lease. The cash is held in custody by theissuing bank, is restricted as to withdrawal or use, and is currently investedin money market funds. Income from these investments is paid to the Company.

 

Short-TermInvestments

 

Allmarketable debt and equity securities that are included in short-terminvestments are considered available-for-sale and are carried at fair value.  Theshort-term investments are considered current assets due to the Company’sability and intent to use them to fund current operations.  Theunrealized gains and losses related to these securities are included inaccumulated other comprehensive income (loss).   When securities aresold, their cost is determined based on the first-in first-outmethod.  The realized gains and losses related to these securitiesare included in other income in the statements of operations.

 

OtherProperty and Equipment

 

Propertyand equipment that are not oil and gas properties are recorded at cost anddepreciated using the straight-line method over their estimated useful lives ofthree to seven years.  Expenditures for replacements, renewals, andbetterments are capitalized.  Maintenanceand repairs are charged to operations as incurred.  Long-livedassets, other than oil and gas properties, are evaluated for impairment todetermine if current circumstances and market conditions indicate the carryingamount may not be recoverable.  The Company has not recognized anyimpairment losses on non oil and gas long-lived assets.  Depreciationexpense was $1,465 for the six months ended June 30, 2010.

 

AssetRetirement Obligations

 

TheCompany records the fair value of a liability for an asset retirementobligation in the period in which the asset is acquired and a correspondingincrease in the carrying amount of the related long-lived asset.  Theliability is accreted to its present value each period, and the capitalizedcost is depreciated over the useful life of the related asset.  Ifthe liability is settled for an amount other than the recorded amount, a gainor loss is recognized.

 

RevenueRecognition and Gas Balancing

 

TheCompany recognizes oil and gas revenues from our interests in producing wellswhen production is delivered to, and title has transferred to, the purchaserand to the extent the selling price is reasonably determinable.  The Company uses the sales method ofaccounting for gas balancing of gas production and would recognize a liabilityif the existing proven reserves were not adequate to cover the currentimbalance situation.  As of June 30,2010, the Company’s natural gas production was in balance, i.e., our cumulativeportion of gas production taken and sold from wells in which we have aninterest equaled the Company’s entitled interest in gas production from thosewells.

 

Stock-BasedCompensation

 

TheCompany has accounted for stock-based compensation under the provisions of FASBAccounting Standards Codification (ASC) 718-10-55. This standard requires the Company to record an expenseassociated with the fair value of stock-based compensation.  TheCompany uses the Black-Scholes option valuation model to calculate stock basedcompensation at the date of grant.  Option pricing

 

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modelsrequire the input of highly subjective assumptions, including the expectedprice volatility.  Changes in these assumptions can materially affectthe fair value estimate.

 

IncomeTaxes

 

TheCompany accounts for income taxes under FASB ASC 740-10-30 (*Prior authoritative literature,*FASBStatement 109, *Accounting for Income Taxes).* Deferred income tax assetsand liabilities are determined based upon differences between the financialreporting and tax bases of assets and liabilities and are measured using theenacted tax rates and laws that will be in effect when the differences areexpected to reverse.  Accounting standards require the considerationof a valuation allowance for deferred tax assets if it is “more likely than not”that some component or all of the benefits of deferred tax assets will not berealized.

 

NetIncome (Loss) Per Common Share

 

NetIncome (Loss) per common share is based on the Net Income (Loss) divided by theweighted average number of common shares outstanding.

 

Dilutedearnings per share are computed using weighted average number of common sharesplus dilutive common share equivalents outstanding during the period using thetreasury stock method.  As the Company has a loss for the three andsix month periods ended June 30, 2010 the potentially dilutive shares areanti-dilutive and are thus not added into the earnings per share calculation.

 

Asof June 30, 2010, there are 229,000 stock options that are issued andpresently exercisable and represent potentially dilutive shares.

 

Asof June 30, 2010, there are also 700,000 stock options that have beengranted but are not presently exercisable and represent potentially dilutiveshares.

 

Asof June 30, 2010 there are also 1,563,051 warrants that are issued but notpresently exercisable.  These warrantshave an exercise price of $.98 and vest in December 2011.

 

FullCost Method

 

TheCompany follows the full cost method of accounting for oil and gas operationswhereby all costs related to the exploration and development of oil and gasproperties are initially capitalized into a single cost center (“full cost pool”).  Suchcosts include land acquisition costs, geological and geophysical expenses,carrying charges on non-producing properties, costs of drilling directlyrelated to acquisition, and exploration activities.

 

Proceedsfrom property sales will generally be credited to the full cost pool, with nogain or loss recognized, unless such a sale would significantly alter therelationship between capitalized costs and the proved reserves attributable tothese costs.  A significant alteration would typically involve a saleof 25% or more of the proved reserves related to a single full costpool.  There were no property sales for the six month period ended June 30,2010.

 

Capitalizedcosts associated with impaired properties and capitalized cost related toproperties having proved reserves, plus the estimated future development costs,asset retirement costs under FASB ASC 410-20-25 (*Prior authoritative literature:,*FASB Statement 143, *Accounting for Asset Retirement Obligations)*will be depleted and amortized on theunit-of-production method based on the estimated gross proved reserves asdetermined by independent petroleum engineers.  The costs of unprovedproperties are withheld from the depletion base until such time as they areeither developed or abandoned.  When proved reserves are assigned orthe property is considered to be impaired, the cost of the property or theamount of the impairment is added to costs subject to depletion calculations.

 

Capitalizedcosts of oil and gas properties (net of related deferred income taxes) may notexceed an amount equal to the present value, discounted at 10% per annum, ofthe estimated future net cash flows from proved oil and gas reserves plus thecost of unevaluated properties (adjusted for related income taxeffects).  Should capitalized costs exceed this ceiling, impairmentis recognized.  The present value of estimated future net cash flowsis computed by applying the 12-month average price of oil and natural gas basedon the prices in effect at the beginning of each month to estimated future productionof proved oil and gas reserves as of period-end, less estimated futureexpenditures to be incurred in developing and producing the proved reserves andassuming continuation of existing economic conditions.  Such presentvalue of proved reserves’ future net cash flows excludes future cash outflowsassociated with settling asset retirement obligations that have been accrued onthe Balance Sheet.  Should this comparison indicate an excesscarrying value, the excess is charged to earnings as an impairmentexpense. As of June 30, 2010 the Company has not realized anyimpairment of its properties.

 

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JointVentures

 

Thefinancial statements as of June 30, 2010 include the accounts of theCompany and its proportionate share of the assets, liabilities, and results ofoperations of the joint ventures it is involved in.

 

Useof Estimates

 

Thepreparation of financial statements under GAAP in the United States requiresmanagement to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilitiesat the date of the financial statements and the reported amounts of revenuesand expenses during the reporting period.  The most significantestimates relate to certain factors involved in the estimates relating tocertain oil and natural gas revenues and expenses, valuation of share based compensationand the valuation of deferred income taxes. Actual results may differ from those estimates.

 

Reclassifications

 

Certainreclassifications have been made to prior periods’ reported amounts in order toconform with the current period presentation. These reclassifications did notimpact our net income, stockholders’ equity or cash flows.

 

Impairment

 

FASBASC 360-10-35-21 requires that long-lived assets to be held and used bereviewed for impairment whenever events or changes in circumstances indicatethat the carrying amount of an asset may not be recoverable.  Oil andgas properties accounted for using the full cost method of accounting (which weuse) are excluded from this requirement but continue to be subject to the fullcost method’s impairment rules.  There was no impairment identifiedat June 30, 2010.

 

Recent Accounting Pronouncements

 

InFebruary 2010, the FASB issued ASU 2010-09, “Subsequent Events (Topic 855)- Amendments to Certain Recognition and Disclosure Requirements.” ASU 2010-09requires an entity that is an SEC filer to evaluate subsequent events throughthe date that the financial statements are issued and removes the requirementthat an SEC filer disclose the date through which subsequent events have beenevaluated. ASC 2010-09 was effective upon issuance. The adoption of thisstandard had no effect on our results of operations or financial position.

 

InApril 2010, the FASB issued ASU 2010-13, “Compensation - StockCompensation (Topic 718) - Effect of Denominating the Exercise Price of a Share-BasedPayment Award in the Currency of the Market in Which the Underlying EquitySecurity Trades.” ASU 2010-13 provides amendments to Topic 718 to clarify thatan employee share-based payment award with an exercise price denominated in thecurrency of a market in which a substantial portion of the entity’s equitysecurities trades should not be considered to contain a condition that is not amarket, performance, or service condition. Therefore, an entity would notclassify such an award as a liability if it otherwise qualifies as equity. Theamendments in ASU 2010-13 are effective for fiscal years, and interim periodswithin those fiscal years, beginning on or after December 15, 2010. Theadoption of this standard will not have an effect on our results of operationsor financial position.

 

Fromtime to time, new accounting pronouncements are issued by FASB that are adoptedby us as of the specified effective date.  If not discussed,management believes that the impact of recently issued standards, which are notyet effective, will not have a material impact on our financial statements uponadoption.

 

Changein Reporting Period End

 

OnJuly 29, 2010, the Company’s Board of Directors approved a change in theCompany’s fiscal year end to a traditional calendar year from that of a lastSunday of quarter end period.  The changein reporting period has been reflected in this Quarterly Report on Form 10-Q.  The Company’s fiscal year end will now be December 31,and the quarters will end on March 31, June 30 and September 30.

 

**NOTE 3     SHORT-TERM INVESTMENTS**

 

Allmarketable debt and equity securities that are included in short-terminvestments are considered available-for-sale and are carried at fairvalue.  The short-term investments are considered current assets dueto the Company’s ability and intent to use them to fund currentoperations.  The unrealized gains and losses related to thesesecurities are included in accumulated other comprehensive income.  When securities are sold, their cost is determined based on the first-infirst-out method.  The realized gains and losses related to thesesecurities are included in other income in the statements of operations.

 

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Thefollowing is a summary of the Company’s short-term investments as of June 30,2010:

 
| ** **                   | ** ** | **Cost at  June 30,  2010** | ** ** | **Unrealized Gain  (Loss)** | ** ** | **Fair  Market  Value at  June 30,  2010** | ** ** |
|------------------------------|------------|----------------------------------|------------|----------------------------------|------------|-------------------------------------------------|------------|
| Corporate Bonds              |       | $                                | 1,959,649  |                             | $          | (7,326                                          | )          | $ | 1,952,323 |   |
| Certificates of Deposit      |       | 2,443,000                        |       | 1,420                            |       | 2,444,420                                       |       |
| Total Short-Term Investments |       | $                                | 4,402,649  |                             | $          | (5,906                                          | )          | $ | 4,396,743 |   |

 

Forthe six months ended June 30, 2010 there were realized gains of $10,138recognized on the sale of investments.

 

**NOTE 4     PROPERTY AND EQUIPMENT**

 

Propertyand equipment at June 30, 2010 consisted of the following:

 
|                                                              |   | **June 30,********2010** |       |
|-------------------------------------------------------------------|--------|-------------------------------|------------|
| Oil and Gas Properties, Full Cost Method                          |   |                          |       |
| Unevaluated Costs, Not Subject to Amortization or  Ceiling Test   |   | $                             | 23,996,882 |   |
| Evaluated Costs                                                   |   | 332,126                       |       |
|                                                              |   | 24.329,008                    |       |
| Office Equipment, Furniture, Leasehold  Improvements and Software |   | 22,346                        |       |
|                                                              |   | 24,351,354                    |       |
| Less: Accumulated Depreciation, Depletion and  Amortization       |   |                          |       |
| Property and Equipment                                            |   | 55,995                        |       |
| Total                                                             |   | $                             | 24,295,359 |   |

 

Thefollowing table shows depreciation, depletion, and amortization expense by typeof asset:

 
| ** **                                                 | ** ** | **Six Months********Ended June 30,** | ** ** |
|------------------------------------------------------------|------------|-------------------------------------------|------------|
| ** **                                                 | ** ** | **2010**                                  | ** ** | **2009** | ** ** |
| Depletion of Costs for Evaluated Oil and Gas  Properties   |       | $                                         | 70,500     |   | $ | — |   |
| Depreciation of Office Equipment, Furniture, and  Software |       | 1,465                                     |       | — |   |
| Total Depreciation, Depletion, and Amortization  Expense   |       | $                                         | 71,965     |   | $ | — |   |

 

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** **

**NOTE 5     OIL AND GAS PROPERTIES**

 

MajorJoint Venture

 

InMay 2008, the Company entered into the Major Joint Venture Agreement witha third-party partner to acquire certain oil and gas leases in the Tiger RidgeGas Field in Blaine, Hill, and Choteau Counties of Montana. Under the terms ofthe agreement, the Company is responsible for all lease acquisition costs. Thethird-party joint venture partner is responsible for coordinating the geology,acquiring the leases in its name, preparing and disseminating assignments,accounting for the project costs and administration of the well operator. TheCompany controls an 87.5% working interest on all future production andreserves, while the third-party joint venture partner controls 12.5%. The jointventure had accumulated oil and gas leases totaling 65,000 net mineral acres asof June 30, 2010. The Company has committed to a minimum of $1,000,000 upto $2,000,000 toward this joint venture. The third-party joint venture partnerissues cash calls during the year to replenish the joint venture cash account.The Company’s contributions to the joint venture totaled $1,892,367 as of June 30,2010. The unutilized cash balance was $174,698 as of June 30, 2010.

 

*Tiger Ridge Joint Venture*

 

InNovember 2009, the Company entered into the Tiger Ridge Joint VentureAgreement with a third-party and a well operator to develop and exploit adrilling program in two certain blocks of acreage in the Major Joint Venture,which is an area of mutual interest. The Company controls a 70.0% workinginterest, while the third-party investor and well operator control 10% and 20%,respectively.  The Agreement requiresthat all parties contribute in cash their proportional share to cover all costsincurred in developing these blocks of acreage for drilling.

 

*Big Snowy Joint Venture*

 

InOctober 2008, the Company entered into the Big Snowy Joint VentureAgreement with an administrator third-party to acquire certain oil and gasleases in the Heath Oil play in Musselshell, Petroleum, Garfield, Rosebud andFergus Counties of Montana, and another third-party to perform as theoperator.  Under the terms of theagreement, the Company is responsible for 72.5% of lease acquisition costs, andthe other two third-parties are individually responsible for 2.5% and 25% ofthe lease acquisition costs. The administrator third-party joint venturepartner is responsible for coordinating the geology, acquiring the leases inits name, preparing and disseminating assignments, accounting for the projectcosts and administration of the well operator. The Company controls a 72.5%working interest on all future production and reserves, while the administratorthird-party joint venture partner controls 2.5% and the well operator controls25%. The joint venture had accumulated oil and gas leases totaling 33,562 netmineral acres as of June 30, 2010. The Company is committed to a minimumof $1,000,000 up to $1,993,750 toward this joint venture, with all partners,including the Company, committing a minimum of $2,750,000. The administratorthird-party joint venture partner issues cash calls during the year toreplenish the joint venture cash account. The Company’s contributions to thejoint venture totaled $724,744 as of June 30, 2010. The unutilized cashbalance was $11,806 as of June 30, 2010.

 

NiobraraDevelopment with Slawson Exploration Company, Inc.

 

On June 28, 2010, the Companyentered into an exploration and development agreement with Slawson ExplorationCompany, Inc. (“Slawson”) to develop Slawson’s 48,000 net acres in theDenver-Julesberg Basin Niobrara Formation in Weld County, Colorado.  Slawson commenced the continuous drillingprogram in early July 2010 with an initial series of three test wellsexpected to be completed by October 2010.  Subject to the results ofthese wells, Slawson expects to commence a continuous drilling programtargeting 57 additional locations in the prospect that will be drilledthroughout 2011.  Voyager purchased a 50%working interest in the approximately 48,000 acre block for $7.5 million andwill participate on a heads-up basis on all wells drilled, as well asparticipate for its proportionate working interest in all additional acreageacquired in an Area of Mutual Interest consisting of Weld and Laramie Counties.

 

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*Other Oil and Gas Acquisitions*

 

InAugust 2009, the Company participated in a federal lease sale and acquiredassignment of certain oil leases in Mountrail County, North Dakota for a totalpurchase price of $351,562 for approximately 66 net acres.

 

InNovember 2009, the Company participated in a federal lease sale andacquired assignment of certain oil leases in McKenzie and Mountrail Counties,North Dakota for a total purchase price of $1,836,774 for approximately 263 netacres.

 

OnMarch 10, 2010 the Company agreed to purchase all right, title andinterests of South Fork Exploration, LLC (“SFE”) in certain oil, gas andmineral leases totaling approximately 3,111 net mineral acres in McLean,Mountrail and Williams County, North Dakota and Sheridan County, Montana.  Under the agreement, the Company paid SFE$1,374,375 cash and issue 2,573,346 unregistered shares of the Company’s commonstock.   The transaction was contingentupon receipt of a fairness opinion from an independent party acceptable in formand substance to the Company confirming that the terms of the proposedtransaction are fair and reasonable to the Company and its shareholders andexecuted assignments from SFE on a county-by-county basis.  All conditions under the agreement have beenfulfilled and the Company closed the acquisition on March 30, 2010.  SFE is wholly owned by J.R. Reger, CEO andshareholder of the Company (See Note 6).

 

OnMarch 15, 2010, the Company’s Board of Directors approved a purchaseagreement with Bakken Explorations (“BE”). Under the terms of the agreement, the Company agreed to pay BE $650 pernet mineral acre as consideration for the assignment of leases covering anaggregate of 827.66672 net acres, contingent upon the Company’s successfulconduction of its own examination of BE’s title to the leases. The Companycompleted its examination of title and closed the transaction on April 14,2010.

 

OnApril 21, 2010 the Company’s Board of Directors approved a purchaseagreement to pay $500 per net mineral acre as consideration for the assignmentof certain leases in Richland County, Montana. On May 14, 2010, theCompany completed a closing with a total purchase price of $2,634,209 for approximately5,268.42 net acres.

 

OnMay 6, 2010 the Company’s Chairman approved the purchase of certain leaseswith a total purchase price of $1,648,891 for approximately 3,297.78 netacres.  The transactions were closed atvarious times during May 2010.

 

TheCompany has also completed other miscellaneous acquisitions in Montana andNorth Dakota.

 

**NOTE 6     RELATED PARTYTRANSACTIONS**

 

OnMarch 10, 2010, the Company purchased leasehold interests from South ForkExploration, LLC (SFE) for $1,374,375 and 2,573,346 shares of restricted commonstock.  SFE’s president was J.R. Reger,CEO and shareholder of Voyager Oil & Gas, Inc.

 

**NOTE 7     PREFERRED AND COMMONSTOCK**

 

Priorto the April 16, 2010 Merger described in Note 14, in January 2010,the Company completed a private placement offering of 924,000 shares of commonstock to accredited investors at a subscription price of $.92 per share fortotal gross proceeds of $847,000.  As part of this private placementthe Company entered into an introduction letter agreement with Great NorthCapital Consultants, Inc. (“Great North”). As compensation for the work performed, Great North received 203,280shares of restricted common stock of the Company and $67,760 in cash.  The fair value of the restricted stock was$186,340 or $.92 per share, based upon the market value of one share of commonstock on the date the transaction closed. These costs were netted against the proceeds of the offering throughAdditional Paid-In Capital.  The offeringwas a private placement made under Rule 506 promulgated under theSecurities Act of 1933 (the “Act”), as amended and the related Form D wasfiled February 1, 2010.   Thesecurities offered and sold (or deemed to be offered and sold, in the case ofunderlying shares of common stock) in the offering have not been registeredunder the Securities Act and may not be offered or sold in the United Statesabsent registration or an applicable exemption from registrationrequirements.  The disclosure about theprivate placement contained in this report does not constitute an offer to sellor a solicitation of an offer to buy any securities of the Company, and is madeonly as required under applicable law and related reporting requirements, andas permitted under Rule 135c under the Securities Act.

 

Priorto the April 16, 2010 merger described in Note 14, on January 25,2010, the Company’s Board of Directors and a majority of its stockholdersapproved a 3-for-1 stock split pursuant to which all stockholders of recordreceived three shares of common stock for each single share of common stockowned as of the record date. This stock split increased the issued andoutstanding shares by approximately 14,100,000 and the outstanding warrants byapproximately 3,600,000.  Generallyaccepted accounting principles require that the stock split be appliedretrospectively to all periods presented. As a result, all stock and warrant transactions have been adjusted toaccount for the 3-for-1 stock split.

 

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RestrictedStock Awards

 

Priorto the merger described in Note 14 during the year ended December 31,2009, the Target Company issued 540,000 restricted shares of common stock ascompensation to its officers. The restricted shares vest on December 1,2011 and December 31, 2011. As of June 30, 2010, there wasapproximately $341,000 of total unrecognized compensation expense related tounvested restricted stock. This compensation expense will be recognized overthe remaining vesting period of the grants. The Company has assumed a zeropercent forfeiture rate for restricted stock. This restricted stock grants were converted to 468,916 restricted sharesof Voyager common stock on the date of the Merger Agreement.

 

Therewere no changes to the outstanding restricted common stock in the six monthperiod ended June 30, 2010.

 

**NOTE 8    STOCK OPTIONS AND WARRANTS**

 

Stock Options

 

TheCompany accounts for stock-based compensation under the provisions of FASB ASC718-10-55 (Prior*authoritative literature:*FASBStatement 123(R), *Share-Based Payment).*Thisstatement requires the Company to record an expense associated with the fairvalue of stock-based compensation.  The Company uses theBlack-Scholes option valuation model to calculate stock-based compensation atthe date of grant.  Option pricing models require the input of highlysubjective assumptions, including the expected price volatility.  Forthe stock options granted in 2010 the Company used a variety of comparable andpeer companies to determine the expected volatility input based on the expectedterm of the options.  The Companybelieves the use of peer company data fairly represents the expected volatilitywe would experience if we were in the oil and gas industry over the expectedterm of the options. The Company used the simplified method to determine theexpected term of the options due to the lack of historical data. Changes inthese assumptions can materially affect the fair value estimate.  Thetotal fair value of the options is recognized as compensation over the vestingperiod.

 

*Stock Options Granted April 21, 2010*

 

OnApril 21, 2010, the Company granted its outside directors stockoptions to purchase a total of 700,000 shares of common stock exercisable at$2.76 per share.   The total fair value of the options wascalculated using the Black-Scholes valuation model based on factors present atthe time the options were granted. The options vest over four years with 175,000of the options vesting on each anniversary date.  As of June 30, 2010, there wasapproximately $1.2 million of total unrecognized compensation expense relatedto these unvested options. This compensation expense will be recognized overthe remaining vesting period of the grants. The Company recognized $50,912 ofexpense related to these options in the six month period ended June 30,2010.

 

Thefollowing assumptions were used for the Black-Scholes model:

 
| ** **                                   | ** ** | **April 21,** | ** ** |
|----------------------------------------------|------------|--------------------|------------|
| ** **                                   | ** ** | **2010**           | ** ** |
| Risk free rates                              |       | 2.52               | %          |
| Dividend yield                               |       | 0                  | %          |
| Expected volatility                          |       | 69.19              | %          |
| Weighted average expected stock options life |       | 6 Years            |       |

 

The“fair market value” at the date of grant for stock options granted is asfollows:

 
| Weighted average fair value per share                       |   | $       | 1.75      |   |
|-------------------------------------------------------------|--------|---------|-----------|--------|
| Total stock options granted                                 |   | 700,000 |      |
| Total weighted average fair value of stock options  granted |   | $       | 1,221,885 |   |

 

All stock options related to thepre-merger entity ante4, Inc. (See Note 14) were expensed prior toJanuary 4, 2010 resulting from the acceleration of all options from theasset sale to Peerless Media, as well as the cancellation of unvested CEO stockoptions on January 1, 2010.  The following table summarizes stockoption activity during the six months ended June 30, 2010:

 

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| ** **                           | ** ** | ** **               | ** ** | **Number of Common Shares** | ** ** |
|--------------------------------------|------------|--------------------------|------------|--------------------------------------------|------------|
| ** **                           | ** ** | **Options  outstanding** | ** ** | **Exercisable**                            | ** ** | **Weighted  ave. exercise  price** | ** ** |
| **Balances at January 3, 2010** |       | 324,666                  |       | 324,666                                    |       | $ | 3.53 |   |
| Granted                              |       | 700,000                  |       | —                                     |       | 2.76 |   |
| Forfeited/exchanged                  |       | (26,666                  | )          | (26,666                                    | )          | 2.21 |   |
| Exercised                            |       | (69,000                  | )          | (69,000                                    | )          | 2.16 |   |
| **Balances at June 30, 2010**   |       | 929,000                  |       | 229,000                                    |       | $ | 2.83 |   |

 

Warrants

 

Priorto the Merger on April 16, 2010 described in Note 14, the Company had5,400,000 warrants outstanding with an exercise price of $.85 per warrant,prior to the Merger Agreement.  As partof the Merger Agreement, these warrants were converted to 4,689,153 warrants inVoyager Oil & Gas, Inc. with an exercise price of $.98 perwarrant.

 

On April 26, 2010, 3,126,102 of these warrants wereexercised.  The warrant holders electedto complete a cashless exercise of these warrants and to complete the cashlessexercise the warrant holders surrendered 875,309 shares of the Company’s commonstock.

 

Thetable below reflects the status of warrants outstanding at June 30, 2010:

 
| ** **             | ** ** | ** **   | ** ** | **Exercise** | ** ** | **Expiration** | ** **             |
|------------------------|------------|--------------|------------|--------------|------------|----------------|------------------------|
| **Issue Date**         | ** ** | **Warrants** | ** ** | **Price**    | ** ** | **Date**       | ** **             |
| December 1, 2009  |       | 260,509      |       | $            | 0.98       |           | December 1, 2019  |   |
| December 31, 2009 |       | 1,302,542    |       | $            | 0.98       |           | December 31, 2019 |   |
|                   |       | 1,563,051    |       |         |       |           |                   |

 

CurrentlyOutstanding Warrants

 

·      No warrantswere forfeited or expired during the six month period ended June 30, 2010.

 

·      The Companyrecorded expense related to these warrants of $241,540 for the six month periodended June 30, 2010.  There is $717,776 of compensation expensethat will be recognized in future periods relating to warrants that have beengranted as of June 30, 2010.

 

·      There are nowarrants exercisable at June 30, 2010.

 

·      3,126,102warrants were exercised during the six month period ended June 30, 2010.

 

·      The per-shareweighted average exercise price of the outstanding warrants was $.98 at June 30,2010.

 

·      The remainingaverage contractual life of the outstanding warrants was 9.6 years at June 30,2010.

 

**NOTE 9     ASSET RETIREMENTOBLIGATION**

 

TheCompany has asset retirement obligations associated with the future pluggingand abandonment of proved properties and related facilities.  Underthe provisions of FASB ASC 410-20-25 (*Priorauthoritative literature:*FASB Statement 143, *Accounting for Asset Retirement Obligations)*,the fair value of a liability for an asset retirement obligation is recorded inthe period in which it is incurred and a corresponding increase in the carryingamount of the related long lived asset.  The liability is accreted toits present value each 

 

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period,and the capitalized cost is depreciated over the useful life of the relatedasset.  If the liability is settled for an amount other than therecorded amount, a gain or loss is recognized.  The Company has noassets that are legally restricted for purposes of settling asset retirementobligations.

 

Thefollowing table summarizes the company’s asset retirement obligationtransactions recorded in accordance with the provisions of FASB ASC 410-20-25during the six months ended June 30, 2010:

 
| ** **                                               | ** ** | **Six Months  Ended**   | ** ** |
|----------------------------------------------------------|------------|-------------------------|------------|
| ** **                                               | ** ** | **June 30,  2010** | ** ** |
| Beginning Asset Retirement Obligation                    |       | $                       | —     |   |
| Liabilities Incurred for New Wells Placed in  Production |       | 1,215                   |       |
| Accretion of Discount on Asset Retirement  Obligations   |       | 41                      |       |
| Ending Asset Retirement Obligation                       |       | $                       | 1,256      |   |

 

**NOTE 10     INCOME TAXES**

 

Deferredincome tax assets and liabilities are determined based upon differences betweenthe financial reporting and tax bases of assets and liabilities and aremeasured using the enacted tax rates and laws that will be in effect when thedifferences are expected to reverse.   The Company does not expect topay any federal or state income tax for 2010 as a result of the losses recordedduring the six months ended June 30, 2010 as well as additional lossesexpected for the remainder of 2010.  Accounting standards require theconsideration of a valuation allowance for deferred tax assets if it is “morelikely than not” that some component or all of the benefits of deferred taxassets will not be realized.  As of June 30, 2010, the Companymaintains a full valuation allowance for all deferred tax assets relating topre-merger company ante4, Inc.  Based on these requirements noprovision or benefit for income taxes has been recorded for deferredtaxes.  The provision reported for thesix months ended June 30, 2010 relates to a capital tax paid to the Stateof Delaware. There were no recorded unrecognized tax benefits at the end of thereporting period

 

**NOTE 11     FAIR VALUE**

 

FASBASC 820-10-55 (Prior*authoritativeliterature:*FASB Statement 157, *FairValue Measurements)*defines fair value, establishes a framework formeasuring fair value under generally accepted accounting principles andenhances disclosures about fair value measurements.  Fair value isdefined under FASB ASC 820-10-55 as the exchange price that would be received foran asset or paid to transfer a liability (an exit price) in the principal ormost advantageous market for the asset or liability in an orderly transactionbetween market participants on the measurement date.  Valuationtechniques used to measure fair value under FASB ASC 820-10-55 must maximizethe use of observable inputs and minimize the use of unobservableinputs.  The standard describes a fair value hierarchy based on threelevels of inputs, of which the first two are considered observable and the lastunobservable, that may be used to measure fair value which are the following:

 

Level1 - Quoted prices in active markets for identical assets or liabilities.

 

Level2 - Inputs other than Level 1 that are observable, either directly orindirectly, such as quoted prices for similar assets or liabilities; quotedprices in markets that are not active; or other inputs that are observable orcan be corroborated by observable market data for substantially the full termof the assets or liabilities.

 

Level3 - Unobservable inputs that are supported by little or no market activity andthat are significant to the fair value of the assets or liabilities.

 

Thefollowing schedule summarizes the valuation of financial instruments measuredat fair value on a recurring basis in the balance sheet as of June 30,2010.

 

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| ** **              | ** ** | **Quoted Prices In  Active Markets  for Identical  Assets (Level 1)** | ** ** | **Significant  Other  Observable  Inputs (Level  2)** | ** ** | **Significant  Unobservable  Inputs (Level  3)** | ** ** |
|-------------------------|------------|-----------------------------------------------------------------------|------------|-------------------------------------------------------|------------|--------------------------------------------------|------------|
| Corporate Bonds         |       | $                                                                     | 1,952,323  |                                                  | $          | —                                           |       | $ | — |   |
| Certificates of Deposit |       | 2,444,420                                                             |       | —                                                |       | —                                           |       |
| Total                   |       | $                                                                     | 4,396,743  |                                                  | $          | —                                           |       | $ | — |   |

 

Level1 assets consist of corporate bonds and certificates of deposit, the fair valueof these investments are based on quoted market prices.

 

TheCompany’s assessment of the significance of a particular input to the fairvalue measurement requires judgment and may affect the valuation of the nonfinancialassets and liabilities and their placement in the fair value hierarchy levels.The fair value of the Company’s asset retirement obligations are determinedusing discounted cash flow methodologies based on inputs that are not readilyavailable in public markets. The fair value of the asset retirement obligationsis reflected on the balance sheet as follows.

 
| ** **                    | ** ** | **Fair Value Measurements at  June 30, 2010 Using**                 | ** ** |
|-------------------------------|------------|--------------------------------------------------------------------------|------------|
| **Description**               | ** ** | **Quoted  Prices In  Active  Markets for  Identical  Assets  (Level 1)** | ** ** | **Significant  Other  Observable  Inputs  (Level 2)** | ** ** | **Significant  Unobservable  Inputs  (Level 3)** | ** ** |
| Other Non-current Liabilities |       | $                                                                        | —     |   | $ | — |   | $ | (1,256 | ) |
| Total                         |       | $                                                                        | —     |   | $ | — |   | $ | (1,256 | ) |

 

SeeNote 9 for a rollforward of the Asset Retirement Obligation.

 

**NOTE 12**     **FINANCIAL INSTRUMENTS**

 

TheCompany’s financial instruments include cash and cash equivalents, short-terminvestments, restricted cash, accounts receivable and accounts payable. Thecarrying amount of cash and cash equivalents, accounts receivable and accountspayable approximate fair value because of their immediate or short-termmaturities.

 

**NOTE 13     COMPREHENSIVE INCOME**

 

TheCompany follows the provisions of FASB ASC 220-10-55 (*Prior authoritative literature:*FASBStatement 130, *Reporting ComprehensiveIncome)*which establishes standards for reporting comprehensiveincome.  In addition to net income, comprehensive income includes allchanges in equity during a period, except those resulting from investments anddistributions to stockholders of the Company.

 

Forthe periods indicated, comprehensive income (loss) consisted of the following:

 

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| ** **                                | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|-------------------------------------------|------------|---------------------------------------|------------|-------------------------------------|------------|
| ** **                                | ** ** | **2010**                              | ** ** | **2009**                            | ** ** | **2010** | ** ** | **2009** | ** ** |
| Net Income (Loss)                         |       | $                                     | (1,098,577 | )                                   | $          | 382 |   | $ | (1,332,618 | ) | $ | 948 |   |
| Unrealized gains on Marketable Securities |       | (18,822                               | )          | —                              |       | (13,812 | ) | — |   |
| Other Comprehensive income (loss) net     |       | $                                     | (1,117,399 | )                                   | $          | 382 |   | $ | (1,346,430 | ) | $ | 948 |   |

 

**NOTE 14**     **MERGER WITH TARGET COMPANY**

 

Voyagerformerly operated as ante4, Inc. (“ante4”), and prior to that, operated asWPT Enterprises, Inc., when it created internationally brandedentertainment and consumer products driven by the development, production andmarketing of televised programming based on gaming themes (the “WPT Business”).On November 2, 2009, ante4 closed a transaction with PeerlessMedia Ltd., a subsidiary of PartyGaming, PLC (“Party”) pursuant towhich ante4 agreed to sell substantially all of its operating assets other thancash, investments and certain excluded assets to Party (the “Party Transaction”).As a result of closing the Party Transaction, ante4 ceased the WPT Business(other than operation of certain excluded assets retained by ante4), andplanned to use the proceeds of the Party Transaction to develop or acquire anew business. In addition, ante4’s name was changed from WPTEnterprises, Inc. to ante4, Inc.

 

OnApril 16, 2010, ante4 closed a transaction pursuant to which Plains EnergyInvestments, Inc., a privately held oil and gas exploration company, wasmerged with and into a wholly-owned subsidiary of ante4. In connection with theMerger, ante4 changed its name to Voyager Oil & Gas, Inc. As a resultof the Merger, the Target Company’s stockholders were issued shares of ante4’scommon stock equal to approximately 51% of ante4’s total outstanding commonstock after the Merger. The assets remaining in the Company post-merger were$27,500,000 of cash and cash equivalents and a $500,000 note receivable fromante5, Inc. maturing on April 16, 2011.

 

TheCompany incurred merger-related costs of $643,486 during the three months endedJune 30, 2010. These costs included advisory, legal, accounting,valuation, other professional fees, and general administrative costs. Inaccordance with ASC 805-40, all merger-related costs were expensed in theperiod in which the costs were incurred and the services were received.

 

**NOTE 15**    **SPIN-OFF OF ASSETS TO ANTE5, INC.**

 

Beforethe Merger with the Target Company became effective, ante4 transferredsubstantially all of its non-cash assets and some cash for working capital(together, the “ante5 Assets”) to ante5, Inc (“ante5”), a wholly-ownedsubsidiary of ante4. The transfer of the ante5 Assets was made with the intentof consummating the spin-off of shares to the ante4 shareholders of record on June 24,2010. After the spin-off, ante5 become a separate publicly reporting U.S.company. The ante5 Assets that have been transferred to ante5 include, amongothers:

 

·      5% of grossgaming revenue and 5% of other revenue of Party Gaming generated by the WPTBusiness and other assets ante4 sold to Party Gaming.

 

·      Cash and cashequivalents of approximately $206,000 as of April 16, 2010. Accounts payablewere approximately $316,000 as of April 16, 2010, and an additionalapproximately $282,000 in accounts payable were accrued since that date.Furthermore, ante5 must repay $500,000 borrowed from Voyager pursuant to apromissory note due April 16, 2011, which accrues interest at a rate oftwo percent (2%) per annum.

 

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·      The right toreceive any and all of the proceeds received by ante4 with respect to auctionrate securities in the amount of approximately $3,700,000 previously held byante4 in its account with UBS Financial Services.

 

·      Contingentclaims and interests relating to (a) to payments previously owed to ante4by Xyience, Inc., a former sponsor of the WPT television series;(b) WPT China, a business segment of ante4 for which most activities wereshut down in March 2009; (c) Cecure Gaming, for which ante4 wasentitled to 50% of the net revenues and an 8% ownership interest, but whosebusiness is currently in receivership in the British equivalent of a bankruptcyproceeding; and (d) a lawsuit currently pending against ante4’s formerauditors, Deloitte & Touche, LLP,.

 

·      ante4’s 25%royalty participation, in perpetuity, in the net proceeds of PokerRoyalty, LLC, a poker talent management company.

 

Inconnection with the transfer of the ante5 Assets, ante5 assumed certainliabilities of ante4 relating to the previous WPT business, as well as a$500,000 note payable to Voyager, maturing on April 16, 2011. ante5 alsoagreed to indemnify ante4 and related individuals from (a) liabilities andexpenses relating to operations of ante4 prior to the effective date of theMerger, (b) operation or ownership of ante5’s assets after the Mergereffective date, and (c) certain tax liabilities of ante4. ante5’sobligation to indemnify ante4 with respect to its former operations and certaintax liabilities is limited to $2.5 million in the aggregate.

 

**NOTE16     SUBSEQUENT EVENTS**

 

OnJuly 1, 2010 the Company made an initial payment to Slawson for a 50%working interest in an acreage block in Weld County, Colorado for $7,500,000 inaccordance with the exploration and development agreement with Slawsondescribed in Note 5.

 

OnJuly 12, 2010 the Company paid $2,114,250 for 50% of the drilling costs onthe initial well drilled in the Denver-Julesberg Basis Niobrara Formation inWeld County, Colorado in accordance with the exploration and developmentagreement with Slawson described in Note 5.

 

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**Item 2. *Management’sDiscussion and Analysis of Financial Condition and Results of Operations.***

 

*The following discussion and analysis of our financialcondition and results of operations should be read together with ourconsolidated financial statements appearing in this Form 10-Q.  Thisdiscussion contains forward-looking statements that involve risks anduncertainties because they are based on current expectations and relate tofuture events and future financial performance.  Our actual results maydiffer materially from those anticipated in these forward-looking statements asa result of many important factors, including those set forth in our AnnualReport on Form 10-K under the heading “Risk Factors”.*

 

**Overview**

 

VoyagerOil & Gas, Inc. (“Voyager,” “we,” “us,” or “our”) is a Delawarecorporation formed for the purpose of providing capital investments for acreageacquisitions and working interests in existing or planned hydrocarbonproduction with a special focus on scaleable, repeatable natural gas plays withestablished operators.  Our business is initially expected to focus onproperties in Montana and North Dakota.  We do not intend to limit our focusto any single geographic area because we want to remain flexible and intend topursue the best opportunities available to us.  Our required capitalcommitment may grow if the opportunity presents itself and depending upon theresults of initial testing and development activities.

 

OnApril 16, 2010 (the “Closing Date”), ante4, Inc. (“ante4”) completedthe acquisition of Plains Energy Investments, Inc., a Nevada corporation(the “Company”) pursuant to an Agreement and Plan of Merger (the “MergerAgreement”).  Subsequent to the Merger, ante4 changed its name to VoyagerOil & Gas, Inc.   Under the Merger Agreement, PlainsEnergy Acquisition, Inc., a Delaware corporation and wholly-ownedsubsidiary of Voyager, merged with and into the Company, with the Companyremaining as the surviving corporation and a wholly-owned subsidiary of Voyager(the “Merger”).  Going forward, Voyager will be a holding company parentof the Company, and Voyager’s business operations following the Merger will bethose of the Company.

 

Whenoperating our former business, we created internationally branded entertainmentand consumer products driven by the development, production and marketing oftelevised programming based on gaming themes. The current season of the WorldPoker Tour®, or WPT® television series - Season Eight, based on a series ofhigh-stakes poker tournaments, currently airs on Fox Sports Net in the UnitedStates, and has been licensed for broadcast globally. In January 2008, welaunched ClubWPT.com, an innovative subscription-based online poker clubtargeted to the estimated 60 million poker players in the United States, whichis currently offered in 38 states. Through November 2008, we offered areal-money online gaming website which prohibited wagers from players in theU.S. and other restricted jurisdictions. We also licensed our brand tocompanies in the business of poker equipment and instruction, apparel,publishing, electronic and wireless entertainment, DVD/home entertainment,casino games and giftware and were engaged in the sale of corporatesponsorships. In addition, through March 2009, we developed and marketedonline and mobile games supporting the WPT China National Traktor Poker TourTM.

 

**Business**

 

Voyager’s primary focus is toacquire high value leasehold interests specifically targeting oil shaleresource prospects in the continental United States.  Our business isinitially focused on properties in Montana and North Dakota, and has expandedto target properties in Northeastern Colorado and SoutheasternWyoming.   We do not intend to limit our focus to any singlegeographic area because we want to remain flexible and intend to pursue thebest opportunities available to us.  We believe our competitive advantagewill be our ability to continue to acquire leases directly from the mineralowners through “organic leasing.”  Organic leasing allows Voyager toacquire acreage on more favorable terms than our competitors.  Because ofour size and maneuverability, we are able to deploy our land acquisition teamsinto specific areas based on the latest industry information.  We willgenerate revenue by and through the conversion of our leasehold intonon-operated working interests in multiple Bakken, Three Forks, Niobrara andother oil shale wells.  We believe our drilling participation, primarilyon a heads-up basis proportionate to our working interest, will allow us todeliver high value with low cost.

 

Voyager is also currently engaged ina top-leasing program in targeted areas of the Williston Basin.  Atop-lease is a lease acquired prior to and commencing immediately upon theexpiration of the current lease.  We believe this approach will allow usto access the most prolific areas of the Bakken oilfields.  Existing leaseterms vary significantly when an area initially becomes productive. We continueto see this approach met with success as the Williston Basin delineates giventhe rapidly expanding nature of the productive area of the play.

 

Voyager explores and produces oiland gas through a non-operator business model.  We engage in the drillingprocess within operators’ drilling units that include our acreage.  As anon-operator, we rely on our operating partners to propose, permit and engagein the drilling process.  Before a well is spud, the operator is requiredto provide all oil and gas interest owners in the designated well unit theopportunity to participate in the drilling costs and revenues of the well on apro-rata basis.  After the well is completed, our operating partners alsotransport, market and account for all production.  It will be policy forVoyager to engage and participate on a 

 

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heads-up basis in substantially all,if not all, wells proposed.  This model provides us with diversificationacross operators and geologic areas.  It also allows us to continue to addproduction at a low marginal cost and maintain general and administrative costsat minimal levels.

 

**Operations**

 

Weplan to continue to structure our operations in a manner that minimizesoverhead and relies on third-parties to supply experience and expertisenecessary to exploit exploration opportunities.  We will attempt to securethe highest possible working interests in the wells in which we invest whileminimizing our general and administrative expenses.  We intend to keepoverhead and staff to a bare minimum and the majority of operational dutieswill be outsourced to consultants and independent contractors.  We believethat the operational responsibilities of our company can be handled by ourcurrent officers, our working relationships with Hancock Enterprises andSlawson Exploration Company, Inc. and through consulting and independentcontractor relationships.  We believe that we will incur minimal generaland administrative expenses, thus devoting substantially all of our capital tohydrocarbon investments.

 

**Assets and Acreage Holdings**

 

Asof August 10, 2010, Voyager controls approximately 147,000 net acres inthe following five primary prospect areas:

 

·     24,000 core net acres in the Williston Basin targeting the Bakken/Three Forksin North Dakota and Montana;

·     24,000 net acres in the Denver-Julesberg Basin targeting the Niobrara formationin Colorado and Wyoming;

·     640 net acres targeting a Red River prospect in Montana;

·     33,500 net acres in a joint venture targeting the Heath Shale formation inMusselshell, Petroleum, Garfield and Fergus Counties of Montana; and

·     65,000 net acres in a joint venture in the Tiger Ridge gas field in Blaine,Hill and Chouteau Counties of Montana.

 

Withthe exception of the leases targeting the Niobrara formation, the leases wecontrol have a minimum term of three years and many have extensions effectivelygiving us control of lands for up to ten years. Our leases in Colorado and Wyoming expire in November 2010, butwill be automatically extended to November 2011 in the event the initialtest wells produce economical volumes of oil.

 

**2010 Drilling Projects**

 

Weare engaged in several drilling activities on properties presently owned andintend to drill or develop additional properties acquired in thefuture.  We drilled or acquired interests in an additionalsix gross Bakken wells (approximately 0.42 net wells) during thequarter.  We also participated in two gross natural gas wells inMontana (approximately 0.75 net gas wells) during the quarter.  All net well positions are calculated on a640-acre spacing unit equivalent.

 

Asof June 30, 2010, we had interests in a total of five gross wells thatwere drilling, completing or producing, including two producing wells and threedrilling or completing wells.  Permits continue to be issued fordrilling units in which we have acreage interests within North Dakota andMontana.

 

Wehave commenced the preliminary development of the acreage position we acquiredin the Denver-Julesberg Basin of Weld County, Colorado in 2010 with ouroperating partner, Slawson Exploration Company, Inc.  Thedevelopment program consists of three gross test wells to be completed during2010 and 57 additional gross wells to be completed by November 2011, withour average working interest in such wells expected to approximate43%.  The first well began drilling activity on July 8, 2010.

 

Weintend to continue drilling efforts on our existing acreage in North Dakota andMontana, and commence our exploration and development agreement with SlawsonExploration Company, Inc. in the Denver-Julesberg Basin of Wyoming andColorado targeting the Niobrara Formation. We may participate in the drillingof as many as 3.5 net wells in 2010, assuming four gross wells are drilledbeyond the three initial test wells.

 

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**Results of Operations**

 

***Comparison of the Three and Six MonthsEnded June 30, 2010 with the Three and Six Months Ended June 30, 2009***

 
| ** **                                            | ** ** | **Three Months  Ended  June 30,  2010** | ** ** | **Three Months  Ended  June 30,  2009** | ** ** | **Six Months  Ended  June 30,  2010** | ** ** | **Six Months  Ended  June 30,  2009** | ** ** |
|-------------------------------------------------------|------------|----------------------------------------------|------------|----------------------------------------------|------------|--------------------------------------------|------------|--------------------------------------------|------------|
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Revenues                                              |       | $                                            | 162,548    |                                         | $          |                                       |       | $                                          | 185,045    |   | $ | — |   |
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Operating Expenses:                                   |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Production Expenses                                   |       | $                                            | 696        |                                         | $          |                                       |       | $                                          | 696        |   | — |   |
| Production Taxes                                      |       | 3,251                                        |       | —                                       |       | 5,838                                      |       | —                                     |       |
| General and Administrative Expense                    |       | 440,000                                      |       | 430                                          |       | 695,710                                    |       | 1,073                                      |       |
| Depletion of Oil and Gas Properties                   |       | 62,000                                       |       | —                                       |       | 70,500                                     |       | —                                     |       |
| Depreciation and Amortization                         |       | 733                                          |       | —                                       |       | 1,465                                      |       | —                                     |       |
| Accretion of Discount on Asset Retirement  Obligation |       | 41                                           |       | —                                       |       | 41                                         |       | —                                     |       |
| Total Operating Expenses                              |       | 506,721                                      |       | 430                                          |       | 774,250                                    |       | 1,073                                      |       |
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Loss From Operations                                  |       | (344,173                                     | )          | (430                                         |       | (589,205                                   | )          | (1,073                                     | )          |
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Other Income (Expense):                               |       | (737,784                                     | )          | 812                                          |       | (726,793                                   | )          | 2,021                                      |       |
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Income (Loss) Before Income Taxes                     |       | (1,065,957                                   | )          | 382                                          |       | (1,315,998                                 | )          | 948                                        |       |
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Provision for Income Taxes                            |       | 32,620                                       |       | —                                       |       | 32,620                                     |       | —                                     |       |
|                                                  |       |                                         |       |                                         |       |                                       |       |                                       |       |
| Net Income (Loss)                                     |       | $                                            | (1,114,577 | )                                            | $          | 382                                        |       | $                                          | (1,348,618 | ) | $ | 948 |   |

 

Duringthe three months ended June 30, 2010, we continued to acquire oil and gasproperties, in the Williston Basin Bakken play.  As of June 30,2010, we had acquired approximately 17,867 net mineral acres in theWilliston Basin. 13,144 acres were acquired in the three months ended June 30,2010.

 

Wereported initial production on its first Bakken well in February 2010 andinitial production on a second well in June 2010. As of June 30,2010, we expect to participate in the drilling of approximately 20-25gross oil wells in 2010, primarily in McKenzie, Mountrail and Williams Countiesof North Dakota.

 

*Revenues*

 

Werecognized $162,548 and $185,045 in revenues from sales of oil and natural gasfor the three and six months ended June 30, 2010, compared to $0 for thethree and six months ended June 30, 2009.  These increases inrevenue are due primarily to our participation and initial production in itssecond completed Bakken well in June 2010. The Company reports itsrevenues on wells in which we have a working interest based on informationreceived from operators.  The recognition of revenues in thismanner is in accordance with generally accepted accounting principles. Forthe period ended June 30, 2010, we reported its 16% interest in theproduction from two wells. The proved reserves related to this well are notmaterial and it was not practical to obtain the reserves for 16% non-operatinginterest.

 

*General and Administrative Expense*

 

Werecognized $440,000 and $695,710 in General and Administrative Expense for thethree months ended June 30, 2010 compared to $0 and $430 for the three andsix months ended June 30, 2009.  This increase resulted from $171,682and $292,452 of share-based compensation for the three and six months ended June 30,2010, compared to $0 for the three and six months ended June 30, 2009,relocation of the corporate headquarters to Billings, Montana, increasedacquisition activity outside of the joint venture agreements, expensesassociated with the Merger on April 16, 2010 and the addition of asalaried officer.

 

*Depreciation Expense*

 

Werecognized $733 and $1,465 in depreciation expense for the three and six monthsended June 30, 2010, compared to $0 for the three and six months ended June 30,2009.  This increase resulted from depreciation of property acquired in December 2009.

 

*Net loss*

 

Wehad a net loss of $1,114,577 and $1,348,618 (representing approximately($0.04) per share) for the three and six months ended June 30, 2010,compared to net income of $382 and $948 for the three and six months ended June 30,2009.  Total operating 

 

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expenseswere $506,721 and $774,250 for the three and six months ended June 30,2010, compared to operating expenses of $430 and $1,073for the three and sixmonths ended June 30, 2009.  This increase in expenses resultedfrom $171,682 and $292,452 of share-based compensation for the three and sixmonths ended June 30, 2010, compared to $0 for the three and six monthsended June 30, 2009, relocation of the corporate headquarters to Billings,Montana, increased acquisition activity outside of the joint venture agreements,the merger on April 16, 2010 and the addition of a salaried officer.

 

**Liquidity and Capital Resources**

 

***Cash and Cash Equivalents***

 

Ourtotal cash resources, excluding short-term investments, as of June 30,2010 were $12,395,413, compared to $691,263 as of December 31, 2009. Theincrease in cash balance was primarily attributable to the Merger on April 16,2010 described in Note 14 in the footnotes to the financial statements.

 

***Net Cash Provided by (Used In) OperatingActivities***

 

Netcash provided by (used in) operating activities was $6,464,765 and $6,400,199for the three and six months ended June 30, 2010 compared to $382 and $948for the three and six months ended June 30, 2009.  Cash provided byoperating activities is primarily attributable to increase in currentliabilities as a result of the Niobrara Exploration and Development Agreementsigned with Slawson Exploration Company, Inc.

 

***Net Cash Used In Investment Activities***

 

Netcash provided by (used in) investment activities was $5,054,131 and $4,499,831for the three and six months ended June 30, 2010 compared to $(230,000)and $(830,369) for the three and six months ended June 30, 2009. Cash provided by investing activities is primarily attributable to cashreceived from the merger described in Note 14 in the footnotes to the financialstatements.  Cash used in investmentactivities is primarily attributable to the purchase of oil and gas propertiesin the Williston and Denver-Julesberg Basins, as well as the payment of prepaiddrilling costs in June 2010.

 

***Net Cash Provided by Financing Activities***

 

Netcash provided by (used in) financing activities was $24,080 and $804,120 forthe three and six months ended June 30, 2010 compared to $688,500 for thethree and six months ended June 30, 2009.  Net cash provided byfinancing activities is primarily attributable to proceeds from the issuance ofstock of the Target Company prior to the merger described in Note 14 in thefootnotes to the financial statements.

 

***Adequacy of Capital Resources***

 

Withthe addition of equity capital achieved through the Merger, we believe we havesufficient capital to meet our drilling commitments and expected general andadministrative expenses through 2010, assuming no additional wells are drilledbeyond the initial three test wells in the Niobrara Exploration and DevelopmentAgreement with Slawson.  If additional wells are drilled beyond theinitial three test wells, additional financing may be required.  Any strategic acquisition of assets mayrequire us to access the capital markets at some point in 2010.  Wemay also choose to access the equity capital markets to fund accelerated orcontinued drilling at the discretion of management and depending on prevailingmarket conditions.  We will evaluate any potential opportunities foracquisitions as they arise.  Given our non-leveraged asset base andanticipated growing cash flows, we believe we are in a position to takeadvantage of any appropriately priced sales that may occur.  However,additional capital may not be available to us on favorable terms or at all.

 

**Off-Balance Sheet Arrangements**

 

Wehave no off-balance sheet arrangements.

 

**Critical Accounting Policies and Estimates**

 

Ourmanagement’s discussion and analysis of financial conditions and results ofoperations is based on the Company’s financial statements, which have beenprepared in accordance with accounting principles generally accepted in theUnited States, or GAAP.  The preparation of these financial statementsrequired us to make estimates and judgments that affect the reported amounts ofassets, liabilities and expenses.  On an ongoing basis, we evaluate theseestimates and judgments, including those described below.  We base ourestimates on our historical experience and on various other assumptions that webelieve to be reasonable under the 

 

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circumstances. These estimates and assumptions form the basis for making judgments about thecarrying values of assets and liabilities that are not readily apparent fromother sources.  Actual results and experiences may differ materially fromthese estimates.

 

Whileour significant accounting policies are more fully described in notes to ourfinancial statements appearing elsewhere in this Form 10-Q, we believethat the following accounting policies are the most critical to aid you infully understanding and evaluating our reported financial results and affectthe more significant judgments and estimates that we used in the preparation ofour financial statements.

 

*Stock-Based Compensation*

 

Wehave accounted for stock-based compensation under the provisions of FASBAccounting Standards Codification (ASC) 718-10-55 (*Prior authoritative literature:*FASB Statement 123(R), *Share-Based Payment). *This statementrequires us to record any expense associated with the fair value of stock-basedcompensation.  We used the Black-Scholes option valuation model tocalculate stock based compensation at the date of grant.  Option pricingmodels require the input of highly subjective assumptions, including theexpected price volatility.  Changes in these assumptions can materiallyaffect the fair value estimate.

 

*Full Cost Method*

 

Wefollow the full cost method of accounting for oil and gas operations wherebyall costs related to the exploration and development of oil and gas propertiesare initially capitalized into a single cost center (“full cost pool”).  Suchcosts include land acquisition costs, geological and geophysical expenses,carrying charges on non-producing properties, costs of drilling directlyrelated to acquisitions, and exploration activities.

 

Proceedsfrom property sales will generally be credited to the full cost pool, with nogain or loss recognized, unless such a sale would significantly alter therelationship between capitalized costs and the proved reserves attributable tothese costs.  A significant alteration would typically involve a saleof 25% or more of the proved reserves related to a single full costpool.  There were no property sales for the period ended June 30,2010 and for the years ended December 31, 2009 and 2008.

 

Capitalizedcosts associated with impaired properties and capitalized cost related toproperties having proved reserves, plus the estimated future development costsand asset retirement costs under FASB ASC 410-20-25 (*Prior authoritative literature:,*FASB Statement 143, *Accounting for Asset Retirement Obligations)*willbe depleted and amortized on the unit-of-production method based on theestimated gross proved reserves as determined by independent petroleumengineers.  The costs of unproved properties are withheld from thedepletion base until such time as they are either developed or abandoned.  Whenproved reserves are assigned or the property is considered to be impaired, thecost of the property or the amount of the impairment is added to costs subjectto depletion calculations.

 

Capitalizedcosts of oil and gas properties (net of related deferred income taxes) may notexceed an amount equal to the present value, discounted at 10% per annum, ofthe estimated future net cash flows from proved oil and gas reserves plus thecost of unevaluated properties (adjusted for related income taxeffects).  Should capitalized costs exceed this ceiling, impairmentis recognized.  The present value of estimated future net cash flows iscomputed by applying the 12-month average price of oil and natural gas based onthe prices in effect at the beginning of each month to estimated futureproduction of proved oil and gas reserves as of period-end, less estimatedfuture expenditures to be incurred in developing and producing the provedreserves and assuming continuation of existing economic conditions.  Suchpresent value of proved reserves’ future net cash flows excludes future cashoutflows associated with settling asset retirement obligations that have beenaccrued on the Balance Sheet.  Should this comparison indicate anexcess carrying value, the excess is charged to earnings as an impairmentexpense.  As of June 30, 2010, we had not realized any impairment ofour properties.

 

*Joint Ventures*

 

TheCompany’s financial statements as of and for the periods ended June 30,2010 and June 30, 2009 and as of December 31, 2009 include theaccounts and the proportionate share of the assets, liabilities, and results ofoperations of the joint ventures in which the Company was involved.

 

**Cautionary Factors That May Affect Future Results**

 

ThisForm 10-Q and other written reports and oral statements made from time totime by us may contain so-called “forward-looking statements,” all of which aresubject to risks and uncertainties.  One can identify theseforward-looking statements by their use of words such as “expects,” “plans,” “estimates,”“forecasts,” “projects” and other words of similar meaning.  One canidentify them by the fact that they do not relate strictly to historical orcurrent facts.  These statements address our growth and businessstrategies, 

 

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expectationsand intentions with respect to expenses, drilling efforts and wellparticipation, geographic focus, financial results, and cash needs.  One must carefully consider any suchstatement and should understand that many factors could cause actual results todiffer from our forward-looking statements.  These factors includeinaccurate assumptions and a broad variety of other risks and uncertainties,including some that are known and some that are not.  No forward-lookingstatement can be guaranteed and actual future results may vary materially.

 

Wedo not assume the obligation to update any forward-looking statement, otherthan as required by law.  One should carefully evaluate such statements inlight of factors described in Voyager’s filings with the SEC, including thesection titled “Risk Factors” in its most recent Annual Report on Form 10-K,as updated in its subsequent periodic reports.

 

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUTMARKET RISK**

 

Notapplicable.

 

**ITEM 4. CONTROLS AND PROCEDURES**

 

Underthe supervision and with the participation of our management, including ourChief Executive Officer and President, and Interim Chief Financial Officer, weconducted an evaluation of our disclosure controls and procedures, as such termis defined under Rules 13a-15(e) or 15d-15(e) promulgated underthe Exchange Act, as of the end of the period covered by this report. Based onthis evaluation, our management has concluded that our disclosure controls andprocedures are effective.

 

Therehave been no changes (including corrective actions with regard to significantdeficiencies of material weaknesses) in our internal control over financialreporting that occurred during our most recently completed fiscal quarter thathave materially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.

 

**PART II— OTHER INFORMATION**

 

**ITEM 1. LEGAL PROCEEDINGS**

 

None.

 

**ITEM 1A. RISK FACTORS**

 

Pleaserefer to the risk factors contained in Item 1A under the caption “RiskFactors” and elsewhere in the Company’s annual report on Form 10-K for thefiscal year ended January 3, 2010, as updated by the Company’s currentreport on Form 8-K as filed April 22, 2010, as amended July 1,2010.

 

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES ANDUSE OF PROCEEDS**

 

None.

 

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

 

None.

 

**ITEM 4.  (REMOVED AND RESERVED)**

 

**ITEM 5.OTHER MATTERS**

 

OnJune 28, 2010, the Company entered into an exploration and developmentagreement with Slawson Exploration Company, Inc. (“Slawson”) to developSlawson’s 48,000 net acres in the Denver-Julesberg Basin Niobrara Formation inWeld County, Colorado.   Voyager purchaseda 50% working interest in the approximately 48,000 acre block for $7.5 millionand will participate on a heads-up basis on all wells drilled, as well asparticipate for its proportionate working interest in all additional acreageacquired in an Area of Mutual Interest consisting of Weld and Laramie Counties.

 

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**ITEM 6. EXHIBITS**

 
| 10.1+  |   | Exploration and Development Agreement with Area of Mutual Interest,  dated effective as of May 1, 2010 between the Company and Slawson  Exploration Company Inc.                                         |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                          |
| 31.1   |   | Certification of Chief Executive Officer pursuant to Securities  Exchange Act Rules 13a-15(e) and 15d-15(e) as adopted pursuant  to Section 302 of the Sarbanes-Oxley Act of 2002         |
|   |   |                                                                                                                                                                                                          |
| 31.2   |   | Certification of Interim Chief Financial Officer pursuant to  Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as  adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|   |   |                                                                                                                                                                                                          |
| 32.1   |   | Certification of Chief Executive Officer and Interim Chief Financial  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002             |

 

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+              Confidentialtreatment will be requested for portions of this exhibit.  

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report on Form 10-Q to be signed on its behalf by theundersigned, thereunto duly authorized.

 
| Dated: August 11, 2010 | VOYAGER OIL & GAS, INC.                 |
|-----------------------------|-------------------------------------------------------|
|                        | Registrant                                            |
|                        |                                                  |
|                        |                                                  |
|                        | /s/ *James Russell (J.R.) Reger*                      |
|                        | James Russell (J.R.) Reger                            |
|                        | Chief Executive Officer (principal executive officer) |
|                        |                                                  |
|                        |                                                  |
|                        | /s/ *Mitchell R. Thompson*                            |
|                        | Mitchell R. Thompson                                  |
|                        | Chief Financial Officer (principal financial officer) |

 

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