**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

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

 

**x**    **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the quarterly period ended April 30, 2009

**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 Number: 333-118138

 

**Nitro Petroleum Incorporated**

(Exact name of registrant as specified in its charter)

 

|   | **Nevada**                                                     |   |   | **98-0488493**                          |   |
|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------|--------|
|   | (State or other jurisdiction of incorporation or organization) |   |   | (I.R.S. Employer Identification Number) |   |

 

**7250 NW Expressway Suite 260**

**OKLAHOMA CITY, OK, 73132**

(Address of principal executive offices)

 

**(405) 728-3800**

(Registrant’s telephone number, including area code)

 

 

(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.

 

Yes x    No o

 

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

 

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

 

Large accelerated filer  o           Accelerated filer  o

 

Non-accelerated filer  o           Smaller reporting company  x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o    No  x

 

At June 19, 2009 there were 101,249,156 shares of the Registrant’s Common Stock outstanding.

 

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**ITEM 1.**  **FINANCIAL STATEMENTS**

 

| **BALANCE SHEETS**                                       |
|----------------------------------------------------------|
|                                                     |   |   |   |   |   |   | **Unaudited** |   | **Audited** |
|                                                     |   |   |   |   |   |   | **April 30,** |   | **January 31,** |
|                                                     |   |   |   |   | **ASSETS** | **2009** |   | **2009** |
| Current                                                  |   |   |   |   |   |   |   |   |
|                                                     | Cash |   |   |   |   | $        23,988  |   | $               930  |
|                                                     | Accounts receivable |   |   |   | 122,123  |   | 87,450  |
|                                                     |   |   |   |   |   |   |   |   |   |
|                                                     |   |   | Total Current Assets |   | 146,111  |   | 88,380  |
|                                                     |   |   |   |   |   |   |   |   |   |
| Property and equipment, net                              |   |   | 55,955  |   | 57,280  |
| Oil and gas properties, net - Using full cost accounting | 644,020  |   | 806,125  |
| Other asset                                              |   |   |   |   | 26,152  |   | 26,152  |
|                                                     |   |   |   |   |   |   |   |   |   |
|                                                     |   |   | Total Assets |   |   | $872,238  |   | $977,937  |
|                                                     |   |   |   |   |   |   |   |   |   |
| **LIABILITIES**                                          |
| Current Liabilities                                      |   |   |   |   |   |   |
|                                                     | Cash overdraft |   |   |   | $                 -  |   | $            4,174  |
|                                                     | Accounts payable |   |   |   | 284,404  |   | 393,038  |
|                                                     | Revenue payable |   |   |   | 51,161  |   | 39,309  |
|                                                     | Due to related party |   |   |   | 16,000  |   | 16,000  |
|                                                     | Short-term notes payable |   |   | 153,372  |   | 13,295  |
|                                                     |   |   |   |   |   |   | 504,937  |   | 465,816  |
| Long-Term Liabilities                                    |   |   |   |   |   |   |
|                                                     | Employee incentive plan liability |   | 121,500  |   | 94,500  |
|                                                     |   |   |   |   |   |   |   |   |   |
|                                                     |   |   |   |   |   |   | 626,437  |   | 560,316  |
|                                                     |   |   |   |   | **STOCKHOLDERS' EQUITY** |   |   |
| Capital stock                                            |   |   |   |   |   |   |   |
|                                                     | Authorized: |   |   |   |   |   |   |
|                                                     |   | 2,000,000,000 common stock, $0.001 par value |   |   |   |
|                                                     |   | 10,000,000 preferred stock, $0.001 par value |   |   |   |
|                                                     | Issued and outstanding: |   |   |   |   |   |
|                                                     |   | 100,049,158 common shares |   | 100,049  |   | 100,049  |
| Additional paid-in capital                               |   |   |   | 4,327,676  |   | 4,327,676  |
| Retained (deficit)                                       |   |   |   | (4,181,924) |   | (4,010,104) |
|                                                     |   |   | Total Stockholders' Equity |   | 245,801  |   | 417,621  |
|                                                     |   |   |   |   |   |   |   |   |   |
|                                                     |   |   | Total Liabilities And Stockholders' Equity | $     872,238  |   | $        977,937  |

 

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

F-1

 

----

| **STATEMENTS OF OPERATIONS**           |
|----------------------------------------|
| **Unaudited**                          |
|                                   |
|                                   |   |   |   | **Three Months Ended** |
|                                   |   |   |   | **April 30** |
|                                   |   |   |   | **2009** |   | **2008** |
|                                   |   |   |   |   |   |   |
| Revenues                               |   |   |   |   |   |
|                                   | Oil and gas sales |   | $          27,055  |   | $          83,808  |
|                                   | Other |   |   | 143  |   | 385  |
|                                   |   |   |   |   |   |   |
|                                   |   | Total Revenues |   | 27,198  |   | 84,193  |
| Expenses                               |   |   |   |   |   |
|                                   | Lease operating |   | 43,230  |   | 100,914  |
|                                   | Production taxes |   | 1,927  |   | 6,117  |
|                                   | Depreciation, depletion and amortization | 16,076  |   | 12,319  |
|                                   | Interest expense |   | 229  |   | 108,676  |
|                                   | General and administrative |   | 93,204  |   | 98,356  |
|                                   |   |   |   |   |   |   |
|                                   |   | Total Expenses |   | 154,666  |   | 326,382  |
|                                   |   |   |   |   |   |   |
| Loss from operations                   |   | (127,468) |   | (242,189) |
|                                   |   |   |   |   |   |   |
| Loss on sale of oil and gas properties |   | (44,352) |   | -  |
|                                   |   |   |   |   |   |   |
| Loss before provision for income taxes |   | (171,820) |   | (242,189) |
|                                   |   |   |   |   |   |   |
| Provision for income taxes             |   | -  |   | -  |
|                                   |   |   |   |   |   |   |
|                                   |   |   |   |   |   |   |
| Net Loss                               |   |   | $        (171,820) |   | $       (242,189) |
|                                   |   |   |   |   |   |   |
|                                   |   |   |   |   |   |   |
| Basic and diluted loss per share       |   | $              (0.00) |   | $             (0.00) |
|                                   |   |   |   |   |   |   |
| Weighted average number of shares      |   |   |   |   |
|                                   | outstanding-basic and diluted |   | 100,049,158  |   | 49,846,054  |

 

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

 

F-2

 

----

| **STATEMENTS OF CASH FLOWS**                    |
|-------------------------------------------------|
| **Unaudited**                                   |
|                                            |
|                                            |   |   |   |   |   |   |   | **Three Months Ended** |
|                                            |   |   |   |   |   |   |   | **April 30,** |
|                                            |   |   |   |   |   |   |   | **2009** |   | **2008** |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Operating Activities                            |   |   |   |   |   |   |   |   |
|                                            | Net loss for the period |   |   |   |   | $  (171,820) |   | $  (242,189) |
|                                            | Adjustments for items not effecting cash: |   |   |   |   |   |
|                                            |   | Depletion, depreciation and amortization |   |   | 16,076  |   | 12,319  |
|                                            |   | Share based compensation |   |   |   | 27,000  |   | -  |
|                                            |   | Loss on sale of oil and gas properties |   |   | 44,352  |   | -  |
|                                            |   | Donated interest |   |   |   |   | -  |   | 86,882  |
|                                            | Change in non-cash working capital balances related to operations |   |   |   |
|                                            |   | Accounts receivable |   |   |   |   | (34,673) |   | (13,792) |
|                                            |   | Accounts payable and accrued liabilities |   |   | (96,783) |   | 658,723  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Cash provided by (used in) operating activities |   |   | (215,848) |   | 501,943  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Investing Activities                            |   |   |   |   |   |   |   |   |
|                                            | Acquisition of oil and gas properties |   |   |   | (96,997) |   | (36,935) |
|                                            | Proceeds from sale of oil and gas properties |   |   | 200,000  |   | -  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Cash used in investing activities               |   |   |   | 103,003  |   | (36,935) |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Financing Activities                            |   |   |   |   |   |   |   |   |
|                                            | Cash overdraft |   |   |   |   |   | (4,174) |   | -  |
|                                            | Payments on short term note payable |   |   | (9,923) |   | -  |
|                                            | Proceeds from short term note payable |   |   | 150,000  |   | -  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Cash provided by financing activities           |   |   |   | 135,903  |   | -  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Increase in cash during the year                |   |   |   | 23,058  |   | 465,008  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Cash, beginning of the year                     |   |   |   |   | 930  |   | 242,077  |
|                                            |   |   |   |   |   |   |   |   |   |   |
| Cash, end of the year                           |   |   |   |   | $      23,988  |   | $    707,085  |

 

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

 

F-3

 

----

**NITRO PETROLEUM INCORPORATED**

NOTES TO THE INTERIM FINANCIAL STATEMENTS

April 30, 2009

(Unaudited)

 

| Note 1 | Interim Reporting |
|--------|-------------------|

 

The accompanying financial statements of Nitro Petroleum, Inc. have not been audited by independent public accountants. In the opinion of management, the accompanying financial statements reflect all adjustments necessary to present fairly our financial position at April 30, 2009 and our income and cash flows for the three months ended April 30, 2009 and 2008. All such adjustments are of        a normal recurring nature. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.

 

Certain disclosures have been condensed or omitted from these financial statements. Accordingly, these financial statements should be read with the financial statements included in our 2008 Annual Report on Form 10-K.

 

| Note 2 | Nature and Continuance of Operations |
|--------|--------------------------------------|

 

Nitro Petroleum Incorporated (the “Company”) was incorporated in October 2003 in the State of Nevada and has established its corporate offices in Oklahoma City, Oklahoma. On February 27, 2006, the Company changed its name from Ingenium Capital Corp. to Nitro Petroleum, Incorporated. The Company is engaged primarily in the acquisition, development, production, exploration        for, and the sale of oil, gas and natural gas liquids. All business activities are conducted in Texas and Oklahoma and the Company sells its oil and gas to a limited number of domestic purchasers.

 

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect        to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. As of April 30, 2009, the Company had not yet achieved profitable operations, has accumulated losses of $4,181,924 since its inception, has a working capital deficiency of $358,826 and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability        to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party        advances, however there is no assurance of additional funding being available. 

 

F-4

 

----

**NITRO PETROLEUM INCORPORATED**

NOTES TO THE INTERIM FINANCIAL STATEMENTS

April 30, 2009

(Unaudited)

 

| Note 3 | Oil and Gas Properties |
|--------|------------------------|

 

|   | a) | Effective July 1 2007, the Company acquired a 6.375% working interest of a 79.125% net revenue interest in an oil and gas lease located in Garvin County, Oklahoma. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | b) | On February 1, 2008, the Company purchased producing properties located in Garvin County and Pottawatomie County, Oklahoma in a transaction that resulted in the distribution of 1,306,054 shares in exchange for a 25% gross working interest in producing wells and in undeveloped proved properties. The shares exchanged have restrictions to sell such shares,                        varying from six months to one year. Management has assigned a value of said properties at 40 cents per share for a total purchase price of $522,422. On March 27, 2009, the Company sold a one-half of their interest in these wells to Encore Renaissance Resources Corporation for two hundred thousand dollars ($200,000). The Company has the option and right within one year of closing to purchase back the working interest in the properties sold for two hundred fifty thousand                        dollars ($250,000). |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | c) | By agreement dated September 1, 2006, as extended November 1, 2006 and February 28, 2007, the Company entered into an agreement whereby the Company disposed of 50% of the Company’s interest in certain oil and gas properties located in the Barnett Shale play in consideration for proceeds of $400,000 payable by way of a promissory note, due October 31,                        2007, which bares interest at 10% per annum and is secured by a general security agreement. As part of the extension, the purchaser agreed to issue 250,000 common shares to the Company. 125,000 common shares may be returned to the purchaser if the purchaser performs all its covenants. The Company and the purchaser have a director in common. As the risks and other incidents of ownership have not transferred to the purchaser with sufficient certainty, this transaction has                        not been reflected in these financial statements. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

|   | d) | On January 26, 2009, the Company entered into a Memorandum of Understanding (the “Memorandum of Understanding”) with REDS, LLC (“REDS”) pursuant to which the Company will acquire oil and gas leases from REDS covering 1,600 acres in Montana and will have two additional options to acquire an additional 1,600 acres per option from REDS.                        The Company will own 100% of the coal, coal bed methane, and oil and natural gas rights to the acreage being acquired pursuant to the Memorandum of Understanding. The Company will pay a 20% net royalty on production. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Pursuant to the terms of the Memorandum of Understanding, the Company will acquire leases covering the initial 1600 acres and drill 10 wells on such acreage. The drilling of the initial 10 wells pursuant to the Memorandum of Understanding is referred to as “Phase One” of the development project contemplated by the Memorandum of Understanding. As consideration for assignment of        leases covering the 1,600 acres that will be drilled in Phase One, the Company will pay REDS a $75,000 bonus. The payment of the bonus is contingent upon the Company’s receipt of title status reports for the Phase One tract and the assignment of unencumbered leases making up the Phase One tract to the Company.

 

F-5

 

----

**NITRO PETROLEUM INCORPORATED**

NOTES TO THE INTERIM FINANCIAL STATEMENTS

April 30, 2009

(Unaudited)

 

Additionally, the Company will deposit $250,000 with an escrow agent immediately after the Phase One leases have been deemed unencumbered and assigned to the Company. The escrowed amount will be released on a pro rata basis to REDS as each Phase One well lease and permit is approved by the Bureau of Indian Affairs (“BIA”) and a Bureau of Land Management (“BLM”)        permit for each well is issued. If the BIA and/or the BLM have not approved the Phase One leases and the wells with 90 days from the date of the Memorandum of Understanding, the escrow agent will refund the escrowed funds to the Company.

 

Upon the completion of Phase One, the Company will have the option to acquire leases covering an additional 1,600 acres to drill 10 additional “Phase Two” wells. The Phase Two wells will be drilled on the same terms and conditions as the Phase One wells, except that the Company will pay REDS $300,000 for the right to drill the Phase Two wells. However, if the Company determines        that the Phase One wells will not reach payout in a fair and reasonable period, then REDS will allow the Company to drill the Phase Two wells for no additional fee.

 

Upon the completion of Phase Two, the Company will have the option to acquire leases covering an additional 1,600 acres to drill 10 additional “Phase Three” wells. The Phase Three wells will be drilled on the same terms and conditions as the Phase Two wells, except that the Company will pay REDS $400,000 for the right to drill the Phase Three wells, unless Phase Two is deemed        economically unfeasible as a result of the drilling the Phase Two wells. The Company has the option of drilling development wells on the leases acquired in Phase One, Phase Two and Phase Three.

 

| Note 4 | Notes Payable |
|--------|---------------|

 

At April 30, 2009, the Company had a 7.5% commercial loan payable to a financial institution in the amount of $3,372 due May 5, 2009. 

 

On April 13, 2009, the Company entered into an agreement with C.U. Your Oil Rig Corporation, in which C.U. Your Oil Rig Corporation advanced the Company a total of $150,000 with a term of 18 months at 15% interest.

 

| Note 5 | Property and Equipment |
|--------|------------------------|

 

|             | **April 30, 2009** |   | **January 31,****2009**                                  |
|------------------|--------------------|--------|----------------------------------------------------------|
|             | **Cost**           |   | **Accumulated Amortization**                             |   | **Net** |   | **Net** |
|             |               |   |                                                     |   |   |   |   |
| Land             | $ 30,769      |   | $         - |   | $ 30,769 |   | $ 30,769 |
| Office furniture | 1,930              |   | 1,040                                                    |   | 890 |   | 1,112 |
| Computer         | 1,420              |   | 360                                                      |   | 1,060 |   | 1,325 |
| 2007 Chevy Truck | 26,749             |   | 7,490                                                    |   | 19,259 |   | 24,074 |
|             |               |   |                                                     |   |   |   |   |
|             | $ 60,868      |   | $ 8,890                                             |   | $ 51,978 |   | $ 57,280 |

 

 

----

**NITRO PETROLEUM INCORPORATED**

NOTES TO THE INTERIM FINANCIAL STATEMENTS

April 30, 2009

(Unaudited)

 

F-6

 

The Company has acquired property in Shawnee, Oklahoma in anticipation of building offices and a warehouse/yard facility. 

 

| Note 6 | Stock Incentive Plan |
|--------|----------------------|

 

The Board of Directors adopted the Nitro Petroleum Incorporated 2008 Stock Incentive Plan (the “Plan”) on July 10, 2008. The Plan will be administered by the Board of Directors, or a committee of the Board of Directors and all officers, employees, directors and individual consultants of the Corporation will be allowed to participate in the Plan. The Plan has a term of ten        years. Accordingly, no grants may be made under the Plan after July 10, 2018, but the Plan will continue thereafter while previous grants remain subject to the Plan.

 

The aggregate number of shares of common stock available under the Plan is 2,500,000 shares. The Plan authorizes the Board of Directors to grant restricted stock award and stock options. The Board of Directors may not grant incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended under the Plan until such time that the Plan is approved by        the Corporation’s stockholders. Until such time, the Board may only grant nonstatutory stock options (any stock option that is not an incentive stock option), and restricted stock under the Plan. All grants under the Plan will be made in the discretion of the Board of Directors. 

 

On July 10, 2008, the Corporation granted shares of restricted stock to the following officers and directors and in the amounts and subject to the vesting schedule set forth below:

 

| **Plan Participant**           | **Restricted****Shares Granted**        | **Vesting Schedule**                                                                                                      |
|--------------------------------|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                           |                                    |                                                                                                                      |
| Larry Wise,

President and CEO | 1,500,000      | 1/3 Vested on grant date

1/3 vesting on First anniversary of grant date

1/3 vesting on second anniversary of grant date |
| Sharon Farris,

Secretary      | 150,000        | 1/3 Vested on grant date

1/3 vesting on First anniversary of grant date

1/3 vesting on second anniversary of grant date |
| James Kirby,

Director         | 50,000         | 1/3 Vested on grant date

1/3 vesting on First anniversary of grant date

1/3 vesting on second anniversary of grant date |
| William Thomas,

Director      | 50,000         | 1/3 Vested on grant date

1/3 vesting on First anniversary of grant date

1/3 vesting on second anniversary of grant date |
| Gunther Weisbrich,

Director   | 50,000         | 1/3 Vested on grant date

1/3 vesting on First anniversary of grant date

1/3 vesting on second anniversary of grant date |

 

 

F-7

 

----

**NITRO PETROLEUM INCORPORATED**

NOTES TO THE INTERIM FINANCIAL STATEMENTS

April 30, 2009

(Unaudited)

 

The Company has accounted for the cost of the Plan utilizing the Black-Scholes option pricing formula, which includes a computed volatility rate of 133.72% obtained through the historical price data of the Company’s stock beginning July 11, 2006 and ending July 10, 2008, the date this Plan was adopted. A risk-free rate of return of 2.57% was also used in the compensation expense as        provided by the U.S. Treasury constant maturities. Other   factors in computing the Plan’s valuation include a per option price of $0.18 per share, as this was the closing price of the Company’s stock on the date this Plan was adopted. Also, a 0% forfeiture rate has been assumed for all periods up to June 30, 2011, the final month of vesting.

 

| Note 7 | Related Party Transactions |
|--------|----------------------------|

 

By a management agreement dated January 1, 2009, the Company agreed to pay a director of the company management fees of $4,000 per month for management services for a term of one year. The term may be renewed for further one year terms at the option of the Company.

 

During the three months ended April 30, 2009, the Company incurred management fees charged by a director of the Company totalling $14,000 (2008: $64,660).

 

Included in accounts payable at April 30, 2009 is $16,000 (January 31, 2009: $16,000) due to a former director of the Company for management services.

 

| Note 8 | Comparative Figures |
|--------|---------------------|

 

Certain of the comparative figures have been reclassified to conform with the current period’s presentation.

 

F-8

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**ITEM 2.**  **MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION**

Unless the context otherwise requires, all preferences to “Nitro,” “our,” “us,” “we” and the “Company” refer to Nitro Petroleum Incorporated.

 

The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. This discussion and analysis should be read in conjunction with our financial statements and the accompanying notes included in this report, as well as our audited financial statements and the accompanying notes        included in our annual report on Form 10-K for the year ended January 31, 2009 (the “2008 Form 10-K”). The following discussion contains forward-looking statements that are dependent upon events, risks and uncertainties that may be outside our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, market prices for natural gas and        crude oil, economic and competitive conditions, regulatory changes, estimates of proved reserves, potential failure to achieve production from development projects, capital expenditures and other uncertainties, as well as those factors discussed below and elsewhere in this report and in our Form 10-K, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur.

 

The financial information with respect to the three month periods ended April 30, 2009 and April 30, 2008 that is discussed below is unaudited. In the opinion of management, this information contains all adjustments, consisting only of normal recurring accruals, necessary to state fairly the unaudited financial statements. The results of operations for the interim periods are not        necessarily indicative of the results of operations for the full fiscal year.

 

**Overview**

 

We intend to continue to acquire high quality oil and gas properties, primarily “proved producing and proved undeveloped reserves” in the United States. We see significant opportunities in acquiring properties with proven producing reserves and undeveloped acreage in fields that have a long history of production. We will also explore low-risk development drilling and        work-over opportunities with experienced, strong operators. We will attempt to finance oil and gas operations through a combination of privately placed debt and/or equity. There can be no assurance that we will be successful in finding financing, or even if financing is found, that we will be successful in acquiring oil and/or gas assets that result in profitable operations.

 

We are continuing our efforts to identify and assess investment opportunities in oil and natural gas properties, utilizing free labor of our directors and stockholders until such time as funding is sourced from the capital markets. It is anticipated that funding for the next twelve months will be required to maintain our operations. Attempts are ongoing to raise funds through private        placements and said attempts will continue throughout 2009. We may also use various debt instruments as well as public offerings to raise needed capital during 2009.

 

----

As oil and gas properties become available and appear attractive to our management, funds, when they become available, will be spent on due diligence and research to determine if said prospects could be purchased to provide income for the Company. Established oil companies continue to strive to reduce costs and debt. This causes significant market opportunities for us to possibly        position ourselves with sellers that wish to divest themselves of production or proven undeveloped properties in order to provide liquidity. Our management believes that current market conditions are creating situations that could result in the opportunity for such production acquisitions.

 

We may also finance acquisition of “proven producing reserves” with predictable production levels and cash flow by offering the secure investors with the mineral interests acquired. We may also hedge price risk by selling forward a portion of future production acquired under fixed-price contracts to minimize risk associated with commodity prices. In some cases the future        value of such fixed-price contracts may be greater that the initial investments, thereby hedging the inherent acquisition risk, without limiting the upside available the stockholders and investors. There can be no assurance, however, that any of these methods of financing will be successful in helping fund our operations.

 

Our operating expenses will increase as we continue to undertake our plan of operations. The increase will be attributable to the continuing geological exploration and acquisition programs and continued professional fees that will be incurred. 

 

We intend to arrange a public financing in the third or fourth quarter of the fiscal year 2010 to raise 3 to 5 million dollars. The funds will be used to acquire additional oil and gas leases and to carry out exploration and development work on these leases.

 

We have now directed our attention to different areas outside of Oklahoma.

 

***Montana***

 

We located and were successful in obtaining an exploration opportunity in the Montana Powder River Basin. We will farm out the exploration and development rights while maintaining a 10 percent carried interest. Prospective farm – in partners are presently examining the project.

 

***Alberta, Canada***

 

We have recently acquired working interests in two wells which have been drilled and completed as successful oil and gas locations. The leases are located in Barrhead, in Central Alberta, Canada. This entire area is a predominant petroleum bearing region. As result of our participation, we have earned the right to participate in up to 17 additional well locations which are under lease by        a private partner, operator.

 

**Financial Condition and Results of Operations**

 

For the three months ended April 30, 2009, we had revenue of $27,055 from production of oil and gas, as compared to $83,808 for the three months ended April 30, 2008.

 

----

 

Cost of continued operations for the three months ended April 30, 2009 was $154,666 resulting in a net loss for the period of $127,468.

 

Cost of continued operations for the three months ended April 30, 2008 was $326,382 resulting in a net loss for the period of $272,189.

 

We expect to continue to receive revenues from the Oklahoma properties and we expect for these revenues to increase. Planned exploration ventures should increase revenues for the fiscal year ending January 31, 2010.

 

**Liquidity and Capital Resources**

 

We had cash of $23,988 as of April 30, 2009, compared to cash of $930 as of January 31, 2009. We had a working capital deficiency of $358,826 as of April 30, 2009, compared to working capital deficiency of $377,436 as of January 31, 2009.

 

We will continue to utilize the free labor of our directors and stockholders until such time as funding is sourced from the capital markets. It is anticipated that funding for the next twelve months will be required to maintain our operations.

 

**Going Concern**

 

We have not attained profitable operations and is dependent upon obtaining financing to pursue any extensive acquisitions and exploration activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt we will be able to continue as a going concern without further financing.

 

**Future Financings**

 

We will continue to rely on equity sales of the common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration        activities.

 

**Off-Balance Sheet Arrangements**

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

 

----

**ITEM 3.**  **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

 

Not applicable.

 

**ITEM 4.**  **CONTROLS AND PROCEDURES.**

 

**Evaluation of Disclosure Controls and Procedures**

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s        rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officer (whom we refer to in this periodic report as our Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Certifying Officer, the effectiveness of our disclosure controls and procedures as of April 30, 2009, pursuant to Rule 13a-15(b) under        the Securities Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of April 30, 2009, our disclosure controls and procedures were effective.

 

**Changes in Internal Controls**

 

There were no changes in our internal control over financial reporting that occurred during the quarter ended April 30, 2009, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

**PART II**

 

**Item 1.**  **Legal Proceedings.**

 

We are not currently a party to any legal proceedings and, to our knowledge, no such proceedings are threatened or contemplated.

 

**Item 1.A.**  **Risk Factors**

 

|   | Not applicable. |
|--------|-----------------|

 

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

 

|   | None. |
|--------|-------|

 

**Item 3.**  **Defaults upon Senior Securities.**

 

|   | None. |
|--------|-------|

 

 

----

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

 

|   | None. |
|--------|-------|

 

**Item 5.**  **Other Information.**

 

|   | None. |
|--------|-------|

 

**Item 6.**  **Exhibits**

 

|  

******Exhibit No.****** |  

******Description of Exhibit******                    |
|---------------------------------|---------------------------------------------------------------|
|  

31.1                    |  

Rule 13a-14 Certification of Chief Executive Officer  |
|  

31.2                    |  

Rule 13a-14 Certification of Chief Financial Officer  |
|  

32.1                    |  

Section 1350 Certification of Chief Executive Officer |
|  

32.2                    |  

Section 1350 Certification of Chief Financial Officer |

 

**SIGNATURES**

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

**NITRO PETROLEUM INCORPORATED**

 

By: /s/ Larry Wise

Larry Wise, President 

 

By: /s/ Shane Broesky

Shane Broesky, Chief Financial Officer

 

Date: June 19, 2009

 

 

| **INDEX TO EXHIBITS** |
|-----------------------|
|                  |   |   |
| **Exhibit No.**       | **Description** | **Method of Filing** |
|                  |   |   |
| 31.1                  | Rule 13a-14 Certification of Chief Executive Officer | Filed herewith electronically |
|                  |   |   |

 

 

----

 

| 31.2   | Rule 13a-14 Certification of Chief Financial Officer  | Filed herewith electronically |
|--------|-------------------------------------------------------|-------------------------------|
|   |                                                  |                          |
| 32.1   | Section 1350 Certification of Chief Executive Officer | Filed herewith electronically |
|   |                                                  |                          |
| 32.2   | Section 1350 Certification of Chief Financial Officer | Filed herewith electronically |