UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549










FORM
10-Q/A

(Amendment
No. 1)










☒   
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the quarterly period ended June 30, 2018



☐
  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE 
SECURITIES EXCHANGE ACT OF 1934



Commission
File Number: 001-32508



CAMBER
ENERGY, INC.

(Exact
name of registrant as specified in its charter)



|Nevada                                                                  | 20-2660243                                          
|----------------------------------------------------------------------- | ----------------------------------------------------
|(State
    or other jurisdiction of 
    incorporation or organization) | (I.R.S.
Employer
        Identification
        No.)



1415
Louisiana, Suite 3500, Houston, Texas 77002

(Address
of principal executive offices)             (Zip Code)



(210)
998-4035

(Registrant’s
telephone number, including area code)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒   No ☐



Indicate
by check mark whether the registrant has submitted electronically every Interactive
Data File required to be submitted 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 such files). Yes ☒  
No ☐



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



|Large
    accelerated filer  ☐ | Accelerated
    filer   ☐      
|------------------------------ | -------------------------------
|Non-accelerated
    filer  ☐   | Smaller
    reporting company ☒
|Emerging
    growth ☐          |                                



If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐



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



Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



|                                             | Title
    of each class |                                                    |  |  | Number
    of Shares | 
|-------------------------------------------- | ----------------------- | -------------------------------------------------- |  |  | -------------------- | 
|Common
    Stock, par value $0.001 per share |                         | 40,046,922
        (as
        of August 13, 2018)



















EXPLANATORY
NOTE



This
Amendment No. 1 on Form 10-Q/A (“Amendment”) to the Quarterly Report on Form 10-Q of Camber Energy, Inc. (the
“Company”) for the quarter ended June 30, 2018 (the “Form 10-Q”), originally filed with
the Securities and Exchange Commission (the “SEC”) on August 14, 2018, is being filed for the sole purpose
of amending Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, to correct the
disclosure therein relating to our total estimated proved reserves as of June 30, 2018 which was reported in error in the original
Form 10-Q, due to a clerical error.



In
accordance with applicable SEC rules, this Amendment also contains new certifications pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 dated as of the date of filing of this Amendment. Because this Amendment does not include financial statements and
does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4 and 5 of the Section
302 certifications have been omitted. Accordingly, this Amendment consists solely of the preceding cover page, this explanatory
note, Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, the signature
page, the Exhibit Index, and Exhibits 31.1 and 31.2.



Except
as described above, no changes have been made to the Form 10-Q and no adjustments have been made to the Form 10-Q in connection
with the Company’s 1-for-25 reverse stock split of the Company’s (a) authorized; and (b) issued and outstanding, shares
of common stock, which was effective on December 24, 2018. The Form 10-Q continues to speak as of the date of the Form 10-Q, except
as described above, and the Company has not updated the disclosures contained herein to reflect any events that have occurred
as of a date subsequent to the date of the Form 10-Q, except as described above. Accordingly, this Amendment should be read in
conjunction with the Form 10-Q and the Company’s filings made with the SEC subsequent to the filing of the Form 10-Q. The
filing of this Amendment is not an admission that the Form 10-Q, when filed, included any untrue statement of a material fact
necessary to make a statement not misleading.










CAMBER
ENERGY, INC.



TABLE
OF CONTENTS



|              |                                                                                       |    | Page
|------------- | ------------------------------------------------------------------------------------- | -- | ----
|PART I.       | FINANCIAL INFORMATION                                                                 |    | 1   
|              |                                                                                       |    |     
|ITEM 2.       | Management’s Discussion and Analysis of Financial Condition and Results of Operations |    | 1   
|              |                                                                                       |    |     
|SIGNATURES    |                                                                                       | 9 
|              |                                                                                       |   
|EXHIBIT INDEX |                                                                                       | 10












PART
1. FINANCIAL INFORMATION



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



CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS



This
report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. These forward-looking statements are generally located in the material set forth below under the headings “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
but may be found in other locations as well. For a more detailed description of the risks and uncertainties involved, the following
discussion and analysis should be read in conjunction with management’s discussion and analysis contained in Camber’s
Annual Report on Form 10-K for the fiscal year ended March 31, 2018, as filed with the SEC on July 2, 2018, and related discussion
of our business and properties contained therein.



These
forward-looking statements are subject to risks and uncertainties and other factors that may cause our actual results, performance
or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking
statements. You should not unduly rely on these statements. Factors, risks, and uncertainties that could cause actual results
to differ materially from those in the forward-looking statements which include, among others:



| | ● | our ability to complete the
    transactions contemplated by the Sale Agreement;
| | - | --------------------------------------------------------------------------------

| | ● | defaults under our loan agreement
    with IBC and the terms of the IBC Standstill Agreement;
| | - | ---------------------------------------------------------------------------------------------

| | ● | the availability of funding
    and the terms of such funding;
| | - | --------------------------------------------------------------

| | ● | our ability to integrate
    and realize the benefits expected from future acquisitions that we may complete;
| | - | -------------------------------------------------------------------------------------------------------------

| | ● | our growth strategies;
| | - | ----------------------

| | ● | anticipated trends in our
    business;
| | - | ---------------------------------------

| | ● | our ability to repay outstanding
    loans and satisfy our outstanding liabilities;
| | - | -----------------------------------------------------------------------------------

| | ● | our liquidity and ability
    to finance our exploration, acquisition and development strategies;
| | - | -------------------------------------------------------------------------------------------------

| | ● | market conditions in the
    oil and gas industry;
| | - | --------------------------------------------------

| | ● | the timing, cost and procedure
    for future acquisitions;
| | - | -----------------------------------------------------------

| | ● | the impact of government
    regulation;
| | - | ----------------------------------------

| | ● | estimates regarding future
    net revenues from oil and natural gas reserves and the present value thereof;
| | - | ------------------------------------------------------------------------------------------------------------

| | ● | legal proceedings and/or
    the outcome of and/or negative perceptions associated therewith;
| | - | ---------------------------------------------------------------------------------------------

| | ● | planned capital expenditures
    (including the amount and nature thereof);
| | - | ---------------------------------------------------------------------------

| | ● | increases in oil and gas
    production;
| | - | ----------------------------------------

| | ● | changes in the market price
    of oil and gas;
| | - | -----------------------------------------------

| | ● | changes in the number of
    drilling rigs available;
| | - | -----------------------------------------------------

| | ● | the number of wells we anticipate
    drilling in the future;
| | - | -------------------------------------------------------------

| | ● | estimates, plans and projections
    relating to acquired properties;
| | - | ---------------------------------------------------------------------

| | ● | the number of potential drilling
    locations; and
| | - | ---------------------------------------------------

| | ● | our financial position, business
    strategy and other plans and objectives for future operations.
| | - | ---------------------------------------------------------------------------------------------------



We
identify forward-looking statements by use of terms such as “may,” “will,” “expect,” “anticipate,”
“estimate,” “hope,” “plan,” “believe,” “predict,” “envision,”
“intend,” “continue,” “potential,” “should,” “confident,” “could”
and similar words and expressions, although some forward-looking statements may be expressed differently. You should be aware
that our actual results could differ materially from those contained in the forward-looking statements. You should consider carefully
the statements under the “Risk Factors” section of this report and other sections of this report which describe factors
that could cause our actual results to differ from those set forth in the forward-looking statements, and the following factors:



| | ● | the possibility that our
    future acquisitions may involve unexpected costs;
| | - | ------------------------------------------------------------------------------





1







| | ● | the volatility in commodity
    prices for oil and gas;
| | - | -------------------------------------------------------

| | ● | the accuracy of internally
    estimated proved reserves;
| | - | ---------------------------------------------------------

| | ● | the
    presence or recoverability of estimated oil and gas reserves;
| | - | ---------------------------------------------------------------------

| | ● | the ability to replace oil
    and gas reserves;                            
| | - | ----------------------------------------------------------------------------
| | ● | the availability and costs of drilling rigs
    and other oilfield services;

| | ● | risks
    inherent in natural gas and oil drilling and production activities, including risks of fire, explosion, blowouts, pipe failure,
    casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | delays
    in receipt of drilling permits;
| | - | ------------------------------------------

| | ● | risks
    relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results,
    production declines and declines in natural gas and oil prices;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | risks
    relating to unexpected adverse developments in the status of properties;
| | - | ----------------------------------------------------------------------------------

| | ● | risks
    relating to the absence or delay in receipt of government approvals or other third party consents;
| | - | ------------------------------------------------------------------------------------------------------------

| | ● | risks
    relating to governmental regulations regarding hydraulic fracturing and the disposition/disposal of produced water;
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | ● | environmental
    risks;
| | - | ------------------------

| | ● | exploration
    and development risks;
| | - | --------------------------------------

| | ● | competition;
| | - | ------------

| | ● | the
    inability to realize expected value from acquisitions;
| | - | --------------------------------------------------------------

| | ● | the
    availability and cost of alternative fuel sources;
| | - | ----------------------------------------------------------

| | ● | our
    ability to maintain the listing of our common stock on the NYSE American;
| | - | ---------------------------------------------------------------------------------

| | ● | our
    limited market capitalization;
| | - | --------------------------------------

| | ● | our
    ability to meet the covenants in our loan agreements and the consequences of not meeting such covenants;
| | - | ----------------------------------------------------------------------------------------------------------------

| | ● | the
    ability of our management team to execute its plans to meet its goals; and
| | - | ----------------------------------------------------------------------------------

| | ● | other
    economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively impact
    our businesses, operations and pricing.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Forward-looking
statements speak only as of the date of this report or the date of any document incorporated by reference in this report. Except
to the extent required by applicable law or regulation, we do not undertake any obligation to update forward-looking statements
to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.



Review
of Information and Definitions



This
information should be read in conjunction with the interim unaudited financial statements and the notes thereto included in this
Quarterly Report on Form 10-Q, and the consolidated financial statements and notes thereto and Part II, Item 7, Management’s
Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year
ended March 31, 2018.



Certain
capitalized terms used below and otherwise defined below, have the meanings given to such terms in the footnotes to our consolidated
financial statements included above under “Part I - Financial Information” - “Item 1. Financial Statements”.



Unless
the context requires otherwise, references to the “Company,” “we,” “us,” “our,”
“Camber”, and “Camber Energy, Inc.” refer specifically to Camber Energy, Inc. and its consolidated subsidiaries.



In
addition, unless the context otherwise requires and for the purposes of this report only:



| | ● | “Bbl”
    refers to one stock tank barrel, or 42 U.S. gallons liquid volume, used in this report in reference to crude oil or other
    liquid hydrocarbons;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | “Boe”
    barrels of oil equivalent, determined using the ratio of one Bbl of crude oil, condensate or natural gas liquids, to six Mcf
    of natural gas;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | “Mcf”
    refers to a thousand cubic feet of natural gas;
| | - | ---------------------------------------------------------





2









| | ● | “SEC”
    or the “Commission” refers to the United States Securities and Exchange Commission; and
| | - | -------------------------------------------------------------------------------------------------

| | ● | “Securities
    Act” refers to the Securities Act of 1933, as amended.
| | - | ----------------------------------------------------------------------





Overview



Camber
Energy, Inc., a Nevada corporation, is an independent oil and natural gas company based in Houston, Texas. We are engaged in the
acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations,
including from the Hunton formation in Lincoln, Logan and Payne Counties, in central Oklahoma; the Cline shale and upper Wolfberry
shale in Glasscock County, Texas; and in connection with our entry into the Horizontal San Andres play on the Central Basin Platform
of the Permian Basin in West Texas announced on January 3, 2017. Incorporated in Nevada in December 2003 under the name Panorama
Investments Corp., the Company changed its name to Lucas Energy, Inc. effective June 9, 2006 and effective January 4, 2017, the
Company changed its name to Camber Energy, Inc.



Our
primary value drivers are our reserves, which must be developed to unlock their full potential. We believe the market conditions
driving us toward the need for a larger entity of greater size and financial mass are even more essential in the current environment.
In order to develop the significant reserves at our disposal, we believe that we must become, or become part of, a larger organization
with ample cash flow and greater access to capital. Measures such as return on equity, liquidity and stock multiples have led
us to conclude that the market, in general, views small-cap and mid-cap exploration and production companies as having greater
potential than microcaps. The larger companies tend to have access to more favorable debt financing, receive greater analyst coverage,
trade with greater liquidity and consequently, often have higher share prices. We are actively conducting workovers and subject
to raising the balance of the funds due in connection with the October 2017 Purchase Agreement (defined and described in “Part
I. Financial Information” – “Item 1. Financial Statements” – “Note 11 – Stockholders’
Deficit” - “Series C Redeemable Convertible Preferred Stock”, above), which is subject to certain closing conditions
described herein, the Company intends to acquire producing/non producing properties at value prices and participate in joint ventures
with industry partners with the goal of enhancing production and cash flow.



The
Company is aggressively seeking to dispose of unprofitable leveraged assets to stabilize cash flow and increase its net worth.
Concurrently, the Company is working to build on the remaining platform and technical capacity created by our recent asset acquisitions
described below. We intend to create a growth company capable of delivering on the long-expected conversion of reserves to production,
continued long-term acreage development, and sustainable shareholder value.



Our
website address is http://www.camber.energy. Our fiscal year ends on the last day of March of each year. The information on, or
that may be accessed through, our website is not incorporated by reference into this report and should not be considered a part
of this report. We refer to the twelve-month periods ended March 31, 2019 and March 31, 2018 as our 2019 Fiscal Year and 2018
Fiscal Year, respectively.



As
of June 30, 2018, the Company had leasehold interests (working interests) covering approximately 17,173 net acres underlying a
total of 74,630 gross acres in its two core regions, Central Oklahoma and West Texas. In Central Oklahoma the Company had 13,638/55,807
(net/gross) acres, most of which was acquired pursuant to the Acquisition. Approximately 95.7% of the Central Oklahoma acreage
is held by production (“HBP”). In West Texas, the Company had 3,488/19,822 (net/gross) acres. Approximately 100% of
this acreage is productive from the Cline and Wolfberry formations acquired pursuant to the Acquisition. The remaining West Texas
acreage is newly acquired leasehold located on the Central Basin Platform of the Permian Basin, which was recently announced by
the Company as part of its entry in the emerging Horizontal San Andres play.



As
of June 30, 2018, Camber was producing an average of 818 net barrels of oil equivalent per day (Boepd) from over 105 active well
bores. The ratio between the gross and net production varies due to varied working interests and net revenue interests in each
well. Our production sales totaled 74,480 barrels of oil equivalent, net to our interest, for the three-month period ended June
30, 2018.



3









At
June 30, 2018, Camber’s total estimated proved reserves were approximately 3.475 million barrels of oil equivalent
(“Boe”), of which approximately .294 million barrels (“Bbls”) were crude oil reserves, approximately
1.546 million barrels (“Bbls”) were natural gas liquids, and approximately 9.806 billion cubic
feet (“Bcf”) were natural gas reserves. Approximately 90% of the barrel of oil equivalent (“Boe”)
was  producing.



As
of June 30, 2018, the Company employed no full-time employees. We utilized contractors on an “as-needed” basis to
carry out various functions, including but not limited to field operations, land administration, corporate activity and information
technology maintenance.



On
July 12, 2018, we entered into an Asset Purchase Agreement described in greater detail above under “Part I. Financial Information”
– “Item 1. Financial Statements” – “Note 2 - Liquidity and Going Concern Considerations” -
“N&B Energy Asset Disposition Agreement”, to the consolidated unaudited financial statements included above. In
the Sale Agreement (or our alternative transaction with IBC, as disclosed above “Part I. Financial Information” –
“Item 1. Financial Statements” – “Note 2 - Liquidity and Going Concern Considerations” - “IBC
Bank Standstill Agreement”), the Company may undertake a change in business focus and/or may seek to combine with another
company.



Industry
Segments



Camber
operations are all crude oil, natural gas and natural gas liquids exploration and production related.



Operations
and Oil and Gas Properties



We
operate and invest in areas that are known to be productive, with a reasonably established production history, in order to decrease
geological and exploratory risk. With the closing of the Acquisition in October 2016, the Company acquired over 13,000 net acres
in producing fields located primarily in the Mid-Continent region of Oklahoma including Payne, Lincoln and Logan Counties, along
with a small amount of interest in production located in Glasscock County, Texas. The Mid-Continent assets produce from a liquids-rich,
gas reservoir known as the Hunton formation. These properties include interests in four different fields, of which one is operated
by Camber and the other three are non-operated.



In
January 2018, we acquired approximately 3,000 leasehold acres in Okfuskee County, Oklahoma, including two producing wells and
7 non-producing well bores, for consideration of $210,000. The acquisition included three salt water disposal wells, to support
existing and potential future hydrocarbon production. These assets are anticipated to be sold and/or transferred as part of the
Sale Agreement.



Our
Glasscock County, Texas properties produce oil and gas primarily from the Wolfberry, Cline and Fusselman formations and are all
non-operated. In addition, the Company owns approximately 1,000 net acres and operations in the Permian Basin, Texas which it
plans to sell or farm out. These assets are anticipated to be sold and/or transferred as part of the Sale Agreement.



In
March 2018, we completed the acquisition of working interests in certain leases, wells and equipment located in the Texas panhandle
and a 75% ownership of two partnerships that owned certain leases, wells and equipment in the same fields, for a total purchase
price of $250,000, payable in three tranches, from an entity which is controlled by Ian Acrey who serves as the operating manager
of our operations through a different entity. A payment of $85,000 was due at closing; $85,000 was due thirty days after closing
and $80,000 was due sixty days after closing. Camber earned 25% of the working interest at the closing and earned an additional
25% of the working interest at each of the two subsequent closings. The seller retained a 25% carried working interest in the
assets. The acquisition includes 49 non-producing well bores, 5 saltwater disposal wells and the required infrastructure and equipment
necessary to support future hydrocarbon production as well as approximately 500 net leasehold acres in Hutchinson County, Texas.
Camber is currently evaluating hydrocarbon production opportunities across all of the acquired acreage including the existing
non-producing well bores for workover opportunities. An entity which was significantly owned by the operator of the Company’s
other operated properties was the seller of the properties.



4









The
Company also plans to execute a growth strategy by building on the platform and technical capacity created by our recent asset
acquisitions described below, provided that the Sale Agreement or the alternative transaction described above with IBC, does not
close.



Financing



A
summary of our financing transactions, funding agreements and other material funding transactions can be found under “Part
I. Financial Information” – “Item 1. Financial Statements” – “Note 2 – Liquidity and
Going Concern Considerations”, “Note 6 – Note Payables and Debenture” and “Note 10 – Stockholders’
Deficit”, above.



In
addition to the transactions noted above, Camber is currently discussing potential financing transactions, which we plan to raise
through the sale of debt or equity in order to fulfill our current obligations and capital requirements, which we believe, if
finalized and completed, will ensure the future viability of the Company. Additionally, due to our current capital structure and
the nature of oil and gas interests, i.e., that rates of production generally decline over time as oil and gas reserves are depleted,
if we are unable to obtain the necessary financing to drill additional wells and develop our proved undeveloped reserves (“PUDs”);
coupled with the low commodity prices over the last twelve months, we believe that our revenues will continue to decline over
time. Therefore, we may be forced to scale back our business plan, sell assets to satisfy outstanding debts or take other remedial
steps which may include seeking bankruptcy protection.



Our
limited cash position and significant liabilities raise substantial doubt about our ability to continue as a going concern for
the next twelve months following the issuance of these financial statements. The accompanying financial statements have been prepared
in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements
do not include any adjustments relating to the recoverability of assets and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.



Market
Conditions and Commodity Prices



Our
financial results depend on many factors, particularly the price of natural gas, natural gas liquids and crude oil and our ability
to market our production on economically attractive terms. Commodity prices are affected by many factors outside of our control,
including changes in market supply and demand, which are impacted by weather conditions, inventory storage levels, basis differentials
and other factors. As a result, we cannot accurately predict future commodity prices and, therefore, we cannot determine with
any degree of certainty what effect increases or decreases in these prices will have on our production volumes or revenues. In
addition to production volumes and commodity prices, finding and developing sufficient amounts of natural gas and crude oil reserves
at economical costs are critical to our long-term success. We expect prices to remain volatile for the remainder of the year.
For information about the impact of realized commodity prices on our crude oil revenues, refer to “Results of Operations”
below.



RESULTS
OF OPERATIONS



The
following discussion and analysis of the results of operations for the three-month periods ended June 30, 2018 and 2017 should
be read in conjunction with our consolidated financial statements and notes thereto included in this Quarterly Report on Form
10-Q. As used below, the abbreviations “Bbls” stands for barrels, “NGL” stands for natural gas liquids,
“Mcf” for thousand cubic feet and “Boe” for barrels of oil equivalent. Natural gas equivalents are determined
using a ratio of 6 Mcf of natural gas to 1 Bbl of crude oil or NGLs (“Natural Gas Liquids”) based on 42 gallons to
1 Bbl of crude oil. The majority of the numbers presented below are rounded numbers and should be considered as approximate.



5









Three
Months Ended June 30, 2018 vs. Three Months Ended June 30, 2017



We
reported a net loss attributable to common stockholders for the three months ended June 30, 2018 of $4.2 million, or $(0.44) per
share of common stock. For the same period a year ago, we reported a net loss attributable to common stockholders of $3.2 million
or $(2.80) per share of common stock. As discussed in more detail below, our net loss attributable to common stockholders increased
primarily to additional general and administrative expenses related to severance agreements.



The
following table sets forth the operating results and production data for the periods indicated:



|                              |  | Three
                                         Months Ended
                                                                                June
                                         30, |           |  | Increase |   |           | %
                                                                                Increase | 
|----------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | -------- | - | --------- | ------------------------------------------------------------------------------------------ | 
|                              |  | 2018                                                                                                                                                                                          |           |  | 2017     |   |           | (Decrease)                                                                                 | 
|Sale
    Volumes:             |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Crude
    Oil (Bbls)          |  |                                                                                                                                                                                               | 3,153     |  |          |   | 9,898     |                                                                                            | 
|Natural
    Gas (Mcf)         |  |                                                                                                                                                                                               | 210,326   |  |          |   | 240,570   |                                                                                            | 
|NGL
    (Gallons)             |  |                                                                                                                                                                                               | 1,523,464 |  |          |   | 1,802,608 |                                                                                            | 
|Total
    (Boe) (1)           |  |                                                                                                                                                                                               | 74,480    |  |          |   | 91,591    |                                                                                            | 
|                              |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Crude
    Oil (Bbls per day)  |  |                                                                                                                                                                                               | 34        |  |          |   | 109       |                                                                                            | 
|Natural
    Gas (Mcf per day) |  |                                                                                                                                                                                               | 2,311     |  |          |   | 2,644     |                                                                                            | 
|NGL
    (Gallons per day)     |  |                                                                                                                                                                                               | 16,741    |  |          |   | 19,809    |                                                                                            | 
|Total
    (Boe per day) (1)   |  |                                                                                                                                                                                               | 818       |  |          |   | 1,021     |                                                                                            | 
|                              |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Average
    Sale Price:       |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Crude
    Oil ($/Bbl)         |  | $                                                                                                                                                                                             | 63.45     |  |          | $ | 46.28     |                                                                                            | 
|Natural
    Gas ($/Mcf)       |  | $                                                                                                                                                                                             | 2.25      |  |          |   | 2.59      |                                                                                            | 
|NGL
    ($/Bbl)               |  | $                                                                                                                                                                                             | 28.15     |  |          |   | 19.15     |                                                                                            | 
|                              |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Net
    Operating Revenues:   |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Crude
    Oil                 |  | $                                                                                                                                                                                             | 200,069   |  |          | $ | 458,039   |                                                                                            | 
|Natural
    Gas               |  |                                                                                                                                                                                               | 473,513   |  |          |   | 623,016   |                                                                                            | 
|NGL                           |  |                                                                                                                                                                                               | 1,021,114 |  |          |   | 821,750   |                                                                                            | 
|Total
    Revenues            |  | $                                                                                                                                                                                             | 1,694,696 |  |          | $ | 1,902,805 |                                                                                            | 



(1)
Assumes 6 Mcf of natural gas equivalents and 42 gallons of NGL to 1 barrel of oil, respectively.



6









Operating
and Other Expenses



The
following table summarizes our production costs and operating expenses for the periods indicated:



|                                                        |  | Three
                                         Months Ended
                                                                                June
                                         30, |           |  | Increase |   |           | %
                                                                                Increase | 
|------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | -------- | - | --------- | ------------------------------------------------------------------------------------------ | 
|                                                        |  | 2018                                                                                                                                                                                          |           |  | 2017     |   |           | (Decrease)                                                                                 | 
|Direct
    lease operating expense                      |  | $                                                                                                                                                                                             | 862,971   |  |          | $ | 553,587   |                                                                                            | 
|Marketing/gathering
    expense                         |  |                                                                                                                                                                                               | 491,357   |  |          |   | 399,735   |                                                                                            | 
|Workovers
    expense                                   |  |                                                                                                                                                                                               | 57,339    |  |          |   | 90,792    |                                                                                            | 
|Other                                                   |  |                                                                                                                                                                                               | —         |  |          |   | 58,781    |                                                                                            | 
|Lease
    Operating Expenses                            |  | $                                                                                                                                                                                             | 1,411,667 |  |          | $ | 1,102,895 |                                                                                            | 
|                                                        |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Severance
    and Property Taxes                        |  |                                                                                                                                                                                               | 82,760    |  |          |   | 84,864    |                                                                                            | 
|Depreciation,
    Depletion, Amortization and Accretion |  |                                                                                                                                                                                               | 327,200   |  |          |   | 572,041   |                                                                                            | 
|Impairment
    of Oil and Gas Properties                |  |                                                                                                                                                                                               | 531,657   |  |          |   | 775,374   |                                                                                            | 
|Gain
    on Sale of Oil and Gas Properties              |  |                                                                                                                                                                                               | —         |  |          |   | (1,195    | )                                                                                          | 
|                                                        |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|General
    and Administrative (“G&A”)                  |  |                                                                                                                                                                                               | 1,539,420 |  |          |   | 1,444,122 |                                                                                            | 
|Share-Based
    Compensation                            |  |                                                                                                                                                                                               | 343,629   |  |          |   | 4,816     |                                                                                            | 
|Total
    G&A Expense                                   |  | $                                                                                                                                                                                             | 1,883,049 |  |          | $ | 1,448,938 |                                                                                            | 
|                                                        |  |                                                                                                                                                                                               |           |  |          |   |           |                                                                                            | 
|Interest
    Expense                                    |  |                                                                                                                                                                                               | 965,296   |  |          |   | 931,563   |                                                                                            | 
|Other
    Expense (Income), Net                         |  |                                                                                                                                                                                               | 5,164     |  |          |   | 37,303    |                                                                                            | 



Direct
Lease Operating Expenses



There
was an increase in direct lease operating expense of approximately $0.3 million when comparing the current quarter to the prior
year quarter. The increase is primarily due to increased costs related to shifting from having employees perform services to all
services being contracted with third parties.



Marketing/Gathering
Expense



Marketing/Gathering
Expense increased from approximately $400,000 for the three-month period ended June 30, 2017 to approximately $491,000 for the
three-month period ended June 30, 2018. The approximate $91,000 increase (23%) was due to overall increased transportation costs.



Depreciation,
Depletion, Amortization and Accretion (DD&A)



DD&A
decreased for the current quarter as compared to the prior year’s quarter by approximately $0.2 million primarily related
to the decrease in assets due to the fiscal year 2018 Rogers foreclosure.



Impairment
of Oil and Gas Properties



The
Company recorded an impairment of $0.5 million related to unproved properties for expired leases during the quarter ended June
30, 2018, compared to total impairments of approximately $0.8 million for the same period last year due to fewer lease expirations.



General
and Administrative (G&A) Expenses and Share-Based Compensation



G&A
expenses increased by approximately $434,000 for the current quarter as compared to the prior year’s quarter. The increase
was due primarily to a severance payment to our former executives for cash of $150,000 and warrants valued at $343,629.



Interest
Expense



Interest
expense for the three months ended June 30, 2018 increased by approximately $34,000 when compared to the three-month period ended
June 30, 2017 due to increased borrowing rate.



Other
Expense (Income), Net



Other
Expense (Income), net, for the three months ended June 30, 2018 decreased by approximately $32,000 when compared to the three-month
period ending June 30, 2017, primarily due to a decrease in the amount of adjustment to the derivative warrant liability. –
See also “Part I. Financial Information” – “Item 1. Financial Statements” – “Note 7
– Derivatives”, above.



LIQUIDITY
AND CAPITAL RESOURCES



The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to
the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue
as a going concern.



7









Our
primary sources of cash for the three months ended June 30, 2018 were from funds generated from the sale of preferred stock, the
sale of natural gas and crude oil production and funds borrowed under funding agreements. These cash flows were primarily used
to fund our capital expenditures and operations and to repay indebtedness. See below for an additional discussion and analysis
of cash flow.



Working
Capital



On
June 30, 2018, the Company’s total current liabilities of $41.9 million exceeded its total current assets of $1.3 million,
resulting in a working capital deficit of $40.6 million, while at March 31, 2018, the Company’s total current liabilities
of $40.0 million exceeded its total current assets of $1.7 million, resulting in a working capital deficit of $38.6 million. The
$2.0 million increase in the working capital deficit is primarily due to operating losses.



A
summary of our financing transactions, significant liabilities, recent funding agreement with Vantage, the Rogers Loan and foreclosure
of amounts due thereunder and other recent funding transactions can be found under “Part I. Financial Information”
– “Item 1. Financial Statements” – “Note 2 – Liquidity and Going Concern Considerations”,
“Note 6 – Note Payables and Debenture”, and “Note 11 – Stockholders’ Deficit”, above.



Cash
Flows



|                                                          |  | Three
                                         Months Ended
                                                                                June
                                         30, |           
|--------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------
|                                                          |  | 2018                                                                                                                                                                                          |           
|Cash
    flows used in operating activities               |  | $                                                                                                                                                                                             | (1,246,307
|Cash
    flows used in investing activities               |  |                                                                                                                                                                                               | (904,275  
|Cash
    flows provided by (used in) financing activities |  |                                                                                                                                                                                               | 2,000,000 
|                                                          |  |                                                                                                                                                                                               |           
|Net
    decrease in cash                                  |  | $                                                                                                                                                                                             | (150,582  



Net
cash used in operating activities was $1.2 million for the three months ended June 30, 2018, compared to $0.4 million for the
same period a year ago. The increase in net cash used in operating activities of $0.8 million was primarily related to a change
in operating liabilities.



Net
cash used in investing activities was $0.9 million for the three months ended June 30, 2018, compared to net cash used in investing
activities of $0.2 million for the same period a year ago, which increase was due to an increase in cash paid for oil and gas
property development costs.



We
had net cash provided by financing activities of $2 million for the three months ended June 30, 2018, compared to having net cash
used by financing activities of $0.7 million for the same period a year ago, which change was primarily due to proceeds received
from the sale of shares of Series C Preferred Stock.



8







SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.



| | CAMBER
    ENERGY, INC.                     
| | --------------------------------------------
| | (Registrant)                                
| |                                             
| | /s/
    Louis G. Schott                     
| | Louis
    G. Schott                         
| | Interim
    Chief Executive Officer         
| | (Principal
    Executive Officer)           
| | Date:
    February 14, 2019                 
| |                                             
| | /s/
    Robert Schleizer                    
| | Robert
    Schleizer                        
| | Chief
    Financial Officer                 
| | (Principal
    Financial/Accounting Officer)
| | Date:
    February 14, 2019                 



9







EXHIBIT
INDEX







|2.1     | Asset Purchase Agreement by and Between N&B Energy, LLC, as Purchaser and Camber Energy, Inc., as Seller, dated July 12, 2018 (Filed as Exhibit 2.1 to the Company’s Report on Form 8-K, filed with the Commission on July 13, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                             
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                                            
|2.2     | First Amendment to Asset Purchase Agreement by and Between N&B Energy, LLC, as Purchaser and Camber Energy, Inc., as Seller, dated August 2, 2018 (Filed as Exhibit 2.2 to the Company’s Report on Form 8-K, filed with the Commission on August 7, 2018 and incorporated herein by reference) (File No. 001-32508)                                                        
|        |                                                                                                                                                                                                                                                                                                                                                                            
|3.1     | Amendment to Certificate of Designations of Preferences, Powers, Rights and Limitations of Series C Redeemable Convertible Preferred Stock as filed with the Secretary of State of Nevada on July 25, 2018 (Filed as Exhibit 3.2 to the Company’s Report on Form 8-K, filed with the Commission on July 27, 2018 and incorporated herein by reference) (File No. 001-32508)
|        |                                                                                                                                                                                                                                                                                                                                                                            
|10.1*** | Separation and Release Agreement between Camber Energy, Inc. and Richard N. Azar II dated May 25, 2018 (Filed as Exhibit 10.1 to the Company’s Report on Form 8-K, filed with the Commission on May 25, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                            
|10.2*** | Common Stock Purchase Warrant granted to Richard N. Azar II dated May 25, 2018 (Filed as Exhibit 10.2 to the Company’s Report on Form 8-K, filed with the Commission on May 25, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                                            
|10.3*** | Engagement Letter with Fides Energy LLC/Louis G. Schott dated May 25, 2018 (Filed as Exhibit 10.3 to the Company’s Report on Form 8-K, filed with the Commission on May 25, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                            
|10.4    | Compromise Settlement Agreement and Mutual Release by and between Camber Energy, Inc. and Segundo Resources, LLC, dated July 12, 2018 (Filed as Exhibit 10.1 to the Company’s Report on Form 8-K, filed with the Commission on July 13, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                            
|10.5    | Agreement in Connection with the Loan by and Between Camber Energy, Inc. and International Bank of Commerce (Filed as Exhibit 10.1 to the Company’s Report on Form 8-K, filed with the Commission on August 7, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                                             
|        |                                                                                                                                                                                                                                                                                                                                                                            
|16.1    | Letter dated August 2, 2018 from GBH CPAs, PC to the Securities and Exchange Commission (Filed as Exhibit 16.1 to the Company’s Report on Form 8-K, filed with the Commission on August 2, 2018 and incorporated herein by reference) (File No. 001-32508)                                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                                                            
|31.1*   | Section 302 Certification of Periodic Report of Principal Executive Officer                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                            
|31.2*   | Section 302 Certification of Periodic Report of Principal Financial Officer                                                                                                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                                                                                                                                                                            
|32.1    | Section 906 Certification of Periodic Report of Principal Executive Officer (filed as an exhibit to the original Form 10-Q filing)                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                            
|32.2    | Section 906 Certification of Periodic Report of Principal Financial Officer (filed as an exhibit to the original Form 10-Q filing)                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                            
|101.INS | XBRL Instance Document.                                                                                                                                                                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                                                            
|101.SCH | XBRL Schema Document.                                                                                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                            
|101.CAL | XBRL Calculation Linkbase Document.                                                                                                                                                                                                                                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                                            
|101.LAB | XBRL Label Linkbase Document.                                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                                            
|101.PRE | XBRL Presentation Linkbase Document.                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                            
|101.DEF | XBRL Definition Linkbase Document                                                                                                                                                                                                                                                                                                                                          



*
Exhibits filed herewith.



**
Exhibits furnished herewith.



***
Management contract or compensatory plan.



10