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| Nevada                                                         |   | 98-0417780                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| Large accelerated filer o |   | Accelerated filer o |   | Non-accelerated filer o |   | Smaller reporting company x |
|---------------------------|--------|---------------------|--------|-------------------------|--------|-----------------------------|

| Class                                    |   | Outstanding as of August 9, 2010 |
|------------------------------------------|--------|----------------------------------|
| Common Stock, par value $0.001 per share |   | 13,622,869                       |

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|                                 |   |                                                                                                                 |   | Page   |
|--------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|--------|
| PART I – FINANCIAL INFORMATION |   |                                                                                                                 |
| Item 1.                              |   | Financial Statements                                                                                                 |   |   |
|                                 | o      | Consolidated Balance Sheets as of June 30, 2010 and March 31, 2010 (unaudited)                                       |   | 3      |
|                                 | o      | Consolidated Statements of Operations for the three months ended June 30, 2010 and 2009 (unaudited)                  |   | 4      |
|                                 | o      | Consolidated Statement of Stockholders’ Equity for the three months ended June 30, 2010  (unaudited) |   | 5      |
|                                 | o      | Consolidated Statements of Cash Flows for the three months ended June 30, 2010 and 2009 (unaudited)                  |   | 6      |
|                                 | o      | Notes to the Consolidated Financial Statements (unaudited)                                                           |   | 7      |
| Item 2.                              |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                          |   | 15     |
| Item 3.                              |   | Quantitative and Qualitative Disclosures about Market Risk                                                           |   | 21     |
| Item 4.                              |   | Controls and Procedures                                                                                              |   | 21     |
|                                 |   |                                                                                                                 |   |   |
| PART II – OTHER INFORMATION    |   |                                                                                                                 |
| Item 1.                              |   | Legal Proceedings                                                                                                    |   | 22     |
| Item 1A.                             |   | Risk Factors                                                                                                         |   | 22     |
| Item 2.                              |   | Unregistered Sales of Equity Securities and Use of Proceeds                                                          |   | 23     |
| Item 3.                              |   | Defaults Upon Senior Securities                                                                                      |   | 23     |
| Item 4.                              |   | Submission of Matters to a Vote of Security Holders                                                                  |   | 23     |
| Item 5.                              |   | Other Information                                                                                                    |   | 23     |
| Item 6.                              |   | Exhibits                                                                                                             |   | 24     |
| EXHIBITS                             |   |                                                                                                                 |

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|                                                                                                                                                                                                                          |   | June 30, 2010 |       |   | March 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|------------|--------|---------------------|--------|
| CURRENT ASSETS                                                                                                                                                                                                                |   |               |       |   |                |   |
| Cash                                                                                                                                                                                                                          |   | $                  | 4,042,567  |   |                | $      | 1,822,780 |   |
| Marketable securities                                                                                                                                                                                                         |   |               | 6,600      |   |                |   | 21,450 |   |
| Oil and gas receivable – trade                                                                                                                                                                                          |   |               | 34,379     |   |                |   | 46,081 |   |
| Oil and gas receivable – oil and gas working interests                                                                                                                                                                  |   |               | 275,394    |   |                |   | 198,803 |   |
| Deferred financing costs, net of amortization of $421,751 and $170,830, respectively                                                                                                                                          |   |               | -          |   |                |   | 250,921 |   |
| Deferred offering costs                                                                                                                                                                                                       |   |               | -          |   |                |   | 119,912 |   |
| Other current assets                                                                                                                                                                                                          |   |               | 44,309     |   |                |   | 43,769 |   |
| TOTAL CURRENT ASSETS                                                                                                                                                                                                          |   |               | 4,403,249  |   |                |   | 2,502,996 |   |
|                                                                                                                                                                                                                          |   |               |       |   |                |   |   |   |
| OIL AND GAS PROPERTIES, FULL COST METHOD                                                                                                                                                                                      |   |               |       |   |                |   |   |   |
| Properties subject to amortization                                                                                                                                                                                            |   |               | 21,191,950 |   |                |   | 24,699,722 |   |
| Accumulated depletion, depreciation and amortization                                                                                                                                                                          |   |               | (2,682,141 | )      |                |   | (2,482,433 | ) |
| OIL AND GAS PROPERTIES, NET                                                                                                                                                                                                   |   |               | 18,509,809 |   |                |   | 22,217,289 |   |
|                                                                                                                                                                                                                          |   |               |       |   |                |   |   |   |
| Property, plant and equipment, net of accumulated depreciation of $21,463 and $15,062, respectively                                                                                                                           |   |               | 55,363     |   |                |   | 20,907 |   |
| Other assets                                                                                                                                                                                                                  |   |               | 64,327     |   |                |   | 57,515 |   |
| TOTAL ASSETS                                                                                                                                                                                                                  |   | $                  | 23,032,748 |   |                | $      | 24,798,707 |   |
|                                                                                                                                                                                                                          |   |               |       |   |                |   |   |   |
| CURRENT LIABILITIES                                                                                                                                                                                                           |   |               |       |   |                |   |   |   |
| Accounts payable – trade                                                                                                                                                                                                |   | $                  | 1,607,287  |   |                | $      | 1,391,446 |   |
| Advances from working interest owners                                                                                                                                                                                         |   |               | 2,788,923  |   |                |   | 3,045,292 |   |
| Borrowings on credit facility, current portion                                                                                                                                                                                |   |               | -          |   |                |   | 2,150,000 |   |
| Stock payable                                                                                                                                                                                                                 |   |               | 31,217     |   |                |   | - |   |
| Accrued expenses                                                                                                                                                                                                              |   |               | 36,988     |   |                |   | 65,541 |   |
| TOTAL CURRENT LIABILITIES                                                                                                                                                                                                     |   |               | 4,464,415  |   |                |   | 6,652,279 |   |
|                                                                                                                                                                                                                          |   |               |       |   |                |   |   |   |
| NON-CURRENT LIABILITIES                                                                                                                                                                                                       |   |               |       |   |                |   |   |   |
| Asset retirement obligations                                                                                                                                                                                                  |   |               | 333,412    |   |                |   | 327,412 |   |
| TOTAL LIABILITIES                                                                                                                                                                                                             |   |               | 4,797,827  |   |                |   | 6,979,691 |   |
|                                                                                                                                                                                                                          |   |               |       |   |                |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                                                                                    |   |               |       |   |                |   |   |   |
| Preferred stock, 10,000,000 shares authorized of $0.001 par value, no shares issued and outstanding                                                                                                                           |   |               | -          |   |                |   | - |   |
| Common stock, 100,000,000 shares authorized of $0.001 par value,13,659,769 issued and 13,622,869 outstanding shares at June 30, 2010, and 12,837,220 issued and 12,800,320 outstanding shares at March 31, 2010, respectively |   |               | 13,659     |   |                |   | 12,837 |   |
| Additional paid-in capital                                                                                                                                                                                                    |   |               | 21,907,785 |   |                |   | 20,639,247 |   |
| Treasury stock, at cost 36,900 shares                                                                                                                                                                                         |   |               | (49,159    | )      |                |   | (49,159 | ) |
| Accumulated deficit                                                                                                                                                                                                           |   |               | (3,637,364 | )      |                |   | (2,783,909 | ) |
| TOTAL STOCKHOLDERS’ EQUITY                                                                                                                                                                                              |   |               | 18,234,921 |   |                |   | 17,819,016 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                              |   | $                  | 23,032,748 |   |                | $      | 24,798,707 |   |

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|                                                |   | For the Three Months Ended |       |   | For the Three Months Ended |   |
|-----------------------------------------------------|--------|----------------------------|------------|--------|----------------------------|--------|
|                                                |   | June 30, 2010         |       |   | June 30, 2009         |   |
|                                                |   |                       |       |   |                       |   |
|                                                |   |                       |       |   |                       |   |
| OIL AND GAS REVENUES                                |   | $                          | 577,540    |   |                       | $      | 441,464 |   |
|                                                |   |                       |       |   |                       |   |   |   |
| EXPENSES                                            |   |                       |       |   |                       |   |   |   |
| Lease operating expenses                            |   |                       | 310,107    |   |                       |   | 307,175 |   |
| Severance and property taxes                        |   |                       | 38,301     |   |                       |   | 19,149 |   |
| Depreciation, depletion, amortization and accretion |   |                       | 212,109    |   |                       |   | 184,626 |   |
| General and administrative                          |   |                       | 594,416    |   |                       |   | 369,001 |   |
|                                                |   |                       |       |   |                       |   |   |   |
| Total Expenses                                      |   |                       | 1,154,933  |   |                       |   | 879,951 |   |
|                                                |   |                       |       |   |                       |   |   |   |
| LOSS FROM OPERATIONS                                |   |                       | (577,393   | )      |                       |   | (438,487 | ) |
|                                                |   |                       |       |   |                       |   |   |   |
| OTHER INCOME (EXPENSES)                             |   |                       |       |   |                       |   |   |   |
| Unrealized (loss) gain on marketable securities     |   |                       | (14,850    | )      |                       |   | 220,444 |   |
| Realized loss on marketable securities              |   |                       | -          |   |                       |   | (30,081 | ) |
| Interest expense                                    |   |                       | (261,212   | )      |                       |   | (60,602 | ) |
| Total Other Income (Expenses)                       |   |                       | (276,062   | )      |                       |   | 129,761 |   |
|                                                |   |                       |       |   |                       |   |   |   |
| NET LOSS BEFORE INCOME TAXES                        |   |                       | (853,455   | )      |                       |   | (308,726 | ) |
|                                                |   |                       |       |   |                       |   |   |   |
| INCOME TAX BENEFIT (EXPENSE)                        |   |                       | -          |   |                       |   | - |   |
|                                                |   |                       |       |   |                       |   |   |   |
| NET LOSS                                            |   | $                          | (853,455   | )      |                       | $      | (308,726 | ) |
|                                                |   |                       |       |   |                       |   |   |   |
| LOSS PER SHARE – BASIC AND DILUTED            |   | $                          | (0.06      | )      |                       | $      | (0.03 | ) |
|                                                |   |                       |       |   |                       |   |   |   |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:      |   |                       |       |   |                       |   |   |   |
| BASIC AND DILUTED                                   |   |                       | 13,351,877 |   |                       |   | 10,346,488 |   |

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|                                                          |   | Preferred Stock |   |   | Common Stock |   |   |   |   |   |       |   |   |           |   |   |                        |   |
|---------------------------------------------------------------|--------|-----------------|--------|--------|--------------|--------|--------|--------|--------|--------|------------|--------|--------|----------------|--------|--------|-----------------------------|--------|
|                                                          |   | Shares          |   |   | Amount       |   |   | Shares |   |   | Amount     |   |   | Treasury Stock |   |   | Additional Paid- In Capital |   |   | Accumulated Deficit |   |   | Total |   |
| Balance, March 31, 2010                                  |   |            | -      |   |         | $      | -      |   |   |   | 12,837,220 |   |   | $              | 12,837 |   |                        | $      | (49,159 | ) |   | $ | 20,639,247 |   |   | $ | (2,783,909 | ) |   | $ | 17,819,016 |   |
|                                                          |   |            |   |   |         |   |   |   |   |   |       |   |   |           |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common shares issued for:                                     |   |            |   |   |         |   |   |   |   |   |       |   |   |           |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash at $1.56 average per share, net                          |   |            | -      |   |         |   | -      |   |   |   | 803,170    |   |   |           | 803    |   |                        |   | - |   |   |   | 1,249,097 |   |   |   | - |   |   |   | 1,249,900 |   |
| Services at weighted average of $1.85 per share               |   |            | -      |   |         |   | -      |   |   |   | 4,000      |   |   |           | 4      |   |                        |   | - |   |   |   | 7,416 |   |   |   | - |   |   |   | 7,420 |   |
| Oil and gas properties at weighted average of $0.78 per share |   |            | -      |   |         |   | -      |   |   |   | 15,379     |   |   |           | 15     |   |                        |   | - |   |   |   | 12,025 |   |   |   | - |   |   |   | 12,040 |   |
| Net loss                                                      |   |            | -      |   |         |   | -      |   |   |   | -          |   |   |           | -      |   |                        |   | - |   |   |   | - |   |   |   | (853,455 | ) |   |   | (853,455 | ) |
| Balance, June 30, 2010                                   |   |            | -      |   |         | $      | -      |   |   |   | 13,659,769 |   |   | $              | 13,659 |   |                        | $      | (49,159 | ) |   | $ | 21,907,785 |   |   | $ | (3,637,364 | ) |   | $ | 18,234,921 |   |

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|                                                                        |   | For the Three Months Ended |       |
|-----------------------------------------------------------------------------|--------|----------------------------|------------|
|                                                                        |   | June 30,              |       |
|                                                                        |   | 2010                       |       |   | 2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                        |   |                       |       |   |   |   |
|                                                                        |   |                       |       |   |   |   |
| Net loss                                                                    |   | $                          | (853,455   | ) |   | $ | (308,726 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                       |       |   |   |   |   |   |
| Depreciation, depletion, amortization and accretion                         |   |                       | 212,109    |   |   |   | 184,626 |   |
| Amortization of deferred financing costs                                    |   |                       | 250,921    |   |   |   | 27,866 |   |
| Unrealized loss (gain) on marketable securities                             |   |                       | 14,850     |   |   |   | (220,444 | ) |
| Realized loss on marketable securities                                      |   |                       | -          |   |   |   | 30,081 |   |
| Share-based compensation                                                    |   |                       | 11,920     |   |   |   | 35,338 |   |
| Changes in operating assets and liabilities:                                |   |                       |       |   |   |   |   |   |
| (Increase) decrease in accounts receivable                                  |   |                       | (76,126    | ) |   |   | (71,894 | ) |
| (Increase) decrease in other current assets                                 |   |                       | (540       | ) |   |   | (12,172 | ) |
| (Increase) decrease in other assets                                         |   |                       | (6,812     | ) |   |   | 34,534 |   |
| Increase (decrease) in accounts payable and accrued expense                 |   |                       | 187,288    |   |   |   | 229,604 |   |
| Net Cash Used in Operating Activities                                       |   |                       | (259,845   | ) |   |   | (71,187 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                        |   |                       |       |   |   |   |   |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| Proceeds from sale of oil and gas properties                                |   |                       | 8,119,035  |   |   |   | 160,000 |   |
| Purchase of oil and gas properties and equipment                            |   |                       | (4,561,989 | ) |   |   | (171,603 | ) |
| Proceeds from sale of marketable securities                                 |   |                       | -          |   |   |   | 1,199 |   |
| Purchase office furniture and equipment                                     |   |                       | (40,857    | ) |   |   | - |   |
| Net Cash Provided by (Used in) Investing Activities                         |   |                       | 3,516,189  |   |   |   | (10,404 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                        |   |                       |       |   |   |   |   |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| Proceeds from sale of common stock                                          |   |                       | 1,406,104  |   |   |   | - |   |
| Stock subscriptions received                                                |   |                       | -          |   |   |   | 67,500 |   |
| Advances from working interest owners                                       |   |                       | (256,369   | ) |   |   | - |   |
| Cash paid for deferred financing costs                                      |   |                       | (36,292    | ) |   |   | - |   |
| Principal payments on credit facility                                       |   |                       | (2,150,000 | ) |   |   | (75,000 | ) |
| Net Cash Used in Financing Activities                                       |   |                       | (1,036,557 | ) |   |   | (7,500 | ) |
|                                                                        |   |                       |       |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH                                             |   |                       | 2,219,787  |   |   |   | (89,091 | ) |
| CASH AT BEGINNING OF PERIOD                                                 |   |                       | 1,822,780  |   |   |   | 136,841 |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| CASH AT END OF PERIOD                                                       |   | $                          | 4,042,567  |   |   | $ | 47,750 |   |
|                                                                        |   |                       |       |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                           |   |                       |       |   |   |   |   |   |
| CASH PAID FOR:                                                              |   |                       |       |   |   |   |   |   |
| Interest                                                                    |   | $                          | 10,291     |   |   | $ | 32,736 |   |
| Income taxes                                                                |   | $                          | -          |   |   | $ | - |   |
| NON-CASH INVESTING AND FINANCING ACTIVITIES:                                |   |                       |       |   |   |   |   |   |
| Stock issued to acquire oil and gas properties                              |   | $                          | 12,040     |   |   | $ | - |   |
| Increase in asset retirement obligations                                    |   | $                          | 6,000      |   |   | $ | 5,775 |   |

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|  Financial Assets (Liabilities): |   | Carrying Amount |   |   | Total Fair Value |   |   | Quoted Prices In Active Markets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
|---------------------------------------|--------|-----------------|--------|--------|------------------|--------|--------|------------------------------------------|--------|--------|----------------------------------------------|--------|--------|------------------------------------------|--------|
|                                  |   |            |   |   |             |   |   |                                     |   |   |                                         |   |   |                                     |   |
| Trading Securities                    |   | $               | 6,600  |   |             | $      | 6,600  |                                     |   | $      | 6,600                                        |   |   | $                                        | -      |   |   | $ | - |   |

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| State of Texas  |   | Total Acres Acquired |   |   | Acquisition Cost (1) |   |
|-----------------|--------|----------------------|--------|--------|---------------------------|--------|
|            |   |                 |   |   |                      |   |
| Gonzales County |   |                 | 2,391  |   |                      | $      | 2,180,089 |   |
| Karnes County   |   |                 | 200    |   |                      | $      | 275,000 |   |
| Sabine County   |   |                 | 160    |   |                      | $      | 154,853 |   |
| Wilson County   |   |                 | 100    |   |                      | $      | 45,954 |   |
| Total           |   |                 | 2,851  |   |                      | $      | 2,655,896 |   |

|   | (1) | Total acquisition cost for lease acreage, wellbores, and associated equipment purchased. |
|--------|-----|------------------------------------------------------------------------------------------|

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|                                            |   | Options |    |   | Weighted Average Exercise Price |   |   | Warrants |   |   | Weighted Average Exercise Price |   |
|-------------------------------------------------|--------|---------|---------|--------|---------------------------------|--------|--------|----------|--------|--------|---------------------------------|--------|
| Outstanding at March 31, 2010              |   |    | 200,000 |   |                            | $      | 2.60   |     |   |   | 3,360,549                       |   |   | $ | 8.00 |   |
| Options and warrants issued                     |   |    | -       |   |                            |   | -      |     |   |   | -                               |   |   |   | - |   |
| Warrants exercised April 29, 2010 at $1.00 |   |    | -       |   |                            |   | -      |     |   |   | (25,000)                        |   |   |   | 1.00 |   |
| Outstanding at June 30, 2010               |   |    | 200,000 |   |                            | $      | 2.60   |     |   |   | 3,335,549                       |   |   | $ | 7.32 |   |

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| Exercise Price |   | Remaining Life |                  | Options Outstanding |    |    | Options Exercisable |   |    | Warrants Outstanding |   |   | Warrants Exercisable |      |
|----------------|--------|----------------|-----------------------|---------------------|---------|---------|---------------------|--------|---------|----------------------|--------|--------|----------------------|-----------|
|           |   |           |                  |                |    |    |                |   |    |                 |   |   |                 |      |
| $              | 8.00   |           | .35 Years             |                |    | -       |                |   |    | -                    |   |   |                 | 3,010,549 |   |   |   | 3,010,549 |   |
| $              | 2.60   |           | .39 Years             |                |    | 200,000 |                |   |    | 200,000              |   |   |                 | -         |   |   |   | - |   |
| $              | 1.00   |           | 2.39  Years |                |    | -       |                |   |    | -                    |   |   |                 | 325,000   |   |   |   | 325,000 |   |
| Total          |   |           |                  |                | 200,000 |    |                |   | 200,000 |                 |   |   | 3,335,549            |      |   |   | 3,335,549 |   |

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IT

|   | * | the sufficiency of existing capital resources and our ability to raise additional capital to fund cash requirements for future operations; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | * | uncertainties involved in the rate of growth of our business and acceptance of any products or services; |
|--------|---|----------------------------------------------------------------------------------------------------------|

|   | * | volatility of the stock market, particularly within the energy sector; and |
|--------|---|----------------------------------------------------------------------------|

|   | * | general economic conditions. |
|--------|---|------------------------------|

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| Proved Reserves                                                                               |   | Oil (Bbls) |      |   | Natural Gas (MCF) |   |   | Discounted Future Net Cash Flow (at 10% per year) |   |
|-----------------------------------------------------------------------------------------------|--------|------------|-----------|--------|-------------------|--------|--------|---------------------------------------------------|--------|
|                                                                                          |   |       |      |   |              |   |   |                                              |   |
| Developed Producing                                                                           |   |       | 73,010    |   |              |   | 11,760 |                                              |   | $ | 1,614,720 |   |
| Developed Non Producing                                                                       |   |       | 63,540    |   |              |   | 19,410 |                                              |   |   | 2,549,300 |   |
| Undeveloped                                                                                   |   |       | 1,833,680 |   |              |   | -      |                                              |   |   | 43,354,360 |   |
| Total, before income taxes                                                                    |   |       | 1,970,230 |   |              |   | 31,170 |                                              |   | $ | 47,518,380 |   |
| Less:  Estimated income taxes on future net cash flows (discounted at 10% per year) |   |       | n/a       |   |              |   | n/a    |                                              |   | $ | (8,311,887 | ) |
| Total, March 31, 2010                                                                         |   |       | 1,970,230 |   |              |   | 31,170 |                                              |   | $ | 39,206,493 |   |

| Probable Reserves              |   | Oil (Bbls) |    |   | Natural Gas (MCF) |   |   | Discounted Future Net Cash Flow (at 10% per year) |   |
|--------------------------------|--------|------------|---------|--------|-------------------|--------|--------|---------------------------------------------------|--------|
|                           |   |       |    |   |              |   |   |                                              |   |
| Undeveloped, at March 31, 2010 |   |       | 680,770 |   |              |   | -      |                                              |   | $ | 4,464,910 |   |

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|                                      |   | For the Three Months Ended June 30, |      |   | Amount Increase/ |   |     | % Increase/ |   |
|-------------------------------------------|--------|------------------------------------------|-----------|--------|------------------|--------|----------|-------------|--------|
|                                      |   | 2010                                     |      |   | 2009             |   |     | (Decrease)  |   |   | (Decrease) |   |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |
| OIL AND GAS REVENUES                      |   | $                                        | 577,540   |   |             | $      | 441,464  |        |   | $ | 136,076 |   |   |   | 31 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| PRODUCTION SALES:                         |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| Oil (barrels)                             |   |                                     | 7,885     |   |             |   | 7,967    |        |   |   | (82 | ) |   |   | -1 | % |
| Natural gas (thousand cubic feet)         |   |                                     | -         |   |             |   | 3,665    |        |   |   | (3,665 | ) |   |   | -100 | % |
| Total (barrels oil equivalent)            |   |                                     | 7,885     |   |             |   | 8,578    |        |   |   | (693 | ) |   |   | -8 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| Oil (barrels per day)                     |   |                                     | 87        |   |             |   | 88       |        |   |   | (1 | ) |   |   | -1 | % |
| Natural gas (thousand cubic feet per day) |   |                                     | -         |   |             |   | 40       |        |   |   | (40 | ) |   |   | -100 | % |
| Total (barrels oil equivalent per day)    |   |                                     | 87        |   |             |   | 94       |        |   |   | (8 | ) |   |   | -8 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| AVERAGE SALES PRICES:                     |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| Oil (per barrel)                          |   | $                                        | 73.25     |   |             | $      | 54.20    |        |   | $ | 19.05 |   |   |   | 35 | % |
| Natural gas (per thousand cubic feet)     |   | $                                        | -         |   |             | $      | 2.65     |        |   | $ | (2.65 | ) |   |   | -100 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| Lease operating expenses                  |   |                                     | 310,107   |   |             |   | 307,175  |        |   |   | 2,932 |   |   |   | 1 | % |
| Severance and property taxes              |   |                                     | 38,301    |   |             |   | 19,149   |        |   |   | 19,152 |   |   |   | 100 | % |
| Depreciation, depletion, and amortization |   |                                     | 212,109   |   |             |   | 184,626  |        |   |   | 27,483 |   |   |   | 15 | % |
| General and administrative                |   |                                     | 594,416   |   |             |   | 369,001  |        |   |   | 225,415 |   |   |   | 61 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| Total Expenses                            |   |                                     | 1,154,933 |   |             |   | 879,951  |        |   |   | 274,982 |   |   |   | 31 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| LOSS FROM OPERATIONS                      |   |                                     | (577,393  | )      |             |   | (438,487 | )           |   |   | (138,906 | ) |   |   | -32 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSES)                   |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| Unrealized (loss) gain on investments     |   |                                     | (14,850   | )      |             |   | 220,444  |        |   |   | (235,294 | ) |   |   | -107 | % |
| Realized loss on investments              |   |                                     | -         |   |             |   | (30,081  | )           |   |   | 30,081 |   |   |   | -100 | % |
| Interest expense                          |   |                                     | (261,212  | )      |             |   | (60,602  | )           |   |   | (200,610 | ) |   |   | 331 | % |
| Total Other Income (Expenses)             |   |                                     | (276,062  | )      |             |   | 129,761  |        |   |   | (405,823 | ) |   |   | -313 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| NET LOSS BEFORE INCOME TAXES              |   |                                     | (853,455  | )      |             |   | (308,726 | )           |   |   | (544,729 | ) |   |   | 176 | % |
|                                      |   |                                     |      |   |             |   |     |        |   |   |   |   |   |   |   |   |
| INCOME TAX (BENEFIT) EXPENSE              |   |                                     | -         |   |             |   | -        |        |   |   | - |   |   |   | 0 | % |
| NET LOSS                                  |   | $                                        | (853,455  | )      |             | $      | (308,726 | )           |   | $ | (544,729 | ) |   |   | 176 | % |

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| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                   |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                          |
| 3.1         |   | Articles of Incorporation (incorporated by reference to the Company Annual Report of Form 10-KSB for the fiscal year ended November 30, 2005 filed with the SEC on February 14, 2006 as Exhibit 3.1)                                                                                          |
|        |   |                                                                                                                                                                                                                                                                                          |
| 3.2         |   | Certificate of Amendment to Articles of Incorporation of Lucas Energy, Inc. (incorporated by reference to Exhibit B to the Information Statement on Schedule 14C filed with the SEC on February 16, 2007).                                                                                    |
|        |   |                                                                                                                                                                                                                                                                                          |
| 3.3         |   | Bylaws (incorporated by reference to the Company Annual Report of Form 10-KSB for the fiscal year ended November 30, 2005 filed with the SEC on February 14, 2006 as Exhibit 3.2)                                                                                                             |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.1        |   | Contract with SMC (incorporated by reference to the Company Annual Report of Form 10-KSB for the fiscal year ended November 30, 2005 filed with the SEC on February 14, 2006 as Exhibit 10.1)                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.2        |   | Consignment Agreement (incorporated by reference to the Company Annual Report of Form 10-KSB for the fiscal year ended November 30, 2005 filed with the SEC on February 14, 2006 as Exhibit 10.2)                                                                                             |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.3        |   | Stock Purchase Agreement between Lucas Energy, Inc. and The Delphic Oil Co., LLC, dated December 20, 2006 (incorporated by reference to the Form 8-K dated December 20, 2006 filed with the SEC on December 21, 2009 as Exhibit 10.1)                                                         |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.4        |   | Oil, Gas and Mineral Lease between Lucas Energy, Inc. and Griffin, filed of record on February 23, 2007 (incorporated by reference to the Form 8-K dated February 24, 2007 filed with the SEC on March 1, 2007 as Exhibit 10.4)                                                               |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.5        |   | Employment Agreement between Lucas Energy, Inc. and James J. Cerna, dated March 20, 2007 (incorporated by reference to the Company Annual Report on Form 10-KSB for the fiscal year ended March 31, 2007 filed with the SEC on June 29, 2007, Exhibit 10.5)                                   |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.6        |   | Employment Agreement between Lucas Energy, Inc. and William A. Sawyer, dated March 20, 2007 (incorporated by reference to the Company Annual Report on Form 10-KSB for the fiscal year ended March 31, 2007 filed with the SEC on June 29, 2007, Exhibit 10.6)                                |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.7        |   | Credit Agreement between Lucas Energy, Inc. and Amegy Bank National Association (Incorporated by reference to the Form 8-K dated October 8, 2008 filed with the SEC October 14, 2008)                                                                                                         |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.8        |   | Secured Promissory Note between Lucas Energy, Inc. and Amegy Bank National Association (Incorporated by reference to the Form 8-K dated October 8, 2008 filed with the SEC October 14, 2008)                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.9        |   | Deed of Trust, Security Agreement, Financing Statement and Assignment of Production from Lucas Energy to Kenneth R. Batson, Trustee, for the benefit of Amegy Bank National Association (Incorporated by reference to the Form 8-K dated October 8, 2008 filed with the SEC October 14, 2008) |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.10       |   | Security Agreement by Lucas Energy, Inc. in favor of Amegy Bank National Association (Incorporated by reference to the Form 8-K dated October 8, 2008 filed with the SEC October 14, 2008)                                                                                                    |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.11       |   | Unregistered Sale of Equity Securities and Departure of Director and Appointment of Director (Incorporated by reference to the Form 8-K dated October 8, 2009 filed with the SEC October 13, 2009)                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.12       |   | Placement Agent Agreement with WR Hambrecht & Co (Incorporated by reference to the Form 8-K dated March 26, 2009 filed with the SEC March 26, 2010)                                                                                                                                       |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.13       |   | Submission of Matters to a Vote of Security Holders, Election of Directors and Compensatory Arrangements of Certain Officers (Incorporated by reference to the Form 8-K/A dated March 30, 2010 filed with the SEC April 22, 2010).                                                            |
|        |   |                                                                                                                                                                                                                                                                                          |
| 10.14       |   | Lucas Energy, Inc. 2010 Long Term Incentive Plan (Incorporated by reference to the Form S-8 filed with the SEC on April 23, 2010)                                                                                                                                                             |

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| 10.15  |   | Purchase and Sale Agreement Between Lucas Energy, Inc. and HilCorp Energy I, L.P. dated April 1, 2010.   (Incorporated by reference to the Form 10-K Annual Report for the year ended March 31, 2010 filed with the SEC on July 14, 2010)                                                                                      |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.16  |   | Termination of Credit Agreement with Amegy Bank and Release of all Liens and Security Interests held dated May 5, 2010 (Incorporated by reference to the Form 8-K dated May 5, 2010 filed with the SEC May 6, 2010)                                                                                                                           |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.17  |   | Unregistered Sale of Equity Securities (Incorporated by reference to the Form 8-K dated May 25, 2010 filed with the SEC May 27, 2010)                                                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 10.18  |   | Report of Forrest A. Garb & Associates, Inc on the Estimated Reserves and Future Net Revenue as of April 1, 2010 Attributable to Interests Owned by Lucas Energy, Inc. dated July 1, 2010. (Incorporated by reference to the Form 10-K Annual Report, Exhibit 99.1 for the year ended March 31, 2010 filed with the SEC on July 14, 2010) |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 14.1   |   | Code of Ethics (Incorporated by reference to the Company Annual Report on Form 10-K/A, Amendment No. 1, for the fiscal year ended March 31, 2009 filed with the SEC on July 29, 2009).                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 14.2   |   | Whistleblower Protection Policy  (Incorporated by reference to the Company Annual Report on Form 10-K/A, Amendment No. 1, for the fiscal year ended March 31, 2009 filed with the SEC on July 29, 2009).                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 14.3   |   | Charter of the Audit and Ethics Committee (Incorporated by reference to the Company Annual Report on Form 10-K/A, Amendment No. 1, for the fiscal year ended March 31, 2009 filed with the SEC on July 29, 2009).                                                                                                                             |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 14.4   |   | Charter of the Nominating Committee (Incorporated by reference to the Company Annual Report on Form 10-K/A, Amendment No. 1, for the fiscal year ended March 31, 2009 filed with the SEC on July 29, 2009).                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 14.5   |   | Charter of the Compensation Committee (Incorporated by reference to the Company Annual Report on Form 10-K/A, Amendment No. 1, for the fiscal year ended March 31, 2009 filed with the SEC on July 29, 2009).                                                                                                                                 |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 31.1   |   | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1)                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 31.2   |   | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (1)                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 32.1   |   | Certification of CEO Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (1)                                                                                                                                                                                                   |
|   |   |                                                                                                                                                                                                                                                                                                                                          |
| 32.2   |   | Certification of CFO Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  (1)                                                                                                                                                                                                   |

|   | (1) | Filed herewith. |
|--------|-----|-----------------|

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| Signature                              |   | Title                                                                       |   | Date            |
|----------------------------------------|--------|-----------------------------------------------------------------------------|--------|-----------------|
|                                   |   |                                                                        |   |            |
| /s/ William A. SawyerWilliam A. Sawyer |   | President and C.E.O.(Principal Executive Officer)                           |   | August 11, 2010 |
|                                   |   |                                                                        |   |            |
| /s/ Donald L. SytsmaDonald L. Sytsma   |   | Chief Financial Officer and Accounting Officer(Principal Financial Officer) |   | August 11, 2010 |

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