UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, DC20549





FORM 10-Q








[X]   Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





For the quarterly period ended February 28, 2011





[ ]   Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934





For the transition period from ___________________ to ___________________





Commission File Number    000-52322





Gulf United Energy, Inc.


(Exact name of small Business Issuer as specified in its charter)





Nevada
20-5893642(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification

No.)


P.O Box 22165;Houston, Texas77227-2165


(Address of principal executive offices)  (Postal or Zip Code)





(713) 942-6575


(Registrant's telephone number, including area code)





N/A


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





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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   [X ] Yes  [  ] No





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




Large accelerated filer                                         [  ]                                         Accelerated filer[  ]


Non-accelerated filer                                           [  ]                                         Smaller reporting company [X]





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





APPLICABLE ONLY TO CORPORATE ISSUERS





As of April14, 2010, there were approximately 454,667,726shares of $0.001par value common stock issued and outstanding.








GULF UNITED ENERGY, INC. AND SUBSIDIARIES


(A Development Stage Company)





TABLE OF CONTENTS




Part I. Financial InformationItem 1

Financial Statements
5Consolidated Balance Sheets (unaudited) - February 28, 2011 and August 31, 2010
5Consolidated Statements of Operations (unaudited) - For the Three Months  and Six Months Ended February 28, 2011 and 2010 and the Period From Inception (September 19, 2003) to February 28, 2011
6Consolidated Statements of Cash Flows (unaudited) - For the Six Months Ended February 28, 2011 and 2010 and the Period from Inception (September 19, 2003) through February 28, 2011
7Consolidated Statements of Changes in Shareholders' Equity (Deficit) (unaudited) for the Period from Inception (September 19, 2003) to February 28, 2011
8Notes to the Consolidated Financial Statements (Unaudited)
11Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations
24Item 3

Quantitative and Qualitative Disclosures About Market Risk
27Item 4

Controls and Procedures
27Part II. Other InformationItem 1

Legal Proceedings
29Item 1A

Risk Factors
29Item 2

Unregistered Sales of Equity Securities and Use of Proceeds
31Item 3

Defaults Upon Senior Securities
31Item 4

(Removed and Reserved)
31Item 5

Other Information
31Item 6

Exhibits
31Signatures
33EX-31.1 (EXHIBIT 31.1)EX-32.1 (EXHIBIT 32.1)







Statement Regarding Forward-Looking Information





This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts included in this Report including, without limitation, statements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Report, regarding our financial condition, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements including, but not limited to, our ability to identify and exploit available corporate acquisitions, farm-in and/or joint venture opportunities in the energy sector in Latin America, , our ability to obtain the requisite consents and approvals of the assignments of rights to us in our oil and gas properties, our ability to legally protect or enforce our rights to our oil and gas properties,our ability to establish technical and managerial infrastructure, our ability to raise required capital on acceptable terms and conditions, our ability to take advantage of, and successfully participate in such opportunities, our ability to successfully operate, or influence our joint venture partners’ operation of, the projects in which we participate in a cost effective and efficient way; future economic conditions, political and regulatory stability and changes and volatility in energy prices.  A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Quarterly Report on Form 10-Q appears in the section captioned “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on December 7, 2010.




Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
 
       
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 PART 1 – FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 
 SECOND QUARTER
 FINANCIAL STATEMENTS
 
 February 28, 2011
 (Unaudited)
                  
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Consolidated Balance Sheets
  February 28,


August 31,2011


2010(Unaudited)


(Audited)ASSETSCurrent AssetsCash

$
11,860,789


$
19,679Payroll taxes receivable


-



39,153Pre-paid expenses


28,885



20,000Total Current Assets


11,889,674



78,832Fixed Assets:Computer Equipment


3,300



3,300Software License


62,563



62,563Less:  Accumulated Depreciation


(24,154
)


(13,727
)Net Fixed Assets


41,709



52,136Other AssetsInvestment in oil and gas properties (Note 3)


17,106,816



7,574,581Total Other Assets


17,106,816



7,574,581Total Assets

$
29,038,199


$
7,705,549LIABILITIESCurrentAccounts payable and accrued liabilities

$
391,136


$
387,692Accounts payable to operators of working interests


-



1,150,000Loans payable related parties (Note 6)


26,574



26,574Shareholder loans payable and accrued interest (Net of note discount -$484,338 at February 28, 2011 and $856,433 at August 31, 2010)  (Note 7)


1,378,651



3,223,516Total Current Liabilities


1,796,361



4,787,782Total Liabilities


1,796,361



4,787,782STOCKHOLDERS' EQUITYPreferred stock, 50,000,000 shares authorized, none issued or outstandingCommon StockAuthorized:700,000,000 shares with a par value of $0.001Issued and Outstanding:451,417,726 as of  February 28, 2011 and


451,418



293,700293,700,000 as of August 31, 2010Additional paid-in capital


41,749,591



6,992,910Common stock subscribed, 1,250,000 shares subscribed at February 28, 2011


110,252



-Deficit Accumulated During The Development Stage


(15,069,423
)


(4,368,843
)Total Stockholders' Equity


27,241,838



2,917,767Total Liabilities and Stockholders' Equity

$
29,038,199


$
7,705,549
 
 The accompanying notes are an integral part of these consolidated financial statements.
 -5-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Consolidated Statements of Operations
 (Unaudited)
  Period FromInceptionThree Months Ended


Six Months Ended


(September 19, 2003)February 28,


February 28,


through2011


2010


2011


2010


February 28 , 2011Revenue

$
-


$
-


$
-


$
-


$
-Expenses:Office and sundry


1,128



38



2,567



75



19,070Business license and fees


1,616



3,160



1,991



5,070



4,333Depreciation expense


5,213



275



10,427



550



24,154Insurance


6,062







6,062







6,062Salary


339,101



-



589,524



-



747,524Payroll tax expense


24,779



-



30,924



-



39,836Professional fees


462,086



153,375



765,684



162,102



1,642,461Consulting


8,245,000



-



8,299,000



-



8,309,455Referral fees


-



-



-



-



45,000Rent and lease expense


-



-



-



-



129,696Public relations


-



-



925



-



2,190Subsidiary formation cost


-



-



-



-



9,600Travel


2,946



3,523



16,747



3,523



45,803Utilities


341



373



520



808



18,743Shareholder loans and other loan interest


790,267



55,385



1,297,023



109,539



2,382,926Total expenses


9,878,539



216,129



11,021,394



281,667



13,426,853Operating Loss


(9,878,539
)


(216,129
)


(11,021,394
)


(281,667
)


(13,426,853
)Other (Income) and ExpenseGain on settlement of debt


-



-



-



-



(3,333
)Interest Income


(814
)


-



(814
)


-



(814
)Loss from continuing operations


(9,877,725
)


(216,129
)


(11,020,580
)


(281,667
)


(13,422,706
)Income (Loss) from discontinued operations


120,000



-



320,000



-



(1,646,717
)Net Loss

$
(9,757,725
)

$
(216,129
)

$
(10,700,580
)

$
(281,667
)

$
(15,069,423
)Basic And Diluted Loss per sharefrom continuing operations

$
(0.027
)

$
(0.008
)

$
(0.033
)

$
(0.011
)

$
(0.231
)Basic And Diluted Loss per sharefrom discontinued operations

$
0.000


$
-


$
0.001


$
-


$
(0.028
)Basic And Diluted Net Loss per share

$
(0.027
)

$
(0.008
)

$
(0.032
)

$
(0.011
)

$
(0.259
)Weighted Average Shares Outstanding


363,163,252



26,376,111



333,503,293



26,362,983



58,071,442
 The accompanying notes are an integral part of these consolidated financial statements.
 -6-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Consolidated Statements of Cash Flows
 (Unaudited)
  Period FromInceptionSix Months Ended


(September 19, 2003)February 28,


February 28,


Through2011


2010


February 28, 2011Cash Flows From Operating ActivitiesNet loss for the period

$
(10,700,580
)

$
(281,667
)

$
(15,069,423
)Adjustments to reconcile net loss to net cash used byoperating activities:Depreciation expense


10,427



550



24,154Expenses paid by issuance of common stock or common stocksubscribed


8,511,800



10,500



8,704,400Accrued interest (paid from) added to shareholder loans


(27,275
)


109,028



694,433Loan discount amortization


995,327



-



1,324,685Non-cash portion of interest expense


-



-



3,333Gain on settlement of debt


-



-



(3,333
)Impairment of investment in joint venture projects


-



-



1,951,210Change in operating assets and liabilitiesPayroll taxes receivable


39,153



-



-Pre-paid expenses


(8,885
)


-



(8,885
)Accounts payable and accrued liabilities


(1,146,556
)


69,081



(758,864
)Net Cash Used By Operating Activities


(2,326,589
)


(92,508
)


(3,138,290
)Cash Flows From Investing ActivitiesCapital Expenditures


-



-



(65,863
)Investment in oil and gas properties


(9,442,235
)


-



(12,310,816
)Advances to and investment in joint venture projects


-



-



(250,000
)Net cash used by investing activities


(9,442,235
)


-



(12,626,679
)Cash Flows From Financing ActivitiesProceeds from sale of common stock


25,799,619



-



26,413,169Common stock subscribed


-



207,500



-Increase in loans payable to related parties


-



-



226,574Proceeds from bridge financing


3,800,000



-



3,800,000Principal payment on bridge financing


(3,800,000
)


-



(3,800,000
)Principal payment on shareholder loan


(1,089,685
)


-



(1,239,685
)(Principal payments on) Proceeds from shareholder loans payable


(1,100,000
)


500



2,225,700Net cash provided by financing activities


23,609,934



208,000



27,625,758Increase In Cash During The Period


11,841,110



115,492



11,860,789Cash, Beginning Of Period


19,679



516



-Cash, End Of Period

$
11,860,789


$
116,008


$
11,860,789
 
 The accompanying notes are an integral part of these consolidated financial statements.


-7-


GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
 Period from Inception (September 19, 2003) to February 28, 2011
 (Unaudited)
  DEFICITACCUMULATEDCOMMON SHARES

ADDITIONAL

COMMON


DURING THEPAR


PAID-IN


SHARES


DEVELOPMENTNUMBER

VALUE

CAPITAL

SUBSCRIBED


STAGE


TOTALBalance, September 19,2003 (date of inception)


-


$
-


$
-


$
-


$
-


$
-Capital stock issued for cash:October 2003 at $0.001


2,500,000



2,500



-



-



-



2,500November 2003 at $0.005


160,000



160



640



-



-



800December 2003 at $0.005


1,400,000



1,400



5,600



-



-



7,000June 2004 at $0.01


1,000,000



1,000



9,000



-



-



10,000July 2004 at $0.25


23,000



23



5,727



-



-



5,750Net loss for the period


-



-



-



-



(15,880
)


(15,880
)Balance, August 31, 2004


5,083,000



5,083



20,967



-



(15,880
)


10,170Net loss for the year


-



-



-



-



(16,578
)


(16,578
)Balance, August 31, 2005


5,083,000



5,083



20,967



-



(32,458
)


(6,408
)November 10, 2005 StockSplit Adjustment


20,332,000



20,332



(20,332
)


-



-



-Net loss for the year


-



-



-



-



(31,577
)


(31,577
)Balance, August 31, 2006


25,415,000



25,415



635







(64,035
)


(37,985
)Capital stock issued for investment:January 2007 at $0.735 per share


185,000



185



135,790



-



-



135,975July 2007 at $0.735 per share


750,000



750



550,500



-



-



551,250Net loss for the year


-



-



-



-



(257,804
)


(257,804
)Balance, August 31, 2007


26,350,000



26,350



686,925







(321,839
)


391,436Net loss for the year


-



-



-



-



(378,039
)


(378,039
)Balance, August 31, 2008


26,350,000



26,350



686,925







(699,878
)


13,397Net loss for the year


-



-



-



-



(1,353,766
)


(1,353,766
)Balance, August 31, 2009


26,350,000



26,350



686,925



-



(2,053,644
)


(1,340,369
)Capital stock issued for settlement of name issue:January 2010 at $0.01 per share


50,000



50



450



-



-



500Capital stock issued to buy subsidiary:March 2010 at $0.032 per share


300,000



300



9,300



-



-



9,600Capital stock issued for cash:March 2010 at $0.01 per share


59,750,000



59,750



527,750



-



-



587,500Capital stock issued for services:March 2010 at $0.01 per share


20,750,000



20,750



186,750



-



-



207,500April 2010 at $0.01 per share


1,500,000



1,500



13,500



-



-



15,000Capital stock issued for oil and gas properties:March 2010 at $0.01 per share


40,000,000



40,000



384,000



200,000



-



624,000Capital stock issued for loan conversion:March 2010 at $0.01 per share


20,000,000



20,000



180,000



200,000



-



400,000Shareholder loan interest forgiven


-



-



631,444



-



-



631,444
  -8-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
  Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
 Period fromInception (September 19, 2003) to February 28, 2011
 (Unaudited)
  DEFICITACCUMULATEDCOMMON SHARES

ADDITIONAL


COMMON


DURING THEPAR


PAID-IN


SHARES


DEVELOPMENTNUMBER

VALUE

CAPITAL


SUBSCRIBED


STAGE


TOTALCapital stock issued with short-term debt:April 2010 at $0.065 per share


17,500,000



17,500



671,894



-



-



689,394May 2010 at $0.065 per share


5,000,000



5,000



191,970



-



-



196,970June 2010 at $0.087  per share


2,500,000



2,500



113,810



-



-



116,310July 2010 at $0.075  per share


3,000,000



3,000



125,571



-



-



128,571July 2010 at $0.120  per share


500,000



500



26,773



-



-



27,273August 2010 at $0.120 per share


500,000



500



26,773



-



-



27,273Capital stock issued for oil and gas properties:June 2010 at $0.01  per share


20,000,000



20,000



180,000



(200,000
)


-



-July 2010 at $0.052  per share


56,000,000



56,000



2,856,000



-



-



2,912,000Capital stock issued for loan conversion:June 2010 at $0.01 per share


20,000,000



20,000



180,000



(200,000
)


-



-Net loss for the period


-



-



-



-



(2,315,199
)


(2,315,199
)Balance, August 31, 2010


293,700,000



293,700



6,992,910



-



(4,368,843
)


2,917,767Capital stock issued for services:September 2010 at $0.06 per share


2,500,000



2,500



147,500



-



-



150,000October 2010 at $0.057 per share


1,200,000



1,200



67,200



-



-



68,400December 2010 at $0.081 per share


40,000,000



40,000



7,960,000



-



-



8,000,000January 2011 at $0.063 per share


2,700,000



2,700



167,400



(170,100
)


-



-February 2011 at $0.20 per share


304,000



304



60,496



-



-



60,800Capital stock issued for cash:December 2010 at $0.20 per share


3,875,000



3,875



755,022



-



-



758,897January 2011 at $0.20 per share


9,750,000



9,750



1,885,645



-



-



1,895,395February 2011 at $0.30 per share


83,388,726



83,389



23,061,938



-



-



23,145,327Capital stock subscribed for services:September 2010 at $0.063 per share


-



-



-



170,100



-



170,100January 2011 at $0.20 per share


-



-



-



25,000



-



25,000February 2011 at $0.20 per share


-



-



-



37,500



-



37,500Capital stock issued with short-term debt:September 2010 at $0.043 per share


6,500,000



6,500



272,073



-



-



278,573October 2010 at $0.047 per share


1,000,000



1,000



45,524



-



-



46,524October 2010 at $0.043 per share


1,500,000



1,500



62,787



-



-



64,287November 2010 at $0.047  per share


1,500,000



1,500



68,286



-



-



69,786Januuary 2011 at $0.047 per share


1,500,000



1,500



68,286



(69,786
)


-



-February 2011 at $0.047 per share


1,000,000



1,000



45,524



(46,524
)


-



-
 -9-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
  Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
 Period fromInception (September 19, 2003) to February 28, 2011
 (Unaudited)
 
 DEFICITACCUMULATEDCOMMON SHARES


ADDITIONAL


COMMON


DURING THEPAR


PAID-IN


SHARES


DEVELOPMENTNUMBER

VALUE


CAPITAL


SUBSCRIBED


STAGE


TOTALCapital stock subscribed withshort-term debt:November 2010 at $0.047  per share


-



-



-



139,572



-



139,572November 2010 at $0.049  per share


-



-



-



24,490



-



24,490Capital stock issued for oil andgas properties:November 2010 at $0.09  per share


1,000,000



1,000



89,000



-



-



90,000Net loss for the period


-



-



-



-



(10,700,580
)


(10,700,580
)Balance, February 28, 2011


451,417,726


$
451,418


$
41,749,591


$
110,252


$
(15,069,423
)

$
27,241,838
 The accompanying notes are an integral part of these consolidated financial statements.
         -10-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
   1.
ORGANIZATION AND BASIS OF PRESENTATION
 
 Gulf United Energy, Inc. (“Gulf United” or the “Company”) is an early-stage oil and gas exploration and production company with operations in South America.   The Company currently has limited operations and is a development stage company as defined by the Financial Accounting Standards Board (FASB) Accounting Standards for Development Stage Entities.Gulf United’s current asset portfolio includes participation in two hydrocarbon exploration blocks operated by SK Energy Co. Ltd. (“ SK Energy”).   SK Energy is a subsidiary of SK Energy Group, one of South Korea’s top five industrial conglomerates.   SK Energy is Korea’s largest petroleum refiner and is currently active in 34 blocks in 19 countries.
 
 In Colombia, we have acquired, subject to regulatory approval, a 12.5% working interest in the 345,592 acre CPO-4 block inthe Llanos Basin. Block CPO-4 is near existing production and immediately adjacent to and on trend with the Guatiquia blockoperated by Petrominerales Ltd. (TSX:PMG). Block CPO-4 is the near-term focus of the Company and SK Energy, with drillingexpected to commence in the second quarter of calendar year 2011.
 
 In Peru, we have acquired, subject to regulatory approval, a 40% working interest in the 2,803,411 acre Z-46 offshore blockin the Trujillo Basin. Recent re-processed 2-D seismic data suggests a submarine fan deposition on the block and multiple leads havebeen identified. Two wells previously drilled on the block by Repsol reported oil, indicating an active hydrocarbon system. TheCompany and SK Energy began the acquisition of additional infill 2-D seismic data in December 2010.
 
 Also in Peru, we have acquired, subject to regulatory approval, a 5% participating interest in Block XXIV, an approximately 276,137 gross acre concession, and a 2% participating interest in the Peru Technical Evaluation Area (the “Peru TEA”). The Peru TEA consists of four contiguous blocks totaling approximately 40 million gross acres onshore on the western flank of the Andes Mountains. Block XXIV and Peru TEA are both operated by Upland Oil & Gas, LLC (“Upland”). Two exploratory wells have beendrilled on Block XXIV and both wells are considered dry holes. There are no current plans to drill additional wells or to reworkexisting wells in the short term on Block XXIV, although future drilling has been planned on this concession by Upland. Similarly,there are no current plans to develop the Peru TEA.
 
 We expect to engage in additional investment opportunities in oil and gas exploration and development as our resources permit. The scope of our activities in this regard may include, but may not be limited to, the acquisition or assignment of rights to develop exploratory acreage under concessions with government authorities and other private or public exploration and production companies, the purchase of oil and gas producing properties, farm-in and farmout opportunities (i.e., the assumption or assignment of obligations to fund the cost of drilling and development).We may turn to opportunities in other countries if we deem the relevant considerations merit our investment. We plan to focus on early-stage exploration of hydrocarbons through a variety of transactions aimed at building a resource base.  An integral part of our strategy is to build a competent and professional management and operations team to enable us to successfully carry out our business plan.
 
 Interim Financial Statements
 
 In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosures needed for a fair presentation may be determined in that context.  Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. These consolidated financial statements should be read in connection with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2010.  The results of operations presented for the three months or six months ended February 28, 2011 are not necessarily indicative of the results to be expected for the year.  Interim financial data presented herein are unaudited.
 -11-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
  These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $15,069,423 and further losses are anticipated in the development of our business raising substantial doubt about the Company’s ability to continue as a going concern.  Our ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.During the quarter ended February 28, 2011, the Company issued 43,004,000 shares of common stock to consultants for services rendered or to be rendered and sold 97,013,726 shares of common stock for net cash proceeds of $25,799,619. As additional consideration, the company issued  five-year warrants to purchase up to 1,000,000 shares of common stock at a $0.30 exercise price per share.  Also during the current quarter, the Company arranged bridge financing from two shareholders totaling $3,800,000; this amount plus interest was repaid during the current quarter.As additional consideration for $350,000 in previously issued short-term notes, the Company issued 2,500,000 shares of common stock with an additional 1,000,000 subscribed shares still to be issued.  Subsequent to February 28, 2011, the Company issued 2,125,000 shares for services rendered or to be rendered, the remaining 1,000,000 shares related to the short-term notes and 125,000 shares sold for cash but not issued by the end of the current quarter.  While the Company has sufficient cash available for immediate obligations, we will need to raise additional funds, beginning as early as July, 2011, to meet our contractual obligations and there is no assurance that the Company will be successful in its efforts. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
 
 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of Accounting
  The Company maintains its accounts on the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America (GAAP). The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary for a fair presentation of consolidated financial position and the results of operations have been reflected herein.
 
 Concentration of Credit Risk
  Financial instruments which potentially subject the Company to concentration of credit risk at this time consist principally of cash.  The Company places its cash with high credit quality financial institutions.  At times, such amounts may exceed FDIC limits; however, these deposits typically may be redeemed upon demand and therefore bear minimal risk.  In monitoring this credit risk, the Company periodically evaluates the stability of the financial institutions.




Use of Estimates
  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  Certain of our more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, and our observance of trends in the industry and information available from other outside sources, as appropriate. Different, reasonable estimates could have been used in the current period.  Additionally, changes in accounting estimates are reasonably likely to occur from period to period. These, and other, factors could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.
 -12-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 Cash
  Cash includes cash in a demand deposit account and a money market account with a Houston bank.
 
 Fair Value of Financial Instruments
  The Company’s financial instruments consist of cash, payroll taxes receivable from shareholder, accounts payable, accrued liabilities and debt.  It is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these instruments. The fair value of these financial instruments approximates their carrying values.
 
 The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest and discount rates that approximate prevailing market rates.  In determining fair values, there are three levels of inputs used to determine value. Level 1 inputs are quoted prices in active markets for identical assets and liabilities.  Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  Level 3 inputs are unobservable inputs which include risk inherent in the asset or liability.
 
 Software License and Fixed Assets
  The value of the software license is stated at cost. Depreciation is computed using the straight-line method over the thirty six-month estimated useful life of the software. Any costs associated with maintenance and upgrades will be charged to expense as incurred. When an asset is retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period; significant renewals and betterments are capitalized.
 
 Impairment of Long-lived Assets
 
 The Company evaluates impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered.  These events include market declines, decisions to sell an asset and adverse changes in the legal or business environment.  If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows may be determined, to determine if the asset is impaired.  If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset through reference to sales data for similar assets, or by using a discounted cash flow approach.  The asset’s carrying value is then adjusted downward to the estimated fair value.  These cash flow estimates and assumptions could change significantly either positively or negatively.  At February 28, 2011, management did not believe that any impairment exists with respect to its long-lived assets.
 
 Inflation
  The Company's results of operations have not been significantly affected by inflation and management does not expect inflation to have a significant effect on its operations in the foreseeable future.
 
 Oil and gas properties
  The Company follows the full cost method of accounting for its oil and gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reservesare capitalized. Such costs include costs of acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities and asset retirement costs. Sales or other dispositions of oil and gas properties will be accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of capitalized costs to proven reserves would significantly change, or to the extent that the sales proceeds exceed our capitalized costs.
 -13-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
  As of February 28, 2011, the Company had oil and gas property investments in the amount of $17,106,816 that are excluded from depletion because reserves have not been proven to be associated with those properties. If proved reserves, if any, are found and when its quantity can be estimated, costs in excess of the present value of estimated future net revenues will be charged toimpairment expense. The Company will apply the full cost ceiling test on a quarterly basis on the date of the latest consolidated balance sheet presented.  It is not known at this time if any recoverable reserves of oil and gas exist.  As of the date of this report and based upon all the known facts and circumstances, management does not believe that any impairment exists with respect to oil and gas properties.
 
 Asset retirement costs will be recognized when an asset is placed in service and will be included in the amortization base and will be amortized over proved reserves, if any, using the units of production method.  Depletion of proved oil and gas properties will be calculated on the units-of-production method based upon estimates of proved reserves, if any. Such calculations include the estimated future costs to develop proved reserves, if any. Costs of unproved properties are not included in the costs subject to depletion. These costs will also be assessed quarterly for impairment.
 
 Asset Retirement Obligation
  GAAP requires that an asset retirement obligation (ARO) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period in which it is incurred and becomes determinable. Under this method, when liabilities for dismantlement and abandonment costs, excluding salvage values, are initially recorded, the carrying amount of the related oil and natural gas properties is increased. The fair value of the ARO asset and liability is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. Accretion of the liability is recognized each period using the interest method of allocation, and the capitalized cost is depleted using the units of production method. Should either the estimated life or the estimated abandonment costs of a property change materially upon the Company’s quarterly review, a new calculation is performed using the same methodology of taking the abandonment cost and inflating it forward to its abandonment date and then discounting it back to the present using the Company’s credit-adjusted-risk-free rate.
  The carrying value of the asset retirement obligation is adjusted to the newly calculated value, with a corresponding offsetting adjustment to the asset retirement cost related to oil and gas property accounts.  At February 28, 2011, the Company has no asset retirement obligations.
 
 Basic Loss per Share
 
 The Company is required to provide basic and diluted earnings (loss) per common share information.  The basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding.  Diluted net loss per common share is computed by dividing the net loss applicable to common stockholders, adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the period ended February 28, 2011, the Company issued five-year warrants to purchase up to 1 million shares of common stock at an exercise price of $0.30 per share as described in Note 4.
 
 Potential dilutive securities (stock warrants and stock subscribed) have been considered, but the dilutive effect of the potential dilutive securities is not believed to be material and would be anti-dilutive.  The Company reported net losses in the three and six month periods ended February 28, 2011and, accordingly, the effects of any additional shares would be anti-dilutive. The weighted average number of common and common equivalent shares outstanding was 363,163,252 and 26,376,111 for the quarters ended February 28, 2011 and 2010, respectively and 333,503,293 and 26,362,983 for the six month periods ended February 28, 2011 and 2010, respectively.
  Principles of Consolidation
  The accompanying consolidated financial statements include the accounts of Gulf United Energy, Inc. and its wholly-owned subsidiaries, Gulf United Energy del Peru, Ltd., Gulf United Energy Cuenca Trujillo, Ltd. and Gulf United Energy de Colombia, Ltd. as of February 28, 2011. All significant inter-company transactions and balances have been eliminated in the consolidation.
 -14-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 
 Accounting for Uncertain Tax Positions
  GAAP provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an entity’s financial statements.  GAAP requires an entity to recognize the financial statement impact of a tax position when it is more likely that not that the position will be sustained upon examination. The Company believes that all significant tax positions utilized by the Company will more likely than not be sustained upon examination.  As of the Company’s fiscal year-end, August 31, 2010, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2007 forward (with limited exceptions). Tax penalties and interest, if any, would be accrued as incurred and would be classified as tax expense in the consolidated statements of operations.
 
 Recently Issued Accounting Pronouncements
 
 In February 2010, the FASB amended guidance on subsequent events to alleviate potential conflicts between FASB guidance and Securities and Exchange Commission (“SEC”) requirements. Under this amended guidance, SEC filers are no longer required to disclose the date through which subsequent events have been evaluated in originally issued and revised financial statements.
 
 This guidance was effective immediately and we adopted these new requirements in first quarter 2010. The adoption of this guidance did not have an impact on our financial statements.In January 2010, the FASB issued authoritative guidance intended to improve disclosures about fair value measurements. The guidance requires entities to disclose significant transfers in and out of fair value hierarchy levels, the reasons for the transfers and to present information about purchases, sales, issuances and settlements separately in the reconciliation of fair value measurements using significant unobservable inputs (Level 3). Additionally, the guidance clarifies that a reporting entity should provide fair value measurements for each class of assets and liabilities and disclose the inputs and valuation techniques used for fair value measurements using significant other observable inputs (Level 2) and significant unobservable inputs (Level 3). As this guidance provides only disclosure requirements, the adoption of this standard did not impact the Company’s results of operations, cash flows or financial position.
  In December 2008, the Securities and Exchange Commission published a Final Rule, “Modernization of Oil and Gas Reporting.”The new rule permits the use of new technologies to determine proved reserves if those technologies have been demonstrated to lead to reliable conclusions about reserve volumes. The new requirements also will allow companies to disclose their probable and possible reserves.  In addition, the new disclosure requirements require companies to (a) report the independence and qualifications of its reserve preparer, (b) file reports when a third party is relied upon to prepare reserve estimates or conducts a reserve audit, and (c) report oil and gas reserves using an average price based upon the prior 12 month period rather than year end prices.  The new requirements were effective for annual reports on Form 10-K for fiscal years ending on or after December 31, 2009. The Company adopted the Final Rule as of August 31, 2010. Because the Company has no proven, probable or possible reserves at this time, there was no impact upon implementation.
  In January, 2010, the FASB issued amended accounting guidance to align oil and gas reserve estimation and disclosure requirements with the requirements in the Security and Exchange Commission’s Final Rule, “Modernization of Oil and Gas Reporting.” The amendments to the accounting guidance are effective for annual reports on Form 10-K for fiscal years ending on or after December 31, 2009. The impact of the adoption of this amended accounting guidance is noted above.
  There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.
 -15-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 
 3. INVESTMENTS
 
 Investment in Joint Venture Entities - Sold
 
 On March 22, 2006, the Company entered into a letter of intent with Cia. Mexicana de Gas Natural, S.A. de C.V. (“CMGN”), a private Mexican corporation, whereby the Company would acquire a 50% interest in a joint venture to be formed (the “Gulf United/CMGN Joint Venture”). The Company contributed cash to the Gulf United/CMGN Joint Venture and CMGN contributed its 24% equity interest in a proposed project to design, construct, operate and maintain an open access natural gas pipeline between Valladolid, Cancun and Punta Venado, as well as its initial 24% equity interest in a project to build a proposed LNG storage and regasification facility.
 
 The value of the joint venture investment was impaired in the amount of $1,010,970 and adjusted as of May 31, 2009 to reflect the present value of the then-agreed sale amount of $1,000,000. The valuation was completed using level 3 inputs, using a 10% discount rate on funds to be received after closing.  The joint venture interest was further impaired in the amount of $940,240 to reflect management’s view that, as of May 31, 2010, the interest had a zero value.




As reported in the Company’s Form 8K filed on November 5, 2010, the Company closed on an agreement with its former joint venture partner, Cia. Mexicana de Gas Natural, S.A. de C.V., to sell all of the Company’s shares in Fermaca LNG de Cancun, S.A. de C.V. and Fermaca Gas de Cancun, S.A. de C.V. for a total amount of $1,000,000 of which$50,000 was paid upon entry into thesale agreement, $150,000 of which was paid at the close of the transaction, $120,000 of the next $150,000 was paid as of February 28, 2011 with the remaining $30,000 paid in March, 2011.   The next three installments of $150,000 are due on May 1, 2011, August 1, 2011 and November 1, 2011 with the final payment of $200,000 due February 1, 2012.  No interest accrues on the installments. Management expects that all installments will be paid, but there is no certainty; consequently, the gain on the sale of the joint venture investment is being recognized on an installment basis as the sales proceeds are received. Because the sale of the joint venture interests ended the Company’s investments in pipeline and LNG infrastructure, the gain from the sale and the impairment losses have been reclassified to discontinued operations. As of February 28, 2011, the unrecorded present value of the $680,000 to be received in the future is $644,975 discounted at a 10% interest rate.
 
 Investments in oil and gas properties
 
 Peru Block XXIV and TEA
 
 On July 31, 2010, the Companyentered into an amendment to the participation agreement dated March 12, 2010covering blocks XXIV Peru and the Peru TEA.Under the terms of the amendment, the Company acquired an undivided 5% working interest in Block XXIV, an approximately 280,000 acre onshore and offshore propertyand an undivided 2% working interest in the Peru TEA which consists of four contiguous blocks totaling approximately 40,000,000 acresin exchange for a $500,000 cash payment and 1,000,000 shares of restricted common stock.Prior to the execution of the amendment, the Company had paid a total of $1,100,000 toward past costs and $1,813,391 for drilling costs throughFebruary 28, 2011.  With respect to the Peru TEA, the Company has paid $250,000 toward the Peru TEA ongoing costs as of February 28, 2011.  Upland spudded two wells on Block XXIV prior to February 28, 2011. Both wells are currently considered dry holes. The right for the Company to make this investment was granted by four related-party assignors in exchange for 60,000,000 shares of the Company’s unregistered, restricted common stock.Theassignors retained a 2% overriding royalty interest, proportionately reduced, in these properties.  There are no current plans to drill additional wells or to rework existing wells in the short term on Block XXIV. Future drilling has been planned on this property by Upland.  Similarly, there are no current plans to develop the Peru TEA.
 -16-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
  
 Peru Z-46
  On July 13, 2010, the Company entered into a farmout agreement with SK Energy pursuant to which the Company will pay to SK Energy approximately $2,914,917 for past costs and expenses incurred through May 31, 2010 to earn an undivided forty percent (40%) participation interest in Block Z-46.  The payment for past costs is due within thirty (30) days after receipt of the approval from Perupetro S.A.
  The Company has paid and will pay SK Energy its proportionate share of on-going costs and an additional thirty-five percent (35%) of seismic acquisition costs (the Company pays a total of seventy five percent (75%) of certain seismic acquisition costs).  The assignment of the participation interest in Block Z-46 is conditioned upon the approval of the assignment by Perupetro S.A.In the event that the PeruPetro consent is delayed or denied, the farmout agreement provides that the parties will meet within thirty days after such date to discuss possible amendments to the farmout agreement to avoid the need for the approval.  If the Company and SK Energy are unable to agree upon the amendment, the farmout agreement will be terminated, the Company’s interest in Block Z-46 will be deemed re-assigned back to SK Energy, and the Company will have the right to have returned any amounts paid under the farmout, without interest.    The right for the Company to make this investment was granted by related-party assignors in exchange for 56,000,000 shares of the Company’s common stock.  The assignors retained a 2% overriding royalty interest in this property.
  Recent re-processed 2-D seismic data suggests a submarine fan deposition on the block and multiple leads have been identified. Two wells previously drilled on the block by Repsol reported oil, indicating an active hydrocarbon system.  The Company and SK Energy began the acquisition of additional infill 2-D seismic data in December 2010.
 
 Colombia CPO-4
 
 On July 30, 2010, the Companyentered into a farmout agreementwith SK Energy pursuant to which, the Company, through its wholly owned subsidiary, Gulf United Energy de Colombia Ltd., acquired the right to earn an undivided twelve and one-half percent (12.5%) participation interest in the CPO-4 block located in the Llanos Basin of Colombia.  The assignment of the interest in CPO-4 is conditioned upon the approval by the National Hydrocarbon Agency of Colombia (“ANH”) and the Republic of Korea by July 31, 2011. If such approval is not received from ANH and the Republic of Korea by July 31, 2011, the farmout agreement provides that the parties will meet within thirty days after such date to discuss possible amendments to the farmout agreement to avoid the need for the approval.  If the Company and SK Energy are unable to agree upon the amendment, the farmout agreement will be terminated, the Company’s interest in Block CPO-4 will be deemed re-assigned back to SK Energy, and the Company will have the right to have returned any amounts paid under the farmout, without interest.
  The Company has paid SK its share of past costs and has paid and will pay SK its proportionate share of on-going costs and an additional twelve and one-half percent (12.5%) of seismic acquisition costs. The Company will pay a total of twenty-five percent (25%) of seismic acquisition costs.
 
 SK Energy serves as operator on CPO-4. Block CPO-4 is near existing production and immediately adjacent to and on trend with the Guatiquia block operated by Petrominerales Ltd. (TSX:PMG). Block CPO-4 is the near-term focus of the Company and SK Energy, with drilling expected to commence in the second quarter of calendar year 2011.
 
 At February 28, 2011, the Company does not have sufficient cash or credit facilities to fund all of the above-noted short-term costswhich are summarized below.  At February 28, 2011, the Company’s investment in oil and gas properties and approximate fiscal 2011 commitments are as follows:
  RemainingTotal Costs


Fiscal 2011To Date


CommitmentBlock XXIV and TEA – Peru

$
4,060,783


$
-Block Z-46 – Peru


8,090,571



3,928,000CPO-4 – Colombia


4,995,462



7,373,000$
17,106,816


$
11,301,000
 -17-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 As of the date of this report and based upon all the known facts and circumstances, management does not believe that any impairment exists with respect to these properties.
 
 4.  COMMON STOCK
 
 As of February 28, 2011 and August 31, 2010, the Company had 451,417,726 and 293,700,000 shares of its $.001 par value common stock issued and outstanding, respectively.
 
 The following schedule is a summary of the transactions in the Company’s common stock since August 31, 2010:
  Shares issued and outstanding as of August 31, 2010:


293,700,000Shares issued for services rendered
September-February, 2011


46,704,000Shares issued in conjunction with oil and gas participation agreement
November, 2010


1,000,000Shares issued in conjunction with debt subscriptions
September-February, 2011


13,000,000Shares issued issued for cash



97,013,726Total shares issued as of February 28, 2011



451,417,726Unregistered, restricted shares issued subsequent to February 28, 2011:Shares issued for cash
March, 2011


125,000Shares issued for services rendered or to be rendered
March, 2011


2,125,000Subscribed shares issued in conjunction with debt subscriptions
March, 2011


1,000,000Total shares issued as of April 14, 2011



454,667,726
  As additional compensation related to sale of the common stock on February 15, 2011, the Company issued to Pritchard Capital warrants to purchase up to 1 million shares of common stock at an exercise price of $0.30 subject to anti-dilution adjustments.  As of February 28, 2011, the total value of these warrants is estimated at approximately $464,831 using the Black-Scholes valuation model.  Expected volatility is based on historical volatility of our common stock over the past twelve months.  The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of issuance for an instrument with a maturity of five years.  A dividend yield rate of zero was used because we have never paid cash dividends and we do not intend to pay cash dividends on our common stock.
 
 5.  INCOME TAXES
 
 Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.  The Company has incurred net operating losses totaling $15,069,423 which commence expiring in 2023 if not previously utilized. Pursuant to Accounting Standards Codification, the Company is required to compute tax asset benefits for net operating loss carry-forwards. The potential benefit of net operating losses has been offset by a valuation allowance in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. The valuation of the tax loss carryforward and the valuation allowance thereon were as follows:
  February 28, 2011


August 31, 2010Tax benefit carry forward

$
4,563,659


$
821,997Loss from discontinued operations


559,884



663,411Valuation allowance


(5,123,543
)


(1,485,408
)$
-


$
-
 -18-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 6.  LOANS PAYABLE TO RELATED PARTIES
  Notes payable to related parties consists of the following as of February 28, 2011 and August 31, 2010:
  Unsecured loans to related parties

$
26,574
  Two stockholders and former directors of the Company provided these loans.  The loans are non-interest bearing,unsecured and payable upon demand.
 
 7.
SHAREHOLDER LOANS PAYABLE AND ACCRUED INTEREST
  Unsecured loans and accrued interest payable to shareholders at February 28, 2011 and August 31, 2010:
  February 28, 2011


August 31,

2010Loan payable

$
-


$
1,089,685Accrued interest


-



19,430-



1,109,115Short-term debt


1,800,000



2,900,000Less:  total note discount for stock issued


(1,082,326
)


(1,185,791
)Add:  amortization of note discount


597,988



329,358Add:  accrued interest


62,989



70,8341,378,651



2,114,401Total shareholder loans payable

and accrued interest

$
1,378,651


$
3,223,516
  During the quarter ended February 28, 2011, the Company used proceeds from common stock sales to retirethe one-year promissory note from arelated party stockholder, James M. Askew, which originally totaled $1,089,685.  The remaining balance paid as of February 15, 2011 was $902,081which consisted of $889,685 in principal and $12,396 in accrued interest.  The Company also retired $2,500,000 in short-term debt (plus $159,994 in accrued interest) with the proceeds from the sales of its common stock.  Also during the current quarter, the Company arranged bridge financing of $3,800,000 from two shareholders and repaid the full amount plus interest on February 16, 2011.
 
 The remaining notes bear interest at 8% annually with all interest and principal due at maturity.As additional consideration for the purchasers of notes, the Company issued 2,500,000 shares of its common stock during the quarter.  An additional 1,000,000 shares were issued subsequent to the end of the quarter and are shown as common stock subscribed as of February 28, 2011.
 
 The notes were discounted based on the fair market value of the common stock received (determined with the assistance of independent valuation experts) as a percentage of the total fair market value of all consideration received.  The resulting note discount is being amortized as additional interest expense over the twelve month life of each note and is being calculated based on a normal amortization schedule using the interest method.
 
 The weighted average interest rates on shareholder loans payable at February 28, 2011 and August 31, 2010 were 8.0% and 8.5%, respectively.
  -19-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 8.
COMMITMENTS AND CONTRACTUAL OBLIGATIONS
 
 Our commitments under existing agreements for the next three fiscal years are estimated as follows as of February 28, 2011:
 
 Contractual Obligations (Amounts in Thousands)

Payments due by periodTotal

FY 2011

FY 2012

FY 2013Debt obligations

$
1,944

$
432

$
1,512

$
-Commitmentsunder

employment agreements


1,111


522


339


250Commitments under

consulting contracts


200


120


80


-Commitments under participation and farmout agreements:CPO - 4


10,397


7,373


2,586


438Z-46


5,992


3,928


1,032


1,032Block XXIV


-


-


-


-Peru TEA


-


-


-


-Subtotal


16,389


11,301


3,618


1,470Total

$
19,644

$
12,375

$
5,549

$
1,720
 
 Oil and Gas Investment Commitments
 
 Colombia CPO-4
 
 On July 30, 2010, the Company entered into a farmout agreement with SK Energy pursuant to which the Company acquired, through its wholly owned subsidiary, Gulf United Energy de Colombia Ltd., the right to earn an undivided twelve and one-half percent (12.5%) participation interest in the CPO-4 block located in the Llanos Basin of Colombia.  The assignment of the interest in CPO-4 is conditioned upon the approval by the National Hydrocarbon Agency of Colombia (“ANH”) and the Republic of Korea by July 31, 2011.  SK Energy serves as operator on CPO-4.The Company will also be responsible for 25% of all future seismic acquisition costs and its pro-rata share of all other future costs with respect to CPO-4.The commitments for Block CPO-4 reflect our plan to drill four wells during calendar year 2011.  The current obligation on Block CPO-4 is $9.521 million which includes four wells at approximately $1.5 million each, payments of $2.25 million for 3-D seismic expense and $1.7 million for seismic acquisition costs incurred subsequent to July 31, 2010 owed to Houston American Energy Corp., and joint operating costs of $440,000.  The budgeted drilling program of four wells assumes success on the initial two wells.  Any drilling success may have associated revenues to offset additional costs.
 
 Peru Z-46
 
 On July 13, 2010, the Company entered into a farmout agreementwith SK Energy pursuant to which the Company acquired, through its wholly owned subsidiary, Gulf United Energy Cuenca Trujillo Ltd., the right to earn an undivided forty percent (40%) participation interest in Block Z-46,an approximately 2.8 million acre offshore block in Peru.  SK Energy, through its subsidiary SK Energy Sucursal Peruana, serves as operator on Block Z-46.
 
 Pursuant to the agreement, the Company will pay to SK Energy approximately $2,914,917 for past costs and expenses incurred through May 31, 2010.  The payment for past costs is due within thirty (30) days after receipt of the approval from Perupetro S.A.  The Company will also pay SK Energy its proportionate share of on-going costs and thirty-five percent (35%) of seismic acquisition costs, approximately $500,000 for seismic processing, and joint operating costs of $860,000.
 -20-


GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 If the results of the 2-D seismic are positive, the Company will consider a 3-D seismic acquisition and drilling a well, increasing the future obligations on the block.
  Peru Block XXIV and TEA
 
 On July 31, 2010, the Company, entered into an amendment to the participation agreement, dated March 12, 2010, covering blocks XXIV Peru and the Peru TEA. Under the terms of the amendment , the Company paid$500,000 for the purchase of an undivided 5% working interest in Block XXIV and an undivided 2% working interest in the Peru TEA.  In addition to the $500,000 payment, the Company issued one million shares of the Company’s common stock to Upland.  The Company is responsible for its proportionate share of future costs incurred with respect to Block XXIV and TEA.
 
 Agreement with our former Chief Executive Officer
  On March 1, 2010, the Company entered into a two-year agreement with Don Wilson for services to be rendered subsequent to March 1, 2010.  Under the agreement, the Company is obligated to pay Mr. Wilson $180,000 before the end of calendar year 2011as compensation when he was Chief Executive Officer and sole director of the Company and as consulting expense once he resigned as Chief Executive Officer and sole director in September 2010.  A pro-rata portion of this obligation has been recorded through February 28, 2011.
 
 Software license agreement
  In March, 2010, the Company began paying a twelve-month software license agreement with Seismic Micro-Technology for seismic analysis software.  The license agreement was entered into on February 23, 2010, is payable in twelve monthly installments of $5,213 beginning March 25, 2010 for a total cost of $62,563. As of February 28, 2011, this obligation has been paid in full.  Management has decidedto pay the software maintenance fee for an annual cost of$8,885 in order to receive software maintenance and upgrades.
  Entry into consulting agreements
  On December 7, 2010, the Company entered into one-year consulting agreements with John Eddie Williams, Jr. and Reese Minerals, Ltd., a Texas limited partnership.  Pursuant to the agreements, consultants provided certain high-level business development and strategic services to the Company.Each of the Consultants received 20,000,000 shares of the Company’scommon stock valued at $4 million based on the then active selling price of the Company’s restricted common shares.  The value of these shares wasexpensed in the current quarter based on work performed related to potential and actual business relationships essential to the company’s business, funding structure and sources, and potential property acquisitions.
  On February 10, 2011, the Company entered into a one-year consulting agreement with Charles Newman under which Mr. Newman will provide director and administrative services for each of the Company’s subsidiaries registered in the British Virgin Islands or which may be registered in the future.  Pursuant to the agreement, Mr. Newman will be paid $1,500 per month.  In addition, Mr. Newman was issued 125,000 shares of  common stock  valued at $37,500 based on the then active selling price of the Company’s restricted common sharesas additional compensation for work performed related to management of the Company’s subsidiaries.  Upon mutual consent, the agreement may be extended for successive one-year periods.
  Entry into employment agreements
  As the Company reported in its Form 8-K filed December 20, 2010, the Company’s board of directors appointed three new executive officers and entered into one-year employment agreements with Jim D. Ford, Ernest B, Miller IV and James C. Fluker III under which these individuals will serve as executive vice president – business development and operations, executive vice president – corporate development and administration and vice president – exploration, respectively.
 -21-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
  In December 2010, the Company entered into employment agreements with each of Messrs. Ford, Miller, and Fluker.  Each of these employment agreements have an initial term of one year, and may be terminated at any time by the Company upon 30 days prior written notice.
  Under these agreements, Messrs. Ford and Miller will be paid an annual salary of $210,000, and Mr. Fluker will be paid an annual salary of $180,000.  Each of Messrs. Ford, Miller, and Fluker may earn bonuses at the sole discretion of the board of directors.  Mr. Ford and Miller were also each paid a one-time signing bonus of $17,500 upon the execution of their respective employment agreements.
  9.  RELATED PARTY TRANSACTIONS
 
 Interest expense of $20,696 was incurred during the quarter ended February 28, 2011 on the note payable to Mr. James Askew.  A total of $66,519 was paid during fiscal 2010 and the remaining note principal balance of $889,685 was paid February 16, 2011.
 
 As of February 28, 2011, officer’s salary of $120,000 had been paid and $50,323 was payable to John B.Connally III; $17,500 had been paid and $43,750 was payable to Jim D. Ford, an owner of Rodeo Resources, LP, and $45,000 had been paid and $16,250 was payable to Ernest B. Miller IV.  All of the payable amounts were paid in March, 2011.
 
 During the six months ended February 28, 2011 the Company incurred $36,565 for administrative services from Rodeo Resources, LP, a related party; the Company incurred $15,000 in administrative services expense in the fiscal year ended August 31, 2010. The Companyhas incurred $13,801 in costs for travel expenses for Jim Ford during the three months ended February 28, 2011; $5,192 was incurred in the fiscal year ended August 31, 2010.
 
 During the three months ended February 28, 2011, the Company incurred $4,000,000 in expense to eachJohn Eddie Williams, Jr. and Reese Minerals, Ltd., a Texas limited partnership, based on services rendered for the common stock issued under the consulting agreements described in Note 8.  The Company also received and paid off bridge financing in the amount of $1,900,000 each from John Eddie Williams and Reese Minerals, Ltd.
 
 10.  SUBSEQUENT EVENTS
  Issuances of common stock
  Since February 28, 2011 and through April14, 2011, the Company has issued an aggregate of 3,250,000 shares (of which 1,000,000 shares were shown as common stock subscribed as of November  30, 2010) of common stock as follows: (i) 125,000 shares at $0.20 per sharesold for cash which had not been issued as of February 28, 2011;(ii) 2,000,0000 shares valued at $400,000 to John Seitz for directors services to be rendered and 125,000 shares valued at $25,000 to Charles Newman related to the consulting agreement described in Note 8; and (iii)1,000,000 shares to subscribers as additional consideration for the purchase of a principal amount of $100,000 in unsecured promissory notes as described in Note 7.
  Subsequent events through April 14, 2011 have been considered in this report.
 -22-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 Notes to the Consolidated Financial Statements
 February 28, 2011
 (Unaudited)
 
 11.  SUPPLEMENTAL DISCLOSURES – CONSOLIDATED STATEMENTS OF CASH FLOWS
  Supplemental Disclosure of Non-Cash and Financing Activities:
 Six months ended February 28,


Period Inception February 28,2011


2010


2011Investment advances paid from shareholder loans

$
-


$
-


$
1,263,985Capital stock issued for investment in joint venture projects

$
-


$
-


$
687,225Capital stock issued or subscribed for expenses

$
8,511,800


$
-


$
8,704,200Capital stock issued for prepaid expenses

$
-


$
-


$
20,000Capital stock issued for oil and gas properties

$
90,000


$
-


$
3,646,000Capital stock issued or subscribed in connection with

short-termnotes

$
623,232


$
-


$
1,809,023Interest forgiven on shareholder loan payable

$
-


$
-


$
631,444Capital stock issued in conversion of shareholder loan

$
-


$
-


$
400,000Capital expenditures acquired with accounts payable

$
-


$
-


$
31,282
 
 Settlement of loan payable by assignment of investment:Loan payable

$
-


$
-


$
(200,000
)Investment

$
-


$
-


$
200,000Warrants issued for non-employee compensation

$
464,831


$
-


$
464,831S  Supplemental Disclosure of Cash Flow Information:Cash paid for:Interest

$
328,970


$
-


$
363,604Income taxes

$
-


$
-


$
-
 
 -23-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
  ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
 The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” above and “Risk Factors” included in our Form 10-K for the fiscal year ended August 31, 2010, filed with the Securities and Exchange Commission (“SEC”) on December 7, 2010 (the “2010 Form 10-K”), for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.
 
 The following discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared on the accrual basis of accounting, whereby revenues are recognized when earned, and expenses are recognized when incurred. These consolidatedfinancial statements as of February 28, 2011, and for the three and six months ended February 28, 2011 and 2010, are unaudited.  In the opinion of management, such financial statements include the adjustments and accruals necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in these financial statements as of February 28, 2011 and for the three and six months ended February 28, 2011 and 2010.
 
 You should read this discussion and analysis together with such financial statements and the notes thereto.
 
 Overview
  We are an international, early-stage oil and gas exploration and production company with operations in South America. We have acquired a working interest in an oil and gas property in Colombia and have entered into agreements to acquire additional working interests in properties located in Peru.  We expect to engage in investment opportunities in oil and gas exploration and development. The scope of our activities in this regard may include, but may not be limited to, the acquisition of or assignment of rights to develop exploratory acreage under concessions with government authorities and other private or public exploration and production (“E&P”) companies, the purchase of oil and gas producing properties, farm-in and farmout opportunities.
  We plan to build a successful oil and gas exploration and production company focused on acquiring working interests, royalty interests, partnership or limited liability company interests, lease options, leasehold positions, or other mineral rights in select countries in South America.  We have initially concentrated our efforts in Colombia and Peru, where we believe we have found good E&P opportunities with straight-forward oil and gas contracting terms and conditions.  We may turn to opportunities in other countries if we deem the relevant considerations merit our investment. We plan to focus on early-stage exploration for hydrocarbons through a variety of transactions aimed at building a resources base.
 
 Recent Developments
 
 Appointment of key executive officers
 
 An integral part of our strategy is to build a competent and professional management and operations team to enable us to successfully carry out our business plan.  As reported in the Company’s Form 8-K filed December 20, 2010, the Company’s board of directors appointed certain key executive officers to fill critical operating rolls within the Company.  These individuals, along with our chief executive officer, have decades of experience in acquiring, developing and operating upstream oil and gas projects and properties.
 
 Private Placement of debt and sale of stock
  On December 7, 2010, the Company received $3,800,000 in bridge financing from two shareholders through the issuance of 14% debentures due upon the earlier of March 11, 2011 or when the Company closed on new financing. In conjunction with the debt placement, the Company sold 1,000,000 common shares at $0.20 per share.  The debentures were paid in full as of February 15, 2011.
 -24-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.
 
 Operational Update
 
 Colombia CPO-4
 We and our operating partner have evaluated the seismic information which validated the existence of viable leads on our CPO-4 block. The data are being further analyzed and mapped.  We plan to initiate drilling during fiscal 2011 with the goal of production by the fourth calendar quarter of 2011.  During 2011, the Company plans to drill at least two wells on the block.  We will fund approximately $3.7 million for past costs including seismic acquisition, approximately $350,000 for joint operating costs and approximately $3.3 million for drilling two exploratory wells (beginning in about April, 2011) and beginning phase 2 drilling (in about August, 2011).  Approximately $3.9 million in past costs was paid in December 2010.  We are currently reprocessing and analyzing seismic data and certain long lead-time items have been ordered.  In addition, environmental permitting is in process related to three drilling sites.
 
 Peru Z-46
 
 During the current  fiscal year, we intend to acquire an additional approximately 2,900 square km of 2D seismic data on Block Z-46 to further delineate prospects in anticipation of a focused 3D acquisition in the future.We and our operating partner have evaluated seismic data as well as information from surrounding drilling activity and management has concluded that valuable prospects exist for oil reserves. Based on this conclusion, 2D seismic acquisition began on December 31, 2010.We expect to pay approximately $2.9 million for funding past costs which is due upon government approval of the assignment of interest (estimated to be in April or May of 2011) and approximately $1.0 million for joint operating costs through the end of the fiscal year.




Peru Block XXIV
 
 During the fiscal year ended August 31, 2010, we paid an aggregate of $2,763,391 to Upland under the existing farmout and participation agreements.  In September 2011, we paid an additional $500,000 to Upland relating to Block XXIV and the Peru TEApursuant to the July 2010 amendment.  During fiscal 2010, two dry holes were drilled on the Block XXIV property and currently there is no drilling activity. There are no current plans to drill additional wells or to rework existing wells in the short-term, but drilling is planned in the future on this property.  The current work program for Block XXIV is comprised of the acquisition and evaluation of new seismic data.
 
 Peru Technical Evaluation Area (“TEA”)
 
 The Peru TEA consists of four contiguous blocks totaling approximately 40,000,000 gross acres onshore on the western flank of the AndesMountains.  As is typical of Technical Evaluation Areas, this project represents a greenfield opportunity to identify prospects from an area that has had virtually no geological study (aeromagnetic, seismic, or otherwise) beyond field notes and descriptions.We intend to acquire and evaluate an aeromagnetic survey in the future, which may or may not be during fiscal year 2011, the results of which may result in further geological evaluation through a 2D seismic survey.
 
 Results of Operations for Three Months and Six Months Ended February 28, 2011
 
 We have not earned any revenues during the period from inception through February 28, 2011. We have not attained profitable operations and are, therefore, dependent upon obtaining additional debt or equity financing. If we are unable to obtain additional financing, there is substantial doubt that we will be able to continue as a going concern.
 
 Sale of pipeline and LNG re-gasification facility joint venture investments
  As reported in the Company’s Form 8K filed November 5, 2010, the Company closed on an agreement with its former joint venture partner, Cia. Mexicana de Gas Natural, S.A. de C.V., to sell all of the Company’s shares in Fermaca LNG de Cancun, S.A. de C.V. and Fermaca Gas de Cancun, S.A. de C.V. for a total amount of $1,000,000.  $350,000 has been paid to date.  The next threeinstallments of $150,000 are due on May 1, 2011, August 1, 2011 and November 1, 2011 with the final payment of $200,000 due February 1, 2012.  No interest accrues on the installments.
 -25-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.
 
 Liquidity and Capital Resources
 
 At February 28, 2011, the Company has current assets of $11,889,674, current liabilities of $1,796,361 resulting in a working capital surplus of $10,093,313.  During the current quarter, the Company received net proceeds of $25,799,619 from sales of common stock.  In addition, the Company funded $8,511,800 in expenses through the issuance of the Company’s restricted, common shares or common stock subscribed. During fiscal 2011, we will need to fund approximately $11 million under existing farmout and participation agreements.  Additionally, we will need to pay approximately $432,000 through the end of the fiscal year under existing credit facilities, and will require an additional $1.7 million to fund obligations under employment and consulting agreements and for other working capital purposes.  The Company has no other sources of financing and will continue to rely on best efforts equity, equity equivalent, or debt financings and borrowings from shareholders. There are no additional commitments from or assurances that we will be able to obtain additional capital on terms favorable to the Company or at all.  Our auditors have issued a going concern opinion for our financial statements due to their substantial doubt about our ability to continue as a going concern.
 
 Results of Operations
 
 Three and Six Months ended February 28, 2011, compared to periods ended February 28, 2010
 
 ($ in Thousands)

Three Months Ended February 28,


Six Months Ended February 28,2011


2010


2011


2010Revenue

$
-


$
-


$
-


$
-Office and other


9



4



12



5Depreciation expense


5



-



10



1Salaries and related expenses


364



-



621



-Professional fees


462



153



766



162Consulting


8,245



-



8,299



-Travel


3



4



17



4Shareholder loan and other interest


791



55



1,297



110Total operating expense


9,879



216



11,022



282Gain on sale of joint venture investment


120



-



320



-Interest Income


1



-



1



-Net loss for the period

$
(9,758
)

$
(216
)

$
(10,701
)

$
(282
)
 
 Operating Expenses
 
 For the quarter ended February 28, 2011, operating expenses increased $9,662,000 as compared to the same quarter ended in 2010. The increase occurred primarily due to: (i) the 8,245,000 increase in consulting expense, (ii) the $364,000 increase in officers’ salary and related expenses, (iii) the $309,000 increase in professional fees which includes accounting, legal fees, geotechnical services and other and, (iv) the $735,000 increase in interest expense and loan discount amortization.  Similarly, for the six months period, operating expenses increased $10,739,000 primarily due to: (i) the 8,299,000 increase in consulting expense, (ii) the $621,000 increase in officers’ salary and related expenses, (iii) the $604,000 increase in professional fees which includes accounting, legal fees, geotechnical services and other and (iv) the $1,187,000 increase in interest expense and loan discount amortization.
 
 Net Loss
 
 The Company incurred a net loss of $9,757,000 for the three months ended February 28, 2011 which is $9,541,000 higher than the net loss of $216,000 in 2010.  The significantly higher loss is due primarily to the increase in consulting expense, increased salaries and related expenses, a significant increase in professional fees as well asthe increased interest expense associated with greater borrowings and loan discount amortization in the current quarter.  A similarly increased loss is reflected for the six-month periods.
 
 -26-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.
 
 Net Loss Applicable to Common Shareholders
 
 For the three months ended February 28, 2011, our net loss per share was $0.027 compared to a loss of $0.008 for the three months ended February 28, 2010.  For the six month periods, our net loss per share was $0.032 compared to a loss of $0.011 for the six months ended February 28, 2010.
 
 Cash flows
 
 For the six months ended February 28, 2011, the Company's operating activities used cash of $2,326,589compared to net cash used of $92,508 for the same period in 2010. Investing activities used cash of $9,442,235 for investment in oil and gas properties.  The Company's financing activities provided net cash of $23,609,934in the six months endedFebruary 28, 2011, compared to $208,000 in cash provided in the six months ended February 28, 2010. The cash provided in the current quarter was provided by proceeds from sales of common shares less the amounts used to pay down shareholder short-term loans.  In 2010, the financing was provided primarily by common stock subscription.
 
 For the period from inception-to-date, the Company used cash of $3,138,290 in operating activities, used $12,626,679 in investing activities and $27,625,758 was provided from financing activities.
 
 ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure results from fluctuations in foreign exchange rates.  The Company is exposed to foreign exchange risk based on the Company’s investments in oil and gas properties in Peru and Colombia.  The Company funds the oil and gas projects and reports the investments in US dollars, but a significant portion of the expenses funded may be denominated in local currency and converted to US dollars. To the extent that we are required to reimburse expenses originally denominated in foreign currencies, our total costs could increase (or decrease). We don’t expect that this risk will have a material impact on future financial statements.  The Company is not exposed to market risks related to fluctuations in interest rates.  The interest rate on all Company debt instruments is fixed.  We do not currently own marketable securities, use interest rate swaps, futures contracts, options on futures or other types of derivative financial instruments. We do not hold or issue financial instruments for trading purposes.
 
 ITEM 4.  CONTROLS AND PROCEDURES
 
 Evaluation of Disclosure Controls and Procedures
 
 The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company's periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with the participation of the Company's principal executive officer and principal financial officer, of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).
 
 Based upon the evaluation, the Company's principal executive officer and principal financial officer concluded that its disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. In addition, the Company's principal executive officer and principal financial officer concluded that its disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.
 
 -27-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 
 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.
 
 Limitations on the Effectiveness of Controls
 
 The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company's financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
 
 Changes in Internal Control Over Financial Reporting
 
 As reported in our Annual Report on Form 10-K filed with the SEC on December 7, 2010, management conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of August 31, 2010. We identified a material weakness in our internal control over financial reporting relating to segregation of duties.  However, the Company’s management believes that the material weaknesses described in our Form 10-K were the result of the scale of our operations, and are intrinsic to our small size and are of a nature that companies of our size would normally encounter.  While the Company intends to seek qualified individuals to add to our staff to improve our segregation of duties, there have not been any changes in our internal control over financial reporting that occurred during the quarter ended February 28, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


-28-


PART II- OTHER INFORMATION
  Item 1. Legal Proceedings
  None.
  Item 1A.  Risk Factors
  The Company is now subject to risk factors in addition to (or which differ materially from) those previously disclosed under Item 1 of the Company’s Form 10-K filed with the Securities and Exchange Commission on December 7, 2010:
  We have a limited cash and liquidity position and will need to raise approximately $6 million to fund existing contractual obligations and estimated working capital needs in calendar year 2011.
  At February 28, 2011, the Company has current assets of $11,889,674, current liabilities of $1,796,361 resulting in a working capital surplus of $10,093,313.  For the fiscal quarter ended February 28, 2011, the Company received net proceeds of $25,799,619 from sales of common stock.  We expect to deploy the remaining proceeds from our financings to fund existing contractual obligations and estimated working capital needs through December 2011, which are as follows:
  ·
$13.8 million under existing farmout agreements ($4.3 million relating to Block Z-46 and $9.5 million relating to Block CPO-4, which amounts are payable throughout calendar year 2011, but mostly in the 2nd calendar quarter);·
$1.9 million under existing credit facilities (due in the second half of calendar year 2011);·
$1.1 million under employment and consulting agreements; and·
$1.0 million for working capital purposes.
  We will need to raise at least $6 million of net proceeds beginning in July 2011 to fund our remaining calendar year 2011 contractual commitments and working capital needs.  Inability to obtain capital on a timely basis may damage our credibility with industry participants if we cannot fund previously closed transactions.
  We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means.  Future financings may be dilutive to our stockholders, as we will most likely issue additional shares of our common stock or other equity to investors in future financing transactions, the terms of which may include preferences, superior voting rights, and the issuance of warrants or other derivative securities. In addition, debt and possible mezzanine financing may involve a pledge of assets and may be senior to equity holders.
  We have historically financed our operations through best efforts private debt and equity financing.  We do not have any credit facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts financings. There is no assurance that we can raise additional debt or equity capital from external sources. The Company has no control over the amount of funds that it may receive in financings and the time frame in which they may be received. Failure to raise additional capital during calendar year 2011 on favorable terms, or at all, will have a material adverse effect on our operations, could result in the loss of our interests in our exploration projects, and will likely cause us to curtail or cease operations.
  We will need to raise additional capital in calendar year 2012.  If we are unable to raise additional capital in 2012, we may be unable to meet our capital requirements in the future, causing us to curtail future growth plans or cut back our operations.
  In addition to the amounts required in calendar year 2011, we will need to raise at least $17 million in calendar year 2012 in order to satisfy our obligations under existing contractual commitments and for general working capital purposes.
 -29-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
  We may need to raise in excess of that amount to meet various objectives including, but not limited to:
  ·
complying with funding obligations under new contractual commitments;·
pursuing growth opportunities, including more rapid expansion;·
making investments to improve our infrastructure;·
hiring and retaining qualified management and key employees;·
responding to competitive pressures;·
complying with licensing, registration and other requirements;·
maintaining compliance with applicable laws; and·
maintaining adequate funds for working capital purposes.
  We plan to pursue sources of such capital through various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means.  Future financings may be dilutive to our stockholders, as we will most likely issue additional shares of our common stock or other equity to investors in future financing transactions, the terms of which may include preferences, superior voting rights, and the issuance of warrants or other derivative securities. In addition, debt and possible mezzanine financing may involve a pledge of assets and may be senior to equity holders.
  We will incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We will also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our results of operations.
  We have historically financed our operations through best efforts private debt and equity financing.  We do not have any credit facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts financings. There is no assurance that we can raise additional debt or equity capital from external sources. The Company has no control over the amount of funds that it may receive in financings and the time frame in which they may be received. Failure to raise additional capital, on favorable terms or at all, will have a material adverse effect on our operations, could result in the loss of our interests in our exploration projects, and will likely cause us to curtail or cease operations.
  We may not receive approval of the assignments of rights to us in our oil and gas properties in which we have invested and are continuing to invest, and, as a result, we may not be able to legally protect our rights under our agreements with the operators of the applicable properties.
  The assignment to the Company of the interest in Block CPO-4 is subject to the approval of both the ANH and the Republic of Korea.  If such approval is not received from ANH and the Republic of Korea by July 31, 2011, the farmout agreement provides that the parties will meet within thirty days after such date to discuss possible amendments to the farmout agreement to avoid the need for the approval.  If the Company and SK Energy are unable to agree upon the amendment, the farmout agreement will be terminated, the Company’s interest in Block CPO-4 will be deemed re-assigned back to SK Energy, and the Company will have the right to have returned any amounts paid under the farmout, without interest.
  The assignment to the Company of the interest in Block Z-46 is subject to the approval of PeruPetro S.A.  If such approval is not received from PeruPetro S.A. by November 30, 2011, the farmout agreement provides that the parties will meet within thirty days after such date to discuss possible amendments to the farmout agreement to avoid the need for the approval.  If the Company and SK Energy are unable to agree upon the amendment, the farmout agreement will be terminated, the Company’s interest in Block Z-46 will be deemed re-assigned back to SK, and the Company will have the right to have returned any amounts paid under the farmout, without interest.
  The assignment to the Company of the interests in Block XXIV and the Peru TEA are also subject to the approval of PeruPetro S.A. and certain governmental agencies of the Republic of Peru.  Until such time as the approvals are received, Upland is holding the Block XXIV and Peru TEA interests in escrow.
 -30-
 GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 We have begun the process of obtaining the necessary approvals described above.  While we believe that we will be successful in obtaining the necessary approvals, if we do not receive such approvals or are not able to work out a favorable alternative arrangement with the parties to our agreements, then we may not be able to legally protect or enforce our rights to the affected oil and gas interests.  As we do not currently have recordable title to any of our oil and gas interests, our business would be materially adversely affected if we are unable to protect or enforce our rights to maintain our rights to our oil and gas interests.  Moreover, while we believe that we would have rights to receive or be refunded all amounts paid under our agreements, there is no assurance that our operating partners would have readily available funds from which to reimburse our advances.
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  During the quarter ended February 28, 2011, the Company sold 97,013,726 unregistered, restricted common shares for net cash proceeds of $25,799,619.  Expenses related to sales of common stocktotaled $1,941,999.  In addition, the Company issued five-year warrants to purchase up to 1 million shares of common stock to Pritchard Capital with an exercise price of $0.30 per share.  These warrants are valued at $464,831 as of February 28, 2011 using the Black-Scholes valuation model.
  Item 3. Defaults Upon Senior Securities
  None.
  Item 4. (Removed and Reserved)
  None.
  Item 5. Other Information
  On March 18, 2011, the Company filed with the SEC a registrationstatement on Form S-1 (the "Registration Statement") to register theresale of 96,288,726 shares of Company common stock, which included anaggregate of 1,000,000 shares of common stock issuable upon the exerciseof outstanding five-year common stock purchase warrants exercisable at$0.30 per share.  TheRegistration Statement was declared effective bythe SEC on April 8, 2011.
  Item 6. Exhibits
 
 3.1 Amended and Restated Articles of Incorporation and By-Laws of the Company(1)
 
 10.1 Purchase Agreement, dated as of December 7, 2010, by and among the Registrant and John Eddie Williams, Jr. and Reese Minerals, Ltd.(2)
 
 10.2   Debenture, dated December 7, 2010, by and between Registrant and John Eddie Williams, Jr.(2)
 
 10.3   Debenture, dated December 7, 2010, by and between Registrant and Reese Minerals, Ltd.(2)
 
 10.4 Security Agreement,dated as of December 7, 2010, by and among the Registrant and John Eddie Williams, Jr. and Reese Minerals, Ltd.(2)
 
 10.5 Common Stock Purchase Agreement,dated as of December 7, 2010, by and among the Registrant and John Eddie Williams, Jr. and Reese Minerals, Ltd.(2)


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GULF UNITED ENERGY, INC. AND SUBSIDIARIES
 (A Development Stage Company)
 
 31.1*   Certifications pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934
 
 32.1*   Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
 * Filed herewith.
 
 (1) Incorporated by reference to Form 10-Q filed July 20, 2010
 
 (2) Incorporated by reference to Form 10-Q filed January 13, 2011


































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SIGNATURES
 
 In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 Gulf United Energy, Inc.
  /S/ JOHN B. CONNALLY, III
 John B. Connally III, President and C.E.O.
 (Principal Executive Officer)
 
 DATED:  April 14, 2011
 
 
 /S/ DAVID POMERANTZ
 David Pomerantz, CFO
 Principal Financial Officer and
 Principal Accounting Officer
 
 DATED:  April 14, 2011






















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