----

----

| [X]            | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|----------------|-----------------------------------------------------------------------------------------|
|           |                                                                                    |
|           | For the quarterly period ended November 30, 2010                                        |
|           |                                                                                    |
| [  ] | Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934        |

| Nevada                                           | 20-5893642                        |
|--------------------------------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation or | (IRS Employer Identification No.) |
| organization)                                    |                              |

| Large accelerated filer | [  ] | Accelerated filer         | [  ] |
|-------------------------|-----------|---------------------------|-----------|
| Non-accelerated filer   | [  ] | Smaller reporting company | [X]       |

----

----

| Part I. Financial Information |   |                                                                                                                                                                                   |
|-------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |   |                                                                                                                                                                                   |   |   |
| Item 1                        |   | Financial Statements                                                                                                                                                                   |   |   |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Consolidated Balance Sheets (unaudited) - November 30, 2010 and August 31, 2010                                                                                                        |   | 6 |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Consolidated Statements of Operations (unaudited) - For the Three Months Ended November 30, 2010 and 2009 and the Period From Inception (September 19, 2003) to November 30, 2010      |   | 7 |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Consolidated Statements of Cash Flows (unaudited) - For the Three Months Ended November 30, 2010 and 2009 and the Period from Inception (September 19, 2003) through November 30, 2010 |   | 8 |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Consolidated Statements of Changes in Shareholders' Equity (Deficit) (unaudited) for the Period from Inception (September 19, 2003) to November 30, 2010                               |   | 9 |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Notes to the Consolidated Financial Statements (Unaudited)                                                                                                                             |   | 11 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 2                        |   | Management's Discussion and Analysis of Financial Condition and Results of Operations                                                                                                  |   | 22 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 3                        |   | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                             |   | 25 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 4                        |   | Controls and Procedures                                                                                                                                                                |   | 25 |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Part II. Other Information                                                                                                                                                             |   |   |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 1                        |   | Legal Proceedings                                                                                                                                                                      |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 1A                       |   | Risk Factors                                                                                                                                                                           |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 2                        |   | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                            |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 3                        |   | Defaults Upon Senior Securities                                                                                                                                                        |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 4                        |   | (Removed and Reserved)                                                                                                                                                                 |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 5                        |   | Other Information                                                                                                                                                                      |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
| Item 6                        |   | Exhibits                                                                                                                                                                               |   | 27 |
|                          |   |                                                                                                                                                                                   |   |   |
|                          |   | Signatures                                                                                                                                                                             |   | 28 |
|                          |   |                                                                                                                                                                                   |   |   |

----

----

----

|                                                                                                                                       |   | November 30, |       |   | August 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|------------|--------|------------|--------|
|                                                                                                                                       |   | 2010         |       |   | 2010       |   |
|                                                                                                                                       |   | (Unaudited)  |       |   | (Audited)  |   |
| ASSETS                                                                                                                                     |   |         |       |   |       |   |
| Current Assets                                                                                                                             |   |         |       |   |       |   |
|        Cash                                                                                             |   | $            | -          |   |       | $      | 19,679 |   |
|        Payroll taxes receivable                                                                         |   |         | 39,153     |   |       |   | 39,153 |   |
|        Pre-paid expenses                                                                                |   |         | 152,000    |   |       |   | 20,000 |   |
| Total Current Assets                                                                                                                       |   |         | 191,153    |   |       |   | 78,832 |   |
|                                                                                                                                       |   |         |       |   |       |   |   |   |
|        Fixed Assets:                                                                                    |   |         |       |   |       |   |   |   |
|        Computer Equipment                                                                               |   |         | 3,300      |   |       |   | 3,300 |   |
|        Software License                                                                                 |   |         | 62,563     |   |       |   | 62,563 |   |
|        Less:  Accumulated Depreciation                                                        |   |         | (18,941    | )      |       |   | (13,727 | ) |
| Net Fixed Assets                                                                                                                           |   |         | 46,922     |   |       |   | 52,136 |   |
|                                                                                                                                       |   |         |       |   |       |   |   |   |
| Other Assets                                                                                                                               |   |         |       |   |       |   |   |   |
|        Investment in oil and gas properties (Note 3)                                                    |   |         | 7,668,333  |   |       |   | 7,574,581 |   |
| Total Other Assets                                                                                                                         |   |         | 7,668,333  |   |       |   | 7,574,581 |   |
|                                                                                                                                       |   |         |       |   |       |   |   |   |
| Total Assets                                                                                                                               |   | $            | 7,906,408  |   |       | $      | 7,705,549 |   |
|                                                                                                                                       |   |         |       |   |       |   |   |   |
| LIABILITIES                                                                                                                                |   |         |       |   |       |   |   |   |
| Current                                                                                                                                    |   |         |       |   |       |   |   |   |
|          Bank overdraft                                                                       |   | $            | 4,858      |   |       | $      | - |   |
|          Accounts payable and accrued liabilities                                             |   |         | 462,965    |   |       |   | 387,692 |   |
|          Accounts payable to operators of working interests                                   |   |         | -          |   |       |   | 1,150,000 |   |
|          Loans payable related parties (Note 6)                                               |   |         | 26,574     |   |       |   | 26,574 |   |
|          Shareholder loans payable and accrued interest (Net of note discount -               |   |         |       |   |       |   |   |   |
|          $1,082,326 at November 30, 2010 and $856,433 at August 31, 2010)  (Note 7) |   |         | 4,335,367  |   |       |   | 3,223,516 |   |
| Total Current Liabilities                                                                                                                  |   |         | 4,829,764  |   |       |   | 4,787,782 |   |
|                                                                                                                                       |   |         |       |   |       |   |   |   |
| Total Liabilities                                                                                                                          |   |         | 4,829,764  |   |       |   | 4,787,782 |   |
| STOCKHOLDERS' EQUITY                                                                                                                       |   |         |       |   |       |   |   |   |
| Preferred stock, 50,000,000 shares authorized, none issued or outstanding                                                                  |   |         |       |   |       |   |   |   |
| Common Stock                                                                                                                               |   |         |       |   |       |   |   |   |
|          Authorized:                                                                          |   |         |       |   |       |   |   |   |
|             700,000,000 shares with a par value of $0.001                      |   |         |       |   |       |   |   |   |
|          Issued and Outstanding:                                                              |   |         |       |   |       |   |   |   |
|            308,900,000 as of  November 30, 2010 and                       |   |         | 308,900    |   |       |   | 293,700 |   |
|            293,700,000 as of August 31, 2010                                        |   |         |       |   |       |   |   |   |
|          Additional paid-in capital                                                           |   |         | 7,745,280  |   |       |   | 6,992,910 |   |
|          Common stock subscribed, 6,200,000 shares subscribed at November 30, 2010            |   |         | 334,162    |   |       |   | - |   |
| Deficit Accumulated During The Development Stage                                                                                           |   |         | (5,311,698 | )      |       |   | (4,368,843 | ) |
| Total Stockholders' Equity                                                                                                                 |   |         | 3,076,644  |   |       |   | 2,917,767 |   |
| Total Liabilities and Stockholders' Equity                                                                                                 |   | $            | 7,906,408  |   |       | $      | 7,705,549 |   |

----

|                                         |   |               |        |   |                 |   |       | Period From       |   |
|----------------------------------------------|--------|--------------------|-------------|--------|----------------------|--------|------------|-------------------|--------|
|                                         |   |               |        |   |                 |   |       | Inception         |   |
|                                         |   | Three Months Ended |        |   | (September 19, 2003) |   |
|                                         |   | November 30        |        |   | through              |   |
|                                         |   | 2010               |        |   | 2009                 |   |       | November 30, 2010 |   |
| Revenue                                      |   | $                  | -           |   |                 | $      | -          |              |   | $ | - |   |
|   Expenses:                        |   |               |        |   |                 |   |       |              |   |   |   |   |
| Office and sundry                            |   |               | 1,439       |   |                 |   | 37         |              |   |   | 17,942 |   |
| Business license and fees                    |   |               | 375         |   |                 |   | 1,910      |              |   |   | 2,717 |   |
| Depreciation expense                         |   |               | 5,214       |   |                 |   | 275        |              |   |   | 18,941 |   |
| Officer's Salary                             |   |               | 250,423     |   |                 |   | -          |              |   |   | 408,423 |   |
| Payroll tax expense                          |   |               | 6,145       |   |                 |   | -          |              |   |   | 15,057 |   |
| Professional fees                            |   |               | 303,598     |   |                 |   | 8,727      |              |   |   | 1,180,375 |   |
| Consulting                                   |   |               | 54,000      |   |                 |   | -          |              |   |   | 64,455 |   |
| Referral fees                                |   |               | -           |   |                 |   | -          |              |   |   | 45,000 |   |
| Rent and lease expense                       |   |               | -           |   |                 |   | -          |              |   |   | 129,696 |   |
| Public relations                             |   |               | 925         |   |                 |   | -          |              |   |   | 2,190 |   |
| Subsidiary formation cost                    |   |               | -           |   |                 |   | -          |              |   |   | 9,600 |   |
| Travel                                       |   |               | 13,801      |   |                 |   | -          |              |   |   | 42,857 |   |
| Utilities                                    |   |               | 179         |   |                 |   | 435        |              |   |   | 18,402 |   |
| Shareholder loans and other loan interest    |   |               | 506,756     |   |                 |   | 54,154     |              |   |   | 1,592,659 |   |
|      Total expenses |   |               | 1,142,855   |   |                 |   | 65,538     |              |   |   | 3,548,314 |   |
| Operating Loss                               |   |               | (1,142,855  | )      |                 |   | (65,538    | )                 |   |   | (3,548,314 | ) |
|                                         |   |               |        |   |                 |   |       |              |   |   |   |   |
| Other Income and Expense                     |   |               |        |   |                 |   |       |              |   |   |   |   |
|    Gain on settlement of debt |   |               | -           |   |                 |   | -          |              |   |   | (3,333 | ) |
| Loss from continuing operations              |   |               | (1,142,855  | )      |                 |   | (65,538    | )                 |   |   | (3,544,981 | ) |
|                                         |   |               |        |   |                 |   |       |              |   |   |   |   |
| Income (Loss) from discontinued operations   |   |               | 200,000     |   |                 |   | -          |              |   |   | (1,766,717 | ) |
| Net Loss                                     |   | $                  | (942,855    | )      |                 | $      | (65,538    | )                 |   | $ | (5,311,698 | ) |
|                                         |   |               |        |   |                 |   |       |              |   |   |   |   |
| Basic And Diluted Loss per share             |   |               |        |   |                 |   |       |              |   |   |   |   |
| from continuing operations                   |   | $                  | (0.004      | )      |                 | $      | (0.002     | )                 |   | $ | (0.075 | ) |
|                                         |   |               |        |   |                 |   |       |              |   |   |   |   |
| Basic And Diluted Loss per share             |   |               |        |   |                 |   |       |              |   |   |   |   |
| from discontinued operations                 |   | $                  | 0.001       |   |                 | $      | -          |              |   | $ | (0.037 | ) |
|                                         |   |               |        |   |                 |   |       |              |   |   |   |   |
| Basic And Diluted Net Loss per share         |   | $                  | (0.003      | )      |                 | $      | (0.002     | )                 |   | $ | (0.112 | ) |
|                                         |   |               |        |   |                 |   |       |              |   |   |   |   |
| Weighted Average Shares Outstanding          |   |               | 303,843,333 |   |                 |   | 26,350,000 |              |   |   | 47,461,604 |   |

----

|                                                                               |   |               |       |   |                 |   |    | Period From       |   |
|------------------------------------------------------------------------------------|--------|--------------------|------------|--------|----------------------|--------|---------|-------------------|--------|
|                                                                               |   |               |       |   |                 |   |    | Inception         |   |
|                                                                               |   | Three Months Ended |       |   | (September 19, 2003) |   |
|                                                                               |   | November 30,       |       |   | November 30,         |   |    | Through           |   |
|                                                                               |   | 2010               |       |   | 2009                 |   |    | November 30, 2010 |   |
| Cash Flows From Operating Activities                                               |   |               |       |   |                 |   |    |              |   |
|    Net loss for the period                                          |   | $                  | (942,855   | )      |                 | $      | (65,538 | )                 |   | $ | (5,311,698 | ) |
|  Adjustments to reconcile net loss to net cash used by                        |   |               |       |   |                 |   |    |              |   |   |   |   |
|  operating activities:                                                        |   |               |       |   |                 |   |    |              |   |   |   |   |
|    Depreciation expense                                             |   |               | 5,214      |   |                 |   | 275     |              |   |   | 18,941 |   |
|    Expenses paid by issuance of common stock or common stock        |   |               |       |   |                 |   |    |              |   |   |   |   |
|    subscribed                                                       |   |               | 256,500    |   |                 |   | -       |              |   |   | 449,100 |   |
|    Accrued interest added to shareholder loans                      |   |               | 80,744     |   |                 |   | 54,101  |              |   |   | 802,452 |   |
|    Loan discount amortization                                       |   |               | 397,339    |   |                 |   |    |              |   |   | 726,697 |   |
|    Non-cash portion of interest expense                             |   |               | -          |   |                 |   | -       |              |   |   | 3,333 |   |
|    Gain on settlement of debt                                       |   |               | -          |   |                 |   | -       |              |   |   | (3,333 | ) |
|    Impairment of investment in joint venture projects               |   |               | -          |   |                 |   | -       |              |   |   | 1,951,210 |   |
| Change in operating assets and liabilities                                         |   |               |       |   |                 |   |    |              |   |   |   |   |
|    Payroll tax receivable                                           |   |               | -          |   |                 |   | -       |              |   |   | (39,153 | ) |
|     Accounts payable and accrued liabilities                   |   |               | (1,074,727 | )      |                 |   | 9,637   |              |   |   | (687,035 | ) |
| Net Cash Used By Operating Activities                                              |   |               | (1,277,785 | )      |                 |   | (1,525  | )                 |   |   | (2,089,486 | ) |
| Cash Flows From Investing Activities                                               |   |               |       |   |                 |   |    |              |   |   |   |   |
|      Capital Expenditures                                 |   |               | -          |   |                 |   | -       |              |   |   | (65,863 | ) |
|      Investment in oil and gas projects                   |   |               | (3,752     | )      |                 |   | -       |              |   |   | (2,872,333 | ) |
|      Advances to and investment in joint venture projects |   |               | -          |   |                 |   | -       |              |   |   | (250,000 | ) |
| Net cash used by investing activities                                              |   |               | (3,752     | )      |                 |   | -       |              |   |   | (3,188,196 | ) |
|                                                                               |   |               |       |   |                 |   |    |              |   |   |   |   |
| Cash Flows From Financing Activities                                               |   |               |       |   |                 |   |    |              |   |   |   |   |
|      Bank overdraft                                       |   |               | 4,858      |   |                 |   | -       |              |   |   | 4,858 |   |
|      Proceeds from sale of common stock                   |   |               | -          |   |                 |   | -       |              |   |   | 613,550 |   |
|      Common stock subscribed                              |   |               | -          |   |                 |   | 120,000 |              |   |   | - |   |
|      Increase in loans payable to related parties         |   |               | -          |   |                 |   | -       |              |   |   | 226,574 |   |
|      Principal payment on shareholder loan                |   |               | (143,000   | )      |                 |   | -       |              |   |   | (293,000 | ) |
|      Proceeds from shareholder loans payable              |   |               | 1,400,000  |   |                 |   | 500     |              |   |   | 4,725,700 |   |
| Net cash provided by financing activities                                          |   |               | 1,261,858  |   |                 |   | 120,500 |              |   |   | 5,277,682 |   |
| Increase/(Decrease)  In Cash During The Period                           |   |               | (19,679    | )      |                 |   | 118,975 |              |   |   | - |   |
| Cash, Beginning Of Period                                                          |   |               | 19,679     |   |                 |   | 516     |              |   |   | - |   |
|                                                                               |   |               |       |   |                 |   |    |              |   |   |   |   |
| Cash, End Of Period                                                                |   | $                  | -          |   |                 | $      | 119,491 |              |   | $ | - |   |

----

|                                               |   |          |       |   |       |   |   |    |   |   |       |   |   | DEFICIT     |    |   |   |   |
|----------------------------------------------------|--------|---------------|------------|--------|------------|--------|--------|---------|--------|--------|------------|--------|--------|-------------|---------|--------|--------|--------|
|                                               |   |          |       |   |       |   |   |    |   |   |       |   |   | ACCUMULATED |    |   |   |   |
|                                               |   | COMMON SHARES |       |   | ADDITIONAL |   |   | COMMON  |   |   | DURING THE |   |   |        |    |
|                                               |   |          |       |   | PAR        |   |   | PAID-IN |   |   | SHARES     |   |   | DEVELOPMENT |    |   |   |   |
|                                               |   | NUMBER        |       |   | VALUE      |   |   | CAPITAL |   |   | SUBSCRIBED |   |   | STAGE       |    |   | TOTAL  |   |
| Balance, September 19,                             |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |
| 2003 (date of inception)                           |   |          | -          |   |       | $      | -      |    |   | $      | -          |   |   | $           | -       |   |   | $      | - |   |   | $ | - |   |
| Capital stock issued for cash:                     |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |   |   |   |
| October 2003 at $0.001                             |   |          | 2,500,000  |   |       |   | 2,500  |    |   |   | -          |   |   |        | -       |   |   |   | - |   |   |   | 2,500 |   |
| November 2003 at $0.005                            |   |          | 160,000    |   |       |   | 160    |    |   |   | 640        |   |   |        | -       |   |   |   | - |   |   |   | 800 |   |
| December 2003 at $0.005                            |   |          | 1,400,000  |   |       |   | 1,400  |    |   |   | 5,600      |   |   |        | -       |   |   |   | - |   |   |   | 7,000 |   |
| June 2004 at $0.01                                 |   |          | 1,000,000  |   |       |   | 1,000  |    |   |   | 9,000      |   |   |        | -       |   |   |   | - |   |   |   | 10,000 |   |
| July 2004 at $0.25                                 |   |          | 23,000     |   |       |   | 23     |    |   |   | 5,727      |   |   |        | -       |   |   |   | - |   |   |   | 5,750 |   |
| Net loss for the period                            |   |          | -          |   |       |   | -      |    |   |   | -          |   |   |        | -       |   |   |   | (15,880 | ) |   |   | (15,880 | ) |
| Balance, August 31, 2004                           |   |          | 5,083,000  |   |       |   | 5,083  |    |   |   | 20,967     |   |   |        | -       |   |   |   | (15,880 | ) |   |   | 10,170 |   |
| Net 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 Stock                            |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Split 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    |   |   |        | -       |   |   |   | - |   |   |   | 135,975 |   |
|   July 2007 at $0.735 per share          |   |          | 750,000    |   |       |   | 750    |    |   |   | 550,500    |   |   |        | -       |   |   |   | - |   |   |   | 551,250 |   |
| Net loss for the year                              |   |          | -          |   |       |   | -      |    |   |   | -          |   |   |        | -       |   |   |   | (257,804 | ) |   |   | (257,804 | ) |
| Balance, August 31, 2007                           |   |          | 26,350,000 |   |       |   | 26,350 |    |   |   | 686,925    |   |   |        |    |   |   |   | (321,839 | ) |   |   | 391,436 |   |
| Net loss for the year                              |   |          | -          |   |       |   | -      |    |   |   | -          |   |   |        | -       |   |   |   | (378,039 | ) |   |   | (378,039 | ) |
| Balance, August 31, 2008                           |   |          | 26,350,000 |   |       |   | 26,350 |    |   |   | 686,925    |   |   |        |    |   |   |   | (699,878 | ) |   |   | 13,397 |   |
| Net 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        |   |   |        | -       |   |   |   | - |   |   |   | 500 |   |
| Capital stock issued to buy subsidiary:            |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |
|   March 2010 at $0.032 per share         |   |          | 300,000    |   |       |   | 300    |    |   |   | 9,300      |   |   |        | -       |   |   |   | - |   |   |   | 9,600 |   |
| Capital stock issued for cash:                     |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   March 2010 at $0.01 per share          |   |          | 59,750,000 |   |       |   | 59,750 |    |   |   | 527,750    |   |   |        | -       |   |   |   | - |   |   |   | 587,500 |   |
| Capital stock issued for services:                 |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |   |   |   |
|   March 2010 at $0.01 per share          |   |          | 20,750,000 |   |       |   | 20,750 |    |   |   | 186,750    |   |   |        | -       |   |   |   | - |   |   |   | 207,500 |   |
|   April 2010 at $0.01 per share          |   |          | 1,500,000  |   |       |   | 1,500  |    |   |   | 13,500     |   |   |        | -       |   |   |   | - |   |   |   | 15,000 |   |
| Capital stock issued for oil and gas properties:   |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |
|   March 2010 at $0.01 per share          |   |          | 40,000,000 |   |       |   | 40,000 |    |   |   | 384,000    |   |   |        | 200,000 |   |   |   | - |   |   |   | 624,000 |   |
| Capital stock issued for loan conversion:          |   |          |       |   |       |   |   |    |   |   |       |   |   |        |    |   |   |   |   |   |   |
|   March 2010 at $0.01 per share          |   |          | 20,000,000 |   |       |   | 20,000 |    |   |   | 180,000    |   |   |        | 200,000 |   |   |   | - |   |   |   | 400,000 |   |
| Shareholder loan interest forgiven                 |   |          | -          |   |       |   | -      |    |   |   | 631,444    |   |   |        | -       |   |   |   | - |   |   |   | 631,444 |   |

----

|                                                     |   |          |        |   |       |   |   |    |    |   |       |       |   |   | DEFICIT     |     |   |   |   |
|----------------------------------------------------------|--------|---------------|-------------|--------|------------|--------|--------|---------|---------|--------|------------|------------|--------|--------|-------------|----------|--------|--------|--------|
|                                                     |   |          |        |   |       |   |   |    |    |   |       |       |   |   | ACCUMULATED |     |   |   |   |
|                                                     |   | COMMON SHARES |        |   | ADDITIONAL |   |   | COMMON  |    |   | DURING THE |       |   |   |        |
|                                                     |   |          |        |   |       | PAR    |   |    | PAID-IN |   |       | SHARES     |   |   | DEVELOPMENT |     |   |   |   |
|                                                     |   | NUMBER        |        |   |       | VALUE  |   |    | CAPITAL |   |       | SUBSCRIBED |   |   | STAGE       |     |   | TOTAL  |   |
| Capital stock issued with short-term debt:               |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |
|   April 2010 at $0.065 per share               |   |          | 17,500,000  |   |       |   |   | 17,500  |    |   |       | 671,894    |   |   |        | -        |   |   |   | - |   |   |   | 689,394 |   |
|   May 2010 at $0.065 per share                 |   |          | 5,000,000   |   |       |   |   | 5,000   |    |   |       | 191,970    |   |   |        | -        |   |   |   | - |   |   |   | 196,970 |   |
|   June 2010 at $0.087  per share     |   |          | 2,500,000   |   |       |   |   | 2,500   |    |   |       | 113,810    |   |   |        | -        |   |   |   | - |   |   |   | 116,310 |   |
|   July 2010 at $0.075  per share     |   |          | 3,000,000   |   |       |   |   | 3,000   |    |   |       | 125,571    |   |   |        | -        |   |   |   | - |   |   |   | 128,571 |   |
|   July 2010 at $0.120  per share     |   |          | 500,000     |   |       |   |   | 500     |    |   |       | 26,773     |   |   |        | -        |   |   |   | - |   |   |   | 27,273 |   |
|   August 2010 at $0.120 per share              |   |          | 500,000     |   |       |   |   | 500     |    |   |       | 26,773     |   |   |        | -        |   |   |   | - |   |   |   | 27,273 |   |
| Capital 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  |   |   |        | -        |   |   |   | - |   |   |   | 2,912,000 |   |
| Capital 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 | ) |   |   | 2,917,767 |   |
|                                                     |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |   |   |   |
|                                                     |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |   |   |   |
| Capital stock issued for services:                       |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |   |   |   |
|   September 2010 at $0.060 per share           |   |          | 2,500,000   |   |       |   |   | 2,500   |    |   |       | 147,500    |   |   |        | -        |   |   |   | - |   |   |   | 150,000 |   |
|   October 2010 at $0.057 per share             |   |          | 1,200,000   |   |       |   |   | 1,200   |    |   |       | 67,200     |   |   |        | -        |   |   |   | - |   |   |   | 68,400 |   |
| Capital stock subscribed for services:                   |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |   |   |   |
|   September 2010 at $0.063 per share           |   |          | -           |   |       |   |   | -       |    |   |       | -          |   |   |        | 170,100  |   |   |   | - |   |   |   | 170,100 |   |
| Capital stock issued with short-term debt:               |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |
|   September 2010 at $0.064 per share           |   |          | 6,500,000   |   |       |   |   | 6,500   |    |   |       | 272,073    |   |   |        | -        |   |   |   | - |   |   |   | 278,573 |   |
|   October 2010 at $0.067 per share             |   |          | 1,000,000   |   |       |   |   | 1,000   |    |   |       | 45,524     |   |   |        | -        |   |   |   | - |   |   |   | 46,524 |   |
|   October 2010 at $0.064 per share             |   |          | 1,500,000   |   |       |   |   | 1,500   |    |   |       | 62,787     |   |   |        | -        |   |   |   | - |   |   |   | 64,287 |   |
|   November 2010 at $0.067  per share |   |          | 1,500,000   |   |       |   |   | 1,500   |    |   |       | 68,286     |   |   |        | -        |   |   |   | - |   |   |   | 69,786 |   |
| Capital stock subscribed with short-term debt:           |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |
|   November 2010 at $0.067  per share |   |          | -           |   |       |   |   | -       |    |   |       | -          |   |   |        | 139,572  |   |   |   | - |   |   |   | 139,572 |   |
|   November 2010 at $0.070  per share |   |          | -           |   |       |   |   | -       |    |   |       | -          |   |   |        | 24,490   |   |   |   | - |   |   |   | 24,490 |   |
| Capital stock issued for oil and gas properties:         |   |          |        |   |       |   |   |    |    |   |       |       |   |   |        |     |   |   |   |   |   |   |
|   November 2010 at $0.090 per share            |   |          | 1,000,000   |   |       |   |   | 1,000   |    |   |       | 89,000     |   |   |        | -        |   |   |   | - |   |   |   | 90,000 |   |
| Net loss for the period                                  |   |          | -           |   |  $-   |   |   | -       |    |   |       | -          |   |   |        | -        |   |   |   | (942,855 | ) |   |   | (942,855 | ) |
| Balance, November 30, 2010                               |   |          | 308,900,000 |   |       |   | $      | 308,900 |    |   | $          | 7,745,280  |   |   | $           | 334,162  |   |   | $      | (5,311,698 | ) |   | $ | 3,076,644 |   |

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| 1. | ORGANIZATION AND BASIS OF PRESENTATION   |
|----|----------------------------------------------------|

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----

----

----

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|                            |   | Total Costs |      |   | Fiscal 2011 |   |
|---------------------------------|--------|-------------|-----------|--------|-------------|--------|
|                            |   | To Date     |      |   | Commitment  |   |
|                            |   |        |      |   |        |   |
| Block XXIV and TEA – Peru |   | $           | 4,060,783 |   |        | $      | - |   |
| Block Z-46 – Peru         |   |        | 2,951,547 |   |        |   | 9,193,000 |   |
| CPO-4 – Colombia          |   |        | 656,003   |   |        |   | 11,875,000 |   |
|                            |   |        |      |   |        |   |   |   |
|                            |   | $           | 7,668,333 |   |        | $      | 21,068,000 |   |

----

| Shares issued and outstanding as of August 31, 2010:                    |                     |   |   | 293,700,000 |   |
|-------------------------------------------------------------------------|--------------------------|--------|--------|-------------|--------|
|                                                                    |                     |   |   |        |   |
|                                                                    |                     |   |   |        |   |
| Shares issued for services rendered or to be rendered                   | September-November, 2010 |   |   | 3,700,000   |   |
|                                                                    |                     |   |   |        |   |
| Shares issued in conjunction with oil and gas participation agreement   | November, 2010           |   |   | 1,000,000   |   |
|                                                                    |                     |   |   |        |   |
| Shares issued in conjunction with debt subscriptions                    | September-November, 2010 |   |   | 10,500,000  |   |
|                                                                    |                     |   |   |        |   |
| Total shares issued as of November 30, 2010                             |                     |   |   | 308,900,000 |   |
|                                                                    |                     |   |   |        |   |
| Unregistered, restricted shares issued subsequent to November 30, 2010: |                     |   |   |        |   |
|                                                                    |                     |   |   |        |   |
| Shares sold in conjunction with bridge financing                        | December, 2010           |   |   | 1,000,000   |   |
| Shares issued for services rendered or to be rendered                   | December, 2010           |   |   | 40,000,000  |   |
| Subscribed shares issued for services rendered or to be rendered        | January, 2010            |   |   | 2,700,000   |   |
| Subscribed shares issued in conjunction with debt subscriptions         | January, 2010            |   |   | 2,500,000   |   |
|                                                                    |                     |   |   |        |   |
| Total shares issued as of January 14, 2010                              |                     |   |   | 355,100,000 |   |

|                              |   | November 30, 2010 |       |   | August 31, 2010 |   |
|-----------------------------------|--------|-------------------|------------|--------|-----------------|--------|
| Tax benefit carry forward         |   | $                 | 1,205,294  |   |            | $      | 821,997 |   |
| Loss from discontinued operations |   |              | 600,684    |   |            |   | 663,411 |   |
| Valuation allowance               |   |              | (1,805,978 | )      |            |   | (1,485,408 | ) |
|                              |   |              |       |   |            |   |   |   |
|                              |   | $                 | -          |   |            | $      | - |   |

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| 7. | SHAREHOLDER LOANS PAYABLE AND ACCRUED INTEREST |
|----|------------------------------------------------|

|                                                  |   | November 30, 2010 |          |   | August 31, 2010 |   |
|-------------------------------------------------------|--------|-------------------|---------------|--------|-----------------|--------|
| Loan payable                                          |   | $                 | 946,685       |   |            | $      | 1,089,685 |   |
| Accrued interest                                      |   |              | 17,142        |   |            |   |  19,430 |   |
|                                                  |   |              |  963,827 |   |            |   | 1,109,115 |   |
|                                                  |   |              |          |   |            |   |   |   |
| Short-term debt                                       |   |              | 4,300,000     |   |            |   | 2,900,000 |   |
| Less:  total note discount for stock issued |   |              | (1,809,023    | )      |            |   | (1,185,791 | ) |
| Add:  amortization of note discount         |   |              | 726,697       |   |            |   | 329,358 |   |
| Add:  accrued interest                      |   |              |  153,866 |   |            |   | 70,834 |   |
|                                                  |   |              | 3,371,540     |   |            |   |  2,114,401 |   |
| Total shareholder loans payable and accrued interest  |   | $                 | 4,335,367     |   |            | $      | 3,223,516 |   |

|   | The weighted average interest rates on shareholder loans payable at November 30, 2010 and August 31, 2010 were 8.4% and 8.5%, respectively.  Subsequent to November 30, 2010, the Company issued short-term 14% debentures valued at $3,800,000 and sold unregistered, restricted common stock for $200,000 as described under Note 10 – Subsequent Events. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 8. | COMMITMENTS AND CONTRACTUAL OBLIGATIONS |
|----|-----------------------------------------|

----

----

|                                                                                    |   |                            |    |   |              |   |   | Period From       |   |
|-----------------------------------------------------------------------------------------|--------|---------------------------------|---------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                                    |   | Three months ended November 30, |    |   | Inception Through |   |
|                                                                                    |   | 2010                            |    |   | 2009              |   |   | November 30, 2010 |   |
|      Investment advances paid from shareholder loans           |   | $                               | -       |   |              | $      | -      |              |   | $ | 1,263,985 |   |
|     Capital stock issued for investment in joint venture projects   |   | $                               | -       |   |              | $      | -      |              |   | $ | 687,225 |   |
|  Capital stock issued or subscribed for expenses                                   |   | $                               | 256,500 |   |              | $      | -      |              |   | $ | 449,100 |   |
|  Capital stock issued for prepaid expenses                                         |   | $                               | 132,000 |   |              | $      | -      |              |   | $ | 152,000 |   |
|  Capital stock issued for oil and gas properties                                   |   | $                               | 90,000  |   |              | $      | -      |              |   | $ | 3,646,000 |   |
|  Capital stock issued or subscribed in connection with  short-term notes |   | $                               | 623,232 |   |              | $      | -      |              |   | $ | 1,809,023 |   |
|  Interest forgiven on shareholder loan payable                                     |   | $                               | -       |   |              | $      | -      |              |   | $ | 631,444 |   |
|  Capital stock issued in conversion of shareholder loan                            |   | $                               | -       |   |              | $      | -      |              |   | $ | 400,000 |   |
| Capital expenditures acquired with accounts payable                                     |   | $                               | -       |   |              | $      | -      |              |   | $ | 31,282 |   |

| Settlement of loan payable by assignment of investment:                        |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|            Loan payable |   | $      | -      |   |   | $      | -      |   |   | $ | (200,000 | ) |
|            Investment   |   | $      | -      |   |   | $      | -      |   |   | $ | 200,000 |   |
|  Supplemental Disclosure of Cash Flow Information:                        |   |   |   |   |   |   |   |   |   |   |   |   |
|          Cash paid for:           |   |   |   |   |   |   |   |   |   |   |   |   |
|            Interest     |   | $      | 28,673 |   |   | $      | -      |   |   | $ | 63,307 |   |
|            Income taxes |   | $      | -      |   |   | $      | -      |   |   | $ | - |   |

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

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|   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont. |
|----------------------------------------------------------------------------------------------------------------|

|  In July 2010, the Company acquired from SK an undivided twelve and one-half percent (12.5%) participating interest in the CPO-4 block located in the Llanos Basin of Colombia (“CPO-4”).  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.  530 sq. km of 3D data was acquired in the Corcel Trend of Block CPO-4 during fiscal 2010. We and our operating partner have evaluated the seismic information which validated the existence of viable leads. 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.  In November 2010, the Company paid $650,000 toward past costs.  In addition to this, we will fund approximately $7.9 million for past costs including seismic acquisition, approximately $500,000 for joint operating costs and approximately $3.5 million for drilling two exploratory wells (beginning in about April, 2011) and beginning phase 2 drilling (in about August, 2011).  Approximately $3.9 million of the $7.9 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. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont. |
|----------------------------------------------------------------------------------------------------|

| 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.  $200,000 has been paid to date.  The next four installments of $150,000 are payable three, six, nine and twelve months after the close with a final payment of $200,000 payable at fifteen months after the close of the purchase transaction.  No interest accrues on the installments. The proceeds from the sale will be used to substantially reduce the Company’s outstanding debt to a related party shareholder.  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ($ in Thousands)                         |   |   |   |
|------------------------------------------|--------|--------|--------|
|                                     |   | 2010   |   |   | 2009 |   |
| Revenue                                  |   | $      | -      |   |   | $ | - |   |
|                                     |   |   |   |   |   |   |   |   |
| Office and other                         |   |   | 3      |   |   |   | 3 |   |
| Depreciation expense                     |   |   | 5      |   |   |   | - |   |
| Officer's salary and related expenses    |   |   | 256    |   |   |   | - |   |
| Professional fees                        |   |   | 304    |   |   |   | 9 |   |
| Consulting                               |   |   | 54     |   |   |   | - |   |
| Travel                                   |   |   | 14     |   |   |   | - |   |
| Shareholder loan and other interest      |   |   | 507    |   |   |   | 54 |   |
| Total expense                            |   |   | 1,143  |   |   |   | 66 |   |
| Gain on sale of joint venture investment |   |   | 200    |   |   |   | - |   |
|                                     |   |   |   |   |   |   |   |   |
| Net loss for the period                  |   | $      | (943   | ) |   | $ | (66 | ) |

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| 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.              |
|   |                                                                                                                                             |
| 10.2*  | Debenture, dated December 7, 2010, by and between Registrant and John Eddie Williams, Jr.                                                        |
|   |                                                                                                                                             |
| 10.3*  | Debenture, dated December 7, 2010, by and between Registrant and Reese Minerals, Ltd.                                                            |
|   |                                                                                                                                             |
| 10.4*  | Security Agreement, dated as of December 7, 2010, by and among the Registrant and John Eddie Williams, Jr. and Reese Minerals, Ltd.              |
|   |                                                                                                                                             |
| 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. |
|   |                                                                                                                                             |
| 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                          |
|   |                                                                                                                                             |

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