UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q/A Amendment No.1

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ To ______________________

Commission file number 000-53447

MASS PETROLEUM INC.(Exact name of registrant as specified in its charter)

N/A(Former Name)



Nevada 20-5893809(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)organization)Suite 507-700 West Pender Street,Vancouver, British Columbia V6C 1G8(Address of principal executive offices) (Zip Code)


604 688 6380(Registrants telephone number)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.  (Check one):



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 [ ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.  [ ] Yes [ ] No

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of July 20, 2012, the registrants outstanding common stock consisted of 30,155,748 shares.



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EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this Amendment) amends the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended May31, 2012, which the Registrant previously filed with the Securities and Exchange Commission onJuly 31, 2012 (the Original Filing). The Registrant is filing this Amendmentas it has restated its financial statements as at May 31, 2012 and for the three and six months ended to record the issuance of 22,500,000 common shares with a fair value of $5,625,000 to settle outstanding notes payable of $22,500.  In addition, the effect of the settlement resulted in a reversal of $3,090 of interest expense.  The effect of the restatement is to decrease total liabilities of $25,590, increase net loss by $5,599,410, and increase loss per share by $0.15 for the three months ended May 31, 2012 and increase loss per share by $0.23 for the six months ended May 31, 2012.  The effect of the restatement had no material effect on the statement of cash flows.  Except as set forth above, the Original Filing has not been amended, updated or otherwise modified.Other events occurring after the filing of the Form 10-Q/A or other disclosures necessary to reflect subsequent events have been addressed in our reports filed with the Securities and Exchange Commission subsequent to the filing of this Form 10-Q/A.





TABLE OF CONTENTS



|                               |          |                                                                                      |  
|------------------------------ | -------- | ------------------------------------------------------------------------------------ | -
|PART I  FINANCIAL INFORMATION |         
|                               | Item 1.  | Financial Statements                                                                 | 3
|                               | Item 2.  | Management Discussion And Analysis Of Financial Condition and Results of  Operations | 5
|                               | Item 4T. | Controls And Procedures                                                              | 6
|                               |          |                                                                                      |  
|PART II  OTHER INFORMATION    |         
|                               | Item 1.  | Legal Proceedings:                                                                   | 7
|                               | Item 2.  | Unregistered Sales Of Equity Securities                                              | 7
|                               | Item 4.  | Submission Of Matters To A Vote Security Holders:                                    | 7
|                               | Item 5.  | Other Information:                                                                   | 7
|                               | Item 6.  | Exhibits                                                                             | 7







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PART I  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

The unaudited financial statements of MASS Petroleum Inc. (the Company, MASS, we, our, us) follow.  All currency references in this report are in US dollars unless otherwise noted.



****

**MASS Petroleum Inc.**

**(An Exploration Stage Company)**

**May 31, 2012**

**(Expressed in US dollars)**

**(unaudited)**





Index




Balance Sheets


F-1




Statements of Operations


F-2




Statements of Cash Flows


F-3




Notes to the Financial Statements


F-4








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MASS PETROLEUM INC.

(An Exploration Stage Company)

Balance Sheets

(Expressed in US dollars)



|                                                                                                                                      | May 31, 2012 $ | November 30, 2011 $
|------------------------------------------------------------------------------------------------------------------------------------- | -------------- | -------------------
|                                                                                                                                      | (unaudited)    |                    
|                                                                                                                                      |                |                    
|ASSETS                                                                                                                                |                |                    
|                                                                                                                                      |                |                    
|Current Assets                                                                                                                        |                |                    
|                                                                                                                                      |                |                    
|Cash                                                                                                                                  | 724            | 5,571              
|Amounts receivable                                                                                                                    | 5,398          | 9,780              
|Prepaid expenses                                                                                                                      | 1,968          | 2,845              
|                                                                                                                                      |                |                    
|Total Current Assets                                                                                                                  | 8,090          | 18,196             
|                                                                                                                                      |                |                    
|Property and equipment (Note 3)                                                                                                       | 1,805          | 2,016              
|Oil and gas property (Note 4)                                                                                                         | 6,978          | 7,582              
|                                                                                                                                      |                |                    
|Total Assets                                                                                                                          | 16,873         | 27,794             
|                                                                                                                                      |                |                    
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                                                                 |                |                    
|                                                                                                                                      |                |                    
|Current Liabilities                                                                                                                   |                |                    
|                                                                                                                                      |                |                    
|Accounts payable                                                                                                                      | 51,264         | 14,972             
|Accrued liabilities                                                                                                                   | 37,125         | 35,387             
|Due to related parties (Note 6)                                                                                                       | 62,356         | 66,283             
|Loans payable (Note 5)                                                                                                                | 438,065        | 425,691            
|                                                                                                                                      |                |                    
|Total Current Liabilities                                                                                                             | 588,810        | 542,333            
|                                                                                                                                      |                |                    
|Loans payable (Note 5)                                                                                                                |               | 20,000             
|                                                                                                                                      |                |                    
|Total Liabilities                                                                                                                     | 588,810        | 562,333            
|                                                                                                                                      |                |                    
|                                                                                                                                      |                |                    
|Nature of Operations and Continuance of Business (Note 1)                                                                             |                |                    
|Subsequent Event (Note 9)                                                                                                             |                |                    
|                                                                                                                                      |                |                    
|Stockholders Deficit                                                                                                                 |                |                    
|                                                                                                                                      |                |                    
|Preferred stock, 20,000,000 shares authorized, $0.0001 par value; 1,000,000 and 1,000,000 shares issued and outstanding, respectively | 100            | 100                
|                                                                                                                                      |                |                    
|Common stock, 1,000,000,000 shares authorized, $0.0001 par value; 52,655,864 and 155,748 shares issued and outstanding, respectively  | 5,266          | 16                 
|                                                                                                                                      |                |                    
|Additional paid-in capital                                                                                                            | 9,147,297      | 3,524,547          
|                                                                                                                                      |                |                    
|Deficit accumulated during the exploration stage                                                                                      | (9,724,600)    | (4,059,202)        
|                                                                                                                                      |                |                    
|Total Stockholders Deficit                                                                                                           | (571,937)      | (534,539)          
|                                                                                                                                      |                |                    
|Total Liabilities and Stockholders Deficit                                                                                           | 16,873         | 27,794             
|                                                                                                                                      |                |                    







*(The accompanying notes are an integral part of these financial statements)*



F-1



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MASS PETROLEUM INC.

(An Exploration Stage Company)

Statements of Operations

(Expressed in US dollars)

(unaudited)



|                                      | Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended | Accumulated from February 14, 2006 (date of inception)
|------------------------------------- | ------------------ | ------------------ | ---------------- | ---------------- | ------------------------------------------------------
|                                      | May 31,            | May 31,            | May 31,          | May 31,          | to May 31,                                            
|                                      | 2012               | 2011               | 2012             | 2011             | 2012                                                  
|                                      | $                  | $                  | $                | $                | $                                                     
|                                      |                    |                    |                  |                  |                                                       
|                                      |                    |                    |                  |                  |                                                       
|Revenue                               | 572                | 1,072              | 1,017            | 1,874            | 24,227                                                
|                                      |                    |                    |                  |                  |                                                       
|Operating Expenses                    |                    |                    |                  |                  |                                                       
|                                      |                    |                    |                  |                  |                                                       
|Depletion                             | 371                | 556                | 604              | 1,025            | 27,060                                                
|Depreciation                          | 371                | 328                | 728              | 656              | 6,040                                                 
|General and administrative (Note 6)   | 22,403             | 32,328             | 54,242           | 68,415           | 2,385,746                                             
|Mineral property costs                |                   |                   |                 |                 | 1,693                                                 
|Oil and gas production costs          | 168                | 467                | 359              | 1,125            | 14,760                                                
|                                      |                    |                    |                  |                  |                                                       
|Total Operating Expenses              | 23,313             | 33,679             | 55,933           | 71,221           | 2,435,299                                             
|                                      |                    |                    |                  |                  |                                                       
|Operating Loss                        | (22,741)           | (32,607)           | (54,916)         | (69,347)         | (2,411,072)                                           
|                                      |                    |                    |                  |                  |                                                       
|Other Income (Expense)                |                    |                    |                  |                  |                                                       
|                                      |                    |                    |                  |                  |                                                       
|Gain on settlement of account payable |                   |                   |                 |                 | 12,585                                                
|Interest expense                      | (2,590)            | (4,540)            | (7,982)          | (8,475)          | (43,243)                                              
|Loss on settlement of debt            | (5,602,500)        |                   | (5,602,500)      |                 | (7,207,870)                                           
|Provision for loan receivable         |                   |                   |                 |                 | (75,000)                                              
|                                      |                    |                    |                  |                  |                                                       
|Total Other Income (Expense)          | (5,605,090)        | (4,540)            | (5,610,482)      | (8,475)          | (7,313,528)                                           
|                                      |                    |                    |                  |                  |                                                       
|Net Loss and Comprehensive Loss       | (5,627,831)        | (37,147)           | (5,665,398)      | (77,822)         | (9,724,600)                                           
|                                      |                    |                    |                  |                  |                                                       
|Net Loss Per Share, Basic and Diluted | (0.15)             | (0.27)             | (0.23)           | (0.57)           |                                                       
|                                      |                    |                    |                  |                  |                                                       
|Weighted Average Shares Outstanding   | 38,762,000         | 135,748            | 24,992,000       | 135,748          |                                                       
|                                      |                    |                    |                  |                  |                                                       





*(The accompanying notes are an integral part of these financial statements)*



F-2



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MASS PETROLEUM INC.

(An Exploration Stage Company)

Statements of Cash Flows

(Expressed in US dollars)

(unaudited)

|                                                                            | Six Months Ended May 31, 2012 $ | Six Months Ended May 31, 2011 $ | Accumulated from February 14, 2006 (Date of Inception) to May 31, 2012 $
|--------------------------------------------------------------------------- | ------------------------------- | ------------------------------- | ------------------------------------------------------------------------
|                                                                            |                                 |                                 |                                                                         
|Operating Activities                                                        |                                 |                                 |                                                                         
|                                                                            |                                 |                                 |                                                                         
|Net loss for the period                                                     | (5,665,398)                     | (77,822)                        | (9,724,600)                                                             
|                                                                            |                                 |                                 |                                                                         
|Adjustments to reconcile net loss to net cash used in operating activities: |                                 |                                 |                                                                         
|Depletion                                                                   | 604                             | 1,025                           | 27,060                                                                  
|Depreciation                                                                | 728                             | 656                             | 6,040                                                                   
|Donated services and rent                                                   |                                |                                | 54,080                                                                  
|Stock-based compensation                                                    |                                |                                | 1,339,063                                                               
|Provision for loan receivable                                               |                                |                                | 75,000                                                                  
|Gain on settlement of account payable                                       |                                |                                | (12,585)                                                                
|Loss on settlement of debt                                                  | 5,602,500                       |                                | 7,207,870                                                               
|Loss on foreign currency translation                                        | (125)                           |                                | (125)                                                                   
|                                                                            |                                 |                                 |                                                                         
|Changes in operating assets and liabilities:                                |                                 |                                 |                                                                         
|Amounts receivable                                                          | 4,381                           | 315                             | (5,399)                                                                 
|Prepaid expenses                                                            | 877                             | (413)                           | (1,968)                                                                 
|Accounts payable                                                            | 36,291                          | (4,429)                         | 63,848                                                                  
|Accrued liabilities                                                         | 1,739                           | 7,268                           | 37,726                                                                  
|Due to related parties                                                      | (3,927)                         | 5,658                           | 13,381                                                                  
|                                                                            |                                 |                                 |                                                                         
|Net Cash Used In Operating Activities                                       | (22,330)                        | (67,742)                        | (920,609)                                                               
|                                                                            |                                 |                                 |                                                                         
|Investing Activities                                                        |                                 |                                 |                                                                         
|                                                                            |                                 |                                 |                                                                         
|Loan receivable                                                             |                                |                                | (75,000)                                                                
|Purchase of property and equipment                                          | (517)                           |                                | (7,845)                                                                 
|Purchase of oil and gas property                                            |                                |                                | (34,038)                                                                
|                                                                            |                                 |                                 |                                                                         
|Net Cash Used in Investing Activities                                       | (517)                           |                                | (116,883)                                                               
|                                                                            |                                 |                                 |                                                                         
|Financing Activities                                                        |                                 |                                 |                                                                         
|                                                                            |                                 |                                 |                                                                         
|Proceeds from loan payable                                                  | 15,000                          | 59,825                          | 495,091                                                                 
|Proceeds from related party loan                                            |                                |                                | 95,625                                                                  
|Proceeds from issuance of common stock                                      | 3,000                           |                                | 449,000                                                                 
|Share issuance costs                                                        |                                |                                | (1,500)                                                                 
|                                                                            |                                 |                                 |                                                                         
|Net Cash Provided by Financing Activities                                   | 18,000                          | 59,825                          | 1,038,216                                                               
|                                                                            |                                 |                                 |                                                                         
|Increase (Decrease) in Cash                                                 | (4,847)                         | (7,917)                         | 724                                                                     
|                                                                            |                                 |                                 |                                                                         
|Cash, Beginning of Period                                                   | 5,571                           | 11,239                          |                                                                        
|                                                                            |                                 |                                 |                                                                         
|Cash, End of Period                                                         | 724                             | 3,322                           | 724                                                                     
|                                                                            |                                 |                                 |                                                                         
|Non-cash Investing and Financing Activities                                 |                                 |                                 |                                                                         
|Common stock issued to settle debt                                          | 5,625,000                       |                                | 7,312,020                                                               
|                                                                            |                                 |                                 |                                                                         
|Supplemental Disclosures                                                    |                                 |                                 |                                                                         
|Interest paid                                                               |                                |                                |                                                                        
|Income taxes paid                                                           |                                |                                |                                                                        
|                                                                            |                                 |                                 |                                                                         



*(The accompanying notes are an integral part of these financial statements)*

F-3



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MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



1.Nature of Operations and Continuance of Business

MASS Petroleum Inc. (the Company) was incorporated in the State of Nevada on February 14, 2006 under the name XTOL Energy Inc. On October 11, 2007, the Company changed its name to LAUD Resources Inc. On June 23, 2008, the Company changed its name from LAUD Resources Inc. to MASS Petroleum Inc. The Company is an exploration stage company, as defined byAccounting Standards Codification (ASC) 915, Development Stage Entities.The Companys principal business is the acquisition and exploration of oil and gas properties located in the United States.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at May 31, 2012, the Company has a working capital deficit of $580,720, and has accumulated losses totaling $9,724,600 since inception. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.



2.Summary of Significant Accounting Policies

(a)Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Companys fiscal year-end is November 30.

(b)Interim Financial Statements

These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Companys financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

(c)Use of Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period.The Company regularly evaluates estimates and assumptions related to the valuation of long-lived assets and oil and gas properties, stock-based compensation and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

(d)Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

F-4

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



2.Summary of Significant Accounting Policies (continued)

(e)Loss Per Share

The Company computes loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing the loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

(f)Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 2012 and 2011, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

(g)Oil and Gas Properties

The Company utilizes the full-cost method of accounting for petroleum and natural gas properties.  Under this method, the Company capitalizes all costs associated with acquisition, exploration, and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country-by-country basis. When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties. Until such determination is made, the Company assesses annually whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties.

The Company applies a ceiling test to the capitalized cost in the full cost pool. The ceiling test limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves based on current economic and operating conditions. Specifically, the Company computes the ceiling test so that capitalized cost, less accumulated depletion and related deferred income tax, do not exceed an amount (the ceiling) equal to the sum of: The present value of estimated future net revenue computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current cost) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus the cost of property not being amortized; plus the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less income tax effects related to differences between the book and tax basis of the property. For unproven properties, the Company excludes from capitalized costs subject to depletion, all costs directly associated with the acquisition and evaluation of the unproved property until it is determined whether or not proved reserves can be assigned to the property. Until such a determination is made, the Company assesses the property at least annually to ascertain whether impairment has occurred. In assessing impairment the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. The Company adds the amount of impairment assessed to the cost to be amortized subject to the ceiling test.

F-5

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



2.Summary of Significant Accounting Policies (continued)

(h)Asset Retirement Obligations

The Company follows the provisions of ASC 410, Asset Retirement and Environmental Obligations, which establishes standards for the initial measurement and subsequent accounting for obligations associated with the sale, abandonment or other disposal of long-lived tangible assets arising from the acquisition, construction or development and for normal operations of such assets.  As at May 31, 2012 and November 30, 2011, the Company did not have any asset retirement obligations.

(i)Property and Equipment

Property and equipment consists of computer hardware, and is recorded at cost and amortized on a straight-line basis over its estimated life of three years.

(j)Revenue Recognition

The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectibility is reasonably assured.

(k)Long-lived Assets

In accordance with ASC 360, Property, Plant, and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

(l)Financial Instruments and Fair Value Measures

ASC 820, Fair Value Measurements and Disclosures,requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

F-6

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



2.Summary of Significant Accounting Policies (continued)

(l)Financial Instruments and Fair Value Measures (continued)

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Companys financial instruments consist principally of cash, amounts receivable, accounts payable, amounts due to related parties, and loans payable.Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, the fair value of our cash equivalents is determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

The Company has transactions in both Canada and the United States, which results in exposure to market risks from changes in foreign currency rates.  The Companys function currency is the United States dollar. The financial risk is the risk to the Companys operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

(m)Foreign Currency Translation

The Companys functional and reporting currency is the United States dollar. Transactions may occur in a foreign currency and management has adopted ASC 830, Foreign Currency Translation Matters. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

(n)Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation  Stock Compensationand ASC 505, Equity Based Payments to Non-Employees,which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.

ASC 718 requires company to estimate the fair value of share-based awards on the date of grant using an option-pricing model.  The Company uses the Black-Scholes option pricing model as its method of determining fair value.  This model is affected by the Companys stock price as well as assumptions regarding a number of subjective variables.  These subjective variables include, but are not limited to the Companys expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours.  The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

F-7

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



2.             Summary of Significant Accounting Policies (continued)

(o)Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.



3.Property and Equipment



|                   | Cost $ | Accumulated Depreciation $ | May 31, 2012 Net Carrying Value $ | November 30, 2011 Net Carrying Value $
|------------------ | ------ | -------------------------- | --------------------------------- | --------------------------------------
|                   |        |                            |                                   |                                       
|Computer equipment | 4,454  | 2,649                      | 1,805                             | 2,016                                 



4.Oil and Gas Property



|                   |  |  | May 31, 2012 Net Carrying Value $ | November 30, 2011 Net Carrying Value $
|------------------ |  |  | --------------------------------- | --------------------------------------
|                   |  |  |                                   |                                       
|Proved Property    |  |  |                                   |                                       
|                   |  |  |                                   |                                       
|Acquisition Costs  |  |  | 34,038                            | 34,038                                
|Depletion          |  |  | (27,060)                          | (26,456)                              
|                   |  |  |                                   |                                       
|Net Carrying Value |  |  | 6,978                             | 7,582                                 

On August 1, 2006, the Company acquired a 2.34% non-operating interest in three oil and gas wells located in Oklahoma for $34,038.



5.Loans Payable

(a)On October 15, 2008, the Company entered into a loan agreement for $30,000 which was payable on October 15, 2009 or when the Company completes a private placement or receives proceeds from other loans.  The amount owing is unsecured and bears interest at 2% per annum, calculated on the basis of 360 day year for actual days elapsed. If interest is not paid as it becomes due, it will be added to the principal sum and treated as part of the principal sum.  On October 15, 2009, the Company did not repay the loan and accrued interest of $600 was added to the loan.On November 23, 2009, the Company agreed to settle $10,000 of the loans by issuing of 4,000,000 common shares of the Company.  On October 15, 2010, the loan was extended to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(b)On July 6, 2009, the Company entered into a loan agreement for $7,500 which is payable on the earlier of July 15, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(c)On July 14, 2009, the Company entered into a loan agreement for $15,000 which is payable on the earlier of July 15, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum.  On July 15, 2010, the loan was extended to June 15, 2011.On June 15, 2011, the Company did not repay the note and the note became due on demand.

F-8

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



5.Loans Payable (continued)

(d)On July 17, 2009, the Company entered into a loan agreement for $5,000 which is payable on the earlier of July 15, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On July 15, 2010, the loan was extended to June 15, 2011.On June 15, 2011, the Company did not repay the note and the note became due on demand.

(e)On September 9, 2009, the Company entered into a loan agreement for $7,000 which is payable on the earlier of September 9, 2011 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On September 9, 2011, the Company did not repay the note and the note became due on demand.

(f)On September 24, 2009, the Company entered into a loan agreement for $13,000 which is payable on the earlier of September 24, 2011 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On September 24, 2011, the Company did not repay the note and the note became due on demand.

(g)On October 5, 2009, the Company entered into a loan agreement for $30,000 which is payable on the earlier of October 5, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On March 22, 2012, the Company issued 22,500,000 shares of common stock at a fair value of $5,625,000 to settle $22,500 of the loan, resulting in a loss on settlement of debt of $5,602,500.

(h)On December 4, 2009, the Company entered into a loan agreement with a shareholder of the Company for $7,500 which is payable on the earlier of December 4, 2010 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On December 4, 2010, the Company extended the maturity date of the loan to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(i)On December 17, 2009, the Company entered into a loan agreement for $10,000 which is payable on the earlier of December 17, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum.

(j)On January 12, 2010, the Company entered into a loan agreement for $6,500 which is payable on the earlier of January 12, 2011 or within 7 days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 2% per annum. On January 12, 2011, the Company extended the maturity date of the loan to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

(k)On January 20, 2010, the Company entered into a loan agreement for $10,000 which is payable on the earlier of January 20, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On January 20, 2012, the Company did not repay the note and the note became due on demand.

(l)On January 21, 2010, the Company entered into a loan agreement for $1,500 which is payable on the earlier of January 21, 2012 or within 7 days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On January 21, 2012, the Company did not repay the note and the note became due on demand.

(m)On January 29, 2010, the Company entered into a loan agreement for $8,713 (Cdn$9,000) (November 30, 2011 - $8,821 (Cdn$9,000) which is payable on the earlier of January 29, 2011 or within seven days of the Company completing a financing in excess of $800,000.  The amount owing is unsecured and bears interest at 5% per annum. On January 29, 2011, the Company extended the maturity date of the loan to June 15, 2011. On June 15, 2011, the Company did not repay the note and the note became due on demand.

F-9

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



5.             Loans Payable (continued)

(n)On March 25, 2010, the Company entered into a loan agreement for $20,000 which is payable on the earlier of March 25, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On March 25, 2012, the Company did not repay the note and the note became due on demand.

(o)On May 5, 2010, the Company entered into a loan agreement for $90,000 which is payable on the earlier of May 5, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On May 5, 2012, the Company did not repay the note and the note became due on demand.

(p)On July 16, 2010, the Company entered into a loan agreement for $20,000 which is payable on the earlier of July 1, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum.

(q)On December 2, 2010, the Company entered into a loan agreement for $10,000 which is payable on the earlier of December 5, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum.

(r)On March 15, 2011, the Company received a loan of $29,300, which is payable on the earlier of March 15, 2012 or within 7 days of the Company completing a financing in excess of $1,500,000. The amount owing is unsecured and bears interest at 5% per annum. On March 15, 2012, the Company did not repay the note and the note became due on demand.

(s)On March 23, 2011, the Company entered into a loan agreement for $20,000 which is payable on the earlier of September 23, 2011 or within 7 days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum. On September 23, 2011, the Company did not repay the note and the note became due on demand.

(t)On July 19, 2011, the Company entered into a loan agreement for $25,000 which is payable on the earlier of July 19, 2012 or within 7 days of the Company completing a financing in excess of $800,000.  The amount owing is unsecured and bears interest at 5% per annum.

(u)On August 31, 2011, the Company entered into a loan agreement for $75,000 which is payable on the earlier of August 31, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum.

(v)On October 13, 2011, the Company entered into a loan agreement for $1,452 (Cdn$1,500) (November 30, 2011 - $1,470 (Cdn$1,500) which is payable on the earlier of October 13, 2012 or within seven days of the Company completing a financing in excess of $1,000,000. The amount owing is unsecured and bears interest at 5% per annum.

(w)On November 14, 2011, the Company entered into a loan agreement for $12,500 which is payable on the earlier of November 14, 2012 or within seven days of the Company completing a financing in excess of $800,000. The amount owing is unsecured and bears interest at 5% per annum.

(x)On February 29, 2012, the Company entered into a loan agreement with a non-related party for proceeds of $15,000. The amount owing is unsecured, bearing interest at 5% per annum, and due on demand.



F-10



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MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



6.Related Party Transactions

(a)During the six months ended May 31, 2012, the Company incurred $5,971 (2011 - $7,915) of management fees to the Chief Financial Officer (CFO) of the Company and a company controlled by the CFO of the Company. As at May 31, 2012, the Company is indebted to the company controlled by the CFO of the Company for $1,084 (Cdn$1,120) (November 30, 2011 - $nil) which is non-interest bearing, unsecured, and due on demand.

(b)On October 13, 2011, the Company entered into a loan agreement with the a company controlled by the President of the Company for $1,453 (Cdn$1,500) (November 30, 2011 - $1,470 (Cdn$1,500) which is unsecured, bears interest at 5% per annum, and is due on October 13, 2012 or within seven days of the Company completing a financing in excess of $1,000,000.As at May 31, 2012, the Company is also indebted to this company for $1,022 (November 30, 2011 - $476), which is non-interest bearing, unsecured and due on demand.

(c)On December 4, 2009, the Company entered into a loan agreement with the President of the Company for $7,000 which is payable on the earlier of December 4, 2010 or within seven days of the Company completing a financing in excess of $800,000.  The amount is unsecured and bears interest at 5% per annum. On December 4, 2010, the Company extended the maturity date of the loan to December 4, 2013. On August 26, 2011, the Company repaid $2,000 of the loan by issuance of 20,000 common shares at $0.0001 per share resulting in a loss on settlement of $52,000.

(d)As at May 31, 2012, the Company is indebted to the President of the Company for $58,797 (November 30, 2011 - $59,337), representing accrued interest and expenditures paid on behalf of the Company.These amounts areunsecured, non-interest bearing and due on demand.



7.             Stock Options

A summary of the Companys stock option activity is as follows:



|                                                                | Number of Options | Weighted Average Exercise Price $ | Aggregate Intrinsic Value $
|--------------------------------------------------------------- | ----------------- | --------------------------------- | ---------------------------
|                                                                |                   |                                   |                            
|Outstanding and exercisable, November 30, 2011 and May 31, 2012 | 500               | 500                               |                           

As at May 31, 2012, the weighted average remaining contractual life was 1.02 years and there was no unrecognized compensation costs related to non-vested share-based compensation.



8.             Common Stock

(a)On December 6, 2011, the Company increased its authorized capital from 160,000,000 common shares to 1,000,000,000 common shares with no change par value. The Company also effected a 1,000 to 1 reverse stock split of its issued and outstanding shares. All share and per share information has been retroactively adjusted to reflect the reverse stock split.

(b)On February 22, 2012, the Company issued 30,000,000 common shares at $0.0001 per share for proceeds of $3,000 to the President of the Company and a company controlled by the President of the Company.

(c)On March 22, 2012, the Company issued 22,500,000 common shares with a fair value of $5,625,000 to settle debt of $22,500, resulting in a loss on settlement of debt of $5,602,500.

F-11

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



9.             Subsequent Event

On June 27, 2012, the Company entered into a bridge loan agreement with D-Helix Inc. (D-Helix), whereby the Company has agreed to lend $75,000 to D-Helix. This loan is evidenced by a promissory note pursuant to which the principal amount will be due and payable on the earlier of September 30, 2012 or within ten business days of the closing of a potential share exchange agreement between the Company and D-Helix. The loan will bear interest at the rate of 10% per annum, payable in quarterly instalments from September 30, 2012.

10.          Restatement

The Company has restated its financial statements as at May 31, 2012 and for the three and six months ended to record the issuance of 22,500,000 common shares with a fair value of $5,625,000 to settle outstanding notes payable of $22,500.  In addition, the effect of the settlement resulted in a reversal of $3,090 of interest expense.  The effect of the restatement is to decrease total liabilities of $25,590, increase net loss by $5,599,410, and increase loss per share by $0.15 for the three months ended May 31, 2012 and increase loss per share by $0.23 for the six months ended May 31, 2012.  The effect of the restatement had no material effect on the statement of cash flows.

The following tables reflect the adjustment and restated amounts:



|                                                 | As at May 31, 2012
|------------------------------------------------ | ------------------
|Balance Sheets                                   | As Reported       
|Liabilities and Stockholders Equity             |                   
|Current Liabilities                              |                   
|Accrued liabilities                              | 40,215            
|Loan payable                                     | 460,565           
|                                                 | 614,400           
|Stockholders Deficit                            |                   
|Common Stock                                     | 3,016             
|Additional Paid-in Capital                       | 3,524,547         
|Deficit Accumulated During the Development Stage | (4,125,190)       
|Total Stockholder Deficit                       | (597,527)         

|
|
|

MASS PETROLEUM INC.

(An Exploration Stage Company)

Notes to the Financial Statements

May 31, 2012

(Expressed in US dollars)

(unaudited)



10.          Restatement (continued)



|                                       | For the Three Months Ended May 31, 2012
|-------------------------------------- | ---------------------------------------
|Statement of Operations                | As Reported                            
|Other Income (Expense)                 |                                        
|Interest expense                       | (5,680)                                
|Loss on settlement of debt             |                                       
|Total Other Income (Expense)           | (5,680)                                
|Net Loss and Comprehensive Loss        | (28,421)                               
|Net Loss Per Share  Basic and Diluted |                                       





|                                       | For the Six Months Ended May 31, 2012
|-------------------------------------- | -------------------------------------
|Statement of Operations                | As Reported                          
|Other Income (Expense)                 |                                      
|Interest expense                       | (11,072)                             
|Loss on settlement of debt             |                                     
|Total Other Income (Expense)           | (11,072)                             
|Net Loss and Comprehensive Loss        | (65,988)                             
|Net Loss Per Share  Basic and Diluted |                                     





|                                | Accumulated from February 14, 2006 (date of inception) toMay 31, 2012
|------------------------------- | ---------------------------------------------------------------------
|Statement of Operations         | As Reported                                                          
|Other Income (Expense)          |                                                                      
|Interest expense                | (46,333)                                                             
|Loss on settlement of debt      | (1,605,370)                                                          
|Total Other Income (Expense)    | (1,714,118)                                                          
|Net Loss and Comprehensive Loss | (4,125,190)                                                          



F-12



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

Forward Looking Statements

This report on Form 10-Q contains certain forward-looking statements.  All statements other than statements of historical fact are forward-looking statements for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

Business Overview

MASS Petroleum Inc. (MASS, we, us) is a start up oil and gas exploration company.  We were incorporated in the State of Nevada on February 14, 2006, under the name of XTOL Energy Inc.  We operated under this name until October 10, 2007 at which time we changed our name to LAUD Resources Inc.  On June 23, 2008 we changed our name to MASS Petroleum Inc. and on July 11, 2008, the new symbol for the quotation of our common stock on the Over the Counter Bulletin board became MASP.OB.  We do not have any subsidiaries.  Our principal office is located at Suite 507  700 West Pender Street, Vancouver, British Columbia, V6C 1G8.  Our telephone number is (604) 688-6380.  Our fiscal year end is November 30.

We have incurred losses since our inception.  We rely upon the sale of our securities to fund our operations.  We have generated limited revenues of $24,227 from our 2.34% non-operated interest in three operating wells in Kingfisher County, Oklahoma since our inception to May 31, 2012.

We intend to build our business through the acquisition of producing and exploration stage oil and natural gas wells, interests and leases.  Our strategy is to combine the secure and reliable revenue source of operated and non-operated interests from producing oil wells with the higher risk development of oil and gas exploration projects.  For the next 12 months (beginning August 2012), we plan to purchase additional operated and non-operated interests in producing oil and natural gas properties, to acquire additional exploration stage properties and carry out an exploration program on the acquired properties.  We are not involved in any bankruptcy, receivership or similar proceedings.

Liquidity and Capital Resources

As of May 31, 2012, we had cash of $724 and a working capital deficit of $580,720 .  Our accumulated deficit from inception to May 31, 2012 was  $9,724,600.  Our net loss of $5,665,398 for the six months ended May 31, 2012 was mostly funded by funds raised from debt and equity financing since inception.  For the six months ended May 31, 2012, we raised $3,000 in funds through the sale of our equities, compared to $nil raised through equity financing during the same period in 2011.  During the six months ended May 31, 2012 our cash position decreased by $4,847.

We used net cash of $22,330 in operating activities for the six months ended May 31, 2012 compared to net cash of $67,742 used in operating activities for the same period in 2011.  This decrease in cash used in operating activities was mainly due to an increase in accounts payable.

During the six months ended May 31, 2012 our monthly cash requirement was approximately $3,722 compared to $11,290 for the same period in 2011.  At May 31, 2012, we had cash of $724, which will cover our costs for less than 1 month according to our current monthly burn rate.





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We expect to require approximately $1,000,000 in financing to continue our planned operation and exploration over the next year plus another $1,000,000 to cover our other operational expenses.

Our planned acquisition and exploration expenditures for oil and gas interests and properties over the next twelve months (beginning August 2012) are summarized as follows:



|                                    |  |                   |  |  |           | 
|----------------------------------- |  | ----------------- |  |  | --------- | 
|Description                         |  | Potential         |  |  | Estimated | 
|                                    |  | completion date   |  |  | Expenses  | 
|                                    |  |                   |  |  | ($)       | 
|Retain a full-time engineer         |  | September 1, 2012 |  |  | 400,000   | 
|and a full-time                     |  |                   |  |  |           | 
|geologist                           |  |                   |  |  |           | 
|Conduct preliminary evaluation of   |  | September 1, 2012 |  |  | 600,000   | 
|potential exploration stage oil and |  |                   |  |  |           | 
|gas properties for acquisition      |  |                   |  |  |           | 
|                                    |  |                   |  |  |           | 
|Total                               |  |                   |  |  | 1,000,000 | 



Our other planned operational expenses for the next 12 months (beginning August 2012) are summarized as follows:



|                                   |  |                 |  |  |           | 
|---------------------------------- |  | --------------- |  |  | --------- | 
|Description                        |  | Potential       |  |  | Estimated | 
|                                   |  | completion date |  |  | Expenses  | 
|                                   |  |                 |  |  | ($)       | 
|Select and appoint a new Board     |  | August 1, 2012  |  |  | 10,000    | 
|member                             |  |                 |  |  |           | 
|                                   |  |                 |  |  |           | 
|Raise additional private or public |  | 12 months       |  |  | 150,000   | 
|equity (legal, accounting and      |  |                 |  |  |           | 
|marketing fees)                    |  |                 |  |  |           | 
|                                   |  |                 |  |  |           | 
|General and administrative         |  | 12 months       |  |  | 100,000   | 
|expenses                           |  |                 |  |  |           | 
|                                   |  |                 |  |  |           | 
|Professional fees (legal,          |  | 12 months       |  |  | 250,000   | 
|accounting and auditing fees)      |  |                 |  |  |           | 
|                                   |  |                 |  |  |           | 
|Consultant, officer, and employee  |  | 12 months       |  |  | 450,000   | 
|fees                               |  |                 |  |  |           | 
|                                   |  |                 |  |  |           | 
|Marketing expenses                 |  | 12 months       |  |  | 40,000    | 
|                                   |  |                 |  |  |           | 
|Total                              |  |                 |  |  | 1,000,000 | 

We intend to raise the $2,000,000 to fund our operations for the next 12 months from private placements, shareholder loans or possibly a registered public offering (either self-underwritten or through a broker-dealer) within the next few months.  If we are unsuccessful in raising enough money through future capital raising efforts, we may review other financing possibilities such as bank loans.  At this time we do not have any commitments from any broker-dealer to provide us with financing.

There is no assurance that any financing will be available or if available, on terms that will be acceptable to us.  We also may need additional financing to carry out our business plan.



Obtaining additional financing will be subject to a number of factors including market conditions, investor acceptance of our business plan, and investor sentiment.  These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us.  If we cannot raise at least $2,000,000 we will have to significantly reduce our spending, delay or cancel planned activities or substantially change our current corporate structure.  In such an event, we intend to implement expense reduction plans in a timely manner.  However, these actions would have material adverse effects on our business, revenues, operating results, and prospects, resulting in a possible failure of our business.  We may need to obtain additional financing which may not be available, which could cause us to cease operations.







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Results of Operations for the Six Months Ended May 31, 2012 Compared to the Same Period in 2011, and From Inception to May 31, 2012

We began to earn nominal revenues in February 2007 from our non-operated working interests in three producing wells.  We plan to purchase additional non-operated and operated working interests in existing oil and gas leases.

Revenues

We have generated $24,227 in revenues from our 2.34% non-operating interest in the Kingfisher property since February 14, 2006 (inception) to May 31, 2012.  We generated revenues of $1,017 for the six months ended May 31, 2012 compared to $1,874 for the six months ended May 31, 2011.

Net Loss

We incurred a net loss of $5,665,398 for the six months ended May 31, 2012 compared to our net loss of $77,822 for the six months ended May 31, 2011.  The increase in net loss was mainly due to  loss on settlement of debt.  Since February 14, 2006 (date of inception) to May 31, 2012, we have incurred a net loss of $9,724,600.Expenses

Our total expenses for the six months ended May 31, 2012 were $55,933 compared to $71,221, for the same period in 2011.  The decrease in our expenses during 2012 was attributable to a decrease in our general and administrative expenses.  Our general and administrative expenses decreased by $14,173 from $68,415 for the six months ended May 31, 2011 compared to $54,242 for the six months ended May 31, 2012.  Our general and administrative expenses consist of professional fees, management and consulting fees, stock based compensation, bank charges, travel, meals and entertainment, rent, office maintenance, communications (cellular, internet, fax and telephone), courier, postage costs and office supplies.

Results of Operations for the Three Months Ended May 31, 2012 Compared to the Same Period in 2011

Revenues

We generated revenues of $572 for the three months ended May 31, 2012 compared to $1,072 for the three months ended May 31, 2011.

Net Loss

We incurred a net loss of  $5,627,831 for the three months ended May 31, 2012 compared to our net loss of $37,147 for the three months ended May 31, 2011.   The increase was mainly due to loss of settlement of debt .

Expenses

Our total expenses for the three months ended May 31, 2012 were $22,741 compared to $32,607, for the same period in 2011.  The decrease in our expenses during 2012 was attributable to a decrease in our general and administrative expenses.  Our general and administrative expenses decreased by $9,925 from $32,328 for the three months ended May 31, 2011 compared to $22,403 for the three months ended May 31, 2012.





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Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position.  The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements



As of May 31, 2012, we had no off balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



Critical Accounting Policies



The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net revenue and expenses in the reporting period.  We base our estimates and assumptions on current facts, historical experience and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenue, costs and expenses that are not readily apparent from other sources.  The actual results experienced by us may differ materially and adversely from our estimates.  To the extent there are material differences between our estimates and the actual results, our future results of operations will be affected.



We believe the following are either (i) critical accounting policies that require us to make significant estimates or assumptions in the preparation of our financial statements or (ii) other key accounting policies that generally do not require us to make estimates or assumptions but may require us to make difficult or subjective judgments:



Oil and Gas Properties



The Company utilizes the full-cost method of accounting for petroleum and natural gas properties.  Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis.  When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves.  The costs of unproved properties are not amortized until it is determined whether or not proved reserves can be assigned to the properties.  Until such determination is made the Company assesses annually whether impairment has occurred, and includes in the amortization base drilling exploratory dry holes associated with unproved properties.



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The Company applies a ceiling test to the capitalized cost in the full cost pool.  The ceiling test limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions.  Specifically, the Company computes the ceiling test so that capitalized cost, less accumulated depletion and related deferred income tax, do not exceed an amount (the ceiling) equal to the sum of: (A) The present value of estimated future net revenue computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current cost) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus (B) the cost of property not being amortized; plus (C) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; less (D) income tax effects related to differences between the book and tax basis of the property. For unproven properties, the Company excludes from capitalized costs subject to depletion, all costs directly associated with the acquisition and evaluation of the unproved property until it is determined whether or not proved reserves can be assigned to the property.  Until such a determination is made, the Company assesses the property at least annually to ascertain whether impairment has occurred.  In assessing impairment the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data.  The Company adds the amount of impairment assessed to the cost to be amortized subject to the ceiling test.



Revenue Recognition



The Company recognizes oil and gas revenue when production is sold at a fixed or determinable price, persuasive evidence of an arrangement exists, delivery has occurred and title has transferred, and collectability is reasonably assured.



Long-lived Assets



In accordance with ASC 360, Property, Plant, and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable.  Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances.  An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.



Stock-based Compensation



The Company records stock-based compensation in accordance with ASC 718, Compensation  Stock Compensationand ASC 505, Equity Based Payments to Non-Employees,which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.

ASC 718 requires company to estimate the fair value of share-based awards on the date of grant using an option-pricing model.  The Company uses the Black-Scholes option pricing model as its method of determining fair value.  This model is affected by the Companys stock price as well as assumptions regarding a number of subjective variables.  These subjective variables include, but are not limited to the Companys expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours.  The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.







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ITEM 4.  CONTROLS AND PROCEDURES

N/A

ITEM 4T.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures

Jordan Shapiro, our Chief Executive Officer and Vitaly Melnikov, our Chief Financial Officer evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Securities Exchange Act of 1934 (the Exchange Act) as of a date within 90 days before the filing date of this report and has concluded that as of the evaluation date, our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.

(b) Changes in internal controls

Subsequent to the date of their evaluation, there were no changes in our internal controls over financial reporting or in other factors that could significantly affect these controls.



PART II  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us.  None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings.  Management is not aware of any other legal proceedings that have been threatened against us.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.  OTHER INFORMATION

None.



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ITEM 6.  EXHIBITS



Exhibit ExhibitNumber Description31.1 Certification of the Chief Executive Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2 Certification of the Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002EX-101.INS XBRL Instance DocumentEX-101.SCH XBRL Taxonomy Extension SchemaEX-101.CAL XBRL Taxonomy Extension Calculation LinkbaseEX-101.LAB XBRL Taxonomy Extension Label LinkbaseEX-101.PRE XBRL Taxonomy Extension Presentation LinkbaseEX-101.DEF XBRL Taxonomy Extension Definition Linkbase


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned thereunto duly authorized.





|                        |  |     | **MASS PETROLEUM INC.**                                             
|----------------------- |  | --- | --------------------------------------------------------------------
|Date: October 18, 2012  |  | By: | /s/ Jordan Shapiro                                                  
|                        |  |     | Jordan Shapiro                                                      
|                        |  |     | Chief Executive Officer, President Secretary, Treasurer and Director
|                        |  |     |                                                                     
|Date:  October 18, 2012 |  | By: | /s/ Vitaly Melnikov                                                 
|                        |  |     | Vitaly Melnikov                                                     
|                        |  |     | Chief Financial Officer                                             
|                        |  |     | and Director                                                        
|                        |  |     |                                                                     
|                        |  |     |                                                                     
|                        |  |     |                                                                     







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