UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                   FORM 10-QSB

[X]  Quarterly  Report under Section 13 or 15(d) of The Securities  Exchange Act
     of 1934
                For the Quarterly Period Ended December 31, 2007

                          Commission File Number 0-9355



                               CUBIC ENERGY, INC.
        (Exact name of small business issuer as specified in its charter)

           Texas                                        87-0352095
 (State or other jurisdiction                  (IRS Employer Identification No.)
        of incorporation)

                                 9870 Plano Road
                                Dallas, TX 75238
                    (Address of principal executive offices)

                                 (972) 686-0369
                (Issuer's telephone number, including area code)



Check  whether the issuer (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 required 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 shell company.

Yes [  ]   No [X]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

As of February 4, 2008, the Company had 57,246,651 shares of common stock, $0.05
par value, outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes [  ] No [X]


<PAGE>


                               CUBIC ENERGY, INC.


                                TABLE OF CONTENTS


                         PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

                Independent Accountant's Report................................1

                Condensed Balance Sheets
                As of December 31, 2007 (unaudited) and June 30, 2007..........2

                Condensed Statements of Operations, (unaudited)
                For the three months ended December 31, 2007
                and December 31, 2006..........................................3

                Condensed Statements of Cash Flows, (unaudited)
                For the six months ended December 31, 2007
                and December 31, 2006..........................................4

                Notes to Condensed Financial Statements......................5-9

Item 2.     Management's Discussion and Analysis or Plan of Operation......10-12

Item 3.     Controls and Procedures...........................................12


                           PART II - OTHER INFORMATION

Item 1.     Legal Proceedings.................................................13

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds ......13

Item 6.     Exhibits..........................................................13

Signatures....................................................................14

Certifications


                                       i

<PAGE>


                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                         INDEPENDENT ACCOUNTANT'S REPORT


The Stockholders and Board of Directors
Cubic Energy, Inc.


We have reviewed the  accompanying  condensed  balance sheets as of December 31,
2007,  and the related  condensed  statements of operations and of cash flows of
Cubic Energy,  Inc. for the three-month and six-month periods ended December 31,
2007  and  2006.  These  financial  statements  are  the  responsibility  of the
Company's management.

We conducted our reviews in accordance  with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  A review of  interim  financial
information consists principally of applying analytical  procedures to financial
data and making  inquiries of persons  responsible  for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with the  standards  of the  Public  Company  Accounting  Oversight  Board,  the
objective  of which is the  expression  of an opinion  regarding  the  financial
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to the  accompanying  financial  statements for them to be in conformity
with accounting principles generally accepted in the United States of America.

We have  previously  audited,  in  accordance  with the  standards of the Public
Company Accounting  Oversight Board (United States),  the balance sheet of Cubic
Energy,  Inc. as of June 30, 2007,  and the related  statements  of  operations,
stockholders'  equity and cash flows for the year then ended;  and in our report
dated  September  26,  2007,  we  expressed  an  unqualified  opinion  on  those
statements.




                                                    PHILIP VOGEL & CO., PC

                                                    /s/ Philip Vogel & Co., PC
                                                    --------------------------

                                                    Certified Public Accountants


Dallas, Texas
February 11, 2008


<PAGE>
<TABLE>
<CAPTION>
                               CUBIC ENERGY, INC.

                                 BALANCE SHEETS

                                                                  December 31,
                                                                2007 (unaudited)     June 30, 2007
                                                                ----------------    ----------------
<S>                                                             <C>                 <C>

Assets
Current assets:
     Cash and cash equivalents                                    $  1,195,992       $  3,122,273
     Accounts receivable - trade                                       124,388            218,874
     Prepaid drilling costs                                          1,535,365            721,136
     Other prepaid expenses                                             83,728            231,232
                                                                  ------------       ------------
            Total current assets                                     2,939,473          4,293,515
Property and equipment (at cost):
     Oil and gas properties, full cost method:
         Proved properties (including wells and related
            equipment and facilities)                                9,595,421          8,836,790
         Unproven properties                                        14,748,642          6,827,341
     Office and other equipment                                         14,672             12,886
                                                                  ------------       ------------
                                                                    24,358,735         15,677,017
Less accumulated depreciation, depletion and amortization            2,497,268          2,011,015
                                                                  ------------       ------------
            Property and equipment, net                             21,861,467         13,666,002
Other assets:
     Deferred loan costs, net                                          120,629            148,724
                                                                  ------------       ------------
            Total other assets                                         120,629            148,724
                                                                  ------------       ------------
                                                                  $ 24,921,569       $ 18,108,241
                                                                  ============       ============
Liabilities and stockholders' equity
Current liabilities:
     Accounts payable and accrued expenses                        $    198,166       $     51,664
     Due to affiliates                                                 765,564          1,635,055
                                                                  ------------       ------------
            Total current liabilities                                  963,730          1,686,719
Long-term liabilities:
     Long-term debt, net of discounts                               16,544,574          7,626,739
                                                                  ------------       ------------
            Total long-term liabilities                             16,544,574          7,626,739
Commitments and contingencies                                             --                 --
Stockholders' equity:
Preferred stock - $.01 par value, authorized 10,000,000 shares,
     issued none                                                          --                 --
Common stock - $.05 par value, authorized 100,000,000 shares,
     issued 56,520,899 shares at December 31, 2007 and
     55,840,896 shares at June 30, 2007                              2,826,046          2,792,046
Additional paid-in capital                                          25,697,929         25,325,429
Accumulated deficit                                                (21,110,710)       (19,322,692)
                                                                  ------------       ------------
            Stockholders' equity                                     7,413,265          8,794,783
                                                                  ------------       ------------
                                                                  $ 24,921,569       $ 18,108,241
                                                                  ============       ============
</TABLE>

        The accompanying notes are an integral part of these statements.



                                       2
<PAGE>
<TABLE>
<CAPTION>
                               CUBIC ENERGY, INC.

                            STATEMENTS OF OPERATIONS

                                                         Three months ended               Six months ended
                                                            December 31,                    December 31,
                                                    ----------------------------    ----------------------------
                                                        2007            2006            2007            2006
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>

Revenues:
     Oil and gas sales                              $    375,825    $     86,263    $    823,813    $    218,369
                                                    ------------    ------------    ------------    ------------
        Total revenues                              $    375,825    $     86,263    $    823,813    $    218,369
Costs and expenses:
     Oil and gas production, operating and
        development costs                                181,422          88,944         421,612         188,575
     Selling, general and administrative expenses        453,811         353,173         827,304         612,853
     Depreciation, depletion and non-loan-related
        amortization                                     204,249          37,099         486,253          88,486
                                                    ------------    ------------    ------------    ------------
        Total costs and expenses                         839,482         479,216       1,735,169         889,914
                                                    ------------    ------------    ------------    ------------
Operating income (loss)                                 (463,657)       (392,953)       (911,356)       (671,545)
                                                    ------------    ------------    ------------    ------------
Non-operating income (expense):
     Other income                                         11,286           2,784          29,156           4,531
     Interest expense, including amortization of
        loan discount                                   (480,556)       (323,588)       (877,722)       (647,144)
     Amortization of loan costs                          (14,048)        (30,828)        (28,096)        (61,655)
                                                    ------------    ------------    ------------    ------------
Total non-operating income (expense)                    (483,318)       (351,632)       (876,662)       (704,268)
                                                    ------------    ------------    ------------    ------------
Loss from operations before income taxes                (946,974)       (744,585)     (1,788,018)     (1,375,813)
Provision for income taxes                                  --              --              --              --
                                                    ------------    ------------    ------------    ------------
Net loss                                            $   (946,974)   $   (744,585)   $ (1,788,018)   $ (1,375,813)
                                                    ============    ============    ============    ============
Net loss per common share - basic and diluted       $      (0.02)   $      (0.02)   $      (0.03)   $      (0.03)
                                                    ============    ============    ============    ============
Weighted average common shares outstanding            56,362,581      46,967,725      56,160,026      45,813,866


</TABLE>








        The accompanying notes are an integral part of these statements.





                                       3
<PAGE>
<TABLE>
<CAPTION>


                               CUBIC ENERGY, INC.

                            STATEMENTS OF CASH FLOWS

                                                                      Six months ended
                                                                        December 31,
                                                                 --------------------------
                                                                     2007          2006
                                                                 -----------    -----------
<S>                                                              <C>            <C>

Cash flows from operating activities:
Net (loss)                                                       $(1,788,018)   $(1,375,813)
Adjustments to reconcile net (loss) to cash provided
     (used) by operating activities:
         Depreciation, depletion and amortization                    773,774        371,514
         Stock issued for compensation                               225,612        243,100
         Change in assets and liabilities:
            (Increase) decrease in accounts receivable - trade        94,486        (29,963)
            (Increase) decrease in other prepaid expenses             25,392           --
            Increase (decrease) in due to affiliates                (371,282)        30,810
            Increase (decrease) in accounts payable and
                accrued expenses                                     146,502         86,306
                                                                 -----------    -----------
     Net cash provided (used) by operating activities               (893,534)      (674,046)
                                                                 -----------    -----------
Cash flows from investing activities:
Acquisition and development of oil and gas properties             (9,178,142)    (1,079,381)
Purchase of office equipment                                          (1,786)        (1,029)
Advances on development costs                                       (814,229)    (1,323,543)
Cash restricted by debt                                                 --           (4,003)
                                                                 -----------    -----------
     Net cash provided (used) by investing activities             (9,994,157)    (2,407,956)
                                                                 -----------    -----------
Cash flows from financing activities:
Proceeds from credit facility                                      8,658,410           --
Issuance of common stock, net                                        303,000      6,040,000
Repayment of advances                                                   --         (100,000)
                                                                 -----------    -----------
     Net cash provided (used) by financing activities              8,961,410      5,940,000
                                                                 -----------    -----------
Net increase (decrease) in cash and cash equivalents             $(1,926,281)   $ 2,857,998
Cash and cash equivalents:
     Beginning of period                                           3,122,273        259,157
                                                                 -----------    -----------
     End of period                                               $ 1,195,992    $ 3,117,155
                                                                 ===========    ===========
Other information:
     Interest paid                                               $   618,296    $   425,772

</TABLE>




        The accompanying notes are an integral part of these statements.





                                       4
<PAGE>


                               CUBIC ENERGY, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2007
                                   (Unaudited)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation:

The accounting policies followed by Cubic Energy, Inc., a Texas corporation (the
"Company" or "Cubic"),  are set forth in the Company's financial statements that
are a part of its June 30,  2007 Form  10-KSB and should be read in  conjunction
with the financial statements contained herein.

The financial  information  included herein as of December 31, 2007, and for the
three-month  and six-month  periods ended December 31, 2007, and 2006, have been
presented  without an audit,  pursuant  to  accounting  principles  for  interim
financial  information  generally accepted in the United States of America,  and
the rules of the Securities and Exchange Commission.

The Company  believes that the  disclosures are adequate to make the information
presented not  misleading.  The information  presented  reflects all adjustments
(consisting solely of normal recurring  adjustments),  which are, in the opinion
of management, necessary for a fair statement of results for the periods.

Earnings per share:

The Company has adopted the  provisions  of Statement  of  Financial  Accounting
Standards  (SFAS)  No.  128,   Earnings  per  Share.   SFAS  No.  128  reporting
requirements  replace  primary and  fully-diluted  earnings per share (EPS) with
basic and diluted EPS. Basic EPS is calculated by dividing net income (available
to  common  stockholders)  by the  weighted  average  number  of  common  shares
outstanding  for the period.  Diluted EPS reflects the  potential  dilution that
could  occur  if  securities  or other  contracts  to issue  common  stock  were
exercised or converted into common stock.

Stock issuance:

On August 27, 2007, two warrant holders of the Company exercised warrants for an
aggregate  of 200,000  shares of Company  common  stock,  through the payment of
$100,000 to the Company.

On September 17, 2007, one warrant holder of the Company exercised  warrants for
25,000  shares of Company  common  stock,  through the payment of $17,500 to the
Company.

On October 22, 2007, two warrant holders of the Company  exercised  warrants for
an aggregate of 250,000 shares of Company  common stock,  through the payment of
$125,000 to the Company.

On December 21, 2007, one warrant holder of the Company  exercised  warrants for
100,000 shares of Company  common stock,  through the payment of $100,000 to the
Company;  and, an  additional  three  warrant  holders of the Company  exercised
warrants for an aggregate of 15,000 shares of Company common stock,  through the
payment of $10,500 to the Company.




                                       5
<PAGE>

                               CUBIC ENERGY, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2007
                                   (Unaudited)

Stock grants:

On December 29, 2005, the  stockholders  of the Company  approved the 2005 Stock
Option Plan (the "Plan") and 3,750,000 shares of common stock were reserved,  of
which 1,801,000 shares have been issued through December 31, 2007.

On  January 5, 2006,  the  Company  issued  572,000  unregistered  shares to the
officers and directors of the Company pursuant to the Plan. As of such date, the
aggregate  market  value of the common stock  granted was $486,200  based on the
last sale price on the OTC Bulletin  Board of the Company's  common stock.  Such
amount was  amortized  to  compensation  expense  on a  quarterly  basis  during
calendar year 2006.  Accordingly,  $121,550 was recorded as compensation expense
and  included in general and  administrative  expenses  for each of the quarters
ended September 30, 2006 and December 31, 2006.

On January 10 and  January  18,  2007,  the  Company  issued  489,500 and 52,500
unregistered shares, respectively, to the officers, directors, and key employees
of the Company  pursuant to the Plan.  As of such dates,  the  aggregate  market
value of the common stock granted was $391,600 and $42,000, respectively,  based
on the last sale price on the OTC Bulletin Board of the Company's  common stock.
Such amounts were amortized to compensation  expense on a quarterly basis during
calendar  year 2007.  An  additional  $30,000 was recorded when our former Chief
Financial Officer resigned during fiscal 2007, with such amount representing the
remaining unamortized portion of his January 10, 2007 stock grant.  Accordingly,
$93,400  was  recorded  as  compensation  expense  and  included  in general and
administrative  expenses for the quarter  ended  September 30, 2007 and December
31, 2007.

On August 20, 2007, the Company issued 90,000  unregistered shares to an officer
of the  Company  pursuant  to the Plan,  with such  grant  subject to vesting in
quarterly  installments  over the  following  12 months.  As of such  date,  the
aggregate  market  value of the common stock  granted was $103,500  based on the
then market price on the OTC Bulletin Board of the Company's common stock.  Such
amount is being  amortized to  compensation  expense on a quarterly basis during
fiscal year 2008. Accordingly,  $12,937 and $25,875 was recorded as compensation
expense and  included in general and  administrative  expenses  for the quarters
ended September 30, 2007 and December 31, 2007, respectively.

Long-term debt:

February 2006 debt issue
------------------------

On February 6, 2006, Cubic entered into a Credit Agreement with Petro Capital V,
L.P. ("Petro  Capital")  pursuant to which Petro Capital advanced to the Company
$5,500,000.  The  indebtedness  bore interest at a rate of 12.5% per annum,  was
scheduled to mature on February 6, 2009, and was secured by substantially all of
the assets of the Company.  $1,800,000  of the funded  amount was used to retire
the then  outstanding 7% Senior  Secured  Convertible  Debentures  that were due
December 31, 2009.  In connection  with the funding under the Credit  Agreement,
the Company issued to Petro Capital and Petro Capital Securities, LLC, warrants,
with  five-year  expirations,  for the purchase of up to  1,833,334  and 250,000
shares, respectively,  of Company common stock at an exercise price of $1.00 per
share.




                                       6
<PAGE>


                               CUBIC ENERGY, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2007
                                   (Unaudited)

The Company  allocated  the proceeds from the issuance of the senior debt to the
warrants and the senior debt based on their  relative  fair market values at the
date of issuance.  The value assigned to the warrants of $1,203,752 was recorded
as an increase in additional  paid in capital.  The assignment of a value to the
warrants  resulted in a loan  discount  being  recorded.  The discount was being
amortized  over the original  three-year  term of the senior debt as  additional
interest expense. Amortization for the quarter and six months ended December 31,
2006 was $110,686 and $221,372, respectively.

Cubic  incurred  loan costs of $483,643  on the  issuance of the senior debt and
warrants.  The amount  allocable to the senior debt of $367,586 was  capitalized
and was being  amortized over the term of the senior debt.  Amortization of loan
costs for the senior debt was $30,827 and $61,655 for the quarter and six months
ended December 31, 2006, respectively.

The senior debt was retired on March 5, 2007,  with  proceeds  from a new senior
debt issue, as set forth below.

March 2007 debt issue
---------------------

On March 5, 2007,  Cubic entered into a Credit Agreement with Wells Fargo Energy
Capital,  Inc.  ("Wells  Fargo")  providing for a revolving  credit  facility of
$20,000,000  (the  "Revolving  Note") and a convertible  term loan of $5,000,000
(the "Term Loan";  together,  the "Credit  Facility").  The  indebtedness  bears
interest  at a  fluctuating  rate equal to the sum of the Wells Fargo Bank prime
rate plus two percent (2%) per annum,  matures on March 1, 2010,  and is secured
by substantially all of the assets of the Company.  Approximately  $5,000,000 of
the funded amount was used,  together with cash on hand, to retire the Company's
previously  outstanding  senior debt that was due  February  6, 2009,  described
above.

The Term Loan of $5,000,000 is convertible into 5,000,000 shares of Cubic common
stock at a conversion price of $1.00 per share. The Revolving Note is subject to
a  borrowing  base,  initially  set at  $4,000,000,  and is subject to  periodic
review. On September 7, 2007, Wells Fargo increased the Company's borrowing base
to $8,600,000  in order to fund the remaining  drilling and casing costs of five
wells drilled since the beginning of fiscal 2008,  the drilling and casing costs
of two new  wells  and the  costs  of  installing  a  gathering/sales  line  and
associated  equipment in the Company's  Johnson  Branch acreage in Caddo Parish,
Louisiana.  On November 19, 2007, Wells Fargo increased the Company's  borrowing
base to $14,500,000  in order to fund the  completion  costs and casing of eight
wells already  successfully  drilled and the drilling of four  additional  wells
located in the Company's Johnson Branch acreage.

In  connection  with entering into the Credit  Facility,  the Company  issued to
Wells Fargo  warrants,  with  five-year  expirations,  for the purchase of up to
2,500,000  shares of  Company  common  stock at an  exercise  price of $1.00 per
share.

The terms of the Credit Facility,  among other things, prohibit the Company from
merging  with  another  company  or  paying  dividends,   and  limit  additional
indebtedness,  sales of certain assets and investments.  Additionally,  upon the
repayment in full of the Revolving  Note, the repayment in full or conversion of
the Term Loan and upon confirmation of the title of Wells Fargo to such interest
upon  conveyance  by the  Company,  the  Company  agreed to convey a net profits
interest to Wells  Fargo  equal to 5% of Cubic's net  interest in certain of its
Louisiana properties.



                                       7
<PAGE>


                               CUBIC ENERGY, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2007
                                   (Unaudited)

The  Company  allocated  the  proceeds  from  the  issuance  of the  debt to the
warrants,  the debt and net profits interest (see above) based on their relative
fair market values at the date of issuance.  The value  assigned to the warrants
of $1,314,289 was recorded as an increase in additional  paid in capital and the
value assigned to the net profits  interest of $213,148 was recorded as a credit
to the full cost pool for oil and gas  properties.  The assignment of a value to
the warrants and net profit interest resulted in a loan discount being recorded.
The discount is being amortized over the original three-year term of the debt as
additional  interest expense.  Amortization for the quarter and six months ended
December 31, 2007 was $129,713 and $259,425, respectively.  Amortization for the
fiscal  years  ending June 30,  2008 and 2009 is  expected  to be  $516,030  and
$514,620, respectively.

Cubic  incurred loan costs of $240,613 on the issuance of the debt and warrants.
The amount  allocable to the debt of $166,590 has been  capitalized and is being
amortized over the term of the debt. Amortization for the quarter and six months
ended  December  31,  2007 was $14,048 and  $28,096,  respectively;  and for the
fiscal  years  ending  June 30,  2008 and 2009 is  expected  to be  $55,886  and
$55,733, respectively.

Related-party transactions:

An affiliated company, Tauren Exploration,  Inc. ("Tauren"), which is owned 100%
by the Company's President and Chief Executive Officer,  Calvin Wallen III, owns
a working interest in the wells in which the Company owns a working interest. As
of December  31, 2007 and June 30,  2007,  the Company  owed Tauren  $13,741 and
$3,715,  respectively,  for miscellaneous  capital  expenditures and general and
administrative expenses paid by Tauren on the Company's behalf.

In addition, the wells in which the Company owns a working interest are operated
by an affiliated company, Fossil Operating, Inc. ("Fossil"), which is owned 100%
by the Company's President and Chief Executive Officer, Calvin Wallen III. As of
December  31  and  June  30,  2007,  the  Company  owed  Fossil  $1,108,647  and
$1,659,786,  respectively,  for drilling costs and lease and operating expenses,
and was owed by  Fossil  $356,824  and  $28,446,  respectively,  for oil and gas
sales.

Subsequent events:

On January 17, 2008, a warrant holder of the Company  exercised  warrants for an
aggregate  of 100,000  shares of Company  common  stock,  through the payment of
$50,000 to the Company.

On January 19,  2008,  the  Company  borrowed an  additional  $1,239,950  on its
revolving line of credit with Wells Fargo.

On January 31 and  February  4, 2008,  the  Company  issued  555,000  and 52,500
unregistered shares, respectively, to the officers, directors, and key employees
of the Company  pursuant to the Plan.  As of such dates,  the  aggregate  market
value of the common stock granted was $880,000 and $84,525, respectively,  based
on the  then-market  price on the OTC  Bulletin  Board of the  Company's  common
stock.  Such amounts will be  amortized to  compensation  expense on a quarterly
basis during calendar year 2008.

On  February  1,  2008,  50,000  warrants  were  exercised  by a warrant  holder
utilizing  a cashless  exercise  price of $1.55 per share and  18,252  shares of
Company common stock were issued.



                                       8
<PAGE>

                               CUBIC ENERGY, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2007
                                   (Unaudited)

SAFE HARBOR  STATEMENTS UNDER THE PRIVATE  SECURITIES  LITIGATION  REFORM
ACT OF 1995:

This report contains "forward-looking  statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended.  Such forward-looking  statements are based on
current expectations that involve a number of risks and uncertainties that could
cause  actual  results to differ  materially  from the results  discussed in the
forward-looking statements. Generally,  forward-looking statements include words
or phrases  such as  "management  anticipates,"  "the  Company  believes,"  "the
Company   anticipates,"   and  words  and   phrases  of  similar   impact.   The
forward-looking  statements  are made pursuant to safe harbor  provisions of the
Private Securities Litigation's Reform Act of 1995.

The  factors  that could  cause  actual  results to differ  materially  from the
forward-looking  statements  include,  but  are not  limited  to:  (i)  industry
conditions  and  competition,  (ii) the cyclical  nature of the industry,  (iii)
domestic and  worldwide  supplies and demand for oil and gas,  (iv)  operational
risks and insurance, (v) environmental liabilities which may arise in the future
which are not covered by insurance or indemnity,  (vi) the impact of current and
future laws and government  regulations,  as well as repeal or  modification  of
same,  affecting  the oil and gas  industry  and  the  Company's  operations  in
particular,  (vii) production  levels and other activities of OPEC and other oil
and gas  producers,  and the impact that the above factors and other events have
on the current and  expected  future  pricing of oil and natural gas, and (viii)
the risks  described  from time to time in the Company's  reports filed with the
Securities  and Exchange  Commission,  including the Company's  Annual Report on
Form 10-KSB for the fiscal year ended June 30, 2007.
















                                       9
<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation.

RESULTS OF OPERATIONS

Three Months Ended December 31, 2007 Compared To Three Months Ended December 31,
2006:

Revenues

OIL AND GAS SALES  increased 336% to $375,825 for the quarter ended December 31,
2007 from  $86,263 for the quarter  ended  December  31, 2006  primarily  due to
higher gas volumes  resulting from eight wells being on-line in Louisiana in the
2007 period versus three in the 2006 period.

Costs and Expenses

OIL AND GAS  PRODUCTION,  OPERATING AND  DEVELOPMENT  COSTS (also referred to as
"LEASE OPERATING  EXPENSES" elsewhere herein) increased 104% to $181,422 (48% of
oil and gas  sales) for 2007 from  $88,944  (103% of oil and gas sales) for 2006
primarily  due to more wells being  on-line in  Louisiana,  which  resulted in a
$48,612  increase  in salt  water  hauling  and  disposal  costs,  and a $43,692
increase  in  costs  passed-through  to  the  Company  by the  purchaser  of the
Company's  gas. Such costs are deducted from the Company's  gross revenue by the
purchaser  and include,  but are not limited to:  costs to market the  Company's
gas,  compression fees, and the cost of fuel used by the purchaser to convey the
Company's gas.

SELLING,  GENERAL AND ADMINISTRATIVE  EXPENSES ("G&A") increased 28% to $453,811
for 2007 from  $353,173  in 2006 as a result  of:  $61,500  in  commitment  fees
related to borrowings on the Company's Credit  Facility,  which was not in place
in  the  2006  period;  a  $43,128  increase  in  compensation-related  expenses
resulting  from an increase in the number of  employees;  a $13,832  increase in
reserve  report  expenses;  and,  $12,696 in expense for  directors and officers
insurance,  which  was not in place in the 2006  period.  These  increases  were
partially  offset  by  a  $32,539  decrease  in  legal  fees  primarily  due  to
preparation and review of documents and filings  related to a private  placement
of shares of the  Company's  common stock in December  2006;  no such  placement
occurred in the 2007 period.

DEPRECIATION,  DEPLETION AND AMORTIZATION ("DD&A") increased 451% to $204,249 in
2007 from $37,099 in 2006.  The increase was primarily  due to a $9,810,190,  or
67%,  increase in  "Property  and  equipment  (at cost)" at December 31, 2007 as
compared to December 31, 2006.  Such increase was  primarily  related to capital
expenditures for the acquisition and development of oil and gas properties.

INTEREST  EXPENSE  increased  49% to  $480,556  in 2007  from  $323,588  in 2006
primarily  due to an increase in debt to  $17,658,410  at December 31, 2007 from
$6,800,000 at December 31, 2006. This increase  resulted from the repayment of a
$1,300,000  note held by  Tauren on  February  2,  2007 from the  proceeds  of a
December 2006 equity offering,  and the retirement of $5,500,000 of indebtedness
held by Petro  Capital V. L.P. on March 5, 2007 via the  borrowing of $5,000,000
pursuant to the  aforementioned  Credit  Facility  with Wells Fargo's new senior
convertible  term loan and subsequent  draws of  approximately  $12,658,410 on a
related  revolving  line of credit.  The Credit  Facility  with Wells Fargo also
resulted in a loan discount being recorded. The discount is being amortized over
the original  three-year  term of the debt as additional  interest  expense with
$129,712 being recorded in the quarter ended December 31, 2007.




                                       10
<PAGE>

Six Months  Ended  December 31, 2007  Compared To Six Months Ended  December 31,
2006:

Revenues

OIL AND GAS SALES  increased  277% to $823,813 for the six months ended December
31, 2007 from $218,639 for the six months ended  December 31, 2006 primarily due
to higher gas  volumes  resulting  from an average  of  approximately  seven and
one-half wells being on-line in Louisiana in the 2007 period versus three in the
2006 period.

Costs and Expenses

OIL AND GAS  PRODUCTION,  OPERATING AND  DEVELOPMENT  COSTS (also referred to as
"LEASE OPERATING  EXPENSES" elsewhere herein) increased 124% to $421,612 (51% of
oil and gas  sales) for 2007 from  $188,575  (86% of oil and gas sales) for 2006
primarily  due to more wells being  on-line in  Louisiana,  which  resulted in a
$99,764  increase  in salt water  hauling  and  disposal  costs,  and a $111,520
increase  in  costs  passed-through  to  the  Company  by the  purchaser  of the
Company's  gas. Such costs are deducted from the Company's  gross revenue by the
purchaser  and include,  but are not limited to:  costs to market the  Company's
gas,  compression fees, and the cost of fuel used by the purchaser to convey the
Company's gas.

SELLING,  GENERAL AND ADMINISTRATIVE  EXPENSES ("G&A") increased 35% to $827,304
for 2007 from  $612,853  in 2006 as a result of:  $112,500  in  commitment  fees
related to borrowings on the Company's Credit  Facility,  which was not in place
in  the  2006  period;  a  $58,824  increase  in  compensation-related  expenses
resulting  from an increase in the number of  employees;  a $39,820  increase in
reserve  report  expenses;  and,  $25,392 in expense for  directors and officers
insurance,  which  was not in place in the 2006  period.  These  increases  were
partially  offset  by  a  $29,545  decrease  in  legal  fees  primarily  due  to
preparation and review of documents and filings  related to a private  placement
of shares of the  Company's  common stock in December  2006;  no such  placement
occurred in the 2007 period.

DEPRECIATION,  DEPLETION AND AMORTIZATION ("DD&A") increased 450% to $486,253 in
2007 from $88,486 in 2006.  The increase was primarily  due to a $9,810,190,  or
67%,  increase in  "Property  and  equipment  (at cost)" at December 31, 2007 as
compared to December 31, 2006.  Such increase was  primarily  related to capital
expenditures for the acquisition and development of oil and gas properties.

INTEREST  EXPENSE  increased  36% to  $877,722  in 2007  from  $647,144  in 2006
primarily  due to an increase in debt to  $17,658,410  at December 31, 2007 from
$6,800,000 at December 31, 2006. This increase  resulted from the repayment of a
$1,300,000  note held by  Tauren on  February  2,  2007 from the  proceeds  of a
December 2006 equity offering,  and the retirement of $5,500,000 of indebtedness
held by Petro  Capital V. L.P. on March 5, 2007 via the  borrowing of $5,000,000
pursuant to the  aforementioned  Credit  Facility  with Wells Fargo's new senior
convertible  term loan and subsequent  draws of  approximately  $12,658,410 on a
related  revolving  line of credit.  The Credit  Facility  with Wells Fargo also
resulted in a loan discount being recorded. The discount is being amortized over
the original  three-year  term of the debt as additional  interest  expense with
$259,425 being recorded in the six months ended December 31, 2007.

Liquidity and Capital Resources:

During the six months ended  December 31, 2007, the Company used cash flows from
operating activities of $893,534.  Cash flow from operations is dependent on our
ability  to  increase   production   through  our  development  and  exploratory
activities and the price received for oil and natural gas.



                                       11
<PAGE>


The Company's  working capital decreased to $1,975,743 at December 31, 2007 from
$2,606,796 at June 30, 2007, primarily due to capital expenditures of $8,679,932
in the six months  ended  December 31, 2007 related to the drilling of new wells
and a $814,229 increase in prepaid drilling costs (also referred to as "advances
on development costs" elsewhere herein). These increases were somewhat offset by
the borrowing of an additional  $8,658,410 on the aforementioned  revolving line
of credit with Wells Fargo.

The Company plans to fund its  development and  exploratory  activities  through
cash provided from operations and utilization of the Credit Facility (see "Notes
to Condensed Financial Statements - Long-Term Debt" elsewhere herein).

The  Company  cannot be  certain  that  adequate  funds will be  available  from
operating cash flow and the Credit Facility to fully fund the projected  capital
expenditures  for fiscal 2008.  Additionally,  because future cash flows and the
availability  of  borrowings  are  subject  to a number  of  variables,  such as
prevailing   prices  of  oil  and  gas,  actual  production  from  existing  and
newly-completed  wells,  the Company's  success in developing  and producing new
reserves,  and the  uncertainty  with  respect to the amount of funds  which may
ultimately  be required to finance the  Company's  development  and  exploration
program,  there can be no assurance that the Company's capital resources will be
sufficient to sustain the Company's development and exploratory activities.

Although the Company  believes it will be able to obtain  funds  pursuant to the
above-mentioned  alternatives,  management  cannot be assured  that such capital
resources  will be  available  to the  Company.  If we are unable to obtain such
capital  resources  on a timely  basis,  the  Company  may  curtail  its planned
development and exploratory activities.

Subsequent events:

During the month of January 2008,  the Company  completed and brought online for
production six previously  drilled wells and reached total drilling depth on two
new wells in the Company's Johnson Branch acreage in Caddo Parish, Louisiana. On
January 30, 2008,  the Company  announced  that one of these two new wells,  the
Hudson 10 No. 1, was control flow drilled through the Bossier/Haynesville Shales
to a total depth of 11,650 feet, and that  third-party  mud logs showed an 1,100
foot  interval of shale gas in the Hudson 10 No. 1 well. As of January 31, 2008,
the  Company  has  successfully  drilled  20  wells in its  northwest  Louisiana
properties (eight in its Bethany  Longstreet acreage in Desoto Parish, and 12 in
its Johnson Branch  acreage) and has completed and brought online for production
14 of such wells (eight in its Bethany  Longstreet acreage in Desoto Parish, and
six in its Johnson Branch acreage).

Item 3.  Controls and Procedures

Our principal  executive and financial  officers have concluded,  based on their
evaluation  as of the  end of the  period  covered  by  this  report,  that  our
disclosure  controls  and  procedures  under  Exchange  Act Rules 13a -15(e) and
15d-15(e) are effective to ensure that  information  we are required to disclose
in the reports we file or submit under the Exchange Act is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms, and include  controls and procedures  designed to ensure that information
we are required to disclose in such reports is accumulated  and  communicated to
management,  including  our  principle  executive  and  financial  officers,  as
appropriate to allow timely decisions regarding required disclosure.  There were
no changes in internal  controls or other factors that could materially  affect,
or are reasonably likely to materially affect, these internal controls.




                                       12
<PAGE>

                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

There are no legal  proceedings  to which the Company is a party or to which its
properties are subject, which are, in the opinion of management,  likely to have
a material  adverse  effect on the Company's  results of operations or financial
condition.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

On August 27, 2007, two warrant holders of the Company exercised warrants for an
aggregate  of 200,000  shares of Company  common  stock,  through the payment of
$100,000 to the Company.

On September 17, 2007, one warrant holder of the Company exercised  warrants for
25,000  shares of Company  common  stock,  through the payment of $17,500 to the
Company.

On October 22, 2007, two warrant holders of the Company  exercised  warrants for
an aggregate of 250,000 shares of Company  common stock,  through the payment of
$125,000 to the Company.

On December 21, 2007, one warrant holder of the Company  exercised  warrants for
100,000 shares of Company  common stock,  through the payment of $100,000 to the
Company;  and, an  additional  three  warrant  holders of the Company  exercised
warrants for an aggregate of 15,000 shares of Company common stock,  through the
payment of $10,500 to the Company.

The aggregate  proceeds to the Company of the  aforementioned  warrant exercises
were $303,000,  all of which have been used for working  capital  purposes.  The
aforementioned   issuances   were  made  in  reliance  upon  an  exemption  from
registration set forth in Regulation D and/or Section 4(2) of the Securities Act
of 1993,  as amended,  which exempts  transactions  by an issuer not involving a
public offering.

Item 6.  Exhibits

31.1     Rule 13a-14(a)/15d-14(a) Certification

31.2     Rule 13a-14(a)/15d-14(a) Certification

32.1     Section 1350 Certification

32.2     Section 1350 Certification











                                       13
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                                       CUBIC ENERGY, INC.
                                       (Registrant)


Date:  February 12, 2008               By:  /s/ Calvin A. Wallen, III
                                            ------------------------------------
                                            Calvin A. Wallen, III, President and
                                            Chief Executive Officer

Date:  February 12, 2008               By:  /s/ Scott D. Guffey
                                            ------------------------------------
                                            Scott D. Guffey,  Chief Financial
                                            Officer (Principal Financial and
                                            Accounting Officer)



















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