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


                                   FORM 10-QSB

[X]      Quarterly  Export under Section 13 or 15(d) of The Securities  Exchange
         Act of 1934

                For the Quarterly Period Ended December 31, 2004

                          Commission File Number 0-9355

                               CUBIC ENERGY, INC.
             (Exact name of registrant as specified in its charter)

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

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

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


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange  Act during the  preceding 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                                 Yes [X] No [ ]

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

            Common Stock             Outstanding at December 31, 2004
          --------------             --------------------------------
            $.05 par value                      31,685,119

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

<PAGE>

                               CUBIC ENERGY, INC.

                                TABLE OF CONTENTS

                         PART 1 - FINANCIAL INFORMATION

ITEM 1. Financial Statements

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

         Condensed Balance Sheets
         As of December 31, 2004 (unaudited) and June 30, 2004...............2,3

         Condensed Statements of Operations, (unaudited)
         For the three months ended December 31, 2004 and 2003.................4

         Condensed Statements of Operations, (unaudited)
         For the six months ended December 31, 2004 and 2003...................5

         Condensed Statements of Cash Flows, (unaudited)
         For the six months ended December 31, 2004 and 2003...................6

         Notes to Condensed Financial Statements............................7-10

ITEM 2. Management's Discussion and Analysis..................................11

ITEM 3.  Control and Procedures...............................................12


                                            PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings.....................................................13

ITEM 4. Submission Of Matters To Vote Of Security Holders ....................13

ITEM 6.  Exhibits on Form 8-K.................................................14

SIGNATURES....................................................................15




<PAGE>

                          PART I. FINANCIAL INFORMATION

                         INDEPENDENT ACCOUNTANTS' REPORT


The Stockholders and Board of Directors
Cubic Energy, Inc.


We have  reviewed the  accompanying  condensed  balance sheet as of December 31,
2004, 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,
2004  and  2003.  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, 2004,  and the related  statements  of  operations,
stockholders'  equity and cash flows for the year then ended;  and in our report
dated  September  3,  2004,  we  expressed  an  unqualified   opinion  on  those
statements.




                                                    PHILIP VOGEL & CO. PC

                                                     /s/ Philip Vogel & Co. PC


                                                    Certified Public Accountants


Dallas, Texas
February 15, 2005




                                       1
<PAGE>
<TABLE>
<CAPTION>

ITEM 1. FINANCIAL STATEMENTS

                               CUBIC ENERGY, INC.
                            CONDENSED BALANCE SHEETS

                                     ASSETS


                                                    (Unaudited)
                                                 December 31, 2004     June 30, 2004
                                                 -----------------   -----------------
<S>                                              <C>                 <C>
Current assets:
  Cash and cash equivalents                      $         841,111   $         193,213
  Accounts receivable                                       54,619              80,180
  Prepaid drilling costs                                   338,996                   0
  Prepaid expenses                                          62,024                   0
                                                 -----------------   -----------------

Total current assets                             $       1,296,750   $         273,393


Property and equipment (at cost):
  Oil and gas properties, full cost method:
    Proved properties (including wells and
    related equipment and facilities)            $       1,537,625   $       1,537,625
    Unproved properties                                  1,418,996                   0
  Office and other equipment                                   910                 910
                                                 -----------------   -----------------
                                                 $       2,957,530   $       1,538,535
Less accumulated depreciation, depletion
  and amortization                                       1,145,817           1,104,849
                                                 -----------------   -----------------
                                                 $       1,811,713   $         433,686

Other assets:
   Deferred loan costs - net                     $         250,609   $               0
                                                 -----------------   -----------------

TOTAL ASSETS                                     $       3,359,072   $         707,079
                                                 =================   =================
</TABLE>






















            See accompanying notes to condensed financial statements.


                                       2
<PAGE>
<TABLE>
<CAPTION>

                               CUBIC ENERGY, INC.
                            CONDENSED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY


                                                (Unaudited)
                                             December 31, 2004      June 30, 2004
                                             -----------------    -----------------
<S>                                          <C>                  <C>
Current liabilities:
  Accounts payable and accrued expenses      $         129,217    $         126,764
  Due to affiliates                                      5,380                3,598
                                             -----------------    -----------------
Total current liabilities                    $         134,597    $         130,362
                                             -----------------    -----------------

Non-current liabilities:
  Deferred income taxes

Long-Term Liabilities
  Debentures payable - net of discounts      $       2,145,508    $               0

Commitments and contingencies

Stockholders' equity:

  Preferred stock - $.01 par value,
    authorized 10,000,000 shares,
    issued: none                             $               0    $               0

  Common stock - $.05 par value,
    Authorized 50,000,000 shares,
    issued 31,685,119 shares at
    December 31, 2004 and 31,451,829
    at June 30, 2004                         $       1,584,257    $       1,572,592

  Additional paid-in capital                         9,600,952            8,972,467

  Accumulated deficit                              (10,106,242)          (9,968,342)
                                             -----------------    -----------------

Stockholders' equity                         $       1,078,967              576,717
                                             -----------------    -----------------

                                             $       3,359,072    $         707,079
                                             =================    =================
</TABLE>














            See accompanying notes to condensed financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                               CUBIC ENERGY, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                    For the Three         For the Three
                                                     Months Ended          Months Ended
                                                  December 31, 2004     December 31, 2003
                                                  -----------------     -----------------
<S>                                               <C>                   <C>
Revenue:
  Oil and gas sales                               $         110,249     $          93,736
                                                  -----------------     -----------------

Total revenue                                     $         110,249     $          93,736
                                                  -----------------     -----------------

Costs and expenses:
  Oil and gas production, operating and
    development costs                             $          64,521     $          36,049
  Selling, general and
    administrative expenses                                  50,059                56,932
  Depreciation, depletion and
    amortization                                             22,468                29,606
                                                  -----------------     -----------------

Total costs and expenses                          $         137,048     $         122,587
                                                  -----------------     -----------------

Operating income (loss)                           $         (26,799)    $         (28,851)
                                                  -----------------     -----------------

Non-operating income (expense):
  Gain (loss) on sales of securities              $               0     $               0
  Other income                                                    0                     0
  Interest expense                                          (72,084)                    0
  Amortization of loan costs                                (13,215)                    0
                                                  -----------------     -----------------

Total non-operating income (expense)              $         (85,299)    $               0
                                                  -----------------     -----------------

Income (loss) before taxes:                       $        (112,098)    $         (28,851)

Provision for (benefit of) income taxes                           0                     0
                                                  -----------------     -----------------

Net income (loss)                                 $        (112,098)    $         (28,851)
                                                  =================     =================

Net gain (loss) per common share
- basic and diluted                               $          (0.004)    $          (0.001)
                                                  =================     =================

Weighted average common shares outstanding
- basic and diluted                                      31,565,560            31,251,242
                                                  =================     =================
</TABLE>











            See accompanying notes to condensed financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>

                               CUBIC ENERGY, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                     For the six           For the six
                                                     Months Ended          Months Ended
                                                  December 31, 2004     December 31, 2003
                                                  -----------------     -----------------
<S>                                               <C>                   <C>
Revenues:
  Oil and gas sales                               $         215,512     $         198,158
                                                  -----------------     -----------------

Total revenues                                    $         215,512     $         198,158
                                                  -----------------     -----------------

Costs and expenses:
  Oil and gas production, operating and
    development costs                             $         106,502     $          71,717
  Selling, general and
    administrative expenses                                 120,641                95,287
    Depreciation, depletion and
    amortization                                             40,968                58,842
                                                  -----------------     -----------------

Total costs and expenses                          $         268,111     $         225,846
                                                  -----------------     -----------------

Operating income (loss)                           $         (52,599)    $         (27,688)
                                                  -----------------     -----------------

Non-operating income (expense):
  Gain (loss) on sales of securities              $               0     $               0
  Other income                                                    0                     0
  Interest expense                                          (72,084)                    0
  Amortization of loan costs                                (13,215)                    0
                                                  -----------------     -----------------

Total non-operating income (expense)              $         (85,299)    $               0
                                                  -----------------     -----------------

Income (loss) before taxes:                       $        (137,898)    $         (27,688)

Provision for (benefit of) income taxes                           0                     0
                                                  -----------------     -----------------

Net income (loss)                                 $        (137,898)    $         (27,688)
                                                  =================     =================

Net gain (loss) per common share
- basic and diluted                               $          (0.004)    $          (0.001)
                                                  =================     =================

Weighted average common shares outstanding
- basic and diluted                                      31,508,695            31,215,786
                                                  =================     =================
</TABLE>











           See accompanying notes to condensed financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>

                               CUBIC ENERGY, INC.
                       CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                         For the six          For the six
                                                        Months Ended         Months Ended
                                                     December 31, 2004    December 31, 2003
                                                     -----------------    -----------------
<S>                                                  <C>                  <C>
Cash flows from operating activities:
Net income (loss)                                    $        (137,898)   $         (27,688)
Adjustments to reconcile net income (loss)
to cash provided (used) by operating activities:
  Depreciation, depletion and amortization                      79,731               58,842
  Stock grant expense                                           39,524                    0
  Stock issued for interest                                     46,536                    0
Net change in assets and liabilities:
  (Increase) decrease in accounts receivable                    25,561              (13,104)
  (Increase) decrease in prepaid expenses                     (361,497)                   0
  Increase (decrease) in loan from affiliate                     1,783                2,269
  Increase (decrease) in accounts payable and
    Accrued liabilities                                          2,452                5,333
  Increase (decrease) in deferred taxes                              0                    0
                                                     -----------------    -----------------
Net cash provided (used) by operating activities     $        (303,808)   $          25,652
                                                     -----------------    -----------------


Cash flows from investing activities:
  Acquisition of oil & gas properties                $      (1,418,994)   $               0
                                                     -----------------    -----------------
Net cash provided (used) by investing activities     $      (1,418,994)   $               0
                                                     -----------------    -----------------


Cash flows from financing activities:
  Issuance of convertible debt and warrants          $       2,635,000    $               0
  Loan costs incurred                                         (264,300)                   0
  Changes in common stock                                            0    $           5,825
  Paid in Capital                                                    0    $          17,475
                                                     -----------------    -----------------
Net cash provided (used) by financing activities     $       2,370,700    $          23,300
                                                     -----------------    -----------------


Net increase (decrease) in cash and
    cash equivalents                                 $         647,898    $          48,952
                                                     -----------------    -----------------

Cash at beginning of period                                    193,213              117,450
                                                     -----------------    -----------------

Cash at end of period                                $         841,111    $         166,402
                                                     =================    =================
</TABLE>








            See accompanying notes to condensed financial statements


                                       6
<PAGE>

                               CUBIC ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2004
                                   (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, 2004,  Form 10-KSB and should be read in  conjunction
with the financial statements contained herein.

The financial  information  included herein as of December 31, 2004, and for the
three-month  and six-month  periods ended December 31, 2004, and 2003, 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 grants:

On September 12, 2003, the Directors of Cubic tentatively approved of a Director
and Officer compensation plan as follows: (i.) Directors of record as of June 1,
2003 would receive  24,000  restricted  Cubic common shares  (16,000  shares per
year,  multiplied  by  1.5  years)  for  years  of  prior  service,   (ii.)  the
President/CEO  of Cubic would  receive  45,000  restricted  Cubic common  shares
(30,000  share per year,  multiplied  by 1.5 years) for years of prior  service,
(iii.) the  Secretary  of Cubic would  receive  22,500  restricted  Cubic common
shares  (15,000  shares per year,  multiplied  by 1.5 years) for prior  years of
service,  (iv.) going forward,  Directors would receive 16,000  restricted Cubic
common shares per year of service,  (v.) going forward,  the President/CEO would
receive 30,000  restricted Cubic common shares per year of service,  (vi.) going
forward,  the Secretary would receive 15,000  restricted Cubic common shares per
year of service,  (vii.) Audit Committee members would receive 10,000 restricted
Cubic common shares per audit,  and, (viii.) any Compensation  Committee member,
should one be formed,  would  receive 3,000  restricted  Cubic common shares per
year of service.



                                       7
<PAGE>

On October 25, 2004, Cubic issued 155,000 common shares of stock to its Officers
and Directors  pursuant to this plan.  Based on a then market price of $0.51 per
share,  Cubic recorded a  compensation  expense of $19,762 for each of the first
two quarters;  which expense is recorded in the above financial  statements as a
selling, general and administrative expense.

Convertible debt and warrants

On October 6, 2004,  Cubic closed a  Securities  Purchase  Agreement  and issued
$2,635,000 in principal amount of 7% Senior Secured  Convertible  Debentures due
September 30, 2009 (the "Debentures"),  to a group of institutional and high net
worth  investors.  The Debentures are secured by the collateral set forth in the
Deed of Trust,  Security Agreement,  Assignment of Production and Fixture Filing
attached  to Form 8K filed  October,  12,  2004.  The  Debentures  pay an annual
interest rate of 7% on a quarterly basis and are convertible  into shares of the
Company's  common stock at a price of $.50 per share. The Company has the option
to pay the  interest on the  Debentures  in common  stock.  The  investors  also
received  warrants to purchase an  additional  2,635,000  shares of common stock
with an  exercise  price of $1.00  per  share.  During  the three  months  ended
December  31,  2004,  $10,000 of  Debentures  were  converted to 5,000 shares of
stock.  68,290  shares of stock were  issued in lieu of cash to pay  interest of
$46,536 for the three months ended December 31, 2004.

The Company has allocated  the proceeds  from the issuance of the  Debentures to
the warrants and the  Debentures  based on their  relative fair market values at
the date of  issuance.  The value  assigned to the warrants of $510,961 has been
recorded as an increase in additional paid in capital. The assignment of a value
to the warrants  results in a loan discount  being recorded for the same amount.
The  discount  is  being  amortized  over the  original  five  year  term of the
Debentures as additional  interest  expense.  Amortization  for the three months
ended December 31, 2004, was $25,548.

Cubic  incurred loan costs of $264,300 on the issuance of the  Debentures  which
have been  capitalized  and are being amortized over the term of the Debentures.
Amortization  of loan costs was $13,215 for the three months ended  December 31,
2004.

The proceeds of the Debentures  have primarily been used for the  acquisition of
interests in oil and gas properties.  Through  December 31, 2004, Cubic incurred
acquisition  and  development  costs of $1,418,996  on properties  with unproved
reserves. In addition,  prepaid drilling costs, net of allocable expenses,  have
been advanced in the amount of $338,996.

Subsequent event

On or about January 11, 2005, The Company issued  1,531,661 shares of its common
stock, $0.05 par value per share, to Caravel Resources Energy Fund 2003-II, L.P.
(the  "Partnership")  in exchange  for a  0.1914575033  working  interest in the
Kraemer  24-1 Well,  Desoto  Parish,  Township 14 N, Range 15 W, Section 24 (the
"Well").  The Company  also issued  468,339  shares of Common Stock to Calvin A.
Wallen III, the Company's  Chairman of the Board,  President and Chief Executive
Officer, in exchange for a 0.0585424967 working interest in the Well. The shares
of Common Stock were issued by the Company in reliance  upon an  exemption  from
registration  set  forth in  Section  4(2) of the  Securities  Act of  1933,  as
amended,  which  exempts  transactions  by an  issuer  not  involving  a  public
offering.



                                       8
<PAGE>
<TABLE>
<CAPTION>

In addition,  in January of 2005, $100,000 of the Debentures described above was
converted into 200,000 shares of common stock.

Pro forma information related to stock options:

The Company accounts for its stock-based  employee  compensation plans under the
recognition  and  measurement  principles of APB Opinion No. 25,  Accounting for
Stock Issued to Employees, and related interpretations.  No stock based employee
compensation cost is reflected in net income, as all options granted under those
plans had an  exercise  price at least  equal to the  market  of the  underlying
common  stock on the date of the grant.  The  following  table  illustrates  the
effect on net income and  earnings per share if the company had applied the fair
value  recognition   provisions  of  FASB  Statement  No.  123,  Accounting  for
Stock-Based Compensation, to stock-based employee compensation.

                                                        3 Months Ended            6 Months Ended
                                                          December 31,              December 31,
                                                       2004         2004         2004         2003
                                                    ---------    ---------    ---------    ---------
<S>                                                 <C>          <C>          <C>          <C>

Net earnings (loss), as reported                    $(112,098)   $ (28,851)   $(137,898)   $ (27,688)

Deduct: Total stock-based employee compensation
  expense determined underfair value based method
  for all awards, net of tax effect                    (4,375)      (8,866)      (8,750)     (17,732)
                                                    ---------    ---------    ---------    ---------

Pro forma net income (loss)                         $(116,473)   $ (37,717)   $ (45,420)   $ (45,420)
                                                    ---------    ---------    ---------    ---------
Earnings (loss) per common share:
   Basic - as reported                              $    --      $    --      $    --      $    --
   Basic - pro forma                                $    --      $    --      $    --      $    --

   Diluted - as reported                            $   n/a      $   n/a      $   n/a      $   n/a
   Diluted - pro forma                              $   n/a      $   n/a      $   n/a      $   n/a
</TABLE>



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



                                       9
<PAGE>

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 to the Securities
and Exchange  Commission,  including the Company's Annual Report Form 10-KSB for
the fiscal year ended June 30, 2004.




























                                       10
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations:

Three Months Ended December 31, 2004 Compared To
Three Months Ended December 31, 2003
Gross  Revenues  for the three months ended  December  31, 2004  increased  from
$93,736 at December  31,  2003 to  $110,249  at December  31, 2004 due to higher
natural gas prices.

Oil and Gas Production,  Operating and Development  Costs increased from $36,049
(38% of oil and gas sales) at December  31, 2003 to $64,521  (59% of oil and gas
sales) at December 31, 2004 due to higher  lease  operating  expenses,  and more
specifically, compressor costs.

Operating Income increased from a loss of $28,851 at December 31, 2003 to a loss
of $26,799 at December 31, 2004 despite higher expenses.

Six Months Ended December 31, 2004 Compared To
Six Months Ended December 31, 2003
Gross  Revenues  for the six months  ended  December  31,  2004  increased  from
$198,158  at December  31,  2003 to $215,512 at December  31, 2004 due to higher
natural gas prices.

Oil and Gas Production,  Operating and Development  Costs increased from $71,717
(36% of oil and gas sales) at December 31, 2003 to $106,502  (49% of oil and gas
sales) at December 31, 2004 due to higher  lease  operating  expenses,  and more
specifically, compressor costs.

Operating Income decreased from a loss of $27,688 at December 31, 2003 to a loss
of $52,599 at December 31, 2004 due to higher lease operating expenses, and more
specifically, compressor costs.

Summary of Two Transactions disclosed in Form 8-K
-------------------------------------------------
         On or about October 1, 2004, the Company  closed a Securities  Purchase
Agreement  and  issued  $2,635,000  in  principal  amount of 7%  Senior  Secured
Convertible  Debentures (the  "Debentures") to a group of institutional and high
net worth investors. None of the investors have a material relationship with the
Company or any of its  affiliates  other than the  transactions  entered into in
connection  with  the  sale of the  Debentures.  Proceeds  from  the sale of the
Debentures  were  used to  acquire  a 25%  working  interest  in Eight  Sections
comprising the Bethany-Longstreet  play of Northern Louisiana, a 25% interest in
infrastructure  and a 25% working  interest in the spudding of two wells,  which
two wells have been  drilled.  The  Debentures  are  secured by a Deed of Trust,
Security  Agreement,   Assignment  of  Production  and  a  Fixture  Filing.  The
Debentures pay an annual interest rate of 7% and are convertible  into shares of
the Company's  common stock,  $0.05 par value per share, at a price of $0.50 per
share. As of December 31, 2004,  $5000 in debt has converted into 10,000 shares.
In addition,  in January of 2005,  $100,000 of debt was  converted  into 200,000
shares.  The Company has the option to pay the  interest  on the  Debentures  in
Common  Stock,  and made the  December  31,  2004  interest  payment  of $46,536
in-kind.  The  investors  also  received  warrants  to  purchase  an  additional
2,635,000  shares of Common Stock with an exercise price of $1.00 per share. The
Company and the investors entered into a Registration Rights Agreement,  whereby
the Company has agreed to register the shares  convertible  under the Debentures
and exercisable under the Warrants.
         The Debentures and Warrants were issued by the Company in reliance upon
an exemption from  registration  set forth in Section 4(2) of the Securities Act
of 1933,  as amended,  which exempts  transactions  by an issuer not involving a
public offering.



                                       11
<PAGE>

         On or about January 11, 2005,  The Company issued  1,531,661  shares of
its common stock,  $0.05 par value per share, to Caravel  Resources  Energy Fund
2003-II,  L.P.  (the  "Partnership")  in  exchange  for a  0.1914575033  working
interest in the Kraemer  24-1 Well,  Desoto  Parish,  Township 14 N, Range 15 W,
Section 24 (the "Well").  The Company also issued 468,339 shares of Common Stock
to Calvin A. Wallen III,  the  Company's  Chairman of the Board,  President  and
Chief Executive Officer, in exchange for a 0.0585424967  working interest in the
Well.  The shares of Common Stock were issued by the Company in reliance upon an
exemption from  registration  set forth in Section 4(2) of the Securities Act of
1933, as amended, which exempts transactions by an issuer not involving a public
offering.

Liquidity and Capital Resources:
Long-term  debt of the company is currently  $2,530,000,  and was  $2,630,000 on
December 31, 2004, under the convertible debt financing  obtained by the Company
as mentioned in the preceding paragraphs.

ITEM 3.    CONTROLS AND PROCEDURES

Our  principal  executive and financial  officer has  concluded,  based on their
evaluation  as of a date within 90 days  before the filing of this Form  10-QSB,
that our disclosure  controls and procedures under Rule 13a-14 of the Securities
Exchange Act of 1934 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.  Subsequent to our evaluation,  there were no significant changes in
internal  controls  or other  factors  that  could  significantly  affect  these
internal controls.















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<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

The Company filed suit in the 29th Judicial District Court in Palo Pinto County,
Texas, styled "Roseland Oil and Gas, Inc. v. William Vandever, et al.", bringing
suit against  Clifford  Kees,  William  Vandever,  and other  persons  seeking a
judicial  determination  that all  grants of  preferential  rights in the Reagan
Sections  11 and 12 are void,  This  lawsuit  was filed on April 26,  1999.  All
Section 11 preferential  rights were returned to the Company on or about January
2002. However, Clifford Kees was to retain his 1% overriding royalty interest in
these Reagan Lease Sections.

Clifford  Kees then moved to trial against on the claim of attorney fees owed to
him for the  prosecution  of this lawsuit.  The trial was heard on September 25,
2002,  with Kees requesting in excess of $200,000.00 in attorney fees and costs.
In June of 2003 the Court  re-opened  the trial as to attorney fees and costs to
allow Kees to put on  additional  evidence,  and such trial was convened on June
19, 2003.

On July 15, 2003,  The Court  entered a Judgment in favor of Kees and as against
the Company for  approximately  $112,000.00.  The Company  believed the Judgment
should not stand and appealed the Judgment. On or about, September 17, 2004, the
Eastland Court Of Appeals  issued its ruling,  modifying the amounts owed by the
Company under the Judgment to $59,000.00,  plus  interest.  The Company has been
denied a Re-Hearing as to clarification and a further reduction of the Judgment.
The Company  filed a Petition For Review with the Texas  Supreme  Court that was
Denied on or about  January 21,  2005.  The Company has put into the registry of
The Court a cash Bond in the amount of $75,000.00  awaiting the final outcome of
this matter.

ITEM 4. Submission Of Matters To A Vote Of Security Holders

         On December 8, 2004, the Company held its Annual  Shareholder  Meeting.
The two items of business before the Shareholders at this Annual Meeting was the
election of Directors to serve for the following year, or until  successors were
duly elected and sworn, and the ratification of the auditor for the Company.

         A vote was then held on the election of each of Calvin Wallen III, Gene
Howard,  Bob  Clements,  Alex  Montano,  Herb  Bayer and Jon S. Ross to hold the
position of Director of the Corporation  until  successors were duly elected and
sworn. Of the 22,371,760 votes, the vote of the Shareholders was as follows:

NAME                              VOTES FOR        VOTES AGAINST       ABSTAIN
----                             -----------       -------------       -------
Calvin Wallen III                 22,192,179             178,701         880
Gene Howard                       22,192,175             178,705         880
Bob Clements                      22,192,171             178,709         880
Alex Montano                      22,192,179             178,701         880
Herb Bayer                        22,192,179             178,701         880
Jon S. Ross                       22,192,179             178,701         880

         A Vote was taken on the  ratification  of Philip  Vogel & Co., PC to be
the independent auditor for the upcoming year. The Vote was as follows:

NAME                              VOTES FOR        VOTES AGAINST       ABSTAIN
----                             -----------       -------------       -------
Philip Vogel & Co., PC            22,181,105               6,281       185,874



                                       13
<PAGE>

ITEM 6. Exhibits and Reports on Form 8-K

         (a).     Exhibits
                  31.1     Rule 13a-14(a)/15d-14(a) Certification
                  32.1     Section 1350 Certification
         (b).     Reports On Form 8-K
                  None
























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<PAGE>

                                   SIGNATURES

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


                                                      CUBIC ENERGY, INC.
                                                      (Registrant)


Date: February 15, 2005                               /s/ Calvin A. Wallen, III
                                                      --------------------------
                                                      Calvin A. Wallen, III, CEO


Date: February 15, 2005                               /s/ Jon Stuart Ross
                                                      --------------------------
                                                      Jon Stuart Ross, CFO






























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