**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, DC 20549**

 

**FORM 10-KSB**

 

**xANNUAL REPORT PURSUANT TO SECTION 13            OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

| For the Fiscal Year Ended | December 31, 2007 |
|---------------------------|-------------------|

 

**o 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: | 333-141993 |
|-------------------------|------------|

 

Petrocorp Inc.

(Exact name of registrant as specified in its charter)

 

DELAWARE 20-5134664

State            or other jurisdiction of (I.R.S. employer

incorporation or organization identification no.)

 

| 1065 Dobbs Ferry Road, White Plains, New York | 10607 |
|-----------------------------------------------|-------|

|   | (Address of principal executive offices) | (Zip code) |
|--------|------------------------------------------|------------|

 

Registrant’s Telephone Number, including area code: (914)            674-4373

 

Securities Registered pursuant to Section 12(b) of the Act:

 

| ______ | Title of each class | Name of each exchange where registered |
|--------|---------------------|----------------------------------------|

 

|   | _____None | Not applicable |
|--------|-----------|----------------|

 

|   | Securities Registered pursuant to Section 12(g) of the                            Act: |
|--------|----------------------------------------------------------------------------------------|

 

|   | Common Stock, par value $0.001 per share |
|--------|------------------------------------------|

|   | (Title of class) |
|--------|------------------|

 

Indicate by check mark if the registrant is a well-known seasoned issuer            as defined in Rule 405 of the Securities Act.

| o Yes | xNo |
|-------|-----|

 

Indicate by check mark if the registrant is not required to file reports            pursuant to Section 13 or 15(d) of the Act.

| o Yes | xNo |
|-------|-----|

Indicate by check mark whether the registrant is a shell company (as            defined in Rule 12b-2 of the Act).

| o Yes | xNo |
|-------|-----|

 

 

 

 

 

 

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The            aggregate market value of voting and non-voting stock held by non-affiliates of the            registrant as of March 20, 2008 was $8,540,000.

 

There            were 5,670,000 shares of common stock outstanding as of March 20, 2008.

| Documents Incorporated by Reference: | None |
|--------------------------------------|------|

 

 

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**PETROCORP INC.**

**FORM 10-KSB**

**INDEX**

             

|                          |         |                                                                                                                                                               |         |     |
|-------------------------------|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|----------|
|                     |    |                                                                                                                                                               |    | **Page** |
| **PART** **I**           |    |                                                                                                                                                               |    |     |
|                          |         |                                                                                                                                                               |
| Item 1.                  |    | Business                                                                                                                                                           |         | 2        |
| Item 1A.                 |         | Risk Factors                                                                                                                                                       |    | 7        |
|                          |         |                                                                                                                                                               |    |     |
| Item 2.                  |    | Properties                                                                                                                                                         |    | 14       |
| Item 3.                  |    | Legal Proceedings                                                                                                                                                  |    | 14       |
| Item 4.                  |    | Submission of Matters to a Vote of Security                            Holders                                                                                     |    | 14       |
|                          |         |                                                                                                                                                               |
| **PART II**                   |    |                                                                                                                                                               |    |     |
|                          |         |                                                                                                                                                               |
| Item 5.                  |    | Market for Registrant's Common Equity, Related                            Stockholder Matters and Issuer Purchases of Equity                            Securities |    | 15       |
| Item 6.                  |    | Selected Financial Data                                                                                                                                            |    | 15       |
| Item 7.                  |    | Management’s Discussion and Analysis of                            Financial Condition and Results of Operation                                              |    | 17       |
| Item 7A.                 |    | Quantitative and Qualitative Disclosures About Market                            Risk                                                                              |    |     |
| Item 8.                  |    | Financial Statements and Supplementary                            Data                                                                                             |    | 20       |
| Item 9.                  |    | Changes in and Disagreements With Accountants on                            Accounting and Financial Disclosure                                                    |    | 20       |
| Item 9A.                 |    | Controls and Procedures                                                                                                                                            |    | 20       |
| Item 9B.                 |    | Other Information                                                                                                                                                  |    | 20       |
|                          |         |                                                                                                                                                               |
| **PART**  

**III** |    |                                                                                                                                                               |    |     |
|                          |         |                                                                                                                                                               |
| Item 10.                 |    | Directors, Executive Officers and Corporate                            Governance                                                                                  |    | 21       |
| Item 11.                 |    | Executive Compensation                                                                                                                                             |    | 22       |
| Item 12.                 |    | Security Ownership of Certain Beneficial Owners and                            Management and Related Stockholder Matters                                          |    | 22       |
| Item 13.                 |    | Certain Relationships and Related Transactions, and                            Director Independence                                                               |    | 23       |
| Item 14.                 |    | Principal Accounting Fees and Services                                                                                                                             |    | 23       |
|                          |         |                                                                                                                                                               |
| **PART**  

**IV**  |    |                                                                                                                                                               |    |     |
|                          |         |                                                                                                                                                               |
| Item 15.                 |    | Exhibits, Financial Statement                            Schedules                                                                                                 |    | 24       |
|                          |    | Index to Consolidated Financial                            Statements                                                                                              |    | F-1      |
|                          |    | Index to Exhibits                                                                                                                                                  |    | 24       |
|                          |    | Signatures                                                                                                                                                         |    | 25       |

  

-I-

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**Cautionary Note Regarding Forward-Looking Statements**

 

This            report contains forward-looking statements within the meaning of Section 27A of the            Securities Act of 1933, as amended (the “Securities Act”), and Section 21E            of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).            All statements other than statements of historical facts are forward-looking            statements. You can find many of these statements by looking for words such as            “believes,” “expects,” “anticipates,”            “estimates,” “intends,” or similar expressions used in this            report.

 

These forward-looking statements are subject to numerous assumptions,            risks and uncertainties. Factors which may cause our actual results, performance or            achievements to be materially different from any future results, performance or            achievements expressed or implied by us in those statements include, among others, the            following:

 

|   | ● | the quality of our properties with regard to, among                            other things, the existence of reserves in economic                            quantities; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | uncertainties about the estimates of                            reserves;                                                                                                 |

 

|   | ● | our ability to increase our production and oil and                            natural gas income through exploration and development; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | the number of well locations to be drilled and the time                            frame within which they will be drilled;           |

 

|   | ● | the timing and extent of changes in commodity prices for                            natural gas and crude oil; |
|--------|---------|----------------------------------------------------------------------------------------------------------------|
|   | ● | domestic demand for oil and natural gas;                                                                       |

 

|   | ● | drilling and operating risks;                                                                                 |
|--------|---------|---------------------------------------------------------------------------------------------------------------|
|   | ● | the availability of equipment, such as drilling rigs and                            transportation pipelines; |

 

|   | ● | changes in our drilling plans and related                            budgets;                                                                                                         |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | the adequacy of our capital resources and liquidity                            including, but not limited to, access to additional borrowing capacity;                            and |

 

|   | ● | other factors discussed under Item 1A Risk Factors with                            the heading “Risks Related To Our Business”. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

 

Because such statements are subject to risks and uncertainties, actual            results may differ materially from those expressed or implied by the forward-looking            statements. You are cautioned not to place undue reliance on such statements, which            speak only as of the date of this report.

 

**PART I**

 

References to “us”, “we” and “our”            in this report refer to Petrocorp Inc. together with its subsidiary.

 

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| **Item** **1.** | **Business** |
|----------------------|--------------|

**BACKGROUND**

 

We            were incorporated as GD Conference Center, Inc. under the laws of Delaware on June 16,            2006.Prior to September 2007, the Company’s business model            provided telephonic conferencing services to businesses, organizations and individuals            in North America. Due to capital constraints and because its executives could no longer            serve the Company without compensation, the Company decided to change            directions.

 

On            September 20, 2007, the Company entered into three separate oil and gas farm out            agreements with James Fitzsimons. The farm outs represent leasehold properties totaling            980 gross acres located in Okfuskee County, Oklahoma. Pursuant to the agreement terms,            the Company acquired the right to earn 22 oil and gas leases. The Company earns each            oil and gas lease in exchange for the Company agreeing to drill a test well in each            region of the leases on or before December 31, 2008; prepare specified reports and            conduct certain production tests. Mr. Fitzsimons also purchased 4,450,000 shares of the            Company’s common stock from certain shareholders, resulting in him owning 84.5%            of the Company’s outstanding shares for $454,000 Mr. Fitzsimons was elected a            director of the Company.

 

On            October 19, 2007, the Company amended its certificate of incorporation changing its            name to “Petrocorp Inc.” and effected a five for one forward stock split            which increased the authorized common stock to 100,000,000 shares at $0.0001 par value.            The Company’s authorized preferred stock was not changed by this            Amendment.

 

On            December 27, 2007, the Company sold 200,000 shares of its common stock to one investor            at $2.50 per share (an aggregate of $500,000). OnMarch 18,            2008, the Company sold 200,000 shares of its common stock            to one investor at $5.00 per share (an aggregate of $1,000,000). The shares were sold            in transactions exempt from registration under Regulation S of the Securities Act of            1933, as amended

 

We            are an exploration stage Company engaged in the acquisition, exploration and, if            warranted, development of prospective oil and gas properties. Our office is located at            1065 Dobbs Ferry Road, White Plains, NY 10607 and our telephone number is (914)            674-4373. We do not maintain a web-site.

 

**CURRENTACTIVITIES**

 

Our            plan of operation is to conduct exploration work on each of our current and future            properties in order to ascertain whether any of them possess commercially exploitable            quantities of oil and gas reserves. There is no assurance that a commercially viable            oil and gas reserve exists on any of our current and future properties, and a great            deal of further exploration will be required before a final evaluation as to the            economic feasibility for our future exploration is determined. To date, we do not know            if any economically viable oil and gas reserves exist on any of our current or future            properties and there is no assurance that we will discover any.

 

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|   | **Oklahoma** |
|--------|--------------|

 

The            Oklahoma leases are near oil and gas fields with proved developed production and within            the general area of the "Woodford shale play," however, the Company has not yet            conducted detailed geological mapping of the leases and does not make any            representations as to their future production, if any.

 

Each            Oklahoma farm out agreement contains the following principal terms:

 

•We must commence drilling an oil and gas test well on any legal            location within any drilling and spacing unit established by the Oklahoma Corporation            Commission which includes all or part of the leasehold acreage that is the subject of            each farm out agreement by December 31, 2008. If we do not drill a test well by the            deadline date indicated, we forfeit our farm out interest in the leased land. There is            no other penalty if we fail to drill such a well;

 

•We must drill each test well and conduct due diligence in a            workmanlike manner to a depth sufficient to thoroughly test common sources of supply            defined within any established drilling and spacing unit; and,

 

•Upon completion of the test well, James Fitzsimons shall execute            an assignment of the leasehold acreage that is subject to the farm out agreement for            the portion of the lease included in the drilling and spacing unit, retaining the            difference between the base royalty and 75%, delivering to us a 75% net revenue            interest.

 

All            of the farm out agreements, which have been filed as exhibits to our current report,            dated September 20, 2007, were prepared using an industry standard Form 635. A schedule            of the oil and gas lease agreements is attached as an exhibit to each of the farm out            agreements. The underlying lease agreement terms all provide time for the drilling of            the oil and gas test wells indicated in the farm out agreements.

 

In            Oklahoma we have retained Keith Summar (a member of the American Association of            Petroleum Geologists) as a consultant to assist us in our operations pursuant to an            agreement that requires him to devote 65 hours a month to our affairs

 

|   | **Alaska** |
|--------|------------|

 

The            Alaska leases are in areas which the Company believes, based upon current available            geological data and maps within the public domain, are promising for gas production            although the Company does not make any representations as to their future production,            if any. Furthermore, any gas recovered from our Alaska leases will not be salable            unless or until a proposed North Slope gas pipeline is completed.

 

On            October 25, 2007, Union Energy (Alaska) LLC (“UEA”), a wholly owned            subsidiary, was the winning bidder for tracts 254, 258 and 259 in the North Slope            Areawide 2007 Competitive Oil and Gas Lease Sale. UEA bid $449,971.20 for the three            5,760 acre tracts and paid deposits

 

3

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with            its winning bids totaling $90,000 to the State of Alaska. Based upon current available            land title information, the Company estimates these tracts, covering approximately            17,280 gross acres, contain 14,807.41 net leaseable acres and that additional payments            to the State of Alaska, in an amount yet to be determined, will be approximately            $279,500. These leases, when issued, will be for a term of seven years and will be            subject to a 12.5% royalty interest in favor of the State of Alaska, and such other            limitations as a complete title search reveals.

 

The            tracts acquired by UEA, designated as 254, 258 and 259, are contiguous and are believed            by the Company, based upon current available geological data and maps within the public            domain, to contain the Kavik gas field, discovered in 1969, which has been evaluated in            detail by the U.S. Department of the Interior, U.S Geological Survey ("USGS"). While            the USGS evaluation is encouraging, the Company can not assure that gas in commercial            paying quantities will be recovered.

 

On            February 27, 2008, UEA was the winning bidder for tracts 922, 923, 927, 988, 989, 990,            991, 992 and 925 in the State of Alaska North Slope Foothills Areawide 2008 oil and gas            lease sale. UEA bid $269,568 for the nine 5,760 acre tracts and paid deposits with its            winning bids totaling $54,000 to the State of Alaska. Based upon current available land            title information, the Company estimates that these tracts, covering approximately            51,840 gross acres, contain approximately 9,600 net leaseable acres and that the            additional payment to the State of Alaska, in an amount yet to be determined, will be            zero.

 

These leases, when issued, will be for a term of 10 years and will be            subject to a 12.5% royalty interest in favor of the State of Alaska and such other            limitations as a complete title search reveals. Tracts 922, 923, 927, 988, 989, 990,            991, 992 and 925 are contiguous and are believed by the Company, based upon current            available geological data and maps within the public domain, to contain the East Kurupa            gas field, discovered by Texaco in 1976. The USGS has been studying the potential for            unconventional over-pressured, continuous gas deposits in the Colville basin that            contains the Kurupa accumulation and is now interpreting the East Kurupa well to have            encountered a thick section of over-pressured gas in Brookian strata. The Company            intends to conduct a detailed geological evaluation of the Kurupa anticline, acquiring            seismic data where available. While these indications are favorable, the Company can            not assure that gas in commercial paying quantities will be recovered.

 

In            relation to Alaska we have retained Frontier Land Inc. (an established land firm and a            member of the American Association of Professional Landmen) to conduct negotiations            with other leaseholders in respect of their acreage and to acquire other land interests            within the vicinity of various tracts

 

**COMPETITION**

 

We            operate in a highly competitive industry, competing with major oil and gas companies,            independent producers and institutional and individual investors, which are actively            seeking oil and gas properties throughout the world together with the equipment, labor            and materials required to operate properties. Most of our competitors have financial            resources, staffs and

 

4

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facilities substantially greater than ours. The principal area of            competition is encountered in the financial ability to acquire good acreage positions            and drill wells to explore for oil and gas, then, if warranted, drill production wells            and install production equipment. Competition for the acquisition of oil and gas            acreage is intense. Therefore, we may not be successful in acquiring and developing            profitable properties in the face of this competition. No assurance can be given that            sufficient oil and gas acreage will be available for acquisition and            development.

 

**GOVERNMENTREGULATION**

 

Oil and            gas exploration and development companies are subject to various federal, state and            local governmental regulations, which may be changed from time to time in response to            economic or political conditions and can have a significant impact upon overall            operations. Matters subject to regulation include permits for drilling operations,            drilling bonds, reports concerning operations, the spacing of wells, unitization and            pooling of properties, taxation, abandonment and restoration and environmental            protection. These laws and regulations are under constant review for amendment or            expansion. Changes in these regulations could require us to expend significant            resources to comply with new laws or regulations or changes to current requirements and            could have a material adverse effect on us.

 

**OILANDGASREGULATION**

 

The            governmental laws and regulations which could have a material impact on our company as            an oil and gas exploration company are as follows:

 

*Drilling and Production*

 

These            types of regulation include permit requirements for the drilling of wells, drilling            bonds and reports concerning operations. Most states regulate one or more of the            following: (i) the location of wells; (ii) the method of drilling and casing wells;            (iii) the rates of production or "allowables"; (iv) the surface use and restoration of            properties upon which wells are drilled; (v) the plugging and abandoning of wells; and            (vi) notice to surface owners and other third parties.

 

State            laws may regulate the size and shape of drilling and spacing units or proration units            governing the pooling of oil and natural gas properties. Some states, including            Oklahoma, allow forced pooling or integration of tracts to facilitate exploration while            other states rely on voluntary pooling of lands and leases. In some instances, forced            pooling or unitization may be implemented by third parties and may reduce our interest            in the unitized properties. In addition, state conservation laws establishing maximum            rates of production from oil and natural gas wells, generally prohibit the venting or            flaring of natural gas and impose requirements regarding the ratability of production.            These laws and regulations may limit the amount of natural gas and oil we can produce            from our wells or limit the number of wells or the locations at which we can drill.            Moreover, each state generally imposes a production or severance tax with respect to            the production and sale of oil, natural gas and natural gas liquids within its            jurisdiction.

 

5

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*Environmental Regulation*

 

Our            activities will be subject to existing federal, state and local laws and regulations            governing environmental quality and pollution control. Our operations will be subject            to stringent environmental regulation by state and federal authorities including the            Environmental Protection Agency ("EPA"). Such regulation can increase the cost of such            activities. In most instances, the regulatory requirements relate to water and air            pollution control measures.

 

*Waste Disposal*

 

The            Resource Conservation and Recovery Act ("RCRA"), and comparable state statutes, affect            oil and gas exploration and production activities by imposing regulations on the            generation, transportation, treatment, storage, disposal and cleanup of "hazardous            wastes" and on the disposal of non-hazardous wastes. Under the auspices of the EPA, the            individual states administer some or all of the provisions of RCRA, sometimes in            conjunction with their own, more stringent requirements. Drilling fluids, produced            waters, and most of the other wastes associated with the exploration, development, and            production of crude oil, natural gas, or geothermal energy constitute "solid wastes",            which are regulated under the less stringent non-hazardous waste provisions, but there            is no guarantee that the EPA or the individual states will not adopt more stringent            requirements for the handling of non-hazardous wastes or categorize some non-hazardous            wastes as hazardous for future regulation.

 

*Air            Emissions*

 

Our            operations are subject to local, state and federal regulations for the control of            emissions of air pollution. Major sources of air pollutants are subject to more            stringent, federally imposed permitting requirements. Administrative enforcement            actions for failure to comply strictly with air pollution regulations or permits are            generally resolved by payment of monetary fines and correction of any identified            deficiencies. Alternatively, regulatory agencies could require us to forego            construction, modification or operation of certain air emission sources.

 

*Clean Water Act*

 

The            Clean Water Act ("CWA") imposes restrictions and strict controls regarding the            discharge of wastes, including produced waters and other oil and natural gas wastes,            into waters of the United States, a term broadly defined. Permits must be obtained to            discharge pollutants into federal waters. The CWA provides for civil, criminal and            administrative penalties for unauthorized discharges of oil, hazardous substances and            other pollutants. It imposes substantial potential liability for the costs of removal            or remediation associated with discharges of oil or hazardous substances. State laws            governing discharges to water also provide varying civil, criminal and administrative            penalties and impose liabilities in the case of a discharge of petroleum or it            derivatives, or other hazardous substances, into state waters. In addition, the EPA has            promulgated regulations that may require us to obtain permits to discharge storm water            runoff. In the event of an unauthorized discharge of wastes, we may be liable for            penalties and costs.

 

6

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**EMPLOYEES**

 

We have            no employees as of the date of this report and anticipate that our operations will be            conducted primarily through third party consultants and contractors rather than by            employees. We do not anticipate hiring a large number of employees.

 

**SUBSIDIARIES**

 

Our            only subsidiary is Union Energy (Alaska), LLC, an Alaska limited liability company            which is wholly owned by us.

 

**Item            1A Risk Factors.**

 

In            addition to other information in this current report, the following risk factors should            be carefully considered in evaluating our business because such factors may have a            significant impact on our business, operating results, liquidity and financial            condition. As a result of the risk factors set forth below, actual results could differ            materially from those projected in any forward-looking statements. Additional risks and            uncertainties not presently known to us, or that we currently consider to be            immaterial, may also impact our business, operating results, liquidity and financial            condition. If any such risks occur, our business, operating results, liquidity and            financial condition could be materially affected in an adverse manner. Under such            circumstances, the trading price of our securities could decline, and you may lose all            or part of your investment.

 

**RISKSRELATINGTOOURBUSINESS**

 

**Our            exploratory drilling operations may not be successful, our business may fail and            investors may lose their entire investment in our company.**

 

We            intend to drill test wells on the Oklahoma properties covered by the farm out            agreements as well as on our anticipated leaseholds in Alaska. There can be no            assurance that our future drilling activities will be successful. We may not recover            all or any portion of our capital investment in the wells. Unsuccessful drilling            activities would have a material adverse effect upon our results of operations and            financial condition and would likely result in the ultimate failure of our business            operations. The cost of drilling, completing, and operating wells is often uncertain,            and a number of factors can delay or prevent drilling operations including: (i)            unexpected drilling conditions; (ii) pressure or irregularities in formation; (iii)            equipment failures or accidents; (iv) adverse weather conditions; and (v) shortages or            delays in availability of drilling rigs and delivery of equipment. If our exploratory            drilling operations are not successful, our business may fail and investors may lose            their entire investment in our company.

 

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**Oil            and gas exploration and development involves many operating risks. If we were to            experience any of these problems, it could have a material, adverse effect on our            operations and possibly cause us to go out of business and investors to lose their            entire investment in our company.**

 

Our            exploration activities will be subject to many risks, including the risk that we may            not discover commercially productive reservoirs. Exploration for oil and natural gas            can be unprofitable, not only from failing to discover reserves, but from productive            wells that do not produce sufficient revenues to return a profit. In addition, our            exploration activities may be curtailed, delayed or cancelled as a result of other            factors, including:

 

•fires;

•explosions;

•blow-outs and surface cratering;

•uncontrollable flows of underground natural gas, oil, or formation            water;

•natural disasters;

•facility and equipment failures;

•title problems;

•shortages or delays in the delivery of equipment and            services;

•abnormal pressure formations; and,

•environmental hazards such as natural gas leaks, oil spills,            pipeline ruptures and discharges of toxic gases.

 

If any            of these events occur, we could incur substantial losses as a result of:

 

•injury or loss of life;

•severe damage to and destruction of property, natural resources or            equipment;

•pollution and other environmental damage;

•clean-up responsibilities;

•regulatory investigation and penalties;

•suspension of our operations; or,

•repairs necessary to resume operations.

 

We may            be affected by any of these events more than larger companies, since we have limited            working capital. We have not obtained any liability insurance for our operations at            this time. If we were to experience any of these problems, it could have a material,            adverse effect on our operations and could cause us to go out of business and investors            to lose their entire investment in our company.

 

**The            operations and the potential profitability of oil and gas exploration and development            companies often depends upon factors beyond our control. If our operations and            potential profitability are negatively impacted because of these factors, our business            could suffer and investors could lose all or part of their investment in our            company.**

 

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The            potential profitability of oil and gas properties is dependent upon many factors beyond            our control. For instance, world prices and markets for oil and gas are unpredictable,            highly volatile and potentially subject to governmental price fixing, pegging and            controls, or any combination of these and other factors, responding to changes in            domestic, international, political, social, and economic environments. Additionally,            due to worldwide economic uncertainty, the availability and cost of funds and other            expenses have become increasingly difficult, if not impossible, to project. These and            other changes and events may materially affect our financial performance.

 

Adverse            weather conditions can also hinder drilling operations. A productive well may become            uneconomic in the event water or other deleterious substances are encountered which            impair or prevent the production of oil and/or gas from the well. In addition,            production from any well may be unmarketable if it is impregnated with water or other            deleterious substances. The marketability of oil and gas, which may be acquired or            discovered will be affected by numerous factors beyond our control. These factors            include, but are not limited to, the proximity and capacity of oil and gas pipelines            and processing equipment, market fluctuations of prices, taxes, royalties, land tenure,            allowable production and environmental protection. These factors cannot be accurately            predicted. If our operations and potential profitability are negatively impacted            because of these factors, our business could suffer and investors could lose all or            part of their investment in our company.

 

**The            oil and gas industry is highly competitive and there is no assurance that we will be            successful in acquiring further oil and gas exploration prospects and hiring qualified            personnel. If we do not compete successfully in these areas, our operations will likely            suffer and our company will likely be unsuccessful.**

 

The oil            and gas industry is intensely competitive, and we compete with other companies that            have greater resources. Many of these companies not only explore for and produce oil            and natural gas, but also carry on refining operations and market petroleum and other            products on a regional, national or worldwide basis. These companies may be able to pay            more for productive oil and natural gas properties and exploratory prospects or define,            evaluate, bid for and purchase a greater number of properties and prospects than our            financial or human resources permit. In addition, these companies may have a greater            ability to continue exploration activities during periods of low oil and natural gas            market prices. Our larger competitors may be able to absorb the burden of present and            future laws and regulations more easily than we can, which would adversely affect our            competitive position. Our ability to acquire additional properties and to discover            reserves in the future will be dependent upon our ability to evaluate and select            suitable properties and to consummate transactions in a highly competitive environment.            These companies also may be better able to attract the qualified personnel required to            run a successful oil and gas exploration company.

 

**Oil            and gas operations are subject to comprehensive regulation which may cause substantial            delays or require capital outlays in excess of those anticipated causing an adverse            effect on us.**

 

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Oil and            gas operations are subject to federal, state, and local laws relating to the protection            of the environment, including laws regulating removal of natural resources from the            ground and the discharge of materials into the environment. Oil and gas operations are            also subject to federal, state, and local laws and regulations which seek to maintain            health and safety standards by regulating the design and use of drilling methods and            equipment. Various permits from government bodies are required for drilling operations            to be conducted; no assurance can be given that such permits will be received.            Environmental standards imposed by federal, state, or local authorities may be changed            and any such changes may have material adverse effects on our activities. Moreover,            compliance with such laws may cause substantial delays or require capital outlays in            excess of those anticipated, thus causing an adverse effect on us. Additionally, we may            be subject to liability for pollution or other environmental damages which we may elect            not to insure against due to prohibitive premium costs and other reasons. To date we            have not been required to spend material amounts on compliance with environmental            regulations. However, we may be required to do so in future and this may affect our            ability to expand or maintain our operations.

 

**Oil            and gas exploration and development activities are subject to certain environmental            regulations which may prevent or delay the commencement or continuance of our            operations.**

 

Our oil            and gas exploration and development activities will be subject to certain federal,            state and local laws and regulations relating to environmental quality and pollution            control. Such laws and regulations increase the costs of these activities and may            prevent or delay the commencement or continuance of a given operation. Compliance with            these laws and regulations has not had a material effect on our operations or financial            condition to date. Specifically, we are subject to legislation regarding emissions into            the environment, water discharges and storage and disposition of hazardous wastes. In            addition, legislation has been enacted which requires well and facility sites to be            abandoned and reclaimed to the satisfaction of state authorities. However, such laws            and regulations are frequently changed and we are unable to predict the ultimate cost            of compliance.

 

**RISKS RELATING TO OUR COMPANY**

 

**If            we do not continue to obtain additional financing we may not be able to fully develop            all of our properties.**

 

While            our current operating funds are sufficient to enable us to commence and complete all            intended test wells on the Oklahoma properties covered by the oil and gas leases, we            may encounter unforeseen costs and expenses. If we incur unforeseen costs and expenses,            we will need to obtain additional financing in order to complete our business plan. We            currently do not have any income producing operations or commitments to provide any            additional funds that may be needed in the future.

 

Our            cash on hand at March 31, 2008, less known liabilities is approximately $1,320,000. We            do not currently have any arrangements for financing and may not be able to find            such

 

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financing. Our ability to obtain additional financing will be subject to            a number of factors, including the market price for oil and gas, the success of our            initial test wells and general market conditions. These factors will make the timing,            amount, terms or conditions of financing uncertain and additional financing may be            unavailable to us. If we do not obtain additional financing, we may be required to            delay or limit the development of certain of our properties.l.

 

**We            are a new entrant into the oil and gas industry without a profitable or long operating            history. We do not have any income producing oil and gas properties and we have limited            financial resources. We have not yet commenced our exploration activities nor have we            generated any revenue since our incorporation. There is no means by which investors can            evaluate our potential for success and there is no assurance that we will ever operate            profitably.**

 

We have            a limited operating history and must be considered in the exploration stage. Our            company's operations will be subject to all the risks inherent in the establishment of            an exploration stage enterprise and the uncertainties arising from the absence of a            significant operating history. Potential investors should be aware of the difficulties            normally encountered by oil and gas exploration and development companies and the high            rate of failure of such enterprises, especially those with a limited operating history            such as ours. The likelihood of success must be considered in light of the problems,            expenses, difficulties, complications and delays encountered in connection with the oil            and gas exploration that we plan to undertake. These potential problems include, but            are not limited to, unanticipated problems relating to exploration, and additional            costs and expenses that may exceed current estimates. The expenditures to be made by us            in our oil and gas exploration may not result in the discovery of oil and gas reserves.            If the results of our exploration do not reveal commercially viable oil or gas            reserves, we may decide to abandon our leasehold interests and acquire new oil and gas            interests for exploration or cease operations. The acquisition of additional oil and            gas interests will be dependent upon us possessing capital resources in order to            purchase such interests. If no funding is available, we may be forced to abandon our            operations. No assurance can be given that we will ever operate on a profitable            basis.

 

Potential investors should be aware of the difficulties normally            encountered by new resource companies and the high rate of failure of such enterprises.            There is a high risk that our business will fail.

 

**Because our directors have other business interests, they may not be            able or willing to devote a sufficient amount of time to our business operations,            causing our business to suffer and possibly fail**.

 

Our            directors intend to spend a minority of their business time providing their services to            us. While they presently possess adequate time to attend to our interests, it is            possible that the demands on our directors from their other obligations could increase,            or the demands of our business operations could increase, with the result that they            would no longer be able to devote

 

11

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sufficient time to the management of our business. If this happens, our            company will not likely perform to its potential and may fail.

 

**Prospects that we decide to drill may not yield natural gas or oil in            commercially viable quantities. If this happens, our business will likely fail and            investors would likely lose their entire investment in our company.**

 

None of            the Oklahoma or Alaska properties covered by the oil and gas leases have yet been fully            evaluated by the company. We will not know for certain, prior to drilling and testing,            whether natural gas or oil will be present in those properties or, if present, whether            natural gas or oil will be present in sufficient quantities to recover drilling or            completion costs or to be economically viable. The cost of drilling, completing and            operating any well is uncertain and any wells we drill may not be productive. If we            never find commercially viable resources of oil and gas, our business will fail and            investors will likely lose their entire investment in our company.

 

**Our            Alaska prospects are in areas believed to contain gas, but presently lacking gas            transportation facilities**.

 

While            our Alaska prospects are in areas that are promising for gas discovery, there are no            existing pipeline facilities available to transport any gas they may produce to market.            Unless such facilities are built and available to us, our gas would be “stranded            gas” with little or no market value. The Company believes that a pipeline            facility will be built within the terms of our leases, however, whether a pipeline is            built, the timing of the construction of the pipeline and whether and on what terms the            pipeline is made available to transport our gas are all matters beyond our control            which could have significant impacts on our future results.

 

**James Fitzsimons, our President, owns approximately 78.5% of the            shares of common stock and his interest could conflict with other investors, which            could cause other investors to lose all or part of their investment.**

 

James            Fitzsimons, our president and a director, owns 4,450,000 shares of our common stock, or            78.5% of our issued and outstanding common stock, as of the date hereof. Due to his            stock ownership, James Fitzsimons is able to substantially influence all matters            requiring stockholder approval, including the election of directors and approval of            significant corporate transactions. Such concentration of ownership may also have the            effect of delaying or preventing a change in control, which may be to the benefit of            our management but not in the interest of the shareholders. This stock ownership and            potential effective control on all matters relating to the business and operations of            our company could eliminate the possibility of shareholders changing the management in            the event that the shareholders did not agree with the conduct ofthe officers and            directors. Additionally, the shareholders would potentially not be able to obtain the            necessary shareholder vote to effect any change in the course of business of our            company. This lack of shareholder control could prevent the shareholders from removing            from the Board of Directors any directors who are not managing the company with            sufficient skill to

 

12

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make it            profitable, which could prevent us from becoming profitable and cause investors to lose            all or part of their investment in our company.

 

**RISKS RELATING TO OUR SECURITIES**

 

**If a            liquid market for our common stock does not develop, shareholders may be unable to sell            their shares.**

 

There            is currently no liquid market for our common stock and no certainty that a liquid            market will develop. While our common stock is quoted for trading on the OTC Bulletin            Board, there has only been sporadic trading of our common stock. If a liquid market is            not developed for our shares, it will be difficult for shareholders to sell their            stock.

 

**A            purchaser of our stock is purchasing penny stock which limits his or her ability to            sell the stock.**

 

Our            shares of common stock are considered penny stock under the Exchange Act. The shares            will remain penny stock for the foreseeable future. The classification of penny stock            makes it more difficult for a broker-dealer to sell the stock into a secondary market,            thus limiting investment liquidity. Any broker-dealer engaged by the purchaser for the            purpose of selling his or her shares in our company will be subject to rules 15g-1            through 15g-10 of the Exchange Act. Rather than creating a need to comply with those            rules, some broker-dealers will refuse to attempt to sell penny stocks such as            ours.

 

**We            do not intend to pay dividends and there will be less ways in which you can make a gain            on any investment in our company.**

 

We have            never paid any cash dividends and currently do not intend to pay any dividends for the            foreseeable future. To the extent that we require additional funding currently not            provided for in our financing plan, our funding sources may likely prohibit the payment            of a dividend.

 

**Our board of directors is authorized to issue shares of preferred            stock, which may have rights and preferences detrimental to the rights of the holders            of our common shares**.

 

We are            authorized to issue up to 1,000,000 shares of preferred stock, $0.0001 par value. To            date we have not issued any shares of preferred stock and have no plans to do so. Our            preferred stock may bear such rights and preferences, including dividend and            liquidation preferences, as the Board of Directors may fix and determine from time to            time. Any such preferences may operate to the detriment of the rights of the holders of            our common shares

 

**Our            articles of incorporation provide for indemnification of officers and directors at our            expense and limit their liability which may result in a major cost to us and hurt            the**

 

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**interests of our shareholders because corporate resources may be            expended for the benefit of officers and/or directors.**

 

Our            articles of incorporation and applicable Delaware law provide for the indemnification            of our directors, officers, employees, and agents, under certain circumstances, against            attorney's fees and other expenses incurred by them in any litigation to which they            become a party arising from their association with or activities on our behalf. We will            also bear the expenses of such litigation or any of our directors, officers, employees,            or agents, upon such person's promise to repay us, therefore, if it is ultimately            determined that any such person should not have been entitled to indemnification this            indemnification policy could result in substantial expenditures by us, which we will be            unable to recoup.

 

We have            been advised that, in the opinion of the SEC, indemnification for liabilities arising            under federal securities laws is against public policy as expressed in the Securities            Act of 1933 and is, therefore, unenforceable. In the event that a claim for            indemnification against these types of liabilities, other than the payment by us of            expenses incurred or paid by a director, officer or controlling person in the            successful defense of any action, suit or proceeding, is asserted by a director,            officer or controlling person in connection with our registered securities , we will            (unless in the opinion of our counsel, the matter has been settled by controlling            precedent) submit to a court of appropriate jurisdiction, the question whether            indemnification by us is against public policy as expressed in the Securities Act and            will be governed by the final adjudication of such issue. The legal process relating to            this matter if it were to occur is likely to be very costly and may result in us            receiving negative publicity, either of which factors is are likely to materially            reduce the market and price for our shares, if such a market ever develops.

 

**Item            1B. Unresolved Staff Comments.**

 

None

 

**Item            2. Properties.**

 

Our            present level of operations has not required us to establish regular executive offices            and we use the offices of our counsel and secretary, Frank J. Hariton, 1065 Dobbs Ferry            Road, White Plains, New York 10607 without charge. Should we require a regular            permanent office we will attempt to locate one in the vicinity of our leases and we            believe that suitable properties are available at reasonable costs.

 

**Item            3. Legal Proceedings**.

 

We are            not currently party to any legal proceedings and are not aware of any threatened legal            proceedings against us.

 

**Item            4. Submission of Matters to a Vote of Security Holders.**

 

14

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On            October 19, 2007, we filed a Certificate of Amendment to our Certificate of            Incorporation (the "Amendment"). The Amendment changed our name from "GD Conference            Center, Inc." to "Petrocorp Inc." and effected a five for one stock split (the "Stock            Split"). The Amendment was approved by the written consent of James Fitzsimons who, at            the time of such action owned 890,000 (4,450,000 as adjusted for the Stock Split) of            our 1,054,000 (5,270,000 as adjusted for the Stock Split) issued and outstanding            shares, then representing approximately 84.5% of our issued and outstanding            shares

 

 

**Part II.**

 

**Item            5.****Market for Registrant's Common Equity, Related            Stockholder Matters and Issuer Purchases of Equity            Securities**.

 

Our            common stock trades on the Over the Counter Bulletin Board under the symbol            “PTCP”. The volume and frequency of both quotations and trades in our stock            has been limited. There are presently six holders of record of our common stock. The            number of holders does not include the shareholders for whom shares are held in a            "nominee" or "street" name. We have not paid any cash dividends and do not anticipate            doing so in the foreseeable future. Future dividends, if any, will depend upon our            results of operations, financial condition, capital needs and such other factors as the            Board of Directors deems relevant.

 

***Recent Sales of Unregistered Securities***

 

On            December 27, 2007, the Company sold 200,000 shares of its common stock to one investor            at $2.50 per share (an aggregate of $500,000). OnMarch 18,            2008, the Company sold 200,000 shares of its common stock            to one investor at $5.00 per share (an aggregate of $1,000,000). The shares were sold            in transactions exempt from registration under Regulation S of the Securities Act of            1933, as amended The shares are not registered under the Securities Act or any state            securities laws and, unless so registered, may not be offered or sold except pursuant            to an applicable exemption from the registration requirements of the Securities Act and            applicable state securities laws. The purchasers of the shares represented that it was            acquiring the shares for its own account, for investment, and that the purchaser was            not a US Person within the meaning of Regulation S. The Company has no obligation to            register the resale of the Shares under the Securities Act. The proceeds from the sale            of the Shares will be used for working capital purposes.

 

**Item            6. Selected Financial Data**.

 

We were            organized in June 2006. The following information is derived from our financial            statements contained elsewhere herein and should be reviewed in conjunction with those            financial statements, the notes thereto and “Item 7. Management’s            Discussion and Analysis of Financial Condition and Results of Operations”            included in this annual report.

 

 

15

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***Balance Sheet Data***:

| **ASSETS**                                                                                     |
|------------------------------------------------------------------------------------------------|
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   | December 31, |
|                                                                                           |   | 2007 |   | 2006 |
| Current assets:                                                                                |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
| Cash                                                                                           |   | $ | 827,755 |   | $ | 22,532 |
|                                                                                           |   |   |   |   |   |   |
| Total current assets                                                                           |   |   | 827,755 |   |   | 22,532 |
|                                                                                           |   |   |   |   |   |   |
| Undeveloped oil and gas properties                                                             |   |   | 385,286 |   |   | - |
|                                                                                           |   |   |   |   |   |   |
| Total assets                                                                                   |   | $ | 1,213,041 |   | $ | 22,532 |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’                            EQUITY**                      |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
| Current liabilities:                                                                           |   |   |   |   |   |   |
| Accrued expenses                                                                               |   | $ | 18,886 |   | $ | 19,829 |
| State of Alaska payable                                                                        |   |   | 279,500 |   |   | - |
| Notes to an officer/stockholder                                                                |   |   | 440,000 |   |   | - |
| Total current liabilities                                                                      |   |   | 738,386 |   |   | 19,829 |
|                                                                                           |   |   |   |   |   |   |
| Stockholders’ equity:                                                                    |   |   |   |   |   |   |
| Preferred stock; $.0001 par value; 1,000,000 shares                            authorized,     |   |   |   |   |   |   |
| none issued or outstanding                                                                     |   |   | - |   |   | - |
| Common stock; $.0001 par value; 100,000,000 shares                            authorized       |   |   |   |   |   |   |
| 5,470,000 and 5,150,000 shares issued and outstanding,                            respectively |   |   | 547 |   |   | 515 |
| Additional paid-in capital                                                                     |   |   | 562,629 |   |   | 29,585 |
| Deficit accumulated during exploration stage                                                   |   |   | (88,521) |   |   | (27,397) |
|                                                                                           |   |   | 474,655 |   |   | 2,703 |
|                                                                                           |   |   |   |   |   |   |
| Total liabilities and stockholders’                            equity                    |   | $ | 1,213,041 |   | $ | 22,532 |

      

 

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***Statement of Operations Data:***

|                                          |   |   |      |                | Period from   |
|-----------------------------------------------|--------|--------|-----------|---------------------|---------------|
|                                          |   |   |      |                | June 19, 2006 |
|                                          |   |   |      | (inception) through |
|                                          |   |   |      | December 31,        |
|                                          |   | 2007   |      | 2006                |          | 2007 |
|                                          |   |   |      |                |          |   |   |   |   |
| Costs and expenses:                           |   |   |      |                |          |   |   |   |   |
| General and administrative                    |   | $      | 36,248    |                | $             | 26,597 |   | $ | 62,845 |
| Depreciation                                  |   |   | 1,071     |                |          | - |   |   | 1,071 |
| Impairment of equipment                       |   |   | 16,929    |                |          | - |   |   | 16,929 |
| Interest                                      |   |   | 6,076     |                |          | - |   |   | 6,076 |
| Franchise taxes                               |   |   | 800       |                |          | 800 |   |   | 1,600 |
| Net loss applicable to common shareholders    |   | $      | (61,124)  |                | $             | (27,397) |   | $ | (88,521) |
|                                          |   |   |      |                |          |   |   |   |   |
| Net loss per common share - basic and diluted |   | $      | (0.01)    |                | $             | (0.01) |   |   |   |
|                                          |   |   |      |                |          |   |   |   |   |
| Weighted average number of common             |   |   |      |                |          |   |   |   |   |
| shares outstanding – basic and diluted  |   |   | 5,259,205 |                |          | 5,085,625 |   |   |   |

 

 

**Item            7. Management’s Discussion and Analysis of Financial Condition and Results of            Operations**.

 

**PLAN            OF OPERATIONS AND CASH REQUIREMENTS**

 

Our            plan of operation for year ending December 31, 2008 is to commence, subject to the            satisfactory completion of the detailed geological mapping of the leases, test wells on            the Oklahoma prospects covered by the oil and gas leases. We anticipate the cost of            these programs will be approximately $1,000,000, however, this figure could be reduced,            possibly substantially, by third-party working interest participation, arising            particularly as a result of spacing and pooling applications and hearings. We also            anticipate being required to pay at least $275,000 to obtain leases from the State of            Alaska during the year ending December 31, 2008 or the following year in connection            with our Alaska prospects.

 

In year            ending December 31, 2008 we also anticipate spending an additional $40,000 on            administrative expenses, including fees payable in connection with our compliance with            our reporting obligations as a public company, such as legal, accounting and audit            fees.

 

Total            expenditures in year ending December 31, 2008 therefore could be at least $1,315,000.            While we have the cash on hand necessary to cover these expenses, we could require            additional funding to meet unforeseen costs. We anticipate that additional funding will            be

 

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provided in the form of equity financing from the sale of our common            stock or from director loans. However, we cannot provide investors with any assurance            that we will be able to raise sufficient funding. We do not have any arrangements in            place for any future equity financing.

We are            in the process of determining our personnel needs. We intend to continue hire            consultants over the course of the next twelve months. To attract qualified personnel,            we may offer percentages of the working interest in the company's oil and gas            properties.

 

**LIQUIDITY AND CAPITAL RESOURCES**

 

Our            company's principal cash requirements are for exploration expenses which we anticipate            will rise as we proceed to determine the feasibility of developing our current or            future property interests.

 

**Capital Resources**

 

As of            December 31, 2007, we had cash of $827,755 and working capital of $89,369 . Our net            cash provided by financing activities during the period from our inception to December            31, 2007 was $994,100 .

 

On            September 20, 2007, a director, James Fitzsimons, loaned $350,000 to our company.            During the year ended December 31, 2007, Mr. Fitzsimons also advanced $90,000 to our            subsidiary Union Energy (Alaska), LLC as a deposit in connection with a bid for Alaskan            oil and gas leases.

 

In            December 2007 we raised $500,000 from the private sale of 250,000 shares of our stock            at $2.50 per share. In March 2008 we raised $1,000,000 from the private sale of            $200,000 shares of our stock at $5.00 per share. These sales were arms length sales to            unaffiliated parties completed pursuant to the exemption from registration under the            Securities Act of 1933, as amended, by Regulation S issued thereunder.

 

**OIL            AND GAS PROPERTIES**

 

**Undeveloped Acreage**

 

In            Oklahoma we hold farm out interests in approximately 980 gross (426 net) acres located            in Okfuskee County, Oklahoma plus a further 28 net acres leased directly from mineral            owners by the Company.  The farm out agreements provide that to earn the leases,            we must commence drilling an oil and gas test well in the regions covered by the            leaseholds by December 31, 2008.  A summary of the leased land covered by our farm            out interests plus acreage leased directly by the Company is as follows:Township 11            North, Range 10 East, Okfuskee Count, Oklahoma

 

Section            10: 400.000 gross acres (158.7760 net acres)

Section            11: 500.000 gross acres (214.5090 net acres)

 

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Section            35: 80.0000 gross acres (80.0000 net acres)

 

We            anticipate being awarded leases with respect to additional acreage in Alaska in            approximately 26,680 gross (24,407 net) acres.  However these leases have not yet            been issued and the acreage in the eventual leases may            vary.**Drilling Activity**

 

As of            the date of this current report, we do not hold an interest in any oil and gas wells            that are in the process of drilling (including wells temporarily suspended),            waterfloods in process of installation, pressure maintenance operations or any other            related operations of material importance.

 

**Seasonality and Inflation**

 

We do            not believe that our business will be seasonal to any material extent except that            exploratory operations, particularly in Alaska, may be hampered by severe adverse            weather conditions. Since energy costs are a key component of inflation, we do not            believe that our results will be materially impacted by inflation in the current fiscal            year.

 

**Critical Accounting Policies and Estimates**

 

Financial Reporting Release No. 60 of the SEC encourages all companies            to include a discussion of critical accounting policies or methods used in the            preparation of the financial statements. There are no current revenue generating            activities that give rise to significant assumptions or estimates. Our most critical            accounting policies relate to the accounting and disclosure of related party            transactions. Our financial statements filed as part of this annual report include a            summary of the significant accounting policies and methods used in the preparation of            our financial statements.

 

**Off-Balance Sheet Arrangements**

 

We have            no significant off-balance sheet arrangements that have or are reasonably likely to            have a current or future effect on our financial condition, changes in financial            condition, revenues or expenses, results of operations, liquidity, capital expenditures            or capital resources that is material to stockholders.

 

**Employees and Purchase of Plant or Equipment**

 

We are            in the process of determining our personnel needs. We intend to hire employees or            consultants over the course of the next twelve months but do not currently have an            estimate of how many employees we will hire or how much it will cost.

 

 

 

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**Item            8 Financial Statements and Supplementary Data**.

 

See            Financial Statements beginning on Page F-1.

 

**Item            9****Changes in and Disagreements With Accountants on            Accounting and Financial Disclosure**

 

No            events have occurred which would require disclosure under this item.

 

**Item            9A Controls and Procedures.**

 

**Conclusions Regarding the Effectiveness of Disclosure Controls and            Procedures**

 

We            maintain disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e),            that are designed to ensure that information required to be disclosed by the company in            the reports that it files or submits under the Securities Exchange Act of 1934, as            amended, is recorded, processed, summarized, and reported within the time periods            specified in the Securities and Exchange Commission’s rules and forms, and that            such information is accumulated and communicated to the company’s management,            including its chief executive officer and chief financial officer, as appropriate to            allow timely decisions regarding required disclosure. Our management evaluated, with            the participation of the Chief Executive Officer and Chief Financial Officer, the            effectiveness of the design and operation of our disclosure controls and procedures as            of December 31, 2007. Based on this evaluation, our principal executive and principal            financial officers concluded that our disclosure controls and procedures were effective            as of December 31, 2007, the end of the period covered by this annual            report.

 

**Management’s Report on Internal Control over Financial            Reporting**

 

This            Annual Report on Form 10-KSB does not include a report of management’s assessment            regarding internal control over financial reporting or an attestation report of the            Company’s independent registered public accounting firm due to a transition            period established by rules of the Securities and Exchange Commission for newly public            companies.

 

**Changes in Internal Control over Financial Reporting**

 

There            has been no change in our internal control over financial reporting that occurred            during our fiscal quarter ended December 31, 2007, that has materially affected, or is            reasonably likely to materially affect, our internal control over financial            reporting.

 

**Item            9B—Other Information**

 

We do            not have any information that was required to be reported on Form 8-K during the fourth            quarter that was not reported.

 

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**Part III**

 

**Item 10 Executive Officers and Corporate Governance**

 

Our            current directors and executive officers are:

 

|   | **Name** | **Age** | **Position(s)** |
|--------|----------|---------|-----------------|

 

|   | James Fitzsimons | 47 | President, CEO and a Director |
|--------|------------------|----|-------------------------------|

 

|   | Stephen M. Siedow | 57 | Director |
|--------|-------------------|----|----------|

 

|   | Frank J. Hariton | 59 | Secretary |
|--------|------------------|----|-----------|

 

***James Fitzsimons***has been a director            of our Company since September 2007. Mr. Fitzsimons is an elected member of the            Schweizerische Vereinigung von Petroleum-Geologen und -Ingeneuren (Swiss Association of            Petroleum Geologists and Engineers) and during the past five years has been employed by            Reta Holding SA of Paradiso, Switzerland, also serving as a member of the board of            directors of Kapital Finanz und Treuhand Gesellshaft (Capital Finance and Trust            Company) a licensed and regulated asset and fund management company and a full member            of SECA (Swiss Private Equity & Corporate Finance Association). Mr. Fitzsimons has            been active in the mineral extraction industry for over 15 years, and has been active            within the oil and gas industry in the state of Oklahoma for over five years. Mr.            Fitzsimons received a Bachelor of Laws degree from University College London. His            industry knowledge comes from direct experience of the oil and gas business both in            Europe and the United States.

 

***StephenM. Siedow***, has been a            director since December 2007 and is a member of The American Institute of Certified            Public Accountants and the Colorado Society of Certified Public Accountants was            appointed to the Registrant’s Board of Directors. From 1974 to 1982 he was with            the audit department of Ernst & Young, Certified Public Accountants in Denver,            Colorado and in 1982, he formed Stephen M. Siedow, PC a professional accounting firm            providing auditing, management consulting and tax services to corporations,            partnerships and individuals. Mr. Siedow specializes in public and SEC accounting and            has experience in industries including construction, mining, oil and gas, and            mergers/acquisitions.

 

***Frank J. Hariton***has been corporate            secretary since September 2007 and is an attorney in private practice in New York            State. Mr. Hariton received his BA (1971) and JD (1974) from Case Western Reserve            University.

 

There are no family relationships among members of our management.            Directors serve for one year terms or until their successors shall have been elected            and shall qualify. Officers serve at the pleasure of the board. Due to its small size,            the Company has not adopted a code of ethics. The Board of Directors does not have any            committees.

 

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**Item 11. Executive Compensation**

 

The following table sets forth the cash and non-cash annual remuneration            of each of the three highest paid persons who are officers and directors and officers            and directors as a group during our last fiscal year:

 

| Name of                            individual or identity of group

                              | Capacities                            in which remuneration was received

                              | Salary

                              | Bonus

                              | Stock                            Awards

                              | All                            Other Compensation

                              | Aggregate remuneration

                              |
|--------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------|--------------------------------------------|-------------------------------------------|-----------------------------------------------------------------------------|---------------------------------------------------------------------------------------|------------------------------------------------------------|
| James Fitzsimons                                                                                       | CEO

                                                                                                   | $0

                                  | $0

                                 | $0

                                                                   | $0

                                                                             | $0

                                                  |
| Stephen M. Siedow

                                                                               | Director                                                                                                     | $0                                         | $0

                                 | $0

                                                                   | $0

                                                                             | $0

                                                  |
| Frank J. Hariton                                                                                       | Secretary                                                                                                    | $0                                         | $0                                        | $0                                                                          | $0                                                                                    | $0                                                         |
|                                                                                                   |                                                                                                         |

 

The            Company has not paid any compensation in cash to any officer or director and does not            intend to do so until such time as its capital resources are sufficient in the judgment            of its Board of Directors and such officers are required to devote significant time to            the Company’s affairs.

 

The            Company has not paid and has no present plan to give any compensation other than cash.            The Company does not have any Stock Option Plan or other equity compensation plans, but            is considering adopting a royalty bonus pool plan for its management in the            future.

 

Mr.            Hariton was paid $10,000 for legal services in connection with our September 2007            transaction with Mr. Fitzsimons. Mr. Siedow has accrued $2,300 in accounting fees as of            December 31, 2007.

 

**Item            12 Security Ownership of Certain Beneficial Owners and Management and Related            Stockholder Matters.**

 

The information in the following table sets forth the beneficial            ownership of our shares of common stock as of March 20, 2008, by: (i) each of the three            highest paid persons who are our officers and directors (or in the alternative, each            officer and director); (ii) all officers and directors as a group; (iii) each            shareholder who beneficially owns more than 5% of any class of our securities,            including those shares subject to outstanding options. A person deemed to be a            beneficial owner of any securities that such a person has a right to acquire within 60            days.

 

 

 

 

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| **Name and Address** | **Number of Shares** | **Percent of Class** |
|----------------------|----------------------|----------------------|

 

| James Fitzsimons | 4,450,000 | 78.5% |
|------------------|-----------|-------|

Selnaustrasse 3

8001            Zurich

Switzerland

 

| Stephen M. Siedow | 0 | 0% |
|-------------------|---|----|

13047 W            Iliff Drive

Lakewood, CO 80228

 

| Frank J. Hariton | 0 | 0% |
|------------------|---|----|

1065            Dobbs Ferry Road

White            Plains, NY 10607

 

All            officers and Directors

| as a group (3 persons) | 4,450,000 | 78.5% |
|------------------------|-----------|-------|

 

 

**Item            13. Certain Relationships and Related Transaction, and Director            Independence.**

 

On            December 17, 2007, James Fitzsimons caused an entity that he controls (Union Energy            (Alaska) LLC (“UEA”)), to contribute its 100% working interest and 87.5%            net revenue interest in its rights to three seven-year oil and gas leases from the            State of Alaska in tracts designated 254, 258 and 259 in the North Slope of Alaska            covering approximately 17,280 gross (14,807.41 net) acres in total (the            “Leases”) to us. UEA had already paid $90,000 for the Leases and the Leases            are subject to an additional payment to the State of Alaska, for which we will be            responsible, in an amount yet to be determined, but believed by UEA and Mr. Fitzsimons            to be approximately $279,500. The Leases were obtained by UEA in a competitive bidding            process. The balance of the net revenue interest in the Leases (12.5%) represents the            State of Alaska's royalty interest. The Board of Directors has determined that the            terms of transaction with Mr. Fitzsimons and UEA with respect to the Leases was in our            best interests and in the best interests of our shareholders. Subsequent to this            transaction, Mr. Fitzsimons contributed his interest in UEA to us.

 

Upon            his acquisition of a controlling interest in the Company in September 2007, Mr.            Fitzsimanos loaned the Company $350,000 for working capital. Mr. Fitzsimons loaned            Union Energy (Alaska), LLC (“UEA”) $90,000 in October 2007 to enable it to            bid on leaseholds in a State of Alaska auction. The Company subsequently acquired UEA            on December 17, 2007

 

Mr.            Siedow owns no stock and has received no compensation from the Company, may be            considered an independent director.

 

**Item            14. Principal Accounting Fees and Services.**

 

Audit            Fees

 

23

----

 

The            aggregate fees billed for professional services rendered by our principal accountant            for the audit of our annual financial statements and review of financial statements            included in the registrant's 10-QSB (17 CFR 249.308b) for the fiscal periods ended            December 31, 2007 and 2006 were $7,500 and $11,000, respectively.All of the fees paid to our independent auditor

were            for auditing or review of financial statements

 

 

**Part IV**

 

**Item            15. Exhibits, Financial Statement Schedules.**

 

(A)            Financial Statements

|   | See index to Financial Statements on Page F-1 |
|--------|-----------------------------------------------|

 

(B)            Exhibits.

 

| **Exhibit Number** | **Exhibit Description** |
|--------------------|-------------------------|

 

| 3.1 | Certificate of Incorporation - Incorporated by reference                            to like numbered exhibit to the Company’s Registration Statement                            on Form SB-2 File Number 333-141993 |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Bylaws - Incorporated by reference to like numbered                            exhibit to the Company’s Registration Statement on Form SB-2 File                            Number 333-141993 |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Certificate of Amendment to Certificate of Incorporation                            - Incorporated by reference to Exhibit 3.1 to Current Report on Form                            8-K filed November 5, 2007. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.1 | Specimen Stock Certificate - Filed Herewith |
|-----|---------------------------------------------|

| 10.1 | Consulting Agreement, dated March 12, 2008, between the                            Company and Keith G. Summar - Filed Herewith |
|------|---------------------------------------------------------------------------------------------------------------------------------|

| 21 | Subsidiary of the Registrant: Union Energy (Alaska) LLC,                            an Alaska limited liability company. (100% owned) |
|----|---------------------------------------------------------------------------------------------------------------------------------------|

| 31.1 | Certification pursuant to Section 302 of the                            Sarbanes-Oxley Act |
|------|--------------------------------------------------------------------------------------------|

| 31.2 | Certification pursuant to Section 302 of the                            Sarbanes-Oxley Act |
|------|--------------------------------------------------------------------------------------------|

| 32 | Certification pursuant to 18 U.S.C. Section 1350, as                            adopted pursuant to Section 906 of the Sarbanes-Oxley Act of                            2002 |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

( C)            Financial Statement Schedules - None

 

 

 

 

 

24

----

**SIGNATURES**

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

|   | PETROCORP INC. |
|--------|----------------|

 

 

|   | By: | /s/ James Fitzsimons   |
|--------|-----|-----------------------------|

|   | James Fitzsimons, |
|--------|-------------------|

|   | (Principal Executive, Financial and |
|--------|-------------------------------------|

|   | Accounting Officer) |
|--------|---------------------|

 

April 10, 2008

 

Pursuant to the requirements of the Securities Exchange Act of 1934,            this report has been signed below by the following persons on behalf of the registrant            and in the capacities and on the dates indicated.

 

| Name | Signature | Date | Capacities |
|------|-----------|------|------------|

 

 

| James Fitzsimons | /s/ James Fitzsimons | April 10 , 2008 | Director and |
|------------------|----------------------|-----------------|--------------|

President

 

| Stephen M. Siedow | /s/ Stephen M. Siedow | April 10 , 2008 | Director |
|-------------------|-----------------------|-----------------|----------|

             

             

 

25

 

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**INDEX TO FINANCIAL STATEMENTS**

December 31, 2007

| Contents                                                                                                                                                                                                                                                                                                          |   | Page        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|
|                                                                                                                                                                                                                                                                                                              |   |        |
| Report of Independent Registered Public Accounting                            Firm                                                                                                                                                                                                                                |   | F-2         |
|                                                                                                                                                                                                                                                                                                              |   |        |
| Consolidated Balance Sheets at December 31, 2007 and                            2006                                                                                                                                                                                                                              |   | F-3         |
|                                                                                                                                                                                                                                                                                                              |   |        |
| Consolidated Statements of Operations for the Year Ended                            December 31, 2007, for the Period from June 19, 2006 (Inception)                            through December 31, 2006, and for the Period from June 19, 2006                            (Inception) through December 31, 2007 |   | F-4         |
|                                                                                                                                                                                                                                                                                                              |   |        |
| Consolidated Statement of Stockholders’ Deficit                            for the Year Ended December 31, 2007                                                                                                                                                                                             |   | F-5         |
|                                                                                                                                                                                                                                                                                                              |   |        |
| Consolidated Statements of Cash Flows for the Year Ended                            December 31, 2007, for the Period from June 19, 2006 (Inception)                            through December 31, 2006, and for the Period from June 19, 2006                            (Inception) through December 31, 2007 |   | F-6         |
|                                                                                                                                                                                                                                                                                                              |   |        |
| Notes to the Consolidated Financial                            Statements                                                                                                                                                                                                                                         |   | F-7 to F-14 |

 

F-1

----

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING            FIRM**

 

To            the Board of Directors and Stockholders

Petrocorp Inc.

(An            exploration stage company)

White Plains, New York

 

We            have audited the accompanying consolidated balance sheets of Petrocorp Inc. (formerly            GD Conference Center, Inc.) and subsidiaries, an exploration stage            company, (collectively, “Petrocorp” or the “Company”) as            of December 31, 2007 and 2006 and the related statements of operations,            stockholders’ equity and cash flows for the year ended December 31, 2007 and for            the period from June 19, 2006 (inception) through December 31, 2006, and for the period            from June 19, 2006 (inception) through December 31, 2007. These consolidated financial            statements are the responsibility of the Company’s management. Our responsibility            is to express an opinion on these financial statements based on our audit.

 

We            conducted our audit in accordance with the standards of the Public Company Accounting            Oversight Board (United States). Those standards require that we plan and perform the            audit to obtain reasonable assurance about whether the financial statements are free of            material misstatement. The Company is not required to have, nor were we engaged to            perform, an audit of its internal control over financial reporting. Our audit included            consideration of internal control over financial reporting as a basis for designing            audit procedures that are appropriate in the circumstances, but not for the purpose of            expressing an opinion on the effectiveness of the Company's internal control over            financial reporting. Accordingly, we express no such opinion. An audit includes            examining, on a test basis, evidence supporting the amounts and disclosures in the            financial statements. An audit also includes assessing the accounting principles used            and significant estimates made by management, as well as evaluating the overall            financial statement presentation. We believe that our audits provide a reasonable basis            for our opinion.

 

In            our opinion, the consolidated financial statements referred to above present fairly, in            all material respects, the financial position of the Company at December 31, 2007 and            2006 and the results of its operations and its cash flows for the year ended December            31, 2007 and for the period from June 19, 2006 (inception) through December 31, 2006,            and for the period from June 19, 2006 (inception) through December 31, 2007 in            conformity with accounting principles generally accepted in the United States of            America.

 

 

*/s/Li & Company, PC*

Li & Company, PC

 

Skillman, New Jersey

March 28, 2008

F-2

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Consolidated Balance Sheets**

| **ASSETS**                                                                                     |
|------------------------------------------------------------------------------------------------|
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   | December 31, |
|                                                                                           |   | 2007 |   | 2006 |
| Current assets:                                                                                |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
| Cash                                                                                           |   | $ | 827,755 |   | $ | 22,532 |
|                                                                                           |   |   |   |   |   |   |
| Total current assets                                                                           |   |   | 827,755 |   |   | 22,532 |
|                                                                                           |   |   |   |   |   |   |
| Undeveloped oil and gas properties                                                             |   |   | 385,286 |   |   | - |
|                                                                                           |   |   |   |   |   |   |
| Total assets                                                                                   |   | $ | 1,213,041 |   | $ | 22,532 |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
| **LIABILITIES AND STOCKHOLDERS’                            EQUITY**                      |
|                                                                                           |   |   |   |   |   |   |
|                                                                                           |   |   |   |   |   |   |
| Current liabilities:                                                                           |   |   |   |   |   |   |
| Accrued expenses                                                                               |   | $ | 18,886 |   | $ | 19,829 |
| State of Alaska payable                                                                        |   |   | 279,500 |   |   | - |
| Notes to an officer/stockholder                                                                |   |   | 440,000 |   |   | - |
| Total current liabilities                                                                      |   |   | 738,386 |   |   | 19,829 |
|                                                                                           |   |   |   |   |   |   |
| Stockholders’ equity:                                                                    |   |   |   |   |   |   |
| Preferred stock; $.0001 par value; 1,000,000 shares                            authorized,     |   |   |   |   |   |   |
| none issued or outstanding                                                                     |   |   | - |   |   | - |
| Common stock; $.0001 par value; 100,000,000 shares                            authorized       |   |   |   |   |   |   |
| 5,470,000 and 5,150,000 shares issued and outstanding,                            respectively |   |   | 547 |   |   | 515 |
| Additional paid-in capital                                                                     |   |   | 562,629 |   |   | 29,585 |
| Deficit accumulated during exploration stage                                                   |   |   | (88,521) |   |   | (27,397) |
|                                                                                           |   |   | 474,655 |   |   | 2,703 |
|                                                                                           |   |   |   |   |   |   |
| Total liabilities and stockholders’                            equity                    |   | $ | 1,213,041 |   | $ | 22,532 |

 

See            notes to consolidated financial statements.

F-3

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Consolidated Statements of Operations**

 

      

|                                          |   |   |      |                | Period from   |
|-----------------------------------------------|--------|--------|-----------|---------------------|---------------|
|                                          |   |   |      |                | June 19, 2006 |
|                                          |   |   |      | (inception) through |
|                                          |   |   |      | December 31,        |
|                                          |   | 2007   |      | 2006                |          | 2007 |
|                                          |   |   |      |                |          |   |   |   |   |
| Costs and expenses:                           |   |   |      |                |          |   |   |   |   |
| General and administrative                    |   | $      | 36,248    |                | $             | 26,597 |   | $ | 62,845 |
| Depreciation                                  |   |   | 1,071     |                |          | - |   |   | 1,071 |
| Impairment of equipment                       |   |   | 16,929    |                |          | - |   |   | 16,929 |
| Interest                                      |   |   | 6,076     |                |          | - |   |   | 6,076 |
| Franchise taxes                               |   |   | 800       |                |          | 800 |   |   | 1,600 |
| Net loss applicable to common shareholders    |   | $      | (61,124)  |                | $             | (27,397) |   | $ | (88,521) |
|                                          |   |   |      |                |          |   |   |   |   |
| Net loss per common share - basic and diluted |   | $      | (0.01)    |                | $             | (0.01) |   |   |   |
|                                          |   |   |      |                |          |   |   |   |   |
| Weighted average number of common             |   |   |      |                |          |   |   |   |   |
| shares outstanding – basic and diluted  |   |   | 5,259,205 |                |          | 5,085,625 |   |   |   |

 

See            notes to consolidated financial statements.

 

F-4

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Consolidated Statements of Stockholders’ Equity**

For            the Period from June 19, 2006 (Inception) through December 31, 2007

|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|---------------------------------------------------------------------------------|-----------------------------------------|-----------|---------|---------------------------------|--------|--------|------------|---------|---------|-------------|----------|--------|-------------------|----------|---------|---------------|
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   | Deficit           |     |    |          |
|                                                                            |                                    |      |    | Common Stock, $0.0001 Par Value |   |   | Additional |    |    | Accumulated |     |   | Total             |
|                                                                            |                                    |      |    | Number of                       |   |   |       |    |    | Paid-in     |     |   | during the        |     |    | Stockholders' |
|                                                                            |                                    |      |    | Shares                          |   |   | Amount     |    |    | Capital     |     |   | Development Stage |     |    | Equity        |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Balance, June 19, 2006 (Inception)                                              |                                    | -         |    | $                               | -      |   | $          | -       |    | $           | -        |   | $                 | -        |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Issuance of common stock for cash                                               |                                    | 5,000,000 |    |                            | 500    |   |       | (400)   |    |        | -        |   |              | 100      |
|                                                                            | ($0.0001 per share)                     |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Issuance of common stock for cash ($1.00 per share                            - |                                    | 150,000   |    |                            | 15     |   |       | 29,985  |    |        | -        |   |              | 30,000   |
|                                                                            | July 1, 2006 through December 31, 2006) |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Net loss                                                                        |                                    |      |    |                            |   |   |       |    |    |        | (27,397) |   |              | (27,397) |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Balance, December 31, 2006                                                      |                                    | 5,150,000 |    |                            | 515    |   |       | 29,585  |    |        | (27,397) |   |              | 2,703    |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|                                                                            | Common stock issued for cash            |      | 120,000 |                            |   | 12     |       |    | 23,988  |        |     |   |              |     | 24,000  |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|                                                                            | Capital contribution                    |      |    |                            |   |   |       |    | 3,000   |        |     |   |              |     | 3,000   |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|                                                                            | Common stock issued for cash            |      | 200,000 |                            |   | 20     |       |    | 499,980 |        |     |   |              |     | 500,000 |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|                                                                            | Interest contribution                   |      |    |                            |   |   |       |    | 6,076   |        |     |   |              |     | 6,076   |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Net loss                                                                        |                                    |      |    |                            |   |   |       |    |    |        | (61,124) |   |              | (61,124) |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |
| Balance, December 31, 2007                                                      |                                    | 5,470,000 |    | $                               | 547    |   | $          | 562,629 |    | $           | (88,521) |   | $                 | 474,655  |
|                                                                            |                                    |      |    |                            |   |   |       |    |    |        |     |   |              |     |    |          |

 

See            notes to consolidated financial statements.

F-5

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Consolidated Statements of Cash Flows**

 

|                                                                           |   |        |      |                | Period from June 19, 2006 |
|--------------------------------------------------------------------------------|--------|-------------|-----------|---------------------|---------------------------|
|                                                                           |   | Year Ended  |      | (inception) through |
|                                                                           |   | December 31 |      | December 31         |
|                                                                           |   | 2007        |      | 2006                |                      | 2007 |
| Cash flows from operating activities:                                          |   |        |      |                |                      |   |   |   |   |
| Net loss                                                                       |   | $           | (61,124)  |                | $                         | (27,397) |   | $ | (88,521) |
| Adjustments to reconcile net loss to net                                       |   |        |      |                |                      |   |   |   |   |
| cash provided by (used in) operating                            activities:    |   |        |      |                |                      |   |   |   |   |
| Capital contribution                                                           |   |        | 3,000     |                |                      |   |   |   | 3,000 |
| Depreciation                                                                   |   |        | 1,071     |                |                      |   |   |   | 1,071 |
| Impairment of equipment                                                        |   |        | 16,929    |                |                      |   |   |   | 16,929 |
| Interest contribution                                                          |   |        | 6,076     |                |                      |   |   |   | 6,076 |
| Changes in operating assets and liabilities:                                   |   |        |      |                |                      |   |   |   |   |
| Accrued expenses                                                               |   |        | (943)     |                |                      | 19,829 |   |   | 18,886 |
| State of Alaska payable                                                        |   |        | 279,500   |                |                      |   |   |   | 279,500 |
| Net cash provided by (used in) operating                            activities |   |        | 244,509   |                |                      | (7,568) |   |   | 236,941 |
|                                                                           |   |        |      |                |                      |   |   |   |   |
| Cash flows from investing activities:                                          |   |        |      |                |                      |   |   |   |   |
| Purchase of undeveloped oil and gas                            properties      |   |        | (385,286) |                |                      |   |   |   | (385,286) |
| Purchase of equipment                                                          |   |        | (18,000)  |                |                      |   |   |   | (18,000) |
| Net cash used in investing activities                                          |   |        | (403,286) |                |                      | -- |   |   | (403,286) |
|                                                                           |   |        |      |                |                      |   |   |   |   |
| Cash flows from financing activities:                                          |   |        |      |                |                      |   |   |   |   |
| Notes to an officer/stockholder                                                |   |        | 440,000   |                |                      |   |   |   | 440,000 |
| Proceeds from sale of common stock                                             |   |        | 524,000   |                |                      | 30,100 |   |   | 554,100 |
| Net cash provided by financing activities                                      |   |        | 964,000   |                |                      | 30,100 |   |   | 994,100 |
|                                                                           |   |        |      |                |                      |   |   |   |   |
| Net increase in cash                                                           |   |        | 805,223   |                |                      | 22,532 |   |   | 827,755 |
| Cash at beginning of period                                                    |   |        | 22,532    |                |                      |   |   |   | -- |
| Cash at end of period                                                          |   | $           | 827,755   |                | $                         | 22,532 |   | $ | 827,755 |
|                                                                           |   |        |      |                |                      |   |   |   |   |
| Supplemental disclosure of cash flow                            information:   |   |        |      |                |                      |   |   |   |   |
| Cash paid for interest                                                         |   |        |      |                |                      |   |   | $ | -- |
| Cash paid for taxes                                                            |   |        |      |                |                      |   |   | $ | -- |
| Supplemental disclosure of noncash investing                            and    |   |        |      |                |                      |   |   |   |   |
| financing activities:                                                          |   |        |      |                |                      |   |   |   |   |
| Capital contribution                                                           |   | $           | 3,000     |                |                      |   |   | $ | 3,000 |
| Interest contribution                                                          |   | $           | 6,076     |                |                      |   |   | $ | 6,076 |

 

See            notes to consolidated financial statements.

 

F-6

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

**NOTE 1 - ORGANIZATION AND OPERATIONS**

 

Petrocorp Inc. (formerly GD Conference Center, Inc.), an exploration            stage company, was incorporated on June 19, 2006 under the laws of the State of            Delaware. Prior to September 2007, the Company’s business model provided            telephonic conferencing services to businesses, organizations and individuals in North            America. Due to capital constraints and because its executives could no longer serve            the Company without compensation, the Company decided to change its business            directions.

 

On            September 20, 2007, the Company entered into three separate oil and gas farm out            agreements with James Fitzsimons. The farm outs represent leasehold properties totaling            980 gross acres located in Okfuskee County, Oklahoma. Pursuant to the agreement terms,            the Company acquired the right to earn 22 oil and gas leases. The Company earns each            oil and gas lease in exchange for the Company agreeing to drill a test well in each            region of the leases on or before December 31, 2008; prepare specified reports and            conduct certain production tests. Mr. Fitzsimons also purchased 4,450,000 shares of the            Company’s common stock from certain shareholders, resulting in him owning 84.5%            of the Company’s outstanding shares for $454,000. Mr. Fitzsimons was elected a            director of the Company.

 

On            October 19, 2007, the Company amended its certificate of incorporation changing its            name to “Petrocorp Inc.” and effected a five for one forward stock split            which increased the authorized common stock to 100,000,000 shares at $0.0001 par value.            The Company’s authorized preferred stock was not changed by this Amendment. All            references to shares and per share data have been adjusted retroactively to reflect the            forward stock split.

 

**NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

*Basis of presentation*

 

The consolidated financial statements include the accounts of Petrocorp            Inc, and its wholly-owned subsidiary Union Energy (Alaska) LLC (“UEA”)            (collectively, “Petrocorp” or the “Company”). These statements            have been prepared in accordance with accounting principles generally accepted in the            United States of America (“U.S. GAAP”). All intercompany accounts and            transactions have been eliminated.

 

*Exploration stage company*

 

The            Company is an exploration stage company as defined by SFAS No 7            “*Accounting and Reporting by Development Stage            Enterprises”*. The Company is devoting substantially all            of its efforts on establishing the business and its planned principal operations have            not yet commenced. All losses since inception have been considered part of the            Company’s exploration stage activities.

 

*Use of estimates*

 

 

F-7

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

The            preparation of financial statements in conformity with 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. Actual results could differ from            those estimates.

 

*Cash equivalents*

 

The            Company considers all highly liquid investments with a maturity of three months or less            when purchased to be cash equivalents.

 

*Oil and gas properties*

 

The            Company’s oil and gas exploration and production activities are accounted for            using the successful efforts method. Under this method, all property acquisition costs            and costs of exploratory and development wells are capitalized when incurred, pending            determination of whether the well has found proved reserves. If an exploratory well            does not find proved reserves, the costs of drilling the well are charged to expense            and included within cash flows from investing activities in the Consolidated Statements            of Cash Flows pursuant to Statement of Financial Accounting Standards No. 19            “*Financial Accounting and Reporting by Oil and Gas            Producing Companies”*(“SFAS No. 19”). The            costs of development wells are capitalized whether productive or nonproductive. Oil and            gas lease acquisition costs are also capitalized. Interest cost is capitalized as a            component of property cost for significant exploration and development projects that            require greater than six months to be readied for their intended use.

 

Other exploration costs, including certain geological and geophysical            expenses and delay rentals for oil and gas leases, are charged to expense as incurred.            The sale of a partial interest in a proved property is accounted for as a cost recovery            and no gain or loss is recognized as long as this treatment does not significantly            affect the unit-of-production amortization rate. A gain or loss is recognized for all            other sales of proved properties and is classified in other operating revenues.            Maintenance and repairs are charged to expense, and renewals and betterments are            capitalized to the appropriate property and equipment accounts.

 

Unevaluated properties are assessed periodically on a            property-by-property basis and any impairment in value is charged to expense. If the            unevaluated properties are subsequently determined to be productive, the related costs            are transferred to proved oil and gas properties. Proceeds from sales of partial            interests in unproved leases are accounted for as a recovery of cost without            recognizing any gain until all costs are recovered.

The            Company reviews its proved oil and gas properties for impairment whenever events and            circumstances indicate a decline in the recoverability of their carrying value may have            occurred. The Company estimates the expected undiscounted future cash flows of its oil            and gas properties and compares such undiscounted future cash flows to the carrying            amount of the oil and gas properties to

 

 

F-8

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

determine if the carrying amount is recoverable. If the carrying amount            exceeds the estimated undiscounted future cash flows, the Company will adjust the            carrying amount of the oil and gas properties to fair value. The factors used to            determine fair value include, but are not limited to, recent sales prices of comparable            properties, estimates of proved reserves, future commodity pricing, future production            estimates, anticipated capital expenditures, and a discount rate commensurate with the            risk associated with realizing the expected cash flows projected.

The            provision for depreciation, depletion and amortization (“DD&A”) of oil            and gas properties is calculated on a field-by-field basis using the unit-of-production            method. Oil is converted to natural gas equivalents, Mcfe, at the rate of one barrel to            six Mcf. Taken into consideration in the calculation of DD&A are estimated future            dismantlement, restoration and abandonment costs, which are net of estimated salvage            values.

 

*Furniture, equipment and other*

 

Land            and other office and field equipment are recorded at cost. Costs of renewals and            improvements that substantially extend the useful lives of the assets are capitalized.            Leasehold improvements are amortized over the lesser of five years or the life of the            lease. Maintenance and repairs are expensed when incurred. Depreciation of other            property and equipment is computed using the straight-line method over their estimated            useful lives of three to ten years. Upon retirement or disposition of assets, the costs            and related accumulated depreciation are removed from the accounts with the resulting            gains or losses, if any, reflected in results of operations.

 

In            September 2007, the Company changed the direction of its efforts from telephonic            conferencing services to the oil and gas sector when the Company came across an            opportunity to enter into three oil and gas farm out agreements with James Fitzsimons.            The Company’s management determined there was $16,929 of impairment charges            related to its telephonic equipment.

 

*Fair value of financial instruments*

 

The            fair value of a financial instrument is the amount at which the instrument could be            exchanged in a current transaction between willing parties. The carrying amounts of            financial assets and liabilities, such as cash, due to stockholder, note payable to            stockholder and accrued expenses, approximate their fair values because of the short            maturity of these instruments and market rates of interest.

 

*Stock-based compensation*

 

The            Company accounts for stock-based compensation in accordance with Statement of Financial            Accounting Standards No. 123 (revised 2004)*“Share-Based            Payment”*(“SFAS No.            123R”)*.*Under the fair value            recognition provisions of this statement, stock-based compensation cost is measured at            the grant date based on the fair value of the award and is recognized as expense on a            straight-line basis over the requisite service period, which is the vesting period. The            Company elected the modified-prospective method, under which prior periods are not            revised for comparative purposes. The valuation provisions of

 

 

F-9

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

SFAS            No. 123R apply to new grants and to grants that were outstanding as of the effective            date and subsequently modified.

 

During the years ended December 31, 2007 and 2006, there were no stock            options granted or outstanding.

 

*Income taxes*

 

The            Company recognizes deferred income tax liabilities and assets for the expected future            tax consequences of events that have been recognized in the financial statements or tax            returns. Under this method, deferred tax liabilities and assets are determined based on            the differences between the financial statement carrying amounts and the tax basis of            assets and liabilities using enacted tax rates in effect in the years in which the            differences are expected to reverse.

 

*Net loss per common share*

 

Statement of Financial Accounting Standards No. 128            “*Earnings per Share”*(“SFAS No. 128”), requires dual presentation of basic and            diluted earnings or loss per share (“EPS”) for all entities with complex            capital structures and requires a reconciliation of the numerator and denominator of            the basic EPS computation to the numerator and denominator of the diluted EPS            computation. Basic EPS excludes dilution; 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 or resulted in the issuance of common stock that then            shared in the earnings of the entity.

 

Basic loss per share is computed by dividing net loss applicable to            common shareholders by the weighted average number of common shares outstanding during            the period. Diluted loss per share reflects the potential dilution that could occur if            dilutive securities and other contracts to issue common stock were exercised or            converted into common stock or resulted in the issuance of common stock that then            shared in the earnings of the Company, unless the effect is to reduce a loss or            increase earnings per share. The Company had no potential common stock instruments            which would result in a diluted loss per share at December 31, 2007 0r 2006. Therefore,            diluted loss per share is equivalent to basic loss per share.

 

*Recently issued accounting pronouncements*

             

On June 5, 2003, the United States Securities and Exchange Commission            (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of            2002 (“Section 404”), as amended by SEC Release No. 33-8889 on February 1,            2008. Commencing with its annual report for the year ending December 31, 2008, the            Company will be required to include a report of management on its internal control over            financial reporting. The internal control report must include a statement

 

| **•**  | Of management’s responsibility for establishing                            and maintaining adequate internal control over its financial                            reporting; |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

| **•**  | Of management’s assessment of the effectiveness of                            its internal control over financial reporting as of year end;                            and |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

 

F-10

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

 

| **•**  | Of the framework used by management to evaluate the                            effectiveness of the Company’s internal control over financial                            reporting. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Furthermore, in the following fiscal year, it is required to file the            auditor’s attestation report separately on the Company’s internal control            over financial reporting on whether it believes that the Company has maintained, in all            material respects, effective internal control over financial reporting.

 

In            September 2006, the FASB issued Statement of Financial Accounting Standards No. 157            “*Fair Value Measurements”*(“SFAS No. 157”). This statement defines fair value,            establishes a framework for measuring fair value in generally accepted accounting            principles, and expands disclosures about fair value measurements. This statement            applies under other accounting pronouncements that require or permit fair value            measurements. SFAS No. 157 is effective for fiscal years beginning after November 15,            2007. The Company does not expect the application of SFAS No. 157 to have a material            affect on its financial statements.

 

In            September 2006, the FASB issued Statement of Financial Accounting Standards No. 158            “*Employers’ Accounting for Defined Benefit Pension            and Other Post Retirement Plan”*(SFAS No. 158). SFAS            No. 158 requires the Company to recognize the funded status of its post retirement            plans on the balance sheet and recognize as a component of accumulated other            comprehensive income the gains and losses, prior service costs or credits that occur            during the financial year but are not recognized as components of the Company’s            pension costs. SFAS No. 158 is effective as of the beginning of an entity’s first            fiscal year that begins after December 15, 2008. The Company does not expect            application of SFAS No. 158 to have a material affect on its financial            statements.

 

In            February 2007, the FASB issued Statement of Financial Accounting Standards No. 159            “*The Fair Value Option for Financial Assets and            Financial Liabilities – Including an Amendment of FASB Statement No.            115”*(“SFAS No. 159”). This statement            permits entities to choose to measure many financial instruments and certain other            items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that            elect the fair value option. However, the amendment to Statement of Financial            Accounting Standards No. 115 “*Accounting for Certain            Investments in Debt and Equity Securities”*(“SFAS            No. 115”) applies to all entities with available-for-sale and trading securities.            SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year            that begins after November 15, 2007. Early adoption is permitted as of the beginning of            a fiscal year that begins on or before November 15, 2007, provided the entity also            elects to apply the provision of SFAS No. 157 “*Fair            Value Measurements”.*The Company does not expect the            application of SFAS No. 159 to have a material affect on its financial            statements.

 

In June 2007, the Emerging Issues Task Force of the FASB issued EITF            Issue No. 07-3*“Accounting for Nonrefundable Advance            Payments for Goods or Services to be Used in Future Research and Development            Activities”*(“EITF Issue No. 07-3”) which            is effective for fiscal years beginning after December 15, 2007.  EITF Issue            No. 07-3 requires that nonrefundable advance payments for future research and            development activities be deferred and capitalized.  Such amounts will be            recognized as an expense as the goods are delivered or the related services are            performed.  The Company does not expect the adoption of EITF Issue No. 07-3            to have a material

 

 

F-11

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

impact on the financial results of the Company.

 

In December 2007, the FASB issued FASB Statement No. 141 (Revised            2007)*“Business Combinations”*(“SFAS No. 141(R)”), which requires the Company to record            fair value estimates of contingent consideration and certain other potential            liabilities during the original purchase price allocation, expense acquisition costs as            incurred and does not permit certain restructuring activities previously allowed under            Emerging Issues Task Force Issue No. 95-3 to be recorded as a component of purchase            accounting.  SFAS No. 141(R) applies prospectively to business combinations            for which the acquisition date is on or after the beginning of the first annual            reporting period beginning on or after December 15, 2008, except for the presentation            and disclosure requirements, which shall be applied retrospectively for all periods            presented. The Company will adopt this standard at the beginning of the Company’s            year ending December 31, 2008 for all prospective business acquisitions. The Company            has not determined the effect that the adoption of SFAS No. 141(R) will have on the            financial results of the Company.

 

In December 2007, the FASB issued FASB Statement No.            160*“Noncontrolling Interests in Consolidated Financial            Statements - an amendment of ARB No. 51”*(“SFAS            No. 160”), which causes noncontrolling interests in subsidiaries to be included            in the equity section of the balance sheet.  SFAS No. 160 applies            prospectively to business combinations for which the acquisition date is on or after            the beginning of the first annual reporting period beginning on or after December 15,            2008, except for the presentation and disclosure requirements, which shall be applied            retrospectively for all periods presented. The Company will adopt this standard at the            beginning of the Company’s year ending December 31, 2008 for all prospective            business acquisitions.  The Company has not determined the effect that the            adoption of SFAS No. 160 will have on the financial results of the Company.

 

Management does not believe that any other recently issued, but not yet            effective accounting pronouncements, if adopted, would have a material effect on the            accompanying consolidated financial statements.

 

**NOTE            3 - UNDEVELOPED OIL AND GAS PROPERTIES**

 

On            September 20, 2007, the Company entered into three separate oil and gas farm out            agreements with James Fitzsimons for 22 leases in sections 10, 11 and 35, Township 11            North, Range 10 East, Okfuskee County, Oklahoma. These farm out agreements expire on            December 31, 2008. In 2007, the Company retained Smyth Land Services of Tulsa, Oklahoma            to complete full title work over sections 10 and 11 and to lease all remaining open            acreage in sections 10 and 11. The Company has retained Keith G. Summar of Tulsa,            Oklahoma (an established consulting geologist and a member of the American Association            of Petroleum Geologists) to complete full geological mapping of all formations in            sections 10 and 11 in preparation for spacing and pooling hearings before the Oklahoma            Corporation Commission. The Company has obtained AFE estimates from contractors to            drill and complete oil and/or gas wells to the deepest known formations in the vicinity            of sections 10 and 11. At December 31, 2007 the Company has $15,786 in capitalized            Oklahoma costs.

 

On            October 25, 2007, UEA was the winning bidder for tracts 254, 258 and 259 in the North            Slope Areawide 2007 Competitive Oil and Gas Lease Sale. UEA bid $449,971.20 for the            three 5,760 acre tracts and paid deposits with its winning bids totaling $90,000 to the            State of Alaska. Based upon current available land title information, the Company            estimates these tracts, covering approximately 17,280 gross acres, contain 14,807.41            net leaseable acres and that additional payments to the State of Alaska, in an amount            yet to be determined, will be approximately $279,500. These leases, when issued, will            be for a

 

 

F-12

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

term            of seven years and will be subject to a 12.5% royalty interest in favor of the State of            Alaska, and such other limitations as a complete title search reveals. At December 31,            2007 the Company has $369,500 in capitalized Alaska costs.

 

**NOTE 4 - NOTES TO AN OFFICER/STOCKHOLDER**

 

The            Company has two unsecured, non-interest bearing notes payable on demand totaling            $440,000 with its President and major stockholder James Fitzsimons. Interest expense of            $6,076 was computed at an implied rate of 6% and this amount was recorded as a capital            contribution by the Company.

 

**NOTE 5 - STOCKHOLDERS’ EQUITY**

 

*Common stock*

 

On            September 30, 2006 the Company issued 5,000,000 shares of common stock to its founders            at par value ($0.0001 per share). During the period July 1 through December 31, 2006,            the Company sold 150,000 shares of its common stock in a private placement at $0.20 per            share (an aggregate of $30,000) to 16 individuals. During the period from January 1            through September 30, 2007, the Company sold 120,000 shares of its common stock at            $0.20 per share (an aggregate of $24,000) to 24 individuals.

 

On            December 27, 2007, the Company sold 200,000 shares of its common stock (the            “Shares”) to one investor at $2.50 per share (an aggregate of $500,000).            The Shares were sold in a transaction exempt from registration under Regulation S of            the Securities Act of 1933, as amended (the “Securities Act”). The Shares            are not registered under the Securities Act or any state securities laws and, unless so            registered, may not be offered or sold except pursuant to an applicable exemption from            the registration requirements of the Securities Act and applicable state securities            laws. The purchaser of the Shares represented that it was acquiring the Shares for its            own account, for investment, and that the purchaser was not a US Person within the            meaning of Regulation S. The Company has no obligation to register the resale of the            Shares under the Securities Act. The proceeds from the sale of the Shares will be used            for working capital purposes.

 

The            Company is authorized to issue 100,000,000 shares of $.0001 par value common stock. The            Company has 5,470,000 shares of its common stock issued and outstanding at December 31,            2007. Dividends may be paid on outstanding shares as declared by the Board of            Directors. Each share of common stock is entitled to one vote.

 

*Preferred stock*

 

The            Company is authorized to issue 1,000,000 shares of $.0001 par value preferred stock. No            shares of preferred stock have been issued or are outstanding. Dividends, voting rights            and other terms, rights and preferences of the preferred shares have not been            designated but may be designated by the Board of Directors from time to            time.

 

 

F-13

----

**PETROCORP INC.**

**(Formerly GD Conference Center, Inc.)**

**(An Exploration Stage Company)**

 

**Notes to the Consolidated Financial Statements**

 

 

**NOTE 6 - INCOME TAXES**

 

The            Company incurred no income taxes for the year ended December 31, 2007 andfor the period from June 19, 2006 (inception) through December 31, 2006.            The expected income tax benefit for the years ended December 31, 2007 and 2006 is            approximately $12,200 and $5,500, respectively. The difference between the expected            income tax benefit and non-recognition of an income tax benefit in each period is the            result of a valuation allowance applied to deferred tax assets.

 

Net            operating loss carry-forwards of approximately $88,500 at December 31, 2007 are            available to offset future taxable income, if any, and expire in 2027. This results in            a net deferred tax asset of approximately $17,700 at December 31, 2007. A valuation            allowance in the same amount has been provided to reduce the deferred tax asset, as            realization of the asset is not assured.

 

**NOTE 7 - RELATED PARTY TRANSACTION**

 

The            Company has been provided office space by its President at no cost.

 

**NOTE 8 - SUBSEQUENT EVENTS**

 

On            February 27, 2008, UEA was the winning bidder for tracts 922, 923, 927, 988, 989, 990,            991, 992 and 925 in the North Slope Foothills Areawide 2008 Competitive Oil and Gas            Lease Sale. UEA bid $269,568 for the nine 5,760 acre tracts and paid deposits with its            winning bids totaling $54,000 to the State of Alaska. Based upon current available land            title information, the Company estimates that these tracts, covering approximately            51,840 gross acres, contain 9,600 net leaseable acres and that the additional payment            to the State of Alaska, in an amount yet to be determined, will be zero. These leases,            when issued, will be for a term of 10 years and will be subject to a 12.5% royalty            interest in favor of the State of Alaska and such other limitations as a complete title            search reveals.

 

OnMarch 18,            2008, the Company sold 200,000 shares of its common stock            (the “Shares”) to one investor at $5.00 per share (an aggregate of            $1,000,000). The Shares were sold in a transaction exempt from registration under            Regulation S of the Securities Act of 1933, as amended (the “Securities            Act”). The Shares are not registered under the Securities Act or any state            securities laws and, unless so registered, may not be offered or sold except pursuant            to an applicable exemption from the registration requirements of the Securities Act and            applicable state securities laws. The purchaser of the Shares represented that it was            acquiring the Shares for its own account, for investment, and that the purchaser was            not a US Person within the meaning of Regulation S. The Company has no obligation to            register the resale of the Shares under the Securities Act. The proceeds from the sale            of the Shares will be used for working capital purposes.

 

 

 

F-14