UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

|  |  |                                                                                        
|- |  | ---------------------------------------------------------------------------------------
|  |  |                                                                                        
|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  May 31, 2011

or

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|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:  000-52794

SENTRY PETROLEUM LTD.

(Exact name of registrant as specified in its charter)



Nevada20-4475552(State or other jurisdiction of 
incorporation or organization)(I.R.S. Employer 
Identification No.)999 18th Street, Suite 3000, Denver  CO80202(Address of principal executive offices)(Zip Code)




(866) 680-7649

(Registrants telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.     Yes  ý    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ̈ Yes    ̈ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer oAccelerated filer oNon-accelerated filer o (Do not check if a smaller reporting company)Smaller reporting company  ý


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o    No   ý

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date:

ClassOutstanding at July 13 , 2011Common Stock, $0.0001 par value47,446,207






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|                               |                                                                                        |     
|------------------------------ | -------------------------------------------------------------------------------------- | ----
|                               | FORM 10-Q
SENTRY PETROLEUM LTD.
May 31, 2011
TABLE OF CONTENTS                         | Page
|PART I  FINANCIAL INFORMATION
|Item 1.                        | Financial Statements.                                                                  | 2   
|Item 2.                        | Managements Discussion and Analysis of Financial Condition and Results of Operations. | 3   
|Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk.                            | 9   
|Item 4.                        | Controls and Procedures.                                                               | 9   
|PART II  OTHER INFORMATION   
|Item 1.                        | Legal Proceedings.                                                                     | 10  
|Item 1A.                       | Risk Factors.                                                                          | 10  
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds.                           | 10  
|Item 3.                        | Defaults Upon Senior Securities.                                                       | 10  
|Item 4.                        | (Removed and Reserved).                                                                | 10  
|Item 5.                        | Other Information.                                                                     | 10  
|Item 6.                        | Exhibits.                                                                              | 11  
|                               |                                                                                        |     
|                               | Signatures                                                                             | 12  
|                               | Exhibits                                                                               | 13  
|                               | Certifications                                                                         |     





---







Sentry Petroleum Ltd.

(An Exploration Stage Company)

May 31, 2011



IndexConsolidated Balance Sheets
      F-2Consolidated Statements of Operations
      F-3Consolidated Statements of Cash Flows
      F-4Notes to the Consolidated Financial Statements
      F-5 to F-11


























F-1

---









|                                                                                     |                                                  |           |             |           |           |            
|------------------------------------------------------------------------------------ | ------------------------------------------------ | --------- | ----------- | --------- | --------- | -----------
|Sentry Petroleum Ltd.                                                                |                                                  |           |             |          
|(An Exploration Stage Company)                                                       |                                                  |           |            
|Consolidated Balance Sheets                                                          |                                                  |           |            
|(Expressed in US dollars)                                                            |                                                  |           |            
|(Unaudited)                                                                          |                                                  |           |            
|                                                                                     |                                                  |           |             | May 31    |           | February 28
|                                                                                     |                                                  |           |             | 2011      |           | 2011       
|                                                                                     |                                                  |           |             | $         |           | $          
|ASSETS                                                                               |                                                  |           |             |           |          
|                                                                                     |                                                  |           |             |           |           |            
|Current Assets                                                                       |                                                  |           |             |          
|                                                                                     | Cash                                             |           |             | 1,429,386 |           | 687,101    
|                                                                                     | Prepaid expenses                                 |           | 15,000      |           | -        
|                                                                                     | Goods and Services Tax Receivable                | 12,618    |             | 1,914    
|                                                                                     |                                                  |           |             |           |           |            
|Total Current Assets                                                                 |                                                  | 1,457,004 |             | 689,015  
|                                                                                     |                                                  |           |             |           |           |            
|Property and Equipment                                                               |                                                  |           |             |          
|                                                                                     | Oil and gas on the basis of full-cost accounting |           |             |          
|                                                                                     | Unproved properties (Note 3)                     | 503,792   |             | 435,508  
|                                                                                     | Property and Equipment (Note 4)                  | 564       |             | 923      
|                                                                                     |                                                  |           |             |           |           |            
|                                                                                     |                                                  |           |             | 504,356   |           | 436,431    
|                                                                                     |                                                  |           |             |           |           |            
|Total Assets                                                                         |                                                  |           | 1,961,360   |           | 1,125,446
|                                                                                     |                                                  |           |            
|LIABILITIES AND STOCKHOLDER'S EQUITY                                                 |                                                  |           |            
|                                                                                     |                                                  |           |             |           |           |            
|Current Liabilities                                                                  |                                                  |           |             |          
|                                                                                     | Accounts Payable                                 |           | 103,410     |           | 103,163  
|                                                                                     | Accrued Liabilities                              | 9,400     |             | -        
|                                                                                     |                                                  |           |             |           |           |            
|Total Liabilities                                                                    |                                                  | 112,810   |             | 103,163  
|Going Concern (Note 1)                                                               |                                                  |           |             |          
|Commitments (Note 7)                                                                 |                                                  |           |             |          
|Stockholders' Equity/(Deficit)                                                       |                                                  |           |            
|                                                                                     |                                                  |           |             |           |           |            
|Common stock: (Note 5)                                                               |                                                  |           |             |          
|200,000,000 share authorized, $0.0001 par value,                                     |                                                  |           |            
|47,386,207 shares issued and outstanding (46,825,601 shares as at February 28, 2011) | 4,739                                            |           | 4,683      
|Additional Paid in Capital                                                           |                                                  | 4,207,493 |             | 2,797,015
|Donated Capital                                                                      |                                                  | 50,000    |             | 50,000   
|Accumulated other comprehensive income                                               | 136,886                                          |           | 91,250     
|Deficit Accumulated During the Exploration Stage                                     | (2,550,568)                                      |           | (1,920,665)
|                                                                                     |                                                  |           |             |           |           |            
|Total Stockholders' Equity                                                           | 1,848,550                                        |           | 1,022,283  
|                                                                                     |                                                  |           |             |           |           |            
|Total Liabilities and Stockholders' Equity                                           | 1,961,360                                        |           | 1,125,446  
|                                                                                     |                                                  |           |             |           |           |            





(The Accompanying Notes are an Integral Part of the Financial Statements)















F-2

---





Sentry Petroleum Ltd.

(An Exploration Stage Company)

Consolidated Statements of Operations

(Expressed in US dollars)

(Unaudited)



|                                       |                                     |            |              |            |              |             |                    
|-------------------------------------- | ----------------------------------- | ---------- | ------------ | ---------- | ------------ | ----------- | -------------------
|                                       |                                     |            |              |            |              |             | For the period     
|                                       |                                     |            | Three months |            | Three months |             | February 23, 2006  
|                                       |                                     |            | ended        |            | ended        |             | (Date of Inception)
|                                       |                                     |            | May 31       |            | May 31       |             | to May 31          
|                                       |                                     |            | 2011         |            | 2010         |             | 2011               
|                                       |                                     |            | $            |            | $            |             | $                  
|                                       |                                     |            |              |            |              |             |                    
|Revenue                                |                                     | -          |              | -          |              | -          
|                                       |                                     |            |              |            |              |             |                    
|Expenses                               |                                     |            |              |            |              |            
|                                       |                                     |            |              |            |              |             |                    
|                                       | Foreign exchange (gain) loss        |            | 350          |            | (3,134)      |             | 128,494            
|                                       | General and administrative          |            | 555,137      |            | 88,071       |             | 2,287,815          
|                                       | Professional fees                   |            | 24,255       |            | 10,661       |             | 113,552            
|                                       | Write-off of Oil and Gas Properties |            | 54,016       |            | -            |             | 56,922             
|                                       |                                     |            | -            |            |              |             |                    
|Total Expenses                         |                                     | 633,758    |              | 95,598     |              | 2,586,783  
|                                       |                                     |            |              |            |              |             |                    
|Other Income                           |                                     |            |              |            |              |            
|                                       | Interest Income                     |            | 3,855        |            | 32           |             | 36,215             
|                                       |                                     |            |              |            |              |             |                    
|Net Income (Loss) for the Period       |                                     | (629,903)  |              | (95,566)   |              | (2,550,568)
|                                       |                                     |            |              |            |              |             |                    
|Other Comprehensive income (loss)      |                                     |            |              |            |              |            
|                                       | Foreign currency translation        |            | 45,636       |            | (22,456)     |             | 136,886            
|                                       |                                     |            |              |            |              |             |                    
|Comprehensive income (loss)            |                                     | (584,267)  |              | (118,022)  |              | (2,413,684)
|                                       |                                     |            |              |            |              |             |                    
|Net Loss Per Share - Basic and Diluted |                                     | ($0.01)    |              | ($0.00)    |              |            
|                                       |                                     |            |              |            |              |             |                    
|Weighted Average Shares Outstanding    |                                     | 47,090,258 |              | 46,325,600 |              |            
|                                       |                                     |            |              |            |              |             |                    







(The Accompanying Notes are an Integral Part of the Financial Statements)















F- 3

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Sentry Petroleum Ltd.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Expressed in US dollars)

(Unaudited)



|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|------------------------------------------------------------------ | ---------------------------------------------------------- | ---------------------------------------- | -------- | -------- | --------- | ----------- | --------- | -------------------
|                                                                   |                                                            |                                          |          |          |           |             |           | For the period from
|                                                                   |                                                            |                                          |          | Period   |           | Period      |           | February 23, 2006  
|                                                                   |                                                            |                                          |          | ended    |           | ended       |           | (Date of Inception)
|                                                                   |                                                            |                                          |          | May 31   |           | May 31      |           | to May 31          
|                                                                   |                                                            |                                          |          | 2011     |           | 2010        |           | 2011               
|                                                                   |                                                            |                                          |          | $        |           | $           |           | $                  
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Cash Flows From (Used in) Operating Activities                     |                                                            |                                          |          |          |          
|                                                                   | Net Income (Loss) for the period                           | (629,903)                                |          | (95,566) |           | (2,550,568)
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|                                                                   | Adjustments to reconcile net cash to operating activities: |                                          |          |          |          
|                                                                   |                                                            | Depreciation                             | 383      |          | 2,811     |             | 25,494   
|                                                                   |                                                            | Donated services                         | -        |          | -         |             | 50,000   
|                                                                   |                                                            | Stock based compensation                 | 410,534  |          | 76,139    |             | 1,445,951
|                                                                   |                                                            | Write off exploration assets             | 54,016   |          |           |             | 56,922   
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|                                                                   | Change in operating assets and liabilities:                |                                          |          |          |           |            
|                                                                   |                                                            | Goods and Services Tax Receivable        | (10,704) |          | 503       |             | (12,618) 
|                                                                   |                                                            | Prepaid expenses                         | (15,000) |          | -         |             | (15,000) 
|                                                                   |                                                            | Accounts payable and accrued liabilities | 9,647    |          | (36,809)  |             | 112,810  
|                                                                   |                                                            | Due to related party                     | -        |          | (1,038)   |             | -        
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Net Cash From (Used in) Operating Activities                       | (181,027)                                                  |                                          | (53,960) |          | (887,009)
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Cash Flows Used in Investing Activities                            |                                                            |                                          |          |          |          
|                                                                   | Unproved properties                                        | (102,561)                                |          | 14,581   |           | (540,975)  
|                                                                   | Additions to furniture and equipment                       | -                                        |          | 235      |           | (26,033)   
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Net Cash Used in Investing Activities                              | (102,561)                                                  |                                          | 14,816   |          | (567,008)
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Cash Flows From Financing Activities                               |                                                            |                                          |          |          |          
|                                                                   | Proceeds from issuance of common shares                    | 1,000,000                                |          | -        |           | 2,766,281  
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Net Cash from Financing Activities                                 | 1,000,000                                                  |                                          | -        |          | 2,766,281
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Increase (decrease) in Cash and Cash Equivalents                   | 716,412                                                    |                                          | (39,144) |          | 1,312,264
|Effect of foreign currency translation on cash and cash equivalent | 25,873                                                     |                                          | (22,456) |          | 117,122  
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Cash -  Beginning of Period                                        | 687,101                                                    |                                          | 473,787  |          | -        
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Cash - End of  the Period                                          | 1,429,386                                                  |                                          | 412,187  |          | 1,429,386
|                                                                   |                                                            |                                          |          |          |           |             |           |                    
|Supplemental Disclosure                                            |                                                            |                                          |          |          |          
|                                                                   | Interest paid                                              |                                          | 16       |          | -         |             | 16       
|                                                                   | Income taxes paid                                          | -                                        |          | -        |           | -          





(The Accompanying Notes are an Integral Part of the Financial Statements)

















F-4

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Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





1.

Nature of Operations and Continuance of Business

Sentry Petroleum Ltd. (the Company) is an Exploration Stage Company as defined by Statement of Financial Accounting Standard (SFAS) No. 7 Accounting and Reporting By Development Stage Enterprisesincorporated under the laws of the State of Nevada on February 23, 2006 as Summit Exploration Inc. On December 3rd, 2007 the Company changed its name from Summit Exploration Inc. to Sentry Petroleum Ltd. The Company is engaged in the acquisition, exploration, and development of oil and gas properties.

The Company has no revenues and has not generated any cash flows from operations to fund its acquisition, exploration and development activities. The Company intends to rely upon the issuance of equity securities to finance its oil and gas property acquisitions and exploration and development on acquired properties, however there can be no assurance it will be successful in raising the funds necessary, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. As at May 31, 2011, the Company has accumulated losses since inception of $2,550,568.  These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Effective November 26, 2007, the Company authorized a 2 to 1 share split the effect of which has been retroactively applied.

On April 15, 2008, the Company incorporated a subsidiary company, Sentry Petroleum (Australia) Pty. Ltd.  in order to facilitate exploration activities in Australia.



2.

Summary of Significant Accounting Policies



a.

Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars.  The Companys fiscal year-end is February 28.



b.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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.  The Company regularly evaluates estimates and assumptions related to donated services and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

















F-5

---

Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





2.

Summary of Significant Accounting Policies (continued)



c.

Comprehensive Loss

In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Code (ASC) topic 220 Comprehensive Income(formerlyFAS130), comprehensive income consists of net income and other gains and losses affecting stockholder's equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. For the period ending May 31, 2011, the Companys other comprehensive income represented foreign currency translation adjustments.



d.

Cash and Cash Equivalents



The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.  As at May 31, 2011, the Company has $ Nil ($Nil in 2010) in cash equivalents.  As at May 31, 2011, $41,830 was deposited in accounts that were federally insured ($49,904 in February 28, 2011).



e.

Oil and Gas Property



The Company follows the full cost method of accounting for oil and gas operations whereby all costs associated with the acquisition, exploration and development of oil and gas properties will be capitalized in cost centers on a country-by-country basis.  These capitalized amounts include the costs of unproved properties, internal costs directly related to acquisitions, development and exploration activities, asset retirement costs and capitalized interest. They include geological and geophysical studies, and costs of drilling both productive and non-productive wells.



Amortization will be calculated for producing properties by using the unit-of-production method based on proved reserves before royalties, as determined by management of the Company or independent consultants.  Unproved reserves are exempt from amortization and are subject to annual assessment as noted below. Sales of oil and gas properties will be accounted for as adjustments of capitalized costs, without any gain or loss recognized, unless such adjustments significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center.  Costs of abandoned oil and gas properties will be accounted for as adjustments of capitalized cost and written off to expense.



A ceiling test will be applied to each cost center by comparing the net capitalized costs to the present value of the estimated future net revenue from production of proved reserves, based on commodity prices in effect as at the Companys year-end and based on current operating costs, discounted by 10%, less the effects of future costs to develop and produce the proved reserves, plus the lower of costs or estimated fair value of unproved properties net of impairment, and less the effects of income taxes.  Any excess capitalized costs are written off to operations.



Unproved properties will be assessed for impairment on an annual basis by applying factors that rely on historical experience. In general, the Company may write-off any unproved property under one or more of the following conditions:



i)

there are no firm plans for further drilling on the unproved property;

ii)

negative results were obtained from studies of unproved property;

ii)

negative results were obtained from studies conducted in the vicinity of the unproved property; or

iv)

the remaining term of the unproved property does not allow sufficient time for further studies or drilling.



f.

Asset Retirement Obligations



The Company will recognize a liability for future asset retirement obligations associated with oil and gas properties.  The estimated fair value of the asset retirement obligation will be based on current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate.  This liability will be capitalized as part of the cost of the related asset and amortized over its useful life.  The liability will accrete until the Company settles the obligation.  As of May 31, 2011, the Company did not have any asset retirement obligations.













F-6

---

Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





2.

Summary of Significant Accounting Policies (continued)



g.

Fair Value Measurements

Effective January 1, 2008, the Company adopted ASC topic 820 Fair Value Measurements and Disclosures, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis.  ASC 820 establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value.



The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.  The Company has adopted ASC 825, Financial Instruments,which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value.The Company has not elected the fair value option for any eligible financial instruments.



h.

Financial Instruments and Risk

Financial instruments, which include cash, accounts payable, accrued liabilities and amounts due to a related party were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Companys wholly owned subsidiarys operations are in Australia, which may result in exposure to market risks from changes in currency rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.



i.

Foreign Currency Translation



The Company's functional currency is US dollars. Foreign currency balances are translated into US dollars as follows:



Monetary assets and liabilities are translated at the period-end exchange rate. Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the period-end exchange rate. Revenue and expense items are translated at the average exchange rate for the period. Foreign exchange gains and losses arising from foreign currency transactions are included in the determination of net income for the respective periods.



The functional currency of the wholly owned subsidiary is Australian dollars. The assets and liabilities arising from these operations are translated at current exchange rates and related revenues and expenses at the exchange rates in effect at the time the revenue or expense is incurred. Resulting translation adjustments, if material, are accumulated as a separate component of accumulated othercomprehensive income in the statement of stockholders' deficit while foreign currency transaction gains and losses are included in operations.



j.

Basic and Diluted Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive.



k.

Income Taxes

The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns. In estimating future tax consequences, all expected future events other than enactment of changes in the tax laws or rates are considered.

Due to the uncertainty regarding the Company's future profitability, the future tax benefits of its losses have been fully allowed for and no net tax benefit has been recorded in the financial statements during the periods presented.



F-7

---

Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





2.

Summary of Significant Accounting Policies (continued)



l.

Stock-based Compensation



On the Companys inception of February 23, 2006, the Company adopted the fair value recognition provisions of ASC topic 718 Stock Compensation (formerly FAS 123(R) under which the Company records stock-based compensation expense for warrants and stock options granted to employees, directors and officers using the fair value method. Under this method, stock-based compensation is recorded over the vesting period of the warrant and option based on the fair value of the warrant and option as the grant date. The fair value of each warrant and option granted is estimated using the Black-Scholes option pricing model that takes into account on the grant date, the exercise price, expected life of the warrant and/or option, the price of the underlying security, the expected volatility, expected dividends on the underlying security, and the risk-free interest rate. Transactions in which goods or services are received from non-employees in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.



Stock based compensation is recorded with a corresponding increase to additional paid-in capital. Consideration received on the exercise of warrants and options, together with the amount previously credited to additional-paid in capital, is recognized as an increase in common stock.



m.

Equipment

Equipment is initially recorded at cost and amortized to operations over its estimated useful life at the following amortization rates and methods:

|                                |                            
|------------------------------- | ---------------------------
|                                |                            
|Computer equipment and software | 55% straight line per annum
|Furniture and fixtures          | 20% straight line per annum



Equipment is written down to its net realizable value if it is determined that its carrying value exceeds the estimated future benefits to the Company.



n.

Revenue Recognition



The company recognizes revenue when a contract is in place, minerals are delivered to the purchaser and collectability is reasonably assured.



o.

Consolidation



The consolidated financial statements include the accounts of the Company and its subsidiary, Sentry Petroleum (Australia) Pty. Ltd. All significant inter-company balances and transactions have been eliminated.



p.

Recent Accounting Pronouncements



The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date.  Management does not believe that any recently issued but not yet effective accounting standards; if currently adopted would have a material effect on the accompanying financial statements.



3.

Unproved properties



The Companys oil and gas properties are located in Australia and its interests in these properties are maintained pursuant to the terms of Authority to Prospect (ATP) granted by the Department of Mines and Energy in Queensland. The Petroleum and Gas (Production and Safety) Act 2004 provides the framework for accessing land to explore and develop petroleum and coal seam gas resources in Queensland. The granting process involves a commitment to a work program that must be carried out within specific time periods. See Note 7 Commitments.





F-8

---

Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





3.

Unproved properties - continued



During the year ended February 28, 2009, the Company acquired 100% working interest in the following tenures in Queensland Australia for cash consideration revealed below: ATP 862, ATP 864, ATP 865, ATP 866, and EPC 1758. A 7% gross overriding royalty was given to the original tenure holder.





|                          |                              |             |         |  |             |             |        
|------------------------- | ---------------------------- | ----------- | ------- |  | ----------- | ----------- | -------
|Period Ended May 31, 2011 | Year Ended February 28, 2011
|                          | Acquisition                  | Exploration | Total   |  | Acquisition | Exploration | Total  
|                          | Costs                        | Costs       | Costs   |  | Costs       | Costs       | Costs  
|                          | $                            | $           | $       |  | $           | $           | $      
|                          |                              |             |         |  |             |             |        
|ATP 862                   | 12,642                       | 195,200     | 207,842 |  | 10,626      | 129,452     | 140,078
|ATP 864                   | 12,642                       | 74,213      | 86,855  |  | 10,626      | 34,652      | 45,278 
|ATP 865                   | 9,177                        | 160.419     | 169,596 |  | 7,713       | 153,494     | 161,207
|ATP 866                   | 12,642                       | 26,857      | 39,499  |  | 10,626      | 25,724      | 36,350 
|EPC 1758                  | 54,016                       | (54,016)    | 0       |  | 52,595      | -           | 52,595 
|                          |                              |             |         |  |             |             |        
|                          | 101,119                      | 402,673     | 503,792 |  | 92,186      | 343,321     | 435,508



EPC 1758 was surrendered during the period ending May 31, 2011 and all capitalized costs were written off.











4.

Equipment

|                       |                           |              |                              |  |        |              |         
|---------------------- | ------------------------- | ------------ | ---------------------------- |  | ------ | ------------ | --------
|                       | Period ended May 31, 2011 |              | Year ended February 28, 2011
|                       |                           | Accumulated  | Net Book                     |  |        | Accumulated  | Net Book
|                       | Cost                      | Amortization | Value                        |  | Cost   | Amortization | Value   
|                       | $                         | $            | $                            |  | $      | $            | $       
|                       |                           |              |                              |  |        |              |         
|Computer equipment     | 10,152                    | (9,831)      | 321                          |  | 9,923  | (9,306)      | 617     
|Furniture and fixtures | 1,246                     | (1,003)      | 243                          |  | 1,246  | (940)        | 306     
|Seismic software       | 15,150                    | (15,150)     | -                            |  | 15,150 | (15,150)     | -       
|                       |                           |              |                              |  |        |              |         
|Total                  | 26,548                    | (25,984)     | 564                          |  | 26,319 | (25,396)     | 923     











5.

Common stock



On February 23, 2006, the Company issued 2 common shares to the President of the Company for cash proceeds of $1.



On March 8, 2006, the Company issued 10,000,000 common shares at $.01 per common share to the President of the Company for cash proceeds of $100,000. In addition, the Company cancelled the 2 common shares issued to the President of the Company.



On November 17, 2006, the Company issued 6,325,600 common shares at $.05 per common share for cash proceeds of $316,280.



On November 2, 2007, the Company issued 30,000,000 common shares at $.025 per common share for cash proceeds of $750,000





F-9

---

Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





5.

Common stock (Continued)



Effective November 26, 2007, the Company authorized a 2 for 1 share split. These financial statements give retroactive application to this event.



On December 3, 2007, the Company increased its authorized share capital to 100,000,000, common shares of $.0001 par value.



On February 5, 2010, the Company increased its authorized share capital to 200,000,000, common shares of $.0001 par value.



On November 4, 2010 the Company issued 416,667 units consisting of one common share and one common share purchase warrant pursuant to a Private Placement for total consideration of $500,000. The warrants are exercisable for a period of 24 months at a price of $1.50 during the first 12 months and $1.75 thereafter.



On December 16, 2010 the Company Issued 83,334 shares of common stock at $1.20 per share for cash proceeds of $100,000 .



On April 14, 2011 the Company issued 227,273 shares of common stock at $2.20 per share for cash proceeds of $500,000.



On April 20, 2011 a shareholder exercised 333,333 warrants at a price of $1.50 per share and the Company issued 333,333 common shares for proceeds of $500,000.







6.

Stock options and warrants



Since 2009 the following management options have been awarded to our Board of Directors and management team.



|                                 |           |   |         
|-------------------------------- | --------- | - | --------
|                                 |           |   |         
|                                 |           |   | Weighted
|                                 |           |   | Average 
|                                 | Number of |   | Exercise
|                                 | Options   |   | Price   
|                                 |           |   |         
|Outstanding at February 28, 2009 | 925,000   | $ | 1.04    
|Granted*                         | 1,325,000 |   | 0.25    
|Cancelled                        | (100,000) |   | 1.04    
|                                 |           |   |         
|Outstanding at February 28, 2010 | 2,150,000 | $ | 0.55    
|Granted*                         | 400,000   |   | 1.30    
|Granted*                         | 1,100,000 |   | 3.01    
|                                 |           |   |         
|Outstanding at February 28, 2011 | 3,650,000 | $ | 1.38    
|                                 |           |   |         
|Outstanding at May 31, 2011      | 3,650,000 | $ | 1.38    



* Subject to shareholder approval at the companys next annual meeting.



The stock options outstanding February 28, 2009 vested over 3 years, with one-third vesting each year.  For the stock options granted in 2010 and 2011, two-thirds vest after 2 years and one-third vest after 3 years.





F-10

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Sentry Petroleum Ltd.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2011





6.

Stock options and warrants (Continued)



A recap of the terms of the stock options as at May 31, 2011 is as follows:



|             |           |                |                       |             |              
|------------ | --------- | -------------- | --------------------- | ----------- | -------------
|Year
awarded | Number    | Exercise price | Currently
Exercisable | Fair  Value | Expiry Date  
|2009         | 825,000   | $1.04          | 550,000               | $653,407    | February 2014
|2010         | 1,325,000 | $0.25          | -                     | $255,107    | February 2015
|2010         | 400,000   | $1.30          | -                     | $461,871    | November 2015
|2011         | 1,100,000 | $3.01          | -                     | $2,528,999  | February 2016



The fair value for stock options was estimated using the Black-Scholes option pricing model assuming no expected dividends and the following weighted average assumptions:





|                         |                 |              |                          |                 
|------------------------ | --------------- | ------------ | ------------------------ | ----------------
|2010 Options             |                 | 2011 Options
|Expected volatility      | 112.86%         |              | Expected volatility      | 111.21%         
|Risk-free interest rate  | 2.30%           |              | Risk-free interest rate  | 2.39%           
|Expected life of options | 3 years         |              | Expected life of options | 4.5 years       
|Fair value               | $0.188 - $0.201 |              | Fair value               | $2.247. - $2.404



During the year ended February 28, 2011, the Company recognized $731,563 in stock-based compensation expense ($242,832 in 2010).



As at May 31, 2011, there were $2,453,433 of unrecognized compensation costs related to non-vested stock options.





7.

Commitments



Under the oil and gas tenures described in Note 3 and in the assignment agreements with the original grantor, the Company is committed to the following work programs in order to maintain its interest in those tenures.



|        |  |            |  |           
|------- |  | ---------- |  | ----------
|Tenure  |  | Commitment |  | Commitment
|        |  | in US $    |  | Period    
|        |  |            |  | Remaining 
|ATP 862 |  | 5,544,000  |  | 1 years   
|ATP 864 |  | 5,275,000  |  | 1 years   
|ATP 865 |  | 3,958,000  |  | 1 years   
|ATP 866 |  | 4,721,000  |  | 1 years   



8.

Subsequent events



On June 7, 2011 the company issued 60,000 restricted shares as compensation for investor relations services. The compensation was booked at the fair value of the shares and was determined to be $180,600, which represents the market value of the shares which approximates the value of the services performed.



F-11

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Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operation

Forward-Looking Statements

This Form 10-Q includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  All statements in this Form 10-Q, other than statements of historical facts, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including operating costs, future capital expenditures (including the amount and nature thereof), and other such matters are forward-looking statements.  The words believe, expect, anticipate, intend, estimate, may, should, could, will, plan, future, continue, and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control.  Therefore, actual results could differ materially from the forward-looking statements contained in this document, and readers are cautioned not to place undue reliance on such forward-looking statements.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs.  There can be no assurance that the forward-looking statements contained in this document will, in fact, transpire or prove to be accurate.

Important factors that may cause the actual results to differ materially from the forward-looking statements, projections or other expectations include, but are not limited to, the following:

·

ability to secure adequate financing on a timely basis;

·

ability to complete work program, which is a condition of maintaining our permits in good standing;

·

changes in our business strategy;

·

the timing of exploration expenditures;

·

access and availability of materials, equipment, supplies, labor and supervision, power and water;

·

results of current and future exploration activities;

·

accidents and labor disputes;

·

disappointing results from our exploration or development efforts;

·

decline in demand for our common stock;

·

changes in general market conditions;

·

investor perception of our industry or our prospects;

·

technological changes in the oil and gas exploration industry, including technological innovations by competitors or in competing technologies;

·

the proximity of natural gas production to natural gas pipelines;

·

the availability of pipeline capacity;

·

the demand for oil and natural gas by utilities and other end users;

·

the availability of alternate fuel sources;

·

the effect of inclement weather;

·

changes in oil and gas exploration, processing and overhead costs;

·

unexpected changes in business and economic conditions;

·

changes in interest rates and currency exchange rates;

·

commodity price fluctuations, including changes in the worldwide price for oil and gas;

·

government regulation of oil and natural gas marketing;

·

government regulation of natural gas sold or transported in interstate commerce;

·

acquisition opportunities or lack of opportunities;

·

changes in laws or regulations;

·

risk factors listed from time to time in our reports filed with the Securities and Exchange Commission and

·

local and community impacts and issues.



3

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The forgoing list is not an exhaustive list of the factors that may affect any of our forward-looking statements.  These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report.  Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.

As used in this report, Sentry Petroleum, the Company, we, us, or our refer to Sentry Petroleum Ltd., unless otherwise indicated.

Overview

We were incorporated in Nevada on February 23, 2006 and are a Denver, Colorado-based oil and gas exploration stage company.  We are considered an exploration stage company because we are involved in the examination and investigation of land that we believe may contain hydrocarbon reserves.

Our current focus is on the exploration of properties for which we acquired four exploration permits (Authority to Prospect 862, 864, 865, and 866) to exclusively engage in exploration for oil and gas in central Queensland, Australia. ATP 862, 864, 865, and 866 have a maximum term of 12 years, but can be terminated earlier for failure to carryout exploration work programs on the properties underlying these permits. Our obligations on the four ATPs include obtaining additional seismic data and drilling of wells on each of the permits prior to February 2012. The total estimated cost to complete our obligations by February 28, 2012 is approximately $13 million (see Footnotes to financial statements for further detail on our exploration obligations).

We have commenced our exploration program on ATP 862, 864, 865, and 866.  We hold a 100% working interest in ATP 862, 864, 865, and 866, subject to a 7% gross overriding royalty payable to the original tenure holder.In the aggregate, our permits encompass approximately 6.9 million net acres.

On March 14, 2011, we awarded an option to Sino American Oil Company (Sino) for $25,000 which gave Sino the right to earn a 70% interest in ATP 865 and 866 by drilling one conventional well to a depth of 1,660 meters and to shoot 100 line Km of seismic. On June 27, 2011, we reached a mutual agreement with Sino American Oil Company to terminate this option agreement. The termination relieves both parties from any further rights or obligations awarded in the option and Sino is entitled to return of the $25,000 paid to us upon execution of the option agreement in March 2011.

These properties underlying our permits are without known reserves and the proposed plan of exploration detailed below is exploratory in nature.  There is no assurance that we will discover commercial quantities of hydrocarbons.  In addition, even if hydrocarbons are discovered, the costs of development may render any hydrocarbons found to be not commercially viable.  If we do not find hydrocarbon reserves or are unable to develop reserves, either because we do not have sufficient capital or the costs of extraction are uneconomical, we will have to cease operations.

As part of our regular business activities, we routinely review and assess interests in exploration or production properties in Australia and Austral Asia for our possible acquisition.  We seek additional properties or permits that we believe have the potential to add shareholder value. There can be no assurance that we will be successful in acquiring additional property interests or permits.  In order to acquire any additional exploration or production properties, we will need to secure additional financing.

We require significant additional funding to complete the work program we committed to when acquiring our current exploration properties. We anticipate raising additional financing through the sale of equity securities to finance these exploration obligations, although there can be no assurance that such funding will be available. In the absence of sufficient financing to finance our exploration activity required to carry out our proposed exploration programs, we will not be able to pursue our exploration program and maintain our permits in good standing.  If we do not execute on our proposed exploration programs, we may be required to relinquish our interests in our permits and will be forced to cease operations.



4

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Additionally, there can be no assurance that if we are successful in securing funding that we will be successful in discovering commercial quantities of hydrocarbons, or that we will have access to funds to develop a successful discovery without significant dilution or cost to our stockholders.

Our business plan is limited in its scope and we intend to derive all of our revenue from a discovery of commercial quantities of hydrocarbons. Specifically, discovering sufficient quantities of hydrocarbons to warrant their profitable development. We have no other business plans and if we are unsuccessful in discovering commercial quantities of hydrocarbons our business will fail.

During the three months ended May 31, 2011, we completed the final preparation for our drilling program. We completed contracts with the landowners, finalized the design and budgeting for each well and secured service contracts with the necessary drilling and testing companies. On June 15, 2011, we commended drilling on the initial wellin ATP 862, the Talundilly_CSG1. We completed drilling of this initial well on June 24, 2011, after reaching target depth (TD) of 436 meters. A total of 15.26 meters of coal and carbonaceous shale cores were collected and forwarded for gas desorption testing. We are not in a position to determine the commerciality of the coal and carbonaceous shale deposit surrounding Talundilly_CSG1 until we receive final results from the desorption analysis. Net coal thickness collected was 12.7 meters. On July 5, 2011, we commenced drilling on the second well, the Albilbah_CSG1. The Albilbah_CSG1 well is located 23 miles to the south of the Talundilly_CSG1.

Upon completion of our current drilling campaign in July or August of this year, we anticipate a period of 2-3 months to complete the gas desorption testing and to analyze all of our results. Our forward going strategy from that point will be based on our conclusions from this analysis. We will engage independent consultants to review and audit our findings. If our findings support certification of reserves, we will engage consultants to commence the certification process. We anticipate testing, analysis, and certification of our results will cost $100,000.  We have sufficient funds to complete our current drilling campaign and associated testing, however will require additional funding for any future exploration or appraisal work.

Plan of Operation

Our plan of operations for the next 12 months is to continue our work obligations on ATP 862, 864, 865, and 866 in the Adavale basin in Queensland Australia and to continue our assessment of various onshore exploration permits in Australia and Asia.

To further explore the delineated coal and carbonaceous shale deposit in ATP 862 and 864 we plan to finalize our drilling of two to three core holes. This program will quantitatively measure original gas in place using canister desorption and core logging methods. Two of the coreholes are placed next to pre-existing conventional oil wildcat wells. If the initial wells are successful we intend to undertake a more substantial exploration and development campaign encompassing more than ten additional wells and the acquisition of additional seismic data. The exact number of wells and their location will be determined as part of our initial 2-3 well program.

In ATP 865 and 866 we plan to undertake a seismic program to advance our prospects. We further plan to drill one conventional well, the Ravenscourt, to test the Etonvale Formation at a depth of approximately 1,700 meters (5,580 feet) downdip from the Rosebank-1 well and will be targeting a thicker carbonate section.

Our work program includes acquisition of seismic data and drilling of additional wells. The time to complete the acquisition of seismic data and drilling of wells depends on, among other things, the availability of personnel and equipment in Queensland. The associated costs will be determined by the depth of the wells and the amount of seismic data to be acquired.

In addition to our current permits we are continuously investigating additional opportunities in Queensland and other parts of South-East Asia.

We do not have sufficient funds to carry out our plan of operations for the next twelve months. We rely principally on the issuance of common shares by private placements to raise funds to finance our business. There is no assurance that market conditions will continue to permit us to raise funds when required. If
possible, we will issue more common shares at prices we determine, possibly resulting in dilution of the value of common shares.



5

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With our ATP 862, 864, 865, and 866 we are obliged to complete proposed work programs to maintain our interests in good standing. As of May 31, 2011 our committed expenditures over the next year total $19.5 million. However, the completion of the work program is determined for each permit individually and there is no cumulative analysis on work completed.

The following table details the capital expenditure required by February 28, 2012 for us to maintain good standing on our four permits:

|                            |  |           |            |            |            |           
|--------------------------- |  | --------- | ---------- | ---------- | ---------- | ----------
|                            |  |           | ATP 862    | ATP 864    | ATP 865    | ATP 866   
|                            |  |           |            |            |            |           
|Deep Upholes                |  | $305,000  | $305,000   | $-         | $-        
|Seismic Reprocessing        |  | 406,000   | 137,000    | 142,000    | 142,000   
|Shooting of Seismic         |  | 2,035,000 | 2,035,000  | 1,017,000  | 1,017,000 
|Drilling of Petroleum wells |  | 2,797,000 | 2,797,000  | 2,797,000  | 3,560,000 
|                            |  |           |            |            |            |           
|                            |  |           | $5,543,000 | $5,274,000 | $3,956,000 | $4,719,000



We do not have sufficient capital to satisfy the required future exploration expenditures needed to maintain our four ATP permits in good standing and we will rely principally on the issuance of common stock to raise funds to finance the expenditures that we expect to incur. Failure to raise the required funds to complete our commitments will result in the failure to meet our obligations and the relinquishment of one or more of our permits. We have relied principally on the issuance of Common Stock in private placements to raise funds to support our business but there can be no assurance that we will be successful in raising additional funds through the issuance of additional equity. We have planned and budgeted for the required work and at the date of this report have sufficient time to complete all the required work prior to February 28, 2012.

We do not expect any significant purchases of plant and equipment or any increase in the number of employees in the near future.

We anticipate incurring expenses of approximately $19 million over the next 12 months for our exploration program. There can be no guarantee that we will be able to secure the necessary financing and equipment to undertake the work program within the anticipated time frame. If we are unsuccessful in securing sufficient financing and equipment we may be subject to relinquishment of any one or all of our existing permits.

Results of Operations for the Three Months Ended May 31, 2011 and 2010

Revenues

We have not generated any revenues from operations since our inception.

Expenses

We reported total expenses in the amount of $633,758 for the three months ended May 31, 2011, compared to total expenses of $95,598 for the three months ended May 31, 2010.  Our total expenses were significantly higher for the three months ended May 31, 2011, as compared to the three months ended May 31, 2010, due primarily to the increased cost of deferred compensation from additional options awarded, from increased shareholder communication expenditures and from write down of exploration assets associated with our surrender of EPC 1758.

We incurred general and administrative expenses of $555,137 for the three months ended May 31, 2011, compared to $88,071 for the three months ended May 31, 2011. This increase in our general and administrative expenses is primarily attributable to the increased cost of deferred compensation from additional options awarded.  For the three months ended May 31, 2011, we incurred deferred compensation of $410,535, compared to $76,139 for the three months ended May 31, 2010. During the three months ended May 31, 2011 we also incurred shareholder communication expenses of $93,621, compared to $906 for the same period in 2010. The increase was caused by increased frequency of communication with a substantial
greater number of shareholders.  For the three months ended May 31, 2011 we further incurred $26,729 related to travel and funding activities as compared to no expenditures for these activities during the three months ended May 31, 2010.



6

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Professional fees for the three months ended May 31, 2011 increased from the professional fees reported for the same period in the prior year.  We incurred professional fees of $24,255 for the three months ended May 31, 2011, compared to $10,661 for the three months ended May 31, 2010. The increase in professional fees is attributable to an increase in our exploration activity and specifically to contract negotiations with land owners and with service providers for our drilling program.  We anticipate that we will incur increased professional fees as we continue our work programs and exploration activity.

We recorded a loss on foreign exchange of $350 for the three months ended May 31, 2011, compared to a gain of $3,134 for the same period in the prior year. The loss on foreign exchange was realized during the three months ended May 31, 2011 as a result of fluctuation in the US dollar as compared to the Australian dollars. These losses were not as substantial as for the comparable period in 2010 as the US dollar has stabilized compared to the Australian dollar.

During the three months ended May 31, 2011, we expensed $54,016 in write down of exploration assets due to our surrender of EPC 1758 during the reporting period.  We did not incur any write down of exploration assets during the three months ended May 31, 2011.

Other Income

We reported other income of $3,855 for the three months ended May 31, 2011 and other income of $32 for the three months ended May 31, 2010. Other income was attributable to interest received on bank deposits and increased do to additional funds held in Australian Dollar at a higher interest rate than U.S. rates.

Net Loss

We had net loss of $629,903 for the three months ended May 31, 2011, as compared to net loss of $95,566 for the three months ended May 31, 2011. The increase in our net loss was attributable to increased expenses described above.

Basic and Diluted Loss per Share

As a result of the above, the basic and diluted loss per common share was $0.01 and $0.00 for the three months ended May 31, 2011 and 2010, respectively.

Liquidity and Capital Resources

As of May 31, 2011, we had total current assets of $1,457,004 (February 2011: $689,015), which included cash of $1,429,386, prepaid expenses of $15,000, and sales taxes receivable of $12,618. As of May 31, 2011, we had total current liabilities in the amount of $112,810 (February 2011: $103,163). As a result, we had working capital of $1,344,194 as of May 31, 2011 (February 2011: $585,852).

We anticipate that we will not generate any revenue during the next twelve months.  In 2008, the proposal to the local government for permits ATP 862, 864, 865 and 866 of an exploration program with a total estimated commitment of approximately $19.5 million to be completed by February 28, 2012 was approved.  As of the date of this report, we have expended approximately $500,000 in exploration expenditures in executing on the proposal to the local government for permits ATP 862, 864, 865 and 866 and we are obligated to complete $19.5 million in exploration expenditures by February 28, 2012 in order to maintain our permits in good standing.  If we do not complete our work obligations, there is a risk that we will lose our rights to continue operations on our permits. In order for us to complete our work obligations we will have to raise additional funds. There can be no assurance that we will be able to raise sufficient funds to complete our obligations.

In addition to these expenditures anticipated to be incurred in connection with our proposed exploration programs, we anticipate spending approximately $60,000 in ongoing general and administrative expenses for the next twelve months.   The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as general office expenses.



7

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Our current cash on hand is insufficient to be able to make our planned exploration expenditures and to pay for our general administrative expenses over the next twelve months.  We must obtain additional financing in order to continue our plan of operations for the next twelve months. We do not have any lending arrangements in place with banking institutions and believe that debt financing will not be an alternative for funding our exploration programs as we have limited tangible assets to secure any debt financing.  We anticipate that additional funding will be in the form of equity financing from the sale of our common stock.  We are currently seeking additional funding in the form of equity financing from the sale of our common stock, but cannot provide any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our proposed exploration programs that is a requirement in order to maintain our permits in good standing.  During the quarter ended May 31, 2011, we raised $1,000,000 through private equity offerings and entered into an agreement that provided for future financing through the issuance of 400,000 common shares for $1.0 million upon our ability to confirm average gas content of coal of not less than 2.5 cubic meters per ton dry ash free and; for Carbonaceous Shale - not less than average 0.5 cubic meters per ton for shale with total organic content greater than 8 weight percent.  This agreement also provides for the issuance of 535,714 shares for $1.5 million upon an initial 3P reserve certification.  There is no assurance that these conditions will be satisfied in order to enable us to closing on these financing commitments.

We are considering entering into a joint venture arrangement to finance the exploration activity required to carry out our proposed exploration programs on the properties underlying our permits.  We are seeking to locate a joint venture participant, but can provide no assurance that we will be successful.  In the event that we enter into a joint venture arrangement, we would likely have to assign a percentage of our property interests to the joint venture participant.

If we are unable to raise additional capital in the immediate future, we will experience liquidity problems and management expects that we will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures.  In the absence of sufficient financing to finance our exploration activity required to carry out our proposed exploration programs, we will not be able to pursue our exploration program and maintain our permits in good standing.  If we do not execute on our proposed exploration programs, we may be required to relinquish our interests in our permits and will be forced to cease operations.

Cash Used in Operating Activities

Cash flows used in operating activities for the three months ended May 31, 2011 were $181,027, as compared to cash flows used in operating activities of $53,960 for the three months ended May 31, 2010.  Our net loss of $629,903 for the three months ended May 31, 2011 was the primary reason for our negative operating cash flow, as compared to our net loss of $95,566 for the three months ended May 31, 2010.  Our reporting negative operating cash flows for the three months ended May 31, 2011 was offset by stock-based compensation of $410,534 and write off of exploration assets of $54,016 for the reporting period.

Cash Used in Investing Activities

For the three months ended May 31, 2011, we used $102,561 in investing activities, as compared to a return of $14,816 for the three months ended May 31, 2010.  For the three months ended May 31, 2011, we invested $102,561 in unproven properties, as compared to the three months ended May 31, 2010, in which we realized a gain of $14,816 in unproven properties.

Cash from Financing Activities

As we have had no revenues since inception, we have financed our operations primarily by using existing capital reserves and through private placements of our common stock.  For the three months ended May 31, 2011, we generated $1,000,000 from the issuance of common shares, as compared to no cash flows provided by financing activities for the three months ended May 31, 2010.

Off-balance sheet arrangements

We do not have any off-balance sheet arrangements.

Going Concern

We have incurred net losses for the period from inception on February 23, 2006 to May 31, 2011 of $2,550,568 and have no source of revenue.  The continuity of our future operations is dependent on our
ability to obtain financing from issuance of equity securities.  These conditions raise substantial doubt about our ability to continue as a going concern.



8

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Recent accounting pronouncements

There have been no recent accounting pronouncements since the filing of our Annual Report on Form 10-K, filed on May 31, 2011, that have a material impact on the Company's financial presentation and disclosure.

Critical Accounting Policies

Our condensed unaudited consolidated financial statements have been prepared in conformity with GAAP.  For a full discussion of our accounting policies as required by GAAP, please refer to our Annual Report on Form 10-K for the year ended February 28, 2011.  We consider certain accounting policies to be critical to an understanding of our condensed consolidated financial statements because their application requires significant judgment and reliance on estimations of matters that are inherently uncertain.  The specific risks related to these critical accounting policies are unchanged at the date of this report and are described in detail in our Annual Report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.  As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and former Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures.  Based upon and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded as of May 31, 2011 that the Company's disclosure controls and procedures are effective.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error.  Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and former Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.  Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended May 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II -OTHER INFORMATION



Item 1.

Legal Proceedings

None.



Item 1A.

Risk Factors

The risks factors disclosed in our Annual Report on Form 10-K for the year ended February 28, 2011 are supplemented to include the following:

Securities eligible for future sale under Rule 144 may be adversely affected by our failure to file all reports required by the Exchange Act.

Rule 144 as promulgated under the Securities Act is not available for the resale of securities initially issued by a shell company (reporting or non-reporting) or a former shell company, unless certain conditions are satisfied. We are a former shell company. As a result, our securities can be resold under Rule 144 provided certain conditions are met. These conditions are:



·

the issuer of the securities has ceased to be a shell company;

·

the issuer is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act;

·

the issuer has filed all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, other than Form 8-K reports; and

·

one year has elapsed since the issuer has filed current Form 10 information with the Commission reflecting its status as an entity that is no longer a shell company.

We are currently in compliance with each of these conditions, but no assurance can be provided that we will remain compliant with these conditions.  In the event that we, as a former shell company, fail to file all reports and other materials required to be filed by Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding 12 months, our securities will not be eligible to be resold under Rule 144.



Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

During the reporting period, we sold to a single investor 227,273 shares of our common stock at a purchase price of $2.20 per share for total proceeds of $500,000. The shares were not sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.  No registration rights were granted to the investor.

During the reporting period, we sold to a single investor 333,333 shares of our common stock at a purchase price of $1.50  per share for total proceeds of $500,000. The shares, which were acquired through the exercise of warrants, were not sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.  No registration rights were granted to the investor.

The foregoing shares were offered and sold in connection with these private placements were in reliance on the exemption from registration under Regulation S promulgated under the Securities Act.  In connection with these private placements, we relied on the Investors written representation.  The Investor represented that they are not a "U.S. person" as that term is defined in Rule 902(k) of Regulation S under the Securities Act.  The Investors represented that they were acquiring the securities for investment only and not with a view toward resale or distribution. We requested our stock transfer agent to affix appropriate restricted legends to the stock certificates issued to the Investors.  The Investors were given adequate access to sufficient information about us to make an informed investment decision.  Neither we nor anyone acting on our behalf offered or sold these Shares by any form of general solicitation or general advertising.



Item 3.

Defaults Upon Senior Securities

None.



Item 4.

(Removed and Reserved).

Not applicable.

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Item 5.

Other Information

None.



Item 6.

Exhibits

See the Exhibit Index included as the last part of this report (following the signature page), which is incorporated herein by reference.























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SIGNATURES

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

SENTRY PETROLEUM LTD.

(Registrant)

|                    |     |                                      
|------------------- | --- | -------------------------------------
|                    |     |                                      
|                    |     |                                      
|Dated: 13 July 2011 | By: | RAJ RAJESWARAN                       
|                    |     | President and Chief Executive Officer
|                    |     |                                      
|Dated: 13 July 2011 | By: | PAUL BOLDY                           
|                    |     | Chief Financial Officer              







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SENTRY PETROLEUM LTD.

(the Registrant)

(Commission File No. 000-52794)

Exhibit Index

to Quarterly Report on Form 10-Q

for the Quarter Ended May 31, 2011



|               |                                                                                                                                                                               
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit
Number | Description                                                                                                                                                                   
|10.1           | Subscription Agreement for Financing Commitment (incorporated by reference to Exhibit 10.1 to current report of Sentry Petroleum Ltd. on Form 8-K, dated April 14, 2011)      
|10.2           | Mutual contractual release with Sino American Oil Company, dated June 26, 2011                                                                                                
|31.1           | Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or Rule 15d- 14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.     
|31.2           | Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or Rule 15d- 14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.     
|32.1           | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

















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