Table of Contents

** **

 

** **

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

** **

**Amendment No. 1**

**to**

** **

**FORM 10-Q**

** **

**(Mark One)**

** **
| **x**                                                  | ** ** | **QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF  1934** |
|--------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------|
| ** **                                             | ** ** | ** **                                                                                        |
| **For the quarterly period ended  July 31, 2008** |
| ** **                                             | ** ** | ** **                                                                                        |
| **OR**                                                 |
| ** **                                             | ** ** | ** **                                                                                        |
| **o**                                                  | ** ** | **TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT**                    |

 

**For the transition period from             to             **

** **

**Commission file number 000-52152**

 

**EXPLORTEX ENERGY INC.**

(Exact name of small business issuer as specified in its charter)

 

| **Nevada**                                                       | ** ** | **98-0489027**                    |
|------------------------------------------------------------------|------------|-----------------------------------|
| (State or other jurisdiction of incorporation or

 organization) |       | (IRS Employer Identification No.) |

 

**1694Falmouth Road  #143**

**Centerville,Ma 02632**

(Address of principal executive offices)

 

**(774)994-2709**

(Issuer’s telephone number)

 

Indicate by checkmark whether the registrant**(**1)** **filedall reports required to be filed by Section 13 or 15(d) of theExchange Act during the past 12 months (or for such shorter****periods that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.   Yes x  No o

 

Indicate by check mark whether the registrant is a largeaccelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “*accelerated filer and large acceleratedfiler*” in Rule 12b-2 of the Exchange Act. (Check one)

 

Largeaccelerated filer o                       Acceleratedfiler o                       Non-acceleratedfiler o                       Smallreport. co. x

 

 

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

 

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

 

Check whether the registrant has filed all documents and reportsrequired to be filed by Sections 12, 13, or 15(d) of the Securities Act of1934 subsequent to the distribution of securities under a plan confirmed by acourt  o Yes   o No

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of September 12, 2008, the registrant’s outstanding commonstock consisted of 4,100,000 shares

 

 

 

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**EXPLORTEXENERGY INC.**

 

TABLE OF CONTENTS

 
| PART 1 – FINANCIAL INFORMATION |   |
|-------------------------------------|--------|
|                                |   |
|                                |   | Item 1.   Financial  Statements |   |
|                                |   | Balance Sheets |   |
|                                |   | Statements of Operations |   |
|                                |   | Statements of Stockholders’ Equity |   |
|                                |   | Statements  of Cash Flows |   |
|                                |   |   |   |
|                                |   | Notes to  Financial Statements |   |
|                                |   |   |   |
|                                |   | Item  2.    Management’s Discussion and Analysis of Financial  Condition and Results of Operations |   |
|                                |   | PLAN OF OPERATIONS |   |
|                                |   | RESULTS OF OPERATIONS |   |
|                                |   | LIQUIDITY AND  CAPITAL RESOURCES |   |
|                                |   |   |   |
|                                |   | Item  4.    Controls and Procedures |   |
|                                |   |   |   |
| PART II – Other Information    |   |
|                                |   |
|                                |   | Item 1.    Legal  Proceedings |   |
|                                |   | Item  2.    Unregistered Sales of Equity Securities and Use of  Proceeds |   |
|                                |   | Item  3.    Default upon Senior Securities |   |
|                                |   | Item  4.    Submission of Matters to a Vote of Security Holders |   |
|                                |   | Item 5.    Other  Information |   |
|                                |   | Item 6.    Exhibits |   |

 

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** **

**EXPLANATORY NOTE**

** **

The registrantfiled a Form 10-Q on September 15, 2008. The registrant is filing thisAmendment No. 1 to Form 10-Q with the SEC in order to update the certificationattached as Exhibit 31.1 as of the date of filing of this Amendment No. 1.

 

**PART 1– FINANCIAL INFORMATION**

 

# **Item 1.                            FinancialStatements**

# ** **

The accompanying unaudited financial statements of Explortex EnergyInc. (the “Company”) have been prepared in accordance with the instructionsfrom Form 10-Q pursuant to the rules and regulations of theSecurities and Exchange Commission and, therefore, do not include all informationand notes normally provided in audited financial statements and should be readin conjunction with the Company’s audited financial statements for the yearended April 30, 2008.  In theopinion of management, the accompanying statements contain all adjustmentsnecessary to present fairly the financial position of the Company as of July 31,2008, and its results of operations, stockholders’ equity, and its cash flowsfor the three month periods ended July 31, 2008 and 2007.  The results for these interim periods are notnecessarily indicative of the results for the entire year.

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Balance Sheets

(Unaudited)

 

**(Expressed in U.S. Dollars)**

 
| ** **                                                                                      | ** ** | **July 31,2008** | ** ** | **April 30, 2008** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|-----------------------|------------|------------------------------|------------|
| **ASSETS**                                                                                      | ** ** | ** **            | ** ** | ** **                   | ** ** |
| ** **                                                                                      | ** ** | ** **            | ** ** | ** **                   | ** ** |
| **Current assets**                                                                              | ** ** | ** **            | ** ** | ** **                   | ** ** |
| ** **                                                                                      | ** ** | ** **            | ** ** | ** **                   | ** ** |
| Cash and cash equivalents                                                                       |       | $                     | 19,815     |                         | 5,918      |   |
| **Oil and gas property,**unproven  (Note 3)                                                     |       | 48,899                |       | 48,899                       |       |
| ** **                                                                                      |       |                  |       |                         |       |
| **Total assets**                                                                                |       | $                     | 68,714     |                         | 54,817     |   |
|                                                                                            |       |                  |       |                         |       |
| **LIABILITIES**                                                                                 |       |                  |       |                         |       |
| ** **                                                                                      |       |                  |       |                         |       |
| **Current liabilities**                                                                         |       |                  |       |                         |       |
| Accounts payable and accrued expenses                                                           |       | $                     | 25,578     |                         | 12,410     |   |
| Related party loan (Note 4)                                                                     |       | 30,138                |       | 30,138                       |       |
| **Total current liabilities**                                                                   |       | 55,716                |       | 42,548                       |       |
|                                                                                            | ** ** | ** **            | ** ** | ** **                   | ** ** |
| **STOCKHOLDERS’ EQUITY**                                                                   | ** ** | ** **            | ** ** | ** **                   | ** ** |
| ** **                                                                                      | ** ** | ** **            | ** ** | ** **                   | ** ** |
| **Share capital**                                                                               | ** ** | ** **            | ** ** | ** **                   | ** ** |
| Common stock, $0.001 par value, 75,000,000  shares authorized, 3,600,000 issued and outstanding |       | 3,600                 |       | 3,600                        | ** ** |
| Common stock issuable, 500,000 shares                                                           |       | 500                   |       |                         |       |
| **Additional paid-in capital**                                                                  |       | 130,400               |       | 105,900                      |       |
| **Deficit accumulated during the exploration  stage**                                           |       | (121,502              | )          | (97,231                      | )          |
| ** **                                                                                      |       |                  |       |                         |       |
| **Total stockholders’ equity**                                                             |       | 12,998                |       | 12,269                       |       |
| ** **                                                                                      |       |                  |       |                         |       |
| **Total liabilities and stockholders’ equity**                                             |       | $                     | 68,714     |                         | 54,817     |   |

 

**The accompanying notes are anintegral part of these financial statements.**

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Statements of Operations

(Unaudited)

 

**(Expressed in U.S. Dollars)**

 
| ** **                                                | ** ** | **Cumulative  March 25, 2004  (inception) to  July 31, 2008** | ** ** | **Three Months  Ended  July 31, 2008** | ** ** | **Three Months  Ended  July 31, 2007** | ** ** |
|-----------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|-------------------------------------------------------|------------|-------------------------------------------------------|------------|
| **Revenues**                                              |       |                                                                                   |       |                                                  |       |                                                  |       |
| Oil and natural gas sales                                 |       | $                                                                                      | 1,108      |                                                  | $          | 127                                                   |       | $ | 468 |   |
| Interest income                                           |       | 116                                                                                    |       |                                                  |       |                                                  |       |
|                                                      |       |                                                                                   |       |                                                  |       |                                                  |       |
|                                                      |       | 1,224                                                                                  |       | 127                                                   |       | 468                                                   |       |
|                                                      |       |                                                                                   |       |                                                  |       |                                                  |       |
| **General and administrative expenses**                   |       |                                                                                   |       |                                                  |       |                                                  |       |
| Bank charges                                              |       | 985                                                                                    |       | 140                                                   |       | 20                                                    |       |
| Management fees                                           |       | 6,000                                                                                  |       | 4,500                                                 |       | —                                                |       |
| Office expenses                                           |       | 1,218                                                                                  |       | —                                                |       | —                                                |       |
| Operating costs                                           |       | 762                                                                                    |       | —                                                |       | 550                                                   |       |
| Professional fees                                         |       | 99,764                                                                                 |       | 17,273                                                |       | 17,345                                                |       |
| Transfer agent and filing fees                            |       | 10,801                                                                                 |       | 2,485                                                 |       | 1,114                                                 |       |
| Travel and entertainment                                  |       | 3,196                                                                                  |       | —                                                |       | —                                                |       |
|                                                      |       |                                                                                   |       |                                                  |       |                                                  |       |
|                                                      |       | 122,726                                                                                |       | 24,398                                                |       | 19,029                                                |       |
|                                                      |       |                                                                                   |       |                                                  |       |                                                  |       |
| **Net loss**                                              |       | $                                                                                      | (121,502   | )                                                     | $          | (24,271                                               | )          | $ | (18,561 | ) |
|                                                      |       |                                                                                   |       |                                                  |       |                                                  |       |
| **Basic and diluted loss per share**                      |       |                                                                                   |       |                                                  |       |                                                  |       |
| Net loss per share                                        |       |                                                                                   |       | $                                                     | (0.01      | )                                                     | $          | (0.01 | ) |
|                                                      |       |                                                                                   |       |                                                  |       |                                                  |       |
| **Weighted average number of common shares  outstanding** |       |                                                                                   |       | 3,716,438                                             |       | 3,1000,000                                            |       |

 

**Theaccompanying notes are an integral part of these financial statements.**

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

For the period from inception (March 25,2004) to July 31, 2008

Statements of Stockholders’ Equity

(Unaudited)

 

**(Expressed in U.S. Dollars)**

 
| ** **                                             | ** ** | ** **            | ** ** | ** **                         | ** ** | ** **       | ** **    | ** **      | ** ** | ** **             | ** ** | **Deficit**     | ** ** | ** ** | ** ** |
|--------------------------------------------------------|------------|-----------------------|------------|------------------------------------|------------|------------------|---------------|-----------------|------------|------------------------|------------|-----------------|------------|------------|------------|
| ** **                                             | ** ** | ** **            | ** ** | ** **                         | ** ** | ** **       | ** **    | ** **      | ** ** | ** **             | ** ** | **accumulated** | ** ** | ** ** | ** ** |
| ** **                                             | ** ** | ** **            | ** ** | ** **                         | ** ** | ** **       | ** **    | ** **      | ** ** | **Additional**         | ** ** | **during**      | ** ** | **Total**  | ** ** |
| ** **                                             | ** ** | **Common stock** | ** ** | **Common Stk. Issuable** | ** ** | **paid-in**      | ** **    | **exploration** | ** ** | **stockholders’** | ** ** |
| ** **                                             | ** ** | **Shares**            | ** ** | **Amount**                         | ** ** | **Shares ** | ** **    | **Amount**      | ** ** | **capital**            | ** ** | **stage**       | ** ** | **equity** | ** ** |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**March 25,  2004 (inception)           |       | —                |       | $                                  | —     |             |          |            |       |                   | $          | —          |       | $          | —     |   | $ | — |   |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Net loss for the period                                |       | —                |       | —                             |       |             |          |            |       | —                 |       | (2,000          | )          | (2,000     | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**April 30,  2004                       |       | —                |       | —                             |       |             |          |            |       | —                 |       | (2,000          | )          | (2,000     | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Stock issued at $0.001 per share in  May 2004     |       | 2,000,000             |       | 2,000                              |       |             |          |            |       | —                 |       | —          |       | 2,000      |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Net loss for the period                                |       | —                |       | —                             |       |             |          |            |       | —                 |       | (269            | )          | (269       | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**April 30,  2005                       |       | 2,000,000             |       | 2,000                              |       |             |          |            |       | —                 |       | (2,269          | )          | (269       | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Stock issued at $0.075 per share in  January 2006 |       | 500,000               |       | 500                                |       |             |          |            |       | 37,000                 |       | —          |       | 37,500     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Stock issued at $0.075 per share in  April 2006   |       | 500,000               |       | 500                                |       |             |          |            |       | 37,000                 |       | —          |       | 37,500     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Net loss for the period                                |       | —                |       | —                             |       |             |          |            |       | —                 |       | (5,220          | )          | (5,220     | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**April 30,  2006                       |       | 3,000,000             |       | 3,000                              |       |             |          |            |       | 74,000                 |       | (7,489          | )          | 69,511     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Stock issued at $0.075 per share in  May 2006     |       | 100,000               |       | 100                                |       |             |          |            |       | 7,400                  |       | —          |       | 7,500      |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Net loss for the period                                |       | —                |       | —                             |       |             |          |            |       | —                 |       | (36,076         | )          | (36,076    | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**April 30,  2007                       |       | 3,100,000             |       | 3,100                              |       |             |          |            |       | 81,400                 |       | (43,565         | )          | 40,935     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Stock issued at $0.05 per share in  February 2008 |       | 500,000               |       | 500                                |       |             |          |            |       | 24,500                 |       | —          |       | 25,000     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Net loss for the period                                |       | —                |       | —                             |       |             |          |            |       | —                 |       | (53,666         | )          | (53,666    | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**April 30,  2008                       |       | 3,600,000             |       | 3,600                              |       |             |          |            |       | 105,900                |       | (97,231         | )          | 12,269     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Stock issuable at $0.05 per share                      |       |                  |       |                               |       | 500,000          |          | 500             |       | 24,500                 |       | —          |       | 25,000     |       |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| Net loss for the period                                |       | —                |       | —                             |       |             |          |            |       | —                 |       | (24,271         | )          | (24,271    | )          |
|                                                   |       |                  |       |                               |       |             |          |            |       |                   |       |            |       |       |       |
| **Balance,**July 31,  2008                        |       | 3,600,000             |       | $                                  | 3,600      |             | 500,000  |            | 500        |                   | 130,400    |            | $          | (121,502   | )          | $ | 12,998 |   |
|                                                        |            |                       |            |                                    |            |                  |               |                 |            |                        |            |                 |            |            |            |  |  |  |  |

 

**The accompanying notes are an integral part of these financialstatements**

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Statements ofCash Flows

(Unaudited)

 

**(Expressed in U.S. Dollars)**

 
| ** **                                                                          | ** ** | **Cumulative  March 25, 2004  (inception) to  July 31, 2008** | ** ** | **Three Months  Ended   July 31, 2008** | ** ** | **Three Months  Ended   July 31, 2007** | ** ** |
|-------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|-------------------------------------------------------------|------------|-------------------------------------------------------------|------------|
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Cash flows from (used in) operating  activities**                                 |       |                                                                                   |       |                                                        |       |                                                        |       |
| Net loss for the period                                                             |       | $                                                                                      | (121,502   | )                                                           | $          | (24,271                                                     | )          | $ | (18,561 | ) |
| Changes in non-cash working capital items:  - accounts payable and accrued expenses |       | 25,578                                                                                 |       | 13,168                                                      |       | 17,978                                                      |       |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Net cash used in operating activities**                                           |       | (95,924                                                                                | )          | (11,103                                                     | )          | (583                                                        | )          |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Cash flows used in investing activities**                                         |       |                                                                                   |       |                                                        |       |                                                        |       |
| Oil and gas properties                                                              |       | (48,899                                                                                | )          | —                                                      |       | (6,832                                                      | )          |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Net cash used in investing activities**                                           |       | (48,899                                                                                | )          | —                                                      |       | (6,832                                                      | )          |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Cash flows from financing activities**                                            |       |                                                                                   |       |                                                        |       |                                                        |       |
| Proceeds from sale of common stock                                                  |       | 134,500                                                                                |       | 25,000                                                      |       | —                                                      |       |
| Due to a related party                                                              |       | 30,018                                                                                 |       | —                                                      |       | —                                                      |       |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Net cash from financing activities**                                              |       | 164,638                                                                                |       | 25,000-                                                     |       | —                                                      |       |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Increase (decrease) in cash and cash  equivalents**                               |       | 19,815                                                                                 |       | 13,897                                                      |       | (7,415                                                      | )          |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Cash and cash equivalents,**beginning  of period                                  |       | —                                                                                 |       | 5,918                                                       |       | 9,021                                                       |       |
|                                                                                |       |                                                                                   |       |                                                        |       |                                                        |       |
| **Cash and cash equivalents,**end  of period                                        |       | $                                                                                      | 19,815     |                                                        | $          | 19,815                                                      |       | $ | 1,606 |   |

 

**Theaccompanying notes are an integral part of these financial statements.**

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

**1.****                                      Basisof Presentation**

 

The accompanying unaudited interim balance sheet, statements ofoperations, statements of shareholders’ equity, and cash flows reflected alladjustments, consisting of normal recurring adjustments that are, in theopinion of management, necessary for a fair presentation of the financialposition of Explortex Energy, Inc, (“the Company”), at July 31, 2008 andthe results of operations, shareholders’ equity and cash flows for the interimperiod ended July 31, 2008.  Theaccompanying unaudited financial statements have been prepared in accordancewith the instruction from Form 10-Q pursuant to the rules andregulations of the Securities and Exchange Commission and, therefore, do notinclude all information and notes normally provided in audited financial statementsand should be read in conjunction with the Company’s audited financialstatements for the fiscal year ended April 30, 2008.  The result of operations for the interimperiods presented is not necessarily indicative of the results to be expectedfor the full year.

 

The accompanying financial statements have been prepared in conformitywith generally accepted accounting principles in the United States of America,which contemplates continuation of the Company as a going concern.  However, the Company has sustainedsubstantial operating losses in recent years resulting in a substantialaccumulated deficit.  As of July 31,2008, the Company had a total of $19,815 in cash and working capital deficit of$35,901.  These factors raise substantialdoubt about the Company’s ability to continue as a going concern.  The ability of the Company to meet itscommitments as they become payable is dependent on the ability of the Companyto obtain necessary financing or achieving a profitable level ofoperations.  To meet these objectives,the Company plans to seek additional equity and expects to raise funds throughprivate or public equity investment in order to support existing operations andexpand the range and scope of its business. There is no assurance that such additional funds will be available forthe Company on acceptable terms, if at all. Management believes that actions presently taken to revise the Company’soperating and financial requirements provide the opportunity for the Company tocontinue as a going concern.  The Company’sability to achieve these objectives cannot be determined at this time.  There are no assurances that the Company willbe successful in achieving these goals.

 

a)                                                              Organization

 

Explortex Energy Inc. was formed on March 25, 2004 under the lawsof the State of Nevada.  On November 9,2005, the Company changed its name from Anacot Technologies to Explortex EnergyInc.

 

The Company is in the business of exploring for oil and gas.  The Company has not yet determined whetherits properties contain resources that may be economically recoverable.

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

The Company therefore has not reached the operation stage and isconsidered to be an exploration stage company.

 

The recoverability of resource property costs is dependent upon theexistence of economically recoverable reserves, confirmation of the Company’sinterest in the underlying properties, the ability of the Company to obtainnecessary financing to complete the exploration and upon future profitableproduction.

 

b)                                                             GoingConcern

 

These financial statements have been prepared in accordance withgenerally accepted accounting principles applicable to a going concern, whichcontemplates the realization of assets and the satisfaction of liabilities andcommitments in the normal course of business.

 

The Company has not generated any material operating revenue sinceinception, and requires additional funds to maintain its operations.  Management’s plans in this regard are toparticipate in a one percent interest in the Malcolm –Star well to ascertainwhether the well possesses commercial quantities of natural gas.  Management must raise additional capital todrill additional wells and for general working capital.

 

These conditions raise substantial doubt about the Company’s ability tocontinue as a going concern.  Thesefinancial statements do not include any adjustments that might result from thisuncertainty.

 

**2.****                                      SignificantAccounting Policies**

 

a)                                                              Cashand Cash Equivalents

 

Cash equivalents comprise certain highly liquid instruments with amaturity of three months or less when purchased.  As at July 31, 2008 cash and cashequivalents consist of cash only.

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

b)                                                             AccountingEstimates

 

The preparation of the financial statements in conformity withgenerally accepted accounting principles in the United States of Americarequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting period.  Actual results could differ from thoseestimates and assumptions.

 

c)                                                              Concentrationof Credit Risk

 

The Company places its cash and cash equivalents with high creditquality financial institutions.  As of July 31,2008 the Company had no balance in a bank beyond FDIC insurance limits.

 

d)                                                             Oiland Gas Properties

 

The Company utilizes the full-cost method of accounting for petroleumand natural gas properties.  Under thismethod, the Company capitalizes all costs associated with acquisition,exploration and development of oil and natural gas reserves, includingleasehold acquisition costs, geological and geophysical expenditures, leaserentals on undeveloped properties and costs of drilling of productive andnon-productive wells into the full cost pool on a country by countrybasis.  As of July 31, 2008 theCompany had no properties with proven reserves. When the Company obtains proven oil and gas reserves, capitalized costs,including estimated future costs to develop the reserves proved and estimatedabandonment costs, net of salvage, will be depleted on the units-of-productionmethod using estimates of proved reserves.

 

The cost ofunproved properties is not depleted until it is determined whether or not provedreserves can be assigned to the properties. Until such determination is madethe Company assesses annually whether impairment has occurred, and includes inthe depletable base drilling exploration dry holes associated with unprovedproperties. In assessing impairment the Company considers factors such ashistorical experience and other data such as primary lease terms of theproperty, average holding periods of unproved property, and geographic andgeologic data. The Company adds the amount of impairment assessed to the costto be amortized subject to the ceiling test. As of July 31, 2008 none ofthe Company’s oil and gas properties were considered impaired.

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

The Company applies a ceiling test to the capitalized cost in the fullcost pool.  The ceiling test limited suchcost to the estimated present value, using a ten percent discount rate, of thefuture net revenue from proved reserves, based on current economic andoperating conditions.  Specifically, theCompany computes the ceiling test so that capitalized costs, less accumulateddepletion and related deferred income tax, do no exceed an amount (the ceiling)equal to the sum of: (A) The present value of estimated future net revenuecomputed by applying current prices of oil and gas reserves (with considerationof price changes only to the extent provided by contractual arrangements) toestimated future production of proved oil and gas reserves as of the date ofthe latest balance sheet presented, less estimated future expenditures (basedon current cost) to be incurred in developing and producing the proved reservescomputed using a discount factor of ten percent and assuming continuation ofexisting economic conditions; plus (B) the cost of property not beingamortized; plus (C) the lower of cost or estimated fair value of unprovenproperties included in the costs being amortized; less (D) income taxeffects related to differences between the book and tax basis of the property.

 

e)                                                              AssetRetirement Obligations

 

The Company recognized a liability for future retirement obligationsassociated with the Company’s oil and gas properties.  The estimated fair value of the assetretirement obligation is based on the current cost escalated at an inflationrate and discounted at a credit adjusted risk-free rate.  This liability is capitalized as part of thecost of the related asset and amortized over its useful life.  This liability accretes until the Companysettles the obligation.  At July 31,2008 the future asset retirement of the Company related to the Malcom-Star wellis considered immaterial.

 

f)                                                                FairValue of Financial Instruments

 

The Company’s financial instruments consistof cash and cash equivalents and accounts payable and accrued expenses andrelated party loans.  The carryingamounts of these financial instruments approximate fair value due to theshort-term nature of these items. Management is of the opinion that the Company is not exposed tosignificant interest, currency or credit risks arising from these financial instruments

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars**

 

g)                                                             IncomeTaxes

 

The Company has adopted Statement ofFinancial Accounting Standards (SFAS”) No. 109, “*Accountingfor Income Taxes*”, which requires the Company to recognize deferred taxliabilities and assets for the expected future tax consequences of events thathave been recognized in the Company’s financial statements or tax returns usingthe liability method.  Under this method,deferred tax liabilities and assets are determined based on the temporarydifferences between the financial statements and tax bases of assets and liabilitiesusing enacted tax rated in effect in the periods in which the differences areexpected to reverse.

 

In July 2006,the FASB issued FIN No. 48. This interpretation clarifies the accountingfor uncertainty in income taxes recognized in a company’s financial statementsin accordance with SFAS No. 109. This interpretation prescribes arecognition threshold and measurement attribute for the financial statementrecognition and measurement of a tax position taken in a tax return. It alsoprovides guidance on derecognition, classification, interest and penalties,accounting in interim periods, disclosure and transition. FIN No. 48 iseffective for fiscal years beginning after December 15, 2006. The adoptionof this interpretation did not have a material impact on the Company’s resultsof operations or financial position. As such, the Company has not recorded anyliabilities for uncertain tax positions or any related interest and penaltiesfor the past tax year. Since the company has not filed a tax return sinceinception, all tax years remain open to audit.

 

h)                                                             ComprehensiveIncome

 

The Company adopted SFAS No. 130, “*Reporting Comprehensive Income*” which requires such thingsas the inclusion of foreign currency translation adjustments to be reportedseparately in its Statement of Stockholders’ Equity as part of othercomprehensive income.  The Company has noother comprehensive income for the periods presented.

 

i)                                                                 LossPer Share

 

Loss per share is computed by dividing thenet loss attributable to common stockholders by the weighted average number ofcommon shares outstanding during the period. The Company has adopted SFAS No. 128, “*Earnings PerShare*”.  Diluted loss pershare is equivalent to basic loss per share as there are no dilutive securitiesoutstanding.  Common Stock issuable isconsidered outstanding as of the original approval date for purposes ofearnings per share computations.

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

j)                                                                 Stock-basedCompensation

 

The Company accounts for stock-based awardsby measuring compensation cost for all stock-based awards at fair value on thedate of grant and recognizing of compensation over the service period forawards expected to vest.  The fair valueof stock options is determined using the Black-Scholes valuation model, whichis consistent with the Company’s valuation techniques previously utilized foroptions in footnote disclosure required under SFAS No. 123, *“Accounting for Stock Based Compensation”,*asamended by SFAS No. 148, *“Accountingfor Stock Based Compensation Transition and Disclosure”.*

 

When the Company issues shares of commonstock to employees and others, the shares of common stock are valued based onthe market price at the date the common stock is approved for issuance.

 

k)                                                              NewAccounting Pronouncements

 

In May 2008, the FASB issued FASB FSPAccounting Principles Board (“APB”)(“FSP APB 14-1*”), “Accounting for Conv. Debt Instruments That May be Settled inCash upon Conversion (Including Partial Cash Settlement).”*FSP APB14-1 applies to convertible**debtinstruments that, by their stated terms, may be settled in cash (or otherassets) upon conversion, including partial cash settlement of the conversionoption. The Company does not believe FSP APB 14-1 will have an effect on itscurrent financial position.

 

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**EXPLORTEXENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

**3.****                                      Oiland Gas Property, Unproven**

 

In December of 2005, the Company enteredinto a participation agreement with PB Energy USA Ltd. (“PB”), for the right toparticipate up to a 25% working interest in twenty-four wells by paying up to33% of the leasing, drilling, completing and pipeline costs.  The wells will target the Barnett Shaleformation and will be located generally in the Dallas-Fort Worth area of NorthTexas.

 

In May 2006, the Company elected toparticipate in a 1% working interest in an exploration well, the Malcom-Star#1H, in the Barnett Shale, which represented 1.33% of the estimated leasing,drilling, completing and pipeline costs.

 

The Company now has a 1 % working interest inthe well. As of July 31, 2008, $48,899 has been spent on drilling,gathering and tie-in activities.  Thewell did come in as a marginal gas producer, producing an income stream to theCompany of approximately $40 per month. The total Costs incurred and excluded from depletion of the Company’soil and gas properties are summarized as follows:

 
| ** **                                       | ** ** | ** **            | ** ** | **Accumulated**        | ** ** | ** ** | ** ** |
|--------------------------------------------------|------------|-----------------------|------------|------------------------|------------|------------|------------|
| ** **                                       | ** ** | **Drilling and** | ** ** | **depletion and** | ** ** | ** ** | ** ** |
| ** **                                       | ** ** | **Gathering**         | ** ** | **amortization**       | ** ** | **Total**  | ** ** |
|                                             |       |                  |       |                   |       |       |       |
| **Malcolm-Starr, Barnett Shale**                 | ** ** | ** **            | ** ** | ** **             | ** ** | ** ** | ** ** |
| ** **                                       | ** ** | ** **            | ** ** | ** **             | ** ** | ** ** | ** ** |
| Year ended April 30, 2008                   |       | $                     | 48,899     |                   | —     |       | $          | 48,899 |   |
| ** **                                       | ** ** | ** **            | ** ** | ** **             | ** ** | ** ** | ** ** |
| Three months ended July 31, 2008            |       | —                |       | —                 |       | —     |       |
|                                             |       |                  |       |                   |       |       |       |
| Total oil and gas properties July 31,  2008 |       | $                     | 48,899     |                   | —     |       | $          | 48,899 |   |

 

Based on the status of the Company’sexploration activities, management has determined that no impairment hasoccurred.

 

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**EXPLORTEX ENERGY INC.**

(An exploration stage enterprise)

Notes to Financial Statements

July 31, 2008

(Unaudited)

**(Expressed in U.S. Dollars)**

 

**4.****                                      RelatedParty Transactions**

 

On October 5, 2007, the Company enteredinto a loan agreement with the sole officer and director of the Company,whereby the Company borrowed $30,000 for a six month term expiring April 5,2008.  The loan is secured against theassets of the Company.  Pursuant to theloan agreement the Company has agreed to pay interest at the rate of 1⁄2% permonth payable together with the repayment of the loan on the maturitydate.  At July 31, 2008, the Companyaccrued $128 of interest towards the loan. The holder of the note, who is no longer affiliated with the Company,has agreed to extend the note to May 5, 2009.

 

Management fees of $1,500 per month are beingpaid to Chamberlain Capital Partners, a company owned by the CEO, for thebenefit of Mr. Lennon as consulting fees. Starting May 1, 2008 an additional $500 per month is being paid toChamberlain to cover the costs related to rent, utilities, and supplies.

 

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**Item 2.            Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

 

### FORWARD LOOKING STATEMENTS

###  

This Quarterly Report may contain forward-looking statements within themeaning of Section 27A of the Securities Act of 1933 that involve risksand uncertainties. In particular such forward-looking statements may be foundin this section. The following discussion and analysis of the financial conditionand results of operations should be read in conjunction with the financialstatements and related notes included elsewhere in this Quarterly Report. Wordsor phrases such as “hope”, “expect”, “intend”, “plan” or similar expressionsare generally intended to identify forward-looking statements. Those statementsinvolve risks and uncertainties that could cause actual results to differmaterially from the results discussed herein. The principal risks anduncertainties that may affect our actual performance and results of operationsinclude the following: general economic conditions; exploration successes, theacquisition of oil and gas assets, continued availability of capital andfinancing; adverse weather; governmental regulations; changes in governmentaland public policy; changes in economic conditions specific to our business;competition; availability of equipment and qualified personnel and unexpectedoperational difficulties. Other risks and uncertainties may also affect theoutcome of our actual performance and results of operations. You are cautionednot to place undue reliance on the forward-looking statements made in thisManagement’s Discussion and Analysis or Plan of Operations.

 

**Overview**

 

We are anatural resource exploration stage company engaged in the participation in thedrilling of oil and gas properties in the United States. On December 1,2005, we entered into a non-exclusive participation agreement (the “PB EnergyParticipation Agreement”) with PB Energy USA Ltd. (“PB Energy”). PB Energy hasthe right to participate in certain wells to be drilled by Star of Texas EnergyServices, Inc. (“Star of Texas Energy Services”). Star of Texas EnergyServices has arranged with land owners and leaseholders for the rights to drillexploration wells targeting the Barnett Shale formation in North Texas and hasproposed to drill, as operator, one exploration well a month for twenty-fourmonths. As operator, Star of Texas Energy Services retains a 25% workinginterest in each well that is to be drilled by it as operator. These rights aredefined in the participation agreement to be entered into for each individualwell drilled by Star of Texas Energy Services. Star of Texas Energy Serviceshas the right to assign part or all of its 25% working interest to thirdparties.

 

The PB EnergyParticipation Agreement gives us the right, but not the obligation, toparticipate up to a maximum 25% working interest, subject to availability, ineach exploration well to be drilled by Star of Texas Energy Services. In orderto purchase each 1% working interest in a well, we are required to pay aproject payment of approximately $35,000 per 1% working participation interest.This amount is based on an estimated gross cost for the horizontal drilling andcompletion attempt per well of $2,700,000 and the requirement under theindividual well participation agreement that the 75% working interestparticipants are obligated to pay 100% of the actual drilling and completioncosts. In aggregate, we have the option to acquire up to a 25% working interestin each well by paying up to 33.33% of all costs and expenses incurred for thejoint account under the operating agreement respecting the drilling and

completion ofeach well.

 

In May 2006,we elected to participate in our first exploration well with Star of TexasEnergy Services pursuant to the PB Energy Participation Agreement. To date, wehave made cash call payments of $48,899 for a 1% working interest in theMalcolm-Star #1H natural gas horizontal well (“Malcolm-Star”). Based on our 1% 

 

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workinginterest, we were obliged to pay for 1.333% of the costs for drilling andcompletion of the well, but were only be entitled to receive a 1% revenueinterest in the well. The Malcolm-Star prospect consists of 211.8 acres in WiseCounty, Texas, a core gas area of the Barnett Shale play of North Texas. Starof Texas Energy Services has access to seismic geological data, which shows thearea to be favorable for the drilling of a horizontal well. Star of TexasEnergy Services commenced drilling the Malcolm-Star well on May 22, 2006.The well was drilled to a depth of 10,500 feet to test the Barnett Shaleformation, which was approximately 2,000 feet farther than expected. At July 31,2008, the company had paid Star of Texas Energy Services approximately $48,899on the drilling, completion and tie-in of the well. Star of Texas EnergyServices has advised the Company, that, after the well was subjected to afracture stimulation program, it began producing natural gas at a marginal rateof production, producing net income to Explortex of less than $40 per month.The company has no plans currently to participate in any more wells on thisprospect.

 

With respectto this prospect, the company was informed in April that as a workinginterest owner on this prospect, it had been named as a 3rd party defendant inlitigation between the operator of the well, Star of Texas Energy Services, andthe driller, Kal Drilling. All legal costs are being covered by Star of Texas,and Explortex has been informed that its only potential liability would be inbeing forced to relinquish its 1% working interest in the well. This well isnot deemed material to the future prospects of the company, as prospects nowbeing considered are considerably larger in scope, and are outside of thisgeographic area.

 

The companyhas decided to begin actively seeking new producing prospects, with developmentand exploration potential, particularly from small, undercapitalized, publicand private entities. The company anticipates it will raise additional fundswhen those prospects are identified.

 

#### **PLANOF OPERATIONS**

####  

Our plan ofoperations for the next twelve months is to complete the following objectiveswithin the time periods specified, subject to our obtaining the fundingnecessary for continued exploration:

 

1.             Identify oil or gas producingprospects, or exploratory prospects, with exceptional risk/rewardcharacteristics in the current environment. We will pay particular attention toprospects with proven production potential, where the working interest owner oroperator is capital-constrained.

 

2.             We intend to evaluate futureparticipation in working interests in further Barnett Shale exploration wells,as proposed under the PB Energy Participation Agreement. It is unlikely wewould proceed with a further 1% working interest in a Barnett Shale well, asevaluated by Star of Texas Energy Services, subject to us having sufficientfinancing. We expect the costs of the 1% working interest in the well to beapproximately $45,000. We anticipate that we will have to raise additionalfunding in order to participate in new exploration wells.

 

3. We anticipatespending approximately $4,000 in ongoing general and administrative expensesper month for the next twelve months, for a total anticipated expenditure of$48,000 over the next twelve months. The general and administrative expenseswill consist primarily of professional fees for the audit and legal workrelating to our regulatory filings throughout the year, as well as transferagent fees and general office expenses.

 

As of July 31,2008, we had cash reserves of $19,815 and a working capital deficit of $35,901.On June 1, 2008, the company sold 500,000 shares of it’s common stock at$.05, for total proceeds of $25,000. The company feels this will be sufficientfor the next 4-6 months.

 

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During thetwelve-month period, we may or may not generate any revenue dependent on thesuccess of our 1% working interest in the Malcolm-Star well. Accordingly, wewill be required to obtain additional financing in order to continue our planof operations. We believe that debt financing will likely not be an alternativefor funding additional exploration wells, as we do not have tangible assets tosecure any debt financing. We anticipate that additional funding will be in theform of equity financing from the sale of our common stock. However, we do nothave any financing arranged and we cannot provide investors with any assurancethat we will be able to raise sufficient funding from the sale of our commonstock to fund participation in additional exploration wells. In the absence ofsuch financing, we will not be able to continue exploration and our businessplan will fail. Even if we are successful in obtaining equity financing to fundadditional exploration wells, there is no assurance that we will obtain thefunding necessary to pursue any further exploration or have the funds tocomplete future wells. If we do not continue to obtain additional financing, wewill not be able to continue with our exploration plan.

 

#### **RESULTSOF OPERATIONS**

####  

#### **Revenues**

####  

We have hadminimal operating revenues since our inception on March 25, 2004 throughto the three months ended July 31, 2008. We anticipate that we will not generate any material revenues unless ourparticipation in the Malcolm-Star well is successful and production of naturalgas is achieved.

 

#### **Generaland Administrative Expenses**

####  

Our general andadministrative expenses for three months ended July 31, 2008 and 2007 aresummarized below:

 
| ** **                                    | ** ** | **Three  Months  Ended  July 31,  2008** | ** ** | **Three  Months  Ended  July 31,  2007** | ** ** |
|-----------------------------------------------|------------|-----------------------------------------------|------------|-----------------------------------------------|------------|
| **General and administrative expenses**       |       |                                          |       |                                          |       |
| Bank Charges                                  |       | $                                             | 140        |                                          | $          | 20 |   |
| Operating expenses                            |       | —                                        |       | 550                                           |       |
| Professional Fees                             |       | 17,273                                        |       | 17,345                                        |       |
| Transfer agent and filing Fees                |       | 2,485                                         |       | 1,114                                         |       |
| Management Fees                               |       | 4,500                                         |       | —                                        |       |
| **Total general and administrative expenses** | ** ** | **$**                                         | **24,398** | ** **                                    | **$**      | **19,029** | ** ** |

 

Professional feesof $17,273 incurred during the three months ended July 31, 2008 related tothe expenses associated with being a reporting company under the SecuritiesExchange Act of 1934.

 

Transfer agent andfiling fees represented amounts paid to keep our corporation in good standingwith State regulators and with the establishment of our transfer agent.

 

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#### **LIQUIDITYAND CAPITAL RESOURCES**

####  

We had cash of$19,815 and a working capital deficit of $35,901 at July 31, 2008,compared to cash of $1,606 and a working capital deficit of $26,525 at July 31,2007.

 

**Planof Operations**

 

We anticipateraising additional funding over the next several months in order to close theworking capital deficit, as well as to provide funding for the acquisition ofadditional properties. We anticipate that our cash will be sufficient to enableus to pay for our general and administrative expenses for the next six months.However, our ability to participate in further exploration wells will besubject to us obtaining additional financing as these expenditures will exceedour cash and working capital reserves. We are currently evaluating severalprospects in the energy area, any one of which will require significantadditional funding. We hope to have our next prospect selected and funded bythe end of calendar year 2008, although there is no assurance as yet that thisgoal will ultimately be met in that time frame.

 

#### **CashUsed in Operating Activities**

####  

Cash used inoperating activities was $11,103 for the three months ended July 31, 2008,compared with cash used in operating activities of $583 for the three monthsended July 31, 2007.  We anticipatethat cash used in operating activities will increase during the next year, asdiscussed under “Plan of Operations”.

 

#### **CashUsed in Investing Activities**

####  

Cash was not usedin investing activities for the three months ended July 31, 2008, comparedwith $6,832 used in investing activities for the year ended July 31,2007.  The decrease in cash used ininvesting activities is a result of reduced drilling, completion and tie-incosts of the Malcolm Star well during the period.

 

#### **Cashfrom Financing Activities**

####  

We have funded ourbusiness to date primarily from sales of our common stock. From our inception,on March 25, 2004, to July 31, 2008, we have raised a total of$134,500 from private offerings of our securities. There were gross proceedsfrom the sale of shares of our common stock of $25,000 during the three monthsended July 31, 2008. There were no such proceeds during the three monthsended July 31, 2007.

 

There are noassurances that we will be able to achieve further sales of our common stock orany other form of additional financing. If we are unable to achieve thefinancing necessary to continue our plan of operations, then we will not beable to continue our exploration of additional wells and our venture will fail.

 

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#### **GoingConcern**

####  

We have notattained profitable operations and are dependent upon obtaining financing topursue any extensive exploration activities. For these reasons our auditorsstated in their report dated July 28, 2008 that they have substantialdoubt we will be able to continue as a going concern.

 

#### **FutureFinancings**

####  

We anticipatecontinuing to rely on equity sales of our common shares in order to continue tofund our business operations. Issuances of additional shares will result indilution to our existing shareholders. There is no assurance that we willachieve any additional sales of our equity securities or arrange for debt orother financing to fund our planned exploration activities.

 

#### **Off-BalanceSheet Arrangements**

####  

We have nosignificant off-balance sheet arrangements that have or are reasonably likelyto have a current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources that is material to stockholders.

 

**Investment in Oil and Gas Properties**

 

We utilize the full cost method to account for our investment in oiland gas properties. Accordingly, all costs associated with acquisition andexploration of oil and gas reserves, including such costs as leasehold acquisitioncosts, interest costs relating to unproved properties, geological expendituresand direct internal costs are capitalized into the full cost pool. As of July 31,2008, we had minimal proven oil and gas properties. When we obtain proven oiland gas reserves, capitalized costs, including estimated future costs todevelop the reserves and estimated abandonment costs, net of salvage, will bedepleted on the units-of-production method using estimates of proved reserves.Investments in unproved properties and major development projects includingcapitalized interest, if any, are not amortized until proved reservesassociated with the projects can be determined. If the future exploration ofunproved properties is determined uneconomical, the amounts of such propertiesare added to the capitalized cost to be amortized.

 

Thecapitalized costs included in the full cost pool are subject to a “ceiling test”,which limits such costs to the aggregate of the estimated present value, usingan estimated discount rate, of the future net revenues from proved reserves,based on current economic and operating conditions and the estimated value ofunproven properties. Specifically, we compute the ceiling test so thatcapitalized cost, less accumulated depletion and related deferred income tax,do not exceed an amount (the ceiling) equal to the sum of: (A) The presentvalue of estimated future net revenue computed by applying current prices ofoil and gas reserves (with consideration of price changes only to the extentprovided by contractual arrangements) to estimated future production of provedoil and gas reserves as of the date of the latest balance sheet presented, lessestimated future expenditures (based on current cost) to be incurred indeveloping and producing the proved reserves computed using a discount factorof ten percent and assuming continuation of existing economic conditions; plus (B) thecost of property not being amortized; plus (C) the lower of cost orestimated fair value of unproven properties included in the costs beingamortized; less (D) income tax effects related to differences between thebook and tax basis of the property.

 

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For unprovenproperties, we exclude from capitalized costs subject to depletion, all costsdirectly associated with the acquisition and evaluation of the unprovedproperty until it is determined whether or not proved reserves can be assignedto the property. Until such a determination is made, we assess the property atleast annually to ascertain whether impairment has occurred. In assessingimpairment we consider factors such as historical experience and other datasuch as primary lease terms of the property, average holding periods ofunproved property, and geographic and geologic data. We add the amount ofimpairment assessed to the cost to be amortized subject to the ceiling test. Asof July 31, 2008, none of our oil and gas properties were consideredimpaired.

 

**Item 4.    Controlsand Procedures.**

 

As required by Rule 13a-15under the Exchange Act, we carried out an evaluation of the effectiveness ofthe design and operation of our disclosure controls and procedures as of July 31,2008, being the end of the period covered by this quarterly report. Thisevaluation was carried out under the supervision and with the participation ofour Chief Executive Officer and Chief Financial Officer, Mr. John J.Lennon. Based upon that evaluation, our Chief Executive Officer and ChiefFinancial Officer concluded that our disclosure controls and procedures areeffective in timely alerting management to material information relating to usrequired to be included in our periodic SEC filings as at the end of the periodcovered by this report. There have been no changes in our internal controls orin other factors that could significantly affect internal controls subsequentto the date we carried out our evaluation.

 

Disclosurecontrols and procedures are controls and other procedures that are designed toensure that information required to be disclosed in our reports filed orsubmitted under the Exchange Act is recorded, processed, summarized andreported, within the time periods specified in the SEC’s rules and forms.Disclosure controls and procedures include, without limitation, controls andprocedures designed to ensure that information required to be disclosed in ourreports filed under the Exchange Act is accumulated and communicated tomanagement, including our Chief Executive Officer and our Chief FinancialOfficer, to allow timely decisions regarding required disclosure.

 

During our mostrecently completed fiscal quarter ended July 31, 2008 there were nochanges in our internal control over financial reporting that have materiallyaffected, or are reasonably likely to affect, our internal control overfinancial reporting during the quarter ended July 31, 2008.

 

The term “*internal control over financial reporting*” is defined as aprocess designed by, or under the supervision of, our principal executive andprincipal financial officers, or persons performing similar functions, andeffected by our board of directors, management and other personnel, to providereasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance withgenerally accepted accounting principles and includes those policies andprocedures that:

 

(a)                                  Pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the registrant;

 

(b)                                 Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles, andthat receipts and expenditures of our company are being made only in accordancewith authorizations of our management and director of the registrant; and

 

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(c)                                  Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use or dispositionof the registrant’s assets that could have a material effect on the financialstatements.

 

The Company disclosed in it’s 10-KSB, for the yearended April 30, 2008, that it had identified four material weaknesses init’s internal controls over financial reporting. The company plans to addressthese weaknesses by first establishing an Audit and Controls Committee, by theend of the calendar year 2008. Additional remediation efforts will beimplemented as the Company’s resources allow. Management will re-evaluate thecontrol environment by the year- end assessment.

 

**PART II – Other Information**

 

**Item 1.            Legal Proceedings.**

 

### Weare not party to any legal proceedings.

###  

### **Item2.            Unregistered Sales of EquitySecurities and Use of Proceeds.**

###  

None.

 

### **Item3.            Default upon SeniorSecurities.**

###  

None.

 

### **Item4.            Submission of Matters to aVote of Security Holders.**

###  

No matters were submitted to our security holders for a vote during thefirst quarter of our fiscal year ending April 30, 2009.

 

### **Item5.            Other Information.**

###  

None.

 

**Item 6.            Exhibits.**

 
| **Exhibit  Number** | ** ** | **Description of Exhibit**                                                                                                       |
|---------------------|------------|----------------------------------------------------------------------------------------------------------------------------------|
| 3.1(1)              |       | Articles of  Incorporation                                                                                                       |
| 3.2(1)              |       | By-Laws                                                                                                                          |
| 3.3(1)              |       | Certificate of  Amendment, as filed with the Nevada Secretary of State                                                           |
| 10.1(1)             |       | Participation  Agreement between Explortex Energy Inc. and PB Energy USA Ltd. dated  December 1, 2005                       |
| 10.2(1)             |       | Participation  Agreement between Explortex Energy Inc. and Star of Texas Energy  Services, Inc. dated December 1, 2005 |

 

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| **Exhibit  Number** | ** ** | **Description of Exhibit**                                                                                                                                                                                                                |
|---------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1(2)             |       | Certification of Chief Executive Officer and Chief Financial Officer  pursuant to Rule 13a-14(b) of the Exchange Act.                                                                                                           |
| 32.1(2)             |       | Certification of Chief Executive Officer and Chief Financial Officer  pursuant Rule 13a-14(b) of the Exchange Act and 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. |

 

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*(1)  Filed as an exhibit to our registrationstatement on Form SB-2 filed with the Commission on July 10, 2006.*

*(2) Filed as an exhibit to this Form 10-Q*

 

 

**SIGNATURES**

 

Inaccordance with the requirements of the Exchange Act, the registrant causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 

**EXPLORTEX ENERGY INC.**

** **
| **Signature**             | ** ** | **Title**                                                                                                                                     | ** ** | **February 6, 2009** |
|---------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------|
|                      |       | **President,  Chief Executive Officer, Chief Financial Officer and Director (Principal  Executive Officer and Principal Accounting Officer)** | ** ** | ** **           |
| ***/s/  John J. Lennon*** | ** ** | ** **                                                                                                                                    | ** ** | ** **           |
| ** **                | ** ** | ** **                                                                                                                                    | ** ** | ** **           |
| **John J.  Lennon**       | ** ** | ** **                                                                                                                                    | ** ** | ** **           |

 

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