**UNITEDSTATES**

**SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**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 January 31, 2009**                                         |
|   |                                                                                             |
|   | **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**

 

**EXPLORTEXENERGY INC.**

(Exactname of small business issuer as specified in its charter)

 

| **Nevada**                                                       | ** ** | **98-0489027**                     |
|------------------------------------------------------------------|------------|------------------------------------|
| (State  or other jurisdiction of incorporation or  organization) |       | (IRS  Employer Identification No.) |

 

**1694 Falmouth Road  #143**

**Centerville, Ma 02632**

 (Addressof principal executive offices)

 

**(774) 994-2709**

(Issuer’stelephone number)

 

Check whether the issuer (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 period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the past 90 days. Yes   x  No   o

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).  Yes  o   No  x

 

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “ *acceleratedfiler and large accelerated filer*” in Rule 12b-2 of the Exchange Act. (Check one)

 
| Large accelerated filer o | Accelerated filer o | Non-accelerated filer o | Small report. co. x |
|---------------------------|---------------------|-------------------------|---------------------|

 

State the number of sharesoutstanding of each of the issuer’s classes of equity stock, as of the latestpracticable date:  4,100,000 shares of common stock issued and outstandingas of March 13, 2009.

 

 

 

----

 

**PART 1 — FINANCIAL INFORMATION**

 

**Item 1.                    FinancialStatements**

 

The accompanying unauditedfinancial statements of Explortex Energy Inc. (the “Company”) have beenprepared in accordance with the instructions from Form 10-Q pursuant tothe rules and regulations of the Securities and Exchange Commission and,therefore, do not include all information and notes normally provided inaudited financial statements and should be read in conjunction with the Company’saudited financial statements for the year ended April 30, 2008.  Inthe opinion of management, the accompanying statements contain all adjustmentsnecessary to present fairly the financial position of the Company as of January 31,2009, and its results of operations, stockholders’ equity(deficit), and itscash flows for the nine-month periods ended of January 31, 2009 and2008.  The results for these interim periods are not necessarilyindicative of the results for the entire year.

 

2

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Balance Sheet

(Unaudited)

 

**(Expressedin U.S. Dollars)**

 
| ** **                                                                                                                                                                     | ** ** | **January 31, 2009** | ** ** | **April 30, 2008** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------|------------|------------------------------|------------|
|                                                                                                                                                                           |       |                           |       |                         |       |
| **ASSETS**                                                                                                                                                                     |       |                           |       |                         |       |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Current assets**                                                                                                                                                             |       |                           |       |                         |       |
| Cash and cash equivalents                                                                                                                                                      |       | $                              | 774        |                         | $          | 5,918 |   |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Oil and gas property,**unproven  (Note 3)                                                                                                                                    |       | 48,899                         |       | 48,899                       |       |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Total assets**                                                                                                                                                               |       | $                              | 49,673     |                         | $          | 54,817 |   |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **LIABILITIES**                                                                                                                                                                |       |                           |       |                         |       |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Current liabilities**                                                                                                                                                        |       |                           |       |                         |       |
| Accounts payable and accrued expenses                                                                                                                                          |       | $                              | 27,867     |                         | $          | 12,410 |   |
| Related party loan (Note 4)                                                                                                                                                    |       | 30,138                         |       | 30,138                       |       |
| **Total current liabilities**                                                                                                                                                  |       | 58,005                         |       | 42,548                       |       |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **STOCKHOLDERS’ EQUITY (DEFICIT)**                                                                                                                                        |       |                           |       |                         |       |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Share capital**                                                                                                                                                              |       |                           |       |                         |       |
| Common stock, $0.001 par value, 75,000,000  shares authorized, 4,100,000 and 3,600,000 issued and outstanding at  January 31, 2009 and April 30, 2008, respectively. |       | 4,100                          |       | 3,600                        |       |
| Common stock issuable, 200,000 shares                                                                                                                                          |       | 200                            |       |                         |       |
| **Additional paid-in capital**                                                                                                                                                 |       | 140,200                        |       | 105,900                      |       |
| **Deficit accumulated during the exploration  stage**                                                                                                                          |       | (152,832                       | )          | (97,231                      | )          |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Total stockholders’ equity (deficit)**                                                                                                                                  |       | (8,332                         | )          | 12,269                       |       |
|                                                                                                                                                                           |       |                           |       |                         |       |
| **Total liabilities and stockholders’ equity  (deficit)**                                                                                                                 |       | $                              | 49,673     |                         | $          | 54,817 |   |

 

**The accompanying notes are an integral part of thesefinancial statements.**

 

3

----

 

**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Statements of Operations

(Unaudited)

 

**(Expressedin U.S. Dollars)**

 
| ** **                                                | ** ** | **Cumulative  March 25, 2004  (inception)  through  January 31, 2009** | ** ** | **Three Months  Ended  January 31, 2009** | ** ** | **Three Months  Ended  January 31, 2008** | ** ** | **Nine Months  Ended  January 31, 2009** | ** ** | **Nine Months  Ended  January 31, 2008** | ** ** |
|-----------------------------------------------------------|------------|--------------------------------------------------------------------------------------------|------------|----------------------------------------------------------|------------|----------------------------------------------------------|------------|---------------------------------------------------------|------------|---------------------------------------------------------|------------|
| **Revenues**                                              |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| Oil and natural gas sales                                 |       | $                                                                                          | 1,249      |                                                     | $          | 39                                                       |       | $                                                       | 126        |                                                    | $          | 268 |   | $ | 862 |   |
| Interest income                                           |       | 116                                                                                        |       |                                                     |       |                                                     |       |                                                    |       | —                                                  |       |
|                                                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
|                                                      |       | 1,365                                                                                      |       | 39                                                       |       | 126                                                      |       | 268                                                     |       | 862                                                     |       |
|                                                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| **General and administrative expenses**                   |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| Bank charges                                              |       | 1,027                                                                                      |       | 42                                                       |       | 133                                                      |       | 182                                                     |       | 313                                                     |       |
| Depletion Expense                                         |       |                                                                                       |       |                                                     |       | 2,448                                                    |       |                                                    |       | 4,886                                                   |       |
| Management fees                                           |       | 16,500                                                                                     |       | 6,000                                                    |       | —                                                   |       | 15,000                                                  |       | —                                                  |       |
| Office expenses                                           |       | 4,218                                                                                      |       | 1,500                                                    |       | —                                                   |       | 3,000                                                   |       | 801                                                     |       |
| Operating costs                                           |       | 762                                                                                        |       | —                                                   |       | —                                                   |       | —                                                  |       | 762                                                     |       |
| Professional fees                                         |       | 114,872                                                                                    |       | 5,900                                                    |       | 4,799                                                    |       | 32,381                                                  |       | 26,644                                                  |       |
| Transfer agent and filing fees                            |       | 13,622                                                                                     |       | 1,895                                                    |       | 35                                                       |       | 5,306                                                   |       | 2,183                                                   |       |
| Travel and entertainment                                  |       | 3,196                                                                                      |       | —                                                   |       | —                                                   |       | —                                                  |       | —                                                  |       |
|                                                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
|                                                      |       | 154,197                                                                                    |       | 15,337                                                   |       | 7,415                                                    |       | 55,869                                                  |       | 35,599                                                  |       |
|                                                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| **Net loss**                                              |       | $                                                                                          | (152,832   | )                                                        | $          | (15,298                                                  | )          | $                                                       | (7,289     | )                                                       | (55,601    | ) | (34,737 | ) |
|                                                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| **Basic and diluted loss per share**                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| Net loss per share                                        |       |                                                                                       |       | $                                                        | (0.01      | )                                                        | $          | (0.00                                                   | )          | $                                                       | (0.00      | ) | (0.01 | ) |
|                                                      |       |                                                                                       |       |                                                     |       |                                                     |       |                                                    |       |                                                    |       |
| **Weighted average number of common shares  outstanding** |       |                                                                                       |       | 4,228,261                                                |       | 3,100,000                                                |       | 3,946,014                                               |       | 3,100,000                                               |       |
|                                                           |            |                                                                                            |            |                                                          |            |                                                          |            |                                                         |            |                                                         |            |  |  |  |  |  |

 

**The accompanying notes are an integral part of thesefinancial statements.**

 

4

----

 

**EXPLORTEX ENERGY INC.**

(Anexploration stage enterprise)

Forthe period from inception (March 25, 2004) to January 31, 2009

Statementsof Stockholders’ Equity (Deficit)

(Unaudited)  expressedin US$

 
| ** **                                                     | ** ** | ** **            | ** ** | ** **                         | ** ** | ** **  | ** ** | ** **      | ** ** | ** **             | ** ** | **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 issued at $0.05 per share in  July 2008             |       | 500,000               |       | 500                                |       |        |       |            |       | 24,500                 |       | —          |       | 25,000     |       |
| Common stock issuable at $.05 per share in  December 2008 |       |                  |       |                               |       | 200,000     |       | 200             |       | 9,800                  |       |            |       | 10,000     |       |
| Net loss for the period                                        |       | —                |       | —                             |       |        |       |            |       | —                 |       | (55,601         | )          | (55,601    | )          |
|                                                           |       |                  |       |                               |       |        |       |            |       |                   |       |            |       |       |       |
| **Balance,**January 31,  2009                             |       | 4,100,000             |       | $                                  | 4,100      |        | 200,000    |            | 200        |                   | 140,200    |            | $          | (152,832   | )          | $ | (8,332 | ) |
|                                                                |            |                       |            |                                    |            |             |            |                 |            |                        |            |                 |            |            |            |  |  |  |  |

 

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

 

5

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Statements of Cash Flows

(Unaudited)

** **

**(Expressedin U.S. Dollars)**

 
| ** **                                                                        | ** ** | **Cumulative  March 25, 2004  (inception) to  January 31, 2009** | ** ** | **Nine Months  Ended  Jan 31, 2009** | ** ** | **Nine Months  Ended  Jan 31, 2008** | ** ** |
|-----------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------|------------|-----------------------------------------------------|------------|-----------------------------------------------------|------------|
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Cash flows used in operating activities**                                       |       |                                                                                      |       |                                                |       |                                                |       |
| Net loss for the period                                                           |       | $                                                                                         | (152,832   | )                                                   | $          | (55,601                                             | )          | $ | (34,737 | ) |
| Items not involving cash:                                                         |       |                                                                                      |       |                                                |       |                                                |       |
| -   Depletion and amortization                                          |       |                                                                                      |       |                                                |       | 4,896                                               |       |
| -   accrued interest payable                                            |       |                                                                                      |       | —                                              |       | 240                                                 |       |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| Changes in non-cash working capital items:  accounts payable and accrued expenses |       | 27,867                                                                                    |       | 15,457                                              |       | 2,204                                               |       |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Net cash used in operating activities**                                         |       | (124,965                                                                                  | )          | (40,144                                             | )          | (27,397                                             | )          |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Cash flows used in investing activity**                                         |       |                                                                                      |       |                                                |       |                                                |       |
| Oil and gas properties                                                            |       | (48,899                                                                                   | )          | —                                              |       | (6,832                                              | )          |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Net cash used in investing activity**                                           |       | (48,899                                                                                   | )          | —                                              |       | (6,832                                              | )          |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Cash flows from financing activities**                                          |       |                                                                                      |       |                                                |       |                                                |       |
| Proceeds from issuance of common stock                                            |       | 144,500                                                                                   |       | 35,000                                              |       | —                                              |       |
| Due to a related party                                                            |       | 30,138                                                                                    |       | —                                              |       | 30,010                                              |       |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Net cash from financing activities**                                            |       | 174,638                                                                                   |       | 35,000                                              |       | 30,010                                              |       |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Increase (decrease) in cash and cash  equivalents**                             |       | 774                                                                                       |       | (5,144                                              | )          | (4,219                                              | )          |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Cash and cash equivalents,**beginning  of period                                |       | —                                                                                    |       | 5,918                                               |       | 9,021                                               |       |
|                                                                              |       |                                                                                      |       |                                                |       |                                                |       |
| **Cash and cash equivalents,**end  of period                                      |       | 774                                                                                       |       | $                                                   | 774        |                                                | $          | 4,802 |   |
|                                                                                   |            |                                                                                           |            |                                                     |            |                                                     |            |  |  |  |

 

**The accompanying notes are an integral part of thesefinancial statements.**

 

6

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

**1.**                                                                                      **Basis of Presentation**

 

The accompanying unauditedinterim balance sheet, statements of operations, statements of stockholders’equity (deficit) and cash flows reflect all adjustments, consisting of normalrecurring adjustments that are, in the opinion of managements, necessary for afair presentation of the financial position of the Explortex Energy, Inc, (“theCompany”), at January 31, 2009 and the results of operations, stockholders’equity (deficit) and cash flows for the interim period ended January 31,2009.  The accompanying unaudited financial statements have been preparedin accordance with 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 financialstatements and should be read in conjunction with the Company’s auditedfinancial statements for the fiscal year ended April 30, 2008.  Theresult of operations for the interim periods presented is not necessarilyindicative of the results to be expected for the full year.

 

The accompanying financialstatements have been prepared in conformity with generally accepted accountingprinciples in the United States of America, which contemplates continuation ofthe Company as a going concern.  However, the Company has sustainedsubstantial operating losses in recent years resulting in a substantialaccumulated deficit.  As of January 31, 2009, the Company had a totalof $774 in cash and working capital deficit of $57,231.  These factorsraise substantial doubt about the Company’s ability to continue as a goingconcern.  The ability of the Company to meet its commitments as theybecome payable is dependent on the ability of the Company to obtain necessaryfinancing or achieving a profitable level of operations.  To meet theseobjectives, the Company plans to seek additional equity and expects to raisefunds through private or public equity investment in order to support existingoperations and expand the range and scope of its business.  There is noassurance that such additional funds will be available for the Company onacceptable terms, if at all.  Management believes that actions presentlytaken to revise the Company’s operating and financial requirements provide theopportunity for the Company to continue as a going concern.  The Company’sability to achieve these objectives cannot be determined at this time. There are no assurances that the Company will be successful in achieving thesegoals.

 

a)                                                                                                              Organization

 

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

 

The Company is in thebusiness of exploring for oil and gas.  The Company has not yet determinedwhether its properties contain resources that may be economically recoverable.

 

7

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

The Company therefore hasnot reached the operation stage and is considered to be an exploration stagecompany.

 

The recoverability ofresource property costs is dependent upon the existence of economicallyrecoverable reserves, confirmation of the Company’s interest in the underlyingproperties, the ability of the Company to obtain necessary financing tocomplete the exploration and upon future profitable production.

 

b)                                                                                                             Going Concern

 

These financial statementshave been prepared in accordance with generally accepted accounting principlesapplicable to a going concern, which contemplates the realization of assets andthe satisfaction of liabilities and commitments in the normal course ofbusiness.

 

The Company has notgenerated any material operating revenue since inception, and requiresadditional funds to maintain its operations.  Management’s plans in thisregard are to participate in a one percent interest in the Malcolm —Star wellto ascertain whether the well possesses commercial quantities of naturalgas.  Management must raise additional capital to drill additional wellsand for general working capital.

 

These conditions raisesubstantial doubt about the Company’s ability to continue as a goingconcern.  These financial statements do not include any adjustments thatmight result from this uncertainty.

 

**2.**                                                                                      **Significant AccountingPolicies**

 

a)                                                                                                              Cash and Cash Equivalents

 

Cash equivalents comprisecertain highly liquid instruments with a maturity of three months or less whenpurchased.  As at January 31, 2009, and April 30, 2008, cash andcash equivalents consist of cash only.

 

8

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

b)                                                                                                             Accounting Estimates

 

The preparation of thefinancial statements in conformity with generally accepted accountingprinciples in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period.  Actual results coulddiffer from those estimates and assumptions.

 

c)                                                                                                              Concentration of Credit Risk

 

The Company places its cashand cash equivalents with high credit quality financial institutions.  Asof January 31, 2009, and April 30, 2008,  the Company had no balance in a bank beyondFDIC insurance limits.

 

d)                                                                                                             Oil and Gas Properties

 

The Company utilizes thefull-cost method of accounting for petroleum and natural gas properties. Under this method, the Company capitalizes all costs associated withacquisition, exploration and development of oil and natural gas reserves,including leasehold acquisition costs, geological and geophysical expenditures,lease rentals on undeveloped properties and costs of drilling of productive andnon-productive wells into the full cost pool on a country by countrybasis.  As of January 31, 2009 the Company had no properties withproven reserves.  When the Company obtains proven oil and gas reserves,capitalized costs, including estimated future costs to develop the reservesproved and estimated abandonment costs, net of salvage, will be depleted on theunits-of-production method using estimates of proved reserves.

 

The cost of unproved propertiesis not depleted until it is determined whether or not proved reserves can beassigned to the properties. Until such determination is made the Companyassesses annually whether impairment has occurred, and includes in thedepletable 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 January 31, 2009 noneof the Company’s oil and gas properties were considered impaired.

 

9

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

The Company applies aceiling test to the capitalized cost in the full cost pool.  The ceilingtest limited such cost to the estimated present value, using a ten percentdiscount rate, of the future net revenue from proved reserves, based on currenteconomic and operating conditions.  Specifically, the Company computes theceiling test so that capitalized costs, less accumulated depletion and relateddeferred income tax, do not exceed an amount (the ceiling) equal to the sum of:(A) The present value of estimated future net revenue computed by applyingcurrent prices of oil and gas reserves (with consideration of price changesonly to the extent provided by contractual arrangements) to estimated futureproduction of proved oil and gas reserves as of the date of the latest balancesheet presented, less estimated future expenditures  (based on currentcost) to be incurred in developing and producing the proved reserves computedusing a discount factor of ten percent and assuming continuation of existingeconomic conditions; plus (B) the cost of property not being amortized;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)                                                                                                              Asset Retirement Obligations

 

The Company recognized aliability for future retirement obligations associated with the Company’s oiland gas properties.  The estimated fair value of the asset retirementobligation is based on the current cost escalated at an inflation rate anddiscounted at a credit adjusted risk-free rate.  This liability iscapitalized as part of the cost of the related asset and amortized over itsuseful life.  This liability accretes until the Company settles theobligation.  At January 31, 2009 the future asset retirementobligations of the Company related to the Malcom-Star well is consideredimmaterial.

 

f)                                                                                                                Fair Value of Financial Instruments

 

The Company’s financialinstruments consist of cash and cash equivalents and accounts payable, accruedexpenses and related party loans.  The carrying amounts of these financialinstruments approximate fair value due to the short-term nature of theseitems.  Management is of the opinion that the Company is not exposed tosignificant interest, currency or credit risks arising from these financial instruments.

 

g)                                                                                                             Income Taxes

 

The Company has adoptedStatement of Financial Accounting Standards (“SFAS”) No. 109, “ *Accounting for Income Taxes*”, which requires the Company torecognize deferred

 

10

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

tax liabilities and assetsfor the expected future tax consequences of events that have been recognized inthe Company’s financial statements or tax returns using the liabilitymethod.  Under this method, deferred tax liabilities and assets aredetermined based on the temporary differences between the financial statementsand tax bases of assets and liabilities using enacted tax rates in effect andapplicable to the periods in which the differences are expected to reverse.

 

In July 2006, the FASBissued FIN No. 48. This interpretation clarifies the accounting foruncertainty in income taxes recognized in a company’s financial statements inaccordance with SFAS No. 109. This interpretation prescribes a recognitionthreshold and measurement attribute for the financial statement recognition andmeasurement of a tax position taken in a tax return. It also provides guidanceon derecognition, classification, interest and penalties, accounting in interimperiods, disclosure and transition. FIN No. 48 is effective for fiscalyears beginning after December 15, 2006. The adoption of thisinterpretation did not have a material impact on the Company’s results ofoperations 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)                                                                                                             Comprehensive Income

 

The Company adopted SFAS No. 130,“ *Reporting Comprehensive Income*” which requires such things as theinclusion of foreign currency translation adjustments to be reported separatelyin its Statement of Stockholders’ Equity as part of other comprehensiveincome.  The Company has no other comprehensive income for the periodspresented.

 

i)                                                                                                                 Loss Per Share

 

Loss per share is computedby dividing the net loss attributable to common stockholders by the weightedaverage number of common shares outstanding during the period.  TheCompany has adopted SFAS No. 128, ”*Earnings Per Share* “. Diluted loss per share is equivalent to basic loss per share as there are nodilutive securities outstanding. For purposes of the weighted averagecalculation, shares issuable are considered outstanding as of the date granted.

 

11

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

j)                                                                                                                 Stock-based Compensation

 

Prior to May 1, 2006,the Company accounted for stock-based awards under the intrinsic value method,which followed the recognition and measurement principles of APB Opinion No. 25,*“Accounting for Stock Issued to Employees”*, and related interpretations.  The intrinsic value method of accountingresulted in compensation expense for stock options to the extent that theexercise prices were set below the fair market price of the Company’s stock atthe date of grant. As of May 1, 2006, the Company adopted SFAS No. 123(R) usingthe modified prospective method, which requires measurement of compensationcost for all stock-based awards at fair value on the date of grant and recognitionof compensation over the service period for awards expected to vest.  Thefair value of stock options is determined using the Black-Scholes valuationmodel, which is consistent with the Company’s valuation techniques previouslyutilized for options in footnote disclosure required under SFAS No. 123, *“Accounting for Stock Based Compensation”,*as amended by SFAS No. 148, *“Accountingfor Stock Based Compensation Transition and Disclosure”.*

 

Since the Company did notissue stock options to its employees during the nine months ended January 31,2009 or 2008, there is no effect on net loss or earnings per share had theCompany applied the fair value recognition provisions of SFAS No. 123(R) tostock based employee compensation.  When the Company issues shares ofcommon stock to employees and others, the shares of common stock are valuedbased on the market price at the date of common stock are approved forissuance.

 

k)                                                                                                              New Accounting Pronouncements

 

There are no new accountingpronouncements not previously disclosed that are not yet effective but expectedto affect the Company’s financial statements.

 

12

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

**3.**                                                                                      **Oil and Gas Property,Unproven**

 

In December of 2005,the Company entered into a participation agreement with PB Energy USA Ltd. (“PB”),for the right to participate up to a 25% working interest in twenty-four wellsby paying up to 33% of the leasing, drilling, completing and pipelinecosts.  The wells will target the Barnett Shale formation and will belocated generally in the Dallas-Fort Worth area of North Texas.

 

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

 

The Company now has a 1 %working interest in the well. As of January 31, 2009, $48,899 has beenspent on drilling, gathering and tie-in activities.  The well did come inas a marginal gas producer, producing an income stream to the Company ofapproximately $25 per month.  The total Costs incurred and excluded fromdepletion of the Company’s oil 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 |   |
|                                                |       |                  |       |                   |       |       |       |
| Nine months ended January 31, 2009             |       | —                |       |                   |       | —     |       |
|                                                |       |                  |       |                   |       |       |       |
| Total oil and gas properties  January 31, 2009 |       | $                     | 48,899     |                   |       |       | $          | 48,899 |   |

 

Based on the status of theCompany’s exploration activities, management has determined that no impairmenthas occurred.

 

13

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**EXPLORTEXENERGY INC.**

(An exploration stageenterprise)

Notes to FinancialStatements

January 31, 2009

(Unaudited)

**(Expressedin U.S. Dollars)**

 

**4.**                                                                                      **Related Party Transactions**

 

On October 5, 2007, theCompany entered into a loan agreement with the sole officer and director of theCompany, whereby the Company borrowed $30,000 for a six month term expiring April 5,2008.  The loan is secured against the assets of the Company. Pursuant to the loan agreement the Company has agreed to pay interest at therate of 1⁄2% per month payable together with the repayment of the loan on thematurity date.  At January 31, 2009, the Company accrued $138 ofinterest towards the loan.  The holder of the note, who is no longeraffiliated with the Company, has agreed to extend the note to May 5, 2009,and forego any additional interest charges in return for full payment.

 

**5.**                                                                                      **Income Taxes**

 

As of April 30, 2008,the Company has an estimated tax loss carryforward for tax purposes of $97,231,which begins to expire in 2021. This amount may be applied against futurefederal taxable income. The Company evaluates its valuation allowancerequirements on an annual basis based on projected future operations. Whencircumstances change and this causes a change in management’s judgement aboutthe realizabliity of deferred tax assets, the impact of the change on thevaluation allowance is generally reflected in current income. The tax effectsof temporary differences that give rise to the company’s deferred tax assetsare as follows:

 
| **Twelve months ended April 30,** | ** ** | **2008** | ** ** | **2007** | ** ** |
|-------------------------------------------------------|------------|----------|------------|----------|------------|
| Loss Carry forwards                                   |       | $        | 18,246     |     | $          | 12,502 |   |
| Valuation Allowances                                  |       | (18,246  | )          | (12,052  | )          |
|                                                  |       | $        | —     |     | $          | — |   |
|                                                  |       |     |       |     |       |

 

**6.****                                                                                     ****Subsequent Event**

 

In February 2009, thecompany sold 500,000 shares of its common stock at $.05, for total proceeds of$25,000 in an unregistered offering conducted under Regulation S of theSecurities Act of 1933, as amended.

 

14

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**Item2.         Management’s Discussionand Analysis or Plan of Operation.**

 

FORWARD LOOKING STATEMENTS

 

This Quarterly Report maycontain forward-looking statements within the meaning of Section 27A ofthe Securities Act of 1933 that involve risks and uncertainties. In particularsuch forward-looking statements may be found in this section. The followingdiscussion and analysis of the financial condition and results of operationsshould be read in conjunction with the financial statements and related notesincluded elsewhere in this Quarterly Report. Words or phrases such as “hope”, “expect”,“intend”, “plan” or similar expressions are generally intended to identifyforward-looking statements. Those statements involve risks and uncertaintiesthat could cause actual results to differ materially from the results discussedherein. The principal risks and uncertainties that may affect our actualperformance and results of operations include the following: general economicconditions; exploration successes, the acquisition of oil and gas assets,continued availability of capital and financing; adverse weather; governmentalregulations; changes in governmental and public policy; changes in economicconditions specific to our business; competition; availability of equipment andqualified personnel and unexpected operational difficulties. Other risks anduncertainties may also affect the outcome of our actual performance and resultsof operations. You are cautioned not to place undue reliance on theforward-looking statements made in this Management’s Discussion and Analysis orPlan of Operations.

 

**Overview**

 

We are a natural resourceexploration stage company engaged in the participation in the drilling of oiland gas properties in the United States. On December 1, 2005, we enteredinto a non-exclusive participation agreement (the “PB Energy ParticipationAgreement”) with PB Energy USA Ltd. (“PB Energy”). PB Energy has the right toparticipate in certain wells to be drilled by Star of Texas Energy Services, Inc.(“Star of Texas Energy Services”). Star of Texas Energy Services has arrangedwith land owners and leaseholders for the rights to drill exploration wellstargeting the Barnett Shale formation in North Texas and has proposed to drill,as operator, one exploration well a month for twenty-four months. As operator,Star of Texas Energy Services retains a 25% working interest in each well thatis to be drilled by it as operator. These rights are defined in theparticipation agreement to be entered into for each individual well drilled byStar of Texas Energy Services. Star of Texas Energy Services has the right toassign part or all of its 25% working interest to third parties.

 

The PB Energy ParticipationAgreement gives us the right, but not the obligation, to participate up to amaximum 25% working interest, subject to availability, in each exploration wellto be drilled by Star of Texas Energy Services. In order to purchase each 1%working interest in a well, we are required to pay a project payment ofapproximately $35,000 per 1% working participation interest. This amount isbased on an estimated gross cost for the horizontal drilling and completionattempt per well of $2,700,000 and the requirement under the individual wellparticipation agreement that the 75% working interest participants areobligated to pay 100% of the actual drilling and completion costs. Inaggregate, we have the option to acquire up to a 25% working interest in eachwell by paying up to 33.33% of all costs and expenses incurred for the joint accountunder the operating agreement respecting the drilling and completion of eachwell.

 

In May 2006, we electedto participate in our first exploration well with Star of Texas Energy Servicespursuant to the PB Energy Participation Agreement. To date, we have made cashcall payments of $48,899 for a 1% working interest in the Malcolm-Star #1Hnatural gas horizontal well (“Malcolm-Star”). Based on our 1% working interest,we were obliged to pay for 1.333% of the costs for drilling and completion ofthe well, but were only entitled to receive a 1% revenue interest in the well.

 

15

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The Malcolm-Star prospectconsists of 211.8 acres in Wise County, Texas, a core gas area of the BarnettShale play of North Texas. Star of Texas Energy Services has access to seismicgeological data, which shows the area to be favorable for the drilling of ahorizontal well. Star of Texas Energy Services commenced drilling theMalcolm-Star well on May 22, 2006. The well was drilled to a depth of10,500 feet to test the Barnett Shale formation, which was approximately 2,000feet farther than expected. At January 31, 2009, the company had paid Starof Texas Energy Services approximately $48,899 on the drilling, completion andtie-in of the well. Star of Texas Energy Services has advised the Company,that, after the well was subjected to a fracture stimulation program, it beganproducing natural gas at a marginal rate of production, producing net income toExplortex of less than $25 per month. The company has no plans currently toparticipate in any more wells on this prospect.

 

With respect to thisprospect, the company was informed in April that as a working interestowner 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 company has decided tobegin actively seeking new producing prospects, with development andexploration potential, particularly from small, undercapitalized, public andprivate entities. The company anticipates it will raise additional funds whenthose prospects are identified.  The Company has also decided to expand it’ssearch for new opportunities outside of the oil and gas sector, due to currenteconomic conditions.

 

**PLAN OFOPERATIONS**

 

Our plan of operations forthe next twelve months is to complete the following objectives within the timeperiods specified, subject to our obtaining the funding necessary for continuedexploration:

 

1.             Identify oil or gas producing prospects, or exploratoryprospects, with exceptional risk/reward characteristics in the currentenvironment. We will pay particular attention to prospects with provenproduction potential, where the working interest owner or operator iscapital-constrained.  We will also look at exceptional growthopportunities, which are currently opening up outside the oil and gas sector.

 

2.             We intend to evaluate future participation in workinginterests in further Barnett Shale exploration wells, as proposed under the PBEnergy Participation Agreement. It is unlikely we would proceed with a further1% working interest in a Barnett Shale well, as evaluated by Star of TexasEnergy Services, subject to us having sufficient financing. We expect the costsof the 1% working interest in the well to be approximately $45,000. Weanticipate that we will have to raise additional funding in order toparticipate in new exploration wells.

 

3.             We anticipate spending approximately $5,000 in ongoinggeneral and administrative expenses per month for the next twelve months, for atotal anticipated expenditure of $60,000 over the next twelve months. Thegeneral and administrative expenses will consist primarily of professional feesfor the audit and legal work relating to our regulatory filings throughout theyear, as well as transfer agent fees and general office expenses.

 

16

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As of January 31, 2009,we had cash reserves of $774 and a working capital deficit of $57,231. On June 1,2008, the company sold 500,000 shares of its common stock at $.05, for totalproceeds of $25,000. The Company currently is conducting a Reg S offering, andon December 4, 2008, the company received proceeds of $10,000, for 200,000shares sold and issuable for $.05 per share. An additional 500,000 shares weresold and issuable in February of 2009, also at $.05, for an additional$25,000. The cash for this investment was received February 6, 2009.

 

During the twelve-monthperiod, we may or may not generate any revenue dependent on the success of our1% working interest in the Malcolm-Star well. Accordingly, we will be requiredto obtain additional financing in order to continue our plan of operations. Webelieve that debt financing will likely not be an alternative for fundingadditional exploration wells, as we do not have tangible assets to secure anydebt financing. We anticipate that additional funding will be in the form ofequity financing from the sale of our common stock. However, we do not have anyfinancing arranged and we cannot provide investors with any assurance that wewill be able to raise sufficient funding from the sale of our common stock tofund participation in additional exploration wells. In the absence of suchfinancing, we will not be able to continue exploration and our business planwill 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.

 

**RESULTS OFOPERATIONS**

 

**Revenues**

 

We have had minimaloperating revenues since our inception on March 25, 2004 through to thenine months ended January 31, 2009.  We anticipate that we will notgenerate any material revenues unless our participation in the Malcolm-Starwell is successful and production of natural gas is achieved.

 

**General andAdministrative Expenses**

 

Our general andadministrative expenses for three and nine months ended January 31, 2009and 2008 are summarized below:

 
| ** **                                    | ** ** | **Nine Months  Ended  January 31,  2009** | ** ** | **Nine Months  Ended  January 31,  2008** | ** ** | **Three  Months  Ended  January 31,  2009** | ** ** | **Three  Months  Ended  January 31,  2008** | ** ** |
|-----------------------------------------------|------------|-----------------------------------------------------|------------|-----------------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|
| **General and administrative expenses**       |       |                                                |       |                                                |       |                                             |       |                                             |       |
| Bank Charges                                  |       | $                                                   | 182        |                                                | $          | 313                                              |       | $                                                | 42         |   | $ | 133 |   |
| Depletion Expense                             |       | —                                              |       | 4,886                                               |       | —                                           |       | 2,448                                            |       |
| Operating expenses                            |       | 3,000                                               |       | 801                                                 |       | 1,500                                            |       | —                                           |       |
| Professional Fees                             |       | 32,381                                              |       | 26,644                                              |       | 5,900                                            |       | 4,799                                            |       |
| Transfer agent and filing Fees                |       | 5,306                                               |       | 2,183                                               |       | 1,895                                            |       | 35                                               |       |
| Management Fees                               |       | 15,000                                              |       | —                                              |       | 6,000                                            |       | —                                           |       |
| **Total general and administrative expenses** | ** ** | **$**                                               | **55,869** | ** **                                          | **$**      | **35,599**                                       | ** ** | **$**                                            | **15,337** | ** ** | **$** | **7,415** | ** ** |

 

Professional fees of $32,381incurred during the nine months ended January 31, 2009 related to theexpenses associated with being a reporting company under the Securities ExchangeAct of 1934.

 

17

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Transfer agent and filingfees represented amounts paid to keep our corporation in good standing withState regulators and with the establishment of our transfer agent.

 

**LIQUIDITYAND CAPITAL RESOURCES**

 

We had cash of $744 and aworking capital deficit of $57,231 at January 31, 2009, compared to cashof $4,802 and a working capital deficit of $37,805 at January 31, 2008.

 

**Plan ofOperations**

 

We anticipate raisingadditional funding over the next several months in order to close the workingcapital deficit, as well as to provide funding for the acquisition ofadditional properties. We anticipate that our cash, combined with the funds weare in the process of raising, will be sufficient to enable us to pay for ourgeneral and administrative expenses for the next three months. However, ourability to participate in further exploration wells will be subject to usobtaining additional financing as these expenditures will exceed our cash andworking capital reserves. We are currently evaluating several prospects in theenergy area, as well as some outside of the energy area, any one of which willrequire significant additional funding. We hope to have our next projectselected and funded by the end of calendar year 2009, although there is noassurance as yet that this goal will ultimately be met in that time frame.

 

**Cash Usedin Operating Activities**

 

Cash used in operatingactivities was $40,144 for the nine months ended January 31, 2009,compared with cash used in operating activities of $27,397 for the nine monthsended January 31, 2008.  We anticipate that cash used in operatingactivities will increase during the next year, as discussed under “Plan ofOperations”.

 

**Cash Usedin Investing Activities**

 

Cash was not used ininvesting activities for the nine months ended January 31, 2009, comparedwith $6,832 used in investing activities for the year ended July 31,2008.  The decrease in cash used in investing activities is a result ofreduced drilling, completion and tie-in costs of the Malcolm Star well duringthe period.

 

**Cash FromFinancing Activities**

 

We have funded our businessto date primarily from sales of our common stock. From our inception, on March 25,2004, to January 31, 2009, we have raised a total of $144,500 from privateofferings of our securities. Gross proceeds from the sales of our common stockduring the nine months ended January 31, 2009 totaled $35,000, compared tono such proceeds in the nine months ended January 31, 2008.

 

**GoingConcern**

 

We have not attainedprofitable operations and are dependent upon obtaining financing to pursue anyextensive exploration activities. For these reasons our auditors stated intheir report dated July 28, 2008 that they have substantial doubt we willbe able to continue as a going concern.

 

**FutureFinancings**

 

We anticipate continuing torely on equity sales of our common shares in order to continue to fund ourbusiness operations. Issuances of additional shares will result in dilution toour existing shareholders.

 

18

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There is no assurance thatwe will achieve any additional sales of our equity securities or arrange fordebt or other financing to fund our planned exploration activities.

 

**Off-BalanceSheet Arrangements**

 

We have no significantoff-balance sheet arrangements that have or are reasonably likely to have acurrent or future effect on our financial condition, changes in financialcondition, revenues or expenses, results of operations, liquidity, capitalexpenditures or capital resources that is material to stockholders.

 

**Investmentin Oil and Gas Properties**

 

We utilize the full costmethod to account for our investment in oil and gas properties. Accordingly,all costs associated with acquisition and exploration of oil and gas reserves,including such costs as leasehold acquisition costs, interest costs relating tounproved properties, geological expenditures and direct internal costs arecapitalized into the full cost pool. As of January 31, 2009, we hadminimal proven oil and gas properties. When we obtain proven oil and gasreserves, capitalized costs, including estimated future costs to develop thereserves and estimated abandonment costs, net of salvage, will be depleted onthe units-of-production method using estimates of proved reserves. Investmentsin unproved properties and major development projects including capitalizedinterest, if any, are not amortized until proved reserves associated with theprojects can be determined. If the future exploration of unproved properties isdetermined uneconomical, the amounts of such properties are added to thecapitalized cost to be amortized.

 

The capitalized costsincluded in the full cost pool are subject to a “ceiling test”, which limitssuch costs to the aggregate of the estimated present value, using an estimateddiscount rate, of the future net revenues from proved reserves, based oncurrent economic and operating conditions and the estimated value of unprovenproperties. Specifically, we compute the ceiling test so that capitalized cost,less accumulated depletion and related deferred income tax, do not exceed anamount (the ceiling) equal to the sum of: (A) The present value ofestimated future net revenue computed by applying current prices of oil and gasreserves (with consideration of price changes only to the extent provided bycontractual arrangements) to estimated future production of proved oil and gasreserves as of the date of the latest balance sheet presented, less estimatedfuture expenditures (based on current cost) to be incurred in developing andproducing the proved reserves computed using a discount factor of ten percentand 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.

 

For unproven properties, weexclude from capitalized costs subject to depletion, all costs directlyassociated with the acquisition and evaluation of the unproved property untilit is determined whether or not proved reserves can be assigned to theproperty. Until such a determination is made, we assess the property at leastannually to ascertain whether impairment has occurred. In assessing impairmentwe consider factors such as historical experience and other data such asprimary lease terms of the property, average holding periods of unproved property,and geographic and geologic data. We add the amount of impairment assessed tothe cost to be amortized subject to the ceiling test. As of January 31,2009, none of our oil and gas properties were considered impaired.

 

19

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**Item 4A.Controls and 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 January 31,2009, 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.

 

Disclosure controls andprocedures are controls and other procedures that are designed to ensure thatinformation required to be disclosed in our reports filed or submitted underthe Exchange Act is recorded, processed, summarized and reported, within thetime periods specified in the SEC’s rules and forms. Disclosure controlsand procedures include, without limitation, controls and procedures designed toensure that information required to be disclosed in our reports filed under theExchange Act is accumulated and communicated to management, including our ChiefExecutive Officer and our Chief Financial Officer, to allow timely decisionsregarding required disclosure.

 

During our most recentlycompleted fiscal quarter ended January 31, 2009 there were no changes inour internal control over financial reporting that have materially affected, orare reasonably likely to affect, our internal control over financial reportingduring the quarter ended January 31, 2009.

 

The term “ *internal control over financial reporting* ” is defined as a process designedby, or under the supervision of, our principal executive and principalfinancial officers, or persons performing similar functions, and effected byour board of directors, management and other personnel, to provide reasonableassurance regarding the reliability of financial reporting and the preparationof financial statements for external purposes in accordance with generallyaccepted accounting principles and includes those policies and procedures that:

 

(a)                                         Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assetsof the registrant;

 

(b)                                        Provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of ourCompany are being made only in accordance with authorizations of our managementand director of the registrant; and

 

(c)                                         Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use or disposition of the registrant’s assets thatcould have a material effect on the financial statements.

 

(d)                                        The Company disclosed in it’s 10-KSB, for the year ended April 30,2008, that it identified four material weaknesses in it’s internal controlsover financial reporting.  The Company plans to address these weaknessesby first establishing an Audit and Controls Committee, by the end of thecalendar year 2008.  Additional remediation efforts will be implemented asthe Company’s resources allow.  Management will re-evaluate the controlenvironment by the year-end assessment.

 

20

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**PART II— Other Information**

 

**Item1.             LegalProceedings.**

 

We are not party to anylegal proceedings.

 

**Item2.            Unregistered Sales of Equity Securities and Use of Proceeds.**

 

On December 4,2008, the Company sold 200,000 shares of its Common Stock at $.05 per share forgross proceeds of $10,000. No underwriters were used in the offering. Theshares were sold to accredited investors outside of the United States in anoffering exempt from registration by Regulation S under the Securities Act of1933. The proceeds of the offering are being used for working capital

 

**Item3.            Default upon Senior Securities.**

 

None.

 

**Item4.            Submission of Matters to a Vote of Security Holders.**

 

No matters were submitted toour security holders for a vote during the third quarter of our fiscal yearending April 30, 2009.

 

**Item5.            Other Information.**

 

None.

 

**Item6.            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                                                                                                          |
| 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 registration statementon Form SB-2 filed with the Commission on July 10, 2006.*

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

 

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**SIGNATURES**

 

In accordance with therequirements of the Exchange Act, the registrant caused this report to besigned on its behalf by the undersigned, thereunto duly authorized.

 

**EXPLORTEXENEGRY INC.**

 
| **Signature**            | ** ** | **Title**                                                                                                                                       | ** ** | **Date:**                |
|--------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------|
| *** ***             | ** ** |                                                                                                                                            |       | **March 13,  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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