|                                  |         |                                    |
|---------------------------------------|--------------|-----------------------------------------|
| Nevada                                |         | 20-4952339                              |
| (State or other jurisdiction of  |         | (IRS Employer Identification No.)  |
| incorporation or organization)   |    |                               |

|  Yes  [X] |   No  [_] |
|---------------------|--------------------------|

|   |  Large accelerated filer [_]      |  Accelerated Filer [_]         |
|--------|---------------------------------------------|-------------------------------------|
|   |                                        |                                |
|   |  Non-accelerated filer   [_] |  Smaller reporting company [X] |

| Yes  [_]  |   No  [X] |
|---------------------|--------------------------|

----

| Item 1.                           | Financial Statements (Unaudited)                                                            |
|-----------------------------------|---------------------------------------------------------------------------------------------|
|                              |                                                                                        |   |   | Page |
|                              |                                                                                        |   |   |
|                              | Balance Sheets – March 31, 2011 and December 31, 2010                                 |   | 1 |
|                              |                                                                                        |   |   |   |
|                              | Statements of Operations -                                                                  |   |   |
|                              |                                                                                        | Three months ended March 31, 2011 and 2010 and |   |   |
|                              |                                                                                        | From May 19, 2006 (Inception) to March 31, 2011  |   | 2 |
|                              |                                                                                        |   |   |   |
|                              | Statements of Shareholders’ Equity (Deficit)                                     |   | 3 |
|                              |                                                                                        |   |   |   |
|                              | Statements of Cash Flows –                                                            |   |   |
|                              |                                                                                        | Three months ended March 31, 2011 and 2010 and |   |   |
|                              |                                                                                        | From May 19, 2006 (Inception) to March 31, 2011 |   | 4 |
|                              |                                                                                        |   |   |   |
|                              | Notes to the Financial Statements                                                           |   | 5 |
|                              |                                                                                        |   |   |   |
| Item 2.                           | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 9 |
|                              |                                                                                        |   |   |   |
| Item 3.                           | Quantitative and Qualitative Disclosures About Market Risk                                  |   |   |
|                              | – Not Applicable                                                                      |   | 12 |
|                              |                                                                                        |   |   |   |
| Item 4.                           | Controls and Procedures                                                                     |   | 12 |
|                              |                                                                                        |   |   |   |
| PART II – OTHER INFORMATION |                                                                                        |   |
|                              |                                                                                        |   |   |   |
| Item 1.                           | Legal Proceedings – Not Applicable                                                    |   | 13 |
|                              |                                                                                        |   |   |   |
| Item 1A.                          | Risk Factors                                                                                |   | 13 |
|                              |                                                                                        |   |   |   |
| Item 2.                           | Unregistered Sales of Equity Securities and Use of Proceeds                                 |   |   |
|                              | – Not Applicable                                                                      |   | 13 |
|                              |                                                                                        |   |   |   |
| Item 3.                           | Defaults Upon Senior Securities                                                             |   | 13 |
|                              |                                                                                        |   |   |   |
| Item 4.                           | Reserved                                                                                    |   | 13 |
|                              |                                                                                        |   |   |   |
| Item 5.                           | Other Information                                                                           |   | 13 |
|                              |                                                                                        |   |   |   |
| Item 6.                           | Exhibits                                                                                    |   | 14 |
|                              |                                                                                        |   |   |   |
| SIGNATURES                        |                                                                                        | 14 |

----

|                                                           |   |           |       |   |              |   |
|----------------------------------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                                           |   | March 31, 2011 |       |   |              |   |
|                                                           |   | (Unaudited)    |       |   | December 31, 2010 |   |
| ASSETS                                                         |   |           |       |   |              |   |
| Current assets:                                                |   |           |       |   |              |   |
| Cash                                                           |   | $              | 9,236      |   |              | $      | - |   |
| Accounts receivable, net                                       |   |           | 6,296      |   |              |   | - |   |
| Total current assets                                           |   |           | 15,532     |   |              |   | - |   |
|                                                           |   |           |       |   |              |   |   |   |
| Oil and gas properties - undeveloped                           |   |           | 8,729,434  |   |              |   | - |   |
|                                                           |   |           |       |   |              |   |   |   |
| Other assets:                                                  |   |           |       |   |              |   |   |   |
|                                                           |   |           |       |   |              |   |   |   |
| Investment in Quad Energy                                      |   |           | 175,000    |   |              |   | - |   |
| Total other assets                                             |   |           | 175,000    |   |              |   | - |   |
|                                                           |   |           |       |   |              |   |   |   |
| Total assets                                                   |   | $              | 8,919,966  |   |              | $      | - |   |
|                                                           |   |           |       |   |              |   |   |   |
|                                                           |   |           |       |   |              |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)                 |   |           |       |   |              |   |   |   |
| Current liabilities:                                           |   |           |       |   |              |   |   |   |
| Accounts payable                                               |   | $              | 400,892    |   |              | $      | 176,127 |   |
| Notes payable                                                  |   |           | -          |   |              |   | 20,250 |   |
| Convertible notes payable, net                                 |   |           | 166,666    |   |              |   | 379,416 |   |
| Accrued interest                                               |   |           | 89,470     |   |              |   | 85,608 |   |
| Total current liabilities                                      |   |           | 657,028    |   |              |   | 661,401 |   |
|                                                           |   |           |       |   |              |   |   |   |
| Long-term note payable                                         |   |           | 3,500,000  |   |              |   | - |   |
| Total liabilities                                              |   |           | 4,157,028  |   |              |   | 661,401 |   |
|                                                           |   |           |       |   |              |   |   |   |
| COMMITMENTS AND CONTENGENCIES                                  |   |           |       |   |              |   |   |   |
| Shareholders' equity (deficit):                                |   |           |       |   |              |   |   |   |
| Common stock par value $.001, 500,000,000 shares authorized,   |   |           |       |   |              |   |   |   |
| 349,813,191 and 69,058,666 issued and outstanding, repectively |   |           | 349,813    |   |              |   | 69,059 |   |
| Additional paid-in-capital                                     |   |           | 7,113,917  |   |              |   | 1,858,064 |   |
| Deficit accumulated during the development stage               |   |           | (2,700,792 | )      |              |   | (2,588,524 | ) |
| Total shareholders' equity (deficit)                           |   |           | 4,762,938  |   |              |   | (661,401 | ) |
| Total liabilities and shareholders' equity (deficit)           |   | $              | 8,919,966  |   |              | $      | - |   |

----

|                                         |   | Three Months Ended |        |   | Three Months Ended |   |       | May 19, 2006(Inception) to |   |
|----------------------------------------------|--------|--------------------|-------------|--------|--------------------|--------|------------|----------------------------|--------|
|                                         |   | March 31, 2011     |        |   | March 31, 2010     |   |       | March 31, 2011             |   |
|                                         |   |               |        |   |               |   |       |                       |   |
| Operating expenses:                          |   |               |        |   |               |   |       |                       |   |
| Leasing expense                              |   | $                  | -           |   |               | $      | -          |                       |   | $ | 453,470 |   |
| Depreciation expense                         |   |               | -           |   |               |   | -          |                       |   |   | 747 |   |
| Professional fees                            |   |               | 86,637      |   |               |   | 35,102     |                       |   |   | 713,069 |   |
| Impairment of oil and gas properties         |   |               | -           |   |               |   | -          |                       |   |   | 203,424 |   |
| General and administrative expenses          |   |               | 173,720     |   |               |   | 20,482     |                       |   |   | 893,751 |   |
| Gain on sale of undeveloped properties       |   |               | (500,000    | )      |               |   | -          |                       |   |   | (500,000 | ) |
| Total operating expenses                     |   |               | (239,643    | )      |               |   | 55,584     |                       |   |   | 1,764,461 |   |
|                                         |   |               |        |   |               |   |       |                       |   |   |   |   |
| Other income:                                |   |               |        |   |               |   |       |                       |   |   |   |   |
| Gain on forgiveness of debt                  |   |               | -           |   |               |   | -          |                       |   |   | 50,000 |   |
| Total other income                           |   |               | -           |   |               |   | -          |                       |   |   | 50,000 |   |
|                                         |   |               |        |   |               |   |       |                       |   |   |   |   |
| Other expense:                               |   |               |        |   |               |   |       |                       |   |   |   |   |
| Unrealized loss on investment in Quad Energy |   |               | (325,000    | )      |               |   | -          |                       |   |   | (325,000 | ) |
| Interest expense                             |   |               | (26,911     | )      |               |   | (25,671    | )                          |   |   | (661,331 | ) |
| Total other expense                          |   |               | (351,911    | )      |               |   | (25,671    | )                          |   |   | (986,331 | ) |
| Net Loss                                     |   | $                  | (112,268    | )      |               | $      | (81,255    | )                          |   | $ | (2,700,792 | ) |
|                                         |   |               |        |   |               |   |       |                       |   |   |   |   |
| Per share information:                       |   |               |        |   |               |   |       |                       |   |   |   |   |
| Basic earnings per common share              |   | $                  | (0.00       | )      |               | $      | (0.00      | )                          |   |   |   |   |
| Diluted earnings per common share            |   | $                  | (0.00       | )      |               | $      | (0.00      | )                          |   |   |   |   |
|                                         |   |               |        |   |               |   |       |                       |   |   |   |   |
| Weighted average shares outstanding          |   |               | 182,743,631 |   |               |   | 46,251,111 |                       |   |   |   |   |

----

|                                                        |   |         |        |   |       |   |    |                                  |   |   |               |   |   |             |       |
|-------------------------------------------------------------|--------|--------------|-------------|--------|------------|--------|---------|---------------------------------------|--------|--------|--------------------|--------|--------|------------------|------------|
|                                                        |   | Common Stock |        |   | Additional |   |    | Deficit AccumulatedDuring Development |   |   | TotalStockholders' |   |
|                                                        |   | Shares       |        |   | Amount     |   |    | Paid-in-Capital                       |   |   | Stage              |   |   | Equity (Deficit) |       |
|                                                        |   |         |        |   |       |   |    |                                  |   |   |               |   |   |             |       |
| Balance at May 19, 2006                                     |   |         | -           |   |       | $      | -       |                                  |   | $      | -                  |   |   | $                | -          |   |   | $ | - |   |
| Stock issued for cash $0.00167 per share                    |   |         | 30,000,000  |   |       |   | 30,000  |                                  |   |   | (20,000            | )      |   |             | -          |   |   |   | 10,000 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (551       | ) |   |   | (551 | ) |
| Balances at June 30, 2006                                   |   |         | 30,000,000  |   |       |   | 30,000  |                                  |   |   | (20,000            | )      |   |             | (551       | ) |   |   | 9,449 |   |
| Stock issued for cash $0.00167 per share                    |   |         | 24,000,000  |   |       |   | 24,000  |                                  |   |   | 16,000             |   |   |             | -          |   |   |   | 40,000 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (18,131    | ) |   |   | (18,131 | ) |
| Balances at June 30, 2007                                   |   |         | 54,000,000  |   |       |   | 54,000  |                                  |   |   | (4,000             | )      |   |             | (18,682    | ) |   |   | 31,318 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (13,867    | ) |   |   | (13,867 | ) |
| Balances at June 30, 2008                                   |   |         | 54,000,000  |   |       |   | 54,000  |                                  |   |   | (4,000             | )      |   |             | (32,549    | ) |   |   | 17,451 |   |
| Shares issued for director services                         |   |         | 50,000      |   |       |   | 50      |                                  |   |   | 40,450             |   |   |             | -          |   |   |   | 40,500 |   |
| Cancelled shares                                            |   |         | (4,000,000  | )      |       |   | (4,000  | )                                     |   |   | 4,000              |   |   |             | -          |   |   |   | - |   |
| Rights to stock issued for convertible notes                |   |         |        |   |       |   |    |                                  |   |   | 256,666            |   |   |             |       |   |   |   | 256,666 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (922,689   | ) |   |   | (922,689 | ) |
| Balances at June 30, 2009                                   |   |         | 50,050,000  |   |       |   | 50,050  |                                  |   |   | 297,116            |   |   |             | (955,238   | ) |   |   | (608,072 | ) |
| Cancelled shares - December 28, 2009                        |   |         | (3,500,000  | )      |       |   | (3,500  | )                                     |   |   | 3,500              |   |   |             | -          |   |   |   | - |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (94,264    | ) |   |   | (94,264 | ) |
| Balances at December 31, 2009                               |   |         | 46,550,000  |   |       |   | 46,550  |                                  |   |   | 300,616            |   |   |             | (1,049,502 | ) |   |   | (702,336 | ) |
| Cancelled shares - February 4, 2010                         |   |         | (500,000    | )      |       |   | (500    | )                                     |   |   | 500                |   |   |             | -          |   |   |   | - |   |
| Shares issued to holders of promissory notes March 29, 2010 |   |         | 366,666     |   |       |   | 367     |                                  |   |   | 21,633             |   |   |             |       |   |   |   | 22,000 |   |
| Net loss                                                    |   |         |        |   |       |   |    |                                  |   |   |               |   |   |             | (81,255    | ) |   |   | (81,255 | ) |
| Balances at March 31, 2010                                  |   |         | 46,416,666  |   |       |   | 46,417  |                                  |   |   | 322,749            |   |   |             | (1,130,757 | ) |   |   | (761,591 | ) |
| Conversion of debentures - May 17, 2010                     |   |         | 1,650,000   |   |       |   | 1,650   |                                  |   |   | 148,350            |   |   |             | -          |   |   |   | 150,000 |   |
| Shares issued to holders of promissory notes - May 28, 2010 |   |         | 150,000     |   |       |   | 150     |                                  |   |   | 8,850              |   |   |             | -          |   |   |   | 9,000 |   |
| Shares issued for service - June 14, 2010                   |   |         | 3,400,000   |   |       |   | 3,400   |                                  |   |   | 200,600            |   |   |             |       |   |   |   | 204,000 |   |
| Beneficial conversion features                              |   |         | -           |   |       |   | -       |                                  |   |   | 174,473            |   |   |             | -          |   |   |   | 174,473 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (832,423   | ) |   |   | (832,423 | ) |
| Balances at June 30, 2010                                   |   |         | 51,616,666  |   |       |   | 51,617  |                                  |   |   | 855,022            |   |   |             | (1,963,180 | ) |   |   | (1,056,541 | ) |
| Conversion of debentures - July 7, 2010                     |   |         | 1,000,000   |   |       |   | 1,000   |                                  |   |   | 49,000             |   |   |             | -          |   |   |   | 50,000 |   |
| Shares issued for service - August 9,2010                   |   |         | 4,200,000   |   |       |   | 4,200   |                                  |   |   | 289,800            |   |   |             | -          |   |   |   | 294,000 |   |
| Conversion of LOC                                           |   |         | 11,000,000  |   |       |   | 11,000  |                                  |   |   | 539,000            |   |   |             | -          |   |   |   | 550,000 |   |
| Conversion of LOC interest                                  |   |         | 1,242,000   |   |       |   | 1,242   |                                  |   |   | 60,844             |   |   |             | -          |   |   |   | 62,086 |   |
| Beneficial conversion features                              |   |         | -           |   |       |   | -       |                                  |   |   | 64,398             |   |   |             |       |   |   |   | 64,398 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (625,344   | ) |   |   | (625,344 | ) |
| Balances at December 31, 2010                               |   |         | 69,058,666  |   |       | $      | 69,059  |                                  |   | $      | 1,858,064          |   |   | $                | (2,588,524 | ) |   | $ | (661,401 | ) |
| Conversion of debentures - January 4, 2011                  |   |         | 2,000,000   |   |       |   | 2,000   |                                  |   |   | 31,000             |   |   |             |       |   |   |   | 33,000 |   |
| Shares issued to holders of promissory                      |   |         |        |   |       |   |    |                                  |   |   |               |   |   |             |       |   |   |   |   |   |
| notes - January 20, 2011                                    |   |         | 405,000     |   |       |   | 405     |                                  |   |   | 19,845             |   |   |             | -          |   |   |   | 20,250 |   |
| Conversion of debentures - January 27, 2011                 |   |         | 1,818,182   |   |       |   | 1,818   |                                  |   |   | 28,182             |   |   |             | -          |   |   |   | 30,000 |   |
| Conversion of debentures - January 27, 2011                 |   |         | 701,754     |   |       |   | 702     |                                  |   |   | 11,298             |   |   |             | -          |   |   |   | 12,000 |   |
| Conversion of debentures - February 8, 2011                 |   |         | 1,052,632   |   |       |   | 1,053   |                                  |   |   | 10,947             |   |   |             | -          |   |   |   | 12,000 |   |
| Conversion of debentures - February 17, 2011                |   |         | 877,193     |   |       |   | 877     |                                  |   |   | 9,123              |   |   |             | -          |   |   |   | 10,000 |   |
| Conversion of debentures - February 23, 2011                |   |         | 1,636,364   |   |       |   | 1,636   |                                  |   |   | 16,364             |   |   |             | -          |   |   |   | 18,000 |   |
| Conversion of debentures - February 23, 2011                |   |         | 3,750,000   |   |       |   | 3,750   |                                  |   |   | 41,250             |   |   |             | -          |   |   |   | 45,000 |   |
| Conversion of debentures - February 23, 2011                |   |         | 3,500,000   |   |       |   | 3,500   |                                  |   |   | 38,500             |   |   |             | -          |   |   |   | 42,000 |   |
| Shares issued for lease - February 24, 2011                 |   |         | 261,471,681 |   |       |   | 261,472 |                                  |   |   | 4,967,962          |   |   |             | -          |   |   |   | 5,229,434 |   |
| Conversion of debentures - March 15, 2011                   |   |         | 895,522     |   |       |   | 895     |                                  |   |   | 11,105             |   |   |             | -          |   |   |   | 12,000 |   |
| Conversion of debentures - March 21, 2011                   |   |         | 772,059     |   |       |   | 772     |                                  |   |   | 9,728              |   |   |             | -          |   |   |   | 10,500 |   |
| Conversion of debentures - March 23, 2011                   |   |         | 974,138     |   |       |   | 974     |                                  |   |   | 10,326             |   |   |             | -          |   |   |   | 11,300 |   |
| Common stock issued for services March 31, 2011             |   |         | 900,000     |   |       |   | 900     |                                  |   |   | 26,100             |   |   |             |       |   |   |   | 27,000 |   |
| Stock compensation expense  - March 31, 2011      |   |         | -           |   |       |   | -       |                                  |   |   | 24,123             |   |   |             | -          |   |   |   | 24,123 |   |
| Net loss                                                    |   |         | -           |   |       |   | -       |                                  |   |   | -                  |   |   |             | (112,268   | ) |   |   | (112,268 | ) |
| Balances at March 31, 2011                                  |   |         | 349,813,191 |   |       | $      | 349,812 |                                  |   | $      | 7,113,917          |   |   | $                | (2,700,792 | ) |   | $ | 4,762,938 |   |

----

|                                                                        |   | Three months endedMarch 31, |     |   | (Restated)Three months endedMarch 31, |   |    | 19-May-06(Inception) to |   |
|-----------------------------------------------------------------------------|--------|-----------------------------|----------|--------|---------------------------------------|--------|---------|-------------------------|--------|
|                                                                        |   | 2011                        |     |   | 2010                                  |   |    | March 31, 2011          |   |
|                                                                        |   |                        |     |   |                                  |   |    |                    |   |
| Cash Flows from Operating Activities                                        |   |                        |     |   |                                  |   |    |                    |   |
| Net loss                                                                    |   | $                           | (112,268 | )      |                                  | $      | (81,255 | )                       |   | $ | (2,700,791 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Depreciation                                                                |   |                        | -        |   |                                  |   | -       |                    |   |   | 747 |   |
| Gain of debt forgriveness                                                   |   |                        | -        |   |                                  |   | -       |                    |   |   | (50,000 | ) |
| Gain on sale of undeveloped properties                                      |   |                        | (500,000 | )      |                                  |   | -       |                    |   |   | (500,000 | ) |
| Unrealized loss on investment in Quad Energy                                |   |                        | 325,000  |   |                                  |   | -       |                    |   |   | 325,000 |   |
| Beneficial conversion feature amortization                                  |   |                        | 19,750   |   |                                  |   | -       |                    |   |   | 189,871 |   |
| Interest related to shares granted with debt                                |   |                        | -        |   |                                  |   | -       |                    |   |   | 256,666 |   |
| Impairment of assets                                                        |   |                        | -        |   |                                  |   | (37,506 | )                       |   |   | 203,424 |   |
| Common stock issued for services and interest expense                       |   |                        | 27,000   |   |                                  |   | 22,000  |                    |   |   | 573,150 |   |
| Stock compensation                                                          |   |                        | 24,123   |   |                                  |   | -       |                    |   |   | 24,123 |   |
| Changes in operating assets and liabilities:                                |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Accounts payable                                                            |   |                        | 224,765  |   |                                  |   | 43,254  |                    |   |   | 400,098 |   |
| Accounts receivable                                                         |   |                        | (6,296   | )      |                                  |   | -       |                    |   |   | (6,296 | ) |
| Accrued interest payable                                                    |   |                        | 7,161    |   |                                  |   | (6,887  | )                       |   |   | 185,855 |   |
| Net cash used in operating activities                                       |   |                        | 9,236    |   |                                  |   | (60,394 | )                       |   |   | (1,098,153 | ) |
|                                                                        |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Cash Flows from Investing Activities:                                       |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Purchases of office equipment                                               |   |                        | -        |   |                                  |   | -       |                    |   |   | (4,171 | ) |
| Purchase of undeveloped oil and gas lease                                   |   |                        | -        |   |                                  |   | -       |                    |   |   | (200,000 | ) |
| Net used in investing activities                                            |   |                        | -        |   |                                  |   | -       |                    |   |   | (204,171 | ) |
|                                                                        |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
|                                                                        |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Cash Flows from Financing Activities:                                       |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Proceeds from convertible promissory notes                                  |   |                        | -        |   |                                  |   | -       |                    |   |   | 691,310 |   |
| Proceeds from issuance of common stock                                      |   |                        | -        |   |                                  |   | -       |                    |   |   | 50,000 |   |
| Proceeds from promissory notes                                              |   |                        | -        |   |                                  |   | -       |                    |   |   | 41,250 |   |
| Payment of promissory note                                                  |   |                        | -        |   |                                  |   | -       |                    |   |   | (21,000 | ) |
| Proceeds from line of credit                                                |   |                        | -        |   |                                  |   | 61,147  |                    |   |   | 550,000 |   |
| Net cash provided by financing activities                                   |   |                        | -        |   |                                  |   | 61,147  |                    |   |   | 1,311,560 |   |
|                                                                        |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                        |   |                        | 9,236    |   |                                  |   | 753     |                    |   |   | 9,236 |   |
| Cash and cash equivalents at the beginning of the period                    |   |                        | -        |   |                                  |   | 8,483   |                    |   |   | - |   |
| Cash and cash equivalents at the end of the period                          |   | $                           | 9,236    |   |                                  | $      | 9,236   |                    |   | $ | 9,236 |   |
|                                                                        |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information:                           |   |                        |     |   |                                  |   |    |                    |   |   |   |   |
| Cash paid for interest expense                                              |   | $                           | -        |   |                                  | $      | -       |                    |   | $ | - |   |
| Cash paid for income taxes                                                  |   | $                           | -        |   |                                  | $      | -       |                    |   | $ | - |   |
| Debt and interest converted to equity                                       |   | $                           | 252,750  |   |                                  | $      | 22,000  |                    |   | $ | 1,095,836 |   |

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| ·     | Commitment to Advanced Seismic Technology.  The Company committed to a 3D seismic data acquisition program, plus advanced processing of the 3D seismic data, as 3D is the most sophisticated technology available for analyzing the formations, faults, integrating land culture, etc.  The distinct advantage of 3D seismic surveys over 2D surveys is that 3D provides a continuity of subsurface rocks and fluids (including hydrocarbons), the ability to extract new information from data, and a common focus for integration of reservoir data from all sources. This technology -- both the 3D data and the processing of that data -- significantly reduces risk in the drilling program.  This heavy front-end commitment provides current state-of-the-art technology that, in turn, contributes significantly to lowering project risk and identifying potential targets with a much higher degree of accuracy. |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | Results of the 3D Analysis.  The Company’s 3D analysis was performed by our outsourced Geoscientist and trusted member of our advisory team, whose experience spans more than 35 years. He has a high level of expertise with the geology of the Permian and Val Verde Basins, where the Company holds mineral rights leases, and his expertise extends to the Strawn and Ellenburger Formations which are located beneath the Company’s leased acreage.  The results of his analysis were used to generate structural maps and seismic attributes for the Strawn and Ellenburger reservoirs, and comparable structural maps for the shallower Canyon Sands formation also located beneath the Company’s leased acreage. Premised upon the 3D seismic interpretations, the Company believes that there is significant natural gas in its current acreage position. |
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| ·     | Acreage Acquisition.  Blugrass holds a lease covering 4,808 acres in Crockett County, located in West Texas, for the purpose of drilling and developing. |
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| ·     | Drilling Targets and HBP Acreage.  Drilling targets are carefully evaluated by the Blugrass management and advisory team.  A number of considerations are factored into each decision and incorporated into the overall drilling plan. These include the seismic results and analysis of possible well locations, the potential reserves at a specific target, the ease or difficulty of building on specific terrain and the associated cost of the location construction (incorporated into the total drilling expenditures), the overall risk associated with a specific target based on geology and depth of the well, and other known factors that may impact success in the immediate geographic area.  Since successful commercial wells hold production acreage, known as HBP (Held by Production) acreage for long-term production for working and royalty interest owners, the overall drilling plan includes the careful selection of drilling locations to maximize HBP acreage within the contracted lease terms.  The drilling plan also incorporates the state’s spacing and other requirements while trying to maximize the desired HBP acreage. |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·     | Advanced Drilling Technology.  Blugrass has selected air drilling technology that uses an air hammer for drilling. This technology has the advantage of being more economical, as well as time-effective. Air hammers drill straight holes because their drilling power comes from high frequency percussion rather than from high rotation and pulldown, and because the air hammer piston impacts directly on the bit rather than through a drill string, which can bend over long hole depths. This technology minimizes hole deviations and doglegs, and the speed of the process, coupled with open hole completions, results in significant savings in total drilling costs. |
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| ·     | Continuous Monitoring, Cost Controls, and Auditing.  Since control activities are a vital part of making business processes work effectively, Blugrass uses the extensive internal audit and contract compliance experience of its CFO in reviewing bid processes, contract compliance with operators, contractors, and vendors including expenditure and revenue audits and reviewing gas measurement controls and contract terms that eventually determine the gas volumes that go into gas settlement statements. |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Exhibit 3.1

Exhibit 3.2

Exhibit 3.3

Exhibit 3.4

Exhibit 3.5

Exhibit 10.1

Exhibit 10.2

Exhibit 31.1

Exhibit 32.1

| Blugrass Energy Inc. (Registrant) |
|-----------------------------------|

|   | By:    | /s/ Abram Janz                              |
|--------|--------|---------------------------------------------|
|   |   | Abram Janz,Chief Executive Officer          |
|   |   |                                        |
|   |   |                                        |
|   | By:    | /s/ Laurence K. Maguire                     |
|   |   | Laurence K. Maguire,Chief Financial Officer |

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