UNITED STATES
                       SECURITIES AND 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 September 30, 2009

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                        For the transition period from __________ to ___________

                        Commission File Number 333-135852


                              BLUGRASS ENERGY, INC.
                              ---------------------
              (Exact name of small business issuer in its charter)

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

                       7609 Ralston Road, Arvada, CO 80002
                       -----------------------------------
                    (Address of principal executive offices)

                                 (403) 830-7566
                               ------------------
                               (Telephone Number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                  Yes  [ X ]                                  No  [ ]

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

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company.

         Large accelerated filer [ ]        Accelerated Filer [ ]

         Non-accelerated filer   [ ]        Smaller reporting company [x]
<PAGE>

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

                  Yes  [ ]                                    No  [ x ]


There were  50,050,000  shares of Common  Stock  outstanding  as of November 13,
2009.
























<PAGE>

<TABLE>
<CAPTION>


PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements       (Unaudited)                                            Page
<S>                                                                                        <C>

         Balance Sheets - September 30, 2009 and June 30, 2009 (Audited)                   F-1

         Statements of Operations  -
                  Three  months ended  September  30, 2009 and 2008 and
                  From May 19, 2006(Inception) to September 30, 2009                       F-2

         Statements of Stockholders' Equity -
                  From May 19, 2006 (Inception) through September 30, 2009                 F-3

         Statements of Cash Flows -
                  Three months ended September 30, 2009 and 2008 and
                  From May 19, 2006 (Inception) to September 30, 2009                      F-4

         Notes to the Financial Statements                                                 F-5

Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                 1

Item 3.  Quantitative and Qualitative Disclosures About Market Risk - Not Applicable

Item 4. Controls and Procedures                                                             3

Item 4T.  Controls and Procedures                                                           4

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings -Not Applicable                                                  4

Item 1A. Risk Factors      - Not Applicable                                                 4

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                        4
                  -Not Applicable

Item 3.  Defaults Upon Senior Securities - Not Applicable                                   5

Item 4.  Submission of Matters to a Vote of Security Holders - Not Applicable               5

Item 5.  Other Information - Not Applicable                                                 5

Item 6.  Exhibits                                                                           5
SIGNATURES                                                                                  6
</TABLE>


<PAGE>


         Item 1.  Financial Statements.

<TABLE>
<CAPTION>

                                      BLUGRASS ENERGY, INC.
                                  (A Development Stage Company)
                                         BALANCE SHEETS


                                                                            September 30,      June 30,
                                                                               2009              2009
                                                                          ---------------   ---------------
                                                                           (Unaudited)        (Audited)
<S>                                                                       <C>               <C>

Assets
        Current Assets:
               Cash                                                             $ 26,948           $ 6,075
                                                                          ---------------   ---------------
        Total Current Assets                                                      26,948             6,075
                                                                          ---------------   ---------------

Total Assets                                                                    $ 26,948           $ 6,075
                                                                          ===============   ===============


Liabilities and Stockholders' Deficit
        Current liabilities
               Accounts payable                                                 $ 54,333          $ 52,918
               Accrued interest                                                   16,640            11,850
               Accrued liabilities, related party                                 15,000                 -
               Notes payable                                                      20,250            41,250
               Line of credit                                                    199,692           130,960
               Convertible notes payable                                         416,666           416,666
                                                                          ---------------   ---------------
        Total Current Liabilities                                                722,581           653,644

Stockholders' Equity
        Common stock, $0.001 par value; 75,000,000 shares
          authorized,50,050,000  shares issued and outstanding
          at September 30, 2009 and June 30, 2009, respectively                   50,050            50,050
        Treasury shares                                                            4,000             4,000
        Additional paid-in capital                                                36,450            36,450
        Deficit accumulated during the development stage                        (786,133)         (738,069)
                                                                          ---------------   ---------------
               Total Stockholders' Equity                                       (695,633)         (647,569)
                                                                          ---------------   ---------------

Total liabilities and stockholders' equity                                      $ 26,948           $ 6,075
                                                                          ===============   ===============
</TABLE>


See the notes to these financial statements.

                                      F-1

<PAGE>

<TABLE>
<CAPTION>

                                      BLUGRASS ENERGY, INC.
                                  (A Development Stage Company)
                                    STATEMENTS OF OPERATIONS
                                           (Unaudited)


                                                         For the Three Months Ended               May 19, 2006
                                                                September 30,                    (Inception) to
                                                          2009                2008             Setpember 30, 2009
                                                    -----------------   -----------------    ------------------------
<S>                                                 <C>                 <C>                  <C>

Revenue:                                                         $ -                 $ -                         $ -
                                                    -----------------   -----------------    ------------------------

Operational expenses:
         Leasing expenses                                          -                   -                     451,036
         Depreciation expense                                      -                   -                         747
         Professional fees                                    37,665               4,000                     252,727
         General and administrative expenses                   5,609               2,263                      61,559
                                                    -----------------   -----------------    ------------------------

                 Total operational expenses                   43,274               6,263                     766,069
                                                    -----------------   -----------------    ------------------------

Other Expense:
         Impairment of fixed assets                                -                                          (3,424)
         Interest expense                                     (4,790)                  -                     (16,640)
                                                    -----------------   -----------------    ------------------------
                                                              (4,790)                  -                     (20,064)

Net loss                                                   $ (48,064)           $ (6,263)                 $ (786,133)
                                                    =================   =================    ========================

Per share information

Net loss per common share
         Basic                                                     *    $             *
         Fully diluted                                             *                  *
                                                    =================   =================

Weighted average number of common
         stock outstanding                                50,050,000           3,600,000
                                                    =================   =================
</TABLE>

         * Less than $(0.01) per share.


See the notes to these financial statements.

                                      F-2

<PAGE>

<TABLE>
<CAPTION>

                                              BLUGRASS ENERGY, INC.
                                          (A Development Stage Company)
                                       STATEMENT OF STOCKHOLDER'S DEFICIT
                            From May 19, 2006 (Inception) through September 30, 2009
                                                   (Unaudited)

                                                                                                     Deficit accum
                                                                     Additional                        During
                                      Common Stock                    paid-in        Treasury         Development
                                    Number of shares    Amount        Capital          Stock           Stage            Totals
                                   ----------------   -----------   -------------   ------------   ---------------   --------------
<S>                                <C>                <C>           <C>             <C>            <C>               <C>

Balance - May 19, 2006                           -           $ -             $ -            $ -               $ -              $ -
  Stock issued for cash $0.005
        per share                        2,000,000         2,000           8,000              -                 -           10,000
  Net loss                                       -             -               -              -              (551)            (551)
                                   ----------------   -----------   -------------   ------------   ---------------   --------------
Balance - June 30, 2006                  2,000,000         2,000           8,000              -              (551)           9,449
                                   ----------------   -----------   -------------   ------------   ---------------   --------------

  Stock issued for cash $0.025
        per share                        1,600,000         1,600          38,400              -                 -           40,000
  Net loss                                       -             -               -              -           (18,131)         (18,131)
                                   ----------------   -----------   -------------   ------------   ---------------   --------------
Balance - June 30, 2007                  3,600,000         3,600          46,400              -           (18,682)          31,318
                                   ----------------   -----------   -------------   ------------   ---------------   --------------

  Net loss                                       -             -               -              -           (13,867)         (13,867)
                                   ----------------   -----------   -------------   ------------   ---------------   --------------
Balance - June 30, 2008                  3,600,000         3,600          46,400              -           (32,549)          17,451
                                   ----------------   -----------   -------------   ------------   ---------------   --------------

  Forward stock split                   50,400,000        50,400         (50,400)             -                 -                -
  Comon stock for director
        services                            50,000            50          40,450              -                             40,500
  Return of shares to treasury          (4,000,000)       (4,000)                         4,000                                  -
  Net loss                                       -             -               -                         (705,520)        (705,520)
                                  ----------------   -----------   -------------   ------------   ---------------   --------------
Balance - June 30, 2009                 50,050,000        50,050          36,450          4,000          (738,069)        (647,569)
                                  -----------------   -----------   -------------   ------------   ---------------   --------------

  Net loss                                       -             -               -              -           (48,064)         (48,064)
                                  -----------------   -----------   -------------   ------------   ---------------   --------------
Balance - September 30, 2009            50,050,000      $ 50,050        $ 36,450        $ 4,000        $ (786,133)      $ (695,633)
                                  =================   ===========   =============   ============   ===============   ==============
</TABLE>


See the notes to these financial statements.

                                                      F-3



<PAGE>

<TABLE>
<CAPTION>

                                      BLUGRASS ENERGY, INC.
                                  (A Development Stage Company)
                                     STATEMENT OF CASH FLOWS
                                           (Unaudited)

                                                                                                           May 19, 2006
                                                                      For the Three Months Ended          (Inception) to
                                                                          September 30, 2009               September 30,
                                                                        2009               2008                2009
                                                                   ---------------    ---------------   --------------------
<S>                                                                <C>                <C>               <C>

Cash Flows from Operating Activities:
        Net Loss                                                        $ (48,064)          $ (6,263)            $ (786,133)
Adjustments to reconcile net loss to
         net cash used by operating activities:
        Depreciation                                                            -                  -                    747
        Common Stock for services                                               -                  -                 40,500
        Impairment of fixed assets                                              -                  -                  3,424
Adjustments to reconcile net loss to net cash used in operating activities:
        Increase in accounts payable                                        1,416                200                 54,333
        Increase in accrued interest payable                                4,790                  -                 16,640
        Increase in accrued liabilities, related party                     15,000                                    15,000
        Increase in notes payables for non-cash items                           -                  -                 41,250
                                                                   ---------------    ---------------   --------------------

Net Cash Used by Operating Activities                                     (26,858)            (6,063)              (614,239)
                                                                   ---------------    ---------------   --------------------

Cash Flows from Investing Activities
        Purchase of office equipment                                            -                  -                 (4,171)
                                                                   ---------------    ---------------   --------------------
Net Cash Used in Investing Activities                                           -                  -                 (4,171)
                                                                   ---------------    ---------------   --------------------

Cash Flows from Financing Activities:
        Proceeds from convertible promissory notes                              -                  -                416,666
        Payment of promissory note                                        (21,000)                                  (21,000)
        Proceeds from line of credit                                       68,732                  -                199,692
        Proceeds from issuance of common stock                                  -                  -                 50,000
                                                                   ---------------    ---------------   --------------------

Net Cash Provided by Financing Activities                                  47,732                  -                645,358
                                                                   ---------------    ---------------   --------------------

Net Increase (decrease) in Cash                                            20,874             (6,063)                26,948

Cash and Cash Equivalents - Beginning of Period                             6,074             14,227                      -
                                                                   ---------------    ---------------   --------------------

Cash and Cash Equivalents - End of Period                                $ 26,948            $ 8,164               $ 26,948
                                                                   ===============    ===============   ====================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
        Cash paid for interest expense                                        $ -                $ -                    $ -
                                                                   ===============    ===============   ====================
        Cash paid for income taxes                                            $ -                $ -                    $ -
                                                                   ===============    ===============   ====================
</TABLE>


See the notes to these financial statements.

                                      F-4

<PAGE>


                              BLUGRASS ENERGY, INC.
                          (A Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009
                                   (Unaudited)


NOTE 1 - BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES


Business

Blugrass Energy, Inc. (the Company) was incorporated under the laws of the State
of Nevada on May 19,  2006,  as Coastal  Media,  Inc.  On  October 1, 2008,  the
Company  amended its Article of  Incorporation  to change its name from  Coastal
Media Inc. to Blugrass Energy,  Inc. The Company was originally formed to engage
in the business of manufacturing, marketing, distributing and selling its marine
DVDs.

In  addition,   on  October  1,  2008,  the  Company  amended  its  Articles  of
Incorporation to change its name from "Coastal Media Inc." to "Blugrass  Energy,
Inc." As a result of the name of the change,  the Company's  trading  symbol was
changed to "BLUG."

On October 1, 2008, the Company affected a forward stock split of the issued and
outstanding  shares  of  common  stock on a fifteen  for one  basis.  Authorized
capital remained at 75,000,000 common shares and par value remained at $.001 per
share.  After the forward  split the Company had  54,000,000  shares  issued and
outstanding.

The  Company  is in the  development  stage.  Its  activities  to date have been
limited to capital formation, organization and development of its business plan.
The Company has commenced limited start up operations.


Basis of Presentation

Development Stage Company

The  Company  has not  earned  significant  revenues  from  planned  operations.
Accordingly,  the  Company's  activities  have been  accounted for as those of a
"Development  Stage  Company."  Among  the  disclosures  required  are  that the
Company's  financial  statements of  operations,  stockholders'  equity and cash
flows disclose activity since the date of the Company's inception.

Interim Presentation

In the opinion of the  management  of the Company,  the  accompanying  unaudited
financial statements include all material adjustments,  including all normal and
recurring  adjustments,  considered  necessary to present  fairly the  financial
position and  operating  results of the Company for the periods  presented.  The
financial  statements and notes do not contain certain  information  included in
the Company's  financial  statements for the year ended June 30, 2009. It is the
Company's  opinion  that  when  the  interim  financial  statements  are read in
conjunction with the June 30, 2009 Audited Financial Statements, the disclosures
are adequate to make the information  presented not misleading.  Interim results
are not necessarily indicative of results for a full year or any future period.

Significant Accounting Policies

Use of Estimates

The  preparation  of the  financial  statements in  conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at

                                      F-5

<PAGE>

                              BLUGRASS ENERGY, INC.
                          (A Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009
                                   (Unaudited)

the date of the financial  statements  and the reported  amounts of revenues and
expenses  during the reporting  periods.  Actual results could differ from those
estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of
three months or less and money market instruments to be cash equivalents.


Revenue Recognition

The Company  recognizes  revenue when it is earned and  expenses are  recognized
when they occur.

Loss Per Share

Earnings per Share requires dual  presentation of basic and diluted  earnings or
loss per share (EPS) with a  reconciliation  of the numerator and denominator of
the basic EPS  computation  to the numerator and  denominator of the diluted EPS
computation.  Basic EPS excludes  dilution.  Diluted EPS reflects the  potential
dilution that could occur if securities or other contracts to issue common stock
were  exercised  or  converted  into common stock or resulted in the issuance of
common stock that then shared in the earnings of the entity.

Income Taxes

A deferred  tax asset or liability  is recorded  for all  temporary  differences
between  financial  and tax  reporting  and net  operating  loss  carryforwards.
Deferred tax expense  (benefit)  results from the net change  during the year of
deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management,  it is more likely than not that some portion of all of the deferred
tax assets will be realized.  Deferred tax assets and  liabilities  are adjusted
for the effects of changes in tax laws and rates on the date of enactment.

Recent Accounting Pronouncements

In  June  2009,  the  Financial   Accounting  Standards  Board  ("FASB")  issued
Accounting  Standards  Codification  ("ASC") 105, "Generally Accepted Accounting
Principals"  (formerly Statement of Financial  Accounting Standards ("SFAS") No.
168, "The FASB Accounting Standards  Codification and the Hierarchy of Generally
Accepted Accounting Principles"). ASC 105 establishes the FASB ASC as the single
source of authoritative nongovernmental U.S. GAAP. The standard is effective for
interim and annual  periods  ending after  September  15,  2009.  We adopted the
provisions of the standard on September 30, 2009,  which did not have a material
impact on our financial statements.

There were various  other  accounting  standards and  interpretations  issued in
2009,  none of which are  expected  to have a material  impact on the  Company's
financial position, operations or cash flows.


NOTE 2 - GOING CONCERN AND MANAGEMENTS' PLAN

The Company's financial statements for the three months ended June 30, 2009 have
been prepared on a going concern basis,  which  contemplates  the realization of
assets and the settlement of liabilities and commitments in the normal course of
business.  The Company reported a net loss of $48,064 for the three months ended

                                      F-6

<PAGE>

                              BLUGRASS ENERGY, INC.
                          (A Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009
                                   (Unaudited)

September 30, 2009, and an accumulated  deficit during the development  stage of
$786,133 as of September  30, 2009.  At  September  30, 2009,  the Company had a
working  capital  deficit of $695,633  and the Company had no revenues  from its
activities during the three months ended September 30, 2009.

The  Company's  ability to continue as a going  concern may be  dependent on the
success of management's  plan discussed below.  The financial  statements do not
include any adjustments  relating to the  recoverability  and  classification of
assets or the amounts and  classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.

During the 2009  fiscal  year,  the Company  intends to continue  its efforts to
acquire,  either by lease,  farmout,  or  purchase,  an  interest  in oil or gas
prospects or properties for exploration, when available, with third parties. The
Company  intends to continue  to raise funds to support the efforts  through the
sale of its equity securities.

To the extent the Company's  operations are not sufficient to fund the Company's
capital  requirements,  the Company  may attempt to enter into a revolving  loan
agreement with financial  institutions  or attempt to raise capital  through the
sale of additional capital stock or through the issuance of debt. At the present
time,  the Company does not have a revolving  loan  agreement with any financial
institution  nor can the Company  provide any assurance  that it will be able to
enter into any such  agreement  in the future or be able to raise funds  through
the further issuance of debt or equity in the Company.

NOTE 3.  NOTES PAYABLE

During  the year  ended  June 30,  2009,  the  Company  issued,  its then  Chief
Executive Officer and Director,  a 4% unsecured  promissory note for $21,000 for
owed compensation in connection with her services. The promissory note had a due
date of August 31, 2009. In July 2009, the Company paid the note in full.

During the year ended June 30, 2009, the Company issued a former shareholder,  a
5% unsecured commercial  promissory note of $20,250 for services performed.  The
promissory  note had a due date of May 6,  2010.  At  September  30,  2009,  the
Company  owed  principal of $20,250 and accrued  interest of $122 in  connection
with  the  promissory  note.  The  Company  has not made  any  payments  on this
promissory note.

NOTE 4.  LINE OF CREDIT

During the year ended June 30,  2009,  entered in a Line of Credit  Agreement to
provide up to $250,000.  The Line of Credit has an interest rate of 6% per annum
and a maturity date of December 31, 2011. At September 30, 2009, the Company had
received advances of $199,692 under the Line of Credit.  The Company has accrued
interest  of $342  during  the  three  months  ended in  September  30,  2009 in
connection with these funds. At September 30, 2009, the Company had not made any
payments on the Line of Credit.







                                      F-7

<PAGE>

                              BLUGRASS ENERGY, INC.
                          (A Development Stage Company)
                        NOTES TO THE FINANCIAL STATEMENTS
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009
                                   (Unaudited)


NOTE 5.  CONVERTIBLE PROMISSORY NOTES

During the year ended June 30,  2009,  in exchange  for funds of  $416,666,  the
Company  executed 6% unsecured  convertible  commercial  promissory  notes.  The
promissory  notes  are due on  February  27,  2009.  The  promissory  notes  are
exchangeable  for a total of 466,666 shares of the Company's  restricted  common
stock.  During the three months ended  September 30, 2009,  the Company  accrued
interest of $16,087 in connection with the promissory notes.

NOTE 6.  STOCKHOLDERS' EQUITY (DEFICIT)


During the three months ended  September 30, 2009, the Company did not issue any
shares of its restricted common stock.

NOTE 7.  SUBSEQUENT EVENTS

On October  12,  2009,  Blugrass  has closed the  acquisition  of the  Robinhood
L.L.C., (Marks and Garner Productions)  properties and corporate assets, located
in and around the Cave Pool Unit in Eddy County, New Mexico.

The Company has  purchased a 100% working  interest and other rights  associated
with the acreage in and around the Cave Pool Unit  located in Eddy  County,  New
Mexico,  comprising  approximately 2,800 acres held by Robinhood L.L.C.,  (Marks
and Garner  Productions).  The Company  will receive all  operating  rights with
respect to the oil and gas leases  owned by Robinhood  L.L.C.  (Marks and Garner
Productions).  This  includes,  all equipment used to produce and sell crude oil
and  natural  gas on the  acreage  owned by  Robinhood  L.L.C.(Marks  and Garner
Productions).

Consideration  for this acquisition  consists of cash in the amount of $550,000,
with terms  consisting of  incremental  cash payments  between  October 2009 and
February 2010.

The  Company  has  evaluated  it  activities  subsequent  to the  quarter  ended
September 30, 2009 and found no other reportable subsequent events.














                                      F-8

<PAGE>


Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations.

Forward-Looking Statements

This  Quarterly  Report on Form 10-Q contains  forward-looking  statements.  Any
statements  contained  herein that are not statements of historical  fact may be
deemed to be forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act. The words "believes,"  "anticipates," "plans," "seeks,"
"expects,"   "intends"   and   similar   expressions   identify   some   of  the
forward-looking  statements.  Forward-looking  statements  are not guarantees of
performance or future results and involve risks,  uncertainties and assumptions.
The  factors  discussed  elsewhere  in this Form 10-Q could  also  cause  actual
results  to  differ   materially   from  those   indicated   by  the   Company's
forward-looking  statements.  The Company  undertakes  no obligation to publicly
update or revise any forward-looking statements.

Business and Plan of Operations

We had no operations  prior to and we had no revenues during the year ended June
30, 2009.  We have minimal  capital and minimal  cash.  We are illiquid and need
cash infusions from investors or shareholders to provide capital,  or loans from
any sources.

We are an oil and gas exploration and development  company focused on creating a
portfolio of North American  assets that exhibit  consistent,  predictable,  and
long-lived production capabilities.  We plan to build value for its shareholders
through the  acquisition  and  development  of gas and oil assets  that  contain
proven reserves in domestic areas where reserves can be economically produced at
a low risk to us relying on joint  venture  partners to supply most of the funds
needed to explore or develop these properties.

Our  main  emphasis  will  be  to  acquire   production  or  revenue  generating
opportunities  either by lease purchase or farmout,  when available,  with third
parties and industry partners.

Decisions  regarding future  participation  in exploration  wells or geophysical
studies or other activities will be made on a case-by-case basis. We may, in any
particular   case,   decide  to   participate  or  decline   participation.   If
participating,  we may pay our  proportionate  share of costs  to  maintain  our
proportionate  interest  through  cash  flow  or debt or  equity  financing.  If
participation  is  declined,  we may  elect  to  farmout,  non-consent,  sell or
otherwise  negotiate  a  method  of cost  sharing  in  order  to  maintain  some
continuing interest in the prospect.

On October  12,  2009,  Blugrass  has closed the  acquisition  of the  Robinhood
L.L.C., (Marks and Garner Productions)  properties and corporate assets, located
in and around the Cave Pool Unit in Eddy County, New Mexico.

The Company has  purchased a 100% working  interest and other rights  associated
with the acreage in and around the Cave Pool Unit  located in Eddy  County,  New
Mexico,  comprising  approximately 2,800 acres held by Robinhood L.L.C.,  (Marks
and Garner  Productions).  The Company  will receive all  operating  rights with
respect to the oil and gas leases  owned by Robinhood  L.L.C.  (Marks and Garner
Productions).  This  includes,  all equipment used to produce and sell crude oil
and  natural  gas on the  acreage  owned by  Robinhood  L.L.C.(Marks  and Garner
Productions).

Consideration  for this acquisition  consists of cash in the amount of $550,000,
with terms  consisting of  incremental  cash payments  between  October 2009 and
February 2010.


                                       1
<PAGE>

We will need  substantial  additional  capital to support  our  proposed  future
energy  operations.  We have no revenues.  We have no  committed  source for any
funds  as of date  here.  No  representation  is made  that  any  funds  will be
available when needed.  In the event funds cannot be raised when needed,  we may
not be able to carry out our business  plan,  may never achieve sales or royalty
income, and could fail in business as a result of these uncertainties.

Results of Operations

For the Three Months Ended September 30, 2009 compared to the Three Months Ended
September 30, 2008

We are still in our development stage and have no revenues to date.

We incurred operating expenses of $43,274 and $6,263 for the three month periods
ended March 31, 2009 and 2008, respectively. The increase of $37,011 is a result
of the  increase  of $33,665 in  professional  fees and the $3,346  general  and
administrative  expenses  over the prior  period.  The increase in our operating
expenses for the three  months  ended June 30,  2009,  was a result of increased
administrative  expenses in connection with our efforts to find possible oil and
gas properties.

During the three months ended  September  30, 2009,  we recognized a net loss of
$48,064  compared to a net loss of $6,263 for the three months  ended  September
30,  2008.  The  increase  of $41,801  was a result of the  $33,665  increase in
operational  expenses as discussed  above  combined with the $4,790  increase in
interest expenses.

Liquidity and Capital Resources

At September 30, 2009, we had total assets of $26,948 consisting solely of cash.
At September 30, 2009, we had total current liabilities of $722,581,  consisting
of accounts payable of $54,333, accrued interest of $16,640, accrued services of
$15,000,  $20,250 in notes payables,  $199,692 in a line of credit, and $416,666
in convertible promissory notes.

During the three months  ended  September  30, 2009,  we used cash of $26,858 in
operations.  During the three months ended September 30, 2008, we used $6,063 in
operations.  During the six  months  ended  September  30,  2009,  net losses of
$48,064 were not adjusted  for any non-cash  items.  During the six months ended
September  30,  2008,  net losses of $6,263 were not  adjusted  for any non-cash
items.

During the three months ended  September  30, 2009 and 2008, we did not have any
cash flows from investment activities.

During the three months ended  September 30, 2009, we received  $47,732 from our
financing  activities.  During the three months ended September 30, 2008, we did
not receive or use funds in our financing activities.

During  the year  ended  June 30,  2009,  the  Company  issued,  its then  Chief
Executive Officer and Director,  a 4% unsecured  promissory note for $21,000 for
owed compensation in connection with her services. The promissory note had a due
date of August 31, 2009. In July 2009, the Company paid the note in full.

During the year ended June 30,  2009,  entered in a Line of Credit  Agreement to
provide up to $250,000.  The Line of Credit has an interest rate of 6% per annum
and a maturity date of December 31, 2011. At September 30, 2009, the Company had
received advances of $199,692 under the Line of Credit.  The Company has accrued
interest  of $342  during  the  three  months  ended in  September  30,  2009 in
connection with these funds. At September 30, 2009, the Company had not made any
payments on the Line of Credit.


                                       2
<PAGE>

Our auditors have expressed their doubt about our ability to continue as a going
concern unless we are able to generate profitable operations.

Off-Balance Sheet Arrangements

We do not have any off-balance  sheet  arrangements  that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources that is material to investors.

Need for Additional Financing

We do not have capital  sufficient to meet our cash needs.  We will have to seek
loans or equity placements to cover such cash needs. Once exploration commences,
our needs for additional financing is likely to increase substantially.

No commitments to provide  additional  funds have been made by our management or
other stockholders.  Accordingly,  there can be no assurance that any additional
funds will be  available  to us to allow it to cover our expenses as they may be
incurred.

ITEM 3.  QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is
defined in Rules 13a 15(e) and 15d-15(e)  under the  Securities  Exchange Act of
1934,  as  amended  (the  "Exchange  Act"))  that are  designed  to ensure  that
information  required to be disclosed in our reports  under the Exchange Act, is
recorded,  processed,  summarized and reported within the time periods  required
under  the  SEC's  rules and forms  and that the  information  is  gathered  and
communicated to our management, including our Chief Executive Officer (Principal
Executive Officer) and Principal Financial Officer, as appropriate, to allow for
timely decisions regarding required disclosure.

As required by SEC Rule 15d-15(b),  Mr. Berscht our Chief Executive  Officer and
Principal  Accounting  Officer,  carried out an evaluation under the supervision
and with the participation of our management, of the effectiveness of the design
and operation of our disclosure controls and procedures pursuant to Exchange Act
Rule  15d-14 as of the end of the period  covered by this  report.  Based on the
foregoing evaluation, Mr. Berscht has concluded that our disclosure controls and
procedures  are  effective  in  timely  alerting  them to  material  information
required  to be  included  in  our  periodic  SEC  filings  and to  ensure  that
information  required to be disclosed in our periodic SEC filings is accumulated
and communicated to our management,  including our Chief Executive  Officer,  to
allow  timely  decisions  regarding  required  disclosure  as a  result  of  the
deficiency in our internal control over financial reporting discussed below.

ITEM 4T. CONTROLS AND PROCEDURES

Management's Quarterly Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal
control over financial  reporting for the company in accordance  with as defined


                                       3
<PAGE>

in Rules  13a-15(f) and 15d-15(f)  under the Exchange Act. Our internal  control
over financial  reporting is designed to provide reasonable  assurance regarding
the  reliability  of  financial  reporting  and  the  preparation  of  financial
statements  for  external   purposes  in  accordance  with  generally   accepted
accounting  principles.  Our internal control over financial  reporting includes
those policies and procedures that:

     (1)  pertain to the  maintenance  of records that,  in  reasonable  detail,
          accurately and fairly reflect the transactions and dispositions of our
          assets;

     (2)  provide  reasonable   assurance  that  transactions  are  recorded  as
          necessary to permit preparation of financial  statements in accordance
          with generally accepted accounting  principles,  and that our receipts
          and expenditures are being made only in accordance with authorizations
          of our management and directors; and

     (3)  provide reasonable  assurance regarding prevention or timely detection
          of  unauthorized  acquisition,  use or  disposition of our assets that
          could have a material effect on our financial statements.

Management's  assessment  of  the  effectiveness  of the  registrant's  internal
control over financial  reporting is as of the three months ended  September 30,
2009. We believe that internal control over financial reporting is effective. We
have not identified any, current material weaknesses  considering the nature and
extent of our current operations and any risks or errors in financial  reporting
under current operations.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

This  annual  report  does not include an  attestation  report of the  Company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public accounting firm pursuant to temporary rules of the Securities
and Exchange  Commission  that permit the Company to provide  only  management's
report in this annual report.

There  was no change in our  internal  control  over  financial  reporting  that
occurred during the fiscal quarter ended September 30, 2009, that has materially
affected,  or is reasonably  likely to materially  affect,  our internal control
over financial reporting.


                           PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

Blugrass Energy,  Inc. is not currently involved in any legal proceedings and we
are not aware of any pending or potential legal actions.

Item 1A.  Risk Factors.

Not applicable to smaller reporting companies.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds.

There were no sales of unregistered securities during the period covered by this
report.


                                       4
<PAGE>

Item 3.  Defaults Upon Senior Securities.

There were no defaults upon senior  securities during the period covered by this
report.

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

There were no matters  submitted to a vote of security holders during the period
covered by this report.

Item 5.  Other Information.

There was no information  required to be disclosed on Form 8-K during the period
covered by this report.

Item 6.  Exhibits.

Exhibits.  The  following is a complete  list of exhibits  filed as part of this
Form 10-Q.  Exhibit  numbers  correspond  to the numbers in the Exhibit Table of
Item 601 of Regulation S-K.

     Exhibit 31.1   Certification  of Chief  Executive and Principal  Accounting
                    Officer pursuant to Section 302 of the Sarbanes-Oxley Act

     Exhibit 32.1   Certification of Principal  Executive and Accounting Officer
                    pursuant to Section 906 of the Sarbanes-Oxley Act






















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<PAGE>



                                   SIGNATURES

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

November 13, 2009                   Blugrass Energy, Inc. (Registrant)



                                    By: /s/ John Kenney Berscht
                                        ------------------------------
                                        John Kenney Berscht,
                                        Chief Executive Officer
                                        and Principal Accounting Officer























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