~~SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549~~UNITED STATES

~~FORM~~SECURITIES AND ~~10-Q~~EXCHANGE COMMISSION

ýWASHINGTON, D.C. ~~QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~20549

~~For the quarterly period ended: May 31, 2006~~FORM 10-Q

~~o TRANSITION~~ý QUARTERLY REPORT PURSUANT ~~UNDER~~TO SECTION 13 OR 15(d) OF ~~THESECURITIES~~THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly ~~transition~~ period ~~from to .~~ended: November 30, 2007

~~Commission~~o TRANSITION ~~File~~REPORT PURSUANT ~~Number:~~TO ~~000-50428~~SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~MAVERICK~~For the transition ~~OIL~~period ~~AND GAS, INC~~from to . ~~(Exact Name of Small Business Issuer as Specified in Its Charter)~~

Nevada		98-0377027
(State or Other Jurisdiction ofIncorporation or Organization)		(IRS Employer Identification No.)

Commission File Number: 000-50428

~~888~~MAVERICK OIL E.AND ~~Las Olas Boulevard~~GAS, ~~Suite 400Fort Lauderdale, Florida 33301~~INC.

(~~954~~Exact Name of Registrant as Specified in Its Charter) ~~463-5707~~

N/A

Nevada		98-0377027
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

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

300 SE 2^nd Street, Suite 860, Fort. Lauderdale, FL	33301
(Address of Principal Executive Offices)	(Zip Code)

~~Indicate~~(954) by463-5707 ~~check~~(Registrant’s ~~mark~~Telephone ~~whether the registrant is a large accelerated filer~~Number, anIncluding ~~accelerated~~Area ~~filer, or a non-accelerated filer. See definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one~~Code):

~~Large~~N/A ~~accelerated~~(Former ~~filer o Accelerated~~Name, ~~filer o Non-accelerated~~Former ~~filer ý~~Address, and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant is(1) ahas ~~shell~~filed ~~company~~all ~~(as~~reports ~~defined~~required into ~~Rule~~be ~~12b-2~~filed by Section 13 or 15(d) of the Exchange Act 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 o x No □ ý

~~APPLICABLE~~Indicate by ~~ONLY~~check TOmark ~~CORPORATE~~whether ~~ISSUERS~~the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

~~Indicate~~Large accelerated ~~the~~filer □ Accelerated filer □ Non-accelerated filer number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: There were 99,446,116 issued and outstanding shares of the registrant’s common stock, par value $.001 per share, as of July 12, 2006.ý

~~MAVERICK~~Indicate by ~~OIL~~check ~~AND~~mark ~~GAS,~~whether ~~INC~~the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No □

~~TABLE~~There were OF118,142,860 ~~CONTENTS~~issued and outstanding shares of the registrant’s common stock, par value $.001 per share,

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets (Unaudited)	1
	Consolidated Statements of Operations — (Unaudited)	2
	Consolidated Statements of Cash Flows — (Unaudited)	3
	Notes to Consolidated Financial Statements — (Unaudited)	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	23
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Submission of Matters to a Vote of Security Holders	26
Item 5.	Other Information	26
Item 6.	Exhibits	27

as of January 22, 2008.

iMAVERICK OIL AND GAS, INC.

~~MAVERICK~~TABLE OF ~~OIL AND GAS, INC AND SUBSIDARIESCONSOLIDATED BALANCE SHEETS(Unaudited)~~CONTENTS

	May 31,2006				August 31,2005
PART I. FINANCIAL INFORMATION
ASSETS
Item 1.	Financial Statements
Current Assets:
	Consolidated Balance Sheets (Unaudited)			1
Cash	$	1,480,581			$	3,008,854
	Consolidated Statements of Operations (Unaudited)			2
Accounts receivable		1,484,657				881,410
	Consolidated Statements of Cash Flows (Unaudited)			3
Prepaid drilling costs and advances to operators		2,118,381				501,459
	Notes to Consolidated Financial Statements (Unaudited)			7
Total Current Assets		5,083,619				4,391,723
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			15
Property, Plant and Equipment:
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			19
Oil and natural gas properties, successful efforts method of accounting:
Item 4.	Controls and Procedures			19
Proved properties, net		9,742,788				5,903,686
PART II. OTHER INFORMATION
Unproved properties not being amortized, net of impairment		21,117,914				5,249,902
Item 1A.	Risk Factors			19
Properties, Furniture and equipment, net of accumulated depreciation of $72,711 and $18,199		827,164				221,285
Item 6.	Exhibits			20
Total Property, Plant and Equipment, Net		31,687,866				11,374,873
	Signatures			20
Prepaid expenses and other assets:
Prepaid loan fees, net of amortization of $319,432		2,792,790				—
Other assets		204,932				342,768
Total prepaid expenses and other assets, Net		2,997,722				342,768
Investment in limited partnership		—				962,199
Total Assets	$	39,769,207			$	17,071,563
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued expenses	$	8,072,838			$	3,060,657
Payables for oil and gas interests		355,842				353,265
Notes payable		32,047				48,451
Derivative Liability		22,979,470				—
Current Portion of long-term debt		4,166,667				—
Total Current Liabilities		35,606,864				3,462,373
Non-Current Liabilities:
Convertible debentures, Net of discount		6,605,878				—
Other liabilities		18,000				18,000
Total non-Current Liabilities		6,623,878				18,000
Minority Interest		1,281,802				889,475
Stockholders’ Equity (Deficit):
Preferred stock, $.001 par value, authorized 10,000,000 shares; none issued and outstanding		—				—
Common stock, $.001 par value, authorized 200,000,000 shares; 99,022,565 shares issued and outstanding May 31, 2006 and 96,472,565 shares issued and outstanding at August 31, 2005		99,023				96,473
Additional paid-in capital		51,705,499				45,687,506
Deferred compensation		—				(3,735,956	)
Accumulated deficit		(55,547,859	)			(29,346,308	)
Total Stockholders’ Equity (Deficit)		(3,743,337	)			12,701,715
Total Liabilities and Stockholders’ Equity (Deficit)	$	39,769,207			$	17,071,563

~~See~~MAVERICK OIL ~~accompanying~~AND ~~Notes~~GAS, toINC. ~~Consolidated~~AND ~~Financial Statements.~~SUBSIDIARIES

1CONSOLIDATED BALANCE SHEETS

~~MAVERICK OIL AND GAS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS~~(Unaudited)

	Three Months EndedMay 31,						Nine Months EndedMay 31,
ASSETS	November 30, 2007			August 31, 2007
	2006			2005			2006			2005
Current Assets:
Oil and gas sales revenues	$	665,156		$	46,129		$	1,838,644		$	46,129
Cash and cash equivalents	$	755,104		$	1,962,747
Expenses:
Accounts receivable		114,134			7,882
Lease operating expenses		390,688			82,238			702,808			82,238
Total Current Assets		869,238			1,970,629
Exploration costs		3,177			2,104,359			65,614			2,174,208
Property, Plant and Equipment:
General and administrative		2,172,699			9,250,687			11,122,975			10,001,847
Oil and natural gas properties, successful efforts method of accounting:
Depreciation, depletion and amortization		177,106			51,070			1,082,580			109,822
Unproved properties not being amortized		24,550,823			24,718,044
Impairment		—			3,018,306			—			5,710,416
Buildings, furniture and equipment, net of accumulated depreciation of $191,061 and $139,228		329,918			389,523
Loss on equity investment		—			18,186			—			77,882
Total Property, Plant and Equipment, Net		24,880,741			25,107,567
Total expenses		2,743,670			14,524,846			12,973,977			18,156,413
Other assets and prepaid loan fees		446,859			508,110
Loss before minority interest		(2,078,514	)		(14,478,717	)		(11,135,333	)		(18,110,284	)
Assets held for sale		—			2,000,000
Minority interest		(10,238	)		501,666			(64,566	)		996,994
Total Assets	$	26,196,838		$	29,586,306
Loss from operations		(2,088,752	)		(13,977,051	)		(11,199,899	)		(17,113,290	)
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Other income (expense):
Current Liabilities:
Change in fair value of derivatives		655,910			—			(12,903,519	)		—
Payables and Accrued Expenses:
Interest expense		(723,507	)		(837,495	)		(2,166,407	)		(2,056,073	)
Accounts payable and accrued expenses	$	749,873		$	4,872,726
Interest income		14,436			24,553			68,274			24,553
Liabilities of held for sale and discontinued operations		—			42,704
Total other income (expense)		(53,161	)		(812,942	)		(15,001,652	)		(2,031,520	)
Other liabilities		—			647,641
Net loss to common shareholders	$	(2,141,913	)	$	(14,789,993	)	$	(26,201,551	)	$	(19,144,810	)
Total Payables and Accrued Expenses		749,873			5,563,071
Basic and diluted loss per common share	$	(0.02	)	$	(0.15	)	$	(0.27	)	$	(0.25	)
Short-term secured convertible debenture		28,546,192			27,992,523
Weighted average common shares outstanding		98,976,015			95,831,341			98,348,755			75,475,782
Total Short-term Debt		28,546,192			27,992,523
Total Current Liabilities		29,296,065			33,555,594
Long-Term Liabilities:
Asset retirement obligation		33,190			33,190
Total Long-Term Liabilities		33,190			33,190
Total Liabilities	$	29,329,255		$	33,588,784
Stockholders’ Equity (Deficit)
Preferred stock, $.001 par value, authorized 10,000,000 shares; none issued and outstanding		—			—
Common stock, $.001 par value, authorized 335,000,000 shares; 118,142,860 shares issued and outstanding at November 30, 2007 and 108,428,360 shares issued and outstanding at August 31, 2007		118,143			108,429
Additional paid-in capital		58,478,333			58,098,699
Accumulated deficit		(61,728,893	)		(62,209,606	)
Total Stockholders’ Equity (Deficit)		(3,132,417	)		(4,002,478	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	26,196,838		$	29,586,306

See accompanying Notes to Consolidated Financial Statements.

MAVERICK OIL AND GAS, INC. AND ~~SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)~~SUBSIDIARIES

	Nine Months EndedMay 31,
	2006			2005
Cash Flows from Operating Activities:
Net loss	$	(26,201,551	)	$	(19,144,810	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share based compensation		5,813,266			8,143,247
Minority interest		64,566			(996,994	)
Depreciation, depletion and amortization		1,082,580			51,066
Impairment		—			5,710,416
Loss on equity investment		—			77,882
Interest expense and amortization of debt discount		1,895,589			2,158,506
Change in fair value of derivatives		12,903,519			—
Changes in working capital:
Increase in accounts receivable		(603,247	)		(40,538	)
Increase in prepaid expenses, advances to operators and other		(1,479,087	)		(1,419,324	)
Increase in accounts payable and accrued expenses		2,420,099			2,533,749
Net cash used in operating activities		(4,104,266	)		(2,926,800	)
Cash Flows from Investing Activities:
Purchase of oil and gas properties		(18,630,138	)		(12,054,378	)
Acquisition of office building		(547,800	)		—
Camden Acquisition Deposit		—			(5,000,000	)
Purchase of furniture and equipment		(108,512	)		(121,005	)
Net cash used in investing activities		(19,286,450	)		(17,175,383	)
Cash Flows from Financing Activities:
Proceeds from issuance of common stock, net of issuance costs		1,860,000			25,364,936
Proceeds from issuance of debt		21,154,850			1,600,000
Proceeds from minority interest owner		863,997			601,666
Repayment of debt		(2,016,404	)		(613,866	)
Net cash provided by financing activities		21,862,443			26,952,736
Net Increase (Decrease) in Cash		(1,528,273	)		6,850,553
Cash at the Beginning of Period		3,008,854			596,748
Cash at the End of Period	$	1,480,581		$	7,447,301
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	396,329		$	—
Taxes	$	—		$	—

CONSOLIDATED STATEMENTS OF OPERATIONS

~~See accompanying Notes to Consolidated Financial Statements.~~(Unaudited)

		Three Months Ended November 30,
		2007			2006

Oil and gas sales revenues		$	29,021		$	73,629

Expenses:
Lease operating expenses		62,341			(65,850)
Exploration costs		10,060			—
Lease termination expenses		162,438			—
General and administrative		775,419			1,438,230
Depreciation, depletion and amortization		51,833			120,205
Total expenses		1,062,091			1,492,585

Loss from continuing operations before other income (expense)		(1,033,070		)	(1,418,956)

Other income (expense):
Gain on extinguishment of trade payables		1,616,922			—
Change in fair value of derivatives		—			10,986,681
Interest expense and discount amortization		(561,051		)	(2,841,443
Interest income		5,402			1,046
Total other income (expense)		1,061,273			8,146,284

Income from continuing operations		28,203			6,727,328

Discontinued Operations:
Net income from operations of discontinued segment, including gain on disposal of $459,740 at November 30, 2007		452,510			207,541

Income before minority interest		480,713			6,934,869

Minority interest in discontinued operations		—			(76,183)

Net Income (Loss)		$	480,713		$	6,858,686

Earnings per share information:
		Three months ended November 30,
		2007			2006
Basic Earnings per common share:
Earnings from continuing operations	$	0.00		$	0.06
Earnings from discontinued operations, net of minority interest	$	0.00		$	0.00
Earnings per common share - basic	$	0.00		$	0.06

Weighted average common shares outstanding - basic	$	115,260,536		$	102,351,331

Diluted Earnings per common share:
Earnings from continuing operations	$	0.00		$	0.03
Earnings from discontinued operations, net of minority interest	$	0.00		$	0.03
Earnings per common share	$	0.00		$	0.00

Weighted average common shares outstanding - diluted		223,100,536			102,351,331

~~MAVERICK~~See accompanying ~~OIL~~Notes ~~AND~~to ~~GAS,~~Consolidated ~~INC.~~Financial ~~AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)~~ Statements.

~~NOTE 1 — BASIS OF PRESENTATION~~ 4

~~The~~MAVERICK OIL ~~unaudited~~AND ~~consolidated financial statements included herein have been prepared by Maverick Oil and Gas~~GAS, ~~Inc~~INC. ~~(“us”,~~AND “we” or the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature. Although we believe that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to such rules and regulations. SUBSIDIARIES

~~Certain~~CONSOLIDATED STATEMENTS ~~reclassifications~~OF ~~have~~CASH ~~been made to the prior years’ financial statements to conform with the current presentation.~~FLOWS

These financial statements should be read in conjunction with the financial statements and the notes thereto included in our 2005 Annual Report on Form 10-KSB filed with the Securities and Exchange Commission. The results of operations for interim periods are not necessarily indicative of the results for any subsequent quarter or the entire fiscal year ending August 31, 2006.(Unaudited)

NOTE 2 — STOCK BASED COMPENSATION

	Three Months Ended November 30,
	2007			2006
Cash Flows from Operating Activities:
Loss from continuing operations	$	28,203		$	6,727,328
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		97,913			391,586
Minority interest		—			76,183
Interest expense and discount amortization		561,051			2,841,443
Depreciation, depletion and amortization		51,833			120,205
Change in fair value of derivatives		—			(10,986,681	)
Lease termination expenses		162,438			—
Exploration costs		10,060			—
Loss on sale of vehicles		—			11,761
Loss on sale of building and furniture		6,325			—
Gain on extinguishment of trade payables		(1,616,922	)		—
Changes in working capital:
Increase in accounts receivable		(106,251	)		(1,462,985	)
Decrease in prepaid expenses, advances to operators and others		26,523			47,470
(Decrease) in accounts payable and accrued expenses		(865,920	)		(2,832,209	)
Net cash used in operating activities		(1,644,747	)		(5,065,899	)

Cash Flows from Investing Activities:
Purchase of oil and gas properties		—			(2,532	)
Proceeds from sale of vehicles		—			32,625
Proceeds from sale of building		36,174			186,659
Net cash provided by investing activities		36,174			216,752

Cash Flows from Financing Activities:
Proceeds from issuance of Secured Convertible Debentures, net of issuance costs		—			5,850,000
Proceeds from minority interest owner		—			658,000
Net cash provided by (used in) financing activities		—			6,508,000

~~During~~See accompanying ~~February~~Notes 2005, the Company adopted a Stock Incentive Plan (the “Stock Incentive Plan”) which covers 10,000,000 shares of common stock. Under its terms, employees, officers and directors of the Company and its subsidiaries are currently eligible to ~~receive~~Consolidated ~~non-qualified~~Financial ~~stock options, restricted stock awards and incentive stock options within the meaning of Section 422 Internal Revenue Code of 1986 (the “Code”)~~Statements. In addition, advisors and consultants who perform services for the Company or its subsidiaries are eligible to receive non-qualified stock options under the Stock Incentive Plan. The Stock Incentive Plan is administered by the Board of Directors or a committee designated by the Board of Directors.

All stock options granted under the Stock Incentive Plan are exercisable for a period of up to ten years from the date of grant. The Company may not grant incentive stock options pursuant to the Stock Incentive Plan at exercise prices which are less than the fair market value of the common stock on the date of grant. The term of an incentive stock option granted under the Stock Incentive Plan to a stockholder owning more than 10% of the issued and outstanding common stock may not exceed five years and the exercise price of an incentive stock option granted to such stockholder may not be less than 110% of the fair market value of the common stock on the date of grant. The Stock Incentive Plan contains certain limitations on the maximum number of shares of the common stock that may be awarded in any calendar year to any one individual for the purposes of Section 162(m) of the Code.5

InMAVERICK OIL ~~addition~~AND ~~to the stock options covered by the Stock Incentive Plan~~GAS, ~~the~~INC. ~~Company~~AND ~~has outstanding options to purchase 4,580,000 shares of common stock.~~SUBSIDIARIES

~~Prior~~CONSOLIDATED STATEMENTS toOF ~~September~~CASH 1, 2005 the Company accounted for stock based compensation under Statement of Financial Accounting Standards No. 123 “Accounting for Stock-Based Compensation” (“FAS 123”). As permitted under this standard, compensation cost was recognized using the intrinsic value method described in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Effective December 1, 2005, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (“FAS 123R”) and applied the provisions of the Securities and Exchange Commission Staff Accounting Bulletin No. 107 using the FLOWS

4(Unaudited)

modified-prospective transition method. Prior periods were not restated to reflect the impact of adopting the new standard. As a result of the adoption of FAS 123R, stock-based compensation expense recognized during the quarter ended May 31, 2006 includes compensation expense for all share-based payments granted on or prior to, but not yet vested as of August 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of FAS 123, and compensation cost for all share-based payments granted on or subsequent to September 1, 2005, based on the grant date fair value estimated in accordance with the provisions of FAS 123R.

	Three Months Ended November 30,
	2007		2006
Cash Flows from Discontinued Operations:
Net cash provided by (used in) operating activities		(590,505)		1,372,118
Net cash provided by (used in) investing activities		700,000		(3,665,898)
Net cash provided by (used in) financing activities		291,435		—
Net cash provided by (used in) discontinued operations		400,930		(2,293,780)

Net Increase Decrease in Cash		(1,207,643)		(634,927)
Cash at the Beginning of Period		1,962,747		2,212,007
Cash at the End of Period	$	755,104	$	1,577,080

During the quarter ended May 31, 2006, the Company recognized stock-based compensation expenses of $589,488 related to outstanding stock options according to the provisions of FAS 123R, using the modified-prospective transition method.

	Three Months Ended November 30,
	2007		2006
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest	$	—	$	—
Taxes	$	—	$	—
Supplemental disclosure of non-cash investing and financing activities:
Discharge of Payables	$	1,519,192	$	—
Discount of note due to derivative liability	$	—	$	2,268,738
Warrants issued for services	$	—	$	130,968
Stock issued for accrued interest	$	—	$	378,082

~~Prior~~See accompanying Notes to ~~the~~Consolidated Financial ~~adoption of FAS 123R and for the nine months ended May 31, 2006, no tax benefits from the exercise of stock options has been recognized as no options have been exercised~~Statements. ~~Any future excess tax benefits derived from the exercise of stock options will be recorded prospectively and reported as cash flows from financing activities in accordance with FAS 123R.~~

The following table illustrates the pro forma effect on operating results and per share information had the Company accounted for share-based compensation in accordance with FAS 123R for the following periods during our prior fiscal year. All options stock-based compensation options granted to date have been issued on or after March 10, 2005:6

	Three MonthsEndedMay 31, 2005			Nine MonthsEndedMay 31, 2005
Net loss, as reported	$	(14,789,993	)	$	(19,144,810	)
Plus: Stock-based employee compensation expense included in reported net income, net of related tax effects		1,283,344			1,283,344
Less: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(453,094	)		(453,094	)
Pro forma net loss	$	(13,959,743	)	$	(18,314,560	)
Net loss per common share:
Net loss per common share, as reported	$	(0.15	)	$	(0.25	)
Net loss per common share, pro forma	$	(0.15	)	$	(0.24	)

MAVERICK OIL AND GAS, INC. AND SUBSIDIARIES

~~The~~NOTES TO ~~fair~~CONSOLIDATED ~~value~~FINANCIAL ~~of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:~~STATEMENTS

	May 31,2006			May 31,2005
Expected life (years)		2.98			2.98
Risk-free interest rate		3.96	%		3.29	%
Expected Volatility		65.20	%		41.77	%
Expected Dividend yield		0.0	%		0.0	%

(Unaudited)

~~The range of risk free interest rates used in the Black-Scholes option pricing Model (the “Model”) was 3~~NOTE 1.2% BASIS toOF ~~4.6%. The range of expected volatility used in the Model was 41.3% to 80.7%.~~PRESENTATION

5The unaudited condensed consolidated financial statements included herein have been prepared by Maverick Oil and Gas, Inc. (“Maverick” or the “Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments that are, in the opinion of management, necessary to fairly present such information. All such adjustments are of a normal recurring nature. Although Maverick believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including a description of significant accounting policies normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), have been condensed or omitted pursuant to such rules and regulations.

AThese financial ~~summary~~statements ofshould be read in conjunction with the ~~options~~financial ~~issued~~statements and bythe notes thereto included in Maverick’s 2007 Annual Report on Form 10-K filed with the ~~Company~~Securities and Exchange Commission. The results of operations for interim periods are not necessarily indicative of the ~~nine~~results ~~months~~for ~~ended~~any ~~May~~subsequent quarter ~~31,~~or ~~2006~~the isentire asfiscal ~~follows:~~year ending August 31, 2008.

	Options		Weighted-AverageExercisePrice per Share		Weighted-AverageRemainingContractualTerm(in years)		AggregateIntrinsicValue
Outstanding on August 31, 2005		4,340,000	$	2.26		8.28
Granted		240,000	$	1.14		9.69
Exercised		—	$	—
Forfeited/Canceled		—	$	—
Outstanding on May 31, 2006		4,580,000	$	2.20		8.35	$	19,200
Exercisable on May 31, 2006		450,000	$	1.50		1.62	$	—

Certain reclassifications have been made to the prior year amounts to conform with the current presentation.

~~The weighted-average grant-date fair value for the nine months ended May 31, 2006 and May 31, 2005 was $0~~NOTE 2.91/share and $0.94/share, respectively. No options were exercised or vested during the periods ended May 31, 2006 and May 31, 2005. The unrecognized share based compensation cost related to stock option expense at May 31, 2006 is $3,053,983 and will be recognized over a weighted average of 4.0 years. GOING CONCERN

~~Prior~~The Company tohas ~~the~~incurred ~~adoption~~significant oflosses ~~FAS~~since ~~123R,~~its ~~the~~inception. ~~Company~~For ~~recorded~~the ~~compensation~~fiscal year ended ~~expense~~August ~~for~~31, ~~restricted~~2007, ~~stock~~our ~~awards~~net ~~based~~loss onwas ~~the~~$11,333,825 ~~fair~~and ~~market~~we ~~value~~had onincurred ~~the~~an accumulated ~~date~~deficit of ~~grant~~$62,209,606 inas ~~accordance~~of ~~with~~August ~~APB~~31, 252007. ~~The~~During ~~fair~~the ~~value~~quarter ended ~~was~~November ~~recorded~~30, as2007, ~~deferred~~we ~~compensation~~had innet aincome ~~separate~~of ~~component~~$480,713, ofand ~~shareholders’~~our ~~equity~~accumulated deficit ~~and~~decreased ~~expensed~~to ~~over~~$ ~~the~~61,728,893 ~~vesting~~as ~~period~~of November 30, 2007. InNet ~~accordance~~incone ~~with~~for the quarter ~~FAS~~was ~~123R,~~primarily ~~during~~attributable to gains on the ~~quarter~~sale ~~ended~~of ~~February~~our discontinued ~~28,~~operations ~~2006~~and, due to the ~~deferred~~Company's ~~compensation~~financial ~~balance~~condition, the settlement of ~~$2,011,569~~trade payables ~~was~~for ~~reclassified~~less tothan ~~paid-in-capital~~their face amount.

~~Stock-based~~Even though ~~compensation~~we ~~expense~~have ~~recognized~~been ~~for~~able ~~restricted~~to ~~stock~~successfully ~~awards~~compromise ~~was~~significant ~~$287,382~~financial obligations to the vendors and $6suppliers to our Fayetteville Shale project,~~329~~ one of our Fayetteville Shale partners,~~755~~ ~~for~~and ~~the~~to ~~three~~an ~~months~~existing ~~ended~~claimant ~~May~~involving 31our Fayetteville Shale project, ~~2006~~our existing capital resources are not sufficient to maintain our operations and ~~May~~to ~~31,~~pay ~~2005,~~the ~~respectively;~~remaining liabilities of the Company and its $3subsidiaries,~~735~~ generally as they become due. This includes,~~957~~ ~~and~~within $6the immediate term,~~329,755~~ ~~for~~amounts which will become payable to certain leaseholders within the ~~nine~~Fayetteville ~~months~~Shale ~~ended~~project ~~May~~because 31we do not have the resources to discharge our drilling obligations to them, ~~2006~~amounts required to remediate existing well sites and ~~May~~certain 31severance and other employment-related obligations. In the longer-term, ~~2005~~we would not have been able to satisfy the amounts which would have become due under our senior secured convertible debentures, ~~respectively~~for which we were obligated to repay the principal amount of approximately $27.8 Atmillion. Furthermore, ~~May~~we 31have been unable to secure financial, ~~2006~~operating ~~there~~or isother developmental nopartners ~~unrecognized~~for ~~compensation~~our ~~cost~~Fayetteville ~~related~~Shale project. We have also been unable to ~~unvested~~secure ~~restricted~~additional ~~shares~~funding for the Company.

AOn December ~~summary~~4, 2007, we received notices of default from the ~~activity~~holders of ~~restricted~~our ~~stock~~senior Secured Convertible Debentures. Subsequently, effective as of December 17, 2007, we entered into a Strict Foreclosure Agreement with the holders of our Secured Convertible Debentures under which they foreclosed upon our interest in the Fayetteville ~~Company’s~~Shale ~~compensation~~Project ~~plans~~through ~~during~~foreclosure upon our interest in Maverick Woodruff County, LLC our wholly owned subsidary (which holds our leasehold interests in the ~~quarter~~Fayetteville ~~ended~~Shale ~~May~~Project), 31Maverick Operating, ~~2006~~LLC (our wholly owned subsidiary that is the aslicensed ~~follows:~~operator of our Fayetteville Shale Project) and miscellaneous seismic data and files related to our Fayetteville Shale Project. In consideration of the transfers evidenced by the Strict Foreclosure Agreement, our obligations under the Secured Convertible Debentures have been extinguished and certain mutual releases have been provided.

	Shares		Weighted AverageGrant Date FairValue
Outstanding on August 31, 2005		3,510,000	$	9,196,200
Granted		300,000		246,000
Vested		—		—
Forfeited/Canceled		—		—
Outstanding on May 31, 2006		3,810,000	$	9,442,200

Following the foreclosure process, we have terminated most of our personnel and ceased all oil and gas related operations as we will now attempt to identify business opportunities and financing that may be suitable for the Company. However, our remaining cash assets will only be sufficient to sustain us as an inactive company for the short-term. There can be no assurances that we will be able to identify a suitable business opportunity or the financing necessary to complete a transaction, or that any business we may acquire will generate profits or increase the value of the Company. If we are unable to execute on our business plan within the short-term, we will be forced to suspend all public reporting with the SEC and possibly liquidate.

~~NOTE~~Notwithstanding the 3foregoing, —the ~~CURRENT~~accompanying ~~PROJECTS~~consolidated financial statements have been prepared on a going concern basis which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. The consolidated financial statements do not include any adjustments that might result if the Company was forced to cease operations as a going concern.

~~Zapata County~~7

On October 1, 2005, the owners of the PHT Resendez Limited Partnership elected to dissolve the partnership and distribute the assets to the members in proportion to their membership interest in the Limited PartnershipNOTE 3. EARNINGS ~~These~~PER ~~assets~~COMMON consisted of some cash, a producing gas well, and leasehold interests in oil and gas properties in Zapata County, Texas. Accordingly, we no longer report our investment on an equity method basis, but consolidate the revenues and expenses into our income statement and reflect the investment in cash and fixed asset sections of the balance sheet.SHARE

6Basic earnings per common share is computed by dividing the earnings available to common shareholders by the weighted average number of common shares outstanding during the period.

~~Fayetteville~~Diluted earnings ~~Shale~~per common share is computed by dividing the net earnings available to common shareholders, adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities.

~~During October 2005, our subsidiary Maverick Woodruff County, LLC, borrowed $1,000,000 to finance lease acquisitions in the Fayetteville Shale project~~NOTE 4. The loan was secured by a pledge of the membership interests of Maverick Woodruff County, LLC. However, the loan automatically converted into shares of the common stock of one of our Fayetteville project participants in February 2006 when we acquired and distributed to this participant its pro SHARE-~~rata interest in 50,000 leasehold acres.~~BASED COMPENSATION

OnThe Company ~~April~~has 4,adopted ~~2006,~~a ~~Maverick~~Stock Incentive ~~Woodruff~~Plan ~~County,~~(the ~~LLC~~"Stock ~~received~~Incentive ~~advances~~Plan") ofwhich ~~$2.6~~covers ~~million from Bamco~~15, ~~LLC~~000,000 ~~one~~ shares of common ~~the Fayetteville Shale project partners~~stock. During ~~The~~November ~~advance~~2006, ~~was~~we ~~used~~amended ~~for~~our Stock Incentive Plan ~~the~~to ~~acquisition~~increase ~~of additional leasehold acreage in~~ the ~~Fayetteville~~shares ~~Shale~~covered ~~project.~~thereunder ~~The advance~~from 10, ~~together with interest at the rate of 8% per annum~~000,000 ~~will be settled when, and~~ to ~~the extent capital contributed to the project by the Fayetteville Shale project partners brings contributions in line with ownership percentages. Bamco~~15, ~~LLC received a $100~~000,000 ~~fee in conjunction with the advance~~. ~~To date, $1.1 million of this advance has been settled.~~

~~Barnett~~In addition ~~Shale~~to the stock options covered by the Stock Incentive Plan, the Company has outstanding options to purchase 450,000 shares of common stock.

~~From~~Effective ~~inception~~December ~~of the project through October 19~~1, 2005, ~~Reichmann~~the ~~Petroleum~~Company ~~Corp~~adopted ~~served~~Statement of Financial asAccounting ~~the~~Standards ~~managing~~No. ~~partner~~123 of(Revised ~~RBE~~2004), "Share-Based Payment" ("FAS 123R") and asapplied the ~~operator~~provisions of the ~~100%~~Securities ~~owned~~and ~~portion~~Exchange Commission ofStaff ~~the~~Accounting ~~project~~Bulletin No. ~~Dyke~~107 ~~Ferrell,~~using the ~~principal~~modified-prospective transition ~~shareholder~~method. ofPrior ~~Reichmann~~periods ~~Petroleum,~~were ~~owned~~not anrestated ~~approximate~~to ~~13%~~reflect ~~interest~~the inimpact ~~RBE.~~of adopting ~~During~~the ~~October~~new ~~2005,~~standard. weAs ~~acquired~~a result of the ~~13%~~adoption ~~interest~~of inFAS ~~RBE~~123R, ~~from~~stock-based compensation ~~Mr.~~expense ~~Ferrell~~recognized ~~for~~during $1the quarters ended November 30,~~750,000~~ 2007 and November ~~250~~30,~~000~~ ~~shares~~2006, ofincludes ~~our~~compensation ~~common~~expense ~~stock,~~ for aall ~~total~~share ~~purchase~~based ~~price~~payments granted ofon ~~$2,037,500.~~or Ofprior ~~the~~to, ~~cash~~but ~~purchase~~not ~~price,~~yet ~~$250~~vested,~~000~~ ~~was~~as ~~paid~~of inNovember ~~October~~30, 2005, ~~and~~ based on the ~~balance~~grant ofdate ~~$1,500,000~~fair ~~was~~value ~~paid~~estimated in ~~January~~accordance ~~2006. In connection~~ with ~~this~~the ~~purchase,~~provisions weof ~~became~~FAS 123R ~~the~~which ~~managing~~permitted ~~member~~use of ~~RBE~~the ~~and~~value ~~operator~~method ofdescribed ~~the~~in ~~100%~~APB ~~owned~~No. ~~portion~~25 of"Accounting for ~~the~~Shares ~~project~~Issued to Employees."

~~NOTE~~During the 4three —months ~~CONVERTIBLE~~ended ~~DEBENTURES~~November ~~AND~~30, ~~DERIVATIVE~~2007 ~~LIABILITY~~and 2006, the Company recognized stock-based compensation expenses of $97,913 and $391,568 respectively related to outstanding stock options according to the provisions of FAS 123R, using the modified-prospective transition method.

~~During~~Prior to the ~~October~~adoption ~~2005,~~of ~~our~~FAS ~~subsidiary,~~123R ~~Maverick~~and ~~Woodruff~~for ~~County, LLC, borrowed $1,000,000 to finance lease acquisitions in~~ the ~~Fayetteville~~three ~~Shale~~months ~~project.~~ended ~~The~~November ~~loan~~30, ~~was~~2007 ~~secured~~and 2006, byno atax ~~pledge~~benefits offrom the ~~membership~~exercise ~~interests~~ of ~~Maverick~~stock ~~Woodruff~~options have ~~County,~~been recognized ~~LLC.~~as ~~However,~~no ~~the~~options ~~loan~~have ~~automatically~~been ~~converted~~exercised. Any ~~into~~future ~~shares~~excess oftax benefits ~~the~~derived ~~common~~from ~~stock~~the ofexercise ~~one~~ of ~~our~~stock ~~Fayetteville~~options ~~project~~will ~~participants~~be inrecorded prospectively ~~February 2006 when we acquired~~ and ~~distributed~~reported toas ~~this~~cash ~~participant~~flows ~~its~~from ~~pro~~financing ~~rata~~activities ~~interest~~ in ~~50,000~~accordance with ~~leasehold~~FAS ~~acres~~123R.

~~During October 2005, we sold convertible debentures and warrants to Trident Growth Fund, L.P. for gross proceeds of $2,000,000.~~ The fair value ~~convertible debentures had a principal amount~~ of ~~$2,000,000~~each ~~and~~option ~~bore~~grant ~~interest~~is atestimated 12% per annum (the “Trident 2005 Debentures”). The warrants are exercisable over a five year term for 500,000 shares of common stock at an exercise price of $1.00 per share (the “Trident 2005 Warrants”). At its inception, we recorded a beneficial conversion feature on the ~~Trident~~date ~~2005 Debentures in the amount~~ of ~~$602,966,~~grant ~~accounted~~using ~~for as a note discount to be amortized over~~ the Black-Scholes ~~life~~option ofpricing ~~the~~model ~~loan.~~with ~~The Trident 2005 Debentures were paid in full in January 2006. Upon repayment,~~ the ~~remaining~~following ~~unamortized note discount was recognized as interest expense.~~assumptions:

Following the January 5, 2006 issuance of $20 million of secured convertible debentures, as discussed below, and by application of anti-dilution provisions, the exercise price of the Trident 2005 Warrants was reduced to $.9376 per share, and the number of warrants was increased to 533,276. Also, following the January 5, 2006 issuance of $20 million of secured convertible debentures, as discussed below, and by application of anti-dilution provisions, the exercise price of 200,000 warrants issued to Trident during July 2004 (the “Trident 2004 Warrants”) was reduced to $.9376 per share, and the number of warrants was increased to 213,310.

Average	November 30, 2007	November 30, 2006
Expected life (years)	—	5.40
Risk-free interest rate	—	4.25	%
Expected Volatility	—	71.07	%
Expected Dividend yield	—	0.0	%

OnAt November ~~January 5~~30, 2006, wethe ~~sold~~range ~~secured convertible debentures and warrants for gross proceeds~~ of ~~$20,000,000.~~risk ~~The~~free ~~secured~~interest ~~convertible~~rates ~~debentures~~used ~~have~~in anthe Black-Scholes ~~aggregate~~option ~~principal~~pricing ~~amount~~Model of(the ~~$20,000,000~~“Model”) ~~and~~was ~~are~~3.2% ~~convertible~~to 5.1%. The ~~into~~range ~~21,331,058 shares~~ of ~~our~~expected ~~common~~volatility ~~stock,~~used ~~based~~in ~~upon~~the anModel ~~initial~~was ~~conversion price of $0~~41.~~9376~~3% ~~per share, which is subject~~ to ~~anti-dilution adjustments The warrants are exercisable~~ 86.1%.

~~for~~No options ~~31,996,587~~were ~~shares of our common stock over a five year period with~~issued, exercised ~~21,331,059~~or ~~having~~surrendered anor ~~initial~~cancelled ~~exercise~~by ~~price of $0.9376 per share, 5,332,764 having an initial exercise price of $1.50 per share, and~~ the ~~remaining~~Company during ~~5,332,764 having an initial exercise price of $2.00 per share. The exercise prices of~~ the ~~warrants~~three ~~are~~months ~~subject~~ended toNovember ~~anti-dilution~~30, ~~adjustments~~2007. WeA ~~agreed~~schedule ~~to register the resale~~ of ~~the~~outstanding options ~~shares~~is ofas common stock issuable upon conversion of the secured convertible debentures and exercise of the warrants. The registration right agreement contains a liquidated damages provision that has been determined to be uneconomic.follows:

As a result, we have determined that the conversion feature of the secured convertible debentures and the warrants issued with the secured convertible debentures are embedded derivative instruments pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. Under the provisions of EITF Issue No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, the accounting treatment of these derivative financial instruments requires that the Company record the derivatives at their fair values as of the inception date of the note agreements and at fair value as of each subsequent balance sheet date as a liability. Any change in fair value is recorded as non-operating, non-cash income or expense at each balance sheet date. The fair value of the derivative liabilities was estimated using the Black-Scholes option pricing model. This model requires the use of estimates such as the expected holding period, the expected future volatility of the company’s common stock and the risk-free rate of return over the holding period. These estimates directly affect the reported amounts of the derivative instrument liabilities. At May 31, 2006, the Company estimated the fair value of the conversion feature and warrant liability and related non-cash expense at $22,979,470 and $12,903,519, respectively.

	Options	Weighted- Average Exercise Price per Share		Weighted-Average Remaining Contractual Term (in years)
Outstanding on August 31, 2007	2,610,000	$	1.87	0.73
Granted	—		—	—
Exercised	—		—	—
Surrendered/Canceled	—		—	—
Outstanding on November 30, 2007	—	$	—	—

Exercisable on November 30, 2007	2,610,000	$	1.87	0.73

The weighted-average ~~following~~grant-date ~~table~~fair ~~illustrates~~value for the ~~components~~three ofmonths ~~our~~ended ~~secured~~November 30, 2006 ~~convertible~~was ~~debentures~~$0.58/share. ~~included~~No inoptions were issued or exercised during the ~~accompanying~~three months ~~consolidated~~ended ~~financial~~November ~~statements:~~30, 2007 and 2006, respectively. The unrecognized share based compensation cost related to stock option expense at November 30, 2007 is $510,261 and will be recognized over a weighted average of 2.75 years.

	May 31,2006			August 31,2005
Convertible debentures, gross proceeds of $20,000,000:
Current Portion, included in current liabilities	$	4,166,667		$	—
Long-term portion	$	15,833,333		$	—
Less: Unamortized discount		(9,227,455	)		—
Long-term portion, net of unamortized discount	$	6,605,878		$	—

Stock-based compensation expense recognized for restricted stock awards was $16,431 and $49,400 for the three months ended November 30, 2007 and 2006, respectively. Total unrecognized compensation cost related to unvested restricted shares at November 30, 2007 was $12,599 and will be recognized over a weighted average of 1.08 years.

~~Future~~During the ~~maturities~~quarter ofended November 30, 2007, no additional restricted stock grants were made. At November 30, 2007 the ~~convertible~~company ~~debentures~~had ~~are~~2,610,000 asoptions ~~follows:~~outstanding with a weighted average exercise price and contractual term in years of $1.87 per share and 0.73 respectively.

	2006		2007		2008
Principal payments	$	—	$	10,000,000	$	10,000,000
Interest	$	1,101,370	$	1,406,507		405,822
Total	$	1,101,370	$	11,406,507	$	10,405,822

As discussed in Note 6 — Subsequent Events, effective as of June 30, 2006 the Company issued registered shares of its common stock in lieu of payment in cash of the accrued interest payable on the January NOTE 5,. SENIOR ~~2006~~SECURED ~~secured~~CONVERTIBLE ~~convertible debentures through that date.~~DEBENTURES

~~As discussed below under Note 6~~January 5, ~~on June 21,~~ 2006, weSenior ~~sold~~Secured ~~secured~~Convertible ~~convertible~~Debentures ~~debentures~~ and ~~warrants~~Contingent for gross proceeds of $10,000,000. This transaction will be reviewed for the application of EITF 00-19 and FAS 133 in regards to accounting for embedded derivatives. However, we expect that the conversion feature of the June 21, 2006 secured convertible debentures and the associated warrants will be accounted for as embedded derivative instruments pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended. Under the provisions of EITF Issue No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” the accounting treatment of these derivative financial instruments will likely require that the Company record the derivatives at their fair valuesLiability ~~as of the inception date of the note agreements and at fair value as of each subsequent balance sheet date as a~~ Accrual

8On January 5, 2006, we sold secured convertible debentures and associated warrants (“the January 5 debentures”), for net proceeds of $18,270,000. The secured convertible debentures had an aggregate principal amount of $20,000,000 and are convertible into 21,331,058 shares of our common stock, based upon an initial conversion price $0.9376 per share, which was subject to anti-dilution adjustments. The January 5 debentures had a maturity date on the third anniversary of their issuance and bore interest at the rate of 7.5% per annum. The associated warrants were exercisable for 31,996,587 shares of our common stock over a five year period with 21,331,059 having an initial exercise price of $0.9376 per share, 5,332,764 having an initial exercise price of $1.50 per share, and the remaining 5,332,764 having an initial exercise price of $2.00 per share. The exercise prices of the warrants were subject to anti-dilution adjustments. As a result of the June 21, 2006 secured convertible debenture transaction described below (“the June 21 debentures”), 5,332,764 of these warrants priced at $1.50 per share were re-priced to $0.9376 per share and 5,332,764 of these warrants priced at $2.00 per share were re-priced to $0.9376 per share and an additional 9,241,334 warrants were issued at an exercise price of $0.9376 per share. In addition, provisions in the June 21 debentures provided for a 25% ($7.5 million) prepayment premium to be applied to the principal balances of both debentures upon the sale of the Barnett Shale assets. This prepayment premium was accounted for as a debt prepayment penalty and expensed in full as a debt prepayment penalty in the consolidated statement of operations.

~~liability.~~During May ~~Any~~2007, ~~change~~the inprepayment ~~fair~~penalty ~~value~~and ~~will~~a beportion ~~recorded~~of asthe ~~non-operating,~~January ~~non-cash~~5 ~~income~~debentures and June or21 ~~expense~~debentures atwere ~~each~~paid. ~~balance~~These ~~sheet~~debentures ~~date~~were subsequently exchanged for new debentures.

~~NOTE~~June 21, 52006 —Senior ~~STOCKHOLDERS’~~Secured ~~EQUITY~~Convertible Debentures

~~During~~On June 21, ~~August and September 2005~~2006, we ~~granted~~sold ~~stock~~secured ~~options~~convertible todebentures ~~three~~and ~~non-employee~~associated ~~directors.~~warrants ~~Each~~for net proceeds of ~~the~~$9,656,000. The ~~options~~secured ~~granted~~convertible ~~entitle~~debentures ~~the~~had ~~director~~an aggregate toprincipal ~~purchase~~amount 80of $10,000,000 and were convertible into 10,665,529 shares of our common stock, ~~provided~~based ~~that~~upon hean ~~remains~~initial onconversion ~~the~~price ~~Company’s Board~~ of ~~Directors~~$0.9376 per ~~through~~share, ~~the~~which ~~vesting~~was ~~period.~~subject ~~One~~to anti-~~half~~dilution ~~(50%)~~adjustments. ofThe ~~these~~secured convertible ~~options~~debentures ~~vest~~had ~~during~~a ~~August~~maturity ~~and~~date ~~September~~on ~~2006 and~~ the ~~remaining~~first ~~50%~~anniversary ~~vest~~of ~~during~~their issuance ~~August~~ and ~~September~~bore ~~2007.~~interest ~~These~~at ~~options~~the ~~have~~rate anof ~~exercise price ranging from $1~~9.0275% ~~to $1.22~~ per ~~share and expire during 2015~~annum. The ~~average~~associated warrants ~~fair~~were ~~value~~exercisable offor ~~each~~18,664,676 ~~option~~shares ~~granted~~of ~~was~~our ~~$0.96.~~common ~~All~~stock ~~options~~over ~~were~~a five year ~~granted~~period with an exercise price ~~equal to the market price on the trading day prior to the date~~ of ~~grant~~$0.9376 per share. The ~~fair~~exercise price ~~value was estimated on the date~~ of ~~grant using~~ the ~~Black-Scholes~~warrants ~~option-pricing~~was ~~model~~subject ~~with~~to ~~an expected average volatility of 40% and a risk~~anti-~~free~~dilution ~~interest rate of 4%~~adjustments.

OnDuring May ~~November 28~~2007, ~~2005, we sold 200,000 investment units at~~ a ~~price~~portion of ~~$10~~these per unit to Millenium Global Investments, Ltd., with each unit consisting of ten (10) shares of our common stock and one (1) thirty month warrant to purchase four (4) shares of our common stock at an exercise price of $1.70 per share. The Millenium warrants were restructured following our January 5, 2006 issuance of secured convertible debentures was ~~and associated warrants~~paid. As restructured, Millenium surrendered warrants to purchase 800,000 shares of our common stock at an exercise price of $1.70 per share, in exchange for warrants to purchase 2,000,000 shares of our common stock; of which 1,000,000 were issued at an exercise price of $.9376 per share; 500,000 at an exercise price of $1.50 per share; and 500,000 at an exercise price of $2.00 per share.

~~On December 2~~November 16, ~~2005,~~2006 Senior weSecured ~~issued 250,000 shares of our common stock to Reichmann Petroleum as part of the purchase price for an additional interest in RBE, LLC, as more fully described in Note 3.~~Convertible Debentures

~~During~~On November ~~February~~16, 2006, we ~~granted~~sold ~~stock~~secured convertible ~~options~~debentures toand aassociated ~~non-employee~~warrants ~~director~~(“the ~~entitling~~November ~~him~~16 todebentures”) for ~~purchase~~net 80proceeds of $5,850,000. The ~~shares~~secured ofconvertible ~~common~~debentures had ~~stock,~~an ~~provided~~aggregate ~~that~~principal heamount ~~remains~~of on$6,750,000 ~~the~~and ~~Company’s~~were ~~Board~~convertible into 8,437,500 shares of ~~Directors~~our ~~through~~common ~~the~~stock, ~~vesting~~based ~~period.~~upon ~~One-half~~an ~~(50%)~~initial conversion price of $0.80 ~~these~~per ~~options~~share, ~~vests~~which ~~during~~was ~~February~~subject ~~2007~~to ~~and~~anti-dilution ~~the~~adjustments. ~~remaining~~The ~~50%~~secured convertible ~~vests~~debentures ~~during~~had ~~February~~a ~~2008.~~maturity ~~These~~date ~~options~~of ~~have~~May an16, ~~exercise~~2008 ~~price~~and bore interest at the rate of ~~$1.39~~8% per ~~share~~annum. In connection with this transaction, and the ~~expire~~associated ~~during~~anti-dilution ~~2016.~~adjustments, ~~The~~we ~~average~~issued ~~fair~~warrants ~~value~~exercisable offor 18,000,000 ~~the~~shares ~~option~~of ~~granted~~our ~~was~~common ~~$1.39.~~stock ~~The~~over ~~options~~a ~~were~~5 ~~granted~~year period with an exercise price ~~equal~~of to$0.20 ~~the~~per ~~market~~share. The exercise price onof the ~~trading~~warrants ~~day~~was subject ~~prior~~ to ~~the~~anti-dilution ~~date of grant~~adjustments. As ~~The~~a ~~fair~~result ~~value~~of ~~was~~the ~~estimated~~November 16 debenture ontransaction, the ~~date~~exercise price of ~~grant using~~ the ~~Black-Scholes~~warrants previously ~~option-pricing~~granted ~~model~~in connection with anthe ~~expected~~January ~~average~~5 ~~volatility~~and ofJune ~~54%~~21 ~~and~~debenture transactions, awas ~~risk-free~~reduced ~~interest~~to ~~rate~~$0.20 ofper 4%share.

~~During~~These debentures ~~the~~were ~~quarter~~subsequently ~~ended~~exchanged ~~May~~for ~~31,~~new ~~2006,~~debentures ~~the~~as ~~Company~~discussed ~~issued~~below in this nonote ~~shares of restricted common stock~~ under ~~our 2005 Incentive Stock Plan. During~~ the ~~nine~~caption ~~months~~“Recapitalization ~~ended May 31, 2006, the Company issued an aggregate~~ of ~~300,000 shares of restricted common stock under~~ our ~~2005~~outstanding ~~Incentive~~secured convertible ~~Stock~~debentures ~~Plan to certain officers~~ and ~~employees.~~associated ~~The~~investment ~~shares are subject to annual vesting over a three-year period~~warrants”.

~~During~~Prior to exchanging ~~March~~our ~~and April~~debentures, ~~2006,~~ we ~~issued~~had ~~five-year~~agreed ~~warrants~~ to ~~purchase~~register anthe ~~aggregate~~resale of ~~1,493,174~~the shares of ~~our~~ common stock atissuable anupon ~~exercise~~conversion (“Conversion ~~price~~Shares”) of ~~$.9376~~the January to5, ~~the~~June ~~investment~~21 ~~bankers~~and ~~who~~November ~~assisted~~16 insecured convertible debentures (collectively, the ~~placement~~“2006 Debentures”) and exercise of the ~~January 5~~77,902,597 warrants associated with such debentures (the “2006 ~~sale~~Warrants”). The registration rights agreements associated with the 2006 Debentures contained a liquidated damages provision that had been determined to be uneconomic. As a result of ~~convertible~~the ~~debentures~~conversion feature the 2006 Debentures and ~~associated~~the ~~warrants.~~2006 ~~The~~Warrants were ~~fair~~treated ~~value~~as ofembedded ~~these~~derivative ~~warrants~~instruments ~~was~~pursuant ~~estimated~~to atSFAS $1No. 133,~~449~~ Accounting for Derivative Instruments and Hedging Activities,~~660~~ ~~accounted~~as amended. Under the provisions of EITF Issue No. 00-19, Accounting for asDerivative ~~prepaid~~Financial Instruments ~~loan~~Indexed ~~fees~~to, ~~being~~and ~~amortized~~Potentially ~~over~~Settled in, a Company's Own Stock, the accounting ~~remainder~~treatment of these derivative financial instruments requires recording the ~~term~~derivatives at their fair values as of the ~~secured~~inception ~~convertible~~date ~~debentures~~and at fair value as of each subsequent balance sheet date as a liability. ~~The~~Any change in fair value ~~was~~is ~~estimated~~recorded as non-operating, non-cash income or expense at ~~grant~~each balance sheet date. The fair value of the derivative liabilities was estimated using the Black-Scholes option pricing model. ~~with~~This anmodel requires the use of estimates such as the expected ~~average~~holding period, the expected future volatility of ~~84.18%~~the Company’s common stock and athe risk-free ~~interest~~ rate ~~ranging~~of ~~from~~return ~~4.71%~~over the toholding 4period.~~85%.~~ ~~During~~These ~~the~~estimates ~~quarter~~directly ~~ended~~affect ~~May~~the ~~31,~~reported ~~2006~~amounts weof the derivative ~~recognized~~instrument ~~amortization~~liabilities. Upon ~~costs~~restructuring of ~~$111,459~~our debt on July 30, 2007, the ~~original~~liquidated ~~fair~~damages ~~value~~provision ofassociated ~~these~~with ~~warrants.~~the registration rights contained within the 2006 Debentures was eliminated by our

~~On April 3~~creditors, and ~~2006,~~therefore wethe ~~agreed~~derivative accounting totreatment ~~issue~~was upno tolonger ~~115,000~~required. ~~shares~~The ofremaining ~~our~~estimated ~~common~~total fair value ~~stock~~of tothe ~~our~~conversion ~~investor~~feature ~~relations~~and ~~firm~~warrant ~~pursuant~~liability toas ~~an agreement dated August 2005, under which approximately 104,583~~ of the ~~shares~~date ~~have~~of restructure ~~been~~was ~~earned through May 31~~$387,715 ~~2006,~~ and ~~the~~was ~~balance~~adjusted to beadditional ~~earned through the end of fiscal 2006~~paid-in-capital.

910

InUnder the terms ~~consideration~~of ~~for~~the ~~certain~~June ~~financial~~21 ~~advisory~~and ~~services,~~November ~~during~~16 ~~April~~secured ~~2006~~convertible debentures, we ~~agreed~~were required to ~~issue~~sell ~~warrants~~our tointerest ~~purchase~~in ~~200,000~~the ~~shares~~Barnett Shale property. Scheduled payments on these debentures were deferred pending completion of ~~our~~the ~~common~~sale. ~~stock~~The atremaining andebt ~~exercise~~discount ~~price~~and deferred financing costs of $~~2.00~~28,004,623 ~~per~~associated ~~share~~with tothese andebentures ~~investment~~was ~~banker~~accelerated and recognized as additional interest expense. ~~These~~We ~~warrants~~completed ~~will~~that ~~not~~sale beon ~~issued~~April 26, ~~however,~~2007 ~~until~~for wenet ~~have~~proceeds ~~amended~~of ~~our~~$22.5 ~~Articles~~million. After the payment of expenses ~~Incorporation~~of tothe ~~increase~~transaction ~~our~~and ~~authorized~~project ~~capital~~related ~~stock~~expenses, we yielded net proceeds from the sale of approximately $20.3 million.

~~NOTE~~On May 62, 2007, —we ~~SUBSEQUENT~~distributed ~~EVENTS~~$19 million of the net proceeds to the debenture holders. Of this distribution, $7,500,000 was applied to the prepayment penalty associated with the January 5, 2006 and June 21, 2006 secured convertible debentures, $1,832,301 was applied to interest due as of that date on the same debentures, and $4,000,000 and $5,667,699 was applied to principal payments of the January 5, 2006 and June 21, 2006 secured convertible debentures, respectively.

~~Effective~~Upon application as of ~~June~~the ~~30,~~May ~~2006~~2, ~~the~~2007 ~~Company~~payment ~~issued~~of ~~423~~$19 million,~~551~~ ~~registered~~all ~~shares~~interest ofamounts due were ~~its~~current ~~common~~and ~~stock~~a asbalance anof ~~interest~~$27,082,301 ~~payment~~remained toon the ~~holders~~secured ofconvertible debentures; $16,000,000 on the ~~$20~~January ~~million~~5, 2006 secured convertible debentures, $4,332,301 ~~issued~~on inthe ~~January~~June 21, 2006 secured convertible debentures, and $6,750,000 on the November 16 secured convertible debentures. On ~~These~~July ~~shares~~25, 2007, we ~~were~~agreed ~~issued~~with inthe ~~lieu~~holders of athe ~~cash~~2006 ~~payment~~Debentures ofto ~~$373,973~~enter ~~that~~into a ~~would~~recapitalization ~~have~~transaction ~~otherwise~~(a ~~been~~“Recapitalization”) ~~paid~~involving ~~representing~~the ~~interest~~retirement of ~~due~~the ~~through~~2006 ~~June~~Debentures ~~30,~~and 2006 Warrants in exchange for new secured convertible debentures.

~~On June 21, 2006, we sold secured convertible debentures and warrants for gross proceeds~~ Recapitalization of ~~$10,000,000. The secured convertible debentures have an aggregate principal amount of $10,000,000 and are convertible into 10,665,529 shares of~~ our ~~common~~outstanding stock, based upon an initial conversion price of $0.9376 per share, which is subject to anti-dilution adjustments The warrants are exercisable for 18,664,676 shares of common stock for a period of five years, at an exercise price of $0.9376 per share. The exercise price of the warrants is subject to anti-dilution adjustments. We agreed to register the resale of the shares of common stock issuable upon conversion of the secured convertible debentures and ~~exercise~~associated ~~of the~~ investment warrants~~. The registration right agreement contains a liquidated damages provision that has been determined to be uneconomic.~~

~~This~~Effective as ~~transaction will be reviewed for the application~~ of ~~EITF~~July ~~00-19 and FAS 133 in regards to accounting for embedded derivatives. However~~30, ~~inasmuch as the June 21~~2007, we ~~2006~~entered ~~transaction~~into ~~contained~~a ~~many~~Recapitalization ofinvolving the retirement ~~same~~of ~~features as~~ the ~~January 5,~~ 2006 ~~transaction,~~Debentures weand ~~expect~~2006 ~~that~~Warrants ~~the~~in ~~conversion~~exchange ~~feature~~for ofnew ~~the June 21, 2006~~ secured convertible debentures ~~and~~ (the ~~associated~~“2007 ~~warrants will be accounted for as embedded derivative instruments pursuant to SFAS No. 133, Accounting for Derivative Instruments~~ Debentures”) and ~~Hedging~~associated warrants ~~Activities, as amended. Under~~ (the ~~provisions~~“2007 ~~of EITF Issue No~~Warrants”). 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, the accounting treatment of these derivative financial instruments could require that the Company record the derivatives at their fair values as of the inception date of the debentures and at fair value as of each subsequent balance sheet date as a liability. Any change in fair value will be recorded as non-operating, non-cash income or expense at each balance sheet date.

AsThe 2007 Debentures ahave ~~result~~an aggregate principal amount of $27.8 million, bear interest at 8 % per annum, and have a maturity date on the second anniversary of their issuance, subject to the right of the ~~warrants~~holders into ~~connection~~require ~~with~~us ~~the~~to ~~sale~~repurchase one-third of ~~these~~the ~~secured~~outstanding ~~convertible~~principal ~~debentures~~amount due on ~~June~~each ~~21,~~of ~~2006 and~~ the ~~anti~~fifteenth and twenty-~~dilution~~first ~~adjustment~~month ~~provisions~~anniversaries of the ~~warrants~~date ~~issued~~of inissuance. ~~connection~~Interest payments and expenses associated with issuance will be due on the ~~sale~~maturity date. The of2007 ~~secured~~Debentures are convertible ~~debentures~~into on111,038,016 ~~January~~shares 5,of our ~~2006,~~common ~~the~~stock ~~exercise~~at a conversion price of ~~approximately 5~~$0.325 ~~million~~per ofshare, ~~the~~subject ~~warrants~~to ~~issued~~only standard onanti-dilution ~~January~~adjustments 5,relating ~~2006~~to ~~was~~stock ~~reduced~~splits, ~~from~~stock $2dividends and the like.00 toThe ~~$0.9376,~~2007 Debentures are not subject to the ~~exercise~~“full-ratchet” ~~price~~and “gross-up” ofanti-dilution ~~approximately~~features ~~5.3~~which ~~million~~were ofincluded within the ~~warrants~~2006 Debentures. ~~issued~~The on2007 ~~January~~Warrants are 5exercisable into 77,902,597 ~~2006~~shares ~~was~~of common ~~reduced~~stock ~~from~~at an ~~$1.50~~exercise toprice of $0.~~9376,~~01 ~~and~~per anshare ~~approximately~~(on 9a post-split basis).3 The ~~million~~2007 ~~additional~~Warrants ~~shares~~are ofsubject ~~common~~to only standard anti-dilution adjustments relating to stock ~~became~~splits, ~~issuable~~stock ~~upon~~dividends ~~exercise~~and the like, and are not subject to the “full-ratchet” and “gross-up” anti-dilution features of the ~~warrants~~2006 Warrants. ~~issued~~As ona ~~January~~result 5of the Recapitalization, ~~2006~~the unamortized debt discount and deferred financing costs were expensed during the period.

~~During~~On December ~~June~~4, ~~2006~~2007, we ~~agreed~~received tonotices ~~issue~~of ~~1.2~~default ~~million~~from ~~shares~~the ofholders of our 2007 ~~common~~Debentures. ~~stock~~Subsequently, toeffective aas ~~third~~of ~~party~~December ~~for~~17, ~~advisory~~2007, ~~services~~we entered ~~provided~~into ina ~~connection~~Strict Foreclosure Agreement with the ~~acquisition~~holders of ~~leasehold~~our ~~acreage~~2007 Debentures byunder which they foreclosed upon our ~~subsidiary~~interest in ~~Woodruff~~the ~~and~~Fayetteville Shale ~~surrounding~~Project ~~counties~~through foreclosure upon our interest in ~~Arkansas~~Maverick Woodruff County, LLC ~~subject~~our towholly ~~certain~~owned subsidiary (which ~~conditions~~holds our leasehold interests in the Fayetteville Shale Project), ~~including~~Maverick aOperating, ~~pending~~LLC our wholly ~~amendment~~owned subsidary (the licensed operator of our Fayetteville Shale Project) and miscellaneous seismic data and files related to our ~~Articles~~Fayetteville Shale Project. In consideration of ~~Incorporation~~the totransfers ~~increase~~evidenced by the ~~number~~Strict ofForeclosure Agreement, ~~shares~~our ofobligations ~~common~~under ~~stock~~the ~~authorized~~2007 Debentures have been extinguished and ~~available~~certain ~~for~~mutual ~~issuance~~releases have been provided.

~~Pursuant~~ The provisions toof anthe ~~Information~~2007 ~~Statement~~Debentures ~~dated~~were ~~July~~evaluated ~~17,~~pursuant ~~2006,~~to onthe ~~August~~terms 7,of ~~2006~~FAS 15, we“Accounting ~~plan~~by toDebtors ~~amend~~and ~~our~~Creditors ~~Articles~~for ofTroubled ~~Incorporation~~Debt toRestructuring” ~~increase~~and EITF-02-04, ~~the~~“Determining ~~number~~Whether ofa ~~authorized~~Debtor’s ~~shares~~Modification ofor ~~our~~Exchange ~~common~~of ~~stock~~Debt Instruments ~~from~~is ~~200~~within ~~million~~the ~~shares~~Scope toof ~~260~~FASB ~~million~~Statement ~~shares~~No. ~~The~~15” ~~action~~and ~~was~~were ~~approved~~determined ~~pursuant~~ to represent ~~written~~a ~~consent~~modification byof ~~the~~debt ~~holders~~rather ofthan a ~~majority~~constructive ofextinguishment and accordingly, ~~our~~no ~~shares~~gain ~~(approximately~~or ~~51.9~~loss ~~million~~on ~~shares).~~the Noexchange ~~meeting~~of ~~was~~the ~~held~~2006 ~~and~~Debentures nofor ~~proxies~~the 2007 Debentures ~~were~~has ~~solicited~~been recognized.

~~During~~The 2007 Warrants ~~June~~had ~~2006,~~a wefair ~~agreed~~market tovalue at date of grant ~~options~~of to$1,124,716, ~~purchase~~which ~~500~~was determined using the Black-Scholes Option Pricing Model utilizing an expected term of 2.5 years,~~000~~ ~~shares~~assumed volatility of ~~our~~97.2%, ~~common~~a ~~stock~~risk free discount rate of 4.58% and ~~100,000~~a ~~shares~~dividend yield of ~~restricted~~zero. Because ~~common~~the ~~stock~~exchange qualified as a modification of debt, ~~each~~the ~~under~~fair ~~our~~value ~~2005~~of ~~Incentive~~the ~~Stock~~2007 ~~Plan,~~Warrants towas aexpensed ~~new~~at date of grant as interest expense.

10As a part of the original Recapitalization, we were required to effectuate a reverse stock split. However, upon the subsequent request of a holder of our Debentures, we abandoned our efforts to effect a reverse stock split.

employee. The options will have an exercise price of $1.04 per share, with annual vesting to occur over a period of five years, subject to continued employment with the Company (and subject to acceleration under certain conditions.) The shares of restricted stock will vest upon grant.11

~~Item 2~~NOTE 6. ~~Management~~ STOCKHOLDERS’s ~~Discussion and Analysis of Financial Condition and Results of Operations.~~EQUITY

~~Cautionary~~During October ~~statement~~2006, ~~for~~we ~~forward-looking~~issued ~~statements~~1,292,244 registered shares of our common stock as an interest payment to the holders of our January 5 debentures. These shares were issued in lieu of a cash payment of $378,082 that would have otherwise been paid as interest through the period ended September 30, 2006.

~~This~~On December ~~report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933~~19, ~~as amended~~2006, ~~and~~we ~~Section~~issued ~~21E~~an ofaggregate ~~the Securities Exchange Act~~ of ~~1934~~5,225,000 asinvestment ~~amended.~~units ~~All statements other than statements of historical facts included or incorporated by reference~~ in a private ~~this~~placement ~~report,~~transaction ~~including,~~at ~~without~~a ~~limitation,~~purchase ~~statements~~price ~~regarding~~of ~~our~~$0.20 ~~future~~per ~~financial position or results~~unit, ~~levels~~for total proceeds of ~~activity~~$1, ~~events~~045, ~~trends or plans, are forward-looking statements~~000. ~~Forward-looking~~Each ~~statements~~investment ~~generally~~unit ~~can~~consisted beof ~~identified~~one byshare ~~the use~~ of ~~forward-looking~~the Company’s ~~terminology~~common ~~such~~stock as(the “~~may,~~Shares”) ~~“will,”~~and ~~“expect,”~~a ~~“intend,”~~warrant ~~“project,”~~to ~~“estimate,”~~purchase ~~“anticipate,”~~an oradditional share ~~“believe”~~of or the ~~negative~~Company’s ~~thereof~~common orstock ~~any~~(the ~~variation thereon or similar terminology~~“Warrants”). ~~Although~~The weWarrants ~~believe that~~are ~~the~~ exercisable ~~expectations~~for ~~reflected~~a inperiod ~~such~~of ~~forward-looking~~three ~~statements are reasonable~~years, ~~there~~commencing isJanuary no30, ~~assurance that such expectations will be accomplished. In connection with our overall business objectives~~2007, weat ~~expect~~an exercise toprice ~~be able to complete the development~~ of ~~our existing projects and implement an aggressive growth strategy~~$0.20 ~~This~~per ~~assumes however~~share, ~~among~~subject ~~other things, that we will be able~~ to ~~develop~~customary oil and gas reserves that can be extracted at commercial rates from our current projects, locate and acquire oil and gas properties on terms and conditions satisfactory to us and outsource project management services on terms satisfactory to usanti-dilution adjustments. ~~Our~~The ~~ability~~Company tohas ~~accomplish~~granted ~~these~~incidental ~~objectives,~~(“piggyback”) ~~however,~~registration rights ~~depends upon among other things, our ability~~ to ~~secure~~the ~~sufficient~~investors ~~funding~~in ~~for~~the ~~these~~private ~~purposes,~~placement ~~also~~pursuant ~~on terms and conditions satisfactory~~ to ~~us.~~which Asthe ~~to our general business operations, important factors that could cause~~Company ~~actual~~ has ~~results~~agreed to ~~differ materially from our expectations~~ include, ~~but are not limited to, our assumptions about energy and mineral markets, production levels, reserve levels, operating results, competitive conditions, technology,~~ the ~~availability~~resale of ~~capital~~the ~~resources,~~Shares ~~capital~~(including ~~expenditure obligations,~~ the ~~supply~~shares ~~and~~issuable upon ~~demand~~exercise ~~for oil, natural gas, minerals and other products or services, the price~~ of ~~oil, natural gas, minerals and other products or services, currency exchange rates,~~ the ~~weather,~~Warrants) inflation, the availability of goods and services, successful exploration, drilling and extraction, drilling and extraction risks, future processing volumes and pipeline throughput, general economic conditions, either nationally or internationally or in the ~~jurisdictions~~next inregistration ~~which~~statement weto ~~are~~be ~~doing business, legislative or regulatory changes, including changes in environmental regulation, environmental risks~~filed ~~and~~ by the ~~liability~~Company ~~under~~with ~~federal, state and foreign environmental laws and regulations,~~ the ~~securities~~Securities ~~or capital markets~~ and ~~other~~Exchange ~~factors~~Commission ~~disclosed in our Annual Report on Form 10-KSB for~~ (the ~~year ended August 31, 2005, under the caption~~ “~~Risk Factors~~SEC”,) ~~the~~(excluding its ~~risk~~current ~~factors~~registration ~~identified~~statement ~~in Item 1A of Part II of this Quarterly Report~~ on ~~Form~~file ~~10-Q,~~with ~~as well as Item 1A of Part II of our Quarterly Report on Form 10-Q for~~ the ~~quarters ended November 30~~SEC). However, these ~~2005~~investors ~~and~~have ~~February~~the ~~28,~~right ~~2006~~to ~~and~~demand ~~other~~that ~~filings with~~ the ~~Securities~~Company ~~and~~file ~~Exchange~~a ~~Commission.~~registration statement ~~All~~registering ~~subsequent~~the ~~written~~resale ~~and~~of ~~oral~~their ~~forward-looking~~Shares ~~statements~~if ~~attributable~~a toregistration ~~us,~~statement including orthe ~~persons~~resale ~~acting~~of ontheir ~~our~~Shares ~~behalf,~~is ~~are~~not ~~expressly~~otherwise ~~qualified~~filed ~~in their entirety~~ by ~~these~~March ~~cautionary statements~~31, 2007. ~~We assume no duty to update or revise our forward-looking statements.~~

~~Overview~~The Shares and Warrants were issued to eight accredited investors, including James A. Watt, our former Chief Executive Officer, who purchased 1 million Shares and Warrants for a purchase price of $200,000. In connection with the transaction, and to insure that our authorized capital was sufficient to complete the placement, Line Trust Corporation Limited, one of our principal shareholders, agreed to surrender for cancellation outstanding warrants to purchase 5,225,000 shares of our common stock that it purchased from us in a private placement transaction completed in early 2005.

WeAs of October ~~are an early stage independent energy company engaged in oil and gas exploration~~15, ~~exploitation~~2007, ~~development~~we compromised and ~~production.~~discharged Wea ~~currently~~total ~~participate~~of approximately in$2,300,000 ~~these~~of ~~activities~~unsecured ~~through~~indebtedness ~~the~~held ~~interests~~by wevendors ~~hold~~who inprovided goods ~~oil~~ and ~~gas~~services ~~exploration~~to ~~and~~Maverick Woodruff County ~~development projects~~ in connection with ~~Arkansas, Texas and Colorado. Our strategy is to continue~~ the development of ~~our~~the ~~current~~Fayetteville ~~exploration~~Shale project. The ~~projects~~indebtedness ~~and~~was todischarged ~~expand~~for ~~our~~aggregate ~~operations~~cash bypayments of ~~acquiring~~approximately ~~additional~~$460,000 ~~exploration opportunities~~ and ~~properties~~the ~~with~~issuance ~~existing~~of ~~production~~6,714,500 ~~taking~~shares ~~advantage~~ of ~~the industry experience of~~ our ~~management~~common stock ~~team~~to ~~and~~the ~~modern~~vendors, ~~techniques~~on ~~such~~a aspro ~~horizontal~~rata ~~drilling and 3D seismic analysis~~basis.

~~Our~~We also settled ~~operations~~the ~~are~~lawsuit ~~presently~~filed ~~focused~~by onM.A. ~~identifying~~Wallace and ~~evaluating~~Elvia ~~prospective~~Vaudine ~~oil~~Wallace against us and ~~gas~~Maverick Woodruff County ~~properties~~in ~~and~~the ~~contributing~~Circuit ~~capital~~Court toof ~~projects~~Cross ~~that~~County, Arkansas. That welawsuit ~~believe~~sought ~~have~~damages of approximately $1,200,000. Under the ~~potential~~terms toof ~~produce~~the ~~oil~~settlement, orwe ~~gas~~paid in$135,000 and issued 3,000,000 shares of our common stock.

1112

~~commercial quantities~~NOTE 7. DISCONTINUED OPERATIONS ~~Over~~AND ~~time,~~ASSETS asHELD weFOR ~~complete the exploration and development stage of a particular project, our primary focus for that project will gradually to shift to drilling and production.~~SALE

We· ~~participate~~Barnett inShale projects directly, as well as indirectly as equity participants in subsidiaries and investees. Until recently, we have not been involved as the operator of the projects in which we participate. Instead, we have relied on others for drilling, delivering any gas or oil reserves we discover, and negotiating all sales contracts. Recently, however, we have become the operator of two of our existing projects, and we expect to act as the operator of certain of the projects in which we participate in the future. Operatorship will be a key component of our strategy to increase our reserves and production.properties:

WeOn April 26, ~~seek~~2007, towe ~~create~~completed ~~shareholder~~the ~~value~~sale byof ~~building~~our ~~oil~~interests ~~and~~in ~~gas~~the ~~reserves,~~Barnett ~~production~~Shale ~~revenues~~project for ~~and~~net ~~operating~~proceeds ~~cash~~of ~~flow~~approximately $22.5 Wemillion. ~~believe~~The ~~that~~sale ~~building~~of ~~oil~~our ~~and~~interest ~~gas~~in the project ~~reserves~~was ~~and~~required ~~production,~~as onpart aof ~~cost-effective~~the ~~basis,~~terms ~~is an important indicator~~ of ~~performance~~the ~~success~~June ~~for~~21 ~~an independent oil~~ and ~~gas~~November ~~company~~16 ~~such~~secured convertible ~~our company~~debentures. WeThe ~~seek~~cash toreceived ~~build~~from ~~oil~~the ~~and~~buyer ~~gas~~was ~~reserves,~~subject ~~production,~~to post-closing ~~and~~adjustments ~~cash~~based ~~flow~~upon ~~through~~the anet ~~balanced program~~ of ~~capital~~total ~~expenditures~~revenues ~~involving acquisition, exploitation~~ and ~~exploration~~capital expenditures ~~activities.~~for ~~We intend to place primary emphasis on~~ the ~~issuance~~period ofJanuary ~~public~~through ~~and~~April ~~private~~2007. ~~debt~~Our ~~and~~final ~~equity~~settlement took toplace ~~finance~~during ~~our~~November ~~business~~2007.

~~Our~~· ~~ability~~Whitewater ~~to generate future revenues and operating cash flow will depend on the successful exploration, exploitation and/or acquisition of oil and gas producing~~ properties, development of our inventory of capital projects, the volume and timing of our production, as well as commodity prices for oil and gas. Such pricing factors are largely beyond our control, and may result in fluctuations in our earnings.:

During November 2007, we sold our interest in our Colorado-based Whitewater project. We ~~believe~~initially ~~significant~~sold ~~opportunities~~a ~~are~~30% ~~available~~interest toin usthe ~~given~~project for $600,000, ~~among~~plus ~~other~~the ~~things~~pro rata assumption of all unpaid project costs since May 2006. Thereafter, we sold the ~~continued~~remaining ~~strength~~70% interest in the ~~market~~project to ~~price~~one of ~~oil~~our ~~and~~Fayetteville ~~gas~~Shale project partners for $200,000, the ~~significant~~discharge of approximately ~~experience~~$1.4 ofmillion ~~our~~owed ~~management~~to ~~team~~this partner, and ~~our~~the ~~efficient~~assumption ~~operating~~of ~~model.~~the remaining ~~Given~~unpaid ~~these~~project ~~factors~~costs wesince ~~believe~~May ~~that~~2006. This weasset ~~have~~was impaired ~~the~~to ~~opportunity~~its expected realizable value of $2,000,000 asin ananticipation ~~early~~of a cash ~~stage~~sale. The ~~independent~~combination ~~energy~~cash ~~company,~~and todischarge ~~successfully~~of ~~compete~~debt transaction resulted in ~~our~~a ~~chosen~~gain ~~market~~of approximately $450,000 for the fiscal period ended November 30, 2007.

~~ProjectsFayetteville~~We have accounted ~~Shale~~for the sale of these assets in accordance with FAS 144 – Accounting for the Impairment or Disposal of Long-Lived Assets. Pursuant to FAS 144 we have separated the detail of the individual assets, liabilities and results from operations of these projects from our consolidated balance sheet and statement of operations at November 30, 2007 as follows:

In September 2005, through our wholly-owned subsidiary, Maverick Woodruff County, LLC, we initiated efforts to develop oil and gas properties located within the Fayetteville Shale play in Arkansas and commenced actively acquiring acreage in Northeastern Arkansas. Pursuant to a joint operating agreement with our two project partners, we are the operator of, and have a 45% working interest in, the project.

Discontinued Operations:	November 30, 2007			August 31, 2007
Assets:
Advances to operators and others		—			55,000
Unproved properties not being amortized, net		—			2,000,000
Total assets held for sale	$	—		$	2,055,000

Liabilities:
Accounts payable and accrued expenses	$	—		$	2,150
Asset retirement liability		—			40,554
Total liabilities of held for sale operations	$	—		$	42,704


	Three Months ended November 30,
	November 30, 2007			November 30, 2007
Oil and gas sales revenues—Barnett Shale properties	$	—		$	441,921
Cost and Expenses		(161	)		(234,380	)
Gain on sale of Whitewater assets		452,671			—
Net income from discounted operations before minority interest		—			207,541
Minority Interest in discontinued operations		—			(76,183	)

Net income from discontinued operations	$	452,510		$	131,626

As of the date of this report, we have fully executed leases on approximately 125,000 acres (56,250 net acres to Maverick) and have approximately another 25,000 acres under contract pending title work for a total of 150,000 acres committed to date. It is our intention to maintain our interest at the net position of 56,250 acres and, if possible, bring in a fourth partner to acquire the final 25,000 acres on a promoted basis. This strategy will enable us to focus our financial resources on drilling and development activities while still maintaining a critical mass of acreage for development in the play. The total cost to Maverick to secure the target level of leased acreage has been approximately $15 million.13

~~We commenced our initial drilling operations during the first quarter calendar of 2006~~NOTE 8. COMMITMENTS ToAND date we have drilled and fracture stimulated two test wells and have commenced drilling a third. Pending successful test results and final completion, production could commence during the fourth quarter of 2006. We plan to have drilled our initial series of six to eight test wells by the end of the calendar year. Following full interpretation of data gathered during this operation, we could initiate a full development program by the first of the calendar year 2007.CONTINGENCIES

12 ● Fayetteville Shale.

~~Barnett~~The winding down of our activities within the Fayetteville Shale play could expose the Company to certain contingent liabilities which could have an adverse effect on our financial condition, results of operations, and liquidity. Certain leases in our former Fayetteville Shale project require us to conduct additional drilling prior to the end of 2007. If these drilling obligations are not met or renegotiated, we could be obligated to pay total penalties of up to $3,000,000 to the landowners under those leases.

We ● Bankruptcy of ~~hold~~Fayetteville ~~a 63% membership interest in RBE, LLC, a Delaware limited liability company (“RBE”), that was formed to explore for oil and gas in the Barnett~~ Shale ~~area~~Project ~~of North Texas~~partner. We acquired a 50% interest in RBE during August 2004 from Ferrell RBE Holdings, LLC (“Ferrell RBE”) for $2 million, of which $1 million was paid to Ferrell RBE and the balance represented our assumption of Ferrell RBE’s obligation to make a $1 million capital contribution to RBE.

~~Through~~On April 3, ~~our~~2007, ~~interest~~Cygnus inOil ~~RBE,~~& weGas ~~own~~Corporation a(“Cygnus”), ~~working~~our ~~interest~~45% partner in ~~more~~the Fayetteville ~~than~~Shale 4project,~~000~~ ~~net~~filed ~~leasehold~~a ~~acres~~petition infor ~~Wise~~protection ~~County,~~under ~~Texas.~~Chapter ~~A portion~~ 11 of the ~~that~~United ~~acreage~~States isBankruptcy ~~operated~~Code. As bya ~~Devon~~result, ~~Energy~~for ~~and~~the aforeseeable future ~~portion~~it is ~~operated~~not bylikely us that ~~until~~Cygnus ~~recently~~will ~~was~~have ~~operated~~adequate byresources ~~Reichmann Petroleum. The interests acquired are subject~~ to asatisfy approximately ~~25% royalty~~$3.6 ~~Drilling~~million isof ~~complete~~project oncosts ~~the~~that ~~initial~~we ~~test~~believe ~~well~~are ~~within~~due ~~the~~relative to our ~~acreage~~Fayetteville ~~operated~~Shale ~~by us~~project. Furthermore, ~~the~~in ~~Pauline~~its ~~Cook #1~~bankruptcy filing, ~~and~~Cygnus ~~this~~claims ~~well is flowing~~ to ~~sales.~~dispute ~~We initiated drilling on~~ the ~~second~~amount ~~well,~~of ~~the~~our ~~Flowers 1-H~~claim, onwithout ~~this~~offering any detail ~~acreage~~as ~~on June 7, 2006. This well satisfies our drilling commitments required~~ to ~~retain leasehold rights on this tract. The Portwood 4H well was drilled on~~ the ~~Devon~~amount ~~operated portion~~ of ~~the~~any ~~project~~such ~~and started flowing to sales in December 2005~~dispute. In ~~This~~response ~~allowed RBE~~ to ~~retain~~this action ~~its~~on ~~leasehold~~August ~~rights~~31, ~~with~~2007 we reclassified ~~respect~~$2.8 tomillion ~~the acreage on the portion~~ of ~~the project.~~this A receivable ~~second~~to ~~well,~~unproved ~~the~~properties ~~Bridges~~to W.reflect B.our ~~GU1,~~increased ~~was~~investment ~~spud~~ in drilling ~~this acreage on June 19, 2006~~ and ~~drilling~~development isactivities ~~now complete~~ and ~~the well is awaiting completion~~$0.8 ~~This~~million isto ~~the~~exploration ~~first of three consecutive wells that Devon plans~~ expense to reflect ~~drill~~Cygnus’ ~~and~~unfunded ~~complete~~portion onof ~~this~~the ~~acreage~~unsuccessful ~~this~~Morris ~~year~~1-3H well.

~~From inception of the project through October 19, 2005, Reichmann Petroleum Corp served as the managing partner of RBE and as the operator of the 1,942 acre portion of the project~~NOTE 9. SUBSEQUENT Dyke Ferrell, the principal shareholder of Reichmann Petroleum, owned an approximate 13% interest in RBE. During October 2005, we acquired the 13% interest in RBE from Mr. Ferrell in consideration for the purchase price of $1,750,000 and 250,000 shares of our common stock. In connection with this purchase, we became the managing member of RBE and operator of the 1,942 acre portion of the project.EVENTS

~~The~~ ● Foreclosure of ~~RBE~~our ~~operating~~Fayetteville ~~agreement~~Shale ~~provides~~Project ~~that cash distributions by RBE are to be made first to us until the aggregate distributions equal $1,000,000 and then to the members in proportion to their ownership~~ interests.

InAs of December ~~connection~~17, 2007, we entered into a Strict Foreclosure Agreement with the original ~~sale~~holders of ~~$10~~our ~~million~~2007 ~~secured~~Debentures ~~convertible~~and ~~debentures~~the ~~and~~transferees ~~warrants~~of ontheir ~~June~~interests under ~~21,~~the ~~2006~~2007 Debentures (the "Transferees"). Under the Strict Foreclosure Agreement, wethe ~~agreed~~Transferees tohave ~~use~~foreclosed upon our ~~best~~interest ~~efforts~~in tothe ~~sell~~Fayetteville Shale Project through foreclosure upon our interest in Maverick Woodruff County, LLC (which holds our leasehold interests in the ~~Barnett~~Fayetteville Shale ~~project~~Project), Maverick Operating, LLC (the licensed operator of our Fayetteville Shale Project) and miscellaneous seismic data and files related to our Fayetteville Shale Project. ~~See~~In ~~“Liquidity~~consideration of the transfers evidenced by the Strict Foreclosure Agreement, our obligations under the 2007 Debentures have been extinguished and ~~Capital~~certain ~~Resources”~~mutual releases have been provided.

~~Whitewater~~We believe that the foreclosure transaction is in our best interest as we have extinguished over $28 million of senior secured indebtedness, while we have been able to retain a modest amount of cash and avoid, in the short-term, an otherwise likely bankruptcy filing. Furthermore, the foreclosure process extricates us from the Fayetteville Shale project, which otherwise would have required significant additional funding (which we have been unable to secure) and whose geologic outcomes remain subject to uncertainty.

OnFollowing the ~~February~~foreclosure 1process, ~~2005,~~we ~~Maverick~~have ~~Whitewater,~~terminated ~~LLC,~~most aof ~~subsidiary~~our ~~that~~personnel weand ~~formed to explore for~~ ceased all oil and gas inrelated ~~Colorado,~~operations ~~paid~~as ~~$5,600,000~~we towill ~~South~~now ~~Oil,~~attempt ~~Inc. (including $2,000,000 of prepaid drilling costs)~~ to ~~acquire~~identify abusiness opportunities ~~working~~and ~~interest~~financing inthat ~~approximately~~may ~~12,000~~be ~~net~~suitable ~~mineral~~for ~~acres~~the ~~in Mesa and Delta Counties in Colorado~~Company. ~~The~~However, our remaining ~~conveyance~~cash ~~also~~assets ~~included~~will ~~two~~only ~~shut-in~~be ~~gas~~sufficient ~~wells and a pipeline tap. The interest was acquired subject~~ to asustain ~~12.5%~~us ~~carried~~as ~~working~~an ~~interest,~~inactive company ~~proportionately~~for ~~reduced~~the ~~in favor of prior parties in interest~~short-term. ToThere ~~date,~~can ~~eleven~~be ~~exploration/~~no ~~delineation~~assurances ~~wells~~that ~~have been drilled. In March 2006,~~ we ~~assumed~~will ~~operatorship~~be ofable to identify ~~this~~a ~~project~~suitable ~~from~~business ~~South~~opportunity ~~Oil~~or ~~and~~the ~~have~~financing ~~begun~~necessary to ~~assess test results and formulate~~ complete a ~~field development plan~~transaction, ~~including~~or ~~plans~~that toany ~~connect~~business towe ~~the~~may ~~Trans~~acquire ~~Colorado~~will ~~pipeline.~~generate Weprofits ~~are~~or increase ~~currently in~~ the ~~process~~value of ~~transitioning~~the ~~this~~Company. ~~operatorship~~If towe aare ~~local~~unable ~~operator who will buy in~~ to aexecute ~~10%~~on ~~working~~our ~~interest~~business plan inwithin ~~this project proportionately from~~ the ~~existing~~short-term, ~~owners.~~we ~~The successful execution of this strategy~~ will ~~allow~~be usforced to ~~focus~~suspend ~~more~~all ofpublic ~~our~~reporting with ~~personnel and financial resources on~~ the ~~Fayetteville~~SEC ~~Shale~~and ~~project~~possibly ~~while still maintaining a 27% interest in this project~~liquidate.

Maverick Whitewater has two separate classes of ownership interest, Class A and Class B. We acquired all of the Class A interests. South Oil, Inc. acquired all of the Class B interests. We serve as the manager of Maverick Whitewater and so are responsible for making all decisions and taking all actions regarding Maverick Whitewater’s business. The operating agreement provides that cash distributions are to be made first to us as the Class A member until the aggregate distributions to us **************************

1314

~~equal~~Item 2. ~~our~~MANAGEMENT’S ~~initial~~DISCUSSION ~~capital~~AND ~~contribution,~~ANALYSIS ~~and~~OF ~~then~~FINANCIAL ~~85%~~CONDITION toAND usRESULTS ~~as the Class A member and 15% to the Class B member~~OF OPERATIONS.

~~Zapata~~Cautionary statement ~~County~~for forward-looking statements

WeThis Report ~~acquired~~may acontain ~~19.8%~~forward ~~limited~~looking ~~partnership~~statements ~~interest~~within inthe ~~PHT~~meaning ~~Resendez~~of ~~Partners,~~Section 27A of ~~L.P.~~the onSecurities ~~October~~Act 5of 1933, ~~2004~~as inamended, ~~return~~and ~~for~~Section an21E ~~initial~~of ~~capital~~the ~~contribution~~Securities Exchange Act of $11934,~~000~~ as amended,~~000.~~ ~~PHT~~regarding ~~Resendez~~future ~~had~~results, alevels ~~net~~of ~~working~~activity, events, ~~leasehold~~trends ~~interest~~or plans. We have based these forward-looking statements on our current ~~approximately~~expectations ~~800~~and ~~net~~projections ~~acres~~about ~~located~~such infuture ~~Zapata~~results, ~~County~~levels of activity, ~~Texas~~events, trends or plans. ~~The~~These ~~initial~~forward ~~test~~looking ~~well,~~statements ~~known~~are asnot guarantees ~~Resendez~~and #1are ~~has~~subject ~~been~~to ~~drilled~~known and ~~completed~~unknown risks, uncertainties and assumptions ~~production~~about ~~facilities~~us ~~and~~that ~~sales~~may ~~pipelines~~cause ~~have~~our ~~been~~actual ~~installed.~~results, ~~Gas~~levels ~~production~~of ~~and~~activity, events, ~~sales~~trends ~~commenced~~or ~~during~~plans ~~April~~to ~~2005~~be materially different than any future results, levels of activity, events, trends or plans expressed or implied by such forward-looking statements. WeIn ~~also~~some ~~acquired~~cases, you can identify forward-looking statements by terminology such as guidance, may, will, should, could, would, expect, plan, anticipate, believe, estimate, continue or the negative of such terms or other such expressions. There are a ~~working~~number ~~interest~~of factors that could cause our actual results to differ materially from our expectations, including but not limited to those risk factors disclosed in our annual report on Form 10-K for the Layear ~~Duquesa~~ended ~~project~~August on31, ~~approximately~~2007, ~~400~~our ~~net~~other ~~acres~~filings inwith ~~Zapata~~the ~~County~~Securities and Exchange Commission, ~~Texas~~as well as our other public documents and press releases which can be found on our web site (www.maverickoilandgas.com). ~~The~~Readers ~~initial~~are cautioned ~~well~~not to place undue reliance on ~~this~~our ~~project~~forward ~~has~~looking ~~been~~statements, ~~successfully~~as they speak ~~completed~~only ~~and~~as ~~gas~~of ~~production~~the date made. Such statements are not guarantees of future performance or events and ~~sales~~we ~~commenced~~undertake ~~during~~no ~~August~~obligation ~~2005~~to disclose any revision to these forward looking statements to reflect events or circumstances occurring after the date hereof.

~~Turner/LaEscalera~~ Overview

~~On February 14~~Since 2004, ~~2005,~~we ~~Maverick~~have ~~Turner~~been ~~Escalera,~~an ~~L.L.C.,~~early astage ~~wholly~~independent ~~owned~~energy ~~subsidiary~~company ~~that~~seeking ~~we formed~~ to ~~explore~~find and develop ~~for~~ oil and gas ~~in West Texas~~reserves., ~~paid~~Following ~~$1,200,000~~the tosale ~~South Oil, Inc. to acquire a working interest~~ in ~~approximately~~April ~~1700~~2007 ~~net~~of ~~option~~our ~~acres with drill-to-earn terms in Tom Green County, Texas, and a 17.5%~~ interest in ~~1631.25~~the ~~leasehold~~Barnett ~~acres~~Shale inplay ~~Pecos County, Texas. We subsequently acquired approximately 200 net acres~~ in ~~Pecos~~Wise County, Texas, ~~subject~~our toonly aremaining ~~12.5%~~active project ~~carried~~involved ~~working~~the ~~interest~~development ~~and~~of aour ~~12.5%~~Fayetteville ~~back-in~~Shale ~~after~~project ~~payout to prior parties~~ in ~~interest~~ Arkansas.

~~Seven wells~~ We have continued ~~been~~to ~~drilled~~incur onsignificant ~~the~~losses ~~Turner~~since ~~Ranch~~our ~~portion~~inception. ofDuring ~~the~~fiscal ~~project~~years 2007 ~~in Tom Green County resulting in six marginal producers~~ and ~~one~~2006, ~~dry~~we ~~hole~~recognized ~~with~~losses ~~production~~to ~~rates~~common instockholders ~~all~~of ~~wells~~$11,333,825 ~~less~~and $21,529,473, ~~than expected~~respectively. OfFor the ~~six~~quarter ~~wells~~ended ~~that~~November ~~have~~30, ~~been tested~~2007, ~~only~~our ~~one~~net income ~~has~~was ~~been~~$480,713 ~~deemed~~and ~~capable~~we ofhad ~~producing~~an ataccumulated ~~commercial~~deficit ~~levels.~~of We$61,728,893 ~~have~~as ~~ceased participating in development activities in the Turner Ranch portion~~ of November ~~this~~30, ~~project~~2007.

~~The two test wells on the La Escalera portion~~ Cessation of ~~the~~Oil ~~project~~and inGas ~~Pecos County were unsuccessful. Accordingly, we have ceased participating in development activities in the La Escalera portion of the project.~~Operations

~~Maverick~~We have been ~~Basin~~unable to secure financial, operating or other developmental partners for our Fayetteville Shale project. We have also been unable to secure additional funding for our operations. We have terminated all of our oil and gas personnel, and most of the balance of our administrative and executive personnel.

OnEven though ~~July~~we ~~28,~~have ~~2004,~~been weable ~~acquired~~to asuccessfully ~~74.25%~~compromise ~~Class~~significant Afinancial obligations ~~membership~~to ~~interest~~the invendors ~~Maverick~~and ~~Basin~~suppliers ~~Exploration,~~to ~~LLC~~our former Fayetteville Shale project, aone ~~Delaware~~of ~~limited~~our ~~liability~~former ~~company~~Fayetteville ~~(“MBE”).~~Shale ~~MBE~~partners, isand to an ~~oil~~existing claimant ~~and~~involving ~~gas~~our ~~exploration~~former ~~and~~Fayetteville ~~production~~Shale ~~company~~project, ~~that~~our ~~entered~~existing ~~into~~capital resources anare ~~exploration~~not sufficient to maintain our operations and ~~joint~~to ~~operating~~pay ~~agreement~~our ~~with~~remaining liabilities ~~Blue~~generally ~~Star~~as ~~Operating,~~they ~~Inc~~become due. This includes, anwithin ~~oil~~the immediate ~~and~~term, ~~gas~~amounts ~~exploration~~which ~~and~~may ~~production~~be ~~company~~payable ~~based~~to incertain ~~Dallas,~~leaseholders ~~Texas~~within our former ~~(“Blue~~Fayetteville ~~Star”).~~Shale ~~This~~project ~~operating~~because ~~agreement~~we ~~gave~~do ~~MBE~~not have the ~~right~~resources to discharge ~~drill~~our ~~four~~drilling ~~wells~~obligations into ~~order~~them, amounts required to ~~secure~~remediate existing awell 10sites,~~240~~ and certain severance and other employment-~~acre~~related obligations. In ~~parcel~~the inlonger-term, we would not have been able to satisfy the ~~Maverick~~amounts ~~Basin~~which inwould ~~Texas~~have become due under our senior secured convertible debentures, for which, isas ~~located~~of ~~adjacent~~November 30, 2007, we were obligated to repay the ~~Mexican~~principal ~~border~~amount of approximately $27.8 million.

WeOn December ~~acquired~~4, 2007, we received notices of default from the holders of our ~~interest~~2007 Debentures. inAs ~~MBE~~of inDecember ~~August~~17, ~~2004~~2007, inwe ~~exchange~~entered ~~for~~into ~~assuming~~a anStrict ~~obligation~~Foreclosure Agreement towith ~~make~~the ~~capital~~original ~~contributions~~holders toof ~~MBE~~our ~~totaling~~2007 ~~$4,000,000~~Debentures and the transferees of their interests under the 2007 Debentures (the "Transferees"). WeUnder ~~paid~~the Strict ~~these~~Foreclosure ~~capital~~Agreement, ~~contributions~~the inTransferees ~~full~~have ~~during~~foreclosed upon our interest in the ~~second~~Fayetteville ~~quarter~~Shale ofProject through foreclosure upon our ~~2005~~interest ~~fiscal~~in Maverick ~~year.~~Woodruff InCounty, ~~addition~~LLC (which holds our leasehold interests in the Fayetteville Shale Project), weMaverick ~~incurred~~Operating, ~~$2.5~~LLC ~~million~~(the licensed operator of our ~~drilling~~Fayetteville Shale Project) and ~~other~~miscellaneous ~~expenses~~seismic ~~during~~data ~~fiscal~~and ~~2005~~files related to ~~this~~our ~~project~~Fayetteville Shale Project. In consideration of the transfers evidenced by the Strict Foreclosure Agreement, our obligations under the 2007 Debentures have been extinguished and certain mutual releases have been provided.

~~There~~We believe ~~have~~that ~~been~~the 3foreclosure ~~wells~~transaction ~~drilled~~was toin ~~date.~~our ~~These~~best ~~wells~~interest ~~have~~as ~~not~~we ~~tested~~have extinguished atover ~~commercial~~$28 ~~rates.~~million Asof asenior ~~result~~secured indebtedness, wewhile we have been ~~ceased~~able ~~participating~~to inretain ~~development~~a ~~activities~~modest ~~for~~amount ~~this~~of ~~project,~~cash and avoid, in ~~March~~the short-term, ~~2006~~an otherwise likely bankruptcy filing. Furthermore, wethe ~~terminated~~foreclosure process ~~our~~extricated ~~interest~~us infrom ~~this~~the ~~project~~Fayetteville ~~and~~Shale ~~surrendered~~project, ~~our~~which ~~interest~~otherwise would have torequired ~~Blue~~significant ~~Star~~additional infunding ~~consideration~~(which ~~for~~we ~~Blue~~have ~~Star’s~~been ~~agreement~~unable to secure) ~~fulfill~~and ~~well~~whose ~~abandonment~~geologic ~~obligations~~outcomes remain subject to uncertainty.

1415

~~Results~~Following the foreclosure process, we have terminated most of ~~Operations~~our personnel and ceased all oil and gas related operations as we will now attempt to identify business opportunities and financing that may be suitable for the Company.~~For~~ However, our remaining cash assets will only be sufficient to sustain us as an inactive company for the ~~Quarters~~short-term. ~~Ended~~There ~~May~~can 31be no assurances that we will be able to identify a suitable business opportunity or the financing necessary to complete a transaction, ~~2006~~or ~~and~~that ~~May~~any 31business we may acquire will generate profits or increase the value of the Company. If we are unable to execute on our business plan within the short-term, ~~2005~~we will be forced to suspend all public reporting with the SEC and possibly liquidate.

AsOur current webusiness ~~have~~plan ~~remained~~is into ~~the~~attempt ~~early~~to ~~stages~~identify ofa ~~development,~~suitable ~~our~~operating ~~revenues~~company with ~~from~~a ~~operations~~view ~~only~~towards ~~recently~~completing ~~commenced~~a ~~during~~business ~~the~~combination ~~third~~that ~~quarter~~could ofachieve long-term ~~fiscal~~growth ~~2005~~for the Company. WeHowever, ~~realized~~as ~~revenues~~of ~~from~~the ~~operations~~date of ~~$665~~this report,~~156~~ ~~for~~we have ~~the~~not ~~three~~identified ~~month~~a ~~period~~particular ~~ended~~industry ~~May~~and ~~31,~~have ~~2006,~~determined ~~compared~~not to ~~$46,129~~restrict our search for ~~the~~a ~~comparable~~target ~~prior~~company ~~year~~to ~~period.~~any ~~Our~~specific ~~third~~business, ~~quarter~~industry ~~revenue~~or geographical location. As of ~~$665~~the date of this report,~~156~~ ~~reflected~~we anhave also ~~increase~~not ofengaged ~~$302~~in any specific discussions with any potential company regarding a transaction. In addition,~~837~~ ~~over~~although ~~our~~we ~~second~~have ~~quarter~~not ~~revenue~~developed any ofdefinitive ~~$362~~criteria for evaluating a successful target,~~319.~~ we expect to consider, among other factors, the following:

We· ~~incurred~~growth apotential ~~net~~as ~~loss~~evidenced ofby ~~$2,141,913~~technological ~~for the three month period ended May 31~~superiority, ~~2006~~anticipated ~~compared~~market toexpansion aor ~~net~~new ~~loss~~products ofor $14,789,993 for the three month period ended May, 2005. Non-cash charges of $11,843,978 were the largest component of our third quarter 2005 losses. Our loss from operations for the three month period ended May 31, 2006 was $2,088,752, compared to a loss from operations of $13,977,051 for the comparable prior year period.services;

~~Total~~· ~~expenses were $2,811,267 for~~ the ~~three~~historic ~~month~~financial ~~period~~performance ended May 31, 2006, as compared to $15,362,341 for the three month period ended May 31, 2005. General and administrative expenses were $2,172,699 for the three month period ended May 31, 2006, as compared to $9,250,687 for the three month period ended May 31, 2005. Non-cash share based compensation of ~~$589,488 and $7,944,497 for~~ the ~~three month periods ended May 31, 2006 and 2005 was a major contributor to General and Administrative expenses.~~target;

~~For~~· the ~~Nine~~quality ~~Months~~of ~~Ended~~the ~~May~~management 31team, ~~2006~~including consultants and ~~May 31, 2005~~advisors;

As· ~~we have remained in~~ the ~~early~~target’s ~~stages~~competitive ofposition ~~development,~~relative ~~our~~to ~~revenues~~other ~~from~~firms ~~operations only recently commenced during the third quarter~~ of ~~fiscal~~similar ~~2005.~~size Weand ~~realized~~experience ~~revenues~~within ~~from~~its ~~operations of $1~~industry,~~838,644~~ ~~for~~a ~~the~~segment ~~nine month periods ended May 31~~thereof, ~~2006,~~or ~~compared~~geographic ~~to revenues of $46,129 for the comparable prior year period.~~location;

We· ~~incurred a net loss of $26,201,551 for~~ the ~~nine~~capital ~~month~~requirements ~~period ended May 31, 2006 compared to a net loss~~ of ~~$19,144,810 for~~ the ~~nine~~target ~~month~~and ~~period~~anticipated ~~ended~~availability ~~May 31, 2005. Non-cash charges were the largest component~~ of ~~our~~required ~~losses~~funds for both ~~periods. Our loss from operations for~~ the ~~nine~~short ~~month~~and ~~period~~long ~~ended May 31, 2006 was $11,199,899, compared to a loss from operations of $17,113,290 for the comparable prior year period.~~term;

~~Total~~· ~~Expenses were $28,043,903 for~~ the ~~nine~~results month period ended May 31, 2006 as compared to $20,212,486 for the nine month period ended May 31, 2005. General and administrative expenses were $11,122,975 for the nine month period ended May 31, 2006, as compared to $10,001,847 for the nine month period ended May 31, 2005. Non-cash share based compensation expense of ~~$5,813,266~~our ~~and $8~~financial,~~143,247~~ ~~for~~business ~~the nine month periods ended May 31, 2006~~ and ~~2005~~management ~~respectively~~due ~~was~~diligence; ~~a major contributor to General~~ and Administrative expense. The year to year increase in general and administrative expenses is reflective of establishing the proper level of professional staff to run the Company and professional fees associated with a high level of financing and regulatory reporting activity. Non-cash expenses of $21,263,925 for the nine month period ended May 31, 2006 included $5,813,266 share based compensation, $1,082,580 depletion, depreciation and amortization, and $12,903,519 for the mark to market of the conversion feature of the debentures and investment warrants primarily associated with the $20,000,000 January 2006 debenture financing and $1,464,560 non-cash interest expense. Non-cash charges for the nine month period ended May 31 2005 of $16,012,169 included $8,143,247 share based compensation, $2,056,073 convertible note discount amortization, and $5,710,416 impairment.

~~EITF-00-19~~· ~~and FAS 133 require that certain financial instruments that meet certain conditions be treated as derivatives with embedded liabilities and must be established as a liability on~~ the ~~balance~~anticipated ~~sheet~~time and ~~marked~~cost to ~~market~~complete ~~through the income statement on~~ a ~~regular basis~~transaction. This is a non-cash accounting event and does not represent a current or future cash requirement of the Company and as such has no impact on liquidity. This convention will cause a non-cash expense to be realized during

15In applying the foregoing criteria, we will attempt to analyze all available, relevant and material factors and circumstances in order to make an informed decision. Potential opportunities may occur in different industries, in different geographic locations and at various stages of development, all of which will make the task of comparing, analyzing and evaluating business opportunities extremely difficult and complex.

~~periods~~Most acquisitions ~~when~~of ~~our~~private ~~share~~operating ~~price~~companies ~~rises~~by public shell companies are completed by way of merger pursuant to which the shareholders of the private company acquire a substantial majority of the issued and ~~non-cash~~outstanding ~~income~~shares of the pubic company after the merger is completed. These transactions are often referred to as “reverse acquisitions” or “reverse mergers” and generally result in substantial additional dilution to the ownership interests of the stockholders of the public company. If any transaction is structured in this manner, our stockholders will suffer substantial dilution. We may complete such an acquisition upon the sole determination of management without any vote or approval by our stockholders. In certain circumstances, however, it may be ~~recognized~~necessary to ~~when~~call a stockholders' meeting and obtain approval of our ~~share~~stockholders, ~~price~~which may ~~falls~~result in delay and additional expense in the consummation of any proposed transaction and may also give rise to certain appraisal rights to dissenting stockholders. Most ~~This~~likely, ~~accounting~~we ~~treatment~~will ~~does~~seek to structure any such transaction so as not ~~impact~~to ~~operating~~require ~~income~~stockholder approval.

~~Liquidity~~It is anticipated that the investigation of specific business opportunities and ~~Capital~~the negotiation, ~~Resources~~drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial cost for accountants, attorneys and other professionals. If we decide not to complete a transaction after we have incurred material transaction costs in connection with the investigation, negotiation and documentation related thereto, such costs will likely not be recoverable.

~~Net~~We intend to ~~cash~~use ~~used~~our bylimited ~~operating~~cash ~~activities~~assets ~~during~~to ~~the~~pay ~~nine~~for ~~month~~our ~~period~~minimal ~~ended~~operations ~~May~~and 31legal, accounting ~~2006~~and ~~was~~professional $4services required to prepare and file our reports with the SEC. Our remaining cash assets,~~104~~ however,~~266,~~ aswill ~~compared~~only be sufficient to ~~net~~sustain ~~cash~~us ~~used~~as ofan ~~$2,926,800~~inactive ~~during~~company for the ~~nine~~short-term. There ~~months~~can ~~ended~~be no ~~May~~assurance ~~31,~~that ~~2005.~~we ~~The~~will ~~primary~~be ~~use~~able ofto ~~cash~~identify inan acceptable operating ~~activities~~company, complete ~~for~~an ~~the~~acquisition, ~~current~~or ~~period~~that ~~was~~any tobusiness ~~fund~~we ~~the~~acquire ~~net~~will ~~loss~~generate ~~and~~profits or ~~prepaid~~increase ~~drilling~~the ~~costs~~value of the Company. If Ofwe ~~our~~are ~~prepaid~~unable ~~drilling~~to ~~costs,~~locate additional $1financing within the short-term,~~692,600~~ ~~was~~we ~~used~~will be forced to ~~secure~~suspend all public reporting with the ~~services~~SEC ofand apossibly ~~dedicated~~liquidate. Furthermore, our ~~drilling~~ability ~~rig~~to ~~for~~execute ~~the~~on ~~Fayetteville~~these ~~Shale~~business ~~project~~objectives ~~for~~may atbe ~~least~~subject 24to ~~months.~~material doubt ~~This~~as ~~cost~~our management team will likely be ~~assigned~~limited to ~~the~~one ~~wells~~part-time ~~drilled~~individual who ~~over~~will ~~that~~have ~~period~~minimal cash resources to support operations for more than the short-term.

Net cash used in investing activities for the nine month period ended May 31, 2006 was $19,286,450, as compared to $17,175,383 used for investing activities during the nine months ended May 31, 2005. For the nine month period ended May 31, 2006, the majority of our net cash used for investing activities primarily consisted of acquiring leasehold interests in the Fayetteville Shale play in eastern Arkansas, with the balance used in the Barnett Shale project for the drilling of the Portwood 1-H well and the acquisition of the additional 13.4% interest in RBE, LLC from Reichman Petroleum.16

Results of Operations.

~~Net~~Results of ~~cash~~operations ~~provided~~exclude ~~by financing activities during~~ the ~~nine~~operation ~~months~~and ~~ended~~sale ~~May~~of ~~31,~~our ~~2006~~interest ~~was~~in ~~$21,862,443,~~the ~~compared~~Barnett Shale toproject ~~$26,952,736~~as ofwe ~~cash~~have ~~provided~~ accounted for the ~~nine~~Barnett ~~months~~Shale assets in ~~ended~~results ~~May~~from ~~31,~~discontinued ~~2005.~~operations ~~The~~for ~~primary sources of this funding came from~~ the ~~issuance~~current ~~of debt of $21,154,850~~ and comparable ~~proceeds~~reporting ~~from the issuance of common stock of $1,860,000, net of repayment of debt of $2,016,404~~periods.

~~Net~~For the ~~working~~Three ~~capital~~Months ~~decreased~~Ended byNovember ~~$31,452,595 as of May 31, 2006 to a deficit of $~~30,~~523,245,~~ as compared to the surplus of $929,350 as of August 31, 2005. This decrease is primarily attributable to a $32,144,491 increase in current liabilities during this period. $27,146,137 of this increase is associated with the secured convertible debentures and warrants issued on January 5, 2006. $4,166,667 of this increase is the portion of that debt that is due to be repaid over the first six months of 2007 and ~~$22,979,470~~November is the derivative liability associated with the secured convertible debentures and warrants. This non-cash liability is recognized as a current liability because the debenture holders have the option to convert the debentures into Maverick shares immediately should they choose. $430,~~987,230 of the increase is a payable to our Fayetteville partners for~~ ~~lease assignments that will be settled as we catch up with our pro-rata share of funding with our Fayetteville Shale Project partners.~~ 2006

~~Our~~We realized ~~working~~revenues ~~capital~~from ~~position~~continuing ~~was~~operations ~~affected~~of by$29,021 ~~the~~for ~~following transactions during~~ the ~~nine-month~~three ~~period~~months ended ~~ending~~November ~~May 31~~30, ~~2006. During October 2005~~2007, weas ~~sold~~compared ~~convertible debentures and warrants~~ to ~~purchase 500~~$73,~~000~~629 ~~shares of our common stock to Trident Growth Fund, LP~~ for ~~gross~~the ~~proceeds~~comparable ofprior ~~$2,000,000~~year period. ~~The convertible debentures had a principal amount of $2,000,000 and bore interest at an annual rate of 12%. The convertible debentures were repaid in full on January 6, 2006.~~

~~The~~We generated ~~warrants~~net ~~have~~income afrom ~~term~~continuing operations of ~~five~~$28,203 ~~years~~for ~~and~~the anthree ~~exercise~~months ended ~~price~~November 30, 2007 as compared to net income of $~~1.00~~6,727,328 ~~per~~for ~~share~~the comparable ~~The~~prior ~~exercise~~year ~~price~~period. A ofgain associated with the ~~warrants~~extinguishment isof trade ~~subject~~payables toof ~~customary~~$1,616,922 ~~anti-dilution~~more ~~adjustments~~than ~~and~~offset a ~~“full~~loss ~~ratchet”~~from ~~adjustment~~continuing inoperations before ~~the~~other ~~event~~income (expense) of ~~the~~$1,033,070 ~~issuance~~and interest expense of ~~common~~$561,051. For ~~stock~~the orperiod ~~common~~ended ~~stock~~November ~~equivalents~~30, ~~for~~2006, a ~~price~~gain ~~less~~on ~~than~~ the ~~then~~mark ~~exercise~~to ~~price~~market of derivative ~~the~~liabilities associated with our convertible debentures and related warrants. Byof ~~application~~$10,986,681 offset a loss before other income (expense) of $1,418,955 ~~these~~and ~~anti-dilution~~interest ~~adjustments~~expense of $2,841,443. EITF-00-19 and FAS 133 require that certain financial instruments that meet certain conditions be treated as derivatives with embedded liabilities and must be established as a liability on the ~~exercise~~balance ~~price~~sheet ofand marked to market through the ~~warrants~~income statement on a regular basis. This was ~~reduced~~a tonon-cash $accounting event and did not represent a current or future cash requirement of the Company and as such had no impact on liquidity.~~9376~~ This ~~per~~convention caused non-cash expense to be realized during periods when our share ~~following~~price ~~the~~rose ~~January~~and 6non-cash income to be recognized when our share price fell. This accounting treatment did not impact operating income. Effective July 30, ~~2006~~2007, ~~issuance~~we entered into a Recapitalization involving the retirement of the ~~$20~~2006 ~~million~~Debentures and Warrants in exchange for new secured convertible debentures and warrants. These ~~referred~~instruments are not subject to ~~below~~EITF-00-19 and FAS 133 accounting treatment.

~~Also~~Operating loss inbefore ~~October~~other ~~2005,~~income ~~our~~(expense) ~~subsidiary,~~for ~~Maverick~~the ~~Woodruff~~three ~~County,~~month ~~LLC~~period ended November 30, 2007 ~~borrowed~~was $1,~~000~~033,~~000~~070 as compared to ~~finance~~a ~~lease~~loss ~~acquisitions~~of in$1,418,956 for the ~~Fayetteville~~comparable prior year ~~Shale project~~period. General ~~The~~and ~~loan~~administrative ~~was~~expenses ~~secured~~of by$775,419 afor ~~pledge of~~ the three ~~membership~~month ~~interests~~period ofended ~~Maverick Woodruff County~~November, ~~LLC.~~2007 ~~However~~were $662,811 ~~the~~lower ~~loan~~than ~~automatically~~general ~~converted~~and administrative ~~into~~expenses ~~shares~~ of ~~the~~$1,438,230 ~~common~~for ~~stock~~the ofcomparable ~~one~~prior ofyear period. The ~~our~~lower ~~Fayetteville~~general ~~project~~and ~~participants~~administrative inexpenses ~~February~~are ~~2006~~reflective of ~~when~~reductions weof ~~acquired~~staff and ~~distributed~~associated ~~to this participant its pro rata interest in 50,000 leasehold acres~~expenses.

From inception of our Barnett Shale project through October 19, 2005, Reichmann Petroleum Corp served as the managing partner of RBE and as the operator of a portion of the project. Dyke Ferrell, the principal shareholder of Reichmann Petroleum, owned an approximate 13% interest in RBE. Discontinued operations

16 The earnings for the three month period ended November 30, 2007 of $452,510 reflect the gain of the sale of the Whitewater assets as compared to net income from discontinued operations of $207,541 for the comparable prior year period which represented earnings from the Barnett Shale assets divested in April 2007.

~~During October 2005, we acquired the 13% interest in RBE from Mr. Ferrell in consideration for the purchase price of $1,750,000~~ Liquidity and ~~250,000~~Capital shares of our common stock. Of the purchase price, $250,000 was paid during October 2005 and the balance of $1,500,000 was paid in January 2006 upon completion by us of a financial audit of all relevant financial and other data relating to the operation of RBE by Reichmann Petroleum. In connection with this purchase, we became the managing member of RBE and operator of the 100% owned portion of the project.Resources

~~During~~Net cash used ~~November~~in ~~2005,~~operations wewas ~~sold 200,000 investment units at a price of~~ $~~10 per unit to Millenium Global Investments~~1,644,748 ~~Ltd.~~for ~~Each~~the ~~unit~~three ~~consisted of ten shares of our common stock and a thirty (30)~~ month ~~warrant~~period toended ~~purchase four shares of our common stock at an exercise price of $1~~November 30, 2007.~~70 per share.~~ The ~~Millenium~~primary ~~warrants~~use ~~were restructured following our January 6, 2006 issuance~~ of ~~secured~~the ~~convertible~~cash ~~debentures~~was ~~and~~to ~~warrants.~~fund Asadministrative ~~restructured,~~expenses ~~Millenium surrendered warrants~~ and to ~~purchase~~settle ~~800,000~~trade ~~shares of our common stock at an exercise price of $1~~payables.70 Net ~~per~~cash ~~share,~~provided inby ~~exchange~~investing activities for ~~warrants~~the toperiod ~~purchase~~was ~~2,000,000 shares of our common stock; of which 1,000,000 have an exercise price of~~ $~~.9376 per share; 500~~36,~~000~~175 ~~have~~compared anto ~~exercise~~funds ~~price~~provided of $~~1.50 per share; and 500~~216,~~000~~752 for the ~~have~~comparable anprior ~~exercise~~year ~~price of $2~~period.~~00 per share.~~

OnThere were ~~January~~no 5,financing ~~2006,~~activities weduring ~~sold for $20 million, convertible secured debentures (~~the ~~“January~~three ~~Secured~~month Convertible Debentures”) and five-year warrants to purchase up to 31,996,587 shares of our common stock (the “January Warrants”). The January Secured Convertible Debentures have an aggregate principal amount of $20 million, bear interest at 7.5% per annum, and have a maturity date on the third anniversary of their issuance, subject to the right of the holders to extend the maturity date for a period ofended upNovember ~~to three years. Interest payments commenced on a quarterly basis during June 2006~~30, ~~with principal payments due in twenty-four equal monthly installments commencing in January~~ 2007. ~~Under~~compared ~~limited circumstances, interest and principal payments may be made in shares of our common stock priced at an agreed upon discount~~ to ~~market. The January Secured Convertible Debentures are convertible into shares of our common stock at an initial conversion price of approximately~~ $~~0.9376 per share~~6, ~~subject to full-ratchet anti-dilution adjustments which reduce the conversion price to any lower price at which the Company issues any common stock~~508,000 ~~or is obligated to issue common stock pursuant to options, warrants, or convertible securities in the future, except for the issuance~~ of ~~certain~~cash ~~excluded~~provided ~~securities.~~during ~~Also, under limited circumstances,~~ the ~~Company~~comparable ~~has~~prior ~~the right to force the holders to convert certain partial amounts due under the January Secured Convertible Debentures, upon payment of certain additional warrants~~year period. ~~The~~Prior ~~Company’s~~year ~~obligations~~cash ~~under~~was ~~the~~primarily ~~January~~provided ~~Secured Convertible Debentures are secured~~ by ~~a security interest in all of~~ the Company’s assets. The terms of the January Secured Convertible Debentures preclude the Company from incurring any other indebtedness, subject to limited carve-outs for trade payables, other forms of operating indebtedness and up to $5 million in senior debt. Of the January Warrants, 21,331,059 had an initial exercise price of $0.9376 per share, 5,332,764 had an initial exercise price of $1.50 per share, and the remaining 5,332,764 had an initial exercise price of $2.00 per share. The exercise prices of the January Warrants are subject to anti-dilution adjustments which reduce the exercise price to any lower price at which the Company issues any common stock, or is obligated to issue common stock pursuant to options, warrants, or convertible securities, in the future, except for the issuance of certain excluded securities. Upon adjustment of the exercise price of the January Warrants, the number of shares issuable upon exercise of the January Warrants will be correspondingly adjusted. As a result of our issuance of warrants in connection with our sale of ~~$10 million of~~ secured convertible debentures on ~~June~~November 2116, 2006 ~~described~~with ~~below~~net ~~and~~proceeds ~~the anti-dilution adjustment provisions~~ of ~~the January Warrants issued on January 5, 2006, the exercise price of approximately 5.3 million of the January Warrants was reduced from~~ $~~2.00 to $0.9376, the exercise price of approximately~~ 5~~.3 million of the warrants issued on January 5~~, ~~2006 was reduced from $1.50 to $0.9376~~850, ~~and an approximately 9~~000.~~3 million additional shares of common stock became issuable upon exercise of the January Warrants.~~

AsNet Cash Flow ~~part~~provided ofby Discontinued ~~this~~Operations ~~transaction~~was $400,930 ~~we secured effectiveness of a registration statement filed with the Securities and Exchange Commission~~ for the ~~purpose~~three ofmonth period ~~registering~~ended ~~the~~November ~~resale~~30, of2007 ~~the~~and ~~shares~~is ofassociated ~~common~~with ~~stock issuable pursuant to~~ the ~~January~~sale ~~Secured Convertible Debentures and exercise~~ of the ~~January Warrants~~Whitewater assets. Net ~~The~~cash ~~registration~~used during ~~statement~~the ~~must~~comparable ~~remain~~prior ~~effective for a predetermined~~ year period was $2,293,781.

17Our net working capital deficit of $28,426,826 as of November 30, 2007 decreased by $3,158,139 versus the August 31, 2007 deficit of $31,584,965. The decrease is primarily attributed to the extinguishment of trade payables for cash and stock during the quarter. The remaining deficit is essentially the balance due on our secured convertible debentures.

~~subject~~On December to4, ~~certain~~2007, ~~“grace~~we ~~periods”.~~received Ifa wenotice ~~fail~~from toeach ~~meet~~of the ~~deadlines~~holders ~~for~~of our Secured ~~the~~Convertible Debentures ~~continued~~that ~~effectiveness~~certain events of default had occurred under the ~~registration~~2007 ~~statement~~Debentures dated July 30, 2007. Under the terms of the 2007 Debentures, we ~~will~~had bean ~~required~~obligation to ~~pay~~redeem ~~liquidated~~the ~~damages~~holder's Debentures. As of ~~two~~November ~~percent~~30, 2007, there ofwas ~~the~~an aggregate ~~purchase~~total ~~price~~ of ~~the~~approximately ~~June~~$28.6 ~~Secured~~million ~~Convertible~~in ~~Debentures~~ principal and accrued ~~associated~~interest ~~warrants~~outstanding onunder the ~~date~~Secured ofConvertible ~~such~~Debentures. We ~~failure~~did ~~and~~not onhave ~~every~~the ~~30th~~resources ~~day~~to ~~thereafter~~pay ~~until~~that ~~such failure is cured~~amount.

On June 21, 2006, we issued $10 million principal amount of secured convertible debentures (the “June Secured Convertible Debentures”) and associated warrants to purchase 18,664,676 shares of our common stock (the “June Warrants”) in a private placement transaction The June Secured Convertible Debentures have an aggregate principal amount of $10 million and are convertible into 10,665,529 shares of our common stock (at an initial conversion price of $0.9376 per share), subject to anti-dilution adjustments. The June Secured Convertible Debentures have a maturity date on the first anniversary of their issuance, subject to the right of the holders to extend the date for the payment of any installment of principal described below. The June Secured Convertible Debentures bear interest at the rate of 9.75% per annum, which rate is increased to 15% upon the occurrence of an event of default under the June Secured Convertible Debentures. Our obligations under the June Secured Convertible Debentures are secured by a security interest in all of the Company’s assets.17

~~The principal amount~~ As of December ~~the June Secured Convertible Debentures is to be repaid in equal monthly installments commencing on November 1~~17, ~~2006 (or~~2007, ifwe ~~earlier, on the first day of the calendar month following the date the registration statement required by a registration rights agreement~~ entered into ina ~~connection~~Strict ~~with~~Foreclosure ~~the Secured Convertible Debentures and warrants (the “Registration Rights~~ Agreement”) iswith ~~declared effective) and ending on June 21, 2007,~~ the original ~~first~~holders ~~anniversary~~ of ~~the date of their issuance. Such principal payments may be paid in cash or, at the option of the Company if certain conditions are satisfied, in shares of~~ our ~~common stock. Any shares of common stock used to pay an installment of principal will be valued at the lower of (1) the then applicable conversion price of the June~~ Secured Convertible Debentures and ~~(2) 82.5% of~~ the ~~arithmetic~~ ~~average~~ transferees of ~~the~~their ~~weighted~~interests ~~average~~under ~~price of~~ the ~~common~~2007 ~~stock~~Debentures ~~for the fifteen trading days preceding the installment payment date~~ (~~but no greater than~~ the ~~arithmetic average of the weighted average price for the first and last three trading days of such fifteen trading day period~~"Transferees"). ~~The~~Under ~~number of shares of common stock which may be issued for~~ the Strict ~~payment~~Foreclosure ofAgreement, ~~any installment of principal may not exceed 22.5% of~~ the ~~aggregate~~Transferees ~~dollar~~have ~~trading~~foreclosed ~~volume~~upon ~~over~~our ~~the~~interest in ~~twenty trading days before~~ the ~~date~~Fayetteville ~~the~~Shale ~~Company~~Project ~~delivers~~through ~~notice~~foreclosure ofupon ~~its~~our ~~election~~interest ~~to pay an installment of principal~~ in Maverick ~~shares~~Woodruff ofCounty, ~~its~~LLC ~~common~~(which ~~stock.~~holds ~~If we use shares of~~ our ~~common~~leasehold ~~stock~~interests toin ~~pay~~the Fayetteville anShale ~~installment~~Project), ofMaverick ~~principal~~Operating, weLLC ~~may be required to deliver additional shares of common stock to pay such principal if~~ (the ~~arithmetic~~licensed ~~average~~ operator of our ~~the~~Fayetteville ~~weighted~~Shale ~~average price for the nineteen (19~~Project) ~~trading~~and ~~days~~miscellaneous ~~following~~seismic ~~the~~data ~~installment~~and ~~payment~~files ~~date is~~related ~~less~~ to ~~than~~our ~~the~~Fayetteville ~~price~~Shale ~~used~~Project. inIn ~~determining~~consideration ~~the number~~ of ~~shares~~the ~~that~~transfers ~~were~~evidenced by ~~delivered on~~ the ~~installment~~Strict ~~payment~~Foreclosure ~~date.~~Agreement, ~~The~~our ~~holders~~obligations ofunder the ~~June~~2007 ~~Secured Convertible~~ Debentures have been ~~may~~extinguished ~~elect~~and tocertain ~~defer~~mutual ~~the~~releases ~~payment~~have ~~of any installment of principal for a period of up to two years from the date such installment was originally due~~been provided.

~~The~~We believe ~~June~~that ~~Secured Convertible Debentures are convertible at~~ the ~~option~~foreclosure oftransaction ~~the~~was ~~holders~~in ~~into shares of~~ our ~~common~~best ~~stock~~interest atas anwe ~~initial~~have extinguished ~~conversion~~over ~~price~~$28 million of ~~$0.9376~~senior ~~per~~secured ~~share~~indebtedness, ~~subject~~while towe have been ~~anti-dilution~~able ~~adjustments.~~to ~~The~~retain ~~anti-dilution~~a ~~adjustments~~modest ~~include~~amount aof ~~“full~~cash ~~ratchet”~~and avoid, ~~adjustment~~in ~~which~~the short-term, ~~reduces~~an ~~the~~otherwise ~~conversion~~likely ~~price~~bankruptcy tofiling. ~~any~~Furthermore, ~~lower~~the ~~price~~foreclosure process atextricated ~~which~~us wefrom ~~issue~~the ~~any~~Fayetteville ~~common~~Shale ~~stock~~project, orwhich ~~are~~otherwise would have ~~obligated~~required tosignificant ~~issue~~additional ~~common~~funding ~~stock~~(which ~~pursuant~~we tohave ~~options,~~been ~~warrants,~~unable orto secure) ~~convertible~~and ~~securities~~whose ingeologic ~~the~~outcomes ~~future,~~remain ~~except~~subject ~~for~~to ~~the issuance of certain excluded securities~~uncertainty.

~~Interest~~Following the onforeclosure ~~the~~process, ~~June~~we ~~Secured~~have ~~Convertible~~terminated ~~Debentures~~most ~~commenced~~of ~~accruing~~our aspersonnel ofand ~~June~~ceased all oil ~~21,~~and ~~2006,~~gas ~~however,~~related ~~the~~operations ~~first~~as ~~payment~~we will ~~not~~now beattempt ~~required~~to ~~until~~identify ~~the~~business opportunities ~~first~~and ~~day~~financing ofthat ~~the~~may ~~month~~be ~~immediately~~suitable ~~following~~for the ~~earlier~~Company. ~~of:~~However, our remaining ~~(i)~~cash ~~the~~assets ~~date~~will ononly ~~which~~be ~~the~~sufficient ~~Registration~~to ~~Statement~~sustain ~~required~~us byas ~~the~~an ~~Registration~~inactive company ~~Rights~~for ~~Agreement~~the isshort-term. ~~declared~~There ~~effective~~can bybe ~~the~~no ~~Securities~~assurances ~~and~~that ~~Exchange~~we ~~Commission;~~will orbe ~~(ii)~~able to identify ~~the~~a ~~four~~suitable ~~month~~business ~~anniversary~~opportunity ofor the ~~closing.~~financing Atnecessary ~~our~~to ~~option~~complete a transaction, ~~provided~~or ~~certain~~that ~~conditions~~any ~~are~~business ~~satisfied,~~we ~~interest~~ may beacquire ~~paid~~will bygenerate profits or increase the ~~issuance~~value of ~~common~~the ~~stock~~Company. ~~Any~~If ~~shares~~we ofare ~~common~~unable ~~stock used~~ to ~~pay~~execute ~~interest~~on ~~will~~our bebusiness plan ~~valued~~within ~~at 82.5% of~~ the ~~arithmetic~~short-term, ~~average~~we ofwill ~~the~~be ~~weighted~~forced ~~average~~to ~~price~~suspend ofall ~~the~~public ~~common~~reporting with ~~stock for~~ the ~~five~~SEC ~~trading~~and ~~days~~possibly ~~preceding the interest payment date~~liquidate.

18Critical Accounting Policies

~~The~~Our financial ~~June~~statements ~~Secured~~are ~~Convertible~~prepared ~~Debentures~~in ~~require~~accordance ~~that~~with weaccounting ~~use~~principles generally ~~our~~accepted ~~best efforts to sell our interest~~ in the ~~Barnett~~United ~~Shale~~States. ~~project~~The bypreparation ~~December~~of ~~31,~~our ~~2006~~financial statements ~~for~~requires aus ~~purchase price equal~~ to ~~its~~make ~~fair~~estimates ~~market~~and ~~value.~~judgments Ifthat ~~the~~affect ~~cash consideration to be received in any such sale is less than~~ the reported amount ~~required~~of toassets, ~~retire~~liabilities, ~~the~~revenues ~~January~~and ~~Secured~~expenses. ~~Convertible~~These ~~Debentures~~estimates ~~and~~are ~~the~~based on ~~June~~information ~~Secured~~that ~~Convertible~~is ~~Debentures,~~currently ~~the~~available ~~consent~~to ofus ~~the~~and ~~holders~~on ofvarious aother assumptions ~~majority~~that ofwe ~~the~~believe ~~outstanding~~to ~~principal~~be ~~amount~~reasonable ofunder the ~~June Secured Convertible Debentures is required~~circumstances. IfActual results ~~such~~could ~~consent~~vary issignificantly ~~not~~from ~~provided,~~those ~~the~~estimates ~~deadline~~under ~~for~~different assumptions ~~the~~and ~~sale is extended until March 31, 2007~~conditions.

~~The~~Critical accounting ~~proceeds~~policies ~~from~~are ~~the~~defined ~~sale~~as ofthose ~~the~~significant ~~Barnett~~accounting ~~Shale~~policies ~~project~~that are ~~must~~most becritical ~~deposited~~to ~~and retained in~~ an ~~escrow~~understanding ~~account until such time as there are no January Secured Convertible Debentures or June Secured Debentures outstanding. The holders~~ of ~~the~~a ~~January~~company’s ~~Secured~~financial ~~Convertible~~condition ~~Debentures~~ and results ~~June Secured Convertible Debentures have the right for a period~~ of ~~three~~operation. ~~months~~We ~~after~~consider ~~the~~an ~~proceeds~~accounting ~~are~~estimate ~~deposited~~or ~~into~~judgment ~~escrow~~ to ~~require~~be critical usif ~~to redeem their debentures in cash or in stock~~ (ati) ~~the~~it ~~conversion~~requires ~~price~~assumptions ofto ~~the~~be ~~June~~made ~~Secured~~that ~~Convertible~~were ~~Debentures)~~uncertain at ~~a 25% premium. We may use~~ the time ~~proceeds in~~ the ~~escrow~~estimate ~~fund~~was tomade, ~~make payments on the January Secured Convertible Debentures~~ and ~~the~~(ii) ~~June~~changes ~~Secured~~in ~~Convertible Debentures. A ratable portion of~~ the ~~escrowed~~estimate ~~proceeds~~or ~~may~~different estimates ~~also~~that becould ~~withdrawn~~have bybeen usselected ascould ~~the~~have ~~principal~~a ~~amount~~material ofimpact ~~the~~on ~~debentures are reduced. In addition, if the closing sale price~~our of results ~~our common stock for thirty trading days during any forty consecutive trading day period is more than $2.00 and certain conditions are satisfied by us, we may withdraw an amount~~ of ~~the~~operations ~~escrowed~~or ~~proceeds~~financial ~~equal to ten percent of the aggregate dollar trading volume during such forty day trading period~~condition.

IfWe believe wethat ~~have not sold~~ the ~~Barnett~~following ~~Shale~~significant ~~project~~accounting ~~prior~~policies toare the ~~applicable~~most ~~deadline, the holders of the June Secured Convertible Debentures have the right~~ critical to have one-third of the outstanding principal amount of the June Secured Convertible Debentures and the January Secured Convertible Debentures held by them redeemed, plus accrued and unpaid interest. If we have not sold the Barnett Shale project within three months after the applicable deadline, the holders of the June Secured Convertible Debentures have the right to have an ~~additional~~evaluation ~~one-third~~ of ~~the~~our ~~principal~~future ~~amount~~financial ~~redeemed,~~condition ~~plus accrued~~ and ~~unpaid~~results ~~interest. If the proceeds from the sale~~ of the Barnett Shale project are less than the amount required to retire the January Secured Convertible Debentures and the January Secured Convertible Debentures, the holders of the June Secured Convertible Debentures have ~~the right to require us to redeem a portion of the deficiency, which may be paid in cash or registered shares of common stock~~ operations. If the proceeds from the sale of the Barnett Shale project exceed the amount required to retire the January Secured Convertible Debentures and the June Secured Convertible Debentures, we may retain any such excess for working capital purposes.

As part of this transaction, we have agreed to file a registration statement with the Securities and Exchange Commission for the purpose of registering the resale of the shares of common stock issuable pursuant to the June Secured Convertible Debentures and exercise of the Warrants. The registration statement must be filed and declared effective by the Commission within certain time periods, and must remain effective for a predetermined period subject to certain “grace periods”. If we fail to meet the deadlines for the filing or effectiveness of the registration statement, we will be required to pay liquidated damages of two percent of the aggregate purchase price of the June Secured Convertible Debentures and June Warrants on the date of such failure and on every 30th day thereafter until such failure is cured.18

Effective as of June 30, 2006, we issued 423,551 registered shares of our common stock as an interest payment to the holders of the January Secured Convertible Debentures issued in January 2006. These shares were issued in lieu of a cash payment of $373,973 that would have otherwise been paid representing interest due through June 30, 2006.Income Taxes

~~Our~~The Company ~~plan of operation for the next twelve months~~ is tosubject ~~continue~~ to ~~conduct~~income ~~oil~~ and ~~gas~~other ~~exploration,~~related ~~development,~~taxes ~~drilling~~in ~~and~~areas ~~production~~in ~~operations~~which onit operates. ~~our~~When ~~existing~~recording ~~projects~~income intax ~~Arkansas and Colorado~~expense, ascertain ~~well~~estimates asare ~~any~~required by management ~~new~~due ~~projects~~to wetiming ~~may~~and ~~identify~~the ~~during~~impact ~~the~~of ~~year.~~future Weevents ~~intend~~on towhen ~~continue~~income ~~drilling~~tax expenses and ~~developing~~benefits ~~efforts,~~are inrecognized ~~our~~by ~~Barnett~~the ~~Shale project~~Company. ~~However,~~The asCompany ~~part~~will periodically ofevaluate ~~the~~its ~~sale~~tax ofoperating ~~our~~loss ~~June~~and ~~21,~~other ~~2006~~carryforwards ~~Secured Convertible Debentures, we have agreed~~ to determine ~~use~~whether ~~our~~a ~~best~~gross ~~efforts~~deferred totax ~~sell~~asset, ~~our~~as ~~Barnett~~well ~~Shale~~as ~~project.~~a Inrelated ~~light of the foregoing~~valuation allowance, ~~our~~should ~~capital~~be ~~spending~~recognized ~~plan~~in ~~for~~its ~~the~~financial ~~next twelve months, excluding~~ statements.

19Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~potential~~Interest Rate ~~acquisitions,~~and ~~contemplates~~Credit ~~the~~Rating ~~expenditure~~Risk. As of ~~approximately~~November ~~$37~~30, ~~million~~2007, ~~across all of our various projects~~we had $755,104 ~~with the greatest concentration~~ in ~~the~~cash ~~Fayetteville~~and ~~Shale~~cash ~~project. However~~equivalents, ~~our~~and ~~current~~short ~~funding will only be sufficient to sustain operations through the fourth calendar quarter of 2006~~term investments. At ~~Our~~November ~~ability~~30, to2007, ~~fund~~approximately ~~our operations and capital spending plan thereafter~~$677,719 was ~~depends~~held ~~upon a number of assumptions including: (i)~~ in our ~~ability~~operating accounts to ~~secure~~be ~~additional~~used ~~financing;~~for ~~(ii)~~general ~~our ability to sell our Barnett Shale project; (iii) completion of our pending amendment to our~~ corporate ~~charter~~purposes, toand $87,385 ~~increase~~was ~~the~~invested ~~number~~in ofovernight ~~shares~~repurchase ofagreements, ~~capital~~100% ~~stock~~collateralized with ~~available~~AAA ~~for~~rated ~~future~~US Government ~~issuance;~~Securities. Based ~~(iv)~~on ~~the~~sensitivity analysis ~~geology~~performed ofon the ~~various~~financial ~~projects~~instruments ~~validating~~held ~~our expectations~~ as toof ~~reserve~~November ~~levels~~30, ~~and~~2007, an immediate ~~supporting~~10% ~~the~~change ~~drilling~~in ofinterest ~~multiple~~rates ~~well~~is ~~locations;~~not ~~(v)~~expected ~~the~~to ~~commercial~~have ~~viability~~a ofmaterial ~~the overall projects,~~effect ~~and~~ on ~~(vi)~~our ~~all~~near ~~such~~term ~~other~~financial ~~assumptions~~condition ~~referenced~~or ~~in the in this report under the caption “Forward-Looking Statements~~results.”

~~The~~Commodity Risk. Our ~~funding~~major ~~provided~~commodity byprice ~~our~~risk ~~recent~~exposure ~~financing~~is ~~transactions during fiscal 2005 and the first nine months of fiscal 2006, has enabled us~~ to ~~make significant progress in our development efforts, including, among other things, increasing our ownership interest in~~ the ~~Barnett~~prices ~~Shale project, completing our first two wells in the Barnett Shale project, securing the use of a drilling rig~~ received for, ~~and commencing~~ our ~~first~~natural ~~two~~gas ~~wells in, the Fayetteville Shale project,~~ and ~~acquiring~~oil ~~approximately 125,000 gross acres in the Fayetteville Shale play~~production. Realized ~~However,~~commodity weprices received ~~have~~for ~~either spent or allocated most of the proceeds from~~ our ~~recent~~production ~~sale~~are of the ~~January~~spot ~~Secured~~prices ~~Convertible~~applicable ~~Debentures and the June Secured Convertible Debentures, and as we expected, our current capital resources will not be sufficient~~ to ~~fund~~natural ~~all~~gas ~~development~~ and ~~drilling of our existing projects, or to cover the interest~~ ~~and~~ crude ~~current portion of our long-term debt due within the next twelve months~~oil. Prices Wereceived ~~will,~~for ~~therefore,~~natural ~~attempt~~gas toand ~~sell~~oil ~~our~~are ~~interest~~volatile ~~in our Barnett Shale project~~ and unpredictable ~~continue to seek additional capital over the next 12 months to finance the development of our existing projects~~ and toare ~~fund~~beyond our ~~future growth and exploration activities~~control. For ~~This may take~~ the ~~form~~quarter ofended ~~either~~November 30, ~~debt-based financing~~2007, ora ~~sale~~10% offluctuation ~~equity~~in ~~securities. Any sale of equity securities would require us to complete~~ the ~~pending~~prices ~~amendment to our corporate charter (to increase the number of shares of capital stock available~~ for ~~issuance).~~natural Ingas ~~the~~and ~~shorter~~oil ~~term,~~production would ifhave wehad ~~are~~an ~~unable~~impact ~~to obtain additional funds when we need them or if we cannot obtain funds~~ on terms favorable to us, we may need to delay, scale back, or eliminate plans for further development efforts. An inability to secure additional funds would require us to consider sale of certain assets or otherwise incur a risk of default upon our ~~January~~revenues ~~Secured~~from ~~Convertible Debentures and June Secured Convertible Debentures~~continuing operations.

~~Critical~~Item 4. ~~Accounting~~Controls ~~Policies~~and Procedures.

~~Our~~An evaluation ~~financial~~of ~~statements~~the ~~are~~effectiveness ~~prepared~~of inour ~~accordance~~disclosure ~~with~~controls ~~accounting~~and ~~principles~~procedures ~~generally~~(as defined ~~accepted~~ in ~~the~~Rules ~~United~~13a-15(e) ~~States.~~or ~~The~~15d-15(e) ~~preparation~~under the Securities Exchange Act of 1934) ~~our~~was ~~financial~~carried ~~statements~~out ~~requires~~by us tounder ~~make~~the ~~estimates~~supervision and ~~judgments~~with ~~that affect~~ the ~~reported~~participation of our ~~amount~~chief ofexecutive ~~assets~~officer, ~~liabilities,~~who ~~revenues~~serves as our principal executive officer and principal ~~expenses~~financial officer. Based ~~These~~upon ~~estimates~~that ~~are~~evaluation, ~~based~~our onchief executive ~~information~~officer concluded that isas ~~currently~~of ~~available~~November to30, us2007, our disclosure controls and onprocedures ~~various~~were ~~other~~effective ~~assumptions~~to ensure (i) that information we ~~believe~~are required to bedisclose ~~reasonable~~in reports that we file or submit under the ~~circumstances.~~Securities Exchange ~~Actual~~Act ~~results~~of ~~could~~1934 ~~vary~~is ~~significantly~~recorded, ~~from~~processed, ~~those~~summarized ~~estimates~~and ~~under~~reported ~~different~~within the time ~~assumptions~~periods specified in the SEC’s rules and ~~conditions~~forms and (ii) that such information is accumulated and communicated to management, including our chief executive officer, in order to allow timely decisions regarding required disclosure.

~~Critical~~There were ~~accounting~~no ~~policies~~changes ~~are~~in ~~defined~~our asinternal ~~those~~control ~~significant~~over ~~accounting policies that are most critical to an understanding of a company’s~~ financial ~~condition~~reporting ~~and~~(as ~~results~~defined in Exchange ofAct ~~operation.~~Rules We13a-15(f) ~~consider an accounting estimate~~ or ~~judgment to be critical if~~ 15d-15(if)) ~~it requires assumptions to be made~~ that ~~were~~occurred ~~uncertain~~during at the ~~time~~fiscal quarter ~~the~~ended ~~estimate~~November ~~was made~~30, ~~and~~2007 ~~(ii) changes in the estimate or different estimates~~ that ~~could~~ have ~~been~~materially ~~selected~~affected, ~~could~~or ~~have~~are areasonably likely ~~material~~to ~~impact~~materially onaffect, our ~~results~~internal ofcontrol ~~operations~~over or financial ~~condition~~ reporting.

WePART II. ~~believe~~OTHER ~~that the following significant accounting policies are the most critical to an evaluation of our future financial condition and results of operations.~~INFORMATION

~~Valuation~~Item 1A. ofRisk ~~Derivative Instruments~~Factors

InThe following ~~accordance~~sets ~~with~~forth ~~the~~material ~~interpretive~~changes ~~guidance~~from inthe ~~EITF~~Risk ~~Issue~~Factors ~~No.~~included ~~00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled~~ in, aour Annual ~~Company’s~~Report ~~Own~~on ~~Stock”,~~SEC weForm ~~valued~~10-K ~~the~~for ~~conversion feature of~~ the ~~debentures~~fiscal ~~and~~year ~~warrants~~ended weAugust ~~issued in January 2006 in our financing~~ 31, 2007.

20Our sole officer and director has sole authority to manage the business and affairs of the Company without approval or input from any other person. Our limited personnel may limit our ability to acquire an operating company.

~~transaction~~As of asthe date aof ~~derivative~~this, ~~liability~~John A. WeRuddy ~~must~~serves ~~make~~as ~~certain~~the ~~periodic~~sole ~~assumptions~~officer and ~~estimates~~director toof ~~value~~ the Company. As ~~derivative~~a ~~liability.~~result, ~~Factors~~he ~~affecting~~has the ~~amount~~sole ofauthority ~~this~~to ~~liability~~manage ~~include~~the business ~~changes~~and inoperations ~~our~~of ~~stock price,~~ the ~~computed~~Company ~~volatility~~without ofinput ~~our~~or ~~stock~~approval ~~price~~from ~~and~~any other person ~~assumptions.~~or, ~~The~~except ~~change~~ in ~~value~~limited iscircumstances ~~reflected~~provided inunder ~~our~~Delaware ~~statements~~Corporation Law, offrom ~~operations~~our asshareholders. Unless ~~non-cash~~he ~~income~~resigns or ~~expense,~~is ~~and~~removed from ~~the~~office ~~changes~~by inour ~~the~~shareholders, ~~carrying~~he ~~value~~will ofcontinue ~~derivatives~~to ~~can~~ have asole ~~material~~authority ~~impact on our financial statements. For~~ over the ~~nine~~day ~~months~~to ~~ended~~day ~~May~~to ~~31,~~operations ~~2006,~~and wemanagement ~~recognized a non-cash charge~~ of ~~$12~~our business,~~903,519~~ ~~upon~~including identifying ~~revaluation~~and ofevaluating ~~the~~operating ~~instruments~~companies that ~~are~~we ~~subject~~may want to acquire. Mr. ~~this~~Ruddy ~~accounting~~may ~~treatment.~~not ~~The~~have ~~derivative~~the ~~liability~~time ~~associated~~or ~~with~~all ~~these~~of ~~warrants~~the isskills necessary ~~reflected~~to onexecute our ~~balance~~plan ~~sheets~~to asidentify, aevaluate ~~short-term~~and ~~liability.~~ultimately ~~This~~acquire an operating ~~liability~~company. In ~~will~~order ~~remain~~to ~~until~~successfully ~~the~~execute ~~debentures~~this ~~and converted~~plan, we ~~exercised,~~may orneed ~~repaid,~~to attract and ~~until~~retain ~~the warrants~~additional ~~are~~highly-qualified ~~exercised~~personnel, consultants ~~expire,~~ or ~~other~~advisors. Due ~~events occur~~ to ~~cause the termination of the derivative accounting, the timing of which may be outside~~ our ~~control.~~limited financial

~~Our secured convertible debentures contain an embedded conversion feature~~and human resources, ~~pursuant~~we ~~to which all or part of the debt owed to the holders~~ may not be ~~converted~~successful ~~into~~in ~~shares~~attracting ~~of our common stock at a negotiated conversion price,~~ and ~~the~~retaining ~~warrants~~such qualified persons. If we ~~issued~~fail to ~~the~~attract ~~purchasers~~such ofpersons, our ~~secured~~ability ~~convertible debentures provide them with the right~~ to execute ~~purchase~~ our ~~common~~plan ~~stock at negotiated exercise prices. As a result of the terms of our agreement~~ to ~~register~~acquire ~~the~~an ~~resale~~operating ofcompany the shares of common stock issuable upon conversion or exercise of these instruments, we are required under applicable accounting rules to treat the conversion feature of the secured convertible debenture and ~~the~~increase ~~warrants~~shareholder ~~as liabilities, rather than as equity instruments. This classification as liabilities also requires that we account for them at fair~~ value ~~and include changes in fair value as a component~~ of other income (expense) for so long as the warrants and the conversion feature of the secured convertible debentures remains classified as liabilities. Changes in fair value are based upon the market price of our common stock and are calculated using the Black Scholes method of valuation. As a result, as the market price of our common stock increases, our other expense increases, and as the market price of our common stock decreases, our other income increases. This accounting treatment could ~~result~~be inseverely ~~wide swings of our other income (expense) and net income in the future~~harmed.

~~Proved Oil and Natural Gas Reserves~~19

~~Proved reserves~~ We are ~~defined~~not bysubject ~~the~~to ~~SEC~~certain asof the ~~estimated~~corporate ~~quantities~~governance provisions of ~~crude~~the Sarbanes-Oxley ~~oil,~~Act ~~condensate,~~of ~~natural~~2002 ~~gas~~ and ~~natural~~our ~~gas~~board ~~liquids~~of ~~that~~directors ~~geological~~currently ~~and~~consists ~~engineering~~of one person ~~data~~who ~~demonstrate~~is ~~with~~not ~~reasonable~~considered ~~certainty~~an ~~are~~independent ~~recoverable in future years from known reservoirs under existing economic and operating conditions~~director. Without voluntary ~~Prices~~compliance ~~include~~with ~~consideration~~such ~~of changes in existing prices provided only by contractual arrangements~~provisions, ~~but~~our ~~not~~shareholders onwill ~~escalations based upon future conditions. Prices do~~ not ~~include~~ receive the benefits ~~effect~~and ofprotections ~~derivative~~they ~~instruments,~~were ifenacted ~~any,~~to ~~entered into by the Company~~provide.

~~Proved~~Since our common ~~developed~~stock ~~reserves~~is ~~are~~not ~~those~~listed ~~reserves~~for ~~expected~~trading toon bea ~~recovered~~national ~~through~~securities ~~existing~~exchange, ~~equipment~~we are not ~~and~~subject ~~operating methods. Additional oil and gas expected~~ to becertain ~~obtained~~of ~~through~~ the ~~application~~corporate ofgovernance ~~fluid~~rules ~~injection~~established orby ~~other~~the national ~~improved~~securities ~~recovery~~exchanges ~~techniques~~pursuant ~~for~~to ~~supplementing~~ the ~~natural~~Sarbanes-Oxley ~~forces~~Act ~~and mechanisms~~ of 2002. These ~~primary~~rules ~~recovery~~relate ~~are~~to ~~included~~independent asdirector ~~proved~~standards, ~~developed~~director nomination ~~reserves~~procedures, ~~only~~audit ~~after~~and ~~testing~~compensation ofcommittees astandards, ~~pilot project or after~~ the ~~operation~~ use of an ~~installed~~audit ~~program~~committee ~~has~~financial ~~confirmed~~expert ~~through~~and ~~production~~the ~~response~~adoption ~~that~~of ~~increased~~a ~~recovery~~code ~~will be achieved~~of ethics.

~~Proved~~By December ~~undeveloped~~31, ~~oil~~2007, ~~and~~all ~~gas~~members ~~reserves~~of ~~are~~our ~~reserves~~board ~~that~~of ~~are~~directors ~~expected~~except toJohn beA. ~~recovered~~Ruddy had ~~from~~resigned. As ~~new~~a ~~wells~~result, onMr. ~~non-drilled~~Ruddy, ~~acreage~~who also serves as our Interim Chief Executive Officer and Chief Financial Officer, oris ~~from~~the ~~existing~~sole ~~wells~~member ~~where~~of our board aof ~~relatively~~directors. Mr. ~~major~~Ruddy ~~expenditure~~is not an “independent director” as that term is ~~required~~defined ~~for~~by reany of the national securities exchanges or inter-~~completion~~dealer quotation systems. Our ~~Reserves~~board onof ~~non~~directors has not created a separately-~~drilled~~designated ~~acreage~~standing ~~are~~audit ~~limited~~committee toand ~~those~~although ~~drilling~~Mr. ~~units~~Ruddy qualifies ~~offsetting~~as ~~productive~~an ~~units~~“audit committee financial expert” as that ~~are~~term ~~reasonably~~is ~~certain~~defined ofin Regulation ~~production~~S-K ~~when~~promulgated ~~drilled~~under the Securities Act, he is not considered independent. Unless ~~Proved~~we ~~reserves~~voluntarily ~~for~~elect ~~other~~to ~~non-drilled~~fully ~~units~~comply ~~are~~with ~~claimed~~those obligations, ~~only~~which ~~where~~we ithave ~~can~~not beto ~~demonstrated~~date, ~~with~~the ~~certainty~~protections that ~~there~~these iscorporate governance ~~continuity~~provisions ofwere ~~production~~enacted ~~from~~to ~~the~~provide, ~~existing~~will ~~productive~~not ~~formation~~exist with respect to the Company.

~~Volumes of reserves are estimates that, by their nature, are subject to revision~~Item 6. The estimates are made using all available geological and reservoir data as well as production performance data. There are numerous uncertainties in estimating crude oil and natural gas reserve quantities, projecting future production rates and projecting the timing of future development expenditures. Oil and gas reserve engineering must be recognized as a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact way and estimates of engineers that we use may differ Exhibits

21The following exhibits are included herein:

from those of other engineers. The accuracy of any reserve estimate is a function of the quantity of available data and of engineering and geological interpretation and judgment. Accordingly, future estimates are subject to change as additional information becomes available.


Exhibit Number		Description

31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(1)
32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)(1)

~~Successful Efforts Accounting~~ (1) Filed herewith.

The Company utilizes the successful efforts method to account for our crude oil and natural gas operations. Under this method of accounting, all costs associated with oil and gas lease acquisition costs, successful exploratory wells and all development wells are capitalized and amortized on a unit-of-production basis over the remaining life of proved developed reserves and proved reserves on a field basis. Unproved leasehold costs are capitalized pending the results of exploration efforts. Exploration costs, including geological and geophysical expenses, exploratory dry holes and delay rentals, are charge to expense when incurred.SIGNATURES

~~Impairment~~In accordance with the requirements of ~~Properties~~the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

WeDate: ~~review~~January our proved properties at the field level when management determines that events or circumstances indicate that the recorded carrying value of the properties may not be recoverable. Such events include a projection of future oil and natural gas reserves that will be produced from a field22, ~~the~~2008 ~~timing~~MAVERICK ofOIL ~~this~~AND ~~future production~~GAS, ~~future costs to produce the oil and natural gas, and future inflation levels~~INC. If/s/ ~~the~~John ~~carrying~~Ruddy ~~amount~~John ofRuddy anChief ~~asset~~Executive ~~exceeds~~Officer ~~the~~(Interim) ~~sum~~Chief ofFinancial the undiscounted estimated future net cash flows, we recognize impairment expense equal to the difference between the carrying value and the fair value of the asset which is estimated to be the expected present value of future net cash flows from proved reserves, utilizing a risk-free rate of return. The Company cannot predict the amount of impairment charges that may be recorded in the future. Unproved leasehold costs are reviewed periodically and a loss is recognized to the extent, if any, that the cost of the property has been impaired.Officer

~~Asset Retirement Obligations~~ 20

The Company is required to make estimates of the future costs of the retirement obligations of its producing oil and gas properties. This requirement necessitates that the Company make estimates of its property abandonment costs that, in some cases, will not be incurred until a substantial number of years in the future. Such cost estimates could be subject to significant revisions in subsequent years due to changes in regulatory requirements, technological advances and other factors that may be difficult to predict.EXHIBIT INDEX

Income Taxes


Exhibit Number		Description
31.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

The Company is subject to income and other related taxes in areas in which it operates. When recording income tax expense, certain estimates are required by management due to timing and the impact of future events on when income tax expenses and benefits are recognized by the Company. The Company will periodically evaluate its tax operating loss and other carryforwards to determine whether a gross deferred tax asset, as well as a related valuation allowance, should be recognized in its financial statements.21

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate and Credit Rating Risk. As of May 31, 2006, we had approximately $1,480,581 in cash and cash equivalents, and short term investments. At May 31, 2006, approximately $1,304,779 was held in our operating accounts to be used for general corporate purposes, and $175,802 was invested in overnight repurchase agreements, 100% collateralized with AAA rated US Government Securities. Based on sensitivity analysis performed on the financial instruments held as of May 31, 2006, an immediate 10% change in interest rates is not expected to have a material effect on our near term financial condition or results.

Commodity Risk. Our major commodity price risk exposure is to the prices received for our natural gas and oil production. Realized commodity prices received for our production are the spot prices applicable to natural gas and crude oil. Prices received for natural gas and oil are volatile and unpredictable and are beyond our control. For the quarter ended May 31, 2006, a 10% fluctuation in the prices for natural gas and oil production would have had less than an approximate $0.1 million impact on our revenues.

Item 4. Controls and Procedures.

During the accounting close for the Company’s fiscal quarter ended November 30, 2005, the Company determined that its disclosure controls were not effective in that some accounting entries relating to debt and equity instruments required adjustment upon review by its independent auditors. To remedy this situation, during the quarter ended February 28, 2006, the Company increased its accounting staff, engaged an outside accounting firm as a consultant to supplement its technical resources and to provide technical support and guidance on accounting issues, and improved the internal distribution of contracts and documents within its organization. After these remedial measures were implemented, we conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon that evaluation, our CEO and CFO concluded, as of the end of the period covered by this quarterly report, that our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. There has been no other change in our internal controls over financial reporting identified in connection with that evaluation that occurred during the period covered by this report 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

None

Item 1A. Risk Factors

Developing our current properties and expanding our operations will require significant capital expenditures which we may be unable to fund.

Our business plan contemplates a sale of one our material project, as well as developing our remaining exploration properties and expanding our business by acquiring additional oil and gas properties. Our plan of operations for the next twelve months anticipates capital spending of approximately $37 million. However, our current funding will only sustain our operations through the beginning of the fourth calendar quarter of 2006. We plan to obtain the additional funding we need through the debt and equity markets. The terms of our Secured Convertible Debentures place limitations on the timing and pricing of any subsequent rounds of equity financing. These limitations could impair our ability to secure the full amount of capital required by our plan of operations, absent the consent of the holders of our Secured Convertible Debentures. There is no assurance that such additional financing will be available to us or, if it is, whether we will be able to complete such financing in light of the restrictions of this recent transaction.

The exercise or conversion of our outstanding convertible securities, options and warrants will result in the dilution of the ownership interests of our existing shareholders and may create downward pressure on the trading price of our common stock.

We may in the future issue up to 118,689,195 additional shares of our common stock upon exercise or conversion of existing outstanding convertible securities as of June 30, 2006, in accordance with the following schedule:

	Number of Shares
• Upon exercise of options granted under our Stock Option Plan		4,130,000
• Upon exercise of Non-Plan Options		450,000
• Upon exercise of Warrants		22,210,010
• Upon conversion of the principal under Secured Convertible Debentures issued on January 5, 2006(1)(2)		21,331,058
• Upon conversion of the principal under Secured Convertible Debentures issued on June 21, 2006(1)(2)		10,665,529
• Upon exercise of Warrants issued in conjunction with the Secured Convertible Debentures issued on January 5, 2006(2)(3)		41,237,922
• Upon exercise of Warrants issued in conjunction with the Secured Convertible Debentures issued on June 21, 2006(2)(3)		18,664,676
TOTAL		118,689,195

(1) Does not include shares issuable in lieu of interest due under the Debentures.

(2) With respect to the holders of our Secured Convertible Debentures and associated warrants, the foregoing determination has been made irrespective of limitations contained within the terms of the Secured Convertible Debentures and associated warrants, which prohibit the holders thereof from converting the Secured Convertible Debentures or exercising the Warrants, on less than sixty days

notice, to the extent such conversion or exercise would cause such holder to beneficially own in excess of 4.99% of our outstanding common stock.

(3) Includes Warrants to purchase 31,996,587 shares of our Common Stock issued on January 5, 2006, which when subject to adjustment by virtue of the June 21, 2006 sale of Secured Convertible Debentures, resulted in an increase by 9,241,335 to the number of shares covered by those Warrants.

Substantial Voting Power Concentrated in the hands of our Principal Stockholders.

We have less than ten shareholders who in the aggregate own and control over fifty percent of our outstanding common stock. In addition, the two holders of the Secured Convertible Debentures and associated warrants issued on January 5, 2006 and June 21, 2006, although they are unrelated, have the right to acquire in excess of 91 million shares of our Common Stock should they convert all of their Secured Convertible Debentures into our shares, and should they exercise all of their Warrants and hold the shares of common stock received upon such conversion and exercise. This would equate to approximately 47% of our outstanding common stock, after giving effect to such issuance. With respect to the holders of our Secured Convertible Debentures and associated warrants, the foregoing determination has been made irrespective of limitations contained within the terms of the Secured Convertible Debentures and associated warrants, which prohibit the holders thereof from converting the convertible debentures or exercising the warrants, on less than sixty days notice, to the extent such conversion or exercise would cause such holder to beneficially own in excess of 4.99% of our outstanding common stock.

The accounting treatment for our secured convertible debentures and related warrants may create volatility in our reporting earnings

The Secured Convertible Debentures we issued in January 2006 contain an embedded conversion feature, pursuant to which all or part of the debt owed to the holders may be converted into shares of our common stock at a negotiated conversion price, and the Warrants we issued to the purchasers of our Secured Convertible Debentures provide them with the right to purchase our common stock at negotiated exercise prices. As a result of the terms of our agreement to register the resale of the shares of common stock issuable upon conversion or exercise of these instruments, we are required under applicable accounting rules to treat the conversion feature of the Secured Convertible Debenture and the Warrants as liabilities, rather than as equity instruments. This classification as liabilities also requires that we account for them at fair value and include changes in fair value as a component of other income (expense) for so long as the warrants remain classified as liabilities. Changes in fair value are based upon the market price of our common stock and are calculated using the Black Scholes method of valuation. As a result, as the market price of our common stock increases, our other expense increases, and as the market price of our common stock decreases, our other income increases. This accounting treatment could result in wide swings of our other income (expense) and net income in the future while these features of the facility are outstanding.

The June 21, 2006 sale of Secured Convertible Debentures will be reviewed for the application of EITF 00-19 and FAS 133 in regards to accounting for embedded derivatives. However, in as much as the June 21, 2006 transaction contained many of the same features as the January 5, 2006 transaction, we expect that the conversion feature of the June 21, 2006 Secured Convertible Debentures and the associated Warrants will similarly be accounted for as embedded derivative instruments.

We need additional capital

We have either spent or allocated most of the proceeds from our recent sale of Secured Convertible Debentures on January 5, 2006 and June 21, 2006, and as we expected, our current capital resources will not be sufficient to sustain operations or to fund all development and drilling of our existing projects, beyond the beginning of the fourth calendar quarter of 2006. In addition, our current capital resources, together with our expected cash flow from operations, will not be sufficient to cover the

interest and current portion of our long-term debt due within the next twelve months. We will, therefore, continue to seek additional capital over the next 12 months to finance the development of our existing projects and to fund our future growth and exploration activities. This may take the form of either debt-based financing, or sale of equity securities. In the shorter term, if we are unable to obtain additional funds when we need them or if we cannot obtain funds on terms favorable to us, we may need to delay, scale back, or eliminate plans for further development efforts. An inability to secure additional funds would require us to consider a sale of certain assets or otherwise incur a risk of default upon our January Secured Convertible Debentures and June Secured Convertible Debentures.

The funding of our Fayetteville Project relies upon liquidity of our partners

Our Maverick Woodruff County, LLC subsidiary, is a 45% project participant in the development of our leasehold acreage in Woodruff and surrounding counties within Eastern Arkansas. Our 45% partner is an early-stage public company which recently experienced liquidity concerns and during our second quarter and became delinquent in its funding to the project by approximately $3.5 million. Although this partner has recently completed a financing and become current in its funding obligations, we cannot be certain that it will have sufficient capital resources to maintain its funded contributions to the project. A failure by this partner, or any other project partner, to maintain its prorata funding of the project, could impair the project’s ability to acquire and develop the acreage as expected.

The terms of our Secured Convertible Debentures require us to sell our Barnett Shale Property within certain time periods

The terms of the Secured Convertible Debentures we issued on June 21, 2006 require us to use our best efforts to sell our Barnett Shale Property by December 31, 2006 for a purchase price equal to its fair market value. If the cash consideration to be received in any such sale is less than the amount required to retire those Secured Convertible Debentures and the Secured Convertible Debentures we issued on January 5, 2006, the consent of the holders of a majority of the outstanding principal amount of the June Secured Convertible Debentures is required. If such consent is not provided, the deadline for the sale is extended until March 31, 2007. If we have not sold the Barnett Shale Property prior to the applicable deadline, the holders of the Secured Convertible Debentures have the right to require us to make certain redemptions of those debentures and the Secured Convertible Debentures we issued on January 5, 2006. It is not likely that we will be able to fund any such redemptions in the absence of such a sale. In addition, the obligation to sell our Barnett Shale Property within the applicable deadlines may result in a lower sales price than could be obtained in the absence of those deadlines.

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

On June 21, 2006, the Company issued Secured Convertible Debentures in the principal amount of $10 million and associated warrants. The Secured Convertible Debentures are convertible into 10,665,529 shares of the Company’s Common Stock, based upon an initial conversion price of $0.9376 per share, which is subject to anti-dilution adjustments. Warrants to purchase up to 18,664,676 shares of the Company’s Common Stock were issued for a period of five years at an exercise price of $.9376 per share, subject to anti-dilution adjustments. Additionally, by operation of anti-dilution features contained within warrants issued to these Investors during January 2006 (the “January 2006 Warrants”), the exercise price of approximately 5.3 million of the January 2006 Warrants has been reduced from $2.00 per share to $.9376 per share, and approximately 5.3 million of the January 2006 Warrants from $1.50 per share to $.9376 per share. In addition, the number of shares issuable upon the exercise of the January 2006 Warrants has been increased by approximately 9.3 million.

The Secured Convertible Debentures and Warrants were issued to institutional accredited investors in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 promulgated by the Commission thereunder.

Item 3. Defaults Upon Senior Securities

None

Item 4. Submission of Matters to Vote of Security Holders

None

Item 5. Other Information

None

Item 6. Exhibits

The following exhibits are included herein:

ExhibitNumber		Description
10.34		Securities Purchase Agreement dated June 21, 2006 (including relevant portions of accompanying schedules)(1)
10.35		Form of Secured Convertible Debenture dated June 21, 2006(1)
10.36		Form of Warrant dated June 21, 2006(1)
10.37		Form of Registration Rights Agreement dated June 21, 2006(1)
10.38		Form of Pledge and Security Agreement dated June 21, 2006(1)
10.39		Form of Escrow Agreement(1)
10.40		Form of Waiver Letter(1)
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2)
31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2)
32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)(2)
32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)(2)

(1) Incorporated by reference to our Current Report on Form 8-K filed with the Commission on June 23, 2006.

(2) Filed herewith.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: July 17, 2006 MAVERICK OIL AND GAS, INC./s/ V. Ray Harlow V. Ray HarlowChief Executive Officer/s/ John Ruddy John RuddyChief Financial Officer

EXHIBIT INDEX

Exhibit Number		Description
31.1		Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification by the Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification by the Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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