UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2011

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission ~~QUARTERLY~~file ~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~number 000-52794

For the quarterly period ended: August 31, 2011

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to Commission File Number: 000-52794

SENTRY PETROLEUM LTD.

(Exact name of registrant as specified in its charter)

Nevada		20-4475552
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
999 18th Street, Suite 3000, Denver CO		80202
(Address of principal executive offices)		(Zip Code)

Nevada

(State or other jurisdiction of incorporation or organization)

999 18th Street, Suite 3000

Denver, CO 80202

(Address of principal executive offices, including zip code.)

(866) 680-7649

(~~Registrant’s~~ telephone number, including area code)

Indicate by check mark whether the ~~registrant~~issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the ~~Securities~~ Exchange Act ~~of 1934~~ during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) , and (2) has been subject to such filing requirements for the ~~past~~last 90 days. ~~ý Yes  No~~ YES [X] NO [ ]

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large ~~accelerated~~Accelerated ~~filer~~Filer [ ] Accelerated ~~filer~~Filer [ ] Non-accelerated ~~filer~~Filer [ ] Smaller Reporting Company [X] (Do not check if a smaller reporting company) ~~Smaller reporting company ý~~

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ~~ Yes~~[ ~~ý No~~ ] NO [X]

~~Indicate~~APPLICABLE ~~the~~ONLY ~~number~~TO ofCORPORATE ~~shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date~~ISSUERS:

Class		Outstanding at October 13 , 2011
Common Stock, $0.0001 par value		47,446,207

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 47,446,207 as of January 9, 2012.

	FORM 10-Q Sentry petroleum ltd. August 31, 2011 TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements.	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	10
Item 4.	Controls and Procedures.	10
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.	12
Item 1A.	Risk Factors.	12
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	12
Item 3.	Defaults Upon Senior Securities.	12
Item 4.	(Removed and Reserved).	12
Item 5.	Other Information.	12
Item 6.	Exhibits.	12
	Signatures
	Exhibits
	Certifications

FORM 10-Q

SENTRY PETROLEUM LTD.

November 30, 2011

TABLE OF CONTENTS

			Page

PART I. – FINANCIAL INFORMATION

Item 1.	Financial Statements.		3

	Financial Statements:
		Balance Sheet	3
		Statements of Operations	4
		Statements of Cash Flows	5
		Notes to the Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		20

Item 4.	Controls and Procedures.		20

PART II. – OTHER INFORMATION

Item 1A.	Risk Factors.		21

Item 6.	Exhibits.		21

Signatures			23

Exhibit Index			24

-2-

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION.

Sentry Petroleum Ltd.
(An Exploration Stage Company)
Consolidated Balance Sheet
(Expressed in US dollars)
(Unaudited)

			November 30	February 28
			2011	2011
			$	$
ASSETS
Current Assets
	Cash		74,108	687,101
	Prepaid expenses		17,895	-
	Goods and Services Tax Receivable		3,631	1,914

Total Current Assets			95,634	689,015

Property and Equipment
	Oil and gas on the basis of full cost accounting
		Unproved properties (Note 3)	1,557,195	435,508
	Equipment (Note 4)		2,449	923
			1,559,644	436,431

Total Assets			1,655,278	1,125,446

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
	Accounts Payable		60,759	103,163
	Accrued liabilities		9,400	-

Total Liabilities			70,159	103,163

Going Concern (Note 1)
Commitments (Note 7)
Stockholders’ Equity

Common stock: (Note 5) 200,000,000 share authorized, $0.0001 par value, 47,446,207 shares issued and outstanding			4,745	4,683
Additional Paid in Capital			5,209,157	2,797,015
Donated Capital			50,000	50,000
Accumulated other comprehensive income			69,427	91,250
Deficit Accumulated During the Exploration Stage			(3,748,210)	(1,920,665)

Total Stockholders’ Equity			1,585,119	1,022,283

Total Liabilities and Stockholders’ Equity			1,655,278	1,125,446

(The Accompanying Notes are an Integral Part of the Financial Statements)

-3-

Sentry Petroleum Ltd.

(An Exploration Stage Company)

~~August~~Consolidated ~~31,~~Statements ~~2011~~of Operations

(Unaudited)

Index

Interim Consolidated Balance Sheets F-2

Interim Consolidated Statements of Operations F-3

Interim Consolidated Statements of Cash Flows F-4

Notes to the Interim Consolidated Financial Statements ...F-5 to F-12

(Expressed in US dollars)

(Unaudited)

					August 31		February 28
		Three	Three	Nine	Nine	For the period
					2011		2011
		months	months	months	months	February 23, 2006
					$		$
		ended	ended	ended	ended	(Date of Inception)
ASSETS
		November 30,	November 30,	November 30,	November 30,	to November 30,
Current Assets
		2011	2010	2011	2010	2011
	Cash				121,447		687,101
		$	$	$	$	$
	Prepaid expenses				7,238		-
Revenue		--	--	--	--	--
	Goods and Services Tax Receivable				103,656		1,914
Expenses
Total Current Assets					232,341		689,015
	Foreign exchange (gain) loss	-	(6,779)	350	(5,840)	128,494
Property and Equipment
	General and administrative	465,202	153,072	1,741,433	352,148	3,474,111
	Oil and gas on the basis of full cost accounting
	Professional fees	14,167	6,055	41,556	19,569	130,853
	Unproved properties (Note 4)				1,540,579		435,508
	Write-off of Oil and gas Properties	-	-	60,569	-	63,475
	Property and Equipment (Note 4)				2,791		923
Total Expenses		479,369	152,348	1,843,908	365,877	3,796,933
					1,543,370		436,431
Other Income
Total Assets					1,775,771		1,125,446
	Interest Income	1,255	6	16,363	45	48,723
LIABILITIES AND STOCKHOLDERS' EQUITY
Net Loss for the Period		(478,114)	(152,342)	(1,827,545)	(365,832)	(3,748,210)
Current Liabilities
Other Comprehensive income (loss)
	Accounts Payable				39,832		103,163
	Foreign currency translation	(73,781)	28,473	(21,822)	25,490	69,427
	Accrued liabilities				9,400		-
Comprehensive loss		(551,895)	(123,869)	(1,849,367)	(340,342)	(3,678,783)
Total Liabilities					49,232		103,163
Net Loss Per Share - Basic and Diluted		(0.01)	(0.00)	(0.04)	(0.01)
Contingencies (Note 1)
Weighted Average Shares Outstanding		47,442,294	46,444,648	47,326,980	46,364,994
Commitments (Note 8)
Stockholders' Equity/(Deficit)
Common stock: (Note 6)
200,000,000 share authorized, $0.0001 par value,
47,446,207 shares issued and outstanding					4,745		4,683
	(46,825,601 outstanding as at February 28, 2011)
Additional Paid in Capital					4,798,622		2,797,015
Donated Capital					50,000		50,000
Accumulated other comprehensive income					143,208		91,250
Deficit Accumulated During the Exploration Stage					(3,270,096)		(1,920,665)
Total Stockholders' Equity					1,726,479		1,022,283
Total Liabilities and Stockholders' Equity					1,775,771		1,125,446

(The Accompanying Notes are an Integral Part of the Financial Statements)

-4-

Sentry Petroleum Ltd.

(An Exploration Stage Company)

~~Interim~~ Consolidated Statements of ~~Operations~~Cash Flows

(Expressed in US dollars)

(Unaudited)

								For the period
					From
			Three months		Three months	Six months	Six months	February 23, 2006
			Nine months	Nine months	February 23, 2006
			ended	ended	~~ended~~(Date of Inception)	~~ended~~	~~ended~~	~~(Date of Inception)~~
			August 31		August 31	August 31	August 31	to August 31
			November 30	November 30	to November 30
			2011	2010	~~2010~~2011	~~2011~~	~~2010~~	~~2011~~
			$	$	$	$	$	$
Revenue			-		-	-	-	-
Cash Flows From (Used in) Operating Activities
Expenses
	Net Loss for the period		(1,827,545)	(365,832)	(3,748,210)
	Foreign exchange (gain) loss		-		4,073	350	939	128,494
	Adjustments to reconcile net cash to operating activities:
	General and administrative		721,094		105,052	1,276,231	199,076	3,008,909
		Depreciation	904	8,519	26,315
	Professional fees		3,134		2,853	27,389	13,514	116,686
		Donated services	-	-	50,000
	Write-off of Oil and gas Properties		6,553		-	60,569	-	63,475
		Stock based compensation	1,231,604	284,764	2,267,021
Total Expenses			770,781		111,978	1,364,539	213,529	3,317,564
		Services paid for with stock	180,600		180,600
Other Income
		Write off of exploration asset	60,569	-	63,475
	Interest Income		11,253		7	15,108	39	47,468
	Change in operating assets and liabilities:
Net Income (Loss) for the Period			(719,582)		(111,971)	(1,349,431)	(213,490)	(3,270,096)
		Goods and Services Tax receivable	(1,717)	16,045	(3,631)
Other Comprehensive income (loss)
		Prepaid expenses	(17,895)	-	(17,895)
	Foreign currency translation		97,595		19,473	51,958	(2,983)	143,208
		Accounts payable and accrued liabilities	(33,004)	(48,056)	70,159
Comprehensive income (loss)			(621,933)		(92,498)	(1,297,473)	(216,473)	(3,126,888)
		Due to related party	-	(2,238)	-
Net Loss Per Share - Basic and Diluted			(0.02)		(0.00)	(0.03)	(0.00)
Net Cash From (Used in) Operating Activities			(406,484)	(106,798)	(1,112,166)
Weighted Average Shares Outstanding			47,442,294		46,325,600	47,269,323	46,325,600
Cash Flows Used In Investing Activities
	Unproven properties		(1,171,668)	(47,975)	(1,620,670)
	Additions to furniture and equipment		(2,430)	(396)	(28,764)
Net Cash Used in Investing Activities			(1,174,098)	(48,371)	(1,649,434)
Cash Flows From Financing Activities
	Proceeds from issuance of common shares		1,000,000	500,000	2,766,281
Net Cash From Financing Activities			1,000,000	500,000	2,766,281
Increase (decrease) in Cash and Cash Equivalents			(580,582)	344,831	4,681
Effect of foreign currency translation on cash and cash equivalent			(32,411)	1,672	69,427
Cash - Beginning of Period			687,101	317,515	-
Cash - End of the Period			74,108	664,018	74,108
Supplemental Disclosure
	Interest paid		16	-	16
	Income taxes paid		-	-	-

(The Accompanying Notes are an Integral Part of the Financial Statements)

-5-

Sentry Petroleum Ltd.

(An Exploration Stage Company)

~~Interim~~Notes ~~Consolidated~~to ~~Statements~~the ofConsolidated ~~Cash~~Financial ~~Flows~~Statements

~~(Expressed~~November in30, ~~US dollars)~~2011

(Unaudited)

					From
			Six months	Six months	February 23, 2006
			ended	ended	(Date of Inception)
			August 31	August 31	to August 31
			2011	2010	2011
			$	$	$
Cash Flows From (Used in) Operating Activities
	Net Income (Loss) for the period		(1,349,431)	(213,490)	(3,270,096)
	Adjustments to reconcile net cash to operating activities:
		Depreciation	901	5,827	26,012
		Donated services	-	-	50,000
		Stock based compensation	821,670	164,184	1,857,087
		Services paid for with stock	180,000		180,000
		Write off of exploration asset	60,569	-	63,475
	Change in operating assets and liabilities:
		Goods and Services Tax receivable	(101,742)	(491)	(103,656)
		Prepaid expenses	(7,238)	-	(7,238)
		Accounts payable and accrued liabilities	(53,931)	(27,894)	49,232
		Due to related party	-	104	-
Net Cash From (Used in) Operating Activities			(449,202)	(71,760)	(1,155,184)
Cash Flows Used In Investing Activities
	Unproved properties		(1,138,810)	(26,086)	(1,577,224)
	Additions to furniture and equipment		(2,522	-	(28,55)
Net Cash Used in Investing Activities			(1,1,41,332)	(26,086)	(1,605,779)
Cash Flows From Financing Activities
	Proceeds from issuance of common shares		1,000,000	-	2,766,281
Net Cash From Financing Activities			1,000,000	-	2,766,281
Increase (decrease) in Cash and Cash Equivalents			(590,534)	(97,846)	5,318
Effect of foreign currency translation on cash and cash equivalent			24,880	(1,761)	116,129
Cash - Beginning of Period			687,101	317,515	-
Cash - End of the Period			121,447	217,908	121,447
Supplemental Disclosure
	Interest paid		16	-	16
	Income taxes paid		-	-

(The Accompanying Notes are an Integral Part of the Financial Statements)

Sentry Petroleum Ltd. (An Exploration Stage Company)

Notes to the Interim Consolidated Financial Statements

August 31, 2011

1. Nature of Operations and Continuance of Business

Sentry Petroleum Ltd. (the “Company”) is an Exploration Stage Company as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting By Development Stage Enterprises” incorporated under the laws of the State of Nevada on February 23, 2006 as Summit Exploration Inc. On December 33rd, 2007 the Company changed its name from Summit Exploration Inc. to Sentry Petroleum Ltd. The Company is engaged in the acquisition, exploration, and development of oil and gas properties.

The Company has no revenues and has not generated any cash flows from operations to fund its acquisition, exploration and development activities. The Company intends to rely upon the issuance of equity securities to finance its oil and gas property acquisitions and exploration and development on acquired properties, however there can be no assurance it will be successful in raising the funds necessary, or that a self-supporting level of operations will ever be achieved. The likely outcome of these future events is indeterminable. As at ~~August~~November 3130, 2011, the Company has accumulated losses since inception of $3,~~270~~748,~~096~~210. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment to reflect the possible future effect on the recoverability and classification of the assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

On April 15, 2008, the Company incorporated a subsidiary company, Sentry Petroleum (Australia) Pty. Ltd. in order to facilitate exploration activities in Australia.

2. Summary of Significant Accounting Policies

a. Basis of Presentation

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company’s fiscal year-end is February 28. While the information presented in the accompanying interim financial statements is unaudited, it includes all adjustments which are in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented in accordance with accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature.

Although these interim financial statements follow the same accounting policies and methods of their application as the Company’s February 28, 2011 annual financial statements, they do not include all information and footnotes required by generally accepted accounting principles for complete financial statements. Accordingly, it is suggested that these interim financial statements be read in conjunction with the Company’s February 28, 2011 annual financial statements.

b. Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company regularly evaluates estimates and assumptions related to donated services and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

~~Sentry Petroleum Ltd. (An Exploration Stage Company)~~-6-

~~Notes~~Sentry toPetroleum ~~the Interim Consolidated Financial Statements~~Ltd.

~~August~~ (An ~~31,~~Exploration ~~2011~~Stage Company)

Notes to the Consolidated Financial Statements

November 30, 2011

(Unaudited)

2. Summary of Significant Accounting Policies (continued)

c. Comprehensive Loss

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Code (“ASC”) topic 220 “Comprehensive Income” (formerly FAS 130), comprehensive income consists of net income and other gains and losses affecting stockholder'’s equity that are excluded from net income, such as unrealized gains and losses on investments available for sale, foreign currency translation gains and losses and minimum pension liability. For the period ending ~~August~~November 3130, 2011, the Company’s other comprehensive income represented foreign currency translation adjustments.

d. Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. As at ~~August~~November 3130, 2011, the Company has $ Nil ($Nil in 2010) in cash equivalents. As at ~~August~~November 3130, 2011, $1420,~~123~~349 was deposited in accounts that were federally insured ($49,904 in February 28, 2011).

e. Oil and Gas Property

The Company follows the full cost method of accounting for oil and gas operations whereby all costs associated with the acquisition, exploration and development of oil and gas properties will be capitalized in cost centers on a country-by-country basis. These capitalized amounts include the costs of unproved properties, internal costs directly related to acquisitions, development and exploration activities, asset retirement costs and capitalized interest. They include geological and geophysical studies, and costs of drilling both productive and non-productive wells.

Amortization will be calculated for producing properties by using the unit-of-production method based on proved reserves before royalties, as determined by management of the Company or independent consultants. Unproved reserves are exempt from amortization and are subject to annual assessment as noted below. Sales of oil and gas properties will be accounted for as adjustments of capitalized costs, without any gain or loss recognized, unless such adjustments significantly alter the relationship between capitalized costs and proved reserves of oil and gas attributable to a cost center. Costs of abandoned oil and gas properties will be accounted for as adjustments of capitalized cost and written off to expense.

A ceiling test will be applied to each cost center by comparing the net capitalized costs to the present value of the estimated future net revenue from production of proved reserves, based on commodity prices in effect as at the Company’s year-end and based on current operating costs, discounted by 10%, less the effects of future costs to develop and produce the proved reserves, plus the lower of costs or estimated fair value of unproved properties net of impairment, and less the effects of income taxes. Any excess capitalized costs are written off to operations.

Unproved properties will be assessed for impairment on an annual basis by applying factors that rely on historical experience. In general, the Company may write-off any unproved property under one or more of the following conditions:

i) there are no firm plans for further drilling on the unproved property;

ii) negative results were obtained from studies of unproved property;

iiiii) negative results were obtained from studies conducted in the vicinity of the unproved property; or

iv)

the remaining term of the unproved property does not allow sufficient time for further studies or drilling.

f. Asset Retirement Obligations

The Company will recognize a liability for future asset retirement obligations associated with oil and gas properties. The estimated fair value of the asset retirement obligation will be based on current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability will be capitalized as part of the cost of the related asset and amortized over its useful life. The liability will accrete until the Company settles the obligation. As of ~~August~~November 3130, 2011, the Company did not have any asset retirement obligations.

~~Sentry Petroleum Ltd. (An Exploration Stage Company)~~-7-

~~Notes~~Sentry toPetroleum ~~the Interim Consolidated Financial Statements~~Ltd.

~~August~~ (An ~~31,~~Exploration ~~2011~~Stage Company)

Notes to the Consolidated Financial Statements

November 30, 2011

(Unaudited)

2. Summary of Significant Accounting Policies (continued)

g. Fair Value Measurements

Effective January 1, 2008, the Company adopted ASC topic 820 “Fair Value Measurements and Disclosures”, for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis. ASC 820 establishes a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value.

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. The Company has adopted ASC 825, “Financial Instruments”, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value. The Company has not elected the fair value option for any eligible financial instruments.

h. Financial Instruments and Risk

Financial instruments, which include cash, accounts payable, accrued liabilities and amounts due to a related party were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company’s wholly owned subsidiary’s operations are in Australia, which may result in exposure to market risks from changes in currency rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.

i. Foreign Currency Translation

The Company'’s functional currency is US dollars. Foreign currency balances are translated into US dollars as follows:

Monetary assets and liabilities are translated at the period-end exchange rate. Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the period-end exchange rate. Revenue and expense items are translated at the average exchange rate for the period. Foreign exchange gains and losses arising from foreign currency transactions are included in the determination of net income for the respective periods.

The functional currency of the wholly owned subsidiary is Australian dollars. The assets and liabilities arising from these operations are translated at current exchange rates and related revenues and expenses at the exchange rates in effect at the time the revenue or expense is incurred. Resulting translation adjustments, if material, are accumulated as a separate component of accumulated other comprehensive income in the statement of stockholders' ’ deficit while foreign currency transaction gains and losses are included in operations.

j. Basic and Diluted Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share on the potential exercise of the equity-based financial instruments is not presented where anti-dilutive.

k. Income Taxes

The Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company'’s financial statements or tax returns. In estimating future tax consequences, all expected future events other than enactment of changes in the tax laws or rates are considered.

Due to the uncertainty regarding the Company'’s future profitability, the future tax benefits of its losses have been fully allowed for and no net tax benefit has been recorded in the financial statements during the periods presented.

~~Sentry Petroleum Ltd. (An Exploration Stage Company)~~-8-

~~Notes~~Sentry toPetroleum ~~the Interim Consolidated Financial Statements~~Ltd.

~~August~~ (An ~~31,~~Exploration ~~2011~~Stage Company)

Notes to the Consolidated Financial Statements

November 30, 2011

(Unaudited)

2. Summary of Significant Accounting Policies (continued)

l. Stock-based Compensation

On the Company’s inception of February 23, 2006, the Company adopted the fair value recognition provisions of ASC topic 718 “Stock Compensation” (formerly FAS 123(R) under which the Company records stock-based compensation expense for warrants and stock options granted to employees, directors and officers using the fair value method. Under this method, stock-based compensation is recorded over the vesting period of the warrant and option based on the fair value of the warrant and option as the grant date. The fair value of each warrant and option granted is estimated using the Black-Scholes option pricing model that takes into account on the grant date, the exercise price, expected life of the warrant and/or option, the price of the underlying security, the expected volatility, expected dividends on the underlying security, and the risk-free interest rate. Transactions in which goods or services are received from non-employees in exchange for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

Stock based compensation is recorded with a corresponding increase to additional paid-in capital. Consideration received on the exercise of warrants and options, together with the amount previously credited to additional-paid in capital, is recognized as an increase in common stock.

m. Equipment

Equipment is initially recorded at cost and amortized to operations over its estimated useful life at the following amortization rates and methods:

	Computer equipment and software	55% straight line per annum

	Furniture and fixtures	20% straight line per annum

Equipment is written down to its net realizable value if it is determined that its carrying value exceeds the estimated future benefits to the Company.

n. Revenue Recognition

The ~~Company~~company recognizes revenue when a contract is in place, minerals are delivered to the purchaser and collectability is reasonably assured.

o. Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiary, Sentry Petroleum (Australia) Pty. Ltd. All significant inter-company balances and transactions have been eliminated.

p. Recent Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any recently issued but not yet effective accounting standards; if currently adopted would have a material effect on the accompanying financial statements.

3. Unproved properties

The Company’s oil and gas properties are located in Australia and its interests in these properties are maintained pursuant to the terms of Authority to Prospect (“ATP”) granted by the Department of Mines and Energy in Queensland. The Petroleum and Gas (Production and Safety) Act 2004 provides the framework for accessing land to explore and develop petroleum and coal seam gas resources in Queensland. The granting process involves a commitment to a work program that must be carried out within specific time periods. See Note 7 Commitments.

~~Sentry Petroleum Ltd. (An Exploration Stage Company)~~-9-

~~Notes~~Sentry toPetroleum ~~the Interim Consolidated Financial Statements~~Ltd.

~~August~~ (An ~~31,~~Exploration ~~2011~~Stage Company)

Notes to the Consolidated Financial Statements

November 30, 2011

(Unaudited)

3. Unproved properties – (continued)

During the year ended February 28, 2009, the Company acquired 100% working interest in the following tenures in Queensland Australia for cash consideration revealed below: ATP 862, ATP 864, ATP 865, ATP 866, and EPC 1758. A 7% gross overriding royalty was given to the original tenure holder.

Period Ended August 31, 2011				Year Ended February 28, 2011
		Period Ended November 30, 2011				Year Ended February 28, 2011
	~~Acquisition~~	~~Exploration~~Acquisition	~~Total~~Exploration	Total	~~Acquisition~~	~~Exploration~~Acquisition	~~Total~~Exploration	Total
	~~Costs~~	Costs	Costs	Costs	~~Costs~~	Costs	Costs	Costs
	$	$	$	$	$	$	$	$
~~ATP 862~~	~~10,568~~ATP 862	110,~~196,750~~568	1,~~207~~212,~~318~~623	1,223,191	~~10,626~~	~~129~~10,~~452~~626	~~140~~129,~~078~~452	140,078
~~ATP 864~~	~~10,568~~ATP 864	9410,~~401~~568	~~104~~94,~~969~~910	105,478	~~10,626~~	3410,~~652~~626	4534,~~278~~652	45,278
~~ATP 865~~	~~7,713~~ATP 865	~~172~~7,~~808~~713	~~180~~170,~~521~~091	177,804	~~7,713~~	~~153~~7,~~494~~713	~~161~~153,~~207~~494	161,207
~~ATP 866~~	~~10,568~~ATP 866	3710,~~203~~568	4740,~~771~~155	50,723	~~10,626~~	2510,~~724~~626	3625,~~350~~724	36,350
~~EPC 1758~~	~~60,569~~EPC 1758	(60,569)	-(60,569)	0	~~52,595~~	-52,595	~~52,595~~-	52,595
	~~99,986~~	199,~~440,593~~986	1,~~540~~457,~~579~~210	1,557,195	~~92,186~~	~~343~~92,~~321~~186	~~435~~343,~~508~~321	435,508

EPC 1758 was surrendered during the period ending May 31, 2011 and all capitalized costs were written off.

4. Equipment

	Period ended August 31, 2011				Year ended February 28, 2011
		Period ended November 30, 2011				Year ended February 28, 2011
		~~Accumulated~~	~~Net Book~~Accumulated	Net Book		~~Accumulated~~	~~Net Book~~Accumulated	Net Book
	~~Cost~~	~~Amortization~~Cost	~~Value~~Amortization	Value	~~Cost~~	~~Amortization~~Cost	~~Value~~Amortization	Value
	$	$	$	$	$	$	$	$
~~Computer equipment~~	~~12,691~~Computer equipment	~~(10~~12,~~081)~~691	2(10,~~610~~361)	2,330	~~9,923~~	(9,~~306)~~923	~~617~~(9,306)	617
~~Furniture and fixtures~~	~~1,246~~Furniture and fixtures	(1,~~065)~~246	~~181~~(1,127)	119	~~1,246~~	~~(940)~~1,246	~~306~~(940)	306
~~Seismic software~~	~~15,150~~Seismic software	(15,150)	-(15,150)	-	~~15,150~~	(15,150)	-(15,150)	-
~~Total~~	~~29,087~~Total	~~(26~~29,~~238)~~087	2(26,~~791~~638)	2,449	~~26,319~~	~~(25~~26,~~396)~~319	~~923~~(25,396)	923

5. Common stock

On February 23, 2006, the Company issued 2 common shares to the President of the Company for cash proceeds of $1.

On March 8, 2006, the Company issued 10,000,000 common shares at $.01 per common share to the President of the Company for cash proceeds of $100,000. In addition, the Company cancelled the 2 common shares issued to the President of the Company.

On November 17, 2006, the Company issued 6,325,600 common shares at $.05 per common share for cash proceeds of $316,280.

On November 2, 2007, the Company issued 30,000,000 common shares at $.025 per common share for cash proceeds of $750,000.

~~Sentry Petroleum Ltd. (An Exploration Stage Company)~~-10-

~~Notes~~Sentry toPetroleum ~~the Interim Consolidated Financial Statements~~Ltd.

~~August~~ (An ~~31,~~Exploration ~~2011~~Stage Company)

Notes to the Consolidated Financial Statements

November 30, 2011

(Unaudited)

5. Common stock (Continued)

Effective November 26, 2007, the Company authorized a 2 for 1 share split. These financial statements give retroactive application to this event.

On December 3, 2007, the Company increased its authorized share capital to 100,000,000, common shares of $.0001 par value.

On February 5, 2010, the Company increased its authorized share capital to 200,000,000, common shares of $.0001 par value.

On November 4, 2010 the Company issued 416,667 units consisting of one common share and one common share purchase warrant pursuant to a Private Placement for total consideration of $500,000. The warrants are exercisable for a period of 24 months at a price of $1.50 during the first 12 months and $1.75 thereafter.

On December 16, 2010 the Company Issued 83,334 shares of common stock at $1.20 per share for cash proceeds of $100,000 .

On April 14, 2011 the Company issued 227,273 shares of common stock at $2.20 per share for cash proceeds of $500,000.

On April 20, 2011 a shareholder exercised 333,333 warrants at a price of $1.50 per share and the Company issued 333,333 common shares for proceeds of $500,000.

On June 7, 2011 the Company issued 60,000 shares to a consultant for investor relations services. The compensation was booked at the fair value of the shares and was determined to be $180,600, which represents the market value of the shares which approximates the value of the services performed. The compensation is reflected in General and Administrative expenses on the Income Statement.

6. Stock options and warrants

Since 2009, the following management options have been awarded to our Board of Directors and management team.

			Weighted
		Number of		Weighted Average
			Average
		Options		Exercise Price
	Number of		Exercise
	Outstanding at February 28, 2009	925,000	$	1.04
	Options		Price
	Granted	1,325,000		0.25
Outstanding at February 28, 2009	925,000	$	1.04
	Cancelled	(100,000)		1.04
Granted	1,325,000		0.25
	Outstanding at February 28, 2010	2,150,000	$	0.55
Cancelled	(100,000)		1.04
	Granted	400,000		1.30
Outstanding at February 28, 2010	2,150,000	$	0.55
	Granted	1,100,000		3.01
Granted	400,000		1.30
	Outstanding at February 28, 2011	3,650,000	$	1.38
Granted	1,100,000		3.01
	Outstanding at November 30, 2011	3,650,000	$	1.38
Outstanding at February 28, 2011	3,650,000	$	1.38
Outstanding at August 31, 2011	3,650,000	$	1.38

The stock options outstanding February 28, 2009 vested over 3 years, with one-third vesting each year. For the stock options granted in 2010 and 2011, two-thirds vest after 2 years and one-third vest after 3 years or when the Company books initial 3P reserves.

~~Sentry Petroleum Ltd. (An Exploration Stage Company)~~-11-

~~Notes~~Sentry toPetroleum ~~the Interim Consolidated Financial Statements~~Ltd.

~~August~~ (An ~~31,~~Exploration ~~2011~~Stage Company)

Notes to the Consolidated Financial Statements

November 30, 2011

(Unaudited)

6. Stock options and warrants (Continued)

A recap of the terms of the stock options as at ~~August~~November 3130, 2011 is as follows:

Year awarded	Number	Exercise price	Currently Exercisable	Fair Value	Expiry Date
2009	825,000	$1.04	550,000	$653,407	February 2014
2010	1,325,000	$0.25	-	$255,107	February 2015
2010	400,000	$1.30	-	$461,871	November 2015
2011	1,100,000	$3.01	-	$2,528,999	February 2016

The fair value for stock options was estimated using the Black-Scholes option pricing model assuming no expected dividends and the following weighted average assumptions:

2010 Options		2011 Options
Expected volatility	112.86%	Expected volatility	111.21%
Risk-free interest rate	2.30%	Risk-free interest rate	2.39%
Expected life of options	3 years	Expected life of options	4.5 years
Fair value	$0.188 - $0.201	Fair value	$2.247. - $2.404

During the ~~six~~nine month period ended ~~August 31~~November 30, 2011, the Company recognized $~~821~~1,~~070~~231,604 in stock-based compensation expense ($~~164~~284,~~184~~764 in 2010).

As at ~~August~~November 3130, 2011, there were $21,~~042~~632,~~898~~363 of unrecognized compensation costs related to non-vested stock options.

7. Commitments

Under the oil and gas tenures described in Note 3 and in the assignment agreements with the original grantor, the Company is committed to the following work programs in order to maintain its interest in those tenures.

Tenure		Commitment		Commitment
			Commitment
		in US $		Period
		Commitment	Period
				Remaining
	Tenure	in US $	Remaining
~~ATP 862~~	ATP 862	5,544,000	3 months	~~1 years~~
~~ATP 864~~	ATP 864	5,275,000	3 months	~~1 years~~
~~ATP 865~~	ATP 865	3,958,000	3 months	~~1 years~~
~~ATP 866~~	ATP 866	4,721,000	3 months	~~1 years~~

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation~~-12-

~~Forward-Looking~~ITEM ~~Statements~~2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

~~This Form 10~~Forward-QLooking includes certain statements that may be deemed to be "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this Form 10-Q, other than statements of historical facts, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including operating costs, future capital expenditures (including the amount and nature thereof), and other such matters are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control. Therefore, actual results could differ materially from the forward-looking statements contained in this document, and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the forward-looking statements contained in this document will, in fact, transpire or prove to be accurate.Statements

~~Important~~This ~~factors~~Form 10-Q includes certain statements that may ~~cause~~be deemed to be “forward-looking statements”. All statements in this Form 10-Q, other than statements of historical facts, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including operating costs, future capital expenditures (including the amount and nature thereof), and other such matters are forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue,” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond our control. Therefore, actual results tocould differ materially from the forward-looking statements contained in this document, ~~projections~~and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or ~~other~~revise ~~expectations~~any ~~include~~forward-looking statements, ~~but~~ ~~are~~whether ~~not~~as ~~limited~~a result of new information, future events or otherwise. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the ~~following:~~forward-looking statements contained in this document will, in fact, transpire or prove to be accurate.

~~· ability~~Important factors that may cause the actual results to ~~secure~~differ ~~adequate~~materially ~~financing~~from onthe aforward-looking ~~timely~~statements, ~~basis;~~projections or other expectations include, but are not limited to, the following:

· ability to ~~complete~~secure ~~our~~adequate ~~planned~~financing ~~work~~on ~~program, which is~~ a ~~condition~~timely ~~of maintaining our permits in good standing~~basis;

· if weability doto ~~not~~ complete our planned work program, onwhich is a ~~timely~~condition ~~basis,~~of wemaintaining ~~may be~~our ~~required~~permits toin ~~relinquish~~good ~~our permits~~standing;

· ~~changes~~ inif we do not complete our ~~business~~planned ~~strategy;~~work program on a timely basis, we may be required to relinquish our permits;

· ~~the~~ ~~timing~~changes ofin ~~exploration~~our ~~expenditures;~~business strategy;

· ~~access~~ ~~and~~the ~~availability~~timing of ~~materials,~~exploration ~~equipment, supplies, labor and supervision, power and water~~expenditures;

· ~~results~~ access and availability of ~~current~~materials, equipment, supplies, labor and ~~future~~supervision, ~~exploration~~power ~~activities;~~and water;

· ~~accidents~~ results of current and ~~labor~~future ~~disputes;~~exploration activities;

· ~~disappointing~~ ~~results~~accidents ~~from~~and ~~our~~labor ~~exploration or development efforts~~disputes;

· ~~decline~~ indisappointing ~~demand~~results ~~for~~from our ~~common~~exploration ~~stock;~~or development efforts;

· ~~changes~~ decline in ~~general~~demand ~~market~~for ~~conditions;~~our common stock;

· ~~investor~~ ~~perception~~changes ofin ~~our~~general ~~industry~~market ~~or our prospects~~conditions;

· ~~technological~~ ~~changes~~investor inperception ~~the~~of ~~oil~~our ~~and gas exploration~~ industry, ~~including technological innovations by competitors~~ or inour ~~competing technologies~~prospects;

· ~~the~~ ~~proximity~~technological ofchanges ~~natural~~in the oil and gas ~~production~~exploration toindustry, ~~natural~~including ~~gas~~technological ~~pipelines;~~innovations by competitors or in competing technologies;

· the ~~availability~~proximity of ~~pipeline~~natural ~~capacity;~~gas production to natural gas pipelines;

· the ~~demand~~availability ~~for~~of ~~oil~~pipeline ~~and natural gas by utilities and other end users~~capacity;

· the ~~availability~~demand offor ~~alternate~~oil ~~fuel~~and ~~sources;~~natural gas by utilities and other end users;

· the ~~effect~~availability of ~~inclement~~alternate ~~weather;~~fuel sources;

· ~~changes~~ inthe ~~oil~~effect ~~and~~of ~~gas~~inclement ~~exploration, processing and overhead costs~~weather;

· ~~unexpected~~ changes in ~~business~~oil and ~~economic~~gas ~~conditions;~~exploration, processing and overhead costs;

· unexpected changes in ~~interest~~business ~~rates~~ and ~~currency~~economic ~~exchange rates~~conditions;

· ~~commodity~~ ~~price fluctuations, including~~ changes in ~~the~~interest ~~worldwide~~rates ~~price~~and ~~for oil~~currency ~~and~~exchange ~~gas~~rates;

· ~~government~~ ~~regulation~~commodity ofprice fluctuations, including changes in the worldwide price for oil and ~~natural~~ gas ~~marketing~~;

· government regulation of oil and natural gas ~~sold or transported in interstate commerce~~marketing;

~~· acquisition opportunities or lack of opportunities;~~ -13-

· ~~changes~~ ingovernment ~~laws~~regulation of natural gas sold or ~~regulations;~~transported in interstate commerce;

· ~~risk~~ ~~factors~~acquisition ~~listed~~opportunities ~~from~~or ~~time~~lack toof ~~time in our reports filed with the Securities and Exchange Commission and~~opportunities;

· ~~local~~ ~~and~~changes ~~community~~in ~~impacts~~laws ~~and~~or ~~issues.~~regulations;

~~The~~· ~~forgoing~~risk ~~list is not an exhaustive list of the~~ factors ~~that~~listed ~~may~~from ~~affect~~time ~~any~~to oftime in our ~~forward-looking~~reports ~~statements.~~filed ~~These~~with ~~and~~the ~~other~~Securities ~~factors should be considered carefully~~ and ~~readers should~~Exchange ~~not~~Commission ~~place undue reliance on our forward-looking statements.~~and

~~Although~~· welocal ~~believe~~and ~~that~~community ~~the~~impacts ~~expectations~~and ~~reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements~~issues. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.

AsThe ~~used~~forgoing inlist ~~this~~is ~~report,~~not ~~“Sentry~~an ~~Petroleum,”~~ exhaustive list of the ~~“Company,”~~factors ~~“we,”~~that ~~“us,”~~may oraffect “any of our” ~~refer~~forward-looking tostatements. These ~~Sentry~~and ~~Petroleum~~other ~~Ltd.,~~factors ~~unless~~should ~~otherwise indicated~~be considered carefully and readers should not place undue reliance on our forward-looking statements.

~~Overview~~Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.

WeAs ~~were~~used ~~incorporated~~ in ~~Nevada~~this onreport, ~~February~~“Sentry 23Petroleum,” ~~2006~~the ~~and~~“Company,” ~~are~~“we,” ~~a Denver~~“us,” ~~Colorado-based~~or ~~oil~~“our” ~~and~~refer ~~gas~~to ~~exploration~~Sentry ~~stage~~Petroleum ~~company~~Ltd., Weunless ~~are~~otherwise ~~considered an exploration stage company because we are involved in the examination and investigation of land that we believe may contain hydrocarbon reserves~~indicated.

Our current focus is on the exploration of properties for which we acquired four exploration permits (Authority to Prospect 862, 864, 865, and 866) to exclusively engage in exploration for oil and gas in central Queensland, Australia. ATP 862, 864, 865, and 866 each have a maximum term of 12 years, but can be terminated earlier for failure to carry out exploration work programs on the properties underlying these permits within certain time constraints. Our obligations on the four ATPs include obtaining additional seismic data and drilling of wells on each of the permits prior to February 2012. The total estimated cost to complete our obligations by February 28, 2012 is approximately $13 million (see Footnotes to financial statements for further detail on our exploration obligations). We currently have insufficient funding to complete the required obligations to maintain our permits.Overview

We ~~have~~were ~~commenced~~incorporated ~~our~~in ~~exploration~~Nevada ~~program~~ on ~~ATP 862,~~February ~~864~~23, ~~865,~~2006 and ~~866.~~are ~~We hold~~ a ~~100%~~Denver, ~~working~~Colorado-based ~~interest~~oil inand ~~ATP~~gas ~~862,~~exploration ~~864,~~stage ~~865,~~company. We ~~and~~are ~~866,~~considered ~~subject~~an toexploration astage 7%company ~~gross~~because ~~overriding~~we ~~royalty payable~~are toinvolved in the ~~original~~examination ~~tenure~~and ~~holder.~~investigation Inof ~~the~~land ~~aggregate,~~that ~~our~~we ~~permits~~believe ~~encompass~~may ~~approximately~~contain ~~6.9~~hydrocarbon ~~million net acres~~reserves.

OnOur ~~March~~current ~~14,~~focus ~~2011,~~is weon ~~awarded~~the anexploration ~~option~~of toproperties ~~Sino American~~for ~~Oil~~which ~~Company~~we acquired four exploration permits (~~“Sino”)~~Authority ~~for~~to ~~consideration~~Prospect of862, ~~$25~~864,~~000~~ 865, ~~which~~and ~~gave~~866) ~~Sino~~to ~~the~~exclusively ~~right~~engage toin ~~earn~~exploration afor ~~70%~~oil ~~interest~~and gas in central Queensland, Australia. ATP 862, 864, 865, and 866 byeach ~~drilling~~have ~~one~~a ~~conventional~~maximum ~~well~~term toof a12 ~~depth~~years, ofbut ~~1,660~~can ~~meters~~be ~~and~~terminated earlier for failure to ~~shoot~~carry ~~100~~out ~~line~~exploration Kmwork ofprograms ~~seismic~~on the properties underlying these permits within certain time constraints. OnOur ~~June~~obligations ~~27,~~on ~~2011, we~~the ~~reached~~four aATPs ~~mutual~~include ~~agreement~~obtaining ~~with~~additional ~~Sino~~seismic ~~American~~data ~~Oil~~and ~~Company~~drilling toof ~~terminate~~wells ~~this~~on ~~option~~each ~~agreement~~of the permits prior to February 2012. The ~~termination~~total ~~relieves~~estimated ~~both parties~~cost ~~from~~to ~~any~~complete ~~further~~our ~~rights~~obligations orby ~~obligations~~February ~~awarded~~28, in2012 ~~the~~is ~~option~~approximately ~~and~~$13 ~~Sino~~million is(see ~~entitled~~Footnotes to ~~return~~financial ofstatements ~~the~~for ~~$25,000~~further ~~consideration Sino~~detail ~~paid~~on toour usexploration ~~upon~~obligations). ~~execution~~We ofcurrently have insufficient funding to complete the ~~option~~required ~~agreement~~obligations into ~~March~~maintain ~~2011~~our permits.

~~The~~We ~~properties~~have ~~underlying~~commenced our ~~permits~~exploration ~~are~~program ~~without known~~on ~~reserves~~ATP ~~and~~862, ~~the~~864, ~~proposed~~865, ~~plan~~and of866. We ~~exploration~~hold ~~detailed~~a ~~below~~100% isworking ~~exploratory~~interest in ~~nature.~~ATP ~~There~~862, ~~is no~~864, ~~assurance that we will discover commercial quantities of hydrocarbons. In addition~~865, ~~even~~and ~~if hydrocarbons are discovered~~866, ~~the costs~~subject ofto ~~development~~a ~~may~~7% ~~render~~gross ~~any~~overriding ~~hydrocarbons~~royalty ~~found~~payable to bethe ~~not~~original ~~commercially~~tenure ~~viable~~holder. In Ifthe ~~we do not find hydrocarbon reserves or are unable to develop reserves~~aggregate, ~~either~~our ~~because~~permits weencompass doapproximately ~~not~~6.9 ~~have~~million ~~sufficient~~net ~~capital or the costs of extraction are uneconomical, we will have to cease operations~~acres.

AsOn ~~part~~March of14, ~~our~~2011, ~~regular~~we ~~business~~awarded ~~activities~~an option to Sino American Oil Company (“Sino”) for consideration of $25, we000, ~~routinely~~which ~~review~~gave ~~and~~Sino ~~assess~~the ~~interests~~right into ~~exploration~~earn ora ~~production~~70% ~~properties~~ interest in ~~Australia~~ATP 865 and ~~Austral~~866 ~~Asia~~by ~~for~~drilling ~~our~~one ~~possible~~conventional ~~acquisition.~~well Weto ~~seek~~a ~~additional~~depth ~~properties~~of or1,660 ~~permits~~meters ~~that~~and weto ~~believe~~shoot ~~have the~~100 ~~potential~~line toKm ~~add~~of ~~shareholder value~~seismic. ~~There~~On ~~can~~June be27, no2011, ~~assurance~~we ~~that~~reached wea ~~will~~mutual beagreement ~~successful~~with inSino ~~acquiring~~American ~~additional~~Oil ~~property~~Company ~~interests or~~to ~~permits~~terminate this option agreement. InThe ~~order~~termination torelieves ~~acquire~~both parties from any ~~additional~~further ~~exploration~~rights or ~~production~~obligations ~~properties~~awarded in the option and Sino is entitled to return of the $25,000 weconsideration ~~will need~~Sino paid to ~~secure~~us ~~additional~~upon ~~financing~~execution of the option agreement in March 2011.

WeThe ~~require~~properties ~~significant~~underlying ~~additional~~our ~~funding~~permits ~~to complete~~are ~~the~~without ~~work~~known ~~program~~reserves weand ~~committed~~the toproposed ~~when~~plan ~~acquiring~~of ~~our~~exploration ~~current~~detailed ~~exploration~~below ~~properties.~~is Weexploratory ~~anticipate~~in ~~raising~~nature. There ~~additional~~is ~~financing through~~no ~~the~~assurance ~~sale~~that ofwe ~~equity~~will ~~securities~~discover tocommercial ~~finance~~quantities ~~these~~of ~~exploration~~hydrocarbons. In ~~obligations~~addition, ~~although~~even ~~there~~if ~~can~~hydrocarbons beare nodiscovered, ~~assurance that such funding will be available. In~~ the ~~absence~~costs of ~~sufficient~~development ~~financing~~may torender ~~finance~~any ~~our~~hydrocarbons ~~exploration~~found ~~activity required~~ to ~~carry~~be ~~out~~not ~~our~~commercially ~~proposed exploration~~viable. If ~~programs,~~ we ~~will~~do not befind ~~able~~hydrocarbon toreserves ~~pursue~~or ~~our~~are ~~exploration~~unable ~~program or~~ to ~~maintain~~develop ~~our~~reserves, ~~permits~~either inbecause ~~good standing. If~~ we do not ~~execute~~have onsufficient ~~our~~capital ~~proposed~~or ~~exploration~~the ~~programs,~~costs weof ~~may~~extraction beare ~~required~~uneconomical, towe ~~relinquish our interests in our permits and~~ will be ~~forced~~have to cease operations.

Additionally, there can be no assurance that if we are successful in securing funding that we will be successful in discovering commercial quantities of hydrocarbons, or that we will have access to funds to develop a successful discovery without significant dilution or cost to our stockholders.-14-

~~Our~~As ~~business~~part ~~plan~~of isour ~~limited~~regular inbusiness ~~its~~activities, ~~scope~~we routinely review and we ~~intend~~assess tointerests ~~derive~~in ~~all~~exploration ofor ~~our~~production ~~revenue~~properties ~~from~~in aAustralia ~~discovery~~and ofAustral ~~commercial~~Asia ~~quantities~~for ofour ~~hydrocarbons~~possible acquisition. We ~~Specifically,~~seek ~~discovering~~additional ~~sufficient quantities~~properties ofor ~~hydrocarbons~~permits tothat ~~warrant~~we ~~their~~believe ~~profitable~~have ~~development.~~the Wepotential ~~have~~to noadd ~~other~~shareholder ~~business~~value. ~~plans~~There ~~and~~can ifbe no assurance that we ~~are~~will ~~unsuccessful~~ be successful in ~~discovering~~acquiring ~~commercial~~additional ~~quantities~~property ofinterests ~~hydrocarbons~~or ~~our~~permits. In ~~business~~order to acquire any additional exploration or production properties, we will ~~fail~~need to secure additional financing.

~~During~~We ~~the~~require ~~three~~significant ~~months~~additional ~~ended~~funding ~~May~~to ~~31,~~complete ~~2011, we completed~~ the ~~final~~work ~~preparation for our drilling~~ program. ~~We completed contracts with the landowners, finalized the design and budgeting for each well and secured service contracts with the necessary drilling and testing companies. On June 15, 2011,~~ we ~~commended drilling~~committed onto ~~the~~when ~~initial~~acquiring ~~well~~our incurrent ~~ATP~~exploration ~~862, the Talundilly_CSG1~~properties. We ~~completed~~anticipate ~~drilling~~raising ofadditional ~~this~~financing ~~initial well~~through onthe ~~June~~sale ~~24, 2011, after reaching target depth (TD)~~ of ~~436~~equity ~~meters.~~securities Ato ~~total~~finance ofthese ~~15.26~~exploration ~~meters~~obligations, ofalthough ~~coal~~there ~~and~~can ~~carbonaceous~~be ~~shale~~no ~~cores were~~assurance ~~collected~~that ~~and~~such ~~forwarded~~funding ~~for~~will ~~gas~~be ~~desorption testing~~available. ~~Net~~In ~~coal~~the ~~thickness~~absence ~~collected~~of ~~was~~sufficient ~~12.7~~financing ~~meters. Due~~ to ~~certain~~finance ~~anomalous data~~our ~~from~~exploration ~~what~~activity werequired ~~believe~~to ~~could~~carry ~~have~~out ~~been~~our ~~errors~~proposed ~~made~~exploration ~~during the testing process~~programs, we ~~are~~will not inbe aable ~~position~~to ~~based~~pursue onour ~~the~~exploration ~~data~~program ~~received~~ or to ~~determine~~maintain ~~the~~our ~~commerciality~~permits ofin ~~the~~good ~~coal~~standing. If ~~and~~we ~~carbonaceous~~do ~~shale~~not ~~deposit~~execute ~~surrounding~~on ~~Talundilly_CSG1.~~our Anproposed ~~additional~~exploration ~~six~~programs, towe ~~eight wells~~may ~~will need to~~ be ~~drilled~~required to ~~obtain~~relinquish ~~more~~our ~~data~~interests in ~~order~~our topermits ~~make any conclusive determination as to the results from the desorption analysis. [what is the anticipated cost~~ and ~~timing?] Drilling of an additional six to eight wells~~ will ~~require~~be ~~significant additional~~forced ~~funding~~ to ~~complete~~cease operations.

~~During the three months ended August 31~~Additionally, ~~2011, we~~there ~~completed~~can ~~the~~be ~~drilling~~no ofassurance ~~the~~that ~~Albilbah_CSG1~~if ~~well~~we inare ~~permit~~successful ~~ATP 862~~ in ~~Queensland~~securing ~~Australia.~~funding ~~The~~that ~~well~~we ~~reached~~will abe ~~total~~successful ~~depth~~in ~~of 1,555~~discovering ~~feet~~commercial ~~and~~quantities ~~472 feet~~ of ~~core were cut. 35 feet of gaseous coal and carbonaceous rock were sealed in 20 canisters for desorption measurement. In addition~~hydrocarbons, ~~the~~or ~~lower~~that ~~Winton~~we ~~Sandstones~~will ~~were~~have ~~found~~access to ~~contain~~funds ~~free gas and 20 feet of these cores were also placed in canisters~~ to ~~measure~~develop ~~the gas emitted from the cores. Evidence of gas in the canisters prompted the re-evaluation of the original Albilbah-1 (drilled by~~ a ~~previous~~successful ~~operator)~~discovery ~~well~~without ~~logs~~significant todilution ~~investigate~~or ~~the~~cost possibility of gas being present in the pore space of the LWSS. Sentry’s log analysis concluded that gas is present in a net 115 feet of the 250 feet interval. Further drilling and testing is required in order to ~~make~~our any determination as to whether the amount of gas present can be economically produced and no assurance can be provided that the amount of gas found to exist will be capable of being economically producedstockholders.

~~With~~Our ~~the~~business ~~completion~~plan ofis ~~our~~limited ~~current~~in ~~drilling~~its ~~campaign, we~~scope ~~are~~and ~~currently~~we ~~finalizing~~intend ~~the~~to ~~laboratory~~derive ~~analysis~~all ~~and completion by end~~ of ~~October 2011. Our forward going strategy from that point will be based on~~ our ~~conclusions~~revenue from ~~this~~a ~~analysis.~~discovery Weof ~~will~~commercial ~~engage~~quantities ~~independent~~of ~~consultants to review and audit our findings~~hydrocarbons. If ~~our~~Specifically, ~~findings~~discovering ~~support~~sufficient ~~certification~~quantities of ~~reserves,~~hydrocarbons ~~we will engage consultants~~ to ~~commence~~warrant ~~the~~their ~~certification~~profitable ~~process~~development. We ~~anticipate that~~have ~~the~~no ~~testing,~~other ~~analysis,~~business plans and ~~certification~~if ofwe ~~our~~are ~~results~~unsuccessful ~~will~~in ~~cost~~discovering ~~$100,000.~~commercial Wequantities ~~have sufficient funds to complete the laboratory analysis and independent review~~ of hydrocarbons our ~~finding,~~business ~~however~~ will ~~require additional funding for any future exploration or appraisal work~~fail.

~~Plan~~During the three months ended May 31, 2011, we completed the final preparation for our drilling program. We completed contracts with the landowners, finalized the design and budgeting for each well and secured service contracts with the necessary drilling and testing companies. On June 15, 2011, we commenced drilling on the initial well in ATP 862, the Talundilly_CSG1. We completed drilling of ~~Operation~~this initial well on June 24, 2011, after reaching target depth (TD) of 436 meters. A total of 15.26 meters of coal and carbonaceous shale cores were collected and forwarded for gas desorption testing. Net coal thickness collected was 12.7 meters. Due to certain anomalous data from what we believe could have been errors made during the testing process, we are not in a position based on the data received to determine the commerciality of the coal and carbonaceous shale deposit surrounding Talundilly_CSG1. An additional six to eight wells will need to be drilled to obtain more data in order to make any conclusive determination as to the results from the desorption analysis. Drilling of an additional six to eight wells will require significant additional funding to complete.

~~Our~~During ~~plan~~the ofthree ~~operations~~months ~~for~~ended ~~the~~August ~~next~~31, ~~twelve~~2011, ~~months is~~we tocompleted ~~continue~~the ~~our~~drilling ~~work~~of ~~obligations~~the onAlbilbah CSG1 well in permit ATP 862, ~~864~~in Queensland Australia. The well reached a total depth of 1,555 ~~865~~feet and 472 feet of core were cut. 35 feet of gaseous coal and carbonaceous rock were sealed in 20 canisters for desorption measurement. In addition, the lower Winton Sandstones (LWSS) were found to contain free gas and ~~866~~20 feet of these cores were also placed in canisters to measure the ~~Adavale~~gas ~~basin~~emitted from the cores. Evidence of gas in ~~Queensland~~the ~~Australia~~canisters ~~and~~prompted the re-evaluation of the original Albilbah-1 (drilled by a previous operator) well logs to ~~continue our~~investigate ~~assessment~~the possibility of ~~various~~gas ~~onshore~~being ~~exploration~~present ~~permits~~in the pore space of the LWSS. Sentry’s log analysis concluded that gas is present in ~~Australia~~a net 115 feet of the 250 feet interval. Further drilling and ~~Asia~~testing is required in order to make any determination as to whether the amount of gas present can be economically produced and no assurance can be provided that the amount of gas found to exist will be capable of being economically produced.

ToDuring ~~further explore~~ the ~~delineated~~three ~~coal~~months ~~and~~ended ~~carbonaceous shale~~November ~~deposit in ATP 862 and 864~~30, 2011 we ~~plan~~completed tothe ~~drill~~final ~~eight~~laboratory toanalysis ~~ten~~and ~~wells~~results byfrom ~~March~~the ofTalundilly_CSG1 ~~2012,~~and ~~assuming we are able to secure sufficient financing~~Albilbah_CSG1. ~~This~~Management ~~program~~believes ~~will~~that ~~quantitatively~~the ~~measure~~results ~~original~~are ~~gas~~inconclusive inand ~~place~~that ~~using~~six ~~canister~~to ~~desorption~~eight ~~and~~additional ~~core~~wells ~~logging~~should ~~methods~~be ~~and we~~drilled ~~will~~before ~~commence~~conclusions ~~flow~~can ~~testing~~be ofmade ~~one~~on ~~or two of~~ the ~~wells.~~commerciality ~~In addition to exploration~~ of the ~~coal~~resource ~~and carbonaceous shale~~ deposit we. The ~~intend~~data toobtained ~~drill two well to flow test the Winton Sandstone interval intercepted~~ during drilling ~~of Albilbah_CSG1~~ and welaboratory ~~intend to~~results ~~acquire~~and ~~additional~~analysis ~~seismic~~has ~~data.~~been Weforwarded ~~expect that in total these activities would cost $10 million. We do not have sufficient funds to complete such activities, however will require additional funding~~ for ~~any~~independent ~~future~~review ~~exploration~~and ~~or appraisal work~~auditing.

In ATP 865 and 866, we plan to undertake a seismic program to advance our prospects during the next 6 months assuming we are able to secure sufficient financing. We further plan to drill one conventional well, the Ravenscourt, to test the Etonvale Formation at a depth of approximately 1,700 meters (5,580 feet) downdip from the Rosebank-1 well and will be targeting a thicker carbonate section. We expect that such activities would cost $3.5 million. We do not have sufficient funds to complete such activities, however will require additional funding for any future exploration or appraisal work.15-

~~Our~~The ~~work~~Company ~~program~~has ~~includes~~been ~~acquisition~~unsuccessful ofin ~~seismic data~~securing ~~and~~joint ~~drilling~~venture ofpartners ~~additional~~or ~~wells.~~to ~~The~~raise ~~time~~funding to ~~complete~~continue the ~~acquisition~~operations ofon ~~seismic~~its ~~data~~permits. ~~and~~As ~~drilling~~a ofcost ~~wells~~saving ~~depends on~~effort, ~~among other things,~~ the ~~availability~~Board of ~~personnel~~Directors ~~and~~has ~~equipment~~passed ina ~~Queensland.~~resolution ~~The~~to ~~associated~~terminate ~~costs~~our ~~will~~reporting beobligations ~~determined~~pursuant byto the ~~depth~~1934 of Exchange Act. It our intention to file the ~~wells~~required ~~and~~documentation with the ~~amount~~Securities ofand ~~seismic~~Exchange ~~data~~Commission prior to beour ~~acquired~~year end on February 28, 2012.

InThe ~~addition~~first tofour year term of our ~~current~~Authorities ~~permits~~to Prospect (ATP) in Queensland expires on February 28, 2012. Prior to this date we ~~are~~must ~~continuously investigating~~submit an application to renew the ATPs for an additional ~~opportunities~~four years. Due to lack of funds, we have not completed all of the work commitments stipulated in the original work program approved by the Queensland Department of Employment, Economic Development and ~~other~~Innovation ~~parts~~(DEEDI). The ATPs will therefore not be in good standing on the date of ~~South-East~~renewal. ~~Asia~~The Company has submitted an application with DEEDI for an extension on completing the work obligations. There is material risk that this application will not be granted. A rejection of the application could result in a substantial or total relinquishment of the Company’s ATPs on February 28, 2012. Such an event would leave the company without operating assets.

WePlan ~~do not have sufficient funds to carry out our plan~~ of operations for the next twelve months. We rely principally on the issuance of common shares by private placements to raise funds to finance our business. There is no assurance that market conditions will continue to permit us to raise funds when required. If possible, we will issue more common shares at prices we determine, possibly resulting in dilution of the value of common shares.Operation

~~With~~The ~~our~~following ~~ATP~~plan ~~862,~~of ~~864,~~operations ~~865,~~is ~~and~~contingent ~~866,~~on weus ~~are~~securing ~~obliged to~~funding ~~complete~~that ~~proposed~~will ~~work~~allow ~~programs~~us to ~~maintain~~continue ~~our interests in good standing~~operations. AsPresently ~~of August 31, 2011~~ our ~~committed~~prospect ~~expenditures over~~for ~~the~~funding ~~next~~is ~~year total $19~~limited.5 ~~million.~~In ~~However,~~ the ~~completion~~event ofthat ~~the~~we ~~work~~are ~~program~~not issuccessful ~~determined~~in ~~for~~securing ~~each~~funding ~~permit~~we ~~individually and~~might ~~there~~be isforced noto ~~cumulative~~relinquish ~~analysis~~our onATPs ~~work~~and ~~completed~~cease operations.

~~The~~In ~~following~~the ~~table~~event ~~details~~that we do secure funding we intend to further explore the ~~capital~~delineated ~~expenditure required~~coal byand ~~February~~carbonaceous 28shale deposit in ATP 862 and 864, ~~2012~~we ~~for~~plan usto drill six to ~~maintain~~eight ~~good~~wells. ~~standing~~This onprogram ~~our~~will ~~four~~quantitatively ~~permits:~~measure original gas in place using canister desorption and core logging methods and we will commence flow testing of one or two of the wells. In addition to exploration of the coal and carbonaceous shale deposit we intend to drill two well to flow test the Winton Sandstone interval intercepted during drilling of Albilbah_CSG1. We further intend to acquire additional seismic data. We expect that in total these activities would cost $10 million. We do not have sufficient funds to complete such activities however, and will require additional funding for any future exploration or appraisal work.

	ATP 862	ATP 864	ATP 865	ATP 866
Deep Upholes	$305,000	$305,000	$-	$-
Seismic Reprocessing	406,000	137,000	142,000	142,000
Shooting of Seismic	2,035,000	2,035,000	1,017,000	1,017,000
Drilling of Petroleum wells	2,797,000	2,797,000	2,797,000	3,560,000
	$5,543,000	$5,274,000	$3,956,000	$4,719,000

In ATP 865 and 866, we plan to undertake a seismic program to advance our prospects during the next 6 months assuming we are able to secure sufficient financing. We further plan to drill one conventional well, the Ravenscourt, to test the Etonvale Formation at a depth of approximately 1,700 meters (5,580 feet) downdip from the Rosebank-1 well and will be targeting a thicker carbonate section. We expect that such activities would cost $3.5 million. We do not have sufficient funds to complete any of the above planned activities and will require additional funding to continue operations.

WeOur dowork ~~not~~program ~~have~~includes ~~sufficient~~acquisition ~~capital~~of toseismic ~~satisfy~~data ~~the required future exploration expenditures needed to maintain our four ATP permits in good standing~~ and wedrilling ~~will rely principally on the issuance~~ of ~~common~~additional ~~stock to raise funds to finance the expenditures that we expect to incur~~wells. ~~Failure~~The totime ~~raise the required funds~~ to complete ~~our commitments will result in~~ the ~~failure~~acquisition toof ~~meet~~seismic ~~our~~data ~~obligations~~ and ~~the~~drilling ~~relinquishment~~ of ~~one~~wells ordepends ~~more~~on, ofamong ~~our permits.~~other Wethings, ~~have relied principally on~~ the ~~issuance~~availability of ~~our~~personnel ~~common~~and ~~stock~~equipment in ~~private~~Queensland. ~~placements~~The toassociated ~~raise~~costs ~~funds to support our business, but there can be no assurance that we~~ will be ~~successful~~determined inby ~~raising additional funds through~~ the ~~issuance~~depth of ~~additional equity. We have planned and budgeted for~~ the ~~required~~wells ~~work~~ and at the ~~date~~amount of ~~this~~seismic ~~report~~data ~~have sufficient time~~ to ~~complete~~be ~~most of the required work prior to February 28, 2012 provided that we are able to obtain sufficient financing on a timely basis~~acquired.

We do not ~~expect~~have ~~any~~sufficient ~~significant~~funds ~~purchases~~to carry out our plan of ~~plant and~~operations ~~equipment~~for orthe ~~any~~next ~~increase~~twelve inmonths. We rely principally on the ~~number~~issuance of ~~employees~~common shares by private placements to raise funds to finance our business. There is no assurance that market conditions will permit us to raise funds. If possible, we will issue more common shares at prices we determine, possibly resulting in dilution of the ~~near~~value ~~future~~of common shares.

WeWith ~~anticipate~~our ~~incurring~~ATP ~~expenses~~862, of864, ~~approximately $19~~865, ~~million~~and ~~over~~866, ~~the~~we ~~next~~are 12obliged ~~months~~to ~~for~~complete ~~our~~proposed ~~exploration~~work ~~program.~~programs ~~There~~to ~~can~~maintain beour nointerests ~~guarantee~~in ~~that~~good westanding. As ~~will~~of beNovember ~~able~~30, to2011 ~~secure~~our ~~the~~committed ~~necessary financing~~expenditures ~~and~~prior ~~equipment~~ to ~~undertake~~February ~~the~~28, ~~work~~2012 ~~program~~total ~~within~~$13 ~~the anticipated time frame~~million. IfHowever, wethe ~~are~~completion ~~unsuccessful~~of inthe ~~securing~~work ~~sufficient financing~~program ~~and~~is ~~equipment~~determined wefor ~~may~~each bepermit ~~subject~~individually toand ~~relinquishment~~there ofis ~~any~~no ~~one~~cumulative oranalysis ~~all~~on ofwork ~~our existing permits~~completed.

~~Results~~The offollowing ~~Operations~~table ~~for~~details the ~~Three~~estimated ~~and~~capital ~~Six~~expenditure ~~Months~~required ~~Ended~~by ~~August 31~~February 28, ~~2011~~2012 ~~and~~for ~~2010~~us to maintain good standing on our four permits:

~~Revenues~~-16-

We have not generated any revenues from operations since our inception.

		ATP 862		ATP 864		ATP 865		ATP 866

Deep Upholes	$	305,000	$	305,000	$	0	$	0
Seismic Reprocessing		406,000		137,000		142,000		142,000
Shooting of Seismic		2,035,000		2,035,000		1,017,000		1,017,000
Drilling of Petroleum wells		2,797,000		2,797,000		2,797,000		3,560,000

	$	5,543,000	$	5,274,000	$	3,956,000	$	4,719,000

~~Expenses~~We do not expect any significant purchases of plant and equipment or any increase in the number of employees in the near future.

We ~~reported~~anticipate ~~total~~incurring expenses ~~in the amount~~ of approximately $~~770,781~~19 ~~for~~million over the ~~three~~next 12 months ~~ended August 31, 2011, compared to total expenses of $111,978~~ for ~~the~~our ~~three~~exploration ~~months ended August 31, 2010~~program. ~~Our~~ ~~total~~There ~~expenses~~can ~~were~~be ~~significantly~~no ~~higher~~guarantee ~~for~~that ~~the~~we ~~three~~will ~~months~~be ~~ended~~able ~~August 31, 2011, as compared~~ to secure the ~~three~~ ~~months~~necessary ~~ended~~financing ~~August~~and ~~31,~~equipment ~~2010.~~to ~~For~~undertake the ~~six~~work ~~month~~program ~~period~~within ~~ended~~the ~~August~~anticipated ~~31,~~time ~~2011 we reported total expenses of $1,364,539 compared to $213,529 for same period last year~~frame. ~~The~~If ~~substantial~~we ~~increase~~are unsuccessful in ~~costs~~securing ~~for~~sufficient ~~the~~financing ~~six~~ and ~~three~~equipment ~~month~~we ~~periods~~may ~~are~~be ~~mostly~~subject ~~related~~ to ~~increased~~relinquishment ~~cost~~ of ~~deferred~~any ~~compensation~~one ~~from~~or ~~additional~~all ~~options awarded, from increased shareholder communication expenditures, write down~~ of ~~exploration assets associated with~~ our ~~surrender~~existing ~~of EPC 1758 and from increased travel related to financing activities~~permits. ~~EPC 1758 was surrendered during the period ending May 31, 2011 and all capitalized costs were at that time written off.~~

WeResults ~~incurred general and administrative expenses~~ of ~~$721,094~~Operations for the ~~three~~Three months ended August 31, 2011, compared to $105,052 for the three months ended August 31, 2010. For the six month period ended August 31, 2011, we reported 1,276,231 compared to $199,076 for the same period in 2010. The increase in our general and ~~administrative~~Nine ~~expenses~~Months ~~for~~Ended ~~both~~November ~~the three and six month periods are primarily attributable to the increased cost of deferred compensation from additional options awarded~~30, ~~increased investor communication expenses and travel related expenses. For the three months ended August 31,~~ 2011, we incurred deferred compensation of $410,535, compared to $88,045 for the three months ended August 31, 2010. For the six month period ended August 31, 2011, we reported deferred compensation expenses of $821,070 compared to $164,183 for the six month period of 2010. During the three months ended August 31, 2011, we also incurred shareholder communication expenses of $246,217, compared to $859 for the same period in 2010. For the six month period ended August 31, 2011, we incurred shareholder communication expenses of $339,838 compared to $ 1,765 for the same period in 2010. The increase was caused by increased frequency of communication with a substantial greater number of shareholders and from issuing 60,000 shares to a consultant for investor relation services. For the three months ended August 31, 2011, we further incurred $37,762 related to travel and funding activities as compared $2,638 for the three months ended August 31, 2010~~. For the six months ended August 31, 2011, we incurred $64,492 for these activities compared to $2,638 for the six months ended August 31, 2010.~~

Professional fees for the three months ended August 31, 2011 did not change significantly from the professional fees reported for the same period in the prior year. We incurred professional fees of $3,134 for the three months ended May 31, 2011, compared to $2,853 for the three months ended August 31, 2010. For the six month periods ended August 31, 2011 and 2010 we incurred professional fees of $27,389 and 13,514, respectively. The increase in professional fees for the six month period is attributable to an increase in our exploration activity and specifically to contract negotiations with land owners and with service providers for our drilling program. We anticipate that we will incur increased professional fees as we continue our work programs and exploration activity.Revenues

We ~~recorded~~have nonot ~~gain~~generated orany ~~loss~~revenues onfrom ~~foreign exchange~~operations ~~for~~since ~~the~~our ~~three months ended August 31, 2011, compared to a loss of $4,073 for the same period in the prior year~~inception. For the six month period ended August 31, 2011, we reported a foreign exchange loss of $350 compared to $939 for the same period in 2010. The loss on foreign exchange was realized during the six months ended August 31, 2011 as a result of fluctuation in the US dollar as compared to the Australian dollars

During the three months ended August 31, 2011, we expensed $6,553 in write down of exploration assets due to our surrender of EPC 1758 during the reporting period. For the six month period ended August 31, 2011, we expensed $60,569. We did not incur any write down of exploration assets during the three or six months ended August 31, 2011.Expenses

~~Other~~We ~~Income~~reported total expenses in the amount of $479,369 for the three months ended November 30, 2011, compared to total expenses of $152,348 for the three months ended November 30, 2010. Our total expenses were significantly higher for the three months ended November 30, 2011, as compared to the three months ended November 30, 2010. For the nine month period ended November 30, 2011 we reported total expenses of $1,843,908 compared to $365,877 for the same period last year. The substantial increase in costs for the nine and three month periods are mostly related to increased cost of deferred compensation from additional options awarded, from increased shareholder communication expenditures, write down of exploration assets associated with our surrender of EPC 1758 and from increased travel related to financing activities. EPC 1758 was surrendered during the period ending May 31, 2011 and all capitalized costs were at that time written off.

We ~~reported~~incurred ~~other~~general ~~income~~ and administrative expenses of $11465,~~253~~ 202 for the three months ended ~~August~~November 3130, 2011, ~~and~~compared ~~other~~to ~~income of~~ $7153,072 for the three months ended ~~August~~November 3130, 2010. For the ~~six~~ nine month ~~periods~~period ~~ending~~ended ~~August~~November 3130, 2011, we reported $1,741,433 compared to $352,148 for the same period in 2010. The increase in our general and ~~August~~administrative 31expenses for both the three and nine month periods are primarily attributable to the increased cost of deferred compensation from additional options awarded, increased investor communication expenses and travel related expenses. For the three months ended November 30, 2011, we incurred deferred compensation of $410,535, compared to $120,581 for the three months ended November 30, 2010. For the nine month period ended November 30, 2011, we reported ~~other~~deferred ~~income~~compensation expenses of $151,~~108~~231,605 ~~and~~compared to $39184,764 ~~respectively~~for the nine month period of 2010. ~~Other~~During ~~income was~~the ~~attributable~~three months ended November 30, 2011, we also incurred shareholder communication expenses of $9,282, compared to ~~interest~~$4,776 ~~received~~for onthe ~~bank~~same ~~deposits~~period ~~and~~in ~~increased~~2010. doFor the nine month period ended November 30, 2011, we incurred shareholder communication expenses of $349,120 compared to ~~additional~~$6,540 ~~funds~~for ~~held~~the same period in ~~Australian~~2010. The ~~Dollar~~increase atwas caused by increased frequency of communication with a ~~higher interest~~substantial ~~rate~~greater ~~than~~number Uof shareholders and from issuing 60,000 shares to a consultant for investor relation services.S For the three months ended November 30, 2011, we further incurred $20,819 related to travel and funding activities as compared $7,562 for the three months ended November 30, 2010. ~~rates~~For the nine months ended November 30, 2011, we incurred $85,311 for these activities compared to $10,204 for the nine months ended November 30, 2010.

~~Net Loss~~-17-

We ~~had~~incurred ~~net~~professional ~~loss~~fees for the three months ended November 30, 2011 of $~~719~~14,~~582~~167 for the three months ended ~~August~~November 3130, 2011, as compared to ~~net loss of~~ $~~111~~6,~~971~~055 for the three months ended ~~August~~November 3130, ~~2011~~2010. For Wethe ~~had~~nine ~~net~~month ~~loss~~periods ~~of $1~~ended November 30,~~349,431~~ ~~for~~2011 ~~the~~and ~~six~~2010 ~~months~~we ~~ended~~incurred ~~August~~professional ~~31,~~fees ~~2011~~of $41,556 asand ~~compared~~$19,569, torespectively. ~~net~~The ~~loss~~increase ofin ~~$213,490~~professional fees for the ~~six~~three ~~months~~and ~~ended~~nine ~~August~~month ~~31,~~periods ~~2011. The~~ is attributable to an increase in our ~~net~~exploration ~~loss~~activity ~~was~~and ~~attributable~~specifically to contract negotiations with land owners and with service providers for our drilling program. We anticipate that we will incur increased ~~expenses~~professional ~~described~~fees ~~above~~as we continue our work programs and exploration activity.

~~Basic~~We ~~and~~recorded ~~Diluted~~no ~~Loss~~gain ~~per~~or ~~Share~~loss on foreign exchange for the three months ended November 30, 2011, compared to a gain of $6,779 for the same period in the prior year. For the nine month period ended November 30, 2011, we reported a foreign exchange loss of $350 compared to a gain of $5,840 for the same period in 2010. The loss on foreign exchange was realized during the nine months ended November 30, 2011 as a result of fluctuation in the US dollar as compared to the Australian dollars

AsDuring athe ~~result~~three ofmonths ~~the~~ended ~~above~~November 30, ~~the~~2011, ~~basic~~we ~~and~~did ~~diluted loss~~not ~~per~~expense ~~common~~any ~~share~~write ~~was~~down ~~$0.02~~of ~~and~~exploration $0assets.00 ~~for~~For the ~~three~~nine ~~months~~month period ended ~~August~~November 3130, 2011, ~~and~~we ~~2010,~~expensed ~~respectively~~$60,569. ~~Basic~~We ~~and~~did ~~diluted loss~~not ~~per~~incur ~~common~~any ~~share~~write ~~was~~down ~~$0.03~~of ~~and~~exploration ~~$0.00~~assets ~~for~~during the ~~six~~three or nine months ended ~~August~~November 3130, 2011 ~~and 2010, respectively~~.

~~Liquidity~~Other ~~and Capital Resources~~Income

AsWe reported other income of ~~August 31~~$1,255 ~~2011,~~for wethe ~~had~~three ~~total~~months ~~current~~ended ~~assets~~November ~~of $232~~30,~~341~~ ~~(February~~ 2011: ~~$689,015),~~and ~~which~~other ~~included~~income ~~cash~~ of $~~121,447,~~6 ~~prepaid~~for ~~expenses of~~the ~~$7,238,~~three ~~and~~months ~~sales~~ended ~~taxes~~November ~~receivable of $103~~30,~~686~~ 2010. For Asthe ofnine ~~August~~month 31periods ending November 30, 2011, weand ~~had~~November ~~total~~30, ~~current~~2010, ~~liabilities~~we inreported ~~the~~other ~~amount~~income of $4916,~~232 (February~~363 ~~2011:~~and $~~103~~45,~~163)~~ respectively. As aOther ~~result,~~income wewas ~~had~~attributable ~~working~~to ~~capital~~interest ofreceived ~~$183,109~~on asbank ofdeposits ~~August 31,~~on ~~2011~~funds ~~(February~~held ~~2011:~~in ~~$585,852)~~Australian Dollar at a higher interest rate than U.S. rates.

WeNet anticipate that we will not generate any revenue during the next twelve months. In 2008, the proposal to the local government for permits ATP 862, 864, 865 and 866 of an exploration program with a total estimated commitment of approximately $19.5 million to be completed by February 28, 2012 was approved. As of the date of this report, we have expended approximately $1,600,000 in exploration expenditures in executing on the proposal to the local government for permits ATP 862, 864, 865 and 866 and we are obligated to complete the $19.5 million in exploration expenditures by February 28, 2012 in order to maintain our permits in good standing. If we do not complete our work obligations, there is a risk that we will lose our rights to continue operations on our permits. In order for us to complete our work obligations we will have to raise additional funds. There can be no assurance that we will be able to raise sufficient funds to complete our obligations.Loss

InWe ~~addition~~had tonet ~~these~~loss ~~expenditures~~of ~~anticipated to~~$478,114 befor ~~incurred~~the inthree ~~connection~~months ~~with~~ended ~~our~~November ~~proposed~~30, ~~exploration programs~~2011, weas ~~anticipate~~compared ~~spending~~to ~~approximately~~net loss of $60152,~~000~~342 infor ~~ongoing~~the ~~general and~~three ~~administrative~~months ~~expenses~~ended ~~for~~November ~~the~~30, ~~next~~2011. ~~twelve~~We ~~months. The~~had ~~general~~net ~~and~~loss ~~administrative~~of ~~expenses~~$1,843,908 for the ~~year~~nine ~~will~~months ~~consist primarily~~ended ofNovember ~~professional~~30, ~~fees~~2011, ~~for~~as ~~the~~compared ~~audit~~to ~~and~~net ~~legal~~loss ~~work~~of ~~relating~~$365,877 tofor ~~our~~the ~~regulatory~~nine ~~filings~~months ~~throughout~~ended ~~the~~November ~~year~~30, as2011. The ~~well~~increase ~~as general~~in ~~office~~our net loss was attributable to increased expenses described above.

~~Our~~Basic ~~current cash on hand is insufficient to be able to make our planned exploration expenditures~~ and toDiluted ~~pay~~Loss for our general administrative expenses over the next twelve months. We must obtain additional financing in order to continue our plan of operations for the next twelve months. We do not have any lending arrangements in place with banking institutions and believe that debt financing will not be an alternative for funding our exploration programs as we have limited tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. We are currently seeking additional funding in the form of equity financing from the sale of our common stock, but cannot provide any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our proposed exploration programs that is a requirement in order to maintain our permits in good standing. During the six months ended August 31, 2011, we raised $1,000,000 through private equity offerings and entered into an agreement that provided for future financing through the issuance of 400,000 common shares for $1.0 million upon our ability to confirm average gas content of coal of not less than 2.5 cubic meters per ton dry ash free and; for Carbonaceous Shale - not less than average 0.5 cubic meters per ton for shale with total organic content greater than 8 weight percent. This agreement also provides for the issuance of 535,714 shares for $1.5 million upon an initial 3P reserve certification. There is no assurance that these conditions will be satisfied in order to enable us to closing on these financing commitments.Share

WeAs ~~are considering entering into~~ a ~~joint venture~~result ~~arrangement~~of tothe ~~finance~~above, the ~~exploration~~basic ~~activity~~and ~~required~~diluted toloss ~~carry~~per ~~out~~common ~~our~~share ~~proposed~~was ~~exploration~~$0.01 ~~programs~~and ~~on the properties underlying our permits~~$0. We00 ~~are~~for ~~seeking~~the tothree ~~locate~~months aended ~~joint~~November ~~venture participant~~30, ~~but~~2011 ~~can~~and ~~provide~~2010, ~~no assurance that we will be successful~~respectively. In ~~the~~Basic ~~event~~and ~~that~~diluted weloss ~~enter~~per ~~into~~common ashare ~~joint~~was ~~venture~~$0.04 ~~arrangement,~~and we$0.01 ~~would~~for ~~likely~~the ~~have~~nine tomonths ~~assign~~ended aNovember ~~percentage of~~30, ~~our~~2011 ~~property~~and ~~interests~~2010, ~~to the joint venture participant~~respectively.

IfLiquidity ~~we are unable to raise additional capital in the immediate future, we will experience liquidity problems~~ and ~~management~~Capital expects that we will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. In the absence of sufficient financing to finance our exploration activity required to carry out our proposed exploration programs, we will not be able to pursue our exploration program and maintain our permits in good standing. If we do not execute on our proposed exploration programs, we may be required to relinquish our interests in our permits and will be forced to cease operations. Resources

~~Cash~~As ~~Used~~of November 30, 2011, we had total current assets of $95,634 (February 2011: $689,015), which included cash of $74,108, prepaid expenses of $17,895, and sales taxes receivable of $3,631. As of November 30, 2011, we had total current liabilities in ~~Operating~~the ~~Activities~~amount of $70,159 (February 2011: $103,163). As a result, we had working capital of $25,475 as of November 30, 2011 (February 2011: $585,852).

~~Cash~~We ~~flows~~anticipate ~~used~~that inwe ~~operating~~will ~~activities for~~not generate any revenue during the ~~six~~next twelve months. In ~~ended~~2008, ~~August~~the ~~31,~~proposal ~~2011~~to ~~were~~the ~~$449~~local government for permits ATP 862,~~202~~ 864, as865 ~~compared~~and to866 ~~cash~~of ~~flows~~an ~~used~~exploration inprogram ~~operating~~with ~~activities~~a total estimated commitment of approximately $~~71,760~~19.5 ~~for~~million ~~the six~~to ~~months~~be ~~ended~~completed ~~August~~by 31February 28, ~~2010~~2012 was approved. ~~Our~~As ~~net~~of ~~loss~~the date of this report, we have expended approximately $1,~~349~~600,~~431~~000 ~~for~~in ~~the~~exploration ~~six~~expenditures ~~months~~in ~~ended~~executing ~~August~~on ~~31,~~the ~~2011~~proposal ~~was~~to the ~~primary reason~~local government for ~~our~~permits ~~negative~~ATP ~~operating~~862, ~~cash flow~~864, as865 ~~compared~~and to866 ~~our~~and ~~net~~we ~~loss~~are ofobligated ~~$213,490~~to ~~for~~complete the ~~six~~$19.5 ~~months~~million ~~ended~~in ~~August~~exploration ~~31,~~expenditures ~~2010. Our~~by ~~reporting~~February ~~negative~~28, ~~operating~~2012 ~~cash~~in ~~flows~~order ~~for~~to ~~the~~maintain ~~six~~our ~~months~~permits ~~ended~~in ~~August~~good ~~31,~~standing. If ~~2011~~we ~~was~~do ~~offset~~not bycomplete ~~stock-based~~our ~~compensation~~work ~~of $821~~obligations,~~670,~~ ~~services~~there ~~paid~~is ~~for~~a ~~with~~risk ~~stock~~that ofwe ~~$180,000,~~will ~~and~~lose ~~write~~our ~~off~~rights ofto ~~exploration~~continue ~~assets~~operations ofon ~~$60,569~~our permits. In order for ~~the~~us ~~reporting~~to ~~period~~complete our work obligations we will have to raise additional funds. There can be no

~~Cash Used in Investing Activities~~-18-

~~For~~assurance ~~the~~that ~~six~~we ~~months~~will ~~ended~~be ~~August~~able ~~31,~~to ~~2011,~~ raise sufficient funds to complete our obligations. Even if we ~~used~~do ~~$1,141,332~~raise inthe ~~investing~~required ~~activities,~~funds aswe ~~compared~~do not have sufficient time to ~~$26,086~~complete ~~for~~our ~~the~~work ~~six~~obligations ~~months~~prior ~~ended~~to ~~August~~February 3128, ~~2010~~2012. ~~For~~ ~~the six~~In ~~months~~order ~~ended~~to ~~August~~complete ~~31,~~our ~~2011,~~work obligations we ~~invested~~will ~~$1,138,810~~have into ~~unproven~~receive ~~properties,~~an asextension ~~compared~~on the deadline to complete our work obligations from the ~~six~~Queensland ~~months~~government. ~~ended~~There ~~August~~can ~~31, 2010,~~be inno ~~which~~assurance that we ~~invested~~will ofreceive ~~$26,086~~any inextension ~~unproven~~on ~~properties~~our deadline to complete our work obligations.

~~Cash~~In ~~from~~addition ~~Financing~~to ~~Activities~~these expenditures anticipated to be incurred in connection with our proposed exploration programs, to maintain operations we will have to incur approximately $15,000 in ongoing general and administrative expenses for the next twelve months. Currently we do not have sufficient funds to maintain ongoing operations. Unless we secure additional funding we will cease all operations until sufficient funding is secured.

AsOur wecurrent cash on hand is insufficient to be able to make our planned exploration expenditures and to pay for our general administrative expenses over the next twelve months. We must obtain additional financing in order to continue our plan of operations. We do not have ~~had~~any nolending ~~revenues~~arrangements ~~since~~in ~~inception,~~ place with banking institutions and believe that debt financing will not be an alternative for funding our exploration programs or to pay for general and administrative expense as we have ~~financed~~limited tangible assets to secure any debt financing. We anticipate that any additional funding will be in the form of equity financing from the sale of our ~~operations~~common ~~primarily~~stock. We byare ~~using~~currently ~~existing~~seeking ~~capital~~additional ~~reserves~~funding ~~and~~in ~~through~~the ~~private~~form ~~placements~~of equity financing from the sale of our common stock, but cannot provide any assurance that we will be able to raise sufficient funding to fund our proposed exploration programs that is a requirement in order to maintain our permits in good standing or to maintain operations. ~~For~~ During the ~~six~~nine months ended ~~August~~November 3130, 2011, we ~~generated~~raised $1,000,000 ~~from~~through private equity offerings and entered into an agreement that provided for future financing through the issuance of 400,000 common shares, asfor ~~compared~~$1.0 million upon our ability to noconfirm ~~cash~~average ~~flows provided~~gas bycontent ~~financing~~of ~~activities~~coal of not less than 2.5 cubic meters per ton dry ash free and; for ~~the~~Carbonaceous ~~six~~Shale ~~months~~- ~~ended~~not ~~August~~less 31than average 0.5 cubic meters per ton for shale with total organic content greater than 8 weight percent. This agreement also provides for the issuance of 535,714 ~~2010~~shares for $1.5 million upon an initial 3P reserve certification. To date we have not been able to satisfy these conditions in order to enable us to closing on these financing commitments.

~~Off-balance~~We ~~sheet~~are ~~arrangements~~considering entering into a joint venture arrangement to finance the exploration activity required to carry out our proposed exploration programs on the properties underlying our permits. We are seeking to locate a joint venture participant, but can provide no assurance that we will be successful. In the event that we enter into a joint venture arrangement, we would likely have to assign a percentage of our property interests to the joint venture participant.

WeIf we are unable to raise additional capital in the immediate future, we will experience liquidity problems and management expects that we will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. In the absence of sufficient financing to fund our exploration activity required to carry out our proposed exploration programs, we will not be able to pursue our exploration program and maintain our permits in good standing. If we do not ~~have~~execute ~~any~~on ~~off-balance~~our ~~sheet~~proposed ~~arrangements~~exploration programs, we may be required to relinquish our interests in our permits and will be forced to cease operations.

~~Going~~Cash ~~Concern~~Used in Operating Activities

WeCash ~~have~~flows ~~incurred~~used ~~net~~in ~~losses~~operating activities for the ~~period from~~nine ~~inception~~months onended ~~February~~November 2330, ~~2006~~2011 were $406,484, as compared to ~~August~~cash ~~31,~~flows ~~2011~~used in operating activities of $3106,~~270,096~~798 ~~and~~for ~~have~~the nonine ~~source~~months ofended ~~revenue~~November 30, 2010. ~~The~~Our ~~continuity~~net loss of ~~our~~ ~~future~~$1,827,545 ~~operations~~for isthe ~~dependent~~nine onmonths ended November 30, 2011 was the primary reason for our ~~ability~~negative tooperating ~~obtain~~cash ~~financing~~flow, ~~from~~as ~~issuance~~compared to our net loss of ~~equity~~$365,832 ~~securities~~for the nine months ended November 30, 2010. ~~These~~Our ~~conditions raise~~reporting ~~substantial~~negative ~~doubt~~operating ~~about~~cash ~~our~~flows ~~ability~~for tothe ~~continue~~nine asmonths aended ~~going~~November ~~concern~~30, 2011 was offset by stock-based compensation of $1,231,604, services paid for with stock of $180,000, and write off of exploration assets of $60,569 for the reporting period.

~~Recent accounting pronouncements~~-19-

~~There~~Cash ~~have~~Used ~~been no~~in ~~recent~~Investing ~~accounting pronouncements since the filing of our Annual Report on Form 10-K, filed on August 31, 2011, that have a material impact on the Company's financial presentation and disclosure.~~ Activities

~~Critical~~For ~~Accounting~~the ~~Policies~~nine months ended November 30, 2011, we used $1,174,098 in investing activities, as compared to $48,371 for the nine months ended November 30, 2010. For the nine months ended November 30, 2011, we invested $1,171,668 in unproven properties, as compared to the nine months ended November 30, 2010, in which we invested of $47,975 in unproven properties.

~~Our~~Cash ~~condensed~~from ~~unaudited~~Financing consolidated financial statements have been prepared in conformity with GAAP. For a full discussion of our accounting policies as required by GAAP, please refer to our Annual Report on Form 10-K for the year ended February 28, 2011. We consider certain accounting policies to be critical to an understanding of our condensed consolidated financial statements because their application requires significant judgment and reliance on estimations of matters that are inherently uncertain. The specific risks related to these critical accounting policies are unchanged at the date of this report and are described in detail in our Annual Report on Form 10-K.Activities

~~Item~~As 3.we ~~Quantitative~~have had no revenues since inception, we have financed our operations primarily by using existing capital reserves and ~~Qualitative~~through ~~Disclosures~~private ~~About~~placements ~~Market~~of ~~Risk~~our common stock. For the nine months ended November 30, 2011, we generated $1,000,000 from the issuance of common shares, as compared to $500,000 cash flows provided by financing activities for the nine months ended November 30, 2010.

~~Not~~Off-balance ~~Applicable.~~sheet arrangements

~~Item~~We 4.do ~~Controls~~not ~~and~~have ~~Procedures~~any off-balance sheet arrangements.

~~Evaluation~~Going ~~of Disclosure Controls and Procedures~~ Concern

~~Disclosure~~We ~~controls and~~have ~~procedures~~incurred ~~are~~net ~~designed~~losses tofor ~~ensure that information required to be disclosed in~~ the ~~reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time~~ period ~~specified~~from ininception ~~the~~on ~~SEC's~~February ~~rules and forms. Disclosure controls and procedures include~~23, ~~without~~2006 ~~limitation, controls and procedures designed~~ to ~~ensure~~November ~~that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management~~30, ~~including~~2011 ~~the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As~~ of ~~the end of the period covered by this report~~$3, ~~the Company carried out an evaluation~~748,210 ~~under the supervision~~ and ~~with~~have ~~the~~no ~~participation~~source of ~~the Company's~~revenue. The ~~management,~~continuity ~~including~~of ~~the~~our ~~Company's~~future ~~Chief~~operations ~~Executive~~is ~~Officer~~dependent ~~and~~on ~~former~~our ~~Chief~~ability ~~Financial~~to ~~Officer,~~obtain offinancing ~~the~~from ~~effectiveness of~~issuance ~~the design and operation~~ of ~~the~~equity ~~Company's disclosure controls and procedures~~securities. These ~~Based~~conditions ~~upon~~raise ~~and~~substantial asdoubt ofabout ~~the~~our ~~date~~ability ofto ~~that~~continue ~~evaluation, the Chief Executive Officer and Chief Financial Officer concluded~~ as ofa ~~May~~going ~~31, 2011 that the Company's disclosure controls and procedures are effective~~concern.

~~Limitations~~Recent onaccounting ~~the Effectiveness of Internal Controls~~pronouncements

~~Our~~There ~~management~~have ~~does~~been ~~not~~no ~~expect~~recent ~~that~~accounting ~~our~~pronouncements ~~disclosure controls~~since ~~and~~the ~~procedures~~filing ~~or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance~~ of ~~achieving~~ our ~~objectives~~Annual ~~and~~Report ~~our~~on ~~Chief~~Form ~~Executive Officer and former Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further~~10-K, ~~the~~filed ~~design~~on ofMay ~~a control system must reflect the fact that there are resource constraints~~31, ~~and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems~~2011, ~~no evaluation of controls can provide absolute assurance~~ that ~~all control issues and instances of fraud, if any, within our Company~~ have ~~been detected.~~a ~~These~~material ~~inherent~~impact ~~limitations~~on ~~include~~ the ~~realities~~Company’s ~~that~~financial ~~judgments~~presentation ~~in decision-making can be faulty,~~ and ~~that breakdowns can occur because of simple error or mistake~~disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

~~Changes~~Critical inAccounting ~~Internal Control over Financial Reporting~~Policies

~~There~~Our ~~were~~condensed nounaudited ~~changes~~ consolidated financial statements have been prepared in conformity with GAAP. For a full discussion of our ~~internal~~accounting ~~control~~policies ~~over~~as ~~financial~~required ~~reporting~~by ~~during~~GAAP, please refer to our Annual Report on Form 10-K for the ~~quarter~~year ended ~~August~~February 3128, 2011. We ~~that have~~consider ~~materially~~certain ~~affected,~~accounting orpolicies to be critical to an understanding of our condensed consolidated financial statements because their application requires significant judgment and reliance on estimations of matters that are ~~reasonably~~inherently ~~likely~~uncertain. The specific risks related to ~~materially~~these ~~affect,~~critical accounting policies are unchanged at the date of this report and are described in detail in our ~~internal~~Annual ~~control~~Report ~~over~~on ~~financial~~Form ~~reporting~~10-K.

~~PART~~ITEM II3. QUANTITATIVE ~~-OTHER~~AND ~~INFORMATION~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Item~~We 1.are ~~Legal~~a ~~Proceedings~~smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

~~None~~ITEM 4. CONTROLS AND PROCEDURES.

~~Item~~We 1Amaintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. ~~Risk~~We ~~Factors~~conducted an evaluation (the

~~(Not Applicable).~~-20-

~~Item~~“Evaluation”), 2.under ~~Unregistered~~the ~~Sales~~supervision and with the participation of ~~Equity~~our ~~Securities~~Chief Executive Officer (“CEO”) and ~~Use~~Chief Financial Officer (“CFO”), of ~~Proceeds~~the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15(b) of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

~~None.~~There were no changes in our internal control over financial reporting during the quarter ended November 30, 2011 that have affected, or are reasonably likely to affect, our internal control over financial reporting.

~~Item~~PART 3.II ~~Defaults~~-OTHER ~~Upon Senior Securities~~INFORMATION

~~None~~ITEM 1A. RISK FACTORS.

~~Item~~We ~~4. (Removed~~ are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and ~~Reserved)~~are not required to provide the information under this item.

~~Not~~ITEM ~~applicable~~6. EXHIBITS.

Item 5. Other Information

Exhibit		Incorporated by reference			Filed
Number	Description	Form	Date	Number	Herewith
3.1	Articles of Incorporation.	SB-2	4/07/06	3.1

3.2	By-Laws.	SB-2	4/07/06	3.2

10.1	Purchase Agreement for ATP 865.	10-K	5/29/09	10.1

10.2	Purchase Agreement for ATP 862, ATP 864 and ATP 866.	10-K/A	6/04/09	10.2

10.3	Indemnity Agreement, CEO.	10-K	6/01/10	10.3

10.4	Indemnity Agreement, CFO.	10-K	5/31/11	10.4

10.5	Indemnity Agreement, VP Exploration.	10-K	6/01/10	10.5

10.6	Indemnity Agreement, Corporate Secretary.	10-K	5/31/11	10.6

10.7	Indemnity Agreement, Director.	10-K	6/01/10	10.7

10.8	Indemnity Agreement, Chief Geophysicist.	10-K	6/01/10	10.8

10.9	Option Agreement, CEO.	10-K	6/01/10	10.9

10.10	Option Agreement, CFO.	10-K	6/01/10	10.10

10.11	Option Agreement, VP Exploration.	10-K	6/01/10	10.11

10.12	Option Agreement, Corporate Secretary.	10-K	6/01/10	10.12

10.13	Option Agreement, Director.	10-K	6/01/10	10.13

10.14	Option Agreement, Chief Geophysicist.	10-K	6/01/10	10.14

~~None.~~-21-

Item 6. Exhibits

10.15	2011 Share Option Plan.	10-K	5/31/11	10.15

10.16	Agreement with Sino American Oil Company dated March 14, 2011.	8-K	3/15/11	10.1

14.1	Code of Ethics and Code of Conduct.	10-KSB	5/29/07	14.1

21.1	Subsidiaries of the Company.	10-K	5/31/11	21.1

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.1	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

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

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				X

101.INS	XBRL Instance Document.				X

101.SCH	XBRL Extension Taxonomy – Schema.				X

101.CAL	XBRL Extension Taxonomy – Calculations.				X

101.DEF	XBRL Extension Taxonomy – Definitions.				X

101.LAB	XBRL Extension Taxonomy – Labels.				X

101.PRE	XBRL Extension Taxonomy – Presentation.				X

~~See the Exhibit Index included as the last part of this report (following the signature page), which is incorporated herein by reference.~~-22-

SIGNATURES

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

SENTRY PETROLEUM LTD.

	SENTRY PETROLEUM LTD.
	(the “Registrant”)

Dated: January 13, 2012	BY:	RAJ RAJESWARAN
		Raj Rajeswaran
		President and Principal Executive Officer

Dated: January 13, 2012	BY:	PAUL BOLDY
		Paul Boldy
		Principal Financial Officer and Principal Accounting Officer

~~(Registrant)~~-23-

Dated: October, 13 2011	By:	RAJ RAJESWARAN
		President and Chief Executive Officer
Dated: October 13 2011	By:	PAUL BOLDY
		Chief Financial Officer

EXHIBIT INDEX

SENTRY PETROLEUM LTD.

Exhibit		Incorporated by reference			Filed
Number	Description	Form	Date	Number	Herewith
3.1	Articles of Incorporation.	SB-2	4/07/06	3.1

3.2	By-Laws.	SB-2	4/07/06	3.2

10.1	Purchase Agreement for ATP 865.	10-K	5/29/09	10.1

10.2	Purchase Agreement for ATP 862, ATP 864 and ATP 866.	10-K/A	6/04/09	10.2

10.3	Indemnity Agreement, CEO.	10-K	6/01/10	10.3

10.4	Indemnity Agreement, CFO.	10-K	5/31/11	10.4

10.5	Indemnity Agreement, VP Exploration.	10-K	6/01/10	10.5

10.6	Indemnity Agreement, Corporate Secretary.	10-K	5/31/11	10.6

10.7	Indemnity Agreement, Director.	10-K	6/01/10	10.7

10.8	Indemnity Agreement, Chief Geophysicist.	10-K	6/01/10	10.8

10.9	Option Agreement, CEO.	10-K	6/01/10	10.9

10.10	Option Agreement, CFO.	10-K	6/01/10	10.10

10.11	Option Agreement, VP Exploration.	10-K	6/01/10	10.11

10.12	Option Agreement, Corporate Secretary.	10-K	6/01/10	10.12

10.13	Option Agreement, Director.	10-K	6/01/10	10.13

10.14	Option Agreement, Chief Geophysicist.	10-K	6/01/10	10.14

10.15	2011 Share Option Plan.	10-K	5/31/11	10.15

10.16	Agreement with Sino American Oil Company dated March 14, 2011.	8-K	3/15/11	10.1

14.1	Code of Ethics and Code of Conduct.	10-KSB	5/29/07	14.1

21.1	Subsidiaries of the Company.	10-K	5/31/11	21.1

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

31.1	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				X

~~(the “Registrant”)~~ -24-

(Commission File No. 000-52794)

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

32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X

101.INS	XBRL Instance Document.	X

101.SCH	XBRL Extension Taxonomy – Schema.	X

101.CAL	XBRL Extension Taxonomy – Calculations.	X

101.DEF	XBRL Extension Taxonomy – Definitions.	X

101.LAB	XBRL Extension Taxonomy – Labels.	X

101.PRE	XBRL Extension Taxonomy – Presentation.	X

~~Exhibit Index~~ -25-

to Quarterly Report on Form 10-Q

for the Quarter Ended August 31, 2011

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) or Rule 15d- 14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) or Rule 15d- 14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *	XBRL Instance Document
101.SCH *	XBRL Taxonomy Extension Schema Document
101.CAL *	XBRL Taxonomy Extension Calculation Linkbase Document
1.01 LAB *	XBRL Extension Labels Linkbase Document
101.PRE *	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF *	XBRL Taxonomy Extension Definition Linkbase Document

* In accordance with SEC rules, this interactive data file is deemed “furnished” and not “filed” for purposes of Sections 11 or 12 of the Securities Act of 1933 and Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under those sections or acts.

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