UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

~~FORM 10-K~~_______________

~~(Mark one)~~Form 10-K

|X| ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

R	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended March 31, 2009

OR

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

~~For~~Commission ~~the fiscal~~File ~~year ended: March 31, 2006~~No. 000-51430

~~|_| 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 000-51430

INDEX OIL AND GAS INC.

(~~Name~~Exact Name of ~~small~~ ~~business~~Registrant ~~issuer~~as Specified in ~~its~~Its ~~charter~~Charter)

Nevada (State or other jurisdiction of incorporation or organization) 20-0815369 (I.R.S. Employer Identification No.)

Nevada	20-0815369
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

10000 Memorial Drive, Suite 440 ~~Houston, Texas (Address of principal executive offices) 77024 (Zip Code)~~

~~Issuer’s~~Houston, ~~telephone Number: (713) 683-0800~~Texas 77024

~~Securities~~(Address ~~registered~~of ~~under~~principal ~~Section~~executive ~~12(b)~~offices, ofincluding ~~the~~zip ~~Exchange Act: NONE~~code)

~~Securities registered under Section 12~~(g713) ~~of the Exchange Act:~~ 683-0800

Title of Each Class	Name of each exchange on which registered
Common Stock, $.001 par value	Over The Counter Bulletin Board

(Registrant’s telephone number, including area code)

~~Indicate~~Securities byregistered ~~check~~pursuant ~~mark~~to ifSection 12(b) ~~the registrant is a well-known seasoned issuer, as defined in Rule 405~~ of the ~~Securities~~ Act~~. Yes |_| No |X|~~:

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|~~None

~~Indicate~~Securities byregistered ~~check~~pursuant ~~mark whether the registrant: (1) has filed all reports required~~ to ~~be filed~~ by Section ~~13 or 15~~ 12(dg) of the ~~Securities Exchange~~ Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_|:

~~Indicate~~Common ~~by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein~~Stock, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K$0. ~~|X|~~001

Indicate by check mark ~~whether~~if the registrant is a ~~large~~well-known ~~accelerated~~seasoned ~~filer~~ issuer, ~~an accelerated~~as ~~filer,~~defined ~~or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer"~~ in Rule 405 ~~12b-2~~ of the ~~Exchange~~Securities Act. ~~(Check one):~~ Yes £ No R

~~Large~~Indicate ~~Accelerate~~by ~~Filer~~check ~~|_|~~mark ~~Accelerated~~if ~~Filer~~the ~~|_|~~registrant ~~Non-accelerated~~is ~~filer~~not required to file reports pursuant to ~~|X|~~Section 13 or Section 15(d) of the Exchange Act. Yes £ No R

Indicate by check mark whether the registrant is(1) has afiled ~~shell~~all ~~company~~reports ~~(as~~required ~~defined~~to be infiled ~~Rule 12b-2~~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)., ~~Yes~~and ~~|_|~~(2) has Nobeen ~~|X|~~subject to such filing requirements for the past 90 days. Yes R No £

~~The~~Indicate ~~aggregate~~by ~~market~~check ~~value~~mark ofwhether the ~~voting~~registrant ~~stock~~has ~~held~~submitted byelectronically ~~non-affiliates~~and ofposted ~~the~~on ~~Registrant~~its ~~based~~corporate onWeb ~~the~~site, ~~last~~if ~~sale~~any, ~~price~~every ~~reported~~Interactive Data onFile ~~the~~required ~~OTC~~to ~~Bulleting Board~~be as submitted and posted pursuant to Rule 405 of ~~July~~Regulation S-T (§ 229.405 of this 6,chapter) during the preceding 12 months (or for such shorter period that ~~2006~~ the registrant was ~~$54,207,894~~required to submit and post such files). Yes £ No R

AsIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of ~~July 6~~Regulation S-K is not contained herein, ~~2006~~ and will not be contained, to the ~~there~~best ~~were~~of ~~outstanding~~registrant’s 54knowledge,~~544,345~~ ~~shares~~in definitive proxy or information statements incorporated by reference in Part III of ~~Common~~this ~~Stock~~Form 10-K or any amendment to this Form 10-K. £

1Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer £ Accelerated Filer £

Non-accelerated Filer £ Smaller reporting company R

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No R

The aggregate market value of the voting stock held by non-affiliates of the registrant based on the closing price of the Registrant’s common stock as quoted on the OTC Bulletin Board on September 30, 2008 was $19,389,292

As of June 30, 2009, there were outstanding 71,656,852 shares of common stock.

Documents Incorporated by Reference

Information required by Part III will either be included in the registrant’s definitive proxy statement filed with the Securities and Exchange Commission or filed as an amendment to this Form 10-K no later than 120 days after the end of the registrant’s fiscal year, to the extent required by the Securities Exchange Act of 1934, as amended.

TABLE OF CONTENTS

		PAGE
PART I
ITEM 1.	Business	4
ITEM 1A.	Risk factors	13
ITEM 1B.	Unresolved staff comments	22
ITEM 2.	Properties	24
ITEM 3.	Legal proceedings	26
ITEM 4.	Submission of matters to a vote of security holders	26
PART II
ITEM 5.	Market for registrant’s common equity and related stockholder matters	26
ITEM 6.	Selected historical financial data	28
ITEM 7.	Management’s discussion and analysis of financial condition and results of operations	28
ITEM 7A.	Quantitative and qualitative disclosures about market risk	38
ITEM 8.	Consolidated financial statements and supplementary data	39
ITEM 9.	Changes in and disagreements with accountants on accounting and financial disclosure	40
ITEM 9A.	Controls and procedures	40
ITEM 9B.	Other information	40
PART III
ITEM 10.	Directors and executive officers of the registrant	40
ITEM 11.	Executive compensation	42
ITEM 12.	Security ownership of certain beneficial owners and management and related stockholder matters	43
ITEM 13.	Certain relationships and related transactions	46
ITEM 14.	Principal accounting fees and services	46
PART IV
ITEM 15.	Exhibits, financial statement schedules	47
Signatures		50

PART I	3
Item 1. Business	3
Item 1A. Risk Factors	10
Item 1B. Unresolved Staff Comments	17
Item 2. Properties.	18
Item 3. Legal Proceedings.	22
Item 4. Submission of Matters to a Vote of Security Holders.	22
PART II	24
Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	24
Item 6. Selected Financial Data.	26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.	33
Item 8. Financial Statements and Supplementary Data.	34
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	34
Item 9A. Controls and Procedures.	34
Item 9A(T). Controls and Procedures.	34
Item 9B. Other Information.	34
PART III	35
Item 10. Directors, Executive Officers, and Corporate Governance.	35
Item 11. Executive Compensation.	35
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	35
Item 13. Certain Relationships and Related Transactions, and Director Independence.	35
Item 14. Principal Accountant Fees and Services.	35
PART IV	36
Item 15. Exhibits and Financial Statement Schedules.	36

SIGNATURES	37

~~Information~~Cautionary Note Regarding Forward Looking Statements

~~Some~~This ~~of the~~Annual ~~statements~~Report ~~contained~~on ~~in this~~ Form 10-K ~~that~~(the ~~are~~“Annual ~~not~~Report”) ~~historical~~contains ~~facts are "~~“forward-looking statements"” ~~which~~that ~~can~~represent beour ~~identified by the use of terminology such as "estimates~~beliefs," ~~"projects,"~~projections ~~"plans,"~~and ~~"believes,"~~predictions ~~"expects,"~~about ~~"anticipates,"~~future ~~"intends,"~~events. orAll ~~the~~statements ~~negative or~~ other ~~variations,~~than orstatements ~~by discussions~~ of ~~strategy that~~historical ~~involve~~fact ~~risks and uncertainties. We urge you to be cautious of the~~are “forward-looking statements”, ~~that~~including ~~such~~any ~~statements,~~projections ~~which~~of ~~are~~earnings, ~~contained~~revenue ~~in this~~or ~~Form~~other ~~10-K~~financial items, ~~reflect~~any ~~our~~statements ~~current~~of ~~beliefs~~the ~~with~~plans, ~~respect~~strategies ~~to future events~~ and ~~involve~~objectives of ~~known~~management ~~and~~for ~~unknown~~future ~~risks~~operations, ~~uncertainties~~any ~~and~~statements ~~other~~concerning ~~factors~~proposed ~~affecting our~~new ~~operations,~~projects ~~market~~or ~~growth,~~other ~~services~~developments, ~~products~~any ~~and~~statements ~~licenses.~~regarding Nofuture ~~assurances can~~economic ~~be given~~conditions ~~regarding~~or ~~the~~performance, ~~achievement~~any statements of ~~future~~management’s ~~results~~beliefs, ~~as actual results may differ~~goals, ~~materially~~strategies, asintentions aand ~~result of the risks we face~~objectives, and ~~actual~~any ~~events~~statements ~~may~~of ~~differ from~~assumptions ~~the~~underlying ~~assumptions~~any ~~underlying~~of the ~~statements~~foregoing. ~~that~~Words ~~have~~such ~~been~~as ~~made~~“may”, ~~regarding anticipated~~“will”, ~~events.~~“should”, ~~Factors~~“could”, “would”, ~~that~~“predicts”, ~~may~~“potential”, ~~cause~~“continue”, ~~actual results~~“expects”, ~~our performance~~“anticipates”, ~~or achievements~~“future”, or“intends”, ~~industry~~“plans”, ~~results~~“believes”, to“estimates” ~~differ~~and ~~materially~~similar ~~from those contemplated~~expressions, byas ~~such~~well ~~forward-looking~~as statements ~~include~~in ~~without~~the ~~limitation:~~future tense, identify forward-looking statements.

•These statements ~~our~~are ~~ability~~necessarily tosubjective ~~attract~~ and ~~retain~~involve ~~management;~~known •and ~~our~~unknown ~~growth~~risks, uncertainties ~~strategies;~~and •other ~~anticipated~~important ~~trends~~factors inthat ~~our~~could ~~business;~~cause • our ~~future~~actual results, performance ofor ~~operations;~~achievements, •or ~~our~~industry ~~ability~~results, to ~~make~~differ ormaterially ~~integrate~~from ~~acquisitions;~~any future ~~• our liquidity and ability to finance our exploration~~results, ~~acquisition~~performance ~~and~~or ~~development~~achievements ~~activities;~~described •in ~~our~~or ~~ability~~implied toby ~~successfully~~such statements. ~~and~~Actual ~~economically~~results ~~explore~~may ~~for~~differ ~~and~~materially ~~develop~~from ~~oil~~expected ~~and~~results ~~gas resources; • market conditions~~ described in ~~the~~our ~~oil~~forward-looking ~~and~~statements, ~~gas~~including ~~industry;~~with •respect ~~the~~to ~~timing,~~correct ~~cost~~ measurement and ~~procedure~~identification ~~for~~of ~~proposed~~factors ~~acquisitions;~~affecting •our business or the ~~impact~~extent of ~~government~~their likely ~~regulation;~~impact, •the ~~estimates~~accuracy ~~regarding~~and ~~future~~completeness ~~net~~of ~~revenues~~the ~~from~~publicly ~~oil~~available information ~~and~~with ~~natural~~respect ~~gas~~to ~~reserves and~~ the ~~present~~factors ~~value~~upon ~~thereof;~~which •our ~~planned~~business ~~capital~~strategy ~~expenditures~~is based ~~(including~~or the ~~amount~~success ~~and~~of ~~nature~~our ~~thereof);~~business. •Furthermore, ~~increases~~industry inforecasts ~~oil~~are ~~and~~likely to ~~gas~~be ~~production;~~inaccurate, •especially ~~the~~over ~~number~~long periods of ~~wells~~time weand ~~anticipate drilling~~ in ~~the~~relatively ~~future;~~new •and rapidly ~~estimates,~~developing ~~plans~~industries ~~and~~such ~~projections~~as ~~relating~~oil toand ~~acquired~~gas. ~~properties;~~Factors •that ~~the~~may ~~number~~cause ofactual results, ~~potential~~our ~~drilling~~performance ~~locations;~~or •achievements, ~~our~~or ~~financial~~industry ~~position~~results, ~~business~~to ~~strategy~~differ materially ~~and~~from ~~other~~those ~~plans~~contemplated ~~and~~by ~~objectives~~such ~~for~~forward-looking ~~future~~statements ~~operations;~~include without limitation:

• ~~the possibility that~~ our acquisitions may involve unexpected costs; • the volatility in commodity prices for oil and gas; • the accuracy of internally estimated proved reserves; • the presence or recoverability of estimated oil and gas reserves; • the ability to ~~replace~~attract ~~oil~~ and ~~gas~~retain reserves; • the availability and costs of drilling rigs and other oilfield services; • environmental risks; • exploration and development risks; • competition; • the inability to realize expected value from acquisitions; • the ability of our management ~~team to execute its plans to meet its goals~~;

3• our growth strategies;

• anticipated trends ~~general economic conditions, whether internationally, nationally or~~ in ~~the~~our ~~regional and local market areas in which we are doing~~ business~~, that may be less favorable than expected~~; ~~and • other economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively impact our businesses, operations and pricing.~~

~~All written and oral forward-looking statements made in connection with this Form 10-K that are attributable to us or persons acting on~~ • our ~~behalf are expressly~~ ~~qualified~~future inresults ~~their~~of ~~entirety by these cautionary statements. Given the uncertainties that surround such statements, you are cautioned not to place undue reliance on such forward-looking statements.~~ operations;

4• our ability to make or integrate acquisitions;

• our liquidity and ability to finance our exploration, acquisition and development activities;

• our ability to successfully and economically explore for and develop oil and gas resources;

• market conditions in the oil and natural gas industry;

• the timing, cost and procedure for acquisitions;

• the impact of government regulation;

• estimates regarding future net revenues from oil and natural gas reserves and the present value thereof;

• planned capital expenditures (including the amount and nature thereof);

• increases in oil and natural gas production;

• the number of wells we anticipate being drilled in the future;

• estimates, plans and projections relating to acquired properties;

• the number of potential drilling locations on lands in which we have an interest;

• our financial position, business strategy and other plans and objectives for future operations;

• the possibility that our acquisitions may involve unexpected costs;

• the volatility in commodity prices for oil and natural gas;

• the accuracy of internally estimated proved reserves;

• the presence or recoverability of estimated oil and natural gas reserves;

• the ability to replace oil and natural gas reserves;

• the availability and costs of drilling rigs and other oilfield services use by the operators of properties in which we have an interest;

• environmental risks;

• exploration and development risks;

• competition;

• the ability of our management team to execute its plans to meet its goals; and

• other economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors that may negatively impact our businesses, operations and pricing.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, our performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, those factors discussed under the headings “Risk factors”, “Management’s discussion and analysis of financial condition and results of operations”, “Business” and elsewhere in this report.

PART I

Item 1. Business

Organization

We are an independent oil and natural gas company engaged in the acquisition, exploration, development, production and sale of oil and natural gas properties in North America. We have interests in properties in Kansas, Louisiana and Texas.

Index Oil and Gas Inc. (“Index”, Index Inc.”, “the Company”, or “we”, “us”, or “our”) was incorporated under the laws of the state of Nevada in March 2004 and is the parent company with four group subsidiaries: Index Oil & Gas Limited (“Index Ltd”), a United Kingdom holding company, which provides management services to the Company, and United States operating subsidiaries; Index Oil & Gas (USA) LLC (“Index USA”), an operating company; Index Investments North America Inc. (“Index Investments”); and Index Offshore LLC (“Index Offshore”), a wholly owned subsidiary of Index Investments and also an operating company. We do not currently operate any of our oil and natural gas properties, and we sell our oil and natural gas production to domestic purchasers through agreements primarily negotiated by the operators of our oil and natural gas properties.

Index was originally incorporated under the name Thai One On, Inc. (“Thai”) in March 2004 under the laws of the State of Nevada. In November 2005, Thai entered into a Letter of Intent agreement with Index Ltd for a proposed reverse merger with Thai. Subsequently, Thai changed its name to Index Oil and Gas Inc. In January 2006, the stockholders of Index Ltd entered into agreements that resulted in a change in control of the public entity. Index Ltd was incorporated in the United Kingdom in February 2003 and commenced oil and gas operations in the US later that year.

Prior to the reverse merger, Index Ltd operated with a fiscal year ended March 31. Subsequent to the reverse merger, the Board of Directors of the newly created Index Oil and Gas Inc. resolved to maintain the fiscal year ended March 31 and adopted this fiscal year end for the Company.

Overview

~~Index~~For the ~~Oil and~~fiscal ~~Gas,~~year ~~Inc.~~ended ~~(“Index”,~~March ~~“the Company”~~31, ~~“we”~~2009, ~~“us”~~Index orhad ~~“our”)~~year-on-year isincreases ~~an independent oil and gas company engaged~~ in ~~the acquisition, development,~~ production ~~and~~ ~~exploration of oil~~ and ~~gas properties located in North America~~revenue. We ~~Index was originally~~have ~~incorporated~~a ~~under~~sustained ~~the~~history ~~name~~of ~~Thai~~drilling ~~One On~~success, ~~Inc. (“Thai”) on March 3,~~ ~~2004~~measured ~~under~~by the ~~laws~~completion ofrate ~~the~~on ~~State~~wells ~~of Nevada for the purpose of developing~~drilled, ~~owning and~~while ~~operating~~pursuing ~~theme restaurants called "Khanom Jeen" in Malaysia. In~~higher-impact ~~March 2004,~~prospects ~~Thai~~and ~~acquired~~while aremaining ~~wholly-owned~~debt ~~subsidiary,~~free ~~Thai Pasta Enterprise Sdn. Bhd., a privately-held Malaysian company~~ (~~“the~~excluding ~~Subsidiary”),~~ordinary ~~from~~course ~~an officer and~~trade ~~director of Thai~~debt). We ~~The~~have ~~Subsidiary~~recruited ~~commenced~~highly ~~operations~~experienced assenior ~~a restaurant operator~~staff inmembers ~~June 2004, but subsequently ceased operations~~ in ~~the~~exploration ~~fourth~~and ~~quarter of 2005. The Subsidiary then sold a portion of its surplus assets~~production, ~~leaving~~land itand ~~with~~operations ~~no significant assets. In November 2005, Thai entered into a Letter of Intent agreement (the “Letter of Intent”) with Index Oil~~ and ~~Gas~~in ~~Ltd.~~accounting ~~(“Index Ltd.” or “Index Limited”) for the~~to ~~proposed acquisition of all outstanding shares of~~ the Index ~~Ltd~~team.~~’s equity stock by the Company. Subsequently, Thai changed its name from Thai One On Inc. to Index Oil and Gas, Inc.~~

OnReserves ~~January~~decreased ~~20,~~approximately ~~2006,~~67% infrom ~~connection~~219.469 ~~with~~MBoe ~~the~~(thousand ~~Letter~~barrels of ~~Intent~~oil equivalent) of proven reserves as of March 31, ~~the~~2008 ~~stockholders~~ to 87.703 MBoe of proven ~~Index~~reserves ~~Ltd.~~as ~~entered~~of ~~into~~March ~~Acquisition~~31, 2009, primarily as a result of a full write-down of ~~and~~remaining ~~Share~~reserves ~~Exchange~~on ~~Agreements~~the ~~with~~Shadyside well, and also on the ~~Company~~Friedrich, Cason (3 wells) and Schroeder wells, partially offset by additions related to the ~~“Agreements”)~~Cochran well. As a result of ~~the~~we ~~Acquisition,~~have ~~there was~~ a ~~change~~low insuccess ~~control~~rate ofon ~~the~~full ~~public~~cycle ~~entity~~commerciality. ~~In accordance~~Production ~~with~~rose ~~Statement~~approximately of250%, ~~Financial~~consistent ~~Accounting~~with drilling ~~Standards~~success, Nofrom 28.6 ~~141~~MBoe for the fiscal year ended March 31, 2008 to 47.8 MBoe for the fiscal ~~“Business Combinations”~~year ended of March 31, 2009. Total production in the fourth quarter of fiscal ~~Company~~year 2009 was ~~deemed~~9.8 toMBoe. Correspondingly, beoil ~~the~~and ~~acquiring~~natural ~~entity~~gas revenues increased approximately 65% from $1.7 ~~The~~million ~~transaction~~for ~~was~~the ~~accounted~~fiscal year ended March ~~for as~~31, a2008 ~~recapitalization~~to of$2.8 million for the ~~Company~~fiscal ~~(reverse~~year ~~acquisition).~~ended March 31, 2009.

~~Pursuant to~~For the fiscal ~~Agreements~~year ended March 31, ~~all~~2009, ~~common~~we ~~shares~~recorded ~~previously~~a ~~owned~~full bycost ~~Index~~ceiling ~~Ltd.’s~~test ~~stockholders~~impairment ~~were~~write-down ~~exchanged~~to ~~for~~its anoil ~~aggregate~~and ofnatural ~~23,375,000~~gas ~~shares~~properties of ~~Index~~approximately ~~common stock,~~ $07.~~001~~0 ~~par~~million, ~~value~~due ~~(“the~~to ~~Common~~a ~~Stock”) of~~downward ~~which 759,448~~adjustment ~~shares~~to ofoil ~~Common~~and ~~Stock~~gas ~~were~~reserves ~~reserved~~and ~~for~~lower ~~issuance by the~~oil ~~Company,~~ and ~~1,092,676~~ ~~warrants~~gas tomarket ~~purchase~~prices ~~shares~~at ofthe ~~Common~~end ~~Stock~~ of ~~Index~~the period. The ~~Out~~impact of ~~the~~this ~~759,448~~impairment ~~shares~~charge ofis ~~Common~~that ~~Stock~~our ~~reserved~~net loss for ~~issuance~~the ~~303,793~~fiscal ~~shares~~year ofended ~~Common~~March 31, 2009 ~~Stock~~is ~~have~~substantially ~~been~~higher ~~granted~~than toany ~~certain~~prior ~~directors~~equivalent ofperiod. In addition, the carrying ~~Company~~amounts in ~~the~~our ~~form~~balance sheet at March 31, 2009 of oil and natural gas ~~stock grants~~properties, total assets and ~~455,655~~total ~~shares~~stockholders ofequity ~~Common~~are ~~Stock~~all ~~remain~~significantly reduced toas bea ~~awarded.~~result ~~For~~of ~~more information~~this ~~please~~$7.0 ~~see~~million ~~Item~~charge. 12For ~~section~~a ~~entitled~~further ~~“Stock~~detailed ~~Grants”. The value~~description of the ~~Company’s~~full ~~stock~~cost ~~that~~accounting ~~was~~method ~~issued~~for ~~was~~oil ~~based~~and onnatural gas properties and the ~~historical~~ceiling ~~cost~~test ofimpairment write-down, see Item 2. Business and ~~the~~Item ~~Company~~7. Management’s ~~net~~Discussion ~~tangible~~and ~~assets~~Analysis of ~~$1,578,~~Financial ~~which~~Condition ~~did~~and ~~not differ materially~~Results ~~from~~of ~~their fair value~~Operations.

Index Ltd. was incorporated on February 21, 2003 in the United Kingdom. The Company invested in a 5% working interest in oil and gas leases covering approximately 8,500 acres located in Stafford County, Kansas (“Kansas Properties”) in July 2003. In August 2003, Index Oil & Gas USA, LLC (“Index USA”), a wholly owned subsidiary of Index Ltd., was formed and the Kansas Properties were transferred into it. Index Ltd. is participating in an ongoing drilling program on these properties. Additionally, Index Investments North America Inc. (“Index Investments”) and Index Offshore LLC (“Index Offshore”), wholly owned subsidiaries of Index Investments, were both formed in July 2004 for future potential investments in the United States. Index Ltd. comprises a United Kingdom holding company, which provides management services and United States operating subsidiaries, which are engaged in the exploration for, development, production and sale of oil and natural gas. Index Ltd. has increased its proved reserves and production principally through acquisitions in conjunction with an active drilling program. Index Ltd. does not currently operate any of its properties and sells its oil production to domestic crude oil purchasers. 3

InGoing ~~addition,~~Concern the Company completed a private placement on January 20, 2006 for 8,533,333 shares of Common Stock of the Company at a price of $0.60 per share for the aggregate sum of $5,120,000, in order to raise capital for investment in oil and gas projects developed by the Company and for operating and working capital purposes.Issues

~~Recent~~Our ~~Developments~~consolidated financial statements have been prepared assuming that the Company will continue as a going concern. We have suffered recurring losses from operations. The continuation of our company as a going concern is dependent upon attaining and maintaining profitable operations and raising additional capital. We are actively currently seeking additional funding through various methods, but due to current market conditions funding may not be readily available. In addition, our current liabilities exceeded our current assets at March 31, 2009 and at the date of this report. One of the reasons for our current financial position is that we have suffered significant cost overruns on one of our projects, the Armour Runnells well, and we have arranged a payment plan with the operator of that property. This arrangement is not specifically covered in the governing agreements for the project or property, and the operator may seek to rely upon any and all provisions of those agreements. These conditions indicate the existence of a material uncertainty which may cast significant doubt over our ability to continue as a going concern.

WeManagement ~~have~~is currently considering other options should current efforts to secure new ~~recently~~funding ~~completed~~be unsuccessful. These could include the ~~following~~establishment ~~transactions:~~of a form of liquidating trust to hold the assets of the Company for the benefit of shareholders or the sale of the Company’s assets as part of a liquidation and, after discharging obligations, distributing the remaining proceeds, if any, to shareholders. Our Board of Directors is also actively considering deregistering from the Securities Exchange Act of 1934, if in its best judgment the costs of the requirements of being a compliant public company outweigh the benefits to shareholders and if we are eligible to deregister.

~~Gulf~~Our ~~Coast~~financial results depend upon many factors, particularly the price of oil and natural gas and our ability to market our production. Commodity prices are affected by changes in market demands, which are impacted by overall economic activity, weather, pipeline capacity constraints, inventory storage levels, basis differentials and other factors. As a result, we cannot accurately predict future oil and natural gas prices, and therefore, we cannot determine what effect increases or decreases will have on our capital program, if any, production volumes and future revenues. In addition to production volumes and commodity prices, finding and developing sufficient amounts of oil and gas reserves at economical costs are critical to our long-term success.

InLike all ~~the fourth~~oil ~~quarter~~and ofnatural ~~2006~~gas ~~fiscal~~exploration ~~year,~~and ~~the~~production ~~Company~~companies, ~~entered~~we ~~into~~face the ~~following~~challenge ~~agreements:~~of ~~(1)~~natural aproduction ~~Seismic~~declines. ~~Reprocessing~~As ~~and~~initial ~~Exploration~~reservoir ~~Agreement~~pressures ~~with~~are ~~ADC Petroleum~~depleted, ~~L.P.~~oil and ~~(“ADC”)~~natural ~~covering~~gas ~~prospective~~production ~~areas~~from ina ~~the~~given USwell ~~Gulf~~naturally ~~Coast~~decreases. ~~The Agreement~~ ~~enables~~Thus, ~~Index~~an ~~Inc~~oil and tonatural ~~participate~~gas inexploration ~~the~~and ~~reprocessing~~production ofcompany andepletes ~~area~~part of its asset ~~up to~~base ~~226~~with ~~square~~each ~~miles~~unit of ~~existing~~oil 3or ~~Dimensional~~natural ~~(“3D”)~~gas ~~land~~it ~~seismic~~produces. ~~data~~We ~~already available~~attempt to ~~ADC~~overcome this asnatural adecline ~~result~~by ofdrilling ~~its~~and ~~participation~~acquiring inmore anreserves ~~agreement~~than ~~signed~~we ~~between~~produce. ~~ADC~~Our ~~and~~future ~~two~~growth ofwill ~~its~~depend ~~other~~on ~~industry~~our ~~partners~~ability ~~(the~~to ~~"ADC~~continue ~~Agreement").~~to ~~This~~add ~~seismic~~reserves in ~~data~~excess ~~covers~~of ~~prospective~~production. ~~areas~~We inwill ~~the~~maintain ~~Gulf~~our ~~Coast~~focus ~~U.S.,~~on ~~throughout~~costs ~~Texas,~~to add reserves ~~Louisiana~~through drilling and ~~Mississippi.~~acquisitions ~~The~~as ~~ADC~~well ~~Agreement~~as ~~sets~~the ~~forth~~costs ~~the~~necessary ~~rights~~to ofproduce ~~the~~our ~~parties~~reserves. inOur ~~their~~ability ~~joint~~to ~~participation~~add ofreserves ~~generating~~through drilling ~~prospects~~is ~~from~~dependent on our ~~such reprocessed~~capital ~~data~~resources and ~~allows~~can ~~the~~be ~~parties~~limited toby ~~jointly~~many ~~exploit~~factors, including the ~~prospects~~ability to ~~generated~~timely obtain drilling permits and regulatory approvals.

5Strengths and Strategies

~~Under~~We are a ~~the terms~~non-operating ofpartner ~~the~~or ~~ADC~~participant ~~Agreement,~~in ~~the~~oil ~~Agreement~~and ~~provides~~natural ~~for~~gas ~~Index's~~projects ~~participation~~ in Texas, ~~two~~Louisiana ~~phases~~and Kansas. We ~~Index~~have ~~has~~interests ~~the~~in ~~right~~lands toand ~~inform~~properties ~~ADC~~and rely ofon ~~its~~third ~~election~~party operators to ~~participate~~drill and operate wells on those ~~in a~~properties. With ~~particular~~each new drilling project noon ~~later~~our ~~then~~properties, we have the ~~date~~opportunity ofto ~~(i)~~participate 5based ~~days~~on ~~before~~the proposal submitted to us by the operator ~~meeting~~for the specific project. We mitigate our risk by performing ~~date~~our own analysis of the ~~Operations~~proposed ~~Committee~~wells ~~composed~~and the geological features of the ~~parties~~target structures toor ~~the~~horizons. Our ~~ADC~~technical ~~Agreement~~staff has considerable (experience in the ~~"Committee")~~oil atand ~~which~~natural ~~the~~gas ~~Committee~~industry ~~reviews~~with specific expertise in the regions ~~summary~~where ~~report~~our ~~for~~properties are located. As a ~~particular~~ ~~project~~non-operator, orwe ~~(ii)~~are able to avoid some of the ~~date~~direct ~~which~~risks isassociated 15with ~~days~~operating ~~after~~oil ~~ADC~~and ~~informs~~natural ~~Index~~gas properties; although, because we rely on third party operators, certain of those risks may affect the ~~Committee's~~properties ~~decision~~and, toif ~~designate~~the arisk ~~project~~is asrealized, ~~final~~would ~~for~~lower ~~participation~~our ~~purposes~~returns on our investment in the properties.

~~Phase~~We are ~~1 of~~able ~~the Agreement enables Index~~ to ~~participate~~access inopportunities ~~the~~through ~~reprocessing~~ongoing ofbusiness ~~105~~relationships ~~square~~and contacts ~~miles~~made ofthrough ~~existing~~our ~~data~~current instaff ~~conjunction~~and ~~with~~associated ~~the aforementioned experienced industry partners already working with ADC~~consultants. InEach ~~addition,~~of ~~the~~these ~~Agreement gives~~persons ~~Index~~is ~~the~~able, ~~right~~through ~~(but~~their ~~not~~experience ~~the~~and ~~obligation)~~industry ~~to participate in any prospects generated from this reprocessing~~contacts, up to anprovide ~~18%~~us ~~working~~with ~~interest ("WI"). If Index elects to participate in~~ a ~~project to an extent less than an undivided 18%~~ ~~WI, the~~flow ~~portion not taken up by Index shall revert to ADC which will then be free either to dispose~~ of orbusiness ~~participate~~opportunities. inTechnical ~~such~~and WIfinancial ~~for~~due ~~its~~diligence ~~own account. In return~~and ~~for~~analysis ~~the foregoing, Index agrees to bear its Phase I share~~ of ~~all~~these ~~costs~~opportunities ~~incurred with~~allows ~~respect~~us to ~~prospects~~select ~~generated during Phase I and with respect to which Index agrees to participate in~~ the ~~exploration~~most ~~and~~appropriate ~~exploitation of~~for participation. InWe ~~addition, with~~are ~~respect~~then able to ~~all~~add ~~prospects~~value ~~in which Index elects~~ to ~~participate, Index shall bear on behalf of ADC a portion of ADC's costs resulting from ADC's participation in~~ the ~~exploration~~ventures ~~and~~through ~~exploitation of the same prospect (the~~high ~~"ADC Share").~~quality ~~Such~~technical ~~costs~~analysis ~~shall include lease acquisition costs, drilling~~ and ~~completion~~ ~~costs and the cost of any production facilities~~advice.

~~Pursuant~~Our tostrategy ~~Phase~~has 2been ofto ~~the~~establish ~~Agreement,~~a ~~within~~presence 90in ~~days of~~ the ~~date~~onshore ofgulf ~~the~~coast ~~Agreement Index~~region ~~has~~through ~~exercised~~participation ~~the option to participate~~ in ~~further~~various ~~121~~projects ~~square~~with ~~miles of reprocessing on~~ the ~~same~~goal ~~basis~~of ashaving ~~Phase~~those operations 1reach ~~and is entitled to obtain up to~~ a ~~12.5%~~ ~~working~~level ~~interest~~of inproduction ~~any~~sufficient ~~prospects generated. If Index elects~~ to ~~participate~~ insupport athe ~~Prospect~~business toat ~~an extent less than an undivided 12.5% WI, the~~its ~~portion~~current ~~not~~levels ~~taken~~while upmaintaining bya ~~Index shall revert to ADC which will then be~~ debt-free ~~either to~~basis ~~dispose~~(except ~~of or participate in such WI~~ for ~~its~~ordinary ~~own~~course trade ~~account~~debt). InAs ~~return~~of ~~for~~ the ~~foregoing,~~ ~~Index~~end isof ~~obligated~~our tofiscal ~~bear~~year ~~its~~ending ~~Phase~~March II31, WI2009, ~~share of all costs~~following ~~incurred~~the ~~with~~reserve ~~respect~~write-downs towe ~~prospects~~have ~~generated~~suffered ~~during Phase II~~ and ~~with~~the ~~respect to which~~drop ~~Index agrees to participate~~ in ~~the~~oil ~~exploration~~ and ~~exploitation of. In addition~~, ~~with respect to all prospects of Phase II~~ in ~~which~~particular, natural ~~Index~~gas ~~elects to participate~~prices, ~~Index~~we ~~shall~~believe ~~bear~~that onwe ~~behalf~~have ofnot ~~ADC~~achieved athis ~~portion~~level of ~~the ADC Share.~~ ~~Such costs~~production ~~shall~~with ~~include~~our ~~lease~~existing ~~acquisition~~interests ~~costs,~~in ~~drilling~~producing ~~and completion costs and the cost of any production facilities~~properties.

If we are able to secure new additional funding on terms satisfactory to management, on a go-forward basis, our goals are to enhance shareholder value by increasing our reserves, production, cash flow and profitability by (1) participating in the development of our existing core properties, (2) establishing new opportunities for exploration in moderate risk, moderate reward properties, (3) completing acquisitions and selective divestitures, (4) maintaining technical expertise, (5) focusing on cost control, and (6) maintaining financial flexibility. We have previously adjusted our business strategy to include more high-impact wells that can deliver, if successful, much higher value, volume, and follow-on potential that has the potential to deliver growth. We have tried to protect ourselves and our investors by limiting any single prospect investment to a small percentage of the overall funding that we have at our disposal. We will pursue appropriate opportunities to acquire or merge with businesses that share our risk-balanced approach to drilling opportunities and whose assets will enhance our growth and shareholder value. While we currently do not operate our properties, we will not preclude becoming an operator in the future if the opportunity and higher risk and cost structure meet with our expectations for enhanced shareholder value.

Our Operating Areas

We own producing and non-producing oil and natural gas properties in Kansas, Louisiana, and Texas. See Item 2. Property for a description of our proved reserves in each state. In each area we are pursuing geological objectives and projects that are consistent with our technical expertise to provide the highest potential economic returns. For the fiscal year ended March 31, 2009, we participated in 7.0 gross and 0.3588 net wells, for which principal drilling and, where applicable, completion operations were concluded in the year. Of these wells, 6.0 gross and 0.265 net wells became productive. The following is a summary of our major operating areas in which we discuss their various characteristics, including our working interests (“WI”) and our net revenue interests (“NRI”) in various properties and wells.

Kansas

~~(2)~~Properties ~~We have~~Summary. At ~~acquired~~March a31, 5%2009, ~~working~~we ~~interest~~owned inapproximately an227 ~~exploration~~net acres ~~project~~ in ~~Barton County,~~ Kansas. Our ~~The 5% working~~production ~~interest in the Barton County project~~ is concentrated in anStafford ~~Area of Mutual Interest~~and ~~(“AMI”) covering approximately 4879 acres~~Barton Counties. Total ~~The~~net ~~operator~~production ~~engaged~~for in the ~~exploration~~ ~~and~~fiscal ~~drilling~~year ofended March ~~this~~31, ~~project~~2009, ~~has~~for ~~recently~~all ~~acquired,~~Kansas ~~through~~wells ~~a geophysical~~was ~~contractor,~~ approximately ~~6.6~~2,500 ~~square~~Bbls ~~miles~~or of15.0 ~~new 3 Dimensional~~MMcfe (~~“3D”)~~thousand ~~seismic~~Mcf ~~data.~~of ~~This~~natural isgas ~~currently being processed prior to evaluation~~equivalent).

~~We believe~~Operations ~~the~~Summary. Our Kansas properties ~~present~~represent a ~~significant,~~very ~~multi-year~~low ~~development~~risk, ~~opportunity primarily~~low incost, ~~the~~low ~~Lansing~~working interest, and limited ~~Arbuckle~~upside ~~formations~~project atwhich ~~depths~~is ofnot ~~3,800~~expected to ~~4,000~~be a significant contributor to ~~feet~~future growth. Our ~~Successful~~working ~~wells~~interest in ~~these~~the ~~fields~~Kansas ~~generally~~wells ~~produce~~is either 5% for ~~more~~wells ~~than~~drilled in Stafford County or 3.25% ~~years~~for wells drilled in Barton County, and ~~have~~the ~~low~~net ~~operating~~revenue ~~costs~~interest is either approximately 4.155% or ~~Our~~2.64%, ~~2006-2007~~respectively. ~~capital~~The ~~budget~~operating economics of ~~$515,600~~our ~~related~~Kansas wells are very sensitive to ~~proven~~the ~~but~~relationship ~~not~~of ~~producing~~oil ~~reserves~~price ~~includes~~and ~~approximately~~operating ~~$514~~costs,~~500~~ ~~for~~and at March 31, ~~anticipated~~2009, ~~capital~~a ~~expenditures~~number ~~related~~of towells ~~costs~~were onshut ~~proved~~in ~~undeveloped~~or were producing marginally. As of March ~~properties~~31, 2009, we had interests in 29 gross productive oil wells in Kansas (1.3725 and ~~See~~expect ~~the~~that ~~Contractual~~participation ~~obligations~~to ~~section~~remain ofbroadly ~~Item~~constant 7“in the fiscal year ~~Management’s Discussion~~ending ~~and~~March ~~Analysis~~31, of2010, ~~Financial~~taking ~~Condition~~into ~~and~~account ~~Results~~possible ofparticipation ~~Operations”~~in ~~for~~new wells ~~more~~and ~~details~~shut-ins of existing wells.

~~Business Strategy~~Louisiana

~~The~~Properties ~~Company is currently seeking to expand its activities in North America~~Summary. At ~~Among several~~March ~~technical~~31, ~~and~~2009, ~~commercial~~we ~~programs~~owned ~~that~~approximately ~~the~~17 ~~Company utilizes to determine~~net ~~the~~acres ~~attractiveness~~in ~~and~~Calcasieu ~~feasibility of particular oil~~ and ~~gas~~St. ~~opportunities is~~Mary ~~a Capital~~Parishes. Total ~~Efficiency Model that compares the~~ net ~~present value of an opportunity~~production tofor the ~~capital~~fiscal ~~expenditure~~year ~~utilized.~~ended ~~This~~March ~~model~~31, ~~provides~~2009, ~~the~~for ~~Company’s management~~2.0 ~~(“Management”)~~gross ~~with~~wells ~~a profitability indicator that they utilize to determine the economic attractiveness of an opportunity~~ in ~~order~~Louisiana ~~to justify~~was ~~an investment~~approximately ~~of capital into such opportunity~~47.6 ~~Management believes that this risk mitigated approach to opportunity evaluation is supported by detailed technical evaluations including the use of 3D seismic data~~Mmcfe.

3Operations Summary. The ~~Phases~~Company’s onshore drilling program in Louisiana is comprised of its interest in the Walker 1 well (WI 12.5%, approximate NRI 9.36%) and the Shadyside 1 well (30% WI, 22.5% NRI). Future production from the Walker well, if any, is expected to be marginally economic. The Shadyside 1 well has experienced production issues and had workover operations performed which were unsuccessful in restoring production. The Company has fully written off its proved reserves on the well. We are in discussions, via our operator, to assign ownership of the Shadyside wellbore to a third party, which would avoid the requirement for us to plug and abandon the well. Should this assignment not proceed our proportion of the costs to plug and abandon the well are expected to be approximately $18,000, which we expect to be materially offset by salvage proceeds.

The Company’s business model currently consists of 3 successive stages. The first phase of the business plan, or Phase I, has been completed, has resulted in the initial startup of Index Ltd.’s business operations in the U.S. and the establishment of early stage oil and gas operations and cashflow. The second phase of the business plan, or Phase II, commenced in 2005 and is focused on establishing a reserve and production base which Management believes is capable of supporting expansion into the future. Phase III commenced in 2006 and is expected to consist of evaluation and eventual entry into larger opportunities with higher equity positions to be held by the Company. Larger opportunities will in turn subject the company to higher risks, which Management intends to attempt to mitigate by appropriate management of its energy portfolio assets. In order for the Company to complete Phase II of its business model, continue with its Phase III projects and remain a viable business entity, it will require an influx of future capital funding anticipated to consist of a mixture of debt and equity financing. Texas

Properties Summary. At March 31, 2009, we owned approximately 1,956 net acres in Texas. Our production is in Brazoria, Matagorda, Victoria, Goliad, Wharton, Colorado, and Nacogdoches counties. Total net production for the fiscal year ended March 31, 2009, for all Texas wells was approximately 223.9 MMcfe or 37.3 MBoe. The table below shows our net production from the various Texas wells during the fiscal year ended March 31, 2009:

Texas Production

Year ending March 31, 2009

Well name	Gas, MMcf		Oil, MBbl		Equivalent, MBoe		Equivalent, MMcfe

Vieman 1		2.382		0.005		0.402		2.413
Hawkins 1		27.352		0.005		4.564		27.352
Freidrich Gas Unit 1		29.708		0.000		4.951		29.708
Schroeder Gas Unit 1		1.421		0.000		0.237		1.421
Cason wells *		14.661		0.000		2.444		14.661
Outlar 1		71.022		4.412		16.249		97.493
Ducroz 1		36.692		0.034		6.149		36.894
Cochran 1		12.856		0.190		2.333		13.998
Total		196.094		4.646		37.328		223.940

* Cason 1, Cason 2 and Cason 3

Operations Summary. As at March 31, 2009 we carried proved reserves against only the following Texas wells:

Outlar 1; Wharton County; WI 10.9% (9.38% after prospect payout **), NRI 8.2% (7.0% after prospect payout).

Ducroz 1; Brazoria County; WI 7.5%, NRI 5.25%.

Hawkins 1; Matagorda County; WI 12.5%, NRI 10.01%.

Cochran #1; Garwood County; WI 5%, NRI 3.75%.

** defined as that point in time when the gross proceeds of the sale of oil and/or gas produced and sold from all wells drilled in the prospect, and/or sale of any wells in the prospect, after deducting all lease burdens, including all overriding royalty interests, and taxes, (including gross production taxes, windfalls profit taxes, if any, and ad valorem taxes) equals the actual costs of drilling, testing, completing, equipping, and operating the test well, and/or any subsequent wells, in addition to the leasehold, overhead, and geological costs of the prospect.

All other wells in the above production table have suffered various depletion and production maintenance issues and were non-productive either at March 31, 2009 or the date of this report. We divested of our interest in the Cason wells and related leases in June 2006, for minimal cash consideration.

We also hold an interest in the following exploration projects in Texas:

Alligator Bayou prospect:

The Alligator Bayou prospect is a deep Wilcox trend high impact exploration prospect, located in Matagorda County, Texas, covering a large 4-way structural closure of approximately 10,000 acres defined by 2D seismic. The Armour-Runnells #1 ST exploratory well has been drilled to a total depth of 23,830 feet, has encountered multiple sands with logged pay and is currently awaiting the commencement of phase 2 testing operations. Index holds a 5% WI and a 3.5% NRI in the well and leases over the prospect. Management views this prospect as a potentially very significant exploration project, although, as of the date of this report, we cannot quantify what that impact may be or provide any assurances that the potential will be realized.

Garwood field:

The Garwood field is a three-way structural closure upthrown to a major Wilcox expansion fault, located in Colorado County, Texas, and has the potential to extend the highly productive Ewers/Meine trend tested in three nearby fields. The Cochran #1 well tested zones at approximately 16,600 feet and 13,800 feet, and is currently producing from the upper zone. The well has proved up at least two further development and three probable locations, with most likely reserves for each such well estimated by management as 2.5 Bcfe gross and 5.0 Bcfe gross, respectively. Index holds a 5% WI and a 3.75% NRI in the Cochran #1 well and leases over the prospect.

We also hold leases in Texas in: (i) the Supple Jack Creek lease area, at a 20% WI, in which a first well, HNH Gas Unit 1, was drilled and is currently suspended pending further evaluation of potential logged pay intervals; and (ii) the West Wharton prospect area, on which the Outlar 1 well was drilled. The second well, Stewart 1, including a sidetrack in which Index did not participate, was a dry hole and the overall project is now under review.

In general we must fund our share of costs of any proposed new operation, described in an Authorization for Expenditure (AFE) issued by an operator, for any existing or new well under an operating agreement in place or go “non-consent”. If we elect to go “non-consent” on an AFE, we generally will lose our interest in the well for which the operation was proposed until actual payout of the operation, plus a penalty as a percentage of payout. In general, under our joint operating agreements we can elect to go “non-consent” on wells, and we continue to evaluate the appropriate circumstances in which we choose to make that election.

~~Phase~~Index is I generally contractually liable for our share of all operational costs not covered by an AFE, such as, for example, well repair costs under a certain amount specified in an operating agreement or the costs of well plugging and abandonment. Index is also contractually liable for all costs it has agreed to under an AFE. Index must fund its share of any lease renewal or lease maintenance costs on any acreage not held by production, or it will lose its interest in that acreage.

~~The~~Our Company’s initial project Kansas I (Seward North, Globe and Seward Townsite) (“Seward”) was initiated by its subsidiary, Index Ltd., in July of 2003 as a start up project aimed at a low risk, low cost oil production opportunity. This project was selected by Management to act upon its core business concept and to establish initial operations and business relationships.Industry

~~The~~Over the ~~Company’s~~past ~~Seward~~few ~~project~~years, ~~consists~~oil ofand anatural 5%gas ~~working~~prices ~~interest~~have inbeen ~~oil~~high; ~~and~~however, ~~gas~~over ~~leases~~the ~~covering~~last ~~approximately~~couple 8of years,~~500~~ ~~acres~~the ~~which~~cost ~~are~~of ~~located~~services, inequipment ~~Stafford~~and ~~County,~~goods ~~Kansas.~~has increased to ~~Management~~offset ~~believes~~most ~~that~~of the ~~acquisition~~gain ~~and~~from ~~processing~~high ofproduct ~~new~~prices. 3DIn ~~seismic~~general, ~~data~~very large ~~enables~~companies ~~Seward~~have ~~project~~focused ~~partners~~on ~~including~~onshore ~~the~~plays ~~Company~~in towhich ~~identify~~they ~~undrilled structural~~have ~~highs~~a insignificant aacreage position ~~proven~~and ~~petroleum~~technological ~~province~~supremacy. ~~The~~Smaller ~~Company~~companies ~~hopes~~have ~~that~~searched ~~the~~for niche ~~Seward~~plays ~~project~~that ~~can~~have ~~act~~been asoverlooked. We ahave ~~catalyst~~tried to ~~providing~~capitalize itby ~~with additional~~using ~~opportunities~~an expertise and intelligence to ~~expand~~select ~~within~~those ~~the~~prospects ~~area.~~that rank highly against our current portfolio.

Phase II

The Company’s goal in Phase II of its operations is to increase its oil/gas reserves and production along with achieving a stream of revenue to cover overhead and other company expenses, as well as contributing to the company’s capital expenditure (“Capex”) requirements. The Company intends to focus its Phase II structured plan on selected gas biased projects in the U.S., with the objective of acquiring higher working interests in larger opportunities in the U.S and North America. Index currently plans to have its Phase II activities consist of a portfolio of several contracted well and gas prospects located on the Gulf Coast and in Kansas.

The Company has signed Exploration and Joint Operating Agreements (the “Operating Agreements”) with Crawford Operating Company (“Crawford”) in the Gulf Coast area, to participate in 4 wells in Louisiana and South Texas during early 2006. Management believes that Crawford’s extensive industry contacts and operations in Texas and Louisiana, including its relationship with a 3D seismic data reprocessor which has successfully reprocessed 3D seismic data in the Louisiana and South Texas region in the past, will enhance its ability to achieve increased oil/gas reserves and production. Participation in such Operating Agreements gives the Company a right to acquire a working interest in the wells when the wells become producing.

The Company has also recently acquired a working interest in a new exploration prospect in the area to the north of Seward project in Barton County, Kansas and subject to availability of resources and financing, hopes to participate in up to 8-10 wells in the Gulf Coast area, as well as seeking additional opportunities in Kansas and other selected areas of U.S. and North America.

Pursuant to the Operating Agreements, the Company has secured a right to participate in the following 4 wells: Walker #1, Vieman #1, Taffy #1 and #2. As of the date hereof, The Walker #1 well has been successfully drilled and completed, and the Company’s subsidiary, Index Ltd., has entered into an operating lease pursuant to which it holds a 12.5% working interest in such well. Management anticipates initial production of the Walker #1 well to commence in the second quarter of 2006, after the construction of a 1.5 mile gas line which would connect to the existing infrastructure.

Management expects the Vieman #1 well to be drilled near Manor Lake in South Texas. The area covering the Vieman #1 location is approximately 320 acres. This prospect is based on 3D seismic data originally shot for EOG Resources in 1997 and reprocessed by Viking.

The Taffy #1 & #2 wells are located in Matagorda County, South Texas. The area where Taffy #1 well is located consists of approximately 370 acres. This prospect is based on 3D seismic data originally shot by Shell in 1993 and recently reprocessed. Management believes that the Taffy #2 well prospect is similar to Taffy #1 well in all respects, except that it is located on a separate 345-acre property and is to be drilled to a lesser depth.

Subject to rig availability, the Company expects to have Taffy #1 & #2 wells drilled in the near future. The Company further expects that the Vieman #1 well will spud in the late second or in the early third quarter of 2006. As of the second quarter of fiscal year ending March 31, 2007, the Company has increased its working interest in Taffy #2 and Vieman wells to 20% and 15%, respectively.

In addition to the foregoing, the Company has secured an interest in an operating lease of up to 5000 acres (the Barton County project), which is located to the north of the Seward project. This project includes 4-5 square miles of new 3D seismic data. The Company expects that, subject to the results of the 3D seismic shots, this project should enter the drilling phase sometime in late 2006.

Phase III .

The Company hopes that the next stage in its development would progress upon the experience and alliances that it hopes to generate from the execution of Phase II. It is currently analyzing a number of proposals and projects with existing partners and has signed a Memorandum of Understanding with ADC which provides the Company an opportunity to negotiate a comprehensive agreement with ADC which, if consummated, would give it an opportunity to participate together with ADC in oil and gas exploration ventures in certain areas covering an aggregate of 220 square miles of Texas, Louisiana and Mississippi.

In summary, our strategy is to increase stockholder value by profitably increasing our reserves, production, cash flow and earnings using a balanced program of:

(1) investing in near term drilling opportunities on a risked managed basis;

(2) developing anomaly supported opportunities through reprocessing 3D seismic data; and

(3) developing land plays.

The following are key elements of our strategy:

Management intends to focus its short and medium term efforts on known petroleum basins within the U.S. and North America which are close to or adjacent to its current ongoing projects. Index’s short to mid term objective is to develop its oil and gas reserves to a point where the cash flow will contribute not only to the company’s overhead, but also to its capital requirements for investing in new and additional projects. Management believes that it can achieve its objective by utilizing a risk mitigated approach of investing in relatively low cost, low risk drilling opportunities. Management hopes that by taking an increased equity position in the early stages of oil exploration where early risk exposure is mitigated by the ability to divest assets and offset risk, Index could successfully position its business in oil exploration and production projects.

Index’s current focus is directed towards:

• efficiently managing ongoing projects;

• identifying appropriate additional gas and oil opportunities;

• seeking to successfully enter future projects; and

• efficiently using its business assets to raise additional capital as needed.

Industry Overview

We are operating at a time where economic conditions have dictated larger oil exploration and production companies to focus their resources within the industry in order to become more cost and income efficient. Major energy companies and large independents continue to focus their attention and resources toward the discovery and development of large fields. This has resulted in larger energy companies neglecting to focus on smaller fields and divestment of production and exploration assets worldwide, a trend which Management expects to continue. In addition, the recent economics of the oil and gas market have improved as prices have risen substantially. Management believes that these conditions provide ample opportunities for smaller independent companies to acquire and exploit oil and gas opportunities in the U.S. We expect that there will be an increased competition for such properties in the future.

Smaller early stage oil exploration and production companies, such as us, have established their focus on the acquisition of the opportunities overlooked by the larger energy firms and have maintained their focus on the divested oil, gas fields and exploration opportunities located in North America that no longer fit the portfolios of larger energy companies. The stable political and economic environment of North America coupled with extensive oil and gas distribution systems available, has contributed to the industry’s geographic focus. As such, we have built up what we believe to be a significant pipeline of potential opportunities through Management’s extensive network of industry contacts in North America.

Similarly situated companies within the industry continue to target potential partner candidates in a disciplined manner in order to target gas and oil biased plays. These companies use waterflooding, 3D seismic data reprocessing, enhanced oil recovery, gas and oil production techniques such as Alkaline-Surfactant-Polymer (ASP) technology, chemical floods, infill drilling and recompilations of existing wells to engage in production of oil and gas. Furthermore, pursuant to industry standards, such oil, gas exploration and production companies enter into “expiring” leases along with the operators who undertake the exploration and development of a particular project on behalf of the companies. If the project becomes successful, meaning that it results in development of producing wells, then the companies enter into producing leases with the operators for as long as the wells are producing.

Business Operations

Kansas, Seward North, Globe and Seward Townsite

Index’s initial project Seward (Seward North, Globe and Seward Townsite) was entered in July 2003 as a start up project aimed at a low risk, low cost oil exploration and production opportunity. This project was selected by Management to act upon its core business concept and to establish initial operations and business relationships.

Index’s Seward project consists of a 5% working interest in oil and gas leases covering approximately 8,500 acres which are located in Stafford County, Kansas. The current retained AMI area is approximately 3871 acres. Management believes that the acquisition and processing of new 3D seismic data enables the Seward project partners including Index to identify undrilled structural highs in a proven petroleum province. Index hopes that the Seward project can act as a catalyst to providing it with additional opportunities to expand within the area.

In April 2005 Seward had 14 producing wells; during the first part of the period Index participated in Curtis #1-16, (spud date April 1), RFP #1-32 (spud date April 13) and in the completion of Marvin Drach # 1-12 (spud date March 15).

Index also recently participated in a continuous 5 well drilling program which commenced in mid January 2006. The first 4 wells (Schilling #1-32, Marvin Drach #2-2, Neeland #1-32 and Witt #1-14) were drilled successfully. All of these wells have been completed as producing wells and commenced production. The final well in this series (Conner-Jackson #1-29) proved non commercial due to poor reservoir development.

Index also participated in ongoing and routine workovers on certain properties during the period.

Barton County

Index also acquired a working interest in an exploration project to the north of Seward in Barton County, Kansas. The 5% working interest in the Barton County project is in an AMI of some 4879 acres. The operator has recently acquired, approximately 6.6 square miles of new 3 Dimensional (“3D”) seismic data. This is currently being processed prior to evaluation.

Index believes that the acquisition and processing of new 3D seismic data may enable the project partners to identify undrilled structural highs in this proven petroleum province.

Both the Seward producing wells and the Barton County project are located on a structure known as the Central Kansas uplift. Since the early 1900’s, several billion barrels of oil have been produced from the Central Kansas Uplift, primarily from carbonate reservoirs of the Pennsylvanian, Lansing Group through to the Arbuckle Group of Cambro-Ordovician age.

South Texas and Louisiana

During the period Index signed Exploration and Joint Operating Agreements (the “Operating Agreements”) with Crawford Operating Company (“Crawford”) in the Gulf Coast area, to participate in 4 wells in Louisiana and Texas. Management believes that the Crawford’s extensive industry contacts and operations in Texas and Louisiana, including its relationship with a 3D seismic data reprocessor which has successfully reprocessed 3D seismic data in the Louisiana and South Texas region in the past, will enhance Index’s ability to access drilling opportunities and achieve increased oil/gas reserves and production.

Pursuant to the Operating Agreements, Index secured a right to participate in the following 4 wells: Walker #1, Vieman #1, Taffy #1 and #2. The Walker #1 well has been successfully drilled and completed, and Index has entered into an operating lease pursuant to which it holds a 12.5% working interest in such well. Management anticipates initial production of the Walker #1 well to commence in the second quarter of 2006 after the construction of a 2.5 mile gas line which would connect to the existing infrastructure.

Subject to rig availability, Index expects that the Vieman #1, Taffy #1 & #2 wells will be drilled in the second quarter of 2006.

Seismic Reprocessing

On March 30, 2006, Index entered into a Seismic Reprocessing and Exploration Agreement with ADC. ADC was formed in November 2004 to take advantage of innovative technology in the exploration and production of hydrocarbons. In October 2005, ADC signed Technology Development and Operating Agreements with two partner companies to find and produce hydrocarbons onshore Gulf of Mexico utilizing new seismic data processing, interpretation and novel well construction techniques. This group currently has access to approximately 2500 square miles of existing 3D seismic data acquired in Texas, Louisiana, Mississippi and Alabama.

The Agreement enables Index to participate in the reprocessing of an area of up to 226 square miles of existing 3D land seismic data already available to ADC as a result of its industry partnerships. This seismic data covers prospective areas in the Gulf Coast U.S.,

throughout Texas, Louisiana and Mississippi. A unique Seismic Reprocessing method is used to improve the structural definition of hydrocarbon traps and potential reservoir characterization, enabling ADC to better identify drillable prospects from existing data.

ADC’s unique proprietary data reprocessing techniques are expected to generate drillable prospects for Index’s optional participation. ADC is also developing leading edge well completion and construction technology to which Index will have access to as a result of the Agreement.

The Agreement provides for Index participation in two phases:

Phase 1: The Agreement enables Index to participate in the reprocessing of 105 square miles of existing data in conjunction with 2 other experienced industry partners already working with ADC. The Agreement gives Index the right (but not the obligation) to participate in any prospects generated from this reprocessing, up to an 18% working interest.

Phase 2: As of the first quarter of fiscal year ending March 31, 2007, Index has exercised the option to participate in further 121 square miles of reprocessing on the same basis and is entitled to obtain up to a 12.5% working interest in any prospects generated.

The Agreement fulfils a fundamental principle of Index’s desired strategy to participate in early stage exploration with experienced industry partners. This is intended to result in more cost effective entry into the projects. Index's expectation is that risk will be mitigated by Index’s own risk management processes in determining the level of participation in any drillable prospects generated as a result of the Agreement. Index’s involvement directly in the application of the 3D reprocessing technology is also expected to build an intellectual value which can be applied to other petroliferous basins known to the management.

Growth

We will continue to review opportunities to acquire drilling prospects, undeveloped acreage and 3D seismic with potential for reprocessing. Initial targets will be in and around our producing and activity areas (Kansas and the Gulf Coast). We will also use our minor producing well ownerships as starting points and knowledge to make further investments.

Maintain Risk Managed Approach

We intend to maintain the risked managed approach that helped us to achieve a drilling success rate of over 80% to date. Index also intends to use advanced geological and geophysical technologies, detailed petrophysical analyses, state-of-the-art reservoir engineering and sophisticated completion and stimulation techniques to grow our reserves and production.

Endeavor to be a Low Cost Producer

We intend to continue to work to minimize our operating costs by concentrating our assets within geographic areas where we can consolidate operating control and capture operating efficiencies.

Competitive Conditions in the Business

~~Index is a~~We are a small independent oil and natural gas exploration and production company that ~~represents~~ ~~less than~~represents 1%fractions of a percent of the oil and natural gas industry. ItWe ~~faces~~ face competition from other oil and natural gas companies in all aspects of ~~its~~ our business, including acquisition of producing properties and oil and ~~gas~~natural gas leases, and obtaining goods, services and labor. Many of ~~its~~ our competitors have substantially greater financial and ~~other~~ other resources. Factors that affect ~~Index’s~~our ability to acquire ~~producing~~ properties include available funds, available information about the property and ~~its~~ our standards established for minimum projected return on investment. Since Index is focusing on acquiring low risk/low cost opportunities and has experience and expertise in exploiting these reserves, it believes that it can effectively compete in the market. Many of these companies explore for, produce and market oil and natural gas, carry on refining operations and market the ~~resultant~~ resultant products on a worldwide basis. The primary areas in which we encounter substantial competition are in locating and acquiring desirable leasehold acreage for our drilling operations, locating and acquiring attractive producing oil and natural gas properties, and obtaining purchasers and transporters of the oil and natural gas we produce. There is also competition between producers of oil and natural gas and other industries producing alternative energy and fuel. Furthermore, competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the government of the United States; however, it is not possible to predict the nature of any such legislation or regulation that may ultimately be adopted or its effects upon our future operations. Such laws and regulations may, however, substantially increase the costs of exploring for, developing or producing natural gas and oil and may prevent or delay the commencement or continuation of a given operation. The effect of these risks cannot be accurately predicted.

Competition

Index is a small independent oil exploration and production company that represents less than 1% of the oil and gas industry. It faces competition from other oil and gas companies in all aspects of its business, including acquisition of producing properties and oil and gas leases, and obtaining goods, services and labor. Many of its competitors have substantially greater financial and other resources. Factors that affect Index’s ability to acquire producing properties include available funds, available information about the property and its standards established for minimum projected return on investment. Since Index is focusing on acquiring low risk/low cost opportunities and has experience and expertise in exploiting these reserves, it believes that it can effectively compete in the market.

Customers

~~Index~~Through ~~sells~~contracts ~~its~~negotiated by our operators, we sell our crude oil and natural gas production to independent purchasers (collectively, “purchasers”), as allowed by our joint operating agreements. Additionally, we may sell directly to our operator crude oil and natural gas under our joint operating agreement. We have limited input into the terms of the contracts for the marketing or sale of our oil and natural gas production to purchasers. Title to the produced quantities transfers to the purchaser at the time the ~~purchaser~~ purchaser collects or receives the quantities. Prices for such production ~~are~~ are defined in sales contracts and are readily determinable based on certain publicly available indices. The purchasers of such production have historically made payment for crude oil and natural gas purchases within ~~thirty~~forty-five days of the end of each production month. We periodically review the difference between the dates of production and the dates we collect payment for such production to ensure that receivables from those purchasers or our operators are collectible. All transportation costs are accounted for as costs that are offset against oil and natural gas sales revenue. In ~~2006, we~~ ~~had~~the ~~one~~fiscal year ~~independent~~ended ~~purchaser~~March ~~that~~31, ~~accounted~~2009, ~~for~~approximately ~~the~~36%, ~~purchase~~22% ~~of approximately~~and ~~91.4~~13% of revenues from our share ~~total~~of oil ~~sales.~~production Inwere ~~2005,~~sold weto ~~had~~three ~~one~~ independent crude oil and gas ~~purchaser~~purchasers, ~~that~~who ~~accounted~~also ~~for~~are ~~the~~our ~~purchase~~operators ofand ~~100%~~who ofact on our ~~total~~behalf ~~oil~~under ~~sales.~~our Injoint ~~2003,~~operating ~~100%~~agreements ofas the ~~purchase~~purchaser of our ~~total~~ oil ~~sales~~and ~~was~~/ toor ~~three~~natural ~~independent~~gas production and who maintain purchasing agreements with the underlying physical purchasers, and for the 2008 fiscal year ended March 31, 2008, approximately 3528%, 2325% and 42 17%, ~~respectively~~of oil sales were sold to three independent crude oil purchasers. We do not ~~believe~~ believe the loss of any one of our purchasers would materially affect our ability to sell the oil and natural gas we produce. We believe ~~other~~that other purchasers are available in our areas of operations.

Seasonality of Business

Weather conditions affect the demand for, and prices of, oil and natural gas and can also delay drilling activities, disrupting our overall business plans. Demand for natural gas is typically higher in the fourth and first quarters resulting in higher natural gas prices. Conversely, oil is in greater demand in the summer months. Due to these seasonal fluctuations, results of operations for individual quarterly periods may not be indicative of results, which may be realized on an annual basis.

Operational Risks

Oil and natural gas exploration and development involves a high degree of risk, which ~~even~~ even a combination of experience, knowledge and careful evaluation may not be ~~able~~ able to overcome. There is no assurance that we or the operators of our properties will discover or acquire additional oil and gas in commercial quantities. Oil and natural gas operations also involve the risk that well fires, blowouts, equipment failure, human error and other circumstances that may cause accidental leakage of toxic or hazardous materials, such as petroleum liquids or drilling fluids into the environment, or cause significant injury to persons or property may occur. In such event, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could substantially reduce available cash and possibly result in loss of oil and gas properties. Such hazards may also cause damage to or destruction of wells, producing formations, production facilities and pipeline or other processing facilities. We are not aware of any of these instances that have occurred to date that need to be accrued for. As is common in the oil and ~~gas~~ natural gas industry, we, and to our knowledge the operators of our properties, will not ~~insure~~be insured fully against all risks associated with our business either because such insurance is not available or because premium costs are considered prohibitive. A loss not fully covered by insurance could have a materially adverse effect on our financial position and results of operations. For further discussion on risks see~~“Item 7 Management’s~~ ~~Discussion~~section ~~and~~titled ~~Analysis~~“Risk ofFactors” ~~Financial~~set ~~Condition~~forth ~~and~~in ~~Results~~“Item of1A. Risk ~~Operations~~Factors.”

Governmental Regulation

Domestic exploration for, and production and sale of, oil and natural gas are extensively regulated at both the federal and state levels. Legislation affecting the oil and natural gas industry is under constant review for amendment or expansion, ~~frequently~~ frequently increasing the regulatory burden. Also, numerous departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations binding on the oil and natural gas industry that often are costly to comply with and that carry substantial penalties for failure to comply. In addition, production operations are affected by changing tax and other laws relating to the petroleum industry, constantly changing administrative regulations and possible interruptions or termination by government authorities.

11Thus, the operation of our properties is subject to extensive and continually changing regulation affecting the oil and natural gas industry. Many departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations binding on the oil and natural gas industry and its individual participants. The failure to comply with such rules and regulations can result in substantial penalties. The regulatory burden on the oil and natural gas industry increases its cost of doing business and, consequently, affects its profitability. As a non-operator, we are not directly affected by these regulations and we do not believe that our properties are affected in a significantly different manner by these regulations than are our competitors’ properties.

State regulatory authorities have established rules and regulations requiring permits for drilling operations, drilling bonds and reports concerning operations. Most states in which we operate also have statutes and regulations governing a number of environmental and conservation matters, including the unitization or pooling of oil and gas properties and establishment of maximum rates of production from oil and gas wells. Many states also restrict production to the market demand for oil and gas. Such statutes and regulations may limit the rate at which oil and gas could otherwise be produced from our properties.7

Thus, the Company’s operations are subject to extensive and continually changing regulation affecting the oil and natural gas industry. Many departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations binding on the oil and natural gas industry and its individual participants. The failure to comply with such rules and regulations can result in substantial penalties. The regulatory burden on the oil and natural gas industry increases its cost of doing business and, consequently, affects its profitability. The Company does not believe that we are affected in a significantly different manner by these regulations than are its competitors.

Transportation and Sale of Natural Gas

Even though ~~Index~~we ~~currently~~initially ~~focuses~~focused on crude oil production, management believes that natural gas sales could contribute a substantial part to ~~its~~our total sales in fiscal year 2009. The interstate transportation and sale for resale of natural gas is subject to federal regulation, including transportation rates and various other matters, by the Federal Energy Regulatory Commission (“FERC”). Federal wellhead price controls on all domestic natural gas were terminated on January 1, 1992 and none of ~~Index’s~~our natural gas sales prices are currently subject to FERC regulation. Index cannot predict the impact of future government regulation on any natural gas operations.

Regulation of Production

The production of crude oil and natural gas is subject to regulation under a wide range of state and federal statutes, rules, orders and regulations. State and federal statutes and regulations require permits for drilling operations, drilling bonds, and reports concerning operations. Texas, Louisiana and Kansas, the states in which ~~Index~~we ~~owns~~own properties, have regulations governing ~~conservation~~ conservation matters, including provisions for the unitization or pooling of oil and natural gas properties, the establishment of maximum rates of production from oil and natural gas wells, the spacing of wells, and the plugging and abandonment of wells and removal of related production equipment. Texas, Louisiana and Kansas also restrict production to the market demand for crude oil and natural gas. These regulations can limit the amount of oil and natural gas ~~Index~~ which can ~~produce~~be produced from ~~its~~our wells, limit the number of wells, or limit the locations at which it can conduct drilling operations. Moreover, each state generally imposes a production or severance tax with respect to production and sale of crude oil, natural gas and gas liquids within its jurisdiction.

Environmental Regulations

~~Index’s~~Operation ~~operations~~of ~~are~~our properties is subject to numerous stringent and complex laws and ~~regulations~~ regulations at the federal, state and local levels governing the discharge of materials into the environment or otherwise relating to human health and ~~environmental~~ environmental protection. These laws and regulations may, among other things, ~~require~~ require acquisition of a permit before drilling or development commences, ~~restrict~~ restrict the types, quantities and concentrations of various materials that can be released into the environment in connection with development and production activities, and limit or prohibit construction or drilling activities in certain ecologically sensitive and other protected areas. Failure to comply ~~with~~ with these laws and regulations or to obtain or comply with permits may result in in the assessment of administrative, civil and criminal penalties, imposition of remedial requirements and the imposition of injunctions to force future compliance. ~~Index’s~~Our business and prospects could be adversely affected to the ~~extent~~ extent laws are enacted or other governmental action is taken that prohibits or restricts ~~its~~our development and production activities or imposes environmental protection requirements that result in increased costs to it or the oil and natural gas industry in general.

Oil and natural gas exploration and production activities on federal lands are subject to the National Environmental Policy Act, or NEPA. NEPA requires federal agencies, including the Department of Interior and various other federal, state, and local environmental, zoning, health and safety agencies, to evaluate major agency actions having the potential to significantly impact the environment human, animal and plant health, and affect our operations and costs. In recent years, environmental regulations have taken a cradle to grave approach to waste management, regulating and creating liabilities for the waste at its inception to final disposition. ~~Our oil and gas exploration~~Exploration, development and production ~~operations~~ of our properties are subject to numerous environmental programs, some of which include solid and hazardous waste management, water protection, air emission controls and situs controls affecting wetlands, coastal operations and antiquities.

In the course of evaluations, an agency will have an “Environmental Assessment ~~(EA)~~ prepared that assesses the potential direct, indirect and cumulative impacts of a a proposed project and, if necessary, will prepare a more detailed Environmental Impact Statement ~~(“EIS”)~~ that may be made available for public review and comment. All of ~~our~~the current exploration and production activities on our properties, as well as proposed exploration and development plans, on federal lands require governmental permits that are subject to the requirements of NEPA. This process has the potential to delay the development of oil and natural gas projects.

In addition, environmental programs typically regulate the permitting, construction and operations of a facility. Many factors, including public perception, can materially impact the ability to secure an environmental construction or operation permit. Once operational, enforcement measures can include significant civil penalties for regulatory violations regardless of intent. Under appropriate circumstances, an administrative agency can request a cease and desist order to terminate operations.

12Our operators conduct development and production activities designed to comply with all applicable environmental regulations, permits and lease conditions, including, monitoring subcontractors for environmental compliance. While we believe operations of our properties conform to those conditions, it remains at risk for inadvertent noncompliance, conditions beyond our control and undetected conditions resulting from activities by prior owners or the operators. Pursuant to industry customs, a project’s operator obtains insurance policy coverage for each of the participant’s in a particular project at a level of coverage that is commensurate with the potential loss.

Index conducts its development and production activities to comply with all applicable environmental regulations, permits and lease conditions, and it monitors subcontractors for environment compliance. While Index believes its operations conform to those conditions, it remains at risk for inadvertent noncompliance, conditions beyond its control and undetected conditions resulting from activities by prior owners or operators of properties in which it owns interests. Pursuant to industry customs, a project’s operator obtains insurance policy coverage for the each of the partner’s in a particular project. The operator for Index’s Seward project site in Kansas has obtained a policy of insurance on behalf of Index’s subsidiary, the partner in this project (the “Seward Insurance Policy”). The Seward Insurance Policy provides for $1,000,000 general commercial liability coverage. This policy also provides for $2,000,000 coverage for general aggregate and products liability. Furthermore, the operator has secured “hired and non-owned” commercial automobile liability coverage with a limit of $1,000,000 and $1,000,000 coverage for workers compensation and employer’s liability insurance.

Crawford, the operator for Index’s Walker I and Vieman I wells located in Louisiana and South Texas, has obtained a policy of insurance on behalf of Index’s subsidiary, the partner in these projects (the “Crawford Policy”). The Crawford Policy provides for $1,000,000 general commercial liability coverage. This policy also provides for $2,000,000 coverage for general aggregate and 1,000,000 coverage for products liability. Furthermore, Crawford has secured “hired and non-owned” commercial automobile liability coverage with a limit of $1,000,000 and $1,000,000 coverage for workers compensation and employer’s liability insurance. Furthermore, the Crawford Policy provides “umbrella liability” coverage per occurrence in amount of $10,000,000.

Occupational Safety Regulations

Index is subject to various federal and state laws and regulations intended to promote occupational health and safety. Although all of its wells are drilled by independent subcontractors under its “footage” or “day rate” drilling contracts, Index has adopted environmental and safety policies and procedures designed to protect the safety of its own supervisory staff and to monitor all subcontracted operations for compliance with applicable regulatory requirements and lease conditions, including environmental and safety compliance. This program includes regular field inspections of its drill sites and producing wells by members of its operations staff or consultants and internal assessments of its compliance procedures. Index considers the cost of compliance a manageable and necessary part of our business.

Federal, State or Native American Leases

~~Index’s~~The ~~operations~~operation of our properties on federal, state or Native American oil and natural gas leases are subject to numerous restrictions, including nondiscrimination statutes. Such operations must be conducted pursuant to certain on-site security regulations and other permits and authorizations issued by the Bureau of Land Management, Minerals Management Service and other agencies.

Waste Handling

The Resource Conservation and Recovery Act, or RCRA, and comparable state statutes, affect oil and natural gas exploration and production activities by imposing regulations on the generation, transportation, treatment, storage, disposal and cleanup of “hazardous wastes” and on the disposal of non-hazardous wastes. Under the auspices of the Environmental Protection Agency, or EPA, the individual states administer some or all of the provisions of RCRA, sometimes in conjunction with their own, more stringent requirements. Drilling fluids, produced waters, and most of the other wastes associated with the exploration, development, and production of crude oil, natural gas, or geothermal energy constitute “solid wastes”, which are regulated under the less stringent non-hazardous waste provisions, but there is no guarantee that the EPA or the individual states will not adopt more stringent requirements for the handling of non-hazardous wastes or categorize some non-hazardous wastes as hazardous for future regulation. Indeed, legislation has been proposed from time to time in Congress to re-categorize certain oil and natural gas exploration and production wastes as “hazardous wastes”.

We believe that wethe operators of our properties are currently in substantial compliance with the requirements of RCRA and related state and local laws and regulations, and that wethey hold all necessary and up-to-date permits, registrations and other authorizations to the extent that our operations require them under such laws.

We are also subject to federal and state Hazard Communications and Community Right to Know statutes and regulations. These regulations govern record keeping and reporting of the use and release of hazardous substances. We believe we are in compliance with these requirements in all material respects.

We may be required in the future to make substantial outlays to comply with environmental laws and regulations. The additional changes in operating procedures and expenditures required to comply with future laws dealing with the protection of the environment cannot be predicted.

13Compliance – General

We find it demanding to meet the overall compliance requirements across our business and the cost of such compliance is a significant component of our total expenses.

Employees

As of March 31 ~~2006~~, ~~Index‘s subsidiary~~2009, ~~Index~~we ~~Ltd.,~~ had ~~full time~~ employment agreements with ~~Mr.~~the ~~Andy~~following ~~Boetius and~~ officers: Mr. Lyndon West, ~~its~~CEO, 2Mr. ~~executive~~Andrew ~~directors~~Boetius, a ~~part~~CFO ~~time~~and ~~employment agreement with~~ Secretary, Mr. ~~Daniel~~ Dan Murphy, ~~its~~Chairman ~~chairman~~(who changed ofto ~~the board,~~three ~~letter~~days ~~agreements~~per ~~with~~week ~~Mr.~~from ~~David~~July ~~Jenkins~~1, 2008) and Mr. ~~Michael~~Gregory ~~Scrutton~~Mendez, ~~its 2 non-executive~~Controller. ~~directors~~In ~~and~~addition, ~~one~~we ~~part~~had ~~time~~consulting agreements ~~employee~~with entities atowned ~~one~~and ofcontrolled ~~Index~~by ~~Oil’s subsidiaries~~Dr. ~~Pursuant~~Ronald toBain, ~~these~~Chief Operating ~~contracts~~Officer, ~~the~~and ~~aforementioned~~Mr. ~~directors~~Samuel ~~provide services~~Culpepper, toVice ~~Index~~President Land ~~Oil~~and Operations, &respectively. ~~Gas~~In ~~Inc.~~addition, Aswe ofhad ~~June~~a ~~30,~~letter ~~2006,~~agreement with Mr. ~~Murphy has entered~~David ~~into~~Jenkins, aour ~~full~~non-executive ~~time~~director. We ~~employment~~also ~~agreement~~had ~~with~~one ~~Index~~employee ~~Ltd.~~ on ~~substantially the~~our ~~same terms~~administrative asstaff. As of ~~the~~March ~~full~~31, ~~time~~2009 ~~employment~~we ~~agreements~~had ~~entered~~five ~~into~~total by and four ~~between~~full ~~Index and~~time ~~Mr.~~employees, ~~West~~excluding ~~and~~the ~~Mr.~~above ~~Boetius~~consulting positions.

~~Index~~ We also contract ~~contracts~~ for the services of independent consultants involved in petroleum engineering, land, regulatory accounting, financial and other disciplines as needed. None of our employees are represented by labor unions or covered by any collective bargaining agreement. We believe that our relations with our employees are satisfactory.

Access to Company Reports

For further information pertaining to us, you may inspect without charge at the public reference facilities of the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549 any of our filings with the SEC. Copies of all or any portion of the documents may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website that contains reports, proxy and information statements and other information that is filed electronically with the SEC. The website can be accessed at www.sec.gov.

Corporate Governance Matters

Our website is http://www.indexoil.com. All corporate filings with the SEC can be found on our website, as well as other information related to our business. Under the Corporate Governance tab of the Investor Relations section you can find copies of our Code of Business Conduct and Ethics and our Whistleblower policy.

Item 1A. Risk Factors

~~RISK~~You ~~FACTORS~~should carefully consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Information Regarding Forward Looking Statements.” The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to the Company or that the Company currently believes are immaterial may also impair the Company’s business operations. If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected, the value of the Company’s Common Stock could decline, and you may lose all or part of your investment.

~~You~~Risks ~~should~~Related ~~carefully~~To consider the risks described below as well as other information provided to you in this document, including information in the section of this document entitled “Information Regarding Forward Looking Statements.” The risks and uncertainties described below are not the only ones facing the Company. Additional risks and uncertainties not presently known to the Company or that the Company currently believes are immaterial may also impair the CompanyIndex’s ~~business~~ ~~operations.~~Financial If any of the following risks actually occur, the Company’s business, financial condition or results of operations could be materially adversely affected, the value of the Company common stock could decline, and you may lose all or part of your investment. Results

~~Risks~~We ~~related~~are toat ~~our~~an ~~financial~~early ~~results~~stage of development and have a limited operating history.

We were formed in 2003 operating as a private company, Index Ltd, formed under the laws isof atthe United Kingdom and through which entity operations were conducted prior to the reverse merger into a public shell company, which occurred in 2006. As of the date of this Annual Report, we have a limited operating history upon which you can base an evaluation of our business and prospects. As a company in the early stage of development, we are subject to substantial risks, uncertainties, expenses and ~~has~~difficulties. aYou ~~limited~~should ~~operating~~consider ~~history~~an investment in Index in light of these risks, uncertainties, expenses and difficulties. To address these risks and uncertainties, we must do the following:

~~Index’s~~• Successfully ~~subsidiary,~~execute ~~Index~~our Ltd., through which it primarily conducts its operations, was formed in 2003 operating as a private company formed under the laws of the United Kingdom. As such, it has a limited operating history upon which you can base an evaluation of its business ~~and prospects. As a start-up company in the early stage of development~~strategy, ~~there~~including ~~are~~being ~~substantial~~able ~~risks, uncertainties, expenses and difficulties Index is subject~~ to. ~~You~~attract ~~should consider an investment in~~adequate ~~Index in light of these risks, uncertainties, expenses and difficulties. To address these risks and uncertainties, Index must do the following:~~ capital;

§• Continue to ~~Successfully~~develop ~~execute~~our ~~its~~oil ~~business~~exploration ~~strategy~~and production assets;

~~§ Continue~~ • Respond to ~~develop~~competitive ~~its~~developments; ~~oil exploration~~ and ~~production assets;~~

§• Attract, integrate, ~~Respond~~retain toand ~~competitive~~motivate ~~developments;~~qualified ~~and~~personnel.

§We ~~Attract~~may be unable to accomplish one or more of these objectives, ~~integrate~~which could cause our business to suffer. In addition, ~~retain~~accomplishing one or more of these objectives might be very expensive, which could harm our financial results. As a result, there can be no assurance that we will be successful in our oil and ~~motivate~~natural ~~qualified~~gas activities. Our future performance will depend upon our management and our ability to locate and negotiate additional oil and natural gas opportunities in which we are solely involved or participate in as a project partner. There can be no assurance that we will be successful in our efforts. Our inability to locate additional opportunities, successfully execute our business strategy, hire additional management and other personnel, or respond to competitive developments, could have a material adverse effect on our results of operations. There can be no assurance that our operations will be profitable.

~~Index~~We ~~may be~~have ~~unable~~incurred tosignificant ~~accomplish~~losses ~~one~~since orinception ~~more~~and ofanticipate ~~these~~that ~~objectives,~~we ~~which could cause~~will ~~its business~~continue to ~~suffer.~~incur Inlosses ~~addition,~~for ~~accomplishing~~the ~~one~~foreseeable ~~or more of these objectives might be very expensive, which could harm its financial results~~future.

~~Index~~In the ~~has~~fiscal year ended March 31, 2009, we incurred ~~significant~~a ~~losses~~financial ~~since~~loss ~~inception~~of approximately $9.4 million, after taxation and ~~anticipates~~inclusive of impairment write-downs of approximately $7.0 million. In the future we may plan to significantly increase our corporate expenses and general overhead. There is no assurance, however, that itwe will be able to successfully achieve an increase in production ~~continue~~and reserves so as to ~~incur~~operate ~~losses~~in ~~for~~a profitable manner. If the ~~foreseeable~~business ~~future~~of oil and natural gas well exploration and development slows, and commodity prices notably decline, our margins and profitability will suffer. We are unable to predict whether our operating results will be profitable.

AsOur ~~of March~~operations ~~31,~~have ~~2006,~~consumed ~~Index had incurred~~ a ~~financial~~substantial ~~loss~~amount ~~after taxation~~ of ~~approximately~~ ~~$2.6~~cash ~~million.~~since ~~Index plans to significantly increase its corporate expenses and general overhead~~inception. ~~Management~~We ~~believes that its business proposition~~expect ~~will be appealing~~ to ~~the~~continue ~~oil exploration and development community. There is no assurance, however, that Index will be able~~ to ~~successfully~~spend ~~achieve~~substantial anamounts ~~increase in production and reserves at its existing properties or future acquisitions, so as~~ to operate in a profitable manner. If the business of oil and gas well exploration and development slows, and commodity prices notably decline, its margins and profitability will suffer. Index is unable to predict whether its operating results will be profitable. :

~~Management~~• identify ~~believes~~and ~~that~~exploit ~~long-term~~oil ~~profitability~~ and ~~growth~~natural ~~will~~gas ~~depend on its ability to:~~ opportunities;

·• maintain and ~~Develop~~increase the ~~reputation~~company’s ofhuman ~~Index~~resources, asincluding afull ~~successful~~time ~~oil~~ and ~~gas exploration and production company~~consultant resources;

14• evaluate drilling opportunities; and

·• evaluate future ~~Successfully~~projects ~~identify~~ and ~~exploit~~areas ~~appropriate~~for ~~opportunities;~~long term development.

~~· Develop viable strategic alliances; and~~10

·We expect ~~Maintain~~to ~~sufficient~~have ~~volume~~increased ofcash ~~successful~~requirements ~~new~~to ~~oil~~fund ~~and~~our ~~gas opportunities~~properties.

~~Index~~We expect ~~will~~that ~~need~~our tocash ~~raise~~requirement ~~substantial~~for ~~additional~~operations and capital toexpenditures ~~fund~~will ~~its~~increase significantly ~~operations,~~over ~~and its~~the ~~failure~~next toseveral ~~obtain~~years. ~~funding~~We ~~when~~will ~~needed~~be ~~may~~required ~~force~~to itraise additional capital to ~~delay,~~meet ~~reduce~~anticipated orneeds. Our future funding requirements ~~eliminate~~will ~~its~~depend ~~products~~on ~~and~~many ~~services.~~factors, including, but not limited to:

~~Index’s~~• success ~~operations have consumed a substantial amount~~ of ~~cash~~ongoing ~~since inception. Index expects to continue to spend substantial amounts to:~~ operations;

·• forward commodity ~~identify~~prices; and ~~exploit oil and gas opportunities;~~

·• operating costs ~~maintain~~(including ~~and increase the company’s~~ human ~~resource including full time and consultant~~ resources; costs).

·To ~~evaluate~~date, our ~~drilling~~sources ~~opportunities;~~of ~~and~~cash have been primarily limited to the sale of equity securities. We cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct our business. If we are unable to raise additional capital, when required, or on acceptable terms, we may have to significantly delay, scale back or discontinue our operations, or cause our business to fail in its entirety.

·We may ~~evaluate~~be ~~future~~unable ~~projects~~to ~~and~~effectively ~~areas~~maintain ~~for~~our ~~long~~oil ~~term~~and ~~development~~gas exploration business.

~~Index~~Timely, ~~expects~~effective ~~that~~and ~~its~~successful ~~cash~~oil ~~requirement~~exploration ~~for~~and ~~operations~~production ~~(Capex)~~is ~~will~~essential ~~increase~~to ~~significantly~~maintaining ~~over~~our ~~the~~reputation ~~next~~as ~~several~~a ~~years~~developing oil exploration company. ~~Index~~Lack ~~will~~of opportunities beor ~~required~~success tomay ~~raise~~significantly affect our viability. The principal ~~additional~~components ~~capital~~of our operating costs include salaries paid to ~~meet~~corporate ~~anticipated~~staff, costs ~~needs.~~of ~~Index’s~~retention ~~future~~of ~~funding~~qualified independent engineers and geologists, annual ~~requirements~~system ~~will~~maintenance ~~depend~~and onrental ~~many~~costs, ~~factors~~insurance, ~~including~~transportation costs and substantial equipment and machinery costs. Because the majority of these expenses are fixed, ~~but~~a reduction in the number of successful oil exploration projects, failures in discovery of new opportunities or termination of ongoing projects will result in lower revenues and margins. Prior success in exploration or production of wells does not ~~limited~~guarantee future success in similar ventures; thus, our revenues could decline and our ability to: effectively engage in oil recovery business would be harmed.

·At March ~~success~~31, 2009, and as of ~~ongoing~~the ~~operations;~~date of this annual report, our current liabilities exceeded our current assets and our independent accountants have raised doubt about our ability to continue as a going concern.

·One ~~forward~~of the ~~commodity~~reasons ~~prices;~~for this position is that we have suffered significant cost overruns on one of our projects and we have arranged a payment plan with the operator of that oil and natural gas property. This arrangement is not embodied in the governing agreements for the project or property and the operator may seek to rely upon any and all provisions of those agreements. In addition net proceeds from any future financings may be required to fund some or all of these past costs. The continuation of our company as a going concern is dependent upon our attaining and maintaining profitable operations and raising additional capital. We are actively seeking additional funding through various methods, but due to current market conditions, funding is not readily available. These conditions indicate the existence of a material uncertainty which may cast significant doubt over our ability to continue as a going concern.

·Fluctuations in our operating ~~costs~~results ~~(including~~and ~~human~~announcements ~~resource~~and ~~costs)~~developments concerning our business affect our stock price.

ToOur ~~date, Index’s~~quarterly ~~sources~~operating ofresults, ~~cash~~the ~~have~~number ~~been~~of ~~primarily~~stockholders ~~limited~~desiring to ~~the~~sell ~~sale of equity~~their ~~securities.~~shares, ~~Index~~changes ~~cannot~~in begeneral ~~certain~~economic ~~that~~conditions ~~additional~~and ~~funding~~the ~~will~~financial bemarkets, ~~available~~the ~~on acceptable~~execution ~~terms,~~of ornew atcontracts ~~all.~~and To the ~~extent~~completion ~~that~~of ~~Index~~existing ~~raises~~agreements ~~additional~~and ~~funds~~other ~~by issuing~~developments ~~equity~~affecting ~~securities~~us, ~~its~~could ~~stockholders~~cause ~~may~~the ~~experience~~market ~~significant~~price ~~dilution. Any~~of ~~debt~~our ~~financing,~~common ifstock ~~available, may involve restrictive covenants that impact Index’s ability~~ to ~~conduct its business. If Index is unable to raise additional~~ ~~capital,~~fluctuate ~~when~~substantially ~~required,~~because orof onthe ~~acceptable~~limited ~~terms,~~daily ittrading ~~may~~volumes ~~have~~in ~~to significantly~~our ~~delay, scale back or discontinue its products and services~~shares.

~~Index~~Risks ~~may~~Related ~~be unable~~ to ~~effectively~~Our ~~maintain its oil and gas exploration business.~~ Business

~~Timely,~~We effective and successful oil exploration and production is essential to maintaining Index’s reputation as a developing oil exploration company. Lack of opportunities or success may significantly affect Index’s viability. The principal components of Index’s operating costs include salaries paid to corporate staff, costs of retention of qualified independent engineers and geologists, annual system maintenance and rental costs, insurance, transportation costs and substantial equipment and machinery costs. Because the majority of these expenses are ~~fixed,~~dependent aon ~~reduction in~~ the ~~number of successful oil exploration projects~~skill, ~~failures~~ability ~~in discovery of new opportunities or termination of ongoing projects will result in lower revenues~~ and ~~margins. Prior success~~decisions ~~in exploration or production~~ of ~~oil~~third ~~wells does not guarantee future~~party ~~success in similar ventures; thus, its revenues could decline and its ability to effectively engage in oil recovery business would be harmed~~operators.

~~Risks~~We do not ~~Related~~operate any of our properties. The success of the drilling, development, production and marketing of the oil and natural gas from our properties is dependent upon the decisions of such third-party operators and their diligence to ~~Index’s~~comply ~~Business~~with various laws, rules and regulations affecting such properties. The failure of any third-party operator to make decisions, perform their services, discharge their obligations, deal with regulatory agencies, and comply with laws, rules and regulations, including environmental laws and regulations in a proper manner with respect to properties in which we have an interest could result in material adverse consequences to our interest in such properties, including substantial penalties and compliance costs. Such adverse consequences could result in substantial liabilities to us or reduce the value of our properties, which could negatively affect our results of operations.

~~Index may be unable to renew or maintain its contracts with independent purchasers, which would harm its business and financial results.~~ 11

~~Upon~~Our ~~expiration~~operators ofmay ~~its~~be ~~independent~~unable ~~purchasers’ contracts, Index is subject~~ to ~~the risk~~renew ~~that~~or ~~the~~maintain ~~oil~~contracts ~~and~~with ~~natural gas purchasers will cease buying Index’s oil and~~independent ~~gas production output. It is not always possible to immediately obtain replacement oil and gas~~ purchasers ~~as the industry is extremely competitive. If these contracts are not renewed~~, itwhich ~~could~~would ~~result~~harm inour abusiness ~~significant~~and ~~negative impact~~financial ~~on Index’s business~~results.

15Upon expiration of our independent purchasers’ contracts, we are subject to the risk that the oil and natural gas purchasers will cease buying our oil and gas production output. It is not always possible for our operators to immediately obtain replacement oil and natural gas purchasers as the industry is extremely competitive. If these contracts are not renewed, it could result in a significant negative impact on our business.

~~Management~~We ~~believes~~may ~~that~~be ~~long-term~~subject ~~profitability~~to ~~and~~liability ~~growth~~risks, ~~will~~which ~~depend~~could onbe ~~its~~costly ~~ability~~and negatively impact ~~to:~~ our business and financial results.

·We ~~Develop~~may be subject to liability claims as an owner of working interests with respect to certain types of liabilities. There are currently many known environmental hazards associated with the ~~reputation~~exploration, discovery and delivery of ~~Index~~natural asgas and oil. Other significant hazards may be discovered in the future. To protect against possible liability, we maintain liability insurance with coverage that we believe is consistent with industry practice and appropriate in light of the risks attendant to our business. However, if we are unable to maintain insurance in the future at an acceptable cost or at all, or if our insurance does not fully cover us and a successful ~~oil~~claim ~~and~~was ~~gas~~made ~~exploration~~against us, we could be exposed to liability. Any claim made against us not fully covered by insurance could be costly to defend against, result in a substantial damage award against us and divert ~~production~~the ~~company;~~attention of management from our operations, which could have an adverse effect on our financial performance.

~~Index~~Loss ~~may~~of bekey ~~subject~~executives and failure to ~~liability~~attract ~~risks~~qualified managers, ~~which~~technologists, independent ~~could~~engineers beand ~~costly~~geologists ~~and~~could ~~negatively~~limit ~~impact its~~our ~~business~~growth and ~~financial~~negatively impact ~~results.~~our operations.

~~Index~~We depend ~~may be~~upon ~~subject~~our management team to ~~liability~~a ~~claims~~substantial extent. ~~There~~In ~~are~~particular, ~~currently~~we ~~many~~depend ~~known hazards~~upon ~~associated~~Mr. ~~with~~Lyndon ~~the exploration~~West, ~~discovery~~our President and ~~delivery~~Chief ofExecutive ~~natural~~Officer, ~~gas and oil~~Mr. ~~Other~~ ~~significant~~Daniel ~~hazards~~Murphy, our ~~may~~Chairman beof ~~discovered in~~ the ~~future.~~Board Toof ~~protect against possible liability~~Directors, ~~Index~~Dr. ~~and~~Ronald ~~its~~Bain, ~~purchasers~~our ~~maintain~~Chief ~~liability insurance with~~Operating ~~coverage~~Officer, ~~that~~Mr. ~~they~~Andrew ~~believe~~Boetius, isour ~~consistent~~Chief ~~with~~Financial ~~industry~~Officer, ~~practice~~Mr. ~~and~~Samuel ~~appropriate~~Culpepper, inour ~~light~~Vice ofPresident ~~the~~Land ~~risks~~and ~~attendant~~Operations, toand ~~its business~~Mr. ~~However~~Gregory Mendez, ifour ~~Index and its~~Controller, ~~purchasers~~for ~~are~~their ~~unable~~skills, toexperience, ~~maintain~~and ~~insurance~~knowledge inof the ~~future~~company atand ~~an acceptable~~industry ~~cost or~~contacts. ~~at all~~Currently, orwe ifhave ~~its~~employment ~~insurance~~or ~~does~~non-executive ~~not~~director ~~fully~~agreements with ~~cover~~all itof ~~and~~our adirectors ~~successful~~who ~~claim was~~are ~~made~~Lyndon ~~against~~West, ~~Index~~Daniel ~~and/or its purchasers~~Murphy, ~~Index~~David ~~could~~Jenkins ~~be exposed to~~and ~~liability~~Andrew Boetius. ~~Any~~The ~~claim~~loss ~~made~~of ~~against~~any ~~Index~~of ~~not~~these ~~fully~~executives, ~~covered~~or byother ~~insurance~~members ~~could be costly~~of ~~to defend~~our ~~against~~management team, ~~result~~could inhave a ~~substantial~~material ~~damage~~adverse ~~award~~effect ~~against~~on ~~Index~~our ~~and~~business, ~~divert the~~results ~~attention~~ of ~~management from Index’s~~ operations, ~~which~~or ~~could have an adverse effect on its~~ financial ~~performance~~condition.

~~Loss~~As we ofgrow, ~~key~~we ~~executives~~may increasingly require field managers with experience in our industry and ~~failure~~skilled engineers, geologists and technologists to ~~attract~~operate our diagnostic, seismic and 3D equipment. It is impossible to predict the availability of qualified managers, technologists, skilled engineers and geologists or the compensation levels that will be required to hire them. In particular, there is a very high demand for qualified technologists who are particularly necessary to operate systems similar to the ones that we operate. We may not be able to hire and retain a sufficient number of technologists, engineers and geologists and we may be required to pay bonuses and higher independent contractor rates to our technologists, engineers and geologists ~~could~~which ~~limit~~would increase ~~Index’s~~our ~~growth~~expenses. The loss of the services of any member of our senior management or our inability to hire qualified managers, technologists, skilled engineers and ~~negatively~~geologists at economically reasonable compensation levels could ~~impact~~adversely ~~its~~affect ~~operations.~~our ability to operate and grow our business.

Index depends upon its management team to a substantial extent. In particular, Index depends upon Mr. Lyndon West, its Chief Executive Officer, Mr. Daniel Murphy, its Chairman of the Board of Directors and Mr. Andrew Boetius, its Chief Financial Officer, for their skills, experience, and knowledge of the company and industry contacts. Currently, Index has employment or consulting agreements with all of its directors who are: Lyndon West, Daniel Murphy, David Jenkins, Michael Scrutton and Andrew Boetius. The loss of any of these executives, or other members of Index’s management team, could have a material adverse effect on its business, results of operations or financial condition.

As Index grows, it will increasingly require field managers with experience in its industry and skilled engineers, geologists and technologists to operate its diagnostic, seismic and 3D equipment. It is impossible to predict the availability of qualified managers, technologists, skilled engineers and geologists or the compensation levels that will be required to hire them. In particular, there is a very high demand for qualified technologists who are particularly necessary to operate systems similar to the ones that Index operates Index may not be able to hire and retain a sufficient number of technologists, engineers and geologists and it may be required to pay bonuses and higher independent contractor rates to its technologists, engineers and geologists which would increase its expenses. The loss of the services of any member of its senior management or Index’s inability to hire qualified managers, technologists, skilled engineers and geologists at economically reasonable compensation levels could adversely affect Index’s ability to operate and grow its business.

Complying with federal and state regulations is an expensive and time-consuming process, and any failure to comply could result in substantial penalties.

~~Index’s~~Our operations are directly or indirectly subject to extensive and continually changing regulation affecting the oil and natural gas industry. Many departments and agencies, both federal and state, are authorized by statute to issue, and have issued, rules and regulations binding on the oil and natural gas ~~industry~~ industry and ~~its~~our individual participants. The failure to comply with such rules ~~and~~ and regulations can result in substantial penalties. The regulatory burden on the oil and natural gas industry increases ~~its~~our cost of doing business and, consequently, affects ~~its~~our profitability. ~~Index does not believe that we are affected in a significantly different manner by these regulations than are its competitors.~~

If ~~Index’s~~ operations of our properties are found to be in violation of any of the laws and regulations to which itwe isare subject, itwe may be subject to the applicable penalty associated with the violation, including civil and criminal penalties, damages, fines and the curtailment of ~~its~~ operations. Any penalties, damages, fines or curtailment of ~~Index’s~~ operations, individually or in the aggregate, could ~~adversely~~ adversely affect ~~its~~our ability to operate ~~its~~our business and ~~its~~our financial results. In ~~The~~addition, ~~risk~~many of ~~Index being found in violation of~~ these laws and regulations ~~is increased by the fact that many of them~~ have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a ~~variety~~ variety of interpretations. Any action against ~~Index~~us for violation of these laws or regulations, even if itwe successfully ~~defends~~defend against it, could cause ~~Index~~ us to ~~incur~~ incur significant legal expenses and divert management’s attention from the ~~operation~~ operation of ~~its~~our business.

~~Index may experience competition from other oil and gas exploration and production companies and this competition could adversely affect Index’s revenues and its business.~~ 12

~~The~~We ~~market~~may ~~for~~experience ~~oil~~competition ~~and~~from ~~gas~~other ~~recovery~~oil ~~projects~~and isnatural ~~generally~~gas ~~highly~~exploration ~~competitive.~~and ~~Index’s~~production ~~ability to compete depends on many factors~~companies, ~~many of which are outside of its control. These factors include: timing~~ and ~~market acceptance,~~this ~~introduction~~competition ofcould ~~competitive~~adversely ~~technologies,~~affect ~~price~~our ~~and purchaser’s~~revenues ~~interest in acquiring Index’s oil~~ and ~~natural~~our ~~gas output~~business.

16The market for oil and natural gas recovery projects is generally highly competitive. Our ability to compete depends on many factors, many of which are outside of our control. These factors include: operation of our properties by third party operators, timing and market acceptance, introduction of competitive technologies, price, and purchaser’s interest in acquiring our oil and natural gas output.

Many existing competitors, as well as potential new competitors, have longer operating histories, greater name recognition, substantial track records, and significantly greater financial, technical and technological resources than ~~Index.~~ us. This may allow them to devote greater resources to the development and ~~promotion~~ promotion of their oil and natural gas exploration and production projects. Many of ~~these~~ these competitors offer a wider range of oil and natural gas opportunities not ~~available~~ available to ~~Index~~us and may attract business partners consequently resulting in a ~~decrease~~ decrease of ~~Index’s~~our business opportunities. These competitors may also engage in ~~more~~ more extensive research and development, adopt more aggressive strategies and ~~make~~ make more attractive offers to existing and potential purchasers, and partners. Furthermore, competitors may develop technology and oil and ~~gas~~natural ~~exploration~~gas exploration strategies that are equal or superior to ~~Index’s~~us and achieve greater ~~market~~ market recognition. In addition, current and potential competitors have ~~established~~ established or may establish cooperative relationships among themselves or with third parties to better address the needs of our target market. As a result, it is possible that new competitors may emerge and rapidly acquire significant market share.

~~Other~~There can ~~companies~~be no assurance that ~~are~~we ~~primarily~~will ~~focused~~be onable ~~offering~~to ~~competitive~~compete ~~products~~successfully ~~are~~against our current ~~Exxon/Mobil,~~or ~~Shell~~future ~~and~~competitors ~~Yukos~~or ~~and~~that ~~numerous~~competition ~~other~~will ~~large~~not ~~oil~~have ~~and~~a ~~gas~~material ~~recovery~~adverse ~~companies.~~effect on our business, results of operations and financial condition.

~~There~~We ~~can be no assurance that Index~~ will beneed ~~able~~ to ~~compete~~increase ~~successfully~~the ~~against~~size ~~its current~~of orour ~~future~~organization, ~~competitors~~and ormay ~~that competition will not have a material~~experience ~~adverse~~difficulties ~~effect~~in onmanaging ~~Index’s business, results of operations and financial condition~~growth.

IfWe are a ~~Index~~small iscompany ~~unable~~with only four full-time employees and one part-time employee as of March 31, 2009. We expect to ~~protect~~experience ~~its~~a ~~intellectual~~period ~~property~~of ~~effectively~~significant expansion in headcount, itfacilities, ~~may~~infrastructure and overhead and anticipate that further expansion will be required to address potential growth and market opportunities. ~~unable~~Future growth will impose significant added responsibilities on members of management, including the need to ~~prevent~~identify, ~~third~~recruit, ~~parties~~maintain ~~from~~and ~~using~~integrate additional ~~its~~independent ~~technologies~~contractors and ~~methods~~managers. Our future financial performance and our ability to compete effectively will depend, ~~which~~in part, on our ~~would~~ability ~~impair~~to ~~its~~manage ~~competitive~~any ~~advantage.~~future growth effectively.

Index does not believe that its operations or products infringe on the intellectual property rights of others. However, there can be no assurance that others will not assert infringement or trade secret claims against Index with respect to its current or future technologies or that any such assertion will not require it to enter into a license agreement or royalty arrangement with the party asserting the claim. Responding to and defending any such claims may distract the attention of Index’s management and have an adverse effect on its business, financial condition and results of operations.

Others may claim in the future that Index has infringed their past, current or future technologies. Index expects that participants in its markets increasingly will be subject to infringement claims as the number of competitors grows. Any claim like this, whether meritorious or not, could be time-consuming, and result in costly litigation and possibly result in agreements covering intellectual property secrets and technologies. These agreements might not be available on acceptable terms or at all. As a result, any claim like this could harm Index’s business.

Index regards the protection of its copyrights, service marks, trademarks, and trade secrets as critical to its success. Index relies on a combination of patent, copyright, trademark, service mark and trade secret laws and contractual restrictions to protect its proprietary rights in products and services. When applicable, it will enter into confidentiality and invention assignment agreements with employees and contractors, and nondisclosure agreements with parties it conducts business with in order to limit access to and disclosure of its proprietary information. These contractual arrangements and the other steps taken to protect its intellectual property may not prevent misappropriation of its technology or deter independent third-party development of similar technologies. Index intends to pursue the registration of trademarks and service marks in the U.S. and internationally. Effective trademark, service mark, copyright and trade secret protection may not be available in every country in which its services are made available.

Index will need to increase the size of its organization, and may experience difficulties in managing growth.

Index is a small company with minimal employees as of March 31, 2006. Index expects to experience a period of significant expansion in headcount, facilities, infrastructure and overhead and anticipates that further expansion will be required to address potential growth and market opportunities. Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate additional independent contractors and managers. Index’s future financial performance and its ability to compete effectively will depend, in part, on its ability to manage any future growth effectively.

Oil and natural gas prices are volatile, and low prices could have a material adverse impact on our business.

Our revenues, profitability and future growth and the carrying value of our properties depend substantially on prevailing oil and natural gas prices. Prices ~~also~~ also affect the amount of cash flow available for capital expenditures, if any, and our ability to borrow and raise additional capital. The amount we will be ~~able~~ able to borrow under ~~our~~any senior revolving credit facility will be subject to ~~periodic~~ periodic redetermination based in part on changing expectations of future prices. Lower prices may also reduce the amount of oil and natural gas that we can economically produce and have an adverse effect on the value of our properties. Prices for oil and natural gas have increased significantly and have been more volatile over the past twelve months. Historically, the markets for oil and natural gas have been volatile, and they are likely to continue to be volatile in the future. Among the factors that can cause ~~volatility~~ volatility are:

17• the domestic and foreign supply of oil and gas;

• the ~~domestic and foreign supply of oil and gas; • the~~ ability of members of the Organization of Petroleum Exporting Countries, or OPEC, and other producing countries to agree upon and maintain oil prices and production levels; • political instability, armed conflict or terrorist attacks, whether or not in oil or gas producing regions; • the level of consumer product demand; • the growth of consumer product demand in emerging markets, such as China; • labor unrest in oil and gas producing regions; • weather conditions, including hurricanes and other natural disasters; • the price and availability of alternative fuels; • the price of foreign imports; • worldwide economic conditions; and • the availability of liquid natural gas imports.

•	political instability, armed conflict or terrorist attacks, whether or not in oil or gas producing regions;

•	the level of consumer product demand;

•	the growth of consumer product demand in emerging markets, such as China;

•	labor unrest in oil and natural gas producing regions;

•	weather conditions, including hurricanes and other natural disasters;

•	the price and availability of alternative fuels;

•	the price of foreign imports;

•	worldwide economic conditions; and

•	the availability of liquid natural gas imports.

These external factors and the volatile nature of the energy markets make it difficult to estimate future prices of oil and gas and our ability to raise capital.

Transportation delays, including as a result of disruptions to infrastructure, could adversely affect our operations.

Our business will depend on the availability of a distribution infrastructure. Any disruptions in this infrastructure network, whether caused by earthquakes, storms, other natural disasters or human error or malfeasance, could materially impact our business. Therefore, any unexpected delay in transportation of our produced oil and natural gas could result in significant disruption to our operations. We rely upon others to maintain the production of our wells and distribution of oil and natural gas, and any failure on their part to maintain the wells and corresponding production could impede the delivery of our oil and natural gas, impose additional costs on us or otherwise cause our results of operations or financial condition to suffer.

Assets we acquire may prove to be worth less than we paid because of uncertainties in evaluating recoverable reserves and potential liabilities.

Our ~~recent~~initial growth is due ~~significantly~~ to acquisitions of ~~producing~~ properties and undeveloped leaseholds. We expect acquisitions will also contribute to our future growth. Successful acquisitions require an assessment of a number of factors, including estimates of recoverable reserves, exploration potential, future oil and gas prices, operating and capital costs and potential environmental and other liabilities. Such assessments are inexact and their accuracy is inherently uncertain. In connection with our assessments, we perform a review of the acquired properties which we believe is generally consistent with industry practices. However, such a review will not reveal all existing or potential problems. In addition, our review may not permit us to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities. We do not inspect every well. Even when we inspect a well, we do not always discover structural, subsurface and environmental problems that may exist or arise. We are generally not entitled to contractual indemnification for ~~preclosing~~ pre-closing liabilities, including environmental liabilities. Normally, we acquire interests in properties on an “as is” basis with limited remedies for breaches of representations and warranties.

As a result of these factors, we may not be able to acquire oil and ~~gas~~natural ~~properties~~gas properties that contain economically recoverable reserves or be able to complete ~~such~~ such acquisitions on acceptable terms.

Estimates of oil and natural gas reserves are uncertain and any material inaccuracies in ~~these~~ these reserve estimates will materially affect the quantities and the value of ~~our~~ our reserves.

This ~~report~~Annual onReport ~~Form 10-K~~ contains estimates of our proved oil and natural gas reserves. These estimates are based upon various assumptions, including assumptions ~~required~~ required by the SEC relating to oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. The process of estimating oil and natural gas reserves is complex. This process requires significant decisions and assumptions in the evaluation of available geological, geophysical, engineering and economic data for each reservoir.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and gas reserves will vary from those estimated. Any significant variance could materially affect the estimated quantities and the value of our reserves. Our properties may also be susceptible to hydrocarbon drainage from production by other operators on adjacent properties. In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and natural gas prices and other factors, many of ~~which~~ which are beyond our control.

Recovery of undeveloped reserves requires significant capital expenditures and successful drilling operations. The reserve data assumes that we will make capital expenditures to develop our reserves. Although we have prepared estimates of these oil and gas reserves and the costs associated with development of these reserves in accordance with SEC regulations, we cannot assure you that the estimated costs or estimated reserves are accurate, that development will occur as scheduled or that the actual results will be as estimated.

1814

~~Our~~Exploration ~~exploration~~ and development drilling efforts and the operation of our wells on our properties may not be profitable or achieve our targeted returns.

We require significant amounts of undeveloped leasehold acreage in order to further our development efforts. Exploration, development, drilling and production activities are subject to many risks, including the risk that commercially productive reservoirs will not be discovered. We invest in property, including undeveloped leasehold acreage, which we believe will result in projects that will add value over time. However, we cannot guarantee that all of our prospects will result in viable projects or that we will not abandon our initial investments. Additionally, we cannot guarantee that the leasehold acreage we acquire will be profitably developed, that new wells drilled byon usthe properties will be productive or that we will recover all or any portion of our investment in in such leasehold acreage or wells. Drilling for oil and natural gas may involve ~~unprofitable~~ unprofitable efforts, not only from dry wells but also from wells that are productive but do not produce sufficient net reserves to return a profit after deducting operating and other costs. In addition, wells that are profitable may not achieve our targeted rate of return. Our ability to achieve our target results are dependent upon the current and future market prices for oil and gas, costs associated with producing oil and gas and our ability to add reserves at an acceptable cost. We rely to a significant extent on 3D seismic data and other advanced technologies in identifying leasehold acreage prospects and in ~~conducting~~determining ~~our~~whether ~~exploration activities~~or not to participate in a new well. The 3D seismic data and other technologies we use do not allow us to know conclusively prior to acquisition of leasehold acreage or the drilling of a well whether oil or natural gas is present or may be produced economically. ~~The use of 3D seismic data and other technologies also requires greater pre-drilling expenditures than traditional drilling strategies.~~

In addition, we may not be successful in implementing our business strategy of controlling and reducing our drilling and production costs in order to improve our overall return. The cost of drilling, completing and operating a well is often uncertain and cost factors can adversely affect the economics of a project. We cannot predict the cost of drilling, and we may be forced to limit, delay or cancel drilling operations as a result of a variety of factors, including:

• unexpected drilling conditions; • pressure or irregularities in formations; • equipment failures or accidents; • adverse weather conditions, including hurricanes or other natural disasters; • compliance with governmental requirements; and • shortages or delays in the availability of drilling rigs and the delivery of equipment.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel and oil field services could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budget.

Our industry is cyclical and, from time to time, there is a shortage of drilling rigs, equipment, supplies or qualified personnel for the operator of our properties. During these periods, the costs and delivery times of rigs, equipment and supplies are substantially greater. In addition, the demand for, and wage rates of, qualified drilling rig crews rise as the number of active rigs in service increases. As a result of increasing levels of exploration and production in response to strong prices of oil and natural gas, the demand for oilfield services has risen, and the costs of these services are increasing, while the quality of these services may suffer. If the unavailability or high cost of drilling rigs, equipment, supplies or qualified personnel ~~were~~ is particularly severe in Kansas, Texas and Louisiana, we could be materially and adversely affected because our ~~operations and~~ properties are concentrated in those areas.

The marketability of our oil and gas production depends on services and facilities that we typically do not own or control. The failure or inaccessibility of any such services or facilities could result in a curtailment of production and revenues.

The marketability of our production depends in part upon the availability, proximity and capacity of gathering systems, pipelines and processing facilities. Pursuant to interruptible or short term transportation agreements, we generally deliver gas through gathering systems and pipelines that we do not own. Under the interruptible transportation agreements, the transportation of our gas may be interrupted due to capacity constraints on the applicable system, for maintenance or repair of the system, or for other reasons as dictated by the particular agreements. If any of the pipelines or other facilities becomes unavailable, we would be required to find a suitable alternative to transport and process the gas, which could increase our costs and reduce the revenues we might obtain from the sale of the gas.

We are dependent on the skill, ability and decisions of third party operators.

We do not operate any of our properties. The success of the drilling, development and production of the oil and gas properties are dependent upon the decisions of such third-party operators and their diligence to comply with various laws, rules and regulations affecting such properties. The failure of any third-party operator to make decisions, perform their services, discharge their obligations, deal with regulatory agencies, and comply with laws, rules and regulations, including environmental laws and regulations in a proper manner with respect to properties in which we have an interest could result in material adverse consequences to our interest in such properties, including substantial penalties and compliance costs. Such adverse consequences could result in substantial liabilities to us or reduce the value of our properties, which could negatively affect our results of operations.

Our oil and gas activities are subject to various risks which are beyond our control.

Our operations are subject to many risks and hazards incident to exploring and drilling for, producing, transporting, marketing and selling oil and gas. Although we may take precautionary measures, many of these risks and hazards are beyond our control and unavoidable under the circumstances. Many of these risks or hazards could materially and adversely affect our revenues and expenses, the ability of certain of our wells to produce oil and gas in commercial quantities, the rate of production and the economics of the development of, and our investment in the prospects in which we have or will acquire an interest. Any of these risks and hazards could materially and adversely affect our financial condition, results of operations and cash flows. Such risks and hazards include:

• human error, accidents, labor force and other factors beyond our control that may cause personal injuries or death to persons and destruction or damage to equipment and facilities; • blowouts, fires, hurricanes, pollution and equipment failures that may result in damage to or destruction of wells, producing formations, production facilities and equipment; • unavailability of materials and equipment; • engineering and construction delays; • unanticipated transportation costs and delays; • unfavorable weather conditions; • hazards resulting from unusual or unexpected geological or environmental conditions; • environmental regulations and requirements; • accidental leakage of toxic or hazardous materials, such as petroleum liquids or drilling fluids, into the environment; • changes in laws and regulations, including laws and regulations applicable to oil and gas activities or markets for the oil and gas produced; • fluctuations in supply and demand for oil and gas causing variations of the prices we receive for our oil and gas production; and • the internal and political decisions of OPEC and oil and natural gas producing nations and their impact upon oil and gas prices.

As a result of these risks, expenditures, quantities and rates of production, revenues and cash operating costs may be materially adversely affected and may differ materially from those anticipated by us.

Governmental and environmental regulations could adversely affect our business.

Our business is subject to federal, state and local laws and regulations on taxation, the exploration for and development, production and marketing of oil and gas and safety matters. Many laws and regulations require drilling permits and govern the spacing of wells, rates of production, prevention of waste, unitization and pooling of properties and other matters. These laws and regulations have increased the costs of planning, designing, drilling, installing, operating and abandoning our oil and gas wells and other facilities. In addition, these laws and regulations, and any others that are passed by the jurisdictions where we have production, could limit the total number of wells drilled or the allowable production from successful wells, which could limit our revenues.

Our operations are also subject to complex environmental laws and regulations adopted by the various jurisdictions in which we have or expect to have oil and gas operations. We could incur liability to governments or third parties for any unlawful discharge of oil, gas or other pollutants into the air, soil or water, including responsibility for remedial costs.

We could potentially discharge these materials into the environment in any of the following ways:

• from a well or drilling equipment at a drill site; • from gathering systems, pipelines, transportation facilities and storage tanks; • damage to oil and gas wells resulting from accidents during normal operations; and • blowouts, hurricanes, cratering and explosions.

Because the requirements imposed by laws and regulations are frequently changed, we cannot assure you that laws and regulations enacted in the future, including changes to existing laws and regulations, will not adversely affect our business. In addition, because we acquire interests in properties that may have been operated in the past by others and are currently operated by others, we may be liable for environmental damage caused by those operators.

We cannot be certain that the insurance coverage maintained by us will be adequate to cover all losses that may be sustained in connection with all oil and gas activities.

We maintain general and excess liability policies, which we consider to be reasonable and consistent with industry standards. These policies generally cover:

• personal injury; • bodily injury; • third party property damage; • medical expenses; • legal defense costs; • pollution in some cases; • well blowouts in some cases; and • workers compensation.

There can be no assurance that this insurance coverage will be sufficient to cover every claim made against us in the future. A loss in connection with our oil and natural gas properties could have a materially adverse effect on our financial position and results of operation to the extent that the insurance coverage provided under our policies cover only a portion of any such loss.

Title to the properties in which we have an interest may be impaired by title defects.

Our operators generally obtain title opinions on significant properties that we have working interests in. However, there is no assurance that we will not suffer a monetary loss from title defects or failure. Generally, under the terms of the operating agreements affecting our properties, any monetary loss is to be borne by all parties to any such agreement in proportion to their interests in such property. If there are any title defects or defects in assignment of leasehold rights in properties in which we hold an interest, we will suffer a financial loss.

WeThe ~~are~~following ~~subject~~risks torelate ~~compliance~~principally ~~with~~to ~~securities~~our ~~law,~~Common ~~which~~Stock ~~exposes~~and usits ~~to potential~~market ~~liabilities, including potential rescission rights.~~value

We have periodically offered and sold our common stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We have not received a legal opinion to the effect that any of our prior offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves.

If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes under the National Securities Markets Improvement Act of 1996. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the SEC and state securities agencies.

The following risks relate principally to the Company’s common stock and its market value

There is a limited market for our common stock which may make it more difficult for you to dispose of your stock.

Our common stock has been quoted on the OTC Bulletin Board under the symbol "“IXOG.OB"” since December 16, 2005. There is a limited trading market for our common stock. ~~For~~Furthermore, the trading in our common stock maybe highly volatile, as for example, approximately ~~more~~ninety ~~than~~percent ~~one-third~~ of the trading days in ~~during~~the ~~May~~quarter ofto ~~2006~~March 31, 2009 saw trading in our stock of less than 20100,000 shares per day, including all days in the month of March 2009. During that same period, the smallest number of shares ~~trade~~traded in one day was ~~2,305~~ zero and the largest number of shares traded in one day was ~~382~~193,~~500~~156. Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock.

The ~~market~~ price of ~~the~~our ~~Company’s~~Common ~~common~~Stock ~~stock~~ may be ~~adversely affected by several factors~~volatile.

The ~~market~~trading price of ~~the~~our ~~Company’s~~ common stock may be highly volatile and could ~~fluctuate~~be ~~significantly~~subject into fluctuations in response to ~~various~~a number of factors ~~and~~beyond ~~events,~~our ~~including:~~control. Some of these factors are:

~~· the~~• ~~Company’s~~our ~~ability~~results toof ~~execute~~operations ~~its~~and ~~business~~the ~~plan;~~performance of our competitors;

~~· operating~~• ~~results~~the ~~below~~public’s ~~expectations;~~reaction to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;

~~· loss~~• ofchanges ~~any~~in ~~strategic~~earnings ~~relationship;~~estimates or recommendations by research analysts who follow, or may follow, us or other companies in our industry;

~~· industry~~• ~~developments~~changes in general economic conditions;

~~· economic~~• ~~and~~changes ~~other~~in ~~external~~market ~~factors;~~prices for oil and gas;

~~· period-to-period~~• ~~fluctuations~~actions inof ~~its~~our ~~financial~~historical ~~results.~~equity investors, including sales of common stock by our directors and executive officers;

~~In addition,~~• ~~the~~actions ~~securities~~by ~~markets~~institutional ~~have~~investors ~~from~~trading ~~time~~in toour time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of the Company’s common stock. ;

~~Our common~~• ~~stock~~disruption ~~is subject to the "penny stock" rules~~ of ~~the SEC and the trading market in~~ our ~~securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.~~operations;

~~The Securities~~• ~~and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as~~ any ~~equity security~~major ~~that~~change ~~has~~in aour ~~market~~management price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:team;

·• ~~that~~other adevelopments ~~broker~~affecting orus, ~~dealer~~our ~~approve~~industry aor ~~person's~~our ~~account for transactions in penny stocks~~competitors; and

·• ~~the~~U.S. ~~broker~~and orinternational ~~dealer receive from the investor a written agreement to the transaction~~economic, ~~setting~~legal ~~forth the identity~~ and ~~quantity~~regulatory offactors ~~the~~unrelated ~~penny stock~~ to beour ~~purchased~~performance.

~~In order to approve a person's account for transactions in penny stocks, the broker or dealer must:~~15

·In ~~obtain~~recent years ~~financial~~the ~~information~~stock market has experienced significant price and ~~investment~~volume fluctuations. ~~experience~~These ~~objectives~~fluctuations may be unrelated to the operating performance of particular companies. These broad market fluctuations may cause declines in the ~~person;~~market price of our common stock. The price of our common stock could fluctuate based upon factors that have little or nothing to do with our company or our performance, and those fluctuations could materially reduce our common stock price.

·Our common ~~make~~stock ais ~~reasonable~~subject ~~determination~~to ~~that~~ the ~~transactions in~~ “penny ~~stocks~~stock” ~~are~~rules ~~suitable~~of ~~for~~the ~~that~~SEC ~~person~~ and the ~~person~~trading market ~~has~~in ~~sufficient~~our ~~knowledge~~securities ~~and~~is ~~experience~~limited, inwhich ~~financial~~makes ~~matters~~transactions toin beour ~~capable~~stock cumbersome ofand ~~evaluating~~may reduce the ~~risks~~value of ~~transactions~~an investment in ~~penny~~our ~~stocks~~stock.

The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

•

that a broker or dealer approve a person’s account for transactions in penny stocks; and

•

the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

•

obtain financial information and investment experience objectives of the person; and

•

make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, which, in highlight form:

·• sets forth the basis on which the broker or dealer made the suitability determination; and

·• that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "“penny stock"” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

22The requirements of being a public company, including compliance with the reporting requirements of the exchange act and the requirements of the Sarbanes Oxley act, strains our resources, increases our costs and may distract management, and we may be unable to comply with these requirements in a timely or cost-effective manner.

~~The~~As a ~~Company~~public ~~does~~company, ~~not~~we ~~expect~~need to ~~pay~~comply ~~dividends~~with inlaws, regulations and requirements, including certain corporate governance provisions of the ~~future~~Sarbanes-Oxley Act of 2002 and related regulations of the SEC. ~~Any~~Complying ~~return~~with onthese ~~investment~~statutes, ~~may~~regulations beand ~~limited~~requirements tooccupies ~~the~~a ~~value~~significant amount of the ~~Company’s~~time ~~stock~~of our board of directors and management. We are or may be required to:

~~The Company~~• ~~does~~institute not anticipate paying cash dividends on its stock in the foreseeable future. The payment of dividends on the Company’s stock will depend on its earnings, financial condition and other business and economic factors affecting the Company at such time as the board of directors may consider relevant. If the Company does not pay dividends, its stock may be less valuable because a ~~return~~comprehensive oncompliance ~~your investment will only occur if the Company’s stock price appreciates.~~ function;

~~A sale~~• ofestablish ainternal ~~substantial~~policies, ~~number~~such ofas ~~shares~~those ofrelating ~~the~~to ~~Company’s~~disclosure ~~common~~controls ~~stock~~and ~~may~~procedures ~~cause the~~and ~~price~~insider ~~of its common stock to decline.~~ trading;

~~If the Company’s~~• ~~stockholders~~design, ~~sell~~establish, ~~substantial~~evaluate ~~amounts~~and ofmaintain ~~the~~a ~~Company’s~~system ~~common~~of ~~stock~~internal ~~in the~~controls ~~public~~over ~~market,~~financial ~~including~~reporting ~~shares~~in ~~issued~~compliance ~~upon~~with the ~~exercise~~requirements of ~~outstanding options~~Section or404 ~~warrants, the market price~~ of ~~its common stock could fall. These sales also may make it more difficult for~~ the ~~Company to sell equity or equity~~Sarbanes-~~related~~Oxley ~~securities~~Act inand the ~~future~~related atrules ~~a time~~ and ~~price~~regulations ~~that~~of the ~~Company deems~~SEC ~~reasonable~~and ~~or appropriate. Stockholders who have been issued shares in~~ the ~~Acquisition~~ ~~will~~Public beCompany ~~able~~Accounting toOversight ~~sell their shares pursuant to Rule 144 under the Securities Act of 1933, beginning one year after the stockholders acquired their shares.~~ Board;

•

prepare and distribute periodic reports in compliance with our obligations under the federal securities laws;

•

involve and retain outside counsel and accountants in the above activities; and

•

establish an investor relations function.

In addition, rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 will require annual assessment of our internal control over financial reporting, and attestation of the assessment by our independent registered public accountants. The requirement for both an annual assessment of our internal control over financial reporting and the attestation of the assessment by our independent registered public accountants, as the rules now stand, will first apply to our annual report for fiscal year ending March 31, 2010. In the future, our ability to continue to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired, and we may be subject to sanctions or investigation by regulatory authorities. In addition, failure to comply with Section 404 or a report of a material weakness may cause investors to lose confidence in us and may have a material adverse effect on our stock price.

Because of the high cost of compliance, our board of directors may in the near future recommend to deregister from the Securities Exchange Act, if possible, if in its best judgment the costs of the requirements of being a compliant public company outweigh the benefits to shareholders and if we are eligible to deregister. If we deregister, the market for trading in our common stock could become even less liquid, and information regarding our company could be less available.

We do not expect to pay dividends in the future. Any return on investment may be limited to the value of our stock.

We do not anticipate paying cash dividends on our stock in the foreseeable future. The payment of dividends on our stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the board of directors may consider relevant. If we do not pay dividends, our stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

The exercise of our outstanding warrants and options may depress our stock price

We currently have 5,~~670~~853,~~202~~947 warrants, excluding the Loyalty Warrants associated with our $2.77 million private placement in February 2008 which have contingent exercise requirements, and options to purchase shares of our common ~~stock~~ stock outstanding, at March 31, 2009. The exercise of warrants and/or options by a ~~substantial~~ substantial number of holders within a relatively short period of time could have the effect of depressing the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. See Note #11 “~~Description~~Options ofand ~~Capital~~Warrants ~~Stock~~and Stock-Based ~~Warrants~~Compensation” onto the ~~page~~Notes 24accompanying our audited consolidated financial statements filed herewith.

We may need to increase our authorized Common Stock which could lead to dilution of the ownership interest of investors.

We require substantial working capital to fund our business. We currently have authorized 75,000,000 shares of Common Stock. In order to raise additional funds through the issuance of equity, equity-related or convertible debt securities, we may need to increase our authorized common stock, the additional issuances of which could lead the holders of our common stock to experience additional dilution.

We may need additional capital that could dilute the ownership interest of investors.

We require substantial working capital to fund our business. If we raise additional funds through the issuance of equity, equity-related or convertible debt securities, these securities may have rights, preferences or privileges senior to those of the rights of holders of our common stock and they may experience additional dilution. We cannot predict whether additional financing will be available to us on favorable terms when required, or at all. Since our inception, we have experienced negative cash flow from operations and expect to experience significant negative cash flow from operations in the future. The issuance of additional common stock by our management, may have the effect of further diluting the proportionate equity interest and voting power of holders of our common stock, including investors in this offering.

We did not properly comply with Federal securities laws in obtaining stockholders’ consent for the increase of our authorized common stock.

As our Common Stock is a security registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we must solicit proxies or obtain consent or authorizations by or on behalf of our management from the holders of record of our Common Stock in accordance with the rules and regulations of the Exchange Act, including those prescribed in Section 14. On November 25, 2005, prior management of the Company obtained the approval of the majority of stockholders of the Company authorizing it to increase the authorized common stock of the Company from 25,000,000 to 75,000,000 (the “Increase”). In doing so, the Company complied with Sections 78.207 and 78.209 of the Revised Statutes of the State of Nevada; however, the management failed to comply with applicable Federal securities laws set forth above. Thus we must obtain a ratification of the Increase (the “Ratification”) from our current stockholders via obtaining the consent of the majority of our current stockholders as of a certain record date, by filing a proxy statement on Schedule 14(a) and obtaining such Ratification.

Item 1B. Unresolved Staff Comments

None.

2317

Item 2. Properties .

Principal Executive Offices

~~Index~~We lease ~~holds~~our ~~an arrangement to rent its~~ main office comprising of ~~300~~approximately 1,665 square feet which is located at ~~10,000~~10000 Memorial Drive, Suite 440, Houston, Texas 77024. ~~For~~Lease ~~the~~payments at ~~months~~fiscal ofyear ~~November~~ended ~~and~~March ~~December~~31, of2009, ~~2005~~were ~~and~~$4,500 ~~January~~per ~~2006,~~month ~~the~~and ~~cost~~are ~~was~~due ~~$1,500 per~~on a month-to-month basis. ~~Starting~~We ~~February~~also ~~2006,~~have ~~rental~~two ~~payments~~leases ~~increased~~related to ~~$2,000~~corporate ~~and~~housing for ~~will be~~UK ~~due~~based officers while periodically working at the corporate office, one on a month-to-month basis and one with a remaining 4-month lease respectively, with $1,760 and $1,800 due per month.

We believe that we have satisfactory title to the properties in which we may own an interest and used in our business, subject to liens for taxes not yet ~~payable~~paid, liens incident to minor encumbrances and easements and restrictions that do not materially detract from the value of these properties, our interests in these properties, or the use of these properties in our business. We believe that our properties are adequate and suitable for us to conduct business in the future.

Oil and Gas Reserves

The March 31, ~~2006~~2009 proved reserve estimates presented in this ~~document~~Annual Report were ~~prepared~~ prepared by Ancell Energy Consulting, Inc. (“Ancell”). The estimates of quantities of proved reserves below were made in accordance with the definitions contained in SEC Regulation S-X, Rule 4-10(a). For additional information regarding estimates of proved reserves, the preparation of such estimates by Ancell and other information about our oil and natural gas reserves, see Item 8. ~~Consolidated~~7 ~~Financial~~“Management’s Discussion ~~Statements~~ and ~~Supplementary Data, Supplemental~~Analysis ~~Oil~~of Financial Condition and ~~Gas~~Results ~~Information~~ of Operations.” Our reserves are sensitive to commodity prices and their effect on economic ~~producing~~production rates. Our estimated proved reserves are based on oil and gas spot market prices in effect for the periods presented in this report on the last trading day of March ~~2006~~2009, ~~2005~~2008 and ~~2004~~2007, respectively. There are a number of uncertainties inherent in estimating quantities of proved reserves, including many factors beyond our control, such as commodity pricing. Therefore, the reserve information in this ~~Form~~Annual ~~10-K~~Report represents only estimates. ~~Reserve~~Reservoir engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact manner. The accuracy of ~~any~~ any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates of different engineers may vary. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revising the original estimate. Accordingly, initial reserve estimates are often different from the quantities of oil and natural gas that are ultimately recovered. The meaningfulness of such estimates depends primarily on the accuracy of the assumptions upon which they were based. Except to the extent we acquire additional properties containing proved reserves or conduct successful exploration and development activities or both, our proved reserves will decline as reserves are produced.

At March 31, ~~2006~~2009, our estimated total proved oil and natural gas reserves were approximately 5987.~~471~~703 ~~Mboe~~MBoe, consisting of 3520.~~401~~967 thousand barrels of oil (MBbls) and ~~144~~400.~~421~~414 million cubic feet (~~Mcf~~MMcf) of natural gas. Approximately 3070.~~518~~879 ~~Mboe~~MBoe or 5180.38% of our proved reserves were classified as proved developed. producing. We ~~focus on maintaining~~aim to maintain a portfolio of long-lived, lower risk reserves along with ~~shorter~~ shorter lived, higher margin reserves. We believe that ~~this~~a balanced reserve mix ~~provides~~will provide a diversified cash flow foundation to ~~fund~~contribute ~~our~~to funding our development and exploration drilling ~~program~~programs.

The following table presents certain information as of March 31, ~~2006~~2009, and for our reserves and properties all located onshore in the United States. Shut-in wells currently not capable of production are excluded from the producing well information.

							South
In MBoe:		Kansas				Louisiana			Texas		Total
In Mboe:	Kansas			Louisiana			Texas		Total
Proved Reserves at Year End
Proved Reserves at Year End
Developed			11.046				--			59.833		70.879
Developed		18.436			12.082			-		30.518
Undeveloped			--				--			16.824		16.824
Undeveloped		6.459			-			22.494		28.953
Total			11.046				--			76,657		87.703
Total		24.895			12.082			22.494		59.471
Gross Wells (1)			29.000				1.000			8.000		38.000
Gross Wells (1)		23.0000			1.0000			1.0000		25.0000
Net Wells (1)			1.3725				0.1250			1.4688		2.9663
Net Wells (1)		1.1500			0.1250			0.1250		1.4000

(1) ~~The~~Gross ~~term~~wells ~~net~~or asacreage ~~used~~means ~~throughout~~the ~~this~~total ~~document~~wells ~~refers~~or toacreage ~~amounts~~in ~~that~~which ~~include~~a ~~only~~working ~~acreage~~interest ~~or production that~~ is owned ~~by the Company and produced to its interest~~, ~~less royalties~~ and ~~production~~net ~~due~~wells toor ~~others.~~acreage ~~Gross~~means ~~Wells~~the ~~represents~~sum of the ~~Operators~~fractional working ~~interest~~interests ~~and~~owned ~~Net~~in ~~Wells~~gross ~~represents~~wells ~~our~~or ~~working~~acreage, ~~interest~~as ~~share~~the ofcase ~~each~~may ~~well~~be.

2418

The oil reserves shown include crude oil and condensate. Oil volumes are expressed in barrels (Bbl) or ~~thousands~~thousand barrels (~~MBbl~~MBbls); a barrel is equivalent to 42 United States gallons. Gas volumes are expressed in thousands of standard cubic feet (Mcf) at the contract temperature and pressure bases. The term ~~Mboe~~MBoe which is defined as ~~thousand~~thousands of barrels of equivalent oil is also used and is calculated by converting gas volumes to oil volumes at the ratio of 6:1.

The estimated reserves and future revenue shown in ~~this~~our reserve report are for proved developed producing, proved ~~developed~~behind ~~non-producing,~~pipe and proved undeveloped reserves. In accordance with SEC guidelines, our estimates do not include any probable or possible reserves, which may exist for these properties. This report does not include any value, which could be attributed to interests in undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated.

This table above is for properties located in ~~Seward~~Stafford (and Barton Counties in Kansas), ~~Walker~~Calcasieu #1Parish (in Louisiana) and Brazoria, Matagorda, Wharton, ~~Vieman~~Nacogdoches, #1Colorado, (Lavaca, and Victoria Counties in Texas).

Future gross revenue to ~~Index~~our interest is prior to deducting state production taxes and ad valorem taxes. Future net revenue is calculated after deducting these taxes, ~~future~~ future capital costs, and operating expenses but before consideration of federal ~~income~~ income taxes; future net revenue for those properties, ~~after~~is calculated after deducting net abandonment costs. In accordance with SEC guidelines, the future net revenue has been discounted at an annual rate of 10% ~~percent~~ to determine its “present worth.” The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the properties.

Oil prices used in this report are based on the March 31, ~~2006~~2009 oil price received at of various points and averaged $5944.6463 per barrel. ~~Gas~~Natural gas prices used in this report are based on a March 31, ~~2006~~ 2009, NYMEX spot market price ofand averaged $73.21 98 per ~~MMBTU~~Mcf, adjusted by lease for energy content, transportation fees, and regional price differentials. Oil and natural gas prices are held constant in accordance with SEC guidelines.

Lease and well operating costs are based on operating expense records of Index. For non-operated properties, these costs include the per-well overhead expenses allowed under joint operating agreements along with costs estimated to be incurred at and below the district and field levels. As requested, lease and well operating costs for the operated properties include only direct lease and field level costs. For all properties, headquarters general and administrative overhead expenses of Index are not included. Lease and well operating costs are held constant in accordance with SEC guidelines. Capital costs are included as required for workovers, new development wells, and production equipment.

Productive Wells and Acreage

As of March 31, ~~2006~~2009, we had 25interests in 38 gross productive wells (12.496625 net ~~productive~~ productive wells). Our oil (only) wells totaled 2530 gross productive wells and 1.4975 net productive oil wells, our gas (only) wells totaled 5 gross productive wells and 1.42000 net productive oil wells) and our ~~gas~~mixed oil and gas wells totaled 03 gross and 0.26875 net ~~productive~~mixed oil and gas productive wells.

Acreage

We“Gross” ~~own interest~~represents inthe ~~developed~~total ~~and~~number ~~undeveloped~~of ~~oil~~acres ~~and~~or ~~gas~~wells ~~acreage~~ in ~~the~~which ~~locations~~a working interest is ~~set forth~~owned and in ~~the~~which ~~table~~we ~~below~~own a working interest. “Net” ~~These~~represents ~~ownership~~our proportionate ~~interests~~working ~~generally~~interest ~~take~~resulting from our ownership in the ~~form~~gross acres ~~of working~~or ~~interests~~wells. Productive wells are wells in ~~oil~~which ~~and~~we ~~gas~~have ~~leases~~a orworking ~~licenses~~interest and that ~~have~~are ~~varying~~capable ~~terms~~of producing oil or natural gas. The following table ~~presents~~sets aforth our ~~summary~~interest ofin ~~our~~undeveloped acreage and ~~interests~~developed acreage in which we own a working interest as of March 31, ~~2006:~~ 2009.

Developed Acreage(1)

Undeveloped Acreage(1)

Total Acreage(1)

Developed Acreage

Undeveloped Acreage

Total Acreage

State

~~Gross~~

Gross

~~Net~~

~~Gross~~

Net

~~Net~~

~~Gross~~

Gross

~~Net~~

Net

Gross

Net

Kansas

~~3,550.88~~

~~171~~3,654.5800

~~4878.80~~

40168.7514

~~8,429.68~~

~~212~~1,090.3330

58.83

4,744.30

226.97

Louisiana

~~350.00~~

31132.9900

-16.53

~~350.00~~

~~31.99~~—

—

132.00

16.53

Texas

-1,917.02

~~1,035.00~~

78205.5152

~~1,035.00~~

7821,645.5113

1,750.26

23,562.15

1,955.78

Total Acreage

~~3,900.88~~

~~203~~5,703.5702

~~5,913.80~~

~~119~~390.2519

~~9,814.68~~

~~322~~22,735.8343

1,809.09

28,438.45

2,199.28

~~(1) The term Gross Acres represents the Operators interest in acreage and Net Acreage represents acreage to our interest, less royalties and production due to others for each well.~~19

25 The following is the expiration of the undeveloped acreage by calendar year of expiration:

The following is the expiration of the undeveloped acreage by year of expiration:

	2009				2010				2011				Thereafter

	Gross		Net		Gross		Net		Gross		Net		Gross		Net

Undeveloped Acreage		5,823.31		724.17		16,896.54		1,083.21		15.58		1.71		--		--

	2006		2007		2008		Thereafter
	Gross	Net	Gross	Net	Gross	Net	Gross	Net
Undeveloped Acreage	1,322.00	11.10	4,511.80	107.48	80.00	0.67	-	-

The majority of our gross undeveloped acreage covers our Alligator Bayou prospect in Texas, with renewal principally due in 2010. A decision to maintain those leases will depend in part on the results of our Armour Runnells well, the first well drilled on the prospect and currently awaiting the start of phase 2 testing operations. Our largest net undeveloped acreage position is on the Supple Jack Creek prospect area, on which the majority of those leases are due to expire later in 2009. A decision on those leases will depend in part on the testing results of the HNH Gas Unit 1 well, currently suspended prior to testing; however it is unlikely these leases will be materially retained. Our operator is currently considering development drilling plans on the Garwood prospect, on which we hold approximately 2,700 gross undeveloped acres and a 5% WI. Our ability to participate in further development in these properties will depend on our ability to acquire sufficient funds to do so or we may be forced to go “non-consent.”

We account for our oil and natural gas producing activities using the full cost ~~method~~ method of ~~accounting~~ ~~as prescribed by the SEC~~accounting. Accordingly, all costs incurred in the acquisition, exploration, and development of proved oil and natural gas properties, ~~including~~ including the costs of abandoned properties, dry holes, geophysical costs, and ~~annual~~ annual lease rentals are capitalized. All general corporate costs are expensed as as incurred. Sales or other dispositions of oil and natural gas properties are accounted for as adjustments to capitalized costs, with no gain or loss recorded unless the ratio of cost to proved reserves would significantly change. Depletion of evaluated oil and natural gas properties is computed on the units of production method based on proved reserves. The net capitalized costs of evaluated oil and natural gas properties are subject to a full cost ceiling test.

Capitalized costs of our evaluated and unevaluated properties at March 31, ~~2006~~2009, ~~2005~~2008 and ~~2004~~2007 are summarized as follows:

	March 31,	~~March 31,~~
		2006		2005			2004
	2009			2008				2007
Capitalized costs:
Evaluated properties	$	722,056	$	334,080		$	148,691
Proved and evaluated properties	$	4,878,182		$	11,181,430			$	3,254,211
Unevaluated properties		356,729		76,529			189,777
Unproved and unevaluated properties		4,878,940			2,821,271				1,927,776
		1,078,785		410,609			338,468
		9,757,122			14,002,701				5,181,987
Less accumulated depreciation and depletion		~~127~~3,493,586		~~62,275~~	1,407,610		~~26,121~~		315,937
	$	~~951~~6,~~199~~263,536	$	~~348,334~~$	12,595,091	$	~~312,347~~	$	4,866,050

Production

Our oil and gas production volumes and average sales price for the twelve months ended March 31, ~~2006~~2009, ~~2005~~2008 and ~~2004~~2007, respectively, are as follows:

	Years Ended March 31,	~~Years Ended March 31,~~
		2006		2005		2004
	2009		2008			2007
Gas production (Mcf)		-		-		-
Gas production (MMcf):		237.381		126.888			8.4900
Oil production (MBbl)		38.42216		27.07478		~~1.21~~	6.660
Equivalent production (Mboe)		3.42		2.07		1.21
Equivalent production (MBoe)		47.779		28.626			8.075
Average price per unit:
Gas (per Mcf)	$	-8.79	$	-8.21	$	-$	6.61
Oil (per Bbl)	$	5590.8931	$	4288.6469	$	~~30.49~~$	60.20
Equivalent (per boe)	$	55.89	$	42.64	$	30.49
Equivalent (per Boe)	$	59.20	$	59.58		$	56.60
Average net realized price	$		$		$

The Company has not entered into any derivative contracts for any purpose from the period of inception through March 31, 2006

Drilling Activity

The table below sets forth the results of our drilling activities for the periods indicated:

	~~Years Ended March 31,~~	Years Ended March 31,
	2006				2005			2004
		2009						2008					2007
	~~Gross~~	Gross	~~Net~~		~~Gross~~Net		~~Net~~	Gross		~~Net~~	Net		Gross		Net
Gross Exploratory Wells:
Productive (1)		-		-	-		-	-		-
Productive			4.00			0.165			10.00			2.019		5.00		0.2150
Dry		-	1.00	-	-	0.094	-	-	3.00	-		0.150		4.00		0.6825
Total Exploratory		-	5.00	-	-	0.259	-	-	13.00	-		2.169		9.00		0.8975
Gross Development Wells:
Productive (1)		19.00		0.75	11.00		0.55	8.00		0.40
Productive			2.00			0.100			1.00			0.075		1.00		0.195
Dry		~~1.00~~	--	-	-	--	-	-	--	-		--		--		--
Total Development		~~20.00~~	2.00	~~0.75~~	~~11.00~~	0.100	~~0.55~~	~~8.00~~	1.00	~~0.40~~		0.075		1.00		0.195
Total Gross Wells:
Productive (1)		19.00		0.75	11.00		0.55	8.00		0.40
Productive			6.00			0.265			11.00			2.094		6.00		0.323
Dry		~~1.00~~	1.00	-	-	0.094	-	-	3.00	-		0.150		4.00		0.518
Total		~~20.00~~	7.00	~~0.75~~	~~11.00~~	0.359	~~0.55~~	~~8.00~~	14.00	~~.40~~		2.244		10.00		0.841

~~(1)~~Note: ~~Although~~Gross awells ~~well~~means ~~may be classified as productive upon completion, future production may deem~~ the ~~well~~total towells bein ~~uneconomical,~~which ~~particularly~~a ~~exploratory~~working ~~wells~~interest ~~where there~~ is noowned, ~~production~~and ~~history. The term~~ net aswells ~~used~~means ~~throughout~~the ~~this~~sum ~~document~~of ~~refers for Gross Wells represents~~ the ~~Operators~~fractional working ~~interest~~interests ~~and~~owned ~~Net~~in ~~Wells~~gross ~~represents our working interest share of each well~~wells.

2721

Present Activities

WeDuring ~~intend~~the year ended March 31, 2009, we reviewed and revised our original capital toexpenditure ~~implement~~budget and plans based on the liquidity issues discussed in this report. We are currently planning to make continuing capital expenditures ~~program~~on asthe Armour-Runnells ~~detailed~~well, inwith ~~“Item~~the 7objective -of achieving definitive test results. ~~Management’s~~Our ~~Discussion~~forward plan includes the potential drilling of second wells on the Garwood and ~~Analysis~~Alligator Bayou projects, together with potential 3D seismic acquisition and lease renewals on Alligator Bayou, and potential additional operations on the HNH Gas Unit well. We do not currently have sufficient funds to be able to commit to these expenditures, if proposed by our operators. We may also have some further small expenditures which may be incurred in Kansas. At the start of ~~Plan~~our current fiscal year commencing on April 1, 2009 we approved a provisional budget for the first quarter of ~~Operation”~~the fiscal year only, recognizing that we need to raise additional funds to be able to participate in new exploration activities. We are currently considering a budget for the second fiscal quarter and beyond, which is dependent on various circumstances and factors, including our ability to raise new funds.

Delivery Commitments

At March 31, ~~2006~~2009, we had no delivery commitments with our purchasers.

Item 3. Legal Proceedings.

From time to time, we may be a defendant and plaintiff in various legal proceedings ~~arising~~ arising in the normal course of our business. We are currently not a party to any material pending legal proceedings or government actions, including any bankruptcy, receivership, or similar proceedings. In addition, management is not aware of any known litigation or liabilities involving the operators of our properties that could affect our operations. Should any liabilities be incurred in the future, they will be accrued based on management’s best estimate of the potential loss. As such, there is no adverse effect on our consolidated financial position, results of operations or cash flow at this time. Furthermore, ~~Management~~management ~~of the Company~~ does not believe that there are any proceedings to which any director, officer, or affiliate of the Company, any owner of record of the beneficially or more than five percent of the common stock of the Company, or any associate of any such director, officer, affiliate of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company.

~~Item~~For the 4month of June 2008 and for the first 18 days of July 2008, Eaglwing, L.P. purchased ~~Submission~~substantially Ofall ~~Matters~~of Tothe Acrude ~~Vote~~oil Ofproduction ~~Security~~of ~~Holders~~certain properties in Barton and Stafford Counties, Kansas, in which Index has a working interest. Our operator then ceased selling crude oil production to the entity. As publicly reported, on July 22, 2008, SemCrude, L.P. ("SemCrude") and certain of its affiliates, including Eaglwing, L.P. ("Eaglwing"), voluntarily filed for bankruptcy in the United States Bankruptcy Court for the District of Delaware. Index has not received payment for such sales. Recovery on such accounts receivable will depend on, among other things, the bankruptcy process governing SemCrude and Eaglwing, a summary of which follows.

NoBy demand ~~matters~~for ~~were~~Reclamation ~~submitted~~of Goods dated July 25, 2008, our operator demanded the return of all such oil received by Eaglwing for the period from June 7, 2008 through July 21, 2008. The demand was made by our operator for itself and as agent for all interest owners, including Index USA, on whose behalf our operator sold oil to Eaglwing. Subsequently, Index executed a ~~vote~~Letter of Authorization to our ~~stockholders~~operator ~~during~~to act as its agent and attorney-in-fact to take certain measures on Index’s behalf in, and in connection with, the ~~fourth~~bankruptcy proceedings. ~~quarter~~We have recently been advised of a decision that our secured claim, for 20 days of oil sales immediately preceding the ~~fiscal~~bankruptcy ~~year~~filing ~~ended~~by Eaglwing, ~~March~~is 31not impaired. We are awaiting details of the timing and amount of this potential recovery, ~~2006~~and which may be received before the end of 2009 calendar year.

28Item 4. Submission of Matters to a Vote of Security Holders.

By proxy statement approved by our Board of Directors, we solicited votes for three proposals during the fourth quarter of our fiscal year ended March 31, 2009. The three proposals presented by the Company to stockholders were approved during the Company's reconvened annual general meeting on January 27, 2009. The annual general meeting was originally held on December 9, 2008, and was adjourned to January 27, 2009 for lack of a quorum.

A quorum of stockholders present in person or by proxy approved the re-election of four directors. Board members re-elected were Daniel L. Murphy, chairman, Lyndon West, Andrew Boetius, and David Jenkins, non-executive director. The Company has no other Board members. Stockholders also ratified the 2008 Stock Incentive Plan and the appointment of RBSM LLP as independent auditors for the fiscal year ending March 31, 2009.

The vote tallies were as follows:

(1) Election of nominees to the Board of Directors of the Company.

	For		Withheld

Daniel L. Murphy		34,384,413		3,533,996
Lyndon West		35,282,239		2,636,170
Andrew Boetius		35,282,239		2,636,170
David Jenkins		35,282,239		2,636,170

(2) Ratification of appointment of RSBM LLP as the Company’s auditors for the fiscal year ending March 31, 2009.

For				Against				Abstain
	36,276,720				41,589				1,600,100

(3) Ratification of the 2008 Stock Incentive Plan.

For				Against				Abstain
	16,912,165				3,925,748				6,267,393

PART II

Item 5. Market For Registrant’s Common Equity, Related Stockholder Matters ~~And~~and Issuer Purchases of Of Equity Securities.

~~The~~Market ~~Company's Common Stock has been quoted on the OTC Bulletin Board under the symbol IXOG.OB since December 16, 2005.~~Information

~~The~~Our ~~following~~common ~~sets~~stock ~~forth~~has ~~the~~been ~~range~~quoted ofon the ~~closing~~OTC ~~bid~~Bulletin ~~prices~~Board ~~for~~under the ~~Company's~~symbol IXOG.OB ~~Common~~since ~~Stock for the period starting~~ December 16, 2005 ~~through June 23, 2006~~. Such prices represent inter-dealer quotations, do not represent actual transactions, and do not include retail mark-ups, markdowns or commissions. Such prices were determined from information provided by a majority of the market makers for the Company's Common Stock.

2006 Fiscal Year	High Close		Low Close
Third Quarter, 2006		-		-
Fourth Quarter, 2006	$	1.66	$	0.97
2007 Fiscal Year
First Quarter, 2006	$	1.65*	$	1.30*
*As of July 6, 2006

The following sets forth the high and low bid prices for our common stock for the quarters in the period starting April 1, 2007, through March 31, 2009. Such prices represent inter-dealer quotations, do not represent actual transactions, and do not include retail mark-ups, markdowns or commissions. Such prices were determined from information provided by a majority of the market makers for our common stock.

The shares quoted are subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the Exchange Act"), commonly referred to as the "penny stock" rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15(g)9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

	High		Low

2008 Fiscal Year
June 30, 2007		1.50		0.78
September 30, 2007		1.07		0.70
December 31, 2007		0.84		0.49
March 31, 2008		0.64		0.47

2009 Fiscal Year
June 30, 2008		0.87		0.54
September 30, 2008		0.64		0.24
December 31, 2008		0.32		0.07
March 31, 2009		0.44		0.07

The ~~Commission~~shares ~~generally~~quoted ~~defines~~are ~~penny stock to be any equity security that has a market price less than $5.00 per share,~~ subject to ~~certain~~the ~~exceptions.~~provisions ~~Rule 3a51-1~~of ~~provides~~Section ~~that~~15(g) ~~any equity security is considered to be a penny stock unless that security is: registered~~ and ~~traded~~Rule on15g-9 ~~a national securities exchange~~of ~~meeting specified criteria set by~~ the ~~Commission;~~Securities ~~authorized~~Exchange ~~for~~Act ~~quotation on The~~of ~~NASDAQ~~1934, ~~Stock~~as ~~Market;~~amended ~~issued by a registered investment company; excluded from~~ (the ~~definition~~Exchange ~~on the basis of price (at least $5.00 per share~~Act”), ~~or the~~commonly ~~registrant's~~referred ~~net~~to ~~tangible~~as ~~assets; or exempted from~~ the ~~definition~~“penny bystock” ~~the Commission~~rule. ~~Trading~~Section in15(g) ~~the~~sets ~~shares~~forth ~~is subject to additional sales practice~~certain requirements onfor ~~broker-dealers~~transactions ~~who~~in ~~sell~~ penny stocks toand ~~persons~~Rule ~~other than~~15(g)-9(d)(1) ~~established~~incorporates ~~customers~~the ~~and~~definition ~~accredited~~of ~~investors,~~penny ~~generally~~stock ~~persons~~as ~~with~~that ~~assets~~ used in ~~excess~~ ofRule $3a51-1~~,000,000~~ orof ~~annual income exceeding $200,000, or $300,000 together~~the ~~with~~Exchange ~~their spouse~~Act.

~~For~~The ~~transactions~~Commission ~~covered~~generally bydefines ~~these~~penny ~~rules,~~stock ~~broker-dealers~~to ~~must~~be ~~make~~any aequity ~~special suitability~~security ~~determination~~that ~~for~~has ~~the~~a market ~~purchase~~price ofless ~~such~~than ~~securities~~$5.00 ~~and~~per ~~must~~share, ~~have received~~subject ~~the~~to ~~purchaser's~~certain ~~written~~exceptions. ~~consent~~Rule 3a51-1 toprovides ~~the~~that ~~transaction~~any ~~prior~~equity tosecurity ~~the purchase.~~is ~~Additionally,~~considered ~~for~~to ~~any~~be ~~transaction involving~~ a penny stock~~, unless~~ ~~exempt,~~unless ~~the~~that ~~rules~~security ~~require~~is: ~~the~~registered ~~delivery,~~and ~~prior~~traded toon ~~the~~a ~~first~~national ~~transaction,~~securities ofexchange ~~a risk~~meeting ~~disclosure~~specified ~~document~~criteria ~~relating~~set toby the ~~penny~~Commission; ~~stock~~issued ~~market.~~by Aa ~~broker-dealer~~registered ~~also~~investment ~~must~~company; ~~disclose~~excluded from the ~~commissions~~definition ~~payable~~on tothe ~~both~~basis ~~the~~of ~~broker-dealer~~price ~~and~~(at ~~the~~least ~~registered~~$5.00 ~~representative,~~per ~~and~~share) ~~current~~or ~~quotations~~the ~~for~~registrant’s ~~the~~net ~~securities.~~tangible ~~Finally, the~~assets; ~~monthly~~or ~~statements~~exempted ~~must~~from bethe definition ~~sent~~by ~~disclosing~~the ~~recent~~Commission. ~~price~~Trading ~~information~~in ~~for~~ the ~~penny~~ ~~stocks~~shares ~~held~~is insubject ~~the~~to ~~account~~additional sales ~~and~~practice ~~information~~requirements on ~~the~~broker-dealers ~~limited~~who ~~market~~sell in penny stocks. ~~Consequently,~~to ~~these~~persons other ~~rules~~than ~~may~~established ~~restrict~~customers ~~the~~and ~~ability~~accredited ofinvestors, ~~broker~~generally ~~dealers~~persons ~~to trade~~with ~~and/or~~assets ~~maintain a market~~ in ~~the~~excess ~~company’s~~of ~~common~~$1,000,000 ~~stock~~or ~~and~~annual ~~may~~income ~~affect~~exceeding ~~the~~$200,000, or ~~ability~~$300,000 oftogether ~~stockholders~~with ~~to sell~~ their ~~shares~~spouse.

For transactions covered by these rules, broker-dealers must make a special suitability determination for the purchase of such securities and must have received the purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market. A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for the securities. Finally, the monthly statements must be sent disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks. Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.

Holders

As of ~~July~~March 631, ~~2006~~2009, the approximate number of our stockholders of record of ~~the Common~~our ~~Stock~~common ofstock ~~the Company~~ was ~~215~~194.

Dividends

We have not declared any dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, if any, to generate growth. The payment by us of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. There are no material restrictions in our certificate of incorporation or bylaws that restrict us from declaring dividends.

Securities ~~authorized~~Authorized for ~~issuance~~Issuance ~~under~~Under ~~equity~~Equity ~~compensation plans~~Compensation Plans

The following table shows information with respect to each equity compensation plan under which ~~the~~our ~~Company’s~~ common stock is authorized for issuance as ~~January~~of 20March 31, ~~2006.~~ 2009:

Plan category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) *

(a)

~~(b)~~

(cb)

(c)

Equity compensation plans approved by security holders

~~-0-~~

4,952,526

~~$ -0-~~

~~-0-~~$

0.37

5,441,037

Equity compensation plans not approved by security holders

~~4,577,526~~

-0-

~~0.35~~

~~647,474~~$

-0-

Total

~~4,577,526~~

4,952,526

~~0.35~~

~~647,474~~$

0.37

5,441,037

~~Recent~~* Based ~~Sales~~on 5,500,000 shares of ~~Unregistered~~common ~~Securities~~stock reserved under the shareholder approved 2008 Stock Incentive Plan, less cumulative issuances to date of 58,963 shares, and assuming no shares are carried forward from the 2006 Incentive Stock Option Plan.

~~In March 2004~~58,963 shares ~~the~~in ~~Company~~aggregate ~~issued~~were awarded as a ~~total~~stock ofaward 1under the 2008 Stock Incentive Plan to Daniel Murphy,~~000~~ Lyndon West,~~000~~ ~~shares~~Andrew Boetius and David Jenkins in lieu of reduced $0salary for the month of December 2008.~~001~~ ~~par~~Equivalent ~~value~~arrangements for ~~common~~reduced salaries and benefits for these individuals continued for the months of January 2009 through May 2009, with stock asawards ~~founder's~~due following the end of the period. Under a provisional calculation an aggregate of 434,461 shares are issuable for the period January to ~~Evon~~March Au2009, ~~David~~and ~~Knapfel~~a further 532,945 for the months of April and AuMay ~~E-Mun~~2009, ~~all~~and ofassuming the Company does not withhold any ~~whom~~shares otherwise distributable in order to satisfy any tax obligations with ~~were~~respect ~~officers~~to ~~and~~the ~~directors~~issuance of ~~Thai~~such shares. ~~Both~~These ~~Evon~~awards Auare ~~and~~subject ~~David~~to ~~Knapfel~~approval ~~received~~of ~~400,000~~the ~~shares~~Board ~~each,~~of Directors and Auhave ~~E-Mun~~not ~~received~~been ~~200,000~~made ~~shares~~as of date of this report. ~~The~~All awards ~~shares~~are ~~were~~to be made under the shareholder approved 2008 Stock Incentive Plan. ~~issued~~These inshares ~~exchange~~are not included for ~~cash~~the inpurpose of the ~~aggregate~~figures ~~amount~~in ofcolumn ~~$5,000.~~(c) in the table above.

2925

OnUnregistered ~~January~~Sales ~~20, 2006 the Company completed a private placement for 8,533,333 shares~~ of ~~common~~Equity ~~stock~~Securities ofand ~~the~~Use ~~Company at a price~~ of ~~$0.60 per share for an aggregate sum of $5,120,000.~~ Proceeds

InIssuance ~~addition, on January 20, 2006, the Company issued an aggregate~~ of ~~22,615,552 shares~~Unregistered of common stock of the Company and 1,092,676 warrants to subscribe for Common Stock of the Company as consideration for the acquisition of Index Ltd.’s outstanding equity stock and warrants from the Index Ltd.’s Stockholders. As part of the Acquisition, an additional 759,448 shares of Common Stock were reserved for issuance by the Company. Securities

All of the above offerings and sales were deemed to be exempt under rule 506 of Regulation D and/or Section 4(2) of the Securities Act of 1933, as amended. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made to a limited number of persons, all of whom were accredited investors, business associates of Index Oil and Gas Inc. or executive officers of Index Oil and Gas Inc., and transfer was restricted by Index Oil and Gas Inc. in accordance with the requirements of the Securities Act of 1933. In addition to representations by the above-referenced persons, we have made independent determinations that all of the above-referenced persons were accredited or sophisticated investors, and that they were capable of analyzing the merits and risks of their investment, and that they understood the speculative nature of their investment. Furthermore, all of the above-referenced persons were provided with access to our Securities and Exchange Commission filings.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

~~ITEM~~Purchases 6.of ~~SELECTED~~Equity ~~HISTORICAL~~Securities ~~FINANCIAL~~by ~~DATA~~the Issuer and Affiliated Purchasers.

~~The following table presents selected historical financial data derived from our consolidated financial statements~~None. ~~The following data is only a summary and should be read with our historical consolidated financial statements and related notes contained in this document.~~

	Year ended March 31,
	2006				2005			2004			2003
Income Statement Data:
Oil and gas sales		$	191,114		$	88,176		$	36,989		$	-
Loss from operations		$	(1,618,511	)	$	(416,348	)	$	(440,846	)	$	(2,713	)
Net loss		$	1,690,806		$	(422,027	)	$	(454,419	)	$	(2,713	)
Loss per share:
Basic and assuming dilution		$	(0.08	)	$	(0.04	)	$	(0.06	)	$	(0.00	)
Balance sheet data:
Working (deficit) capital		$	4,958,333		$	(264,979	)	$	(36,905	)	$	101,689
Total assets		$	6,516,287		$	415,562		$	595,532		$	320,880
Total long-term debt		$	-		$	-		$	-		$	-
Stockholders’ equity		$	5,885,959		$	75,240		$	275,362		$	101,689

Item 6. Selected Financial Data.

~~ITEM~~Not 7Applicable. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~The information in this report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995~~Item 7. This Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about themselves provided they identify these statements as forward looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements other than statements of historical fact made in this report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. Forward-looking statements reflect management Management’s ~~current expectations and are inherently uncertain. Our~~ ~~actual~~Discussion ~~results may differ significantly from management’s expectations as a result of many factors, including, but not limited to, the volatility in prices for crude oil~~ and ~~natural~~Analysis ~~gas, the timing~~ of ~~acquisitions,~~Financial ~~product~~Condition ~~demand, market competition, interruption in production,~~ and ~~the~~Results ~~success~~ of ~~waterflooding~~ ~~and enhanced oil recovery techniques~~Operations.

30Forward Looking Statements

~~You~~Please ~~should~~see ~~read~~page ~~the~~ii ~~following discussion and analysis in conjunction with the consolidated financial statements~~ of ~~Index~~this ~~Oil~~Annual &Report ~~Gas,~~for ~~Inc.~~“Information ~~and~~Regarding ~~subsidiaries and~~Forward ~~notes thereto, included herewith. This discussion should not be construed~~Looking ~~to imply~~Statements” ~~that~~appearing ~~the~~throughout ~~results~~this ~~discussed~~Annual ~~herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future~~Report. ~~Such discussion represents only the best present assessment of management.~~

Business Overview

~~Index Oil &~~For ~~Gas, Inc. (“Index” or “the Company”) is an independent oil and gas company~~this ~~engaged~~information inplease ~~the~~see ~~acquisition,~~Part ~~development~~1, ~~production~~Item ~~and~~1 ~~exploration of oil and gas properties located in North America. In March 2004, a company named Thai One On, Inc. (~~“~~Thai”)~~Business ~~was incorporated under the laws of the State of Nevada. Thai then acquired a wholly-owned subsidiary, Thai Pasta Enterprise Sdn. Bhd., a privately-held Malaysian company (“the Subsidiary~~Overview”~~), from an officer and director of Thai~~. The Subsidiary commenced operations as a restaurant operator in June 2004, but subsequently ceased operations in the fourth quarter of 2005. The Subsidiary then sold a portion of its surplus assets, leaving it with no significant assets. In November 2005, a Letter of Intent Agreement was entered into for the proposed acquisition (“the Letter of Intent”) of all outstanding shares of the Index Ltd.’s equity stock by the Company. Subsequently, Thai changed its name from Thai One On Inc. to Index Oil & Gas, Inc. Index had a total of 75,000,000 authorized shares with a par value of $0.001 per share and 33,220,000 shares issued and outstanding as of December 31, 2005. In approximately mid January, 2006, Thai retired 10,128,333 shares of stock leaving 23,091,667 shares outstanding at January 20, 2006. Index’s year end for accounting purposes was December 31, 2005.

OnResults ~~January 20, 2006, the stockholders~~ of Index Oil & Gas Limited ("Index Ltd.") entered into Acquisition and Share Exchange Agreements. As a result of the acquisition, there was a change in control of the public entity. In accordance with Statement of Financial Accounting Standards 141, the Company is deemed to be the acquiring entity. The transaction will be accounted for as a recapitalization of the Company (reverse acquisition). Operations

~~Effective~~Year ~~with~~Ended ~~the~~March ~~Agreement~~31, ~~all~~2009 ~~previously~~Compared outstanding common stock owned by the Company’s stockholders were exchanged for an aggregate of 23,375,000 shares of Index common stock, $0.001 par value (“the Common Stock”) of which 759,448 shares of Common Stock were reserved for issuance by the Company and 1,092,676 warrants to ~~purchase~~Year ~~shares~~Ended ofMarch ~~Common Stock of Index. The value of the stock that was issued was the historical cost of Index's net tangible assets of $1~~31,~~578~~ ~~which did not differ materially from their fair value.~~ 2008

~~Index~~We had a ~~Ltd~~net loss of $9.4 ~~was~~million ~~incorporated~~for onthe ~~February~~fiscal ~~21,~~year ~~2003~~ended inMarch ~~the~~31, ~~United~~2009 ~~Kingdom.~~compared ~~The~~to ~~Company~~a ~~invested~~net inloss aof 5%$1.9 ~~working~~million ~~interest~~for inthe ~~oil~~fiscal ~~and~~year ~~gas~~ended ~~leases~~March ~~covering~~31, ~~approximately~~2008. The ~~8,500~~significant ~~acres~~change ~~located~~ in ~~Stafford~~our ~~County,~~results ~~Kansas~~over ~~(“Kansas~~the ~~properties”)~~two inperiods ~~July 2003.~~is Inprimarily ~~August~~the ~~2003,~~result of ~~Index~~our ~~Oil~~approximately &$7.0 ~~Gas~~million ~~USA~~impairment charge, ~~LLC~~which ~~(“Index~~we ~~USA”)~~anticipate ~~was formed and~~taking upon the ~~Kansas~~completion ~~properties~~of ~~were~~our ~~transferred~~audited ~~into~~financial ~~this~~statements ~~wholly~~and ~~owned~~which ~~subsidiary.~~is ~~The~~the result ~~Company~~primarily isof ~~participating~~the inrecent ansevere ~~ongoing~~decrease ~~drilling~~in ~~program~~commodity onprices, ~~these~~together ~~properties.~~with ~~Additionally,~~reserve ~~Index~~write ~~Investments~~downs. Revenue ~~North~~increased ~~America~~by ~~Inc~~$1.1 ~~(“Index~~million ~~Investments”)~~while ~~and~~operating ~~Index~~income ~~Offshore~~decreased ~~LLC~~by ~~(“Index~~$7.3 ~~Offshore”)~~million, awhich ~~wholly~~included ~~owned~~general ~~subsidiary~~and ~~of Index~~administrative ~~Investments,~~costs ~~were~~of ~~both~~$2.4 ~~formed~~million, inwhich ~~July~~was ~~2004~~relatively ~~for future potential investments~~unchanged, ~~in the~~increased depletion of $1.0 ~~United~~million ~~States~~to $2.1 ~~The Company comprises a United Kingdom holding company~~million, ~~which provides~~ ~~management services~~ and ~~United States operating subsidiaries, which~~an ~~are engaged~~increased inimpairment ~~the~~of ~~exploration~~$7.0 ~~for,~~million ~~development~~, ~~production~~ and ~~sale~~lower ofinterest ~~oil~~income ~~and~~on capital ~~natural~~previously ~~gas.~~raised Weand ~~have~~used ~~increased~~in our ~~proved~~operations. The ~~reserves~~following ~~and production principally~~table ~~through~~summarizes ~~acquisitions~~key initems ~~conjunction~~of ~~with~~comparison anand ~~active~~their ~~drilling~~related ~~program.~~increase ~~The~~(decrease) ~~Company~~for the ~~does~~fiscal ~~not~~years ~~currently~~ended ~~operate~~March ~~any~~31, of2009 ~~its properties~~ and ~~sells its oil production to domestic crude oil purchasers~~2008.

On January 20, 2006 the entire issued share capital of Index Ltd. was acquired by Index Oil and Gas Inc. (“Index”), together with the raising of $5,120,000 of new equity capital for investment in oil and gas projects developed by the Company and for operating and working capital purposes.

	Years Ended March 31,						Increase
	2009			2008			(Decrease)

Oil and gas sales	$	2,828,751		$	1,705,593		$	1,123,158
Production expenses:
Lease operating		520,434			188,521			331,913
Taxes other than income		183,748			114,952			68,796
General and administrative:
General and administrative		2,218,695			2,155,018			63,677
Stock-based compensation		211,748			302,911			(91,163	)
Depletion — Full cost		2,085,976			1,091,673			994,303
Depreciation — Other		8,506			4,556			3,949
Impairment		7,002,472			--			7,002,472
Interest expense (income) and other		(24,207	)		(205,608	)		181,401
Income tax benefit (provision)		--			--			--

Net income (loss)	$	(9,378,621	)	$	(1,946,430	)	$	(7,432,191)


Production:
Natural Gas — MMcf		237.381			126.888			110.493
Crude Oil — MBbl		8.216			7.478			0.738
Equivalent — MBoe		47.779			28.626			19.153

Average price per unit:
Gas price per Mcf	$	8.79		$	8.21		$	0.58
Oil price per Bbl	$	90.31		$	88.69		$	1.62
Equivalent per Boe	$	59.20		$	59.58		$	(0.38)

Average cost per Boe:
Production expenses:
Lease operating	$	10.89		$	6.59		$	4.30
Taxes other than income	$	3.89		$	4.02		$	(0.13	)
General and administrative expense:
General and administrative	$	46.44		$	75.28		$	(28.84	)
Stock-based compensation	$	4.43		$	10.58		$	(6.15	)
Depletion expense	$	43.66		$	38.14		$	5.52

At March 31, 2006, our estimated total proved oil and gas reserves were approximately 59.471 Mboe, consisting of 35.401 thousand barrels of oil (MBbls) and 144.421 million cubic feet (Mcf) of natural gas. Approximately 30.518 Mboe or 51.3% of our proved reserves were classified as proved developed. We focus on maintaining a portfolio of long-lived, lower risk reserves along with shorter lived, higher margin reserves. We believe that this balanced reserve mix provides a diversified cash flow foundation to fund our development and exploration drilling program.26

~~Our~~For the ~~financial~~year ~~results~~ended ~~depend~~March ~~upon~~31, ~~many factors~~2009, ~~particularly~~oil ~~the~~and ~~price~~natural ofgas ~~oil~~sales ~~and~~increased $1.1 million, ~~gas~~from ~~and~~the ~~our~~same ~~ability~~period in 2008, to ~~market~~$2.8 ~~our~~million. The increase for the year was primarily due to the increase in production volumes of 19.2 ~~Commodity~~MBoe ~~prices~~from ~~are~~28.6 ~~affected~~MBoe ~~by changes~~to 47.8 MBoe or approximately the whole $1.1 million increase. The increase in volumes ~~market~~of ~~demands,~~19.2 ~~which~~MBoe was ~~are~~primarily ~~impacted~~due byto ~~overall~~additional ~~economic~~volumes ~~activity,~~from Outlar of ~~weather~~9.9 MBoe, ~~pipeline~~Ducroz ~~capacity~~4.7 ~~constraints~~MBoe, ~~inventory~~Hawkins ~~storage~~3.8 ~~levels~~MBoe, ~~basis~~and Shadyside of 1.0 MBoe offset by ~~differentials~~Walker ~~and~~which ~~other~~decreased ~~factors~~1.6 AsMBoe aand ~~result,~~Schroeder wewhich ~~cannot~~decreased ~~accurately~~by ~~predict~~2.0 MBoe. The ~~future~~Cason wells also contributed 1.0 MBoe. Total oil ~~and~~production ~~gas~~was ~~prices,~~8.2 MBoe and ~~therefore,~~total wenatural ~~cannot~~gas ~~determine~~production ~~what~~was ~~effect~~237.4 MMcf. Additionally, ~~increases~~our orrevenue ~~decreases~~variance ~~will~~related ~~have~~to year-on-year price changes was a slight decrease with our ~~capital~~average ~~program~~price per Boe decreasing by $0.38, ~~production~~or 0.6%, in fiscal 2009 to ~~volumes~~$59.20 per Bbl from $59.58 per Bbl in fiscal 2008 and ~~future~~reflecting ~~revenues~~an increased proportion of natural gas volumes which had a lower energy equivalent value. This Inis ~~addition~~based toon ~~production~~weighted average gas volumes at an increased price of $8.79 per Mcf and ~~commodity~~weighted average oil volumes at an increased price per barrel of $90.31. We benefited from increased product prices, ~~finding~~in ~~and~~the ~~developing~~year ~~sufficient~~to ~~amounts~~March of31, 2009, both for oil and natural gas. However, ~~reserves~~our atproduction and sales mix has ~~economical~~switched ~~costs~~to ~~are~~become ~~critical~~predominantly natural gas comprised, and the year on year price increase on a Boe basis is less significant than the absolute price changes for each product, due to ~~our~~natural ~~long-term~~gas ~~success~~realizing a lower energy equivalent price compared to crude oil.

Depletion, depreciation and amortization (“DD&A”) expense increased $1.0 million from the same period in 2008 to $2.1 million for the fiscal year ended March 31, 2009. The increase is primarily due to increased production from the following wells; Ducroz, Shadyside, Hawkins, and Outlar, and an increase in the unit depletion cost rate. Depletion for oil and gas properties is calculated using the unit of production method, which essentially depletes the capitalized costs associated with the proved properties based on the ratio of production volume for the current period to total remaining reserve volume for the evaluated properties. On a per unit basis, DD&A expense increased from $6.38 per Mcfe to $7.31 per Mcfe.

~~Recent~~Ceiling ~~Developments~~test impairment expense was recorded for the fiscal year ended March 31, 2009 in the amount of $7.0 million. Quarterly, we assess the value of unamortized capitalized costs within our cost center over the discounted present value of cash flows associated with its reserves. Any excess requires an immediate write-down of our capital costs by this amount. During the fiscal year ended March 31, 2009, the excess of unamortized capitalized costs over the related cost ceiling limitation was $7.0 million due primarily to a full write-down of remaining reserves on Shadyside of approximately 542.8 Mmcfe, Friedrich of approximately 111.6 Mmcfe, Cason (3 wells) of approximately 67.8 Mmcfe, and Schroeder of approximately 47.8 Mmcfe and the effect of these write-downs on the present value ceiling in the ceiling test computation. Reserve reductions were partially offset by additions related to the Cochran well (174.5 Mmcfe). In addition, adjustments to the projected average prices for our oil and natural reserves, and which were used for the purposes of our ceiling tests, lead to a reduction from $11.93/Mcfe at March 31, 2008 to $4.81/Mcfe at March 31, 2009. The impact of this impairment charge is that our net loss for the fiscal year ended March 31, 2009 is substantially higher than any prior equivalent period. In addition the carrying amounts in our balance sheet at March 31, 2009 of oil and natural gas properties, total assets and total stockholders equity are all significantly reduced as a result of this $7.0 million charge.

WeOur major ~~have~~market risk exposure to inflation is in the pricing of our oil and natural gas ~~recently~~production. ~~completed~~Realized pricing is primarily driven by the ~~following~~prevailing ~~transactions:~~worldwide price for crude oil and spot market prices applicable to our U.S. natural gas production. Pricing for oil and natural gas production has been volatile and unpredictable for several years, and we expect this volatility to continue in the future. The prices we receive for production depend on many factors outside of our control. Based on average daily production for the years ended March 31, 2009 and 2008, our annual income before income taxes would change by approximately $24,000 and $12,000, respectively for each $0.10 per Mcf change in natural gas prices and approximately $8,000 and $7,000, respectively for each $1.00 per Bbl change in crude oil prices, excluding the effects of hedging activities, which we currently do not engage in.

~~Gulf~~Lease ~~Coast~~operating expenses increased approximately $0.3 million for the year ended March 31, 2009 as compared to the same period in 2008. The increase was primarily due to production from the following wells; Outlar, Shadyside, Ducroz and Hawkins. On a per unit basis, lease operating expenses increased by $4.30 per Boe to $10.89 per Boe in 2009 from $6.59 per Boe in 2009 due primarily to an increase in production volumes offset by industry-wide service costs associated with the overall increase in commodity prices.

InTaxes ~~the fourth~~other ~~quarter~~than ofincome ~~2006~~increased ~~fiscal~~$0.06 ~~year,~~million ~~the~~for ~~Company entered into~~ the ~~following agreements:~~year ~~(1)~~ended aMarch ~~Seismic~~31, ~~Reprocessing~~2009 ~~and Exploration Agreement with ADC~~as ~~Petroleum,~~compared ~~L.P.~~to ~~(“ADC”)~~the ~~covering~~same ~~prospective~~period ~~areas~~ in ~~the~~2008 USdue ~~Gulf Coast. The Agreement enables Index Inc~~ to ~~participate~~higher inoil ~~the~~and ~~reprocessing~~gas ofrevenues, anbut ~~area~~on ofa ~~up to~~per ~~226~~unit ~~square~~basis ~~miles~~decreased of$0.13 ~~existing~~per 3DBoe ~~land seismic data already available~~ to ~~ADC as a~~$3.89 ~~result~~per ~~of its participation in an agreement signed between ADC and two of its other industry partners (the "ADC Agreement")~~Boe. This ~~seismic~~was ~~data~~due ~~covers~~to our ~~prospective~~increased ~~areas~~production in the ~~Gulf~~State ~~Coast~~of ~~U.S.~~Texas, ~~throughout~~relative ~~Texas,~~to our Louisiana and Kansas ~~Mississippi~~wells. Production ~~The~~taxes ~~ADC~~are ~~Agreement~~generally ~~sets~~assessed ~~forth~~as ~~the~~a ~~rights~~percentage of ~~the parties in their~~ ~~joint~~gross ~~participation~~oil ~~of generating drilling prospects from such reprocessed data~~ and/or ~~allows~~natural ~~the~~gas ~~parties to jointly exploit the prospects generated~~sales.

~~Under~~General ~~the terms~~and ofadministrative ~~the ADC Agreement~~expenses, ~~the~~excluding ~~Agreement~~stock-based ~~provides~~compensation expense, for ~~Index's participation in two phases. Index has~~ the ~~right to inform ADC of its election to participate~~ ~~in a~~year ~~particular~~ended ~~project~~March no31, ~~later~~2009 ~~then~~was ~~the~~relatively ~~date~~unchanged ofat ~~(i)~~$2.2 5million ~~days~~compared ~~before the meeting date of the Operations Committee composed of the parties~~ to ~~the ADC Agreement~~ (the ~~"Committee")~~same atperiod ~~which~~in the Committee reviews the summary report for a particular project, or (ii) the date which is 15 days after ADC informs Index of the Committee's decision to designate a project as final for participation purposes2008.

~~Phase~~Stock-based ~~1 of~~compensation ~~the~~expense, ~~Agreement~~within ~~enables~~general ~~Index~~and toadministrative ~~participate~~expenses, inwas ~~the reprocessing of 105 square~~$0.2 ~~miles~~million offor ~~existing data in conjunction with~~ the ~~aforementioned~~year ~~experienced industry~~ended ~~partners~~March ~~already working with ADC. In addition~~31, ~~the~~2009 ~~Agreement~~as ~~gives Index~~compared ~~the right (but not the obligation)~~ to ~~participate~~$0.3 inmillion ~~any~~for ~~prospects~~the ~~generated~~year ~~from~~ended ~~this~~March ~~reprocessing~~31, up2008 tofor ~~an 18% working interest ("WI"). If Index elects to participate in~~ a ~~project~~net todecrease ~~an extent less than an undivided 18% WI, the portion not taken up by Index shall revert to ADC which will then be free either to dispose~~ of or$0.1 ~~participate~~million in ~~such~~fiscal ~~WI for its own account~~2009. ~~In return~~ ~~for~~This ~~the~~is ~~foregoing,~~primarily ~~Index~~due ~~agrees~~ to ~~bear~~less ~~its~~stock-based ~~Phase~~compensation Iexpense ~~share~~in offiscal ~~all costs incurred~~year ~~with~~2009. All ~~respect~~stock tocompensation ~~prospects~~was ~~generated~~calculated ~~during~~at ~~Phase~~fair Imarket ~~and~~value ~~with respect to which~~and ~~Index~~other ~~agrees~~required toinputs ~~participate~~at in the ~~exploration~~date ~~and exploitation~~ of. Inthe ~~addition, with~~grant ~~respect to all prospects~~ in ~~which~~accordance ~~Index~~with ~~elects to participate, Index shall~~SFAS ~~bear on behalf of ADC a portion of ADC's costs resulting from ADC's participation in the exploration of the same prospect~~ 123(~~"ADC Share"~~R). ~~Such costs shall include lease acquisition costs, drilling and completion costs and the cost of any production facilities.~~

~~Pursuant~~Interest toincome ~~Phase~~and 2other ofdecreased ~~the~~$0.2 ~~Agreement,~~million ~~Index~~for ~~has~~the ~~exercised~~year ~~the~~ended ~~option~~March to31, ~~participate~~2009 ~~in further~~compared ~~121~~to ~~square miles of reprocessing on~~ the same ~~basis~~period as2008. ~~Phase~~This 1decrease ~~and~~ is ~~entitled~~ toprimarily ~~obtain~~due a ~~12.5%~~reduction WI in ~~any prospects generated. If Index elects to~~ ~~participate~~interest inincome athrough ~~Prospect to an extent less than an undivided 12.5% WI,~~ the ~~portion~~ ~~not~~use ~~taken up by Index shall revert to ADC which will then be free either to dispose~~ of orcapital ~~participate~~ in ~~such~~investing WIactivities ~~for its own account. In return for the foregoing, Index shall bear its Phase II WI share~~ of ~~all costs incurred with~~ ~~respect~~approximately ~~to Prospects generated during Phase II and with respect to which Index agrees to participate in the exploration and exploitation~~$2.7 Inmillion ~~addition,~~from ~~with respect~~prior toyear's ~~all~~private ~~prospects~~placement ofequity ~~Phase II in which Index elects to participate,~~fund ~~Index shall bear on behalf of ADC a portion of ADC Share~~raisings. ~~Such costs shall include lease acquisition costs, drilling and completion costs and the cost of any production facilities.~~

~~Kansas~~There was no provision for income taxes for the fiscal years ended 2009 and 2008 due to a valuation allowance of $8.4 million and $5.1 million recorded for the years ended March 31, 2009 and 2008, respectively on the total tax provision as we believed that it is more likely than not that the asset will not be utilized during the next year.

(2) An agreement to acquire a 5% WI in an exploration project in Barton County, Kansas. The 5% working interest in the Barton County project is in an Area of Mutual Interest covering approximately 4879 acres. The operator engaged in the exploration and drilling of this project, has recently acquired, through a geophysical contractor, approximately 6.6 square miles of new 3D seismic data. This is currently being processed prior to evaluation.27

WeLiquidity ~~believe the properties present a significant, multi-year development opportunity primarily in the Lansing~~ and ~~Arbuckle~~Capital formations at depths of 3,800 to 4,000 feet. Successful wells in these fields generally produce for more than 25 years and have low operating costs. Our 2006-2007 capital budget of $515,600 related to proven but not producing reserves includes approximately $514,500 for anticipated capital expenditures related to costs on proved undeveloped properties. See the Contractual obligations section of Item 7“ Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more details.Resources

~~RESULTS~~Operating OFcash ~~OPERATIONS~~flow fluctuations were substantially driven by commodity prices and changes in our production volumes. Prices for oil and natural gas have historically been subject to seasonal influences characterized by peak demand and higher prices in the winter heating season for natural gas and summer travel for oil; however, the impact of other risks and uncertainties have influenced prices throughout the recent years.

~~Year~~The ~~Ended~~recent and ongoing changes in the global economy, including the economic recession in the United States, are adversely affecting the demand for oil and natural gas, and commodity prices for both products have fallen significantly. There is a high probability of continuing low prices for the foreseeable future and possibly further price declines. Our revenues are based on sales of oil and natural gas at prevailing market prices. Cash flows provided by operating activities were positive for the fiscal year ended March 31, ~~2006~~2009, ~~Compared~~but towere based ~~Year~~on ~~Ended~~average prices that were higher than the average from March 31, 2009 to ~~2005~~the date of this report.

32Working capital was substantially influenced by these factors. See “Results of Operations” for a review of the impact of prices and volumes on sales. In the fiscal year ended March 31, 2009, positive cash flows were generated by operating activities, inclusive of working capital movements, but these did not contribute any material funding to exploration and development expenditures. The ceiling test limitation impairment charge is a non-cash item and had no impact on our cash flows and did not affect our liquidity. See below for additional discussion and analysis of cash flow.

	Years Ended March 31,						Increase
	2006			2005			(Decrease)
Oil and gas sales	$	191,114		$	88,176		$	102,938
Production expenses:
Lease operating		33,859			19,897			13,962
Taxes other than income		8,094			3,687			4,407
General and administrative:
General and administrative		702,278			442,645			259,633
Stock-based compensation		1,043,823			-			1,043,823
Depletion — Full cost		65,311			36,155			29,156
Depreciation — Other		6,260			2,140			4,120
Impairment		10,000						10,000
Interest expense (income) and other (1)		12,295			5,679			6,616
Income tax benefit (provision)		-			-			-
Net (loss) income	$	(1,690,806	)	$	(422,027	)	$	(1,268,779	)
Production:
Natural Gas — Mcf		-			-			-
Crude Oil — Mbbl		3.42			2.07			1.35
Equivalent — Mboe		3.42			2.07			1.35
Average price per unit (2):
Gas price per Mcf	$	-		$	-		$	-
Oil price per Bbl	$	55.89		$	42.64		$	13.25
Equivalent per Boe	$	55.89		$	42.64		$	13.25
Average cost per Boe:
Production expenses:
Lease operating	$	9.90		$	9.61		$	0.29
Taxes other than income	$	2.37		$	1.78		$	0.59
General and administrative expense:
General and administrative	$	205.34		$	213.84		$	(8.50	)
Stock-based compensation	$	305.21		$	-		$	305.21
Depletion expense	$	19.10		$	17.47		$	1.63

During the second half of fiscal year 2009, we decided to minimize capital expenditures because we did not expect to generate positive cash flows from operations through to March 31, 2009 and in the near term thereafter and also because we had not, and still have not as of the date of this report, secured any new funding. Our total capital expenditures for the fiscal year to March 31, 2009 were less than our original budget, having taken into account cost increases on the Armour-Runnells well.

For the year ended March 31, 2006, oil and gas sales increased $102,938, from the same period in 2005, to $191,114. The increase for the year was primarily due to the increase in volumes of 1.35 MBbls from 2.07 MBbls to 3.42 MBbls or approximately $58,000. Additionally, revenue increased approximately $45,000 due to higher commodity prices as our average price per barrel increased $13.25, or 31.0%, in 2006 to $55.89 per Bbl from $42.64 per Bbl in 2005. Continued lower natural gas storage levels, supply uncertainty due to global events and a weaker U.S. dollar favorably impacted crude oil prices again in 2006.

	Years Ended March 31,

	2009			2008

Cash flows provided by (used in) operating activities	$	492,300		$	(1,194,749	)
Cash flows (used in) investing activities		(2,708,458	)		(8,792,152	)
Cash flows provided by financing activities		--			2,397,752
Effect of exchange rate changes		14,674			(14,674)
Net (decrease) in cash and cash equivalents	$	(2,201,485	)	$	(7,603,823)

Lease operating expenses increased $13,962 for the year ended March 31, 2006 as compared to the same period in 2005. The increase was primarily due to increased production on our Kansas properties acquired in 2005. On a per unit basis, lease operating expenses increased only 3% from $9.61 per Bbl in 2006 to $9.90 per Bbl in 2005 due to an increase in production volumes offset by industry-wide service costs associated with the overall increase in commodity prices.

Taxes other than income increased $4,407 for the year ended March 31, 2006 as compared to the same period in 2005 due to higher oil and gas revenues and on a per unit basis increased $0.59 per Bbl to $2.37 per Bbl. Production taxes are generally assessed as a percentage of gross oil and/or natural gas sales.

General and administrative expense for the twelve months ended March 31, 2006 increased $259,633 to $702,278 compared to the same period in 2005 primarily due to transaction costs of $168,612 related to the reverse merger and increased costs of consulting, audit and professional fees, as well as, an increase in salaries for employees/directors.

Stock-based compensation expense was $1,043,823 for the year ended March 31, 2006 with no stock-based compensation in 2005. During the year ended March 31, 2005, the Company granted an aggregate of stock options and warrants to certain directors and stockholders. Since there was no public market for the Company’s stock and operations were not comparable to a peer group during the years ended March 31, 2006 and 2005, the latest stock issuance price used in previous fundraising was used as the share market price. The exercise price and this fair market value of the stock options granted were $0.35 and $0.60, respectively. All options vested 50% on the date of the grant with the remaining amounts to vest 25% in each of the next two years. The expense was calculated based on the difference of the fair market value at the date of the grant in accordance with SFAS 123(R).

Depletion expense increased $6,616 from the same period in 2005 to $65,311 for the year ended March 31, 2006. Depletion for oil and gas properties is calculated using the unit of production method, which essentially depletes the capitalized costs associated with the evaluated properties based on the ratio of production volume for the current period to total remaining reserve volume for the evaluated properties. On a per unit basis, depletion expense increased 9% from $17.47 to $19.10 per Bbl.

Interest income and other increased $5,140 for the year ended March 31, 2006 compared to the same period 2005. This increase is primarily due to amortization of debt issue costs offset by interest income earned on $5.12 million received in a private equity fund raising in the fourth quarter of fiscal 2006.

There was no provision for income taxes for the fiscal years ended 2006 and 2005 due to a valuation allowance of $912,038 and $305,308 recorded for the years ended March 31, 2006 and 2005, respectively on the total tax provision as the Company believed that it is more likely than not that the asset will not be utilized during the next year.

Year Ended March 31, 2005 Compared to Year Ended March31, 2004

We had revenues of $88,176 for the year ended March 31, 2005 compared to $36,989 for 2004. The following table summarizes key items of comparison and their related increase (decrease) for the year ended March 31 for the periods indicated.

	Years Ended March 31,						Increase
	2005			2004			(Decrease)
Oil and gas sales	$	88,176		$	36,989		$	51,187
Production expenses:
Lease operating		19,897			14,613			5,284
Taxes other than income		3,687			1,588			2,099
General and administrative:
General and administrative		442,645			293,487			149,158
Stock-based compensation		-			53,388			(53,388	)
Depletion — Full cost		36,155			26,121			10,034
Depreciation — Other		2,140			1,090			1,050
Ceiling Test Write-down		-			87,548			(87,548	)
Interest expense and other (1)		5,679			13,573			(7,894	)
Income tax benefit (provision)		-			-			-
Net (loss) income	$	(422,027	)	$	(454,419	)	$	32,392
Production:
Natural Gas — Mcf		-			-			-
Crude Oil — MBbls		2.07			1.21			0.86
Equivalent — Mboe		2.07			1.21			0.86
Average price per unit (2):
Gas price per Mcf	$	-		$	-		$	-
Oil price per Bbl	$	42.64		$	30.49		$	12.15
Equivalent per Boe	$	42.64		$	30.49		$	12.15
Average cost per Boe:
Production expenses:
Lease operating	$	9.61		$	12.08		$	(2.46	)
Taxes other than income	$	1.78		$	1.31		$	0.47
General and administrative expense:
General and administrative	$	213.84		$	242.55		$	(28.71	)
Stock-based compensation	$	-		$	44.12		$	(44.12	)
Depletion expense	$	17.47		$	21.59		$	(4.12	)

For the year ended March 31, 2005, oil and gas sales increased $51,187, from the same period in 2004, to $88,176. The increase for the year was primarily due to the increase in volumes of approximately 0.86 MBbls from 1.21 MBbls to 2.07 MBbls or approximately $26,000. Also, revenue increased approximately $25,000 due to higher commodity prices as our average price per barrel increased $12.15 in 2005 to $42.64 per Bbl from $30.49 per Bbl in 2004. Continued lower natural gas storage levels, supply uncertainty due to global events and a weaker U.S. dollar favorably impacted crude oil prices again in 2005.

Lease operating expenses increased $5,284 for the year ended March 31, 2005 as compared to the same period in 2004. The increase was primarily due to increased production on our Kansas properties primarily. However, on a per unit basis, lease operating expenses decreased 20% from $12.08 per Bbl in 2004 to $9.61 per Bbl in 2005 due to an increase in production volumes offset by industry-wide service costs associated with the overall increase in commodity prices.

Taxes other than income increased $2,099 for the year ended March 31, 2005 as compared to the same period in 2004 due to higher oil and gas revenues and on a per unit basis increased $0.47 per Bbl to $1.78 per Bbl. Production taxes are generally assessed as a percentage of gross oil and/or natural gas sales.

General and administrative expense for the twelve months ended March 31, 2005 increased $149,158 to $442,645 compared to the same period in 2004 primarily due to consulting and professional fees and increased salaries for employees.

Stock-based compensation expense was $53,388 for the year ended March 31, 2004 with no stock-based compensation in 2005. During the year ended March 31, 2004, the Company granted an aggregate of 297,425 stock options to certain directors and stockholders. Since there was no public market for the Company’s stock and operations were not comparable to a peer group during the years ended March 31, 2004 and 2005, the latest stock issuance price used in previous fundraising was used as the share market price. The exercise price and this fair market value of the stock options granted were $0.18 and $0.36, respectively. All options vested on the date of the grant. Based on the difference between the fair market value and the exercise price of the options at the date of the grant, using a conversion rate of $1.795 to ₤1.0, compensation expense of $53,388 was recorded for the year ended March 31, 2004. All of the options were exercised in April 2004.

Depletion expense increased $10,034 from the same period in 2005 to $36,155 for the year ended March 31, 2005. Depletion for oil and gas properties is calculated using the unit of production method, which essentially depletes the capitalized costs associated with the evaluated properties based on the ratio of production volume for the current period to total remaining reserve volume for the evaluated properties. On a per unit basis, depletion expense decreased 19% from $21.59 to $17.47per Bbl.

Interest expense and other decreased $7,894 for the year ended March 31, 2005 compared to the same period 2004. This decrease is primarily due to the lower amortization of debt issue costs in 2005 compared to 2004, in each case offset by interest income.

There was no provision for income taxes for the fiscal years ended 2004 and 2005 due to a valuation allowance of $305,308 and $151,752 recorded for the years ended March 31, 2005 and 2004, respectively on the total tax provision as the Company believed that it is more likely than not that the asset will not be utilized during the next year.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of cash in 2006 were from operating activities and financing and equity transactions. Proceeds from the issuance of convertible short term debt and equity issuances and cash received from operations were offset by cash used in investing activities for our properties. Operating cash flow fluctuations were substantially driven by commodity prices and changes in our production volumes. Prices for oil and gas have historically been subject to seasonal influences characterized by peak demand and higher prices in the winter heating season for natural gas and summer travel for oil; however, the impact of other risks and uncertainties have influenced prices throughout the recent years. Working capital was substantially influenced by these variables. Fluctuation in cash flow may result in an increase or decrease in our capital and exploration expenditures. See Results of Operations for a review of the impact of prices and volumes on sales. Cash flows provided by operating activities were primarily used to fund exploration and development expenditures. See below for additional discussion and analysis of cash flow.

	Year Ended March 31,
	2006			2005			2004
Cash flows provided by operating activities	$	(190,961	)	$	(337,040	)	$	(140,961	)
Cash flows used in investing activities		(649,358	)		(66,140	)		(583,218	)
Cash flows provided by (used in) financing activities		6,351,191			161,805			487,511
Effect of exchange rate changes		16,461			(5,984	)		5,326
Net increase in cash and cash equivalents	$	5,527,333		$	(247,359	)	$	(54,428	)

Operating Activities

Net cash ~~outflow~~flow from operating activities during the fiscal year ended March 31, ~~2006~~2009 was $~~(190,961)~~0.5 million which was a ~~decrease~~positive change in use of ~~$146,079~~cash orof ~~43%~~$1.7 ~~from~~million from $~~(337,040)~~1.2 million net cash outflow during the fiscal year ended March 31, ~~2005~~2008. ~~This decrease was primarily~~The ~~due~~year toended ~~higher~~March ~~commodity~~31, ~~prices~~2009 ~~and~~generated anneutral ~~increase~~cash inflow ~~sales~~at ~~volumes offset by transaction costs of $168,612 due to~~ the ~~reverse~~operations ~~merger. Average equivalent~~level, ~~prices~~together ~~increased~~with ~~$13.25~~positive ~~from~~working ~~$42.64~~capital ~~per~~movements, ~~Boe~~which inresulted ~~2005 to $55.89 per Boe~~ in ~~2006.~~small ~~Production~~overall ~~volumes~~positive ~~increased~~cash ~~1.3~~flows ~~Mboe~~ from 2.1 Mboe in 2005 to 3.4 Mboe in 2006. We expect 2006/7 production to increase, but we are unable to predict future commodity prices. As a result, we cannot provide any assurance about future levels of net cash provided by operating activities. This decrease was primarily due to a 71% increase in production and an increase of 12.8% on the average equivalent price per Boe and offset by a an increase in general and administrative costs in the start up of the business.

Investing Activities

The primary driver of cash used in investing activities was capital spending. We establish the budget for these amounts based on our estimate of future commodity prices. Due to the volatility of commodity prices, our budget may be periodically adjusted during any given year. Cash used in investing activities during the fiscal year ended March 31, 2006 was $(649,358), which was an increase of $583,218 or 782% from $(66,140) of cash used in investing activities during the fiscal year ended March 31, 2005. This increase was primarily due to increased exploration and development activity, together with capitalized costs relating to the reverse acquisition. We have established a capital budget of approximately $515,600 for developing proven reserves for fiscal year ending March 31, 2007, to be funded primarily from cash flows from operations and recently raised equity funding. Cash used in investing activities during the fiscal year ended March 31, 2005 decreased $360,175 from $426,315 during the fiscal year ended March 31, 2004 to $66,140 in 2005 primarily due to major acquisition costs for our Kansas properties in 2004. The acquisition transactions were funded with proceeds from convertible notes payable and issuance of common stock.

~~Financing~~Cash used ~~Activities~~in investing activities during the fiscal year ended March 31, 2009 was $2.7 ~~Net~~million, ~~cash provided~~which bywas ~~financing~~a ~~activities~~decrease ~~increased~~of $6.21 million from $8.8 million of cash used in investing activities during the fiscal year ended March 31, ~~2006 to $6~~2008.4 ~~million~~This asdecrease was ~~compared~~primarily due to ~~$161,805~~decreased ~~during~~exploration ~~the~~and ~~fiscal~~development activity in the fiscal year ended March 31, ~~2005.~~2009 Atversus March 31, ~~2006,~~2008. Capital spending wewas ~~had~~primarily noon ~~long~~the Armour-~~term~~Runnells ~~debt~~1 well of $2.2 million and on the ~~outstanding~~Cochran 1 well of $0.5 ~~Management~~million. The ~~believes~~activity ~~that~~included wein ~~may~~prior ~~have~~year capital spending was primarily for drilling operations on the ~~ability~~Cason to1, ~~finance~~2, ~~through~~and 3 ~~new~~wells ~~debt~~of or$1.8 ~~equity~~million, ~~offerings~~the Taffy 1, if2, ~~necessary~~and 3 wells of $0.2 million, ~~our~~Vieman ~~capital~~1 ~~requirements~~of $0.2 million, ~~including~~Shadyside 1 of $2.5 million, HNH Gas Unit 1 of $1.8 million, ~~acquisitions~~combined Outlar 1 and Stewart 1 of $1.2 million, Alligator Bayou of $0.4 million and an aggregate of spending on other projects and wells of $0.2 million.

OnFinancing January 20, 2006 we sold in a private placement 8,533,333 shares of our common stock at a per share price equal to $0.60. The gross proceeds were $5,120,000, and will be used for general corporate purposes and working capital. The common stock sold in the private placement has not been registered under the Securities Act or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. Activities

AsThere was ofno cash used or provided by financing activities during the fiscal year ended March 31, ~~2006~~2009, ~~our~~as ~~common~~no ~~stock~~proceeds iswere ~~the~~received ~~only~~for ~~class~~capital oftransactions ~~stock outstanding~~ and ~~we have~~ no financing ~~outstanding~~or ~~long-term~~ debt ~~financing.~~transactions occurred.

~~Based~~Historically, ~~on reserve~~we ~~reports~~have ~~prepared~~financed byour ~~Ancell Energy~~cash ~~Consulting,~~needs ~~Inc.,~~by anprivate ~~independent~~placements ~~oil~~of ~~and~~our securities. We ~~gas~~intend ~~reservoir~~to ~~engineering consulting~~finance ~~firm,~~future ~~the following~~cash ~~table~~needs ~~presents~~primarily ~~certain~~through equity ~~information~~offerings asbut ofmay ~~March~~fund ~~31,~~those ~~2006~~needs ~~and~~through ~~for our~~debt ~~reserves~~offerings. There ~~and~~is ~~properties~~no ~~all~~assurance ~~located~~that ~~onshore~~we inwill ~~the~~be ~~United~~able ~~States.~~to ~~Shut-in wells~~obtain ~~currently~~financing ~~not~~on ~~capable~~terms ofconsistent ~~production~~with ~~are~~our ~~excluded~~past ~~from~~financings ~~the~~or ~~producing~~satisfactory ~~well~~to ~~information~~us.

In Mboe:	Kansas	Louisiana	South Texas	Total
Proved Reserves at Year End
Developed	18.436	12.082	-	30.518
Undeveloped	6.459	-	22.494	28.953
Total	24.895	12.082	22.494	59.471
Gross Wells (1)	23.0000	1.0000	1.0000	25.0000
Net Wells (1)	1.1500	0.1250	0.1250	1.4000

As of March 31, 2009 and 2008, our common stock is the only class of stock outstanding, and we have no outstanding short or long-term debt financing.

(1) The term net as used throughout this document refers to amounts that include only acreage or production that is owned by the Company and produced to its interest, less royalties and production due to others. Gross Wells represents the Operators working interest and Net Wells represents our working interest share of each well.28

36Liquidity Issues and Going Concern Issues

~~The~~Management ~~oil reserves~~is ~~shown~~of ~~include~~the ~~crude~~view ~~oil~~that ~~and~~we ~~condensate.~~will ~~Oil~~find ~~volumes~~it ~~are~~very ~~expressed~~ difficult in the current market ~~barrels~~conditions ~~(BBL);~~to araise ~~barrel~~any isnew ~~equivalent~~funds tothrough 42debt ~~United~~or ~~States~~equity ~~gallons.~~offerings, ~~Gas~~although ~~volumes~~we ~~are~~continue ~~expressed~~to inseek ~~thousands~~these ofopportunities. ~~standard~~This ~~cubic~~has ~~feet~~forced ~~(Mcf)~~us atto ~~the~~curtail ~~contract~~and ~~temperature~~reconsider any planned growth strategies in the immediate future and ~~pressure~~could result ~~bases.~~in the curtailment of our operations.

The ~~estimated~~continuation ~~reserves~~of ~~and~~our ~~future~~company ~~revenue~~as ~~shown~~a ingoing ~~this~~concern ~~report~~is ~~are~~dependent ~~for~~upon ~~proved~~our attaining ~~developed~~and ~~producing,~~maintaining ~~proved~~profitable ~~developed~~operations ~~non-producing,~~ and ~~proved~~raising ~~undeveloped reserves~~additional capital. InWe ~~accordance~~are actively ~~with~~seeking ~~SEC~~additional ~~guidelines,~~funding ~~our~~through ~~estimates~~various domethods, ~~not~~but ~~include~~due ~~any~~to current ~~probable~~market ~~or possible reserves~~conditions, ~~which~~funding ~~may~~is ~~exist~~not ~~for~~readily ~~these properties~~available. ~~This~~These ~~report~~conditions indicate ~~does~~the ~~not~~existence ~~include~~of ~~any~~a ~~value,~~material uncertainty which ~~could~~may becast ~~attributed~~significant todoubt ~~interests in~~about ~~undeveloped~~our ~~acreage~~ability ~~beyond~~to ~~those~~continue ~~tracts~~as ~~for~~a ~~which~~going ~~undeveloped reserves have been estimated~~concern.

~~This~~Based on ~~table~~our ~~above~~current iscash ~~for~~resources ~~properties~~and ~~located~~other current assets, and using assumptions that by nature are imprecise, management believes we have available liquidity to fund only limited operations over the immediate future and do not have liquidity to participate in ~~Seward~~new ~~(Kansas)~~drilling activities in our current properties. In addition, our ~~Walker~~current #1liabilities ~~(Louisiana)~~exceeded our current assets as at March 31, 2009 and at ~~Vieman~~the #1date ~~(Texas).~~of this report.

~~Based~~We have ~~on our current~~endeavored ~~cash~~to ~~resources~~reduce general and ~~other~~administrative ~~current~~costs ~~assets,~~where ~~management~~possible. ~~believes~~We we have ~~sufficient~~concluded ~~liquidity~~arrangements towith ~~fund~~certain ~~operations~~of ~~for~~our ~~the~~management ~~next~~and ~~twelve~~Directors ~~months.~~under ~~We are~~which ~~contemplating~~salaries ~~additional~~and ~~debt~~fees were reduced by 30% and /then or50% ~~equity~~and ~~financing~~certain ~~transactions~~benefits ~~that,~~would be ~~if successful,~~suspended ~~are~~and ~~expected~~for lost salary and benefits to ~~sufficiently~~be ~~fund~~replaced ~~expenditures~~by stock awards of an ~~for potential~~equivalent ~~acquisitions~~value, ~~and~~to ~~other~~be ~~expansions~~made ofunder our ~~business~~2008 Stock Incentive Plan. WeSuch arrangements doare ~~not~~effective ~~currently~~from December 1, 2008 through to May 31, 2009, at ~~have~~which ~~any~~point ~~commitments~~prior ~~for~~terms ~~such~~were ~~financing~~to ~~and~~be ~~there~~re-applied. isThe noRemuneration ~~assurance~~Committee of the Board of Directors has recommended that wethe ~~will~~ arrangements be ~~successful~~extended inthrough ~~obtaining~~to July ~~such~~31, ~~funds~~2009. IfWe wehave ~~cannot~~also ~~obtain~~reduced ~~additional~~the ~~financing, we~~usage ~~will~~of certain consulting services and have toterminated ~~significantly~~certain ~~curtail~~consultant agreements. We have reduced our ~~acquisition~~expenditures to ~~plans~~a minimum on investor and ~~possibly~~public relations related activities. We continue to operate month-to-month arrangements for the use of our Houston ~~operations~~office.

We are subject to continuing cost overruns on operations on the Armour-Runnells well and are at risk of low and declining product prices for our sales of oil and natural gas. Our priorities are to continue to be able to participate in and fund continuing expenditures on the Armour-Runnells well, if we conclude such expenditures are of potential benefit, and to continue to meet operating cost and other contractual obligations on our existing wells. We may not be able to make future undeveloped lease renewal and lease maintenance expenditures that we may wish to make, and therefore, we may lose rights to certain undeveloped acreage. We currently are not able to make any new financial commitments to participate in new projects and will only be able to consider participation in any discretionary proposed new operations on our existing properties if we conclude we have funds for the expenditure. During 2009 and 2010, we may be presented with proposals for new operations, including new drilling on our Garwood, Alligator Bayou, Supple Jack Creek and Kansas properties, and possibly others. We await recommendations from our operator of the Shadyside well.

Index is generally contractually liable for our share of all operational costs not covered by an AFE, such as, for example, well repair costs under a certain amount specified in an operating agreement or the costs of well plugging and abandonment. Index is also contractually liable for all costs it has agreed to under an AFE. Index must fund its share of any lease renewal or lease maintenance costs on any acreage not held by production, or it will lose its interest in that acreage.

We are currently actively considering all potential corporate transactions, which may include full or partial asset disposals or a business combination with another entity in a transaction where Index is not the surviving entity. Because of the current economic conditions affecting oil and natural gas companies and because of our lack of liquidity, there is no assurance that any such transaction would be accretive to our shareholders or result in any profit being realized by our shareholders.

As part of our analysis of ways to reduce costs and in light of the high cost of continuing to be a public reporting company under the Securities Exchange Act of 1934, as amended, and complying with the Sarbanes-Oxley Act of 2002, we are exploring alternative platforms, which may involve deregistering under the Securities Exchange Act of 1934, or “going dark”, and having our common stock quoted on the "pink sheets", which is an automated quotation system under which broker-dealers publish quotes for trading in over-the-counter securities. We anticipate that this move would provide substantial savings from the costs of being registered under the Securities Exchange Act of 1934. We also are evaluating the benefits of continuing to be traded on the OTC-Bulletin Board. Analysis of a move to the “pink sheets” involves not only reducing costs, but also our expected sources of future capital as well as the number of record holders of our outstanding common stock. A move to having our common stock quoted on the “pink sheets” may result in a less liquid market for our shares and less readily available information on us, but will result in continued public trading of our common stock by holders wishing to trade.

We currently are seeking payment in a bankruptcy proceeding related to the former purchaser of our Kansas oil production, Eaglwing L.P., for the recovery of approximately $50,000 in value of oil sales. We dispute that our debt be classified as unsecured on the basis that, under applicable Kansas law, producers have liens in product delivered to debtors and we have recently been advised of a decision that our secured claim, for 20 days of oil sales immediately preceding the bankruptcy filing by Eaglwing, is not impaired. Recovery of the debt is uncertain, and the debt has been fully provided against. In the current economic environment, there is an increased risk that other of our purchasers could similarly file for bankruptcy protection and we continue to assess such risk. See also Part II, Item 1.

Contractual Obligations

We have no material long-term commitments associated with our capital expenditure plans or operating agreements. Consequently, we believe we have a significant degree of flexibility to adjust the level of such expenditures as circumstances warrant. Our level of capital expenditures will vary in future periods depending on the success we experience in our acquisition, developmental and exploration activities, oil and natural gas price conditions and other related economic factors. Currently no sources of liquidity or financing are provided by off-balance sheet arrangements or transactions with unconsolidated, limited-purpose entities.

~~The~~Amounts ~~following~~related ~~table~~to ~~summarizes~~ our ~~contractual~~asset retirement obligations (ARO) are uncertain regarding the actual timing of such expenditures. Of the total ARO, $125,716 is classified as a current liability at March 31, 2009 while $14,998 and ~~commitments~~$88,209 are classified as a long-term liability at March 31, 2009 and 2008, respectively. For each of the years ended March 31, 2009 and 2008, we recognized no accretion expense related to our ARO, due to the assumption of a full offset in aggregate of salvage values. In the aggregate, we expect that proceeds from salvage value of tangible well and surface equipment will materially offset and fund the costs of plugging and abandoning our onshore producing wells. We have taken steps to mitigate our plugging and abandoning liabilities by divesting our 3 Cason wellbores subsequent to March 31, 2009 and are currently in discussions to assign our interest in the Shadyside wellbore. Following significant cost overruns we have arranged a payment ~~periods~~plan (with the operator of our Armour Runnels well for certain costs incurred, and such costs representing the majority of our accounts payable and accrued expenses at March 31, 2009 and the date of this report. This arrangement is not specifically covered in ~~thousands)~~the governing agreements for the project or property, and the operator may seek to rely upon any and all provisions of those agreements.

	Payments Due by Period
			Less than						More than
Contractual Obligations	Total		one year		1-3 years		3-5 years		5 years
Operating leases(1)	$	2,000	$	2,000	$	-	$	-	$	-
Total contractual obligations	$	2,000	$	2,000	$	-	$	-	$	-

(1) The Company holds an arrangement to rent its main office with rentals due on a month-to-month basis

Amounts related to our asset retirement obligations are not included in the table above given the uncertainty regarding the actual timing of such expenditures. Of the total ARO, $25,300 and $16,500 are classified as a long-term liability at March 31, 2006 and 2005, respectively. For each of the years ended March 31, 2006 and 2005, the Company recognized no depreciation expense related to its ARO, due to the assumption of a full offset of salvage values.

Off-Balance Sheet Arrangements

AtFor the ~~March 31,~~fiscal ~~2006~~year ended as of and at March 31, ~~2005~~2009, we did not have any off-balance sheet arrangements.

Plan of Operation for 2007

On an annual basis, we generally fund most of our capital and exploration activities, including oil and gas property acquisitions, with cash generated from operations and from equity financings. We have budgeted approximately $515,600 in capital expenditures relating to proven reserves.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect our reported results of operations and the amount of reported assets, liabilities and proved oil and ~~gas~~natural gas reserves. Some accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts ~~could~~ could have been reported under different conditions, or if different assumptions had been used. Actual results may differ from the estimates and assumptions used in in the preparation of our consolidated financial statements. Described below are ~~the~~ the most significant policies we apply in preparing our consolidated financial statements, some of which are subject to alternative treatments under accounting principles generally accepted in the United States of America. We also describe the most significant estimates and assumptions we make in applying these policies. We discussed the development, selection and disclosure of each of these with our ~~audit~~Board ~~committee~~of Directors. See Results of Operations above and Item 8. Consolidated Financial Statements and Supplementary Data ~~Note~~Notes 1 and 2, Organization and ~~Summary~~Operations of ~~Significant~~the ~~Events~~Company and Summary of Significant Accounting Policies, for a discussion of additional accounting policies and estimates made by by management.

Oil and Gas Activities

Accounting for oil and natural gas activities is subject to special, unique rules. Two ~~generally~~ generally accepted methods of accounting for oil and natural gas activities are available — successful efforts and full cost. The most significant differences ~~between~~ between these two methods are the treatment of exploration costs and the manner in which the carrying value of oil and natural gas properties are amortized and evaluated for impairment. The successful efforts method requires exploration costs to be expensed as they are incurred while the full cost method provides for the capitalization of these costs. Both methods generally provide for the ~~periodic~~ periodic amortization of capitalized costs based on proved reserve quantities. ~~Impairment~~ Impairment of oil and natural gas properties under the successful efforts method is based on an evaluation of the carrying value of individual oil and natural gas properties against their estimated fair value, while impairment under the full cost method requires an evaluation of the carrying value of oil and natural gas properties included in a cost center against the net present value of future cash flows from the related proved reserves, using period-end prices and costs and a 10% discount rate.

Full Cost Method

We use the full cost method of accounting for our oil and gas activities. Under this method, all costs incurred in the acquisition, exploration and development of oil and gas properties are capitalized into a cost center (the amortization base). Such amounts include the cost of drilling and equipping productive wells, dry hole costs, lease acquisition costs and delay rentals. Costs associated with production and general corporate activities are expensed in the period incurred. The capitalized costs of our oil and gas properties, plus an estimate of our future development and abandonment costs are amortized on a unit-of-production method based on our estimate of total proved reserves. Our financial position and results of operations would have been significantly different had we used the successful efforts method of accounting for our oil and gas activities.

Proved Oil and Gas Reserves

Our engineering estimates of proved oil and natural gas reserves directly impact ~~financial~~ financial accounting estimates, including depreciation, depletion and amortization expense and the full cost ceiling limitation. Proved oil and natural gas reserves are the estimated quantities of oil and ~~gas~~natural gas reserves that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under period-end economic and operating conditions. The process of estimating quantities of proved reserves is very complex, requiring significant subjective decisions in the evaluation of all geological, engineering and economic data for each reservoir. The data for a given reservoir may change substantially over time as a result of numerous factors including additional development activity, evolving production history and continual reassessment of the viability of production under varying economic conditions. Changes in oil and natural gas prices, operating costs and expected performance from a ~~given~~ given reservoir also will result in revisions to the amount of our estimated ~~proved~~ proved reserves.

Our estimated proved reserves for the four years ended March 31, ~~2006,~~2009 ~~2005 and 2004~~ were ~~prepared~~ prepared by Ancell Energy Consulting, Inc., an independent ~~oil~~petroleum ~~and gas reservoir~~ engineering ~~consulting~~ firm. For more information regarding reserve estimation, including historical reserve revisions, ~~refers~~refer to Item 8. Consolidated Financial Statements and Supplementary Data, Supplemental Oil and Gas Disclosure.

Depreciation, Depletion and Amortization

The quantities of estimated proved oil and natural gas reserves are a significant component of our calculation of depletion expense and revisions in such estimates may alter the rate of future expense. Holding all other factors constant, if reserves are revised upward, earnings would increase due to lower ~~depletion~~ depletion expense. Likewise, if reserves are revised downward, earnings would ~~decrease~~ decrease due to higher depletion expense or due to a ceiling test write-down.

Full Cost Ceiling Limitation

Under the full cost method, we are subject to quarterly calculations of a ceiling or limitation on the amount of our oil and natural gas properties that can be ~~capitalized~~ capitalized on our balance sheet. If the net capitalized costs of our oil and natural gas properties exceed the cost center ceiling, we are subject to a ceiling test write-down to the extent of such excess. If required, it would reduce earnings and impact stockholders’ equity in the period of occurrence and result in lower amortization expense in future periods. The discounted present value of our proved reserves is a major component of the ceiling calculation and ~~represents~~ represents the component that requires the most subjective judgments. However, ~~the~~ the associated prices of oil and natural gas reserves that are included in the ~~discounted~~ discounted present value of the reserves do not require judgment. The ceiling ~~calculation~~ calculation dictates that prices and costs in effect as of the last day of the ~~quarter~~ quarter are held constant. However, we may not be subject to a write-down if prices increase subsequent to the end of a quarter in which a write-down might otherwise be required. If oil and natural gas prices decline, even if for only a short period of time, or if we have downward revisions to our estimated proved reserves, it is possible that write-downs of our oil and natural gas properties could occur in the future.

Future Development and Abandonment Costs

Future development costs include costs incurred to obtain access to proved reserves such as drilling costs and the installation of production equipment. Future abandonment costs include costs to dismantle and relocate or dispose of our production platforms, gathering systems and related structures and restoration costs of land and seabed. Our operators develop estimates of these costs for each of our properties based upon their geographic location, type of production structure, well depth, currently available procedures and ongoing consultations with construction and engineering consultants. Because these costs typically extend many years into the future, estimating these future costs is difficult and requires management to make judgments that are subject to future revisions based upon numerous factors, including changing technology and the political and regulatory environment. We review our assumptions and estimates of future development and future abandonment costs on an annual basis.

The accounting for future abandonment costs changed on January 1, 2003 with the adoption of SFAS No. 143, Accounting for Asset Retirement Obligations. This ~~new~~ standard requires that a liability for the discounted fair value of an asset retirement obligation be recorded in the period in which it is incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Holding all other factors constant, if our estimate of future abandonment and development costs is revised upward, earnings would decrease due to higher depreciation, depletion and amortization (DD&A) expense. Likewise, if these estimates are revised downward, earnings would increase due to lower DD&A expense. ~~Amounts~~Of ~~related to our asset retirement obligations are not included in~~ the ~~table~~total ~~above~~ARO, ~~given~~$125,716 ~~the~~is ~~uncertainty~~classified ~~regarding~~as ~~the~~a ~~actual~~current ~~timing~~liability ~~of such~~at ~~expenditures.~~March Of31, ~~the~~2009 ~~total~~while ~~ARO,~~ $2514,~~300~~998 and $1688,~~500~~209 are classified as a long-term liability at March 31, ~~2006~~2009 and ~~2005~~2008, respectively. For each of the years ended March 31, 2009 ~~2006~~ and ~~2005~~2008, the Company recognized no ~~depreciation~~ accretion expense related to its ARO, due to the assumption of a full offset in aggregate of salvage values.

Allocation of Purchase Price in Business Combinations

As part of our business strategy, we actively pursue the acquisition of oil and ~~gas~~ natural gas properties. The purchase price in an acquisition is allocated to the assets acquired and liabilities assumed based on their relative fair values as of the acquisition date, which may occur many months after the announcement date. Therefore, while the consideration to be paid may be fixed, the fair value of the assets acquired and liabilities assumed is subject to change during the period between the announcement date and the acquisition date. Our most significant estimates in our allocation typically relate to the value ~~assigned~~ assigned to future recoverable oil and natural gas reserves and unproved properties. As the allocation of the purchase price is subject to significant estimates and subjective judgments, the accuracy of this assessment is ~~inherently~~ inherently uncertain.

Effective January 1, 2002, we adopted SFAS No. 142, Goodwill and Other Intangible Assets, under which goodwill is no longer subject to amortization. Rather, goodwill of each reporting unit is tested for impairment on an annual basis, or more frequently if an event occurs or circumstances change that would reduce the fair value of the reporting unit below its carrying amount. In making this assessment, we rely on a number of factors including operating results, economic projections and anticipated cash flows. As there are inherent uncertainties related to these factors and our judgment in applying them to the analysis of goodwill impairment, there is risk that the carrying value of our goodwill may be overstated. If it is overstated, such impairment would reduce earnings during the period in which the impairment occurs and would result in a corresponding reduction to goodwill.

Revenue Recognition

We recognize revenue when crude oil and natural gas quantities are delivered to or collected by the respective purchaser. or operator (collectively "purchasers"). We ~~sell~~sold our crude oil and natural gas production to ~~two independent~~ ~~purchasers~~several ~~and~~ purchasers as of March 31, ~~2006, we did not have any natural gas sales~~2009. Title to the produced quantities transfers to the purchaser at the time the purchaser collects or receives the quantities. Prices for such ~~production~~ production are defined in sales contracts and are readily determinable based on ~~certain~~ certain publicly available indices. The purchasers of such production ~~have~~ have historically made payment for crude oil and natural gas purchases within ~~thirty~~forty-five days of the end of each production month. We periodically review the difference between the dates of production and the dates we collect payment for such production to ensure that receivables from those purchasers are collectible. All transportation costs are accounted for as a reduction of oil and natural gas sales revenue.

39Recent Accounting Developments

~~Recently~~Business ~~Issued~~Combinations. In ~~Accounting~~December ~~Standards~~2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”), which replaces SFAS No. 141. SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquired and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. The adoption of SFAS 141(R) will have an impact on accounting for business combinations once adopted, but the effect is dependent upon acquisitions after that time.

In March 2005, the Financial Accounting Standard Board (FASB) issued FASB Interpretation (FIN) No. 47 (FIN 47), Accounting for Conditional Asset Retirement Obligations. This Interpretation clarifies the definition and treatment of conditional asset retirement obligations as discussed in FASB Statement No. 143, Accounting for Asset Retirement Obligations (SFAS 143). A conditional asset retirement obligation is defined as an asset retirement activity in which the timing and/or method of settlement are dependent on future events that may be outside our control. FIN 47 states that a company must record a liability when incurred for conditional asset retirement obligations if the fair value of the obligation is reasonably estimable. This Interpretation is intended to provide more information about long-lived assets, future cash outflows for these obligations and more consistent recognition of these liabilities. FIN 47 is effective for fiscal years ending after December 15, 2005. The Company does not expect the adoption of this Interpretation to have a material impact on its consolidated financial position, results of operations or cash flows since it currently does not have any conditional asset retirement obligations outstanding at March 31, 2006. 32

InNoncontrolling Interests. In December 162007, ~~2004,~~ the ~~Financial~~FASB ~~Accounting~~issued ~~Standards~~SFAS ~~Board~~No. ~~("FASB") published~~160, ~~Statement~~“Noncontrolling ofInterests in Consolidated Financial Statements - an amendment of Accounting ~~Standards~~Research Bulletin No. ~~123~~51” (~~Revised~~“SFAS ~~2004~~160”), ~~Share-Based~~which establishes accounting ~~Payment~~and ~~("SFAS~~reporting ~~123-R").~~standards ~~SFAS~~for ~~123-R~~ownership ~~requires~~interests ~~that~~in ~~compensation~~subsidiaries ~~cost~~held ~~related~~by parties other than the parent, the amount of consolidated net income attributable to the ~~share-based~~parent ~~payment~~and ~~transactions~~to bethe ~~recognized~~noncontrolling interest, changes in ~~the~~a ~~financial~~parent’s ~~statements.~~ownership ~~Share-based~~interest ~~payment~~and ~~transactions within~~ the ~~scope~~valuation of ~~SFAS~~retained ~~123~~non-Rcontrolling ~~include~~equity ~~stock~~investments when a ~~warrants,~~subsidiary ~~restricted~~is ~~stock~~deconsolidated. ~~plans,~~The ~~performance-based~~Statement ~~awards,~~also ~~stock~~establishes ~~appreciation~~reporting ~~rights,~~requirements ~~and~~that ~~employee~~provide ~~share~~sufficient ~~purchase~~disclosures ~~plans.~~that ~~Prior~~clearly toidentify ~~January~~and distinguish 1between ~~2006,~~the interests of the ~~Company accounted~~parent ~~for~~and ~~its~~the ~~share~~interests of the non-~~based~~controlling ~~payment~~owners. ~~transactions~~SFAS ~~under~~160 ~~the~~is ~~provisions~~effective offor fiscal years beginning after ~~APB 25~~December 15, ~~whereby~~2008. ~~compensation~~The ~~expense~~Company isdoes ~~recognized~~not ~~using~~currently ~~the~~have ~~intrinsic~~any ~~value~~noncontrolling ofinterests ~~the options~~in atsubsidiaries, ~~the~~but ~~date~~once ofadopted, the ~~grant~~effects will be dependent upon acquisitions after that time.

OnFair Value Measurements. In ~~April~~September 2006, the FASB issued SFAS 157, “Fair Value Measurements”, which 14defines fair value, ~~2005~~establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), ~~the~~and ~~SEC~~expands ~~amended~~disclosures ~~the~~about fair ~~effective~~value ~~date~~measurements. Prior to this Statement, there were different definitions of fair value and limited guidance for applying those definitions in GAAP. This Statement provides the ~~provisions~~definition ofto ~~SFAS~~increase ~~123~~consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. The Statement emphasizes that fair value is a market-Rbased measurement, not an entity-specific measurement. The Statement clarifies that ~~Accordingly~~market participant assumptions include assumptions about risk, i.e. the ~~Company~~risk inherent ~~adopted~~in a particular valuation technique used to measure fair value and/or the ~~revised~~risk ~~standard~~inherent in the inputs to the valuation technique. The Statement expands disclosures about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. The disclosures focus on ~~January~~the 1inputs used to measure fair value and for recurring fair value measurements using significant unobservable inputs, ~~2006~~the effect of the measurements on earnings for the period. The FASB also issued FASB Staff ~~Since~~Position (“FSP”) FAS 157-2 (“FSP No. 157-2”), which delayed the effective date ~~there~~of ~~were~~SFAS noNo. ~~outstanding~~157 ~~options~~for atnonfinancial ~~March~~assets 31and liabilities, ~~2005~~except ~~and~~for items that are recognized or disclosed at fair value in the ~~Company~~financial ~~had~~statements noon a ~~stock~~recurring basis (at least annually), until fiscal years beginning after November ~~forfeitures~~15, ~~since~~2008. ~~date~~We are still in the process of ~~inception,~~evaluating ~~there~~the ~~was~~effect noof SFAS No. 157 on our nonfinancial assets and liabilities and therefore have not yet determined the impact that it will have on our financial statements upon full adoption ofThe initial adoption of SFAS ~~123-R~~ to157 did not have a material impact on the company’s consolidated financial position, results of operations or cash flows.

~~For~~Oil and Gas Reporting ~~more~~Requirements. ~~recently~~In ~~issued~~December ~~accounting~~2008, ~~standards~~the SEC released Release No. 33-8995, “Modernization ~~please~~of Oil and Gas Reporting” (the “Release”). The disclosure ~~see~~requirements ~~Note~~under 3this ~~"Summary~~Release will permit reporting of ~~Significant~~oil ~~Accounting~~and ~~Policies"~~gas reserves using an average price based upon the prior 12-month period rather than year-end prices and the use of new technologies to determine proved reserves if those technologies have been demonstrated to result in reliable conclusions about reserves volumes. Companies will also be allowed to disclose probable and possible reserves in SEC filings. In addition, companies will be required to report the ~~Notes~~independence and qualifications of its reserves preparer or auditor and file reports when a third party is relied upon to prepare ~~Consolidated~~reserves ~~Financial~~estimates ~~Statements~~or conduct a reserves audit. The new disclosure requirements become effective for the Company beginning with our annual report on Form 10-K for the year ended March 31, 2010. We are currently evaluating the impact of this Release on our oil and gas accounting disclosures.

Item 7A. Quantitative and ~~And~~ Qualitative Disclosures About Market Risk.

~~Oil~~Not ~~and gas prices fluctuate widely, and low prices for an extended period of time are likely to have a material adverse impact on our business~~applicable.

Our operating revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing prices for gas and, to a lesser extent, oil. Declines in oil and gas prices may materially adversely affect our financial condition, liquidity, ability to obtain financing and operating results. Lower oil and gas prices may also reduce the amount of oil and gas that we can produce economically. Historically, oil and gas prices and markets have been volatile, with prices fluctuating widely and they are likely to continue to be volatile.33

~~Prices~~Item 8. Financial ~~for~~Statements ~~oil~~ and ~~gas~~Supplementary are subject to wide fluctuations in response to relatively minor changes in the supply of and demand for oil and gas, market uncertainty and a variety of additional factors that are beyond our controlData. ~~These factors include:~~

•Our consolidated ~~The~~financial ~~domestic and foreign supply of oil and gas; • The level of consumer product demand; • Weather conditions; • Political conditions in oil producing regions~~statements, ~~including~~together ~~the~~with ~~Middle East; • The ability of~~ the ~~members~~independent ofregistered public ~~the~~accounting ~~Organization~~firm's ofreport ~~Petroleum Exporting Countries to agree to and maintain oil price and production controls; • The price~~ of ~~foreign~~RBSM ~~imports;~~LLP, •begin ~~Actions~~on ofpage ~~governmental authorities; • Domestic and foreign governmental regulations; • The price~~F-1, ~~availability~~immediately after ~~and~~the ~~acceptance~~signature ~~of alternative fuels; and • Overall economic conditions~~page.

~~These~~Item 9. Changes ~~factors~~in ~~make~~and itDisagreements ~~impossible~~With toAccountants ~~predict~~on ~~with~~Accounting ~~any certainty the future prices of oil~~ and ~~gas~~Financial Disclosure.

40None.

WeItem 9A. doControls ~~not use hedges at this time to reduce price volatility, help ensure that we have adequate cash flow to fund our capital programs~~ and ~~manage price risks and returns on some of our acquisitions and drilling programs~~Procedures. ~~This policy could change n the future.~~

~~Fair~~Not ~~Market Value of Financial Instruments~~Applicable.

~~The estimated fair values for financial instruments under FASB Statement No.~~Item ~~107, Disclosures about Fair Value of Financial Instruments, are determined at discrete points in time based on relevant market information~~9A. ~~These estimates involve uncertainties and cannot be determined with precision~~(T). ~~The~~ Controls ~~estimated fair value of cash, cash equivalents, accounts receivable~~ and ~~accounts~~ ~~payable approximates their carrying value due to their short-term nature~~Procedures.

~~Interest~~Evaluation ~~Sensitivity~~of Disclosure Controls and Procedures

~~Since~~Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the doeffectiveness ~~not~~of ~~have~~the ~~long~~design and operation of our disclosure controls and procedures, as defined in Rules 13a-~~term~~15(e) ~~debt~~and ~~subject~~15d-15(e) tounder ~~variable~~the ~~interest~~Securities Exchange ~~rates~~Act of 1934, as amended (“Exchange Act”), as of March 31, 2009. Disclosure controls and procedures are those controls and procedures designed to provide reasonable assurance that the ~~company~~information required to be disclosed in our Exchange Act filings is (1) recorded, processed, summarized and reported ~~not~~within ~~exposed~~the time periods specified in Securities and Exchange Commission’s rules and forms, and (2) accumulated and communicated to ~~interest~~management, ~~rate~~including ~~sensitivity~~our Chief atExecutive ~~March~~Officer 31and Chief Financial Officer, ~~2006~~as appropriate, to allow timely decisions regarding required disclosure.

~~Item~~Based on 8.that ~~Consolidated~~evaluation, ~~Financial~~the ~~Statements~~Chief ~~And~~Executive ~~Supplementary~~Officer ~~Data~~and ~~Index~~Chief ToFinancial Officer ~~Consolidated~~concluded ~~Financial~~that, ~~Statements~~as of March 31, 2009, our disclosure controls and procedures were effective.

	Page
Reports of Independent Registered Certified Public Accounting Firm		F-1
Consolidated Balance Sheets at March 31, 2006 and 2005		F-2
Consolidated Statements of Losses for the Years Ended March 31, 2006 and 2005		F-3
Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended March 31, 2006 and 2005		F-4
Consolidated Statements of Cash Flows for the Years Ended March 31, 2006 and 2005		F-5
Notes to the Consolidated Financial Statements		F-6 - F-28
Supplemental Oil and Gas Information (Unaudited)		F-29

Management’s Annual Report on Internal Control Over Financial Reporting

41Management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a – 15(f). Management conducted an assessment as of March 31, 2009 of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on that evaluation, management concluded that our internal control over financial reporting was effective as of March 31, 2009, based on criteria in Internal Control – Integrated Framework issued by the COSO.

~~RUSSELL~~Our ~~BEDFORD~~assessment ~~STEFANOU~~identified ~~MIRCHANDANI~~that ~~LLP~~an adequate standard had been met in compliance with our internal controls framework. Our assessment was an internal review by management, based on an evaluation of individual controls and did not involve any independent review or testing. In addition our controls framework was not enhanced over the year to March 31, 2009 due to a lack of resources, although there was no material change to our business or operations that necessitated such. There are certain sections of our internal controls matrix against which there has been no or minimal relevant business activity. Should such activity arise in the future there is a risk that we will have insufficient resources to ensure effectiveness with the existing controls.

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

~~REPORT~~This OFAnnual Report does not include an attestation report of our registered public ~~INDEPENDENT~~accounting ~~REGISTERED~~firm ~~CERTIFIED~~regarding ~~PUBLIC~~internal ~~ACCOUNTING~~control ~~FIRM~~over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this Annual Report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the quarter ended March 31, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required to be contained in this Item is incorporated by reference from Part I of this report and by reference either to our definitive proxy statement to be filed with respect to our 2009 annual meeting or via the filing of an amendment to this Annual Report on Form 10-K.

Item 11. Executive Compensation.

The information required to be contained in this Item is incorporated either by reference to our definitive proxy statement to be filed with respect to our 2009 annual meeting under the heading “Executive Compensation” or via the filing of an amendment to this Annual Report on Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

This information required to be contained in this Item is incorporated either by reference to our definitive proxy statement to be filed with respect to our 2009 annual meeting under the heading “Principal Stockholders and Security Ownership of Management” or via the filing of an amendment to this Annual Report on Form 10-K.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required to be contained in this Item is incorporated either by reference to our definitive proxy statement to be filed with respect to our 2009 annual meeting under the heading “Certain Transactions” or via the filing of an amendment to this Annual Report on Form 10-K.

Item 14. Principal Accountant Fees and Services.

The information required to be contained in this Item is incorporated either by reference to our definitive proxy statement to be filed with respect to our 2009 annual meeting or via the filing of an amendment to this Annual Report on Form 10-K.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

The following documents are filed as a part of this report or incorporated herein by reference:

(1) Our Consolidated Financial Statements are listed on page F-1 of this Annual Report.

(2) Financial Statement Schedules:

None

(3) Exhibits:

The following documents are included as exhibits to this Annual Report:

Exhibit Number		Description
3.1		Restated Articles of Incorporation of Index Oil and Gas Inc., Inc. (1)

3.2		Bylaws of Index Oil and Gas Inc. (2)

10.1		Acquisition Agreement between Index Oil and Gas Inc., certain stockholders of Index Oil & Gas Ltd, and Briner Group Inc. dated January 20, 2006. (3)

10.2		Form of Share and Warrant Exchange Agreement entered into by and between Index Oil and Gas Inc., Inc. and certain Index Oil & Gas Ltd stockholders. (3)

10.3+		Employment Agreement entered into by and between Index Oil & Gas Ltd and Lyndon West, dated January 20, 2006. (3)

10.4+		Employment Agreement entered into by and between Index Oil & Gas Ltd and Andy Boetius, dated January 20, 2006. (3)

10.5+		Employment Agreement entered into by and between Index Oil & Gas Ltd and Daniel Murphy, dated January 20, 2006. (3)

10.6+		Letter Agreement entered into by and between Index Oil & Gas Ltd and David Jenkins, dated January 20, 2006. (3)

10.7+		Letter Agreement entered into by and between Index Oil & Gas Ltd and Michael Scrutton, dated January 20, 2006. (3)

10.8+		Employment Agreement entered into by and between Index Oil and Gas Inc. and John G. Williams, dated August 29, 2006. (4)

10.9		Form of Subscription Agreement dated as of January 20, 2006. (3)

10.10		Form of Subscription Agreement dated as of August 29 and October 4, 2006. (5)

10.11		Form of Registration Rights Agreement dated as of August 29, 2006. (5)

10.12+		Index Oil and Gas Inc. 2006 Incentive Stock Option Plan. (6)

10.13		Securities Purchase Agreement dated as of November 5, 2007. (7)

10.14		Form of Warrant to Purchase Common Stock. (7)

10.15+		Agreement for Exploration, Production and Strategic Services dated February 1, 2008 between the Company and ConRon Consulting Inc., as amended by Addendum #1 dated June 1, 2008 and Addendum #2 dated July 1, 2008. (8)

10.16+		Amended and Restated Agreement for Exploration, Production and Strategic Services between Index Oil and Gas Inc. and ConRon Consulting Inc. dated December 8, 2008. (9)

10.17+		Amended Employment Agreement of Daniel Murphy, dated March 4, 2009. (10)

10.18+		Amended Employment Agreement of Lyndon West, dated March 4, 2009. (10)

10.19+		Amended Employment Agreement of Andrew Boetius, dated March 4, 2009. (10)

14.1		Code of Ethics and Business Conduct for officers, directors and employees of Index Oil and Gas Inc. adopted by the Company’s Board of Directors on March 31, 2006. (11)

21.1		List of subsidiaries of the Company. *

23.1		Consent of RBSM LLP. *

23.2		Consent of Ancell Energy Consulting, Inc. *

31.1		Certification by Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. *

31.2		Certification by Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act. *

32.1		Certification by Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code. *

32.2		Certification by Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code. *

* Filed Herewith

+ Compensatory plan or arrangement

(1) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on September 5, 2008.

(2) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on October 9, 2008.

(3) Incorporated by reference to the Company’s Amended Current Report filed on Form 8-K/A with the SEC on March 15, 2006.

(4) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on September 8, 2006.

(5) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on September 11, 2006.

(6) Incorporated by reference to the Company’s Registration Statement filed on Form S-8 with the SEC on October 3, 2007.

(7) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on February 29, 2008.

(8) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on July 8, 2008.

(9) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on December 12, 2008.

(10) Incorporated by reference to the Company’s Current Report filed on Form 8-K with the SEC on March 6, 2009.

(11) Incorporated by reference to the Company’s Annual Report filed on Form 10-KSB with the SEC on April 10, 2006.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	INDEX OIL AND GAS INC.

Date: July 10, 2009	By:	/s/ Lyndon West
		Lyndon West
		President and Chief Executive Officer

	INDEX OIL AND GAS INC.

Date: July 10, 2009	By:	/s/ Andrew Boetius
		Andrew Boetius
		Chief Financial Officer, (Principal Accounting Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Daniel Murphy	Chairman of the Board	July 10, 2009
Daniel Murphy

/s/ Lyndon West	Chief Executive Officer and Director	July 10, 2009
Lyndon West

/s/ Andrew Boetius	Chief Financial Officer, (Principal Accounting Officer),	July 10, 2009
Andrew Boetius	(Principal Financial Officer) and Director

/s/ David Jenkins	Director	July 10, 2009
David Jenkins

Index to Consolidated Financial Statements


			Page
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets at March 31, 2009 and 2008			F-3
Consolidated Statements of Losses for the Years Ended March 31, 2009 and 2008			F-4
Consolidated Statement of Stockholders’ Equity for the Two Years Ended March 31, 2009 and 2008			F-5
Consolidated Statements of Cash Flows for the Years Ended March 31, 2009 and 2008			F-6
Notes to the Consolidated Financial Statements			F-7
Supplemental Oil and Gas Information (Unaudited)			F-25

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Index Oil and Gas, Inc.

Houston, USA

We have audited the accompanying consolidated balance sheets of Index Oil and Gas, Inc. (and subsidiaries) (the “Company”) as of March 31, ~~2006~~2009 and ~~2005~~2008 and the related consolidated statements of losses, stockholders’ equity, and cash flows for each of the two years in the period ended March 31, ~~2006~~2009. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on the financial statements based upon our audits.

We have conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Index Oil and Gas, Inc. at March 31, 2009 ~~2006~~ and ~~2005~~2008 and the results of its operations and its cash flows for each of of the two years in the period ended March 31, ~~2006~~2009, in conformity with ~~accounting~~ accounting principles generally accepted in the United States of America.

New York, New York		/s/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
July 10, 2006		Russell Bedford Stefanou Mirchandani LLP
		Certified Public Accountants

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in the Note 1, the Company has suffered recurring losses from operations and also, its current liabilities exceeded current assets as of March 31, 2009, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 1. The accompanying statements do not include any adjustments that might result from the outcome of this uncertainty.

~~F-1~~/s/ RBSM LLP

~~INDEX OIL~~New ~~AND GAS~~York, ~~INC.~~ New York

July 10, 2009

F-2

INDEX OIL AND GAS INC.

CONSOLIDATED BALANCE SHEETS

MARCH 31, ~~2006~~2009 AND ~~2005~~2008

	2006			2005
	2009				2008
ASSETS
Current Assets:
Cash and cash equivalents (Note 3)	$	5,536,006		$	8,673
Cash and cash equivalents (Note 2)	$	335,817			$	2,537,302
Trade receivables (Note 4)		12,501			9,769
Trade receivables (Note 3 and Note 13)		326,737				970,794
Other receivables (Note 3)		6,254			40,401
Other receivables (Note 2)		5,144				5,402
Other current assets		8,600			-
Other current assets (Note 2)		41,157				43,460
Total Current Assets		5708,~~563,361~~855			~~58,843~~	3,556,958
Oil & Gas Properties, full cost, net of accumulated depletion (Notes 3, 5, 8 and 15)		951,199			348,334
Oil & Gas Properties, full cost, net of accumulated depletion (Notes 2, 4, 7 and 9)		6,263,537				12,595,091
Property and Equipment, net of accumulated depreciation (Note 3 and 5)		1,727			8,385
Property and Equipment, net of accumulated depreciation (Notes 2 and 4)		21,595				26,031
Total Oil & Gas Properties and Property and Equipment		~~952~~6,~~926~~285,132			~~356,719~~	12,621,122
Total Assets	$	6,~~516~~993,~~287~~987		$	~~415,562~~$	16,178,080
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses (Note 3)	$	555,452		$	229,219
Accounts payable and accrued expenses	$	978,856			$	1,025,894
Bank loan (Note 6)		48,569			-
Asset Retirement Obligation (Notes 2 and 7)		125,716				-
Notes payable to affiliates (Note 6, 10 and 14 )		-			94,603
Total Current Liabilities		1,104,572				1,025,894
Other current liability (Note 14 )		1,007			-
Long-Term Liabilities:
Total Current Liabilities		605,028			323,822
Asset Retirement Obligation (Notes 2 and 7)		14,998				88,209
Long-Term Liabilities:
Total Liabilities		1,119,570				1,114,103
Asset Retirement Obligation (Notes 3 and 7)		25,300			16,500
Commitments and Contingencies (Note 9)		-				-
Total Liabilities		630,328			340,322
Stockholders Equity: (Notes 10, 11 and 12)
Commitments and Contingencies (Note 9)		-			-
Preferred stock, par value $0.001, 10 million shares authorized, no shares issued and outstanding at March 31, 2009 and 2008 (see Note 10)		-				-
Stockholders Equity: (Note 6 and 11)
Common stock, par value $0.001, 500 million shares authorized, 71,636,019 and 71,369,880 issued and outstanding at March 31, 2009 and 2008, respectively (see Note 10)		71,636				71,370
Common stock, par value $0.001, 75 million shares authorized , 54,544,345 and 12,303,674 issued and outstanding at March 31, 2006 and 2005, respectively (see Note 10)		54,544			12,304
Additional paid in capital		21,950,246				21,738,764
Additional paid in capital		8,387,306			944,140
Accumulated deficit		(16,126,289	)			(6,747,667	)
Accumulated deficit		(2,575,581	)		(884,775	)
Other comprehensive income (Note 2)		(21,176)				1,510
Other comprehensive income (Note 3)		19,690			3,571
Total Stockholders’ Equity		5,874,417				15,063,977
Total Stockholders' Equity		5,885,959			75,240
Total Liabilities and Stockholders’ Equity	$	6,993,987			$	16,178,080
Total Liabilities and Stockholders' Equity	$	6,516,287		$	415,562

See accompanying notes to consolidated financial statements

F-23

INDEX OIL AND GAS, INC.

CONSOLIDATED STATEMENT OF LOSSES

FOR THE YEARS ENDED MARCH 31, ~~2006~~2009 AND ~~2005~~2008

	2006			2005
	2009				2008
Revenue:
Oil sales	$	191,114		$	88,176
Oil & gas sales (Note 2 and Note 13)	$	2,828,751			$	1,705,593
Operating Expenses:
Operating costs		41704,~~953~~183			~~23,584~~	303,474
Depreciation and amortization (Note 5)		71,571			38,295
Depletion, depreciation and amortization (Note 4)		2,094,481				1,096,229
Impairment		10,000			-
Impairment charges (Note 4)		7,002,472				-
General and administrative expenses		12,~~746~~430,~~101~~443			~~442,645~~	2,457,929
Total Operating Expenses		112,~~869~~231,~~625~~579			~~504,524~~	3,857,632
Loss from Operations		(19,~~678~~402,~~511~~828	)		~~(416,348~~	)(2,152,039	)
Other Income (Expenses):		(43,234	)		(6,807	)
Other Income:
Interest income		3024,~~939~~207			~~1,128~~	205,609
Total Other Income (Expense)		(12,295	)		(5,679	)
Total Other Income		24,207				205,609
Loss before Income Taxes		(19,~~690~~378,~~806~~621	)		~~(422,027~~	)(1,946,430	)
Income Taxes Benefit (Note 8)		-			-	-
Net Loss	$	(19,~~690~~378,~~806~~621	)	$	~~(422,027~~$	)(1,946,430	)
Loss per share (Note 12):
Basic and assuming dilution	$	(0.0813	)	$	~~(0.04~~$	)(0.03	)
Weighted average shares outstanding:
Basic and assuming dilution		2271,~~391~~477,~~357~~513			~~11,623,413~~	66,288,104

See accompanying notes to consolidated financial statements

F-34

INDEX OIL AND GAS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

FOR THE TWO YEARS ENDED MARCH 31, ~~2006~~ 2009

	Common Stock								Additional Paid in				(Accumulated				Other Comprehensive			Total Stockholders’
	Shares			~~Amount~~	Amount		~~Additional Paid in Capital~~		Capital	~~(Accumulated Deficit)~~			~~Other Comprehensive Income/(Loss~~Deficit)			~~Total Stockholders’ Equity~~	Income/(Loss)			Equity
Balance at March 31, 2003		1,980,780		$	1,981		$	108,334		$	(8,329	)	$	(297	)	$	101,689
Balance at March 31, 2007		65,737,036			$	65,737			$	19,043,734			$	(4,801,237	)		$	15,399		$	14,323,633
Issuance of common stock		7,894,030			7,894			566,549			-			-			574,443
Issuance of common stock on private offerings		5,541,182				5,541				2,765,049				-				-			2,770,590
Stock issue costs		-			-	-		~~(6,808~~	)	(382,171	-)			-			~~(6,808~~	)-			(382,171	)
Compensation cost related to stock options		-			-			53,388			-			-			53,388
Stock compensation, net of tax of $0		-				-				302,911				-				-			302,911
Compensation cost related to warrants		-			-			639			-			-			639
Issuance of stock upon vesting of stock award		25,000				25				(25	)			-				-			-
Other comprehensive income-foreign currency translation adjustment		-			-			-			-			6,430			6,430
Issuance of stock upon exercise of warrants		66,662				67				9,266				-				-			9,333
Net loss		-			-			-			(454,419	)		-			(454,419	)
Other comprehensive income foreign currency translation adjustment		-				-				-				-				(13,889	)		(13,889	)
Balance at March 31, 2004		9,874,810		$	9,875		$	722,102		$	(462,748	)	$	6,133		$	275,362
Net loss		-				-				-				(1,946,430	)			-			(1,946,430	)
Issuance of common stock		1,579,163			1,579			167,778			-			-			169,357
Balance at March 31, 2008		71,369,880			$	71,370			$	21,738,764			$	(6,747,667	)		$	1,510		$	15,063,977
Issuance of common stock, on exercise of share options		849,701			850			54,260			-			-			55,110
Stock compensation, net of tax of $0		-				-				211,748				-				-			211,748
Other comprehensive income-foreign currency translation adjustment		-			-			-			-			(2,562	)		(2,562	)
Stock Awards		266,139				266				(266	)			-				-			-
Net loss		-			-			-			(422,027	)		-			(422,027	)
Other comprehensive income foreign currency translation adjustment		-				-				-				-				(22,687	)		(22,687	)
Balance at March 31, 2005		12,303,674		$	12,304		$	944,140		$	(884,775	)	$	3,571		$	75,240
Net loss		-				-				-				(9,378,621	)			-			(9,378,621	)
Issuance of common stocks		9,596,735			9,597			1,176,449			-			-			1,186,046
Balance at March 31, 2009		71,636,019			$	71,636			$	21,950,246			$	(16,126,288	)		$	(21,177)		$	5,874,417
Stock issue costs		-			-			(23,219	)		-			-			(23,219	)
Issuance of common stock on conversion of stockholder loan		715,143			715			86,043			-			-			86,758
Shares relating to Index Ltd cancelled in relation to reverse merger in January 2006 (Note 2)		(22,615,552	)		(22,616	)		-			-			-			(22,616	)
Shares issued to Index Ltd shareholders relating to reverse merger in January 2006 (Note 2)		22,615,552			22,616			-			-			-			22,616
Stock compensation, net of tax of $0		-			-			1,043,823			-			-			1,043,823
Stock compensation, net of tax of $0		303,793			303			37,274			-			-			37,577
Shares issued to Index Inc shareholders in relation to merger with Index Ltd in January 2006 (Note 2)		23,091,667			23,092			-			-			-			23,092
Issuance of common stock on private offering		8,533,333			8,533			5,111,467			-			-			5,120,000
Issuance of warrants		-			-			11,329			-			-			11,329
Other comprehensive income foreign currency translation adjustment		-			-			-			-			16,119			16,119
Net loss		-			-			-			(1,690,806	)		-			(1,690,806	)
Balance at March 31, 2006		54,544,345		$	54,544		$	8,387,306		$	(2,575,581	)	$	19,690		$	5,885,959

See accompanying notes to consolidated financial statements

F-45

INDEX OIL AND GAS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, ~~2006~~2009 AND ~~2005~~ 2008

	2006			2005
	2009				2008
Cash Flows From Operating Activities:
Net loss	$	(19,~~690~~378,~~806~~621	)	$	~~(422,027~~$	)(1,946,430	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Organization costs arising from acquisition		1,578
Non cash stock based compensation cost		211,748				302,911
Non cash stock based compensation cost		1,043,823			-
Depreciation, amortization and impairment		9,096,953				1,096,229
Amortization of debt issue costs-current year		43,234			6,807
Allowance for doubtful accounts		49,320				-
Non-cash interest expense on warrant issuance on loan conversion		1,476			-
Decrease (Increase) in receivables		597,034				(859,427	)
Depreciation and amortization		71,571			38,295
(Decrease) Increase in accounts payable and accrued expenses		(84,134	)			211,968
Impairment		10,000			-
Net Cash Provided By (Used In) Operating Activities		492,300				(1,194,749	)
(Increase) in receivables		(14,104	)		(31,787	)
Cash Flows From Investing Activities:
Increase in accounts payable and accrued expenses		342,267			71,672
Payments for property and equipment		(4,070	)			(18,094	)
Net Cash (Used In) Operating Activities		(190,961	)		(337,040	)
Payments for oil and gas properties		(2,704,388	)			(8,774,058	)
Cash Flows From Investing Activities:
Net Cash (Used In) Investing Activities		(2,708,458	)			(8,792,152	)
Cash received in reverse merger		10,018			-
Cash Flows From Financing Activities:
Payments for oil and gas properties and property and equipments		(659,376	)		(70,540	)
Proceeds from issuance of shares		-				2,779,923
Proceeds from sale of oil and gas properties		-			4,400
Payment for share issue costs		-				(382,171	)
Net Cash (Used In) Investing Activities		(649,358	)		(66,140	)
Net Cash Provided by Financing Activities		-				2,397,752
Cash Flows From Financing Activities:
Effect of exchange rate changes on cash and cash equivalents		14,674				(14,674)
Proceeds from issue of shares		5,681,229			-
Net (Decrease) in Cash And Cash Equivalents		(2,201,485	)			(7,603,823)
Proceeds from issue of warrants		8,377			-
Cash and cash equivalents at beginning of year	$	2,537,302			$	10,141,125
Proceeds from issue of shares and options		-			77,311
Cash and cash equivalents at the end of year	$	335,817			$	2,537,302
Proceeds from convertible notes payable		676,664			91,302
Supplemental Disclosures of Cash Flow Information:
Proceeds from bank term debt		51,374			-
Cash received during the year for interest	$	24,207			$	205,608
Payment for share issue costs		(23,219	)		-
Cash paid during the year for taxes	$	-			$	-
Payment for debt issue costs		(43,234	)		(6,807	)
Non-cash Financing and Investing Transactions:
Net Cash Provided by Financing Activities		6,351,191			161,805
Non-cash stock based compensation cost	$	211,747			$	302,911
Effect of exchange rate changes on cash and cash equivalents		16,461			(5,984	)
Net Increase/(Decrease) in Cash And Cash Equivalents		5,527,333			(247,359	)
Cash and cash equivalents at beginning of period	$	8,673		$	256,032
Cash and cash equivalents at the end of period	$	5,536,006		$	8,673
Supplemental Disclosures of Cash Flow Information:
Cash paid (received) during the year for interest	$	(32,415	)	$	(1,128	)
Cash paid during the year for taxes	$	-		$	-
Non-cash Financing and Investing Transactions:
Conversion of loan capital into share capital	$	750,630		$	147,156
Non cash stock based compensation cost	$	1,043,823		$	-
Non-cash interest expense on warrant issuance on loan conversion	$	1,476		$	-
Acquisitions :
Common stock retained by Index Inc.	$	23,092		$	-
Assets acquired	$	(23,500	)	$	-
Liabilities acquired	$	1,986		$	-
Total consideration paid	$	1,578		$	-

See accompanying notes to consolidated financial statements

F-5

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 1 - ORGANIZATION AND OPERATIONS OF THE COMPANY

Index Oil & Gas Limited (“Index Ltd.”) was incorporated on February 21, 2003 in the United Kingdom. Index Ltd. invested in a 5% working interest in oil and gas leases covering approximately 8,500 acres located in Stafford County, Kansas (“Kansas properties”) in July 2003. In August 2003, Index Oil & Gas USA, LLC (“Index USA”) was formed and the Kansas properties were transferred into this wholly owned subsidiary. Index Ltd. is participating in an ongoing drilling program on these properties. Additionally, Index Investments North America Inc. (“Index Investments”) and Index Offshore LLC (“Index Offshore”), a wholly owned subsidiary of Index Investments, were both formed in July 2004 for future potential investments in the United States. Index Ltd. comprises a United Kingdom holding company, which provides management services and United States operating subsidiaries, which are engaged in the exploration for, development, production and sale of oil and natural gas. Index Ltd. does not currently operate any of its properties and sells its oil production to domestic crude oil purchasers.

In August 2005, Index Ltd.’s U.S. subsidiaries entered into agreements to participate in the drilling of four wells in Texas and Louisiana. The first of these commenced drilling in December 2005 and is awaiting completion and pipeline installation. A subsidiary of Index Ltd. has been participating in an ongoing drilling program on the Stafford County, Kansas properties.

On January 20, 2006, the entire issued share capital of Index Ltd. was acquired by Index Oil and Gas Inc. (“the Company”, “Index Inc.”), together with the raising of $5,120,000 of new equity capital for investment in oil and gas projects developed and for operating and working capital purposes.

Subsequent to the acquisition, a subsidiary of Index Ltd. entered into two agreements: (1) a Seismic Reprocessing and Exploration Agreement covering prospective areas in the U.S. Gulf Coast; and (2) an agreement to acquire a 5% working interest in an exploration project in Barton County, Kansas.

NOTE 2 - MERGER AND CORPORATE RESTRUCTURE

In March 2004, a company named Thai One On, Inc. (“Thai”) was incorporated under the laws of the State of Nevada. Thai then acquired a wholly-owned subsidiary, Thai Pasta Enterprise Sdn. Bhd., a privately-held Malaysian company (“Thai Pasta”), from an officer and director of Thai. Thai Pasta commenced operations as a restaurant operator in June 2004, but subsequently ceased operations in the fourth quarter of 2005. Thai Pasta then sold a portion of its surplus assets, leaving it with no significant assets. In November 2005, a Letter of Intent agreement was entered into for the proposed acquisition (“the Letter of Intent”) of all outstanding shares of Index Ltd.’s common stock by Thai. Subsequently, Thai changed its name from Thai One On Inc. to Index Inc. At December 31, 2005, Thai had 33,220,000 shares outstanding. In January 2006, the Company retired 10,128,333 shares of stock leaving 23,091,667 shares outstanding.

On January 20, 2006, the stockholders of Index Ltd. (“Index”) entered into Acquisition and Share Exchange Agreements (“Acquisition Agreements”, “the Transaction”, or “Merger”) with the Company. The Company had a total of 75,000,000 authorized shares with a par value of $0.001 per share and 33,220,000 shares issued and outstanding as of December 31, 2005.

The Company’s year end for accounting purposes was December 31, 2005. As a result of the Merger , there was a change in control of the public entity. In accordance with Statement of Financial Accounting Standards 141, Index Ltd. is deemed to be the acquiring entity. While the transaction is accounted for using the purchase method of accounting, in substance the Merger is a recapitalization of Index Ltd.’s capital structure

For accounting purposes, the Company accounted for the transaction as a reverse acquisition and Index is the surviving entity. The total purchase price and carrying value of net assets acquired was $ 1,578. The Company did not recognize goodwill or any intangible assets in connection with the transaction. As of the date of the Agreement, Thai was an inactive corporation with no significant assets and liabilities.

Effective with the Acquisition Agreements, all previously outstanding common stock owned by Index’s stockholders were exchanged for an aggregate of 22,615,552 shares of the Company’s common stock, $0.001 par value (“the Common Stock”) and all issued warrants to purchase shares of Common Stock in Index Ltd. were exchanged for 1,092,676 warrants to purchase shares of Common Stock of the Company. As part of the Transaction it was agreed that, subsequent to the Transaction 10,128,333 shares of common stock held by the former directors and officers of the Company were retired and subsequently canceled by the transfer agent for the Company. The effect of the Transaction was that 23,091,667 shares of Common Stock would be retained (see Note 9).

F-6

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, ~~2006~~2009 AND ~~2005~~2008

NOTE 21 - ~~MERGER~~ORGANIZATION AND ~~CORPORATE~~OPERATIONS ~~RESTRUCTURE~~OF -THE ~~(continued)~~COMPANY

The value of the stock issued was the historical cost of the Company's net tangible assets of $1,578, which did not differ materially from their fair value. The total consideration paid of $1,578 is summarized further below. Organization

	January 20, 2006
Common stock retained by Index Inc.	$	23,092
Assets acquired		(23,500	)
Liabilities assumed		1,986
Total consideration paid	$	1,578

We are an independent oil and natural gas company engaged in the acquisition, exploration, development production and sale of oil and natural gas properties in North America. We have interests in properties in Kansas, Louisiana and Texas.

InIndex Oil ~~accordance~~and ~~with~~Gas ~~Statement~~Inc. (“Index”, Index Inc.”, “the Company” or “we”, “us”, or “our”) was incorporated in March 2004 under the laws of ~~Position~~the ~~98-5~~State of Nevada and is the parent company with four group subsidiaries: Index Oil & Gas Limited (“~~SOP 98-5~~Index Ltd”), a United Kingdom holding company, which provides management services to the Company, ~~will~~and United States operating subsidiaries; Index Oil & Gas (USA) ~~expense~~LLC as(“Index ~~organization~~USA”), ~~costs~~an ~~the~~operating $1company; Index Investments North America Inc. (“Index Investments”); and Index Offshore LLC (“Index Offshore”),~~578~~ a wholly owned subsidiary of Index Investments and also an operating company. Index Inc., through its subsidiaries, is engaged in exploration, appraisal, development, production and sale of oil and natural gas. The Company does not currently operate any of its properties and sells its oil and gas production to domestic purchasers.

Concurrent with the Transaction was a private placement totaling $5.12 million for 8,533,333 shares of $0.001 par value common stock of the Company at a price of $0.60 per share. Furthermore in the fourth quarter, an aggregate amount of 10,128,333 shares of common stock held by the former directors and officers of the Company were retired and subsequently canceled by the transfer agent for the Company.Overview

~~NOTE~~For the 3fiscal year ended March 31, 2009, Index had year-on-year ~~SUMMARY~~increases OFin ~~SIGNIFICANT~~production and ~~ACCOUNTING~~revenues ~~POLICIES~~but a decrease in reserves. The Company holds an interest in the Alligator Bayou and Garwood prospect areas, and in the first wells drilled on each, Armour Runnells 1 ST and Cochran 1, respectively, which represent the most significant potential in the Company’s portfolio. Index remains free of borrowings.

Reserves decreased approximately 60% from 219.469 MBoe (thousand barrels of oil equivalent) proven reserves at March 31, 2008 to 87.702 MBoe at March 31, 2009. Production rose approximately 67% from 28.6 MBoe for the fiscal year ended March 31, 2008 to 47.8 MBoe for the fiscal year ended March 31, 2009. Correspondingly, revenues increased approximately 65% from $1.7 million for the fiscal year ended March 31, 2009 to $2.8 million for the year ended March 31, 2009.

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern. We have suffered recurring losses from operations. The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital. We are actively and currently seeking additional funding through various methods, but due to current market conditions funding may not be readily available. In addition our current liabilities exceeded our current assets as at March 31, 2009 and at the date of this report. These conditions indicate the existence of a material uncertainty which may cast significant doubt about our ability to continue as a going concern. These consolidated financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern. Management is currently considering plans should current efforts to secure new funding not be successful. These could include the establishment of a form of liquidating trust to hold the assets of the Company for the benefit of shareholders or the sale of the Company’s assets as part of a liquidation and, after discharging obligations, distributing the remaining proceeds, if any, to shareholders. Our Board of Directors is also actively considering deregistering from the Securities Exchange Act, if possible, if in its best judgment the costs of the requirements of being a compliant public company outweigh the benefits to shareholders and if we are eligible to deregister.

Operations

We own producing and non-producing oil and natural gas properties in Kansas, Louisiana, and Texas.

Our Kansas properties represent a very low risk, low cost, low working interest, and limited upside project and which is not expected to be a significant contributor to future growth. Our working interest in the Kansas wells is either 5% for wells drilled in Stafford County or 3.25% for wells drilled in Barton County, and the net revenue interest is either approximately 4.155% or 2.64%, respectively. The operating economics of our Kansas wells are very sensitive to the relationship of oil price and operating costs and as at March 31, 2009 a number of wells were shut in or were producing marginally.

The Company’s onshore drilling program in Louisiana comprises its interest in the Walker 1 well (WI 12.5%, approximate NRI 9.36%) and the Shadyside 1 well (30% WI, 22.5% NRI). Future production from the Walker well, if any, is expected to be marginally economic. The Shadyside 1 well has experienced production issues and had workover operations performed which were unsuccessful in restoring production. The Company has fully written off its proved reserves on the well and is in receipt of a recommendation to plug and abandon the well from the operator.

As at March 31, 2009 we carried proved reserves against the following Texas wells:

F-7

Outlar 1; Wharton County; WI 10.9% (9.38% after prospect payout), NRI 8.2% (7.0% after prospect payout).

Ducroz 1; Brazoria County; WI 7.5%, NRI 5.25%.

Hawkins 1; Matagorda County; WI 12.5%, NRI 10.01%.

Cochran 1; Colorado County; WI 5%, NRI 3.75%.

The Company also holds an interest in the following exploration projects in Texas:

Alligator Bayou prospect:

The Alligator Bayou prospect is a deep Wilcox trend high impact exploration prospect, located in Matagorda County, Texas, of approximately 10,000 acres defined by 2D seismic. The Armour-Runnells #1 ST exploratory well has been drilled to a total depth of 23,830 feet, has encountered multiple sands with logged pay and is currently awaiting the commencement of phase 2 testing operations. Index holds a 5% WI and a 3.5% NRI in the well and leases over the prospect.

Garwood field:

The Garwood field is upthrown to a major Wilcox expansion fault, located in Colorado County, Texas. The Cochran #1 well tested zones at approximately 16,600 feet and 13,800 feet, and is currently producing from the upper zone. The well has proved up further development and probable locations. Index holds a 5% WI and a 3.75% NRI in the Cochran #1 well and leases over the prospect.

We also hold leases in Texas in: i) the Supple Jack Creek lease area, at a 20% WI, in which a first well, HNH Gas Unit 1, was drilled and is currently suspended pending further evaluation of potential logged pay intervals; ii) the West Wharton prospect area, on which the Outlar 1 well was drilled. The second well, Stewart 1, including a sidetrack in which Index did not participate, was a dry hole and the overall project is now under review.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows:

Principles of Consolidation

The consolidated financial statements as of March 31, ~~2006~~2009 and ~~2005~~2008 and for the ~~two year~~years ~~periods~~ ended March 31, ~~2006~~2009 and ~~2005~~2008 include the accounts of the Company and its wholly owned subsidiaries, ~~Index USA, Index Investments, Index Offshore, and Thai Pasta (inactive),~~ after eliminating all significant intercompany accounts and transactions. As described in Note 2, Merger and Corporate Restructure these consolidated financial statements are presented as a recapitalization of Index Ltd. Results of operations are included from the date of incorporation and to the extent of differences in dates of incorporation as a result the results of operations for the years ended March 31, 2006 are not comparable with March 31, 2005. For the reverse merger between the Company and Index Ltd. at January 20, 2006 the stockholder’s equity section and earnings per share in the consolidated balance sheet at March 31, 2006 and March 31, 2005 were restated to reflect the exchange of shares using a conversion ration of approximately 2.857 shares of the Company to 1 share of Index Ltd.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles generally accepted in the United States 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. Certain accounting policies involve judgments and uncertainties to such an extent that there is reasonable likelihood that materially different amounts could have been reported under different conditions, or if different assumptions had been used. We evaluate our estimates and assumptions on a regular basis. We base our estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions used in preparation of our financial statements. The most significant estimates with regard to these financial statements relate to the provision for income taxes, dismantlement and abandonment costs, estimates to certain oil and gas revenues and expenses and estimates of proved oil and natural gas reserve quantities used to calculate depletion, depreciation and impairment of proved oil and natural gas properties and equipment.

~~F-7~~Correction of Errors

~~INDEX~~The ~~OIL~~Company ~~AND~~adopted ~~GAS~~SFAS 154, ~~INC~~“Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3 (“SFAS 154”)” in April 1, 2007, in which it changed the requirements for the accounting for and the reporting of a change in accounting principle. The Company requires that a new accounting principle be applied to the balances of assets and liabilities as of the beginning of the earliest period for which retrospective application is practicable and that a corresponding adjustment is made to the opening balance of retained earnings (or other appropriate components of equity or net assets in the balance sheet) for that period rather than being reported in the statement of operations. When it is impracticable to determine the cumulative effect of applying a change in accounting principle to all prior periods, The Company applies the new accounting principle as if it were adopted prospectively from the earliest date practicable. The Company will also revise previously issued financial statements to reflect the correction of an error, should one occur, and limit the application to the direct effects of the change. Indirect effects of a change in accounting principle will be recognized in the period of the accounting change. The Company will continue to account for a change in accounting estimate in accordance with APB 20. The adoption of this pronouncement had no impact to the Company’s consolidated financial position or results of operations.

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~F-8

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash and Cash Equivalents, and Concentrations of Credit Risk

Cash and cash equivalents represent cash in banks. The Company considers any highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. The Company’s accounts receivable are concentrated among entities engaged in the energy industry, within the United States. Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and related party receivables. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit.

Accounting for Bad Debts and Allowances

Bad debts and allowances are provided based on historical experience and management's evaluation of outstanding accounts receivable. ~~The~~Management ~~management~~ periodically ~~evaluates~~ evaluates past due or delinquency of accounts receivable in evaluating its allowance for doubtful accounts. ~~There~~For ~~was~~oil noand gas sales receivables we generally only consider booking an allowance if and when a specific instance of non payment occurs. Allowance for doubtful accounts at was $49,320 at March 31, ~~2006~~2009 and ~~2005~~$nil at March 31, 2008.

Other Current Assets

Other receivables at March 31, ~~2006~~2009 and ~~2005~~2008, of $65,~~254~~144 and $405,~~401~~402, respectively consist primarily of ~~prepaid expenses and~~ value added tax recoverable in the United Kingdom by the Company. Other current assets of $841,~~600~~157 and $43,460 at March 31, 2009 and 2008 ~~2006~~ consist of ~~accrued~~prepaid ~~interest income from cash in banks~~expenses.

Oil and Gas Properties

The Company follows the full cost method of accounting for oil and gas properties. Accordingly, all costs associated with acquisition, exploration, and development of properties within a relatively large geopolitical cost center are capitalized when incurred and are amortized as mineral reserves in the cost center are produced, subject to a limitation that the capitalized costs not exceed the value of those reserves. In some cases, however, certain significant costs, such as those associated with offshore U.S. operations, are deferred separately without amortization until the specific property to which they relate is found to be either productive or nonproductive, at which time those deferred costs and any reserves attributable to the property are included in the computation of amortization in the cost center. All costs incurred in oil and gas producing activities are regarded as integral to the acquisition, discovery, and development of whatever reserves ultimately result from the efforts as a whole, and are thus associated with the Company’s reserves. The Company capitalizes internal costs directly identified with performing or managing acquisition, exploration and development activities. The Company has not capitalized any internal costs or interest at March 31, ~~2006~~ 2009 and ~~2005~~2008. Unevaluated costs are excluded from the full cost pool and are periodically evaluated for impairment rather than amortized. Upon evaluation, costs associated with productive properties are transferred to the full cost pool and amortized. Gains or losses on the sale of oil and natural gas properties are generally included in the full cost pool unless the entire pool is sold.

Capitalized costs and estimated future development costs are amortized on a unit-of-production method based on proved reserves associated with the applicable cost center. The Company has assessed the impairment for oil and natural gas properties for the full cost pool at March 31, ~~2006~~2009 and ~~2005~~ 2008 and will assess quarterly thereafter using a ceiling test to determine if impairment is necessary. Specifically, the net unamortized costs for each full cost pool less related deferred income taxes should not exceed the following: (a) the present value, discounted at 10%, of future net cash flows from estimated production of proved oil and gas reserves plus (b) all costs being excluded from the amortization base plus (c) the lower of cost or estimated fair value of unproved properties included in the amortization base less (d) the income tax effects related to differences between the book and tax basis of the properties involved. The present value of future net revenues should be based on current prices, with consideration of price changes only to the extent provided by contractual arrangements, as of the latest balance sheet presented. The full cost ceiling test must take into account the prices of qualifying cash flow hedges in calculating the current price of the quantities of the future production of oil and gas reserves covered by the hedges as of the balance sheet date. In addition, the use of the hedge-adjusted price should be consistently applied in all reporting periods and the effects of using cash flow hedges in calculating the ceiling test, the portion of future oil and gas production being hedged, and the dollar amount that would have been charged to income had the effects of the cash flow hedges not been considered in calculating the ceiling limitation should be disclosed. Any excess is charged to expense during the period that the excess occurs. The Company did not have any hedging activities during the two year period ended March 31, 2009. Application of the ceiling test is required for quarterly reporting purposes, and any write-downs cannot be reinstated even if the cost ceiling subsequently increases by year-end. Sales of proved and unproved properties are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in income. Abandonment of properties is accounted for as adjustments of capitalized costs with no loss recognized.

F-8

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Oil and Gas Properties (continued)

being hedged, and the dollar amount that would have been charged to income had the effects of the cash flow hedges not been considered in calculating the ceiling limitation should be disclosed. Any excess is charged to expense during the period that the excess occurs. The Company did not have any hedging activities during the three year period ended March 31, 2006 and 2005. Application of the ceiling test is required for quarterly reporting purposes, and any write-downs cannot be reinstated even if the cost ceiling subsequently increases by year-end. A ceiling test write-down of $87,548 was recorded for the year period ended March 31, 2004. Sales of proved and unproved properties are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in income. Abandonment of properties is accounted for as adjustments of capitalized costs with no loss recognized.

Other Property, Plant and Equipment

Other property, plant and equipment primarily includes computer equipment, which is recorded at cost and depreciated on a straight-line basis over useful lives of five years. Repair and maintenance costs are charged to expense as incurred while acquisitions are capitalized as additions to the related assets in the period incurred. Gains or losses from the disposal of property, plant and equipment are recorded in the period incurred. The net book value of the property, plant and equipment that is retired or sold is charged to accumulated depreciation and amortization, and the difference is recognized as a gain or loss in the results of operations in the period the retirement or sale transpires.

~~Other Current Liabilities~~F-9

Other current liabilities consist primarily of accruals for lease operating costs, capital expenditures and general and administrative expenses. Additionally, current liabilities also include a note payable to a bank. Other current liabilities at March 31, 2006 and 2005 include compensation expense payable to directors. See Note 13.

Comprehensive Income

Statement of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive Income,” establishes standards for reporting and displaying of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. The Company reports foreign currency translation adjustments within other comprehensive income in the periods presented.

Net Earnings (Losses) Per Common Share

The Company computes earnings (losses) per share under Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (“SFAS 128”). Net earnings (losses) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding during the year. Dilutive common stock equivalents consist of shares issuable upon conversion of convertible notes payable and the exercise of the Company's stock options and warrants (calculated using the treasury stock method). During the year ended March 31, ~~2006~~2009 and ~~2005~~2008, common stock equivalents are not considered in the calculation of the weighted average number of common shares outstanding because they would be anti-dilutive, thereby decreasing the net loss per common share. For the reverse merger between the Company and Index Ltd. at January 20, 2006, the stockholder’s equity section and earnings per share in the consolidated balance sheet at March 31, 2006 and 2005 were restated (recapitalization) to reflect the exchange of shares using a conversion ratio of approximately 2.857 shares of the Company to 1 share of Index Ltd.

F-9

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

The Company uses the sales method of accounting for the recognition of natural gas and oil revenues. The Company has an agreement with the ~~operator~~operators of its properties to sell, on its behalf, production from the properties for which it has working interest ownership. Since there is a ready market for natural gas, crude oil and natural gas liquids (“NGLs”), production is sold at various locations at which time title and risk of loss pass to the buyer. Revenue is recorded when title passes based on the Company’s net interest or nominated deliveries of production volumes. The Company records its share of revenues based on sales volumes and contracted sales prices. The sales price for natural gas, natural gas liquids and crude oil are adjusted for transportation cost and other related deductions. The transportation costs and other deductions are based on contractual or historical data and do not require significant judgment. Subsequently, these deductions and transportation costs are adjusted to reflect actual charges based on third party documents once received by the Company. Historically, these adjustments have been insignificant. In addition, natural gas and crude oil volumes sold are not significantly different from the Company’s share of production.

The Company receives its share of revenue after all calculated ~~and~~ royalties are paid on natural gas, crude oil and NGLs in accordance with the particular ~~contractual~~ contractual provisions of the lease, license or concession agreements and the laws and regulations applicable to those agreements. Therefore, there is no Royalties payable ~~Payable~~ on the Company’s Consolidated~~/Combined~~ Balance Sheet.

Imbalances. When ~~actual~~ actual natural gas sales volumes exceed delivered share of sales volumes, an over-produced imbalance could occur. To the extent an over-produced imbalance exceeds the remaining estimated proved natural gas reserves for a given property,; the Company would record a liability. At and during the years ended March 31, ~~2006~~2009 and ~~2005~~2008, the Company had no imbalances.

Derivative and Hedging

The Company has also not entered into any derivative contracts for any purpose from the period of inception through March 31, ~~2006~~2009.

Foreign Currency Translation

The Company translates the foreign currency financial statements in accordance with the requirements of Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation.” Assets and liabilities of non-U.S. subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars at fiscal year-end exchange rates. Revenue and expense items are translated at average exchange rates prevailing during the fiscal year. Translation adjustments are included in ~~Accumulated~~accumulated other comprehensive loss in the equity section of the ~~balance~~Consolidated Balance ~~sheet~~Sheet ~~with the corresponding foreign currency transaction (losses)/gains included in - other comprehensive loss - foreign currency translation in the statement of operations~~ and totaled $16(22,~~119~~687) and $(213,~~562~~889) for the years ended March 31, ~~2006~~2009 and ~~2005~~2008, respectively., and foreign currency transaction (losses)/gains are included in the Consolidated Statement of Operations

Income Taxes

Deferred income taxes are provided using the asset and liability method for financial reporting purposes in accordance with the provisions of Statements of Financial Standards No. 109, “Accounting for Income Taxes”. Under this method, deferred tax assets and liabilities are recognized for temporary differences between the tax bases of assets and liabilities and their carrying values for financial reporting purposes and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be removed or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the ~~statements~~ Consolidated Statements of ~~operations~~Operations in the period that includes the enactment date. A valuation allowance is established to reduce deferred tax assets if it is is more likely than not that the related tax benefits will not be realized.

F-10

~~INDEX~~Segment ~~OIL AND GAS, INC.~~Information

~~NOTES~~Statement TOof ~~CONSOLIDATED~~Financial ~~FINANCIAL~~Accounting ~~STATEMENTS~~Standards No. 131, “Disclosures about Segments of an Enterprise and Related Information” (“SFAS 131”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. SFAS 131 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal operating segment.

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock Based Compensation

In ~~determining~~December ~~our~~16, ~~accounting policies~~2004, the ~~Company~~Financial ~~has chosen to apply the intrinsic value method pursuant to~~ Accounting Standards Board (~~“APB”~~"FASB") ~~APB~~published ~~No. 25,~~Statement ~~“Stock~~of ~~Issued~~Financial toAccounting ~~Employees”~~Standards ~~(“APB~~ No. ~~25”),~~ ~~effective~~123 ~~February 2003.~~(Revised ~~Under APB No. 25~~2004), ~~no compensation is recognized when the exercise~~Share-Based ~~price~~Payment ~~for~~("SFAS ~~options granted equals the fair value of the Company’s common stock on the date of the grant~~123-R"). ~~Accordingly, the provisions of~~ SFAS ~~No.~~ 123~~, “Accounting for Stock~~-~~Based~~R ~~Compensation,”~~requires ~~permit~~that ~~the~~compensation ~~continued~~cost ~~use~~related ~~of the method prescribed~~to byshare-based ~~APB~~payment ~~No. 25~~transactions ~~but~~be ~~require~~recognized ~~additional~~in ~~disclosure,~~the ~~including~~financial ~~pro forma~~statements. ~~calculations~~Share-based ofpayment ~~net~~transactions ~~income~~within ~~(loss) per share as if~~ the ~~fair~~scope ~~value method~~ of ~~accounting~~ ~~prescribed by~~ SFAS ~~No.~~ 123-R ~~had~~include ~~been applied. Although the~~stock ~~Company~~warrants, ~~applied~~restricted ~~the intrinsic method in accounting for~~ stock ~~issued to employees~~plans, itperformance-based does record compensation expense for the difference between the fair market value and the exercise price at the date of the grant using the Black Scholes valuation model. Thereforeawards, ~~there~~stock ~~was no pro forma impact for~~appreciation ~~the fiscal years ended March 31~~rights, ~~2006~~ and ~~2005~~employee asshare ~~shown~~purchase ~~below~~plans. ~~See Notes 10 and 13 for further discussion of these transactions.~~

	For the year ended March 31,
	2006			2005
Net loss, as reported	$	(1,690,806	)	$	(422,027	)
Add: Total stock based employee compensation expense as reported under intrinsic value method, net of tax of $0		-			-
Deduct: Total stock based employee compensation expense as reported under fair value based method, net of tax of $0		-			-
Net loss , pro forma	$	(1,690,806	)	$	(422,027	)
Basic and fully diluted loss per share, as reported	$	(0.08	)	$	(0.04	)
Basic and fully diluted loss per share, pro forma	$	(0.08	)	$	(0.04	)

On April 14, 2005, the SEC amended the effective date of the provisions of SFAS 123-R. Accordingly, the Company adopted the revised standard on January 1, 2006. Since there were no outstanding options at March 31, 2005 and the Company had no stock forfeitures since date of inception to March 31, 2005, there was no impact upon adoption of SFAS 123-R to the company’s financial position, results of operations or cash flows. See Notes 10 and 13 for further discussion of these transactions.

In December 2003, the FASB issued SFAS No.148, "Accounting for Stock-Based Compensation-Transition and Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, this statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.

In December 16, 2004, the Financial Accounting Standards Board ("FASB") published Statement of Financial Accounting Standards No. 123 (Revised 2004), Share-Based Payment ("SFAS 123-R"). SFAS 123-R requires that compensation cost related to share-based payment transactions be recognized in the financial statements. Share-based payment transactions within the scope of SFAS 123-R include stock warrants, restricted stock plans, performance-based awards, stock appreciation rights, and employee share purchase plans. Prior to January 1 2006, the Company accounted for its share-based payment transactions under the provisions of APB 25, whereby compensation expense is recognized using the intrinsic value of the options at the date of the grant.

On April 14, 2005, the SEC amended the effective date of the provisions of SFAS 123-R. Accordingly, the Company adopted the revised standard on January 1, 2006. Since there were no outstanding options at March 31, 2005 and the Company had no stock forfeitures since date of inception, there was no impact upon adoption of SFAS 123-R to the company’s financial position, results of operations or cash flows.

F-11

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Asset Retirement Obligations

Our financial statements reflect the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations. SFAS No.143 provides that, if the fair value for an asset retirement obligation can be reasonably estimated, the liability should be recognized in the period when it is incurred. Oil and gas producing companies incur this liability upon acquiring or drilling a well. Under the method prescribed by SFAS No.143, the retirement obligation is recorded as a liability at its estimated present value at the asset’s inception, with an offsetting increase to producing properties on the ~~balance~~Consolidated ~~sheet~~Balance Sheet. Periodic accretion of discount of the estimated ~~liability~~ liability is recorded, as appropriate, as an expense in the ~~statement~~Consolidated Statement of ~~operations~~Operations. The Company’s asset retirement obligations relate to the abandonment of oil producing wells. The Company has recognized an asset retirement liability of $25140,~~300~~714 and $1688,~~500~~ 209 at March 31, ~~2006~~2009 and ~~2005~~2008, ~~respectively, all relating to wells in production~~ ~~on the Kansas properties as of these dates~~respectively. It is estimated that salvage values of well equipment will be equal, in aggregate, to the cost of plugging and abandoning these wells at that point, and this estimate has been taken into account in the calculation of of accretion expense.

Long-Lived Assets

The Company has adopted Statement of Financial Accounting Standards No. 144 (SFAS 144). The Statement requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should any impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. SFAS No. 144 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. At March 31, 2006, the Company recorded an impairment of $10,000 related to restaurant equipment acquired during the reverse merger with Index Inc. These assets were deemed to be impaired as there is no future cash flow associated with these assets.

~~Conditional Asset Retirement Obligations.~~F-11

~~In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, “Accounting for~~ Conditional Asset Retirement ~~Obligations, an interpretation of FASB Statement~~ No. 143,” which requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability’s fair value can be reasonably estimated. The Company is required to adopt the provisions of FIN 47 no later than the first quarter of fiscal 2006. There was no impact to adoption of this Interpretation on its consolidated financial position, results of operations or cash flows since it currently does not have any conditional asset retirement obligations outstanding at March 31, 2006.Obligations

~~New~~In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, “Accounting ~~Pronouncements~~for Conditional ~~Not~~Asset ~~Yet~~Retirement ~~Adopted~~Obligations, an interpretation of FASB Statement No. 143”, which requires an entity to recognize a liability for the fair value of a conditional asset retirement obligation when incurred if the liability's fair value can be reasonably estimated. There was no impact of this Interpretation on the Company’s consolidated financial position, results of operations or cash flows since it currently does not have any conditional asset retirement obligations outstanding at March 31, 2009 and 2008.

~~Certain Hybrid~~Employers’ ~~Instruments. On February 16,~~Defined ~~2006 the FASB issued SFAS 155, “Accounting for Certain Hybrid~~Benefit ~~Instruments,”~~Pension ~~which amends SFAS 133, “Accounting for Derivative Instruments~~ and ~~Hedging~~ ~~Activities,”~~Other ~~and~~Postretirement SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS 140. This statement is effective for all financial instruments acquired or issued in fiscal years beginning after September 15, 2006. The Company does not expect its adoption of this new standard to have a material impact on its financial position, results of operations or cash flows as it currently does not have any hybrid instruments outstanding at March 31, 2006. Plans

~~Accounting Changes and Error Corrections.~~ In ~~May 2005~~September ~~the~~2006, the FASB issued SFAS ~~No. 154~~158, “Employers’ Accounting ~~Changes~~for Defined Benefit Pension and Other ~~Error~~postretirement ~~Corrections—a~~Plans”, which improves financial reporting by requiring an ~~replacement~~employer to recognize the overfunded or underfunded status of ~~APB~~a ~~Opinion~~defined ~~No.~~benefit postretirement 20plan ~~and~~as ~~FASB~~an ~~Statement~~asset ~~No.~~or 3liability ~~(“SFAS~~in ~~154”)”,~~its ~~which~~statement of financial position and to recognize changes ~~the~~in ~~requirements~~that ~~for~~funded status in the ~~accounting~~year ~~for~~in ~~and~~which the changes ~~reporting~~occur through comprehensive income of a ~~change~~ business entity or changes in ~~accounting~~unrestricted ~~principle~~net asset of a net-for-profit organization. This Statement ~~applies~~also improves financial reporting by requiring an employer to ~~all~~measure ~~voluntary~~the ~~changes~~funded status inof a plan as of the date of its year-end statement of financial position ~~accounting~~with ~~principle~~limited exceptions. ItThe ~~also~~required ~~applies~~date toof ~~changes~~adoption ~~required~~of bythe anrecognition ~~accounting~~and ~~pronouncement~~disclosure inprovisions ~~the~~of ~~unusual~~this ~~instance~~Statement ~~that~~is as of the ~~pronouncement~~end ~~does~~of ~~not~~the ~~include~~fiscal year ~~specific~~ending ~~transition~~after ~~provisions~~December 15, 2006. ~~When~~The aadoption ~~pronouncement~~of ~~includes~~this ~~specific~~statement on April 1, 2007 ~~transition~~had ~~provisions~~no impact to the Company’s consolidated financial position, ~~those~~results ~~provisions~~of operations ~~should~~or becash ~~followed~~flows as the Company does not currently have a defined benefit pension plan.

~~F-12~~Certain Hybrid Instruments. On February 16, 2006 the FASB issued SFAS 155, “Accounting for Certain Hybrid Instruments,” which amends SFAS 133, “Accounting for Derivative Instruments and Hedging Activities,” and SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole (eliminating the need to bifurcate the derivative from its host) if the holder elects to account for the whole instrument on a fair value basis. SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and SFAS 140. This statement is effective for all financial instruments acquired or issued in fiscal years beginning after September 15, 2006. The Company had no impact from the adoption of this new standard on its consolidated financial position, results of operations or cash flows as it currently does not have any hybrid instruments outstanding at March 31, 2009.

~~INDEX~~Accounting ~~OIL~~for ~~AND~~Servicing ~~GAS~~of Financial Assets. In March 2006, ~~INC~~the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140”(“SFAS No. 156”), which amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities.

~~NOTES~~This ~~TO CONSOLIDATED FINANCIAL STATEMENTS~~Statement:

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

New Accounting Pronouncements Not Yet Adopted (continued)

APB 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. When it is practicable to determine the period-specific effects of an accounting change on one or more individual prior periods presented, SFAS 154 requires that the new accounting principle be applied to the balances of assets and liabilities as of the beginning of the earliest period for which retrospective application is practicable and that a corresponding adjustment be made to the opening balance of retained earnings (or other appropriate components of equity or net assets in the balance sheet) for that period rather than being reported in the statement of operations. When it is impracticable to determine the cumulative effect of applying a change in accounting principle to all prior periods, this Statement requires that the new accounting principle be applied as if it were adopted prospectively from the earliest date practicable.

This Statement defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. This Statement also redefines restatement as the revising of previously issued financial statements to reflect the correction of an error.

SFAS 154 requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. Indirect effects of a change in accounting principle, such as a change in nondiscretionary profit-sharing payments resulting from an accounting change, should be recognized in the period of the accounting change. SFAS 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate affected by a change in accounting principle. This Statement carries forward without change the guidance contained APB 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. SFAS 154 also carries forward the guidance in APB 20 requiring justification of a change in accounting principle on the basis of preferability.

SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Early adoption is permitted for accounting changes and corrections of errors made in fiscal years beginning after the date SFAS 154 is issued. SFAS 154 does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of SFAS 154. This Statement is not expected to impact the Company’s consolidated financial position or results of operations.

Accounting for Servicing of Financial Assets. In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140”(“SFAS No. 156”), which amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement:

Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in any of the following situations:

a. A transfer of the servicer’s financial assets that meets the requirements for sale accounting

	a.	A transfer of the servicer’s financial assets that meets the requirements for sale accounting

	b.	A transfer of the servicer’s financial assets to a qualifying special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale securities or trading securities in accordance with FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities

b. A transfer of the servicer’s financial assets to a qualifying special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale securities or trading securities in accordance with FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities

An acquisition or assumption of an obligation to service a financial asset that does not relate to financial assets of the servicer or its consolidated affiliates.

Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if practicable.

F-13

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounting for Servicing of Financial Assets (continued).

Permits an entity to choose either of the following subsequent measurement methods for each class of separately recognized servicing assets and servicing liabilities:

Amortization method—Amortize servicing assets or servicing liabilities in proportion to and over the period of estimated net servicing income or net servicing loss and assess servicing assets or servicing liabilities for impairment or increased obligation based on fair value at each reporting date.

Fair value measurement method—Measure servicing assets or servicing liabilities at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur.

At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by entities with recognized servicing rights, without calling into question the treatment of other available-for-sale securities under Statement 115, provided that the available-for-sale securities are identified in some manner as offsetting the entity’s exposure to changes in fair value of servicing assets or servicing liabilities that a servicer elects to subsequently measure at fair value.

Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the statement of financial position and additional disclosures for all separately recognized servicing assets and servicing liabilities.

F-12

This Statement requires that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. The Board concluded that fair value is the most relevant measurement attribute for the initial recognition of all servicing assets and servicing liabilities, because it represents the best measure of future cash flows. This Statement permits, but does not require, the subsequent measurement of servicing assets and servicing liabilities at fair value. An entity that uses derivative instruments to mitigate the risks inherent in servicing assets and servicing liabilities is required to account for those derivative instruments at fair value. Under this Statement, an entity can elect subsequent fair value measurement of its servicing assets and servicing liabilities by class, thus simplifying its accounting and providing for income statement recognition of the potential offsetting changes in fair value of the servicing assets, servicing liabilities, and related derivative instruments. An entity that elects to subsequently measure servicing assets and servicing liabilities at fair value is expected to recognize declines in fair value of the servicing assets and servicing liabilities more consistently than by reporting other-than-temporary impairments.

The Board decided to require additional disclosures and separate presentation in the statement of financial position of the carrying amounts of servicing assets and servicing liabilities that an entity elects to subsequently measure at fair value to address concerns about comparability that may result from the use of elective measurement methods. The Company adopted this Statement on April 1, 2007 with no impact on its consolidated financial position, results of operations or cash flows.

AnIncome ~~entity should~~Taxes. ~~adopt~~In ~~this~~June 2006, ~~Statement~~the asFASB ofissued ~~the~~FASB ~~beginning~~Interpretation ofNo ~~its~~48 ~~first~~(“FIN ~~fiscal~~48”), ~~year~~“Accounting for ~~that begins~~Uncertainty ~~after~~in ~~September~~Income ~~15,~~Taxes—an ~~2006.~~interpretation ~~Earlier~~of ~~adoption~~FASB isStatement ~~permitted~~No. as109”, ofwhich clarifies the ~~beginning~~ ofaccounting anfor ~~entity~~uncertainty in income taxes recognized in an enterprise’s ~~fiscal~~financial ~~year,~~statements ~~provided~~in ~~the~~accordance ~~entity~~with ~~has~~FASB ~~not~~109. ~~yet~~The Interpretation ~~issued~~prescribes a recognition threshold and measurement attribute for the financial ~~statements,~~statement ~~including~~recognition ~~interim~~and ~~financial~~measurement ~~statements,~~of ~~for~~a ~~any~~tax ~~period~~position taken or ~~of that~~expected ~~fiscal~~to ~~year~~be taken in a tax return. The ~~effective~~Interpretation ~~date~~also ofprovides ~~this~~guidance on ~~Statement~~derecognition, isclassification, ~~the~~interest ~~date~~and anpenalties, ~~entity adopts~~accounting ~~the~~in ~~requirements~~interim periods, ofdisclosure ~~this~~and ~~Statement~~transition. The Company’s ~~has~~adoption of this Interpretation on April 1, 2007 did not ~~yet~~have ~~determined the~~any impact on the Company’s consolidated financial position, or results of operations or cash flows.

~~NOTE~~In 4December 2006, the FASB issued FSP EITF 00-19-2, ~~TRADE~~Accounting ~~RECEIVABLES~~for Registration Payment Arrangements ("FSP 00-19-2") which addresses accounting for registration payment arrangements. FSP 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies. FSP 00-19-2 further clarifies that a financial instrument subject to a registration payment arrangement should be accounted for in accordance with other applicable generally accepted accounting principles without regard to the contingent obligation to transfer consideration pursuant to the registration payment arrangement. For registration payment arrangements and financial instruments subject to those arrangements that were entered into prior to the issuance of EITF 00-19-2, this guidance shall be effective for financial statements issued for fiscal years beginning after December 15, 2006 and interim periods within those fiscal years. The Company adopted the guidance of this FSP on April 1, 2007 and did not have any impact on its consolidated financial position, results of operations or cash flows.

Historically, through March 31, 2006, all of the Company’s trade receivables related to its working interest share of oil sales have been collected. No allowance for doubtful accounts has been recorded at March 31, 2006 and 2005.F-13

Fair Value Measurements. In September 2006, the FASB issued SFAS 157, “Fair Value Measurements”, which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements (“SFAS 157”). Prior to this SFAS 157, there were different definitions of fair value and limited guidance for applying those definitions in GAAP. SFAS 157 provides the definition to increase consistency and comparability in fair value measurements and for expanded disclosures about fair value measurements. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. SFAS 157 clarifies that market participant assumptions include assumptions about risk, i.e. the risk inherent in a particular valuation technique used to measure fair value and/or the risk inherent in the inputs to the valuation technique. SFAS 157 expands disclosures about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. The disclosures focus on the inputs used to measure fair value and for recurring fair value measurements using significant unobservable inputs, the effect of the measurements on earnings for the period. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including the financial statements for an interim period within that fiscal year. In November 2007, the FASB deferred the implementation of SFAS 157 for non-financial assets and liabilities until October 2008. The Company partially adopted this standard on April 1, 2008, as to financial assets and liabilities and has chosen to defer the implementation of nonfinancial assets and liabilities in accordance with the FASB deferral in Staff Position FAS 157-2. The adoption of this standard did not have an impact on its consolidated financial position results of operations or cash flows as the Company has not engaged in any financial activities to which this standard would apply. In October 2008, the FASB issued Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, to clarify the application of FASB Statement No. 157, Fair Value Measurements, in a market that is not active and to provide an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. The adoption of this standard and related staff positions do not have an impact on our consolidated financial position, results of operations or cash flows as the Company has not engaged in any financial activities to which this standard would apply.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities—including an amendment of FASB Statement No. 115” (“SFAS 159”), permitting entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting measurement. SFAS 159 applies to all entities, including not-for profit organizations. Most of the provisions of SFAS 159 apply only to entities that elect the fair value option. However, the amendment to FASB Statement No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, applies to all entities with available-for-sale and trading securities. The Company also elected to adopt this standard on April 1, 2008, but has not elected to present assets and liabilities at fair value that were not required to be measured at fair value prior to adoption of SFAS 159.

Recent Accounting Developments and New Accounting Pronouncements Not Yet Adopted

The Hierarchy of Generally Accepted Accounting Principles. In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles (GAAP) in the United States (the GAAP hierarchy). SFAS 162 is effective following the SEC’s approval of the Public Company Accounting Oversight Board (PCAOB) amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles, and is effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. An entity that has and continues to follow an accounting treatment in category (c) or category (d) as of March 15, 1992, need not change to an accounting treatment in a higher category ((b) or (c)) if its effective date was before March 15, 1992. For pronouncements whose effective date is after March 15, 1992, and for entities initially applying an accounting principle after March 15, 1992 (except for EITF consensus positions issued before March 16, 1992, which become effective in the hierarchy for initial application of an accounting principle after March 15, 1993), an entity shall follow this Statement. Any effect of applying the provisions of SFAS 162 shall be reported as a change in accounting principle in accordance with FASB Statement No. 154,

F-14

~~INDEX~~Accounting Changes and Error ~~OIL~~Corrections ~~AND~~(“SFAS ~~GAS~~154”). An entity shall follow the disclosure requirements of SFAS 154, ~~INC~~and additionally, disclose the accounting principles that were used before and after the application of the provisions of SFAS 154 and the reason why applying SFAS 154 resulted in a change in accounting principle. The Company does not expect the adoption of SFAS 162 to have a material impact on its consolidated financial position, results of operations or cash flows.

~~NOTES~~Business TOCombinations. In ~~CONSOLIDATED~~December ~~FINANCIAL~~2007, ~~STATEMENTS~~the FASB issued SFAS No. 141(R), "Business Combinations" ("SFAS 141(R)"), which replaces SFAS No. 141. SFAS No. 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquired and the goodwill acquired. The Statement also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008. The adoption of SFAS 141(R) will have an impact on accounting for business combinations once adopted, but the effect will be dependent upon acquisitions after that time.

~~MARCH~~Noncontrolling 31Interests. In December 2007, ~~2006~~the ~~AND~~FASB ~~2005~~issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - an amendment of Accounting Research Bulletin No. 51" ("SFAS 160"), which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest and the valuation of retained non-controlling equity investments when a subsidiary is deconsolidated. The Statement also establishes reporting requirements that provide sufficient disclosures that clearly identify and distinguish between the interests of the parent and the interests of the non-controlling owners. SFAS 160 is effective for fiscal years beginning after December 15, 2008. The Company does not currently have any noncontrolling interests in subsidiaries, but once adopted, the effects will be dependent upon acquisitions after that time.

~~NOTE~~Disclosures about Derivative 5Instruments and Hedging Activities. In May 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities-an ~~PROPERTY~~Amendment to FASB Statement No. 133” (“SFAS 161”). Statement No. 133, Accounting for Derivative ~~PLANT~~Instruments ~~AND~~and ~~EQUIPMENT~~Hedging Activities, ~~PROPERTY~~establishes, ~~ACQUISITIONS~~among ~~AND~~other ~~DISPOSITIONS~~things, ~~AND~~the disclosure ~~CAPITALIZED~~requirements for derivative instruments and for hedging activities ~~INTEREST~~(“Statement 133”). SFAS 161 amends and expands the disclosure requirements of Statement 133 with the intent to provide users of financial statements with an enhanced understanding of:

	a.	How and why an entity uses derivative instruments.
	b.	How derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations.
	c.	How derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.

To meet those objectives, SFAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. SFAS 161 shall be effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Early application is encouraged. SFAS 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption In September 2008, the FASB issued Staff Position 133-1 and FASB Interpretation No. 45-4, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 161”, which addressed various issues related to FASB No. 133 and FIN 45, but also clarified the effective date of SFAS 161 to be any period, annual or interim beginning after November 15, 2008. The Company is adopting SFAS 161 for its next interim period. The adoption of SFAS 161 is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows as the Company has not engaged in any derivative instruments or hedging activities.

F-15

Oil and Gas Reporting Requirements. In December 2008, the SEC released Release No. 33-8995, “Modernization of Oil and Gas Reporting” (the “Release”). The disclosure requirements under this Release will permit reporting of oil and gas reserves using an average price based upon the prior 12-month period rather than year-end prices and the use of new technologies to determine proved reserves if those technologies have been demonstrated to result in reliable conclusions about reserves volumes. Companies will also be allowed to disclose probable and possible reserves in SEC filings. In addition, companies will be required to report the independence and qualifications of its reserves preparer or auditor and file reports when a third party is relied upon to prepare reserves estimates or conduct a reserves audit. The new disclosure requirements become effective for the Company beginning with our annual report on Form 10-K for the year ended March 31, 2010. We are currently evaluating the impact of this Release on our oil and gas accounting disclosures.

In June 2009 the FASB issued SFAS 166, “Accounting for Transfers of financial Assets — an amendment of FASB Statement No. 140” (SFAS 166). SFAS 166 eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and changes the initial measurement of a transferor’s interest in transferred financial assets. SFAS No. 166 is applicable for annual periods after November 15, 2009 and interim periods therein and thereafter. The adoption of SFAS 166 is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In June 2009 the FASB issued SFAS 167, “Amendments to FASB Interpretation No. 46(R)” (SFAS 167). SFAS 167 eliminates Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying Interpretation 46(R)’s provisions. SFAS No. 167 is applicable for annual periods after November 15, 2009 and interim periods thereafter. The adoption of SFAS 167 is not expected to have an impact on the Company’s consolidated financial position, results of operations or cash flows as the Company does not have any ownership of or arrangements with any variable interest entity or special-purpose entity.

NOTE 3 - TRADE RECEIVABLES

Historically, through March 31, 2009, all of the Company’s trade receivables related to its net revenue interest share of oil and gas sales have been collected, with the exception of an allowance for doubtful accounts which was recorded for $49,320 at March 31, 2009 for amounts owing that are subject to bankruptcy proceedings for SemCrude, L.P. No allowance for doubtful accounts had been recorded at March 31, 2008.

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT, PROPERTY ACQUISITIONS AND DISPOSITIONS AND CAPITALIZED INTEREST

Oil and Gas Properties

Major classes of oil and gas properties under the full cost method of accounting at March 31, ~~2006~~2009 and ~~2005~~2008 consist of the following:

	For the year ended March 31,
	March 31,
	2006			2005
	2009				2008
Subject to depletion	$	722,056		$	334,080
Proved properties, net of cumulative impairment charges	$	4,878,182			$	11,181,430
Not subject to depletion:
Unevaluated and unproved properties		4,878,940				2,821,271
Exploration costs		236,806			9,529
Gross oil and gas properties-onshore		9,757,122				14,002,701
Cost of undeveloped acreage		119,923			67,000
Less: accumulated depletion		3,493,585				1,407,610
Total not subject to depletion		356,729			76,529
Net oil and gas properties-onshore	$	6,263,537			$	12,595,091
Gross oil and gas properties		1,078,785			410,609
Less: accumulated depletion		(127,586	)		(62,275	)
Net oil and gas properties	$	951,199		$	348,334

~~Depletion~~Included ~~expense~~in ~~was~~the ~~$65,311~~Company's oil and gas properties are asset retirement obligations of $36140,~~154~~714, orcomprising ~~$19.10~~both current and ~~$17.48~~long ~~per~~term ~~barrel~~items, ofand ~~production for~~$88,209 ~~the~~as ~~years~~of ~~ended~~ March 31, ~~2006~~2009 and ~~2005~~2008, respectively.

ItQuarterly, ~~is anticipated~~the ~~that~~Company assesses the ~~cost~~value of ~~undeveloped~~unamortized ~~acreage~~capitalized ofcosts ~~$119,923~~within ~~and~~its ~~exploration~~cost ~~costs~~center over the discounted present value of ~~$236,806~~cash ~~will~~flows beassociated ~~included~~with inits reserves. ~~depreciation,~~Any ~~depletion~~excess ~~and~~requires ~~amortization~~an immediate write-down of its capital costs by ~~within~~this ~~one~~amount, ~~year~~under the full cost ceiling test.

Impairment Charges

In the year to March 31, 2009 total impairment charges under the full cost ceiling test were $7,002,472, including a charge of $792,657 in the three months to March 31, 2009, and is reported within the expense category “Depreciation, depletion, amortization and impairment”. The most significant factor causing the full year charge was the write off during the year of reserves on the Shadyside well, which represented approximately 41% of reserves at March 31, 2008, together with earlier than expected depletion on a number of other wells, leading to other reserve reductions. Also natural gas prices continued to fall in the quarter to March 31, 2009. Weighted average product prices in our March 31, 2009 reserves report, and used for the ceiling test at that date, were $4.81/mcfe or $28.85/boe.

F-16

Proved properties are reported net of cumulative impairment charges of $7,090,020 at March 31, 2009, inclusive of the current period impairment charge, and $87,548 at March 31, 2008, respectively.

Depletion expense was $2,085,976 and $1,091,673 or $54.87 and $38.14 per barrel of production for the years ended March 31, 2009 and 2008, respectively.

At March 31, 2009 and 2008, the Company excluded the following capitalized costs from depletion, depreciation and amortization:

	March 31, 2009		March 31, 2008
Not subject to depletion-onshore:
Exploration costs	$	3,989,014	$	1,960,886
Cost of undeveloped acreage		889,926		860,385
Total not subject to depletion	$	4,878,940	$	2,821,271

It is anticipated that the cost of undeveloped acreage of $889,926 and exploration costs of $3,989,014 will be included in depreciation, depletion and amortization when the initial drilling projects are concluded. Included in exploration cost and undeveloped acreage are costs of approximately $0.4 million and $0.3 million related to undeveloped leasehold for the Supple Jack Creek and Alligator Bayou prospects, respectively, on which initial drilling and completion operations are expected to conclude in fiscal year 2010 and approximately $0.1 million related to the West Wharton Project. Exploration costs include approximately $1.7 million on the HNH Gas Unit #1 wells, drilled on the Supple Jack Creek prospect and $2.3 million on the Armour Runnells #1 ST, drilled on the Alligator Bayou prospect. Completion operations on the HNH Gas Unit #1 well were suspended in May 2008, and following a change in operator, a recommendation on the project is pending.

Acquisitions and Dispositions

~~The~~There Company paid $375,000 in July 2003 to acquire its’ interest in the oil and gas leases comprising the Kansas properties, which included rights to a number of newly drilled wells that were inno ~~the~~acquisitions ~~process~~or ofdispositions being brought on stream at that time. Initially $100,000 of the overall acquisition cost was allocated to proved property acquisition costs and $275,000 to unproved property acquisition costs. It is expected that at least 24 prospects will be drilled in ~~total on these properties and for each well that has been drilled on~~ the ~~Kansas~~fiscal ~~properties subsequent~~year toended ~~the acquisition and through to~~ March 31, ~~2006, $16,000 per~~ well (being approximately 1/24 of the original acquisition cost) has been reclassified as proved property costs and brought into the calculation of amortization against estimated proven reserves2009. ~~In addition an equivalent transfer has been made for future well locations for which proven undeveloped reserves have been ascribed at March 31, 2006 and 2005.~~

Drilling and completion of wells on the Kansas properties generally takes no more than one month in total. No well related costs have been excluded from the amortization calculations. During the year ended March 31, 2005, the Company disposed of its’ interest in 3 low level producing wells that had been acquired as part of the acquisition of the Kansas properties for $4,400, which has been credited to proved oil and gas leasehold costs.

F-15

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 5 - PROPERTY, PLANT AND EQUIPMENT, PROPERTY ACQUISITIONS AND DISPOSITIONS AND CAPITALIZED INTEREST (continued)

Other Property and Equipment

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are depreciated using the straight-line method over their estimated useful lives of the assets. Maintenance, repairs, and minor renewals are charged against earnings when incurred. Additions and major renewals are capitalized. Major assets at March 31, ~~2006~~2009 and ~~2005~~2008 were as follows:

		For the year ended March 31,
	March 31,
		2006			2005
	2009				2008
Computer Costs, including foreign translation adjustment of $418 and $816 at March 31, 2006 and 2005, respectively		$	11,217		$	11,615
Computer Costs and Furniture and Fixtures, including foreign translation		$	43,649			$	42,069
Less: accumulated depreciation			(922,~~490~~053	)		~~(3,230~~	)16,038
Total other property and equipment		$	121,~~727~~596		$	~~8,385~~$	26,031

Depreciation expenses from continuing operations amounted to $68,~~260~~505 and $24,~~140~~556 for the years ended March 31, ~~2006~~2009 and ~~2005~~2008, respectively.

Capitalized Interest

There was no interest capitalized in property, plant and equipment at March 31, ~~2006~~ 2009 and ~~2005~~2008.

F-16

INDEX OIL AND GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006 AND 2005

NOTE 6 - NOTES PAYABLE

Index Ltd incurred debt and raised capital through a series of rounds of fundraising from inception through March 31, 2006. All of the Index Ltd stockholder funding was later converted to common stock at par and additional paid in capital. The transactions involving debt or convertible debt are summarized below by period for Index Ltd :

		Equity Issuances							Debt & Subsequent Equity Conversions (1)
		Total Proceeds			Common Stock		Additional Paid In Capital		ConvertibleDebt		Debt Converted To Stock			Common Stock Converted From Debt		Additional Paid In Capital Converted From Debt
Year Ended March 31, 2004	$	507,448		$	92,640	$	60,344	$	354,464	$	(421,459	)	$	361,977	$	59,482
Share option exercise		55,110			55,110
Round 3 conversion		-			-		-				(147,156	)		89,111		58,045
Individual subscription		22,201			11,100		11,101
Stockholder loan		91,302			-		-		91,302		-			-		-
Foreign currency translation		(2,529	)		-		-		3,301		(5,830	)		-		-
Year ended March 31, 2005	$	166,084		$	66,210	$	11,101	$	94,603	$	(152,986	)	$	89,111	$	58,045
Totals through March 31, 2005	$	1,003,503		$	268,840	$	71,445	$	669,048	$	(574,445	)	$	451,088	$	117,527
Round 4		676,664			-		-		676,664		-			-		-
Round 4 conversion		-			-		-				(663,872	)		331,936		331,936
Conversion of 2005 Stockholder loan		-			-		-				(86,758	)		43,379		43,379
Foreign currency translation		-			-		-				(20,637	)
Year ended March 31, 2006		676,664			-		-		676,664		771,267			375,315		375,315
Totals through March 31, 2006		1,680,167			268,840		71,445		1,345,712		(1,345,712	)		826,403		492,842

(1) The debt was convertible at various prices for each round of financing. The price per share for Round 3 financing averaged $0.30 per share and Round 4 financing averaged $0.36 per share and conversion of 2005 stockholder loan averaged $0.35 per share.

F-17

~~INDEX~~NOTE ~~OIL~~5 ~~AND~~- ~~GAS,~~COMPREHESIVE ~~INC.~~LOSS

~~NOTES~~For the TOyears ~~CONSOLIDATED~~ended ~~FINANCIAL~~March ~~STATEMENTS~~31, 2009 and 2008, comprehensive income consisted of the amounts listed below.

MARCH 31, 2006 AND 2005

	Years Ended March 31,
	2009			2009			2008			2008

Accumulated other comprehensive income beginning of period				$	1,510					$	15,399
Net (loss)	$	(9,378,621	)				$	(1,946,430	)

Foreign currency translation (loss)		(22,687	)					(13,889	)
Total other comprehensive (loss)		(22,687	)		(22,687	)		(13,889	)		(13,889

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