UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended ~~September~~March 3031, ~~2012~~2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File No. 000-24778

TEXAS VANGUARD OIL COMPANY

(Exact name of registrant as specified in its charter)

Texas (State or other jurisdiction of incorporation or organization) 74-2075344 (IRS Employer Identification No.)

Texas		74-2075344
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

9811 Anderson Mill Rd., Suite 202

Austin, Texas 78750

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (512) 331-6781

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

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 or No o.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

o Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company

o Non-accelerated filer x 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 o No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Outstanding at ~~September~~March 3031, ~~2012~~2013

1,416,587 shares

Table of Contents

TEXAS VANGUARD OIL COMPANY

TABLE OF CONTENTS

	Page Number
Part I. Financial Information
Item 1 - Financial Statements	3
Condensed Balance Sheets – September 30, 2012 and December 31, 2011	3
Condensed Balance Sheets - March 31, 2013 and December 31, 2012	3
Condensed Statements of Earnings – Three and nine months ended September 30, 2012 and 2011	4
Condensed Statements of Earnings -Three months ended March 31, 2013 and 2012	4
Condensed Statements of Cash Flows – Nine months ended September 30, 2012 and 2011	5
Condensed Statements of Cash Flows -Three months ended March 31, 2013 and 2012	5
Notes to the Condensed Financial Statements	6
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3 - Quantitative and Qualitative Disclosures about Market Risk	7
Item3 - Quantitative and Qualitative Disclosures about Market Risk	7
Item 4 - Controls and Procedures	7
Item 4 – Controls and Procedures	7
Part II. Other Information
Item 6 - Exhibits	8
Item 6 – Exhibits	8
Signatures	9

In the opinion of the Registrant, all adjustments (consisting of normal recurring accruals) necessary to a fair statement of the results of the interim periods have been included.

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEXAS VANGUARD OIL COMPANY

Condensed Balance Sheets

Assets
	September 30,			December 31,
	March 31,			December 31,
	2012			2011
	2013			2012
	(Unaudited)			(Audited)
Current assets:
Cash and cash equivalents	$	9,~~005~~369,~~389~~425		$	89,~~575~~036,~~692~~449
Trade accounts receivable, net of allowance for doubtful accounts of $218,787 and $209,666 in 2012 and 2011, respectively		152,369			272,819
Trade accounts receivable, net of allowance for doubtful accounts of $228,238 and $209,554 in 2013 and 2012, respectively		107,919			140,286
Prepaid expense		~~139~~37,~~072~~113			~~176~~36,~~839~~053
Prepaid federal income tax		~~194~~88,~~412~~323			27221,~~776~~468
Total current assets		9,~~491~~602,~~242~~780			9,~~053~~434,~~126~~256
Property and equipment, at cost:
Oil and gas properties - successful efforts method of accounting		9,~~376~~452,~~505~~403			9,~~038~~447,~~331~~796
Office furniture and vehicles		156,871			~~233~~156,~~035~~871
		9,533,376			9,271,366
		9,609,274			9,604,667
Less accumulated depreciation, depletion and amortization		(5,~~036~~090,~~042~~411	)		(4,~~815~~988,~~808~~052	)
Total property and equipment		4,497,334			4,455,558
Total property and equipment, net		4,518,863			4,616,615
Other assets		1,000			1,000
TOTAL ASSETS	$	1314,~~989~~122,~~576~~643		$	1314,~~509~~051,~~684~~871
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable	$	~~447~~288,~~655~~238		$	~~414~~487,~~402~~590
Taxes payable		3046,~~190~~336			4137,~~473~~813
Asset retirement obligation, current portion		4,~~837~~319			784,~~797~~319
Notes payable		150,000			150,000
Total current liabilities		~~632~~488,~~682~~893			~~684~~679,~~672~~722
Deferred federal income tax liability		~~322~~331,~~149~~641			~~322~~331,~~149~~641
Asset retirement obligation, less current portion		~~584~~627,~~140~~142			~~474~~624,~~201~~000
Total liabilities		1,~~538~~447,~~971~~676			1,~~481~~635,~~022~~363
Stockholders' equity:
Common stock, par value $.05; authorized 12,500,000 shares; 1,416,587 issued and outstanding in 2012 and 2011, respectively		70,828			70,828
Common stock, par value $.05; authorized 12,500,000 shares; 1,416,587 issued and outstanding in 2013 and 2012, respectively		70,828			70,828
Additional paid-in capital		1,888,528			1,888,528
Accumulated earnings		10,491,249			10,069,306
Retained earnings		10,715,611			10,457,152
Total stockholders' equity		12,~~450~~674,~~605~~967			12,~~028~~416,~~662~~508
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1314,~~989~~122,~~576~~643		$	1314,~~509~~051,~~684~~871

See accompanying notes to condensed financial statements.

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TEXAS VANGUARD OIL COMPANY

Condensed Statements of Earnings

(Unaudited)

	Three months ended						~~Nine months ended~~
	September 30,						September 30,
	March 31,
	2012			2011			2012		2011
	2013			2012
Revenue:
Operating revenue	$	1,~~384~~469,~~636~~167		$	1,~~710~~929,~~700~~451			~~5,070,498~~		~~5,432,904~~
Other income		613,~~662~~119			1316,~~604~~042			~~38,019~~		~~40,994~~
Total revenue		1,~~391~~482,~~298~~286			1,~~724~~945,~~304~~493			~~5,108,517~~		~~5,473,898~~
Costs and expenses:
Production cost		1798,~~369,887~~489			~~958~~1,~~033~~090,462			~~3,643,254~~		~~3,241,836~~
Depreciation, depletion and amortization		~~108~~102,~~236~~359			109,~~055~~962			~~326,434~~		~~327,165~~
General and administrative		~~140~~161,~~247~~757			~~132~~159,~~776~~915			~~446,422~~		~~424,348~~
Impairment of oil and gas property		-0-			-0-			12,517		-0-
Impairment in value of oil and gas property		-0-			1,888
Interest		~~662~~870			~~1,003~~748			~~2,088~~		~~2,510~~
Doubtful account receivable expense		118,~~924~~684			~~(15~~6,~~743~~983	)		~~9,121~~		~~10,764~~
Total costs and expenses		1,~~620~~082,~~956~~159			1,~~185~~369,~~124~~958			~~4,439,836~~		~~4,006,623~~
Earnings (loss) before taxes		(229,658	)		539,180			668,681		1,467,275
Earnings before taxes		400,127			575,535
Federal and state taxes:
Provision (benefit) for federal income tax		(80,804	)		179,950			217,364		488,172
Provision for federal income tax		133,145			191,878
Provision for state margin tax		8,~~000~~523			911,~~915~~187			~~29,374~~		~~31,475~~
Net earnings (loss)	$	(156,854	)		349,315			421,943		947,628
Net earnings	$	258,459		$	372,470
Weighted average number of shares outstanding		1,416,587			1,416,587			~~1,416,587~~		~~1,416,587~~
Basic earnings (loss) per share		(.11	)		.25			.30		.67
Basic earnings per share	$	.18		$	.26
Diluted earnings (loss) per share		(.11	)		.25			.30		.67
Diluted earnings per share	$	.18		$	.26

See accompanying notes to condensed financial statements.

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TEXAS VANGUARD OIL COMPANY

Condensed Statements of Cash Flows

(Unaudited)

	Nine months ended
	Three months ended March 31,
	September 30,
	2013			2012
	2012			2011
Net cash provided by operating activities	$	337,583		$	944,695
Net cash provided by operating activities	$	789,046		$	1,253,932
Cash flows used in investing activities:
Additions to oil and gas properties		(~~446~~4,~~349~~607	)		(~~391~~333,~~896~~022	)
Proceeds from sale of equipment		72,000			-0-
Purchase of equipment		-0-			-0-
Proceeds from sale of oil and gas properties		15,000			10,000
Proceeds from sale of equipment		-0-			72,000
Net cash used in investing activities		(~~359~~4,~~349~~607	)		(~~381~~261,~~896~~022	)
Net cash used in financing activities		---			---
Net change in cash and cash equivalents		~~429~~332,~~697~~976			~~872~~683,~~036~~673
Cash and cash equivalents at beginning of period		89,~~575~~036,~~692~~449			78,~~621~~575,~~018~~692
Cash and cash equivalents at end of period	$	9,~~005~~369,~~389~~425		$	89,~~493~~259,~~054~~365

See accompanying notes to condensed financial statements.

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TEXAS VANGUARD OIL COMPANY

Notes to Condensed Financial Statements

(Unaudited)

~~September~~March 3031, ~~2012~~2013

Note 1: Oil and Gas Properties

Texas Vanguard Oil Company (the “Company”) follows the "successful efforts" method of accounting for oil and gas exploration and production operations. Accordingly, costs incurred in the acquisition and exploratory drilling of oil and gas properties are initially capitalized and either subsequently expensed if the properties are determined not to have proved reserves, or reclassified as a proven property if proved reserves are discovered. Costs of drilling development wells are capitalized. Geological, geophysical, carrying and production costs are charged to expense as incurred.

The Company performs a periodic review for impairment of proved properties. The Company determines if impairment has occurred through either adverse changes or as a result of its periodic review for impairment. Upon abandonment of properties, the reserves are deemed fully depleted and any unamortized costs are recorded in the statement of income under impairment expense. Upon the sale of oil and gas reserves in place, costs less accumulated amortization of such property are removed from the accounts and resulting gain or loss on sale is reflected in operations.

Impairment of unproved properties is assessed periodically and any impairment in value is currently charged to expense. Loss is recognized to the extent that such impairment is indicated. When an entire interest in an unproved property is sold, gain or loss is recognized, taking into consideration any recorded impairment.

Depreciation, depletion and amortization of proved oil and gas property costs, including related equipment and facilities, are provided using the units-of-production method.

Note 2: Income Taxes

The Company uses the "asset and liability method" of income tax accounting, which bases the amount of current and future taxes payable on the events recognized in the financial statements and on tax laws existing at the balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes enactment date.

Note 3: Statement of Cash Flows

Cash and cash equivalents as used in the Condensed Statements of Cash Flows include cash in banks and certificates of deposits owned.

Note 4: Recently Issued Accounting Standards

The ~~Financial Accounting Standards Board (FASB) did not issue any updates during the first or second quarters of 2012. The~~ Company has reviewed the updates issued by the Financial Accounting Standards Board (FASB) during the three-month period ended ~~September~~March 3031, ~~2012~~2013, and determined that the updates are either not applicable to the Company or will not have a material impact upon the Company.

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

The following information is provided in compliance with SEC guidelines to explain financial information shown in the Condensed Financial Statements.

RESULTS OF OPERATIONS

Operating revenues decreased by $~~326~~460,~~064~~284 (1924%) ~~and $362,406 (7%)~~ for the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2012~~2013 from the comparable prior -year ~~periods~~period primarily as a result of less oil ~~and gas~~ sales as well as lower commodity prices in ~~2012~~2013 as compared to ~~2011~~2012. Production costs ~~increased~~decreased by $~~411~~291,~~854~~973 (4327%) ~~and $401,418 (12%)~~ for the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2011~~2013 asfrom ~~compared to~~ the prior -year ~~periods~~period. ~~Increased~~Decreased production costs for the three ~~month and nine~~-month ~~periods~~period ended ~~September~~March 3031, ~~2012~~2013 as compared to the prior-year ~~periods~~period isare largely associated with ana ~~increase~~decrease in workover activity as well as a decrease in overall field expenses.

General and administrative expenses ~~increased~~for $7the three-month period ended March 31,~~471~~ ~~(6%)~~2013 ~~and~~increased $221,~~074~~842 (51%) as compared to the prior year period. Interest expense increased $122 for the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2012~~2013 asfrom ~~compared to~~ the ~~prior~~comparable prior-year ~~periods~~period. Depreciation, depletion, and amortization ~~remained~~decreased ~~almost constant decreasing~~ by $~~731~~7,603 (7%) for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2012~~2013 from the comparable prior-year period. Depreciation, depletion and amortization varies from period to period because of changes in reserve estimates, changes in quantities of oil and gas produced, changes in price of oil and gas sold, as well as the acquisition, discovery, or sale of producing properties. For the three-month and nine-month periods ended September 30, 2012, the Company provided a provision of $-0- and $12,517 for the impairment of value of oil and gas properties due to less than expected production performance of specific wells and for wells that were plugged and abandoned.

LIQUIDITY AND CAPITAL RESOURCES

During the period ended ~~September~~March 3031, ~~2012~~2013, the Company's liquidity remained strong enough to meet its short-term cash needs. The sources of liquidity and capital resources are generated from cash on hand, cash provided by operations and from credit available from financial institutions. Working capital at ~~September~~March 3031, ~~2012,~~2013 ~~has~~ increased to 1519.0064 to 1 from 13.2288 to 1 at December 31, ~~2010~~2012. ~~The~~Management ~~Company~~believes ~~continued~~that ~~its~~oil ~~policy~~and ofgas ~~making~~property ~~strategic~~investing ~~investments~~activities in ~~producing~~2013 can be financed through cash on hand, cash from operating activities, and bank borrowings. The Company anticipates continued investments in proven oil and gas properties in ~~the~~2013 ~~same~~when orthey ~~similar~~can ~~fields~~be topurchased ~~properties~~at ~~already~~prices ~~operated~~that bywill provide a short payback period. If bank credit is not available, the Company, ~~which~~may ~~are~~not ~~primarily~~be ~~financed~~able ~~with~~to ~~short~~continue ~~term~~its ~~notes~~policy ~~payable~~of ~~and~~continued ~~cash~~investment ~~from~~in ~~operations~~strategic oil and gas properties. Cash flow ~~from~~provided by operations was $~~789~~337,~~046~~583 for the ~~nine~~three months ended ~~September~~March 3031, ~~2012~~2013. The Company used $~~446~~4,~~349~~607 to invest in oil and gas properties in the first ~~nine~~three months of ~~2012~~2013 as compared to $~~391~~333,~~896~~022 in the first ~~nine~~three months of ~~2011~~2012.

The worldwide crude oil prices continue to fluctuate in ~~2012~~2013. The Company cannot predict how prices will vary during the remainder of ~~2012~~2013 and what effect they will ultimately have on the Company, but management believes that the Company will be able to generate sufficient cash from operations to service its bank debt and provide for maintaining current production of its oil and gas properties. ~~Inflation is not anticipated to have a significant impact on the Company’s operations.~~

Inflation is not anticipated to have a significant impact on the Company’s operations.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The Company does not engage in hedging activities and does not use commodity futures nor forward contracts in its cash management functions.

Our financial condition, results of operations and capital resources are highly dependent upon the prevailing market prices of, and demand for, oil and natural gas. These commodity prices are subject to wide fluctuations and market uncertainties due to a variety of factors that are beyond our control. We cannot predict future oil and natural gas prices with any degree of certainty. Sustained declines in oil and natural gas prices may adversely affect our financial condition and results of operations, and may also reduce the amount of net oil and natural gas reserves that we can produce economically.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as of ~~September~~March 3031, ~~2012~~2013 (the "Evaluation Date"). Based upon this evaluation, our principal financial and accounting officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission ("SEC") reports is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms relating to the Company, including, our consolidated subsidiaries, and was made known to them by others within those entities, particularly during the period when this report was being prepared.

In addition, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date.

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PART II. OTHER INFORMATION

Item 6. Exhibits

Exhibits:	31.1	Rule 13a-14(a)/15d-14(a) Certification
	32.1	18 U.S.C. 1350 Certification
	101.INS	XBRL Instance Document
	101.SCH	XBRL Taxonomy Extension Schema
	101.CAL	Taxonomy Extension Calculation Linkbase
	101.DEF	Taxonomy Extension Definition Linkbase
	101.LAB	Taxonomy Extension Label Linkbase
	101.PRE	Taxonomy Extension Presentation Linkbase

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SIGNATURES

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

	TEXAS VANGUARD OIL COMPANY (Registrant)
Date: November 6, 2012	By:	/s/ William G. Watson, President
		William G. Watson, President and
		Principal Financial and Accounting Officer

TEXAS VANGUARD OIL COMPANY

(Registrant)

William G. Watson, President

(Chief Executive Officer and Chief Financial Officer)

Date: May 7, 2013

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