UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the year ended December 31, ~~2017~~2018

Commission File No. 333-171064

TEXAS SOUTH ENERGY, INC.

(Exact name of the issuer as specified in its charter)

Nevada		99-0362471
(State or Other Jurisdiction of		(I.R.S. Employer
incorporation or organization)		I.D. No.)

4550 Post Oak Place Dr., Suite 300

Houston, Texas 77027

(Address of Principal Executive Offices)

(713) 820-6300

(Issuer’s Telephone Number)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the 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 ☒ No ☐

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

Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, 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. ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or an emerging growth company:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

State the aggregate market value of the ~~voting~~ voting and non-voting common stock held by non-affiliates computed by reference to the price at which the common stock was last sold, or the average bid and asked price of such common stock, as of the last business day of the Registrant’s most recently ~~completed~~ completed second quarter: $413,~~982~~102,~~907~~619 on June 30, ~~2017~~2018.

Indicate the number of shares outstanding of each of the Registrant’s classes of common equity, as of the latest practicable date:

Class		Outstanding as of ~~March~~April 271, ~~2018~~2019
Common Capital Voting Stock, $0.001 par value per share		~~867~~999,~~440~~199,~~670~~769

Documents incorporated by reference: None

TABLE OF CONTENTS

PART 1
ITEM 1. Business	1
ITEM 1A. Risk Factors	67
ITEM 1B. Unresolved Staff Comments	1314
ITEM 2. Properties	1314
ITEM 3. Legal Proceedings	1415
ITEM 4. Mine Safety Disclosures	1415
PART II
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1516
ITEM 6. Selected Financial Data	1516
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1617
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk	1920
ITEM 8. Financial Statements and Supplementary Data	F-1
ITEM 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	2021
ITEM 9A. Controls and Procedures	2021
ITEM 9B. Other Information	2021
PART III
ITEM 10. Directors, Executive Officers and Corporate Governance	2122
ITEM 11. Executive Compensation	2223
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2324
ITEM 13. Certain Relationships and Related Transactions, and Director Independence	2526
ITEM 14. Principal Accounting Fees and Services	2627
PART IV
ITEM 15. Exhibits, Financial Statement Schedules	2728
ITEM 16. Form 10-K Summary	2728
Signatures	2829

PART I

FORWARD LOOKING STATEMENTS

In this Annual Report, references to “Texas South Energy,” the “Company,” “we,” “us,” and “our” refer to “Texas South Energy, Inc., and its wholly owned subsidiary Texas South Operating Company, Inc.” the Registrant.

This Annual Report contains certain forward-looking statements and for this purpose any statements contained in this Annual Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “projects,” “expects,” “may,” “goal,” “estimates,” “should,” “plans,” “targets,” “intends,” “could,” or “anticipates,” or the negative thereof, or other variations thereon, or comparable terminology, or by discussions of strategy or objectives. Forward-looking statements relate to anticipated or expected events, activities, trends or results. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the markets in which the Company may participate, competition within the Company’s chosen industry, technological advances and failure by us to successfully develop business relationships. Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Annual Report on Form 10-K to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

ITEM 1. BUSINESS

The Company

WeOur business plan as ~~are~~an ~~engaged~~oil and gas company is to focus primarily on properties in the ~~onshore~~Gulf Coast Region. We plan to obtain and ~~offshore~~manage working and non-working interests in oil and gas ~~business~~properties.

InWe ~~March~~are ~~2014,~~in wethe ~~entered~~business ~~into~~of aexploring ~~farm~~for, ~~out~~drilling ~~letter~~and ~~agreement~~producing ~~with~~oil ~~GulfSlope~~and ~~Energy, Inc~~gas. ~~(“GulfSlope”)~~Our ~~relating~~business tois ~~certain~~subject ~~prospects~~to ~~GulfSlope bid~~multiple onfactors ateffecting the ~~Central~~production ~~Gulf~~ of ~~Mexico~~oil and ~~Lease~~gas, ~~Sale 231~~including, ~~located~~but ~~within~~not ~~2.2~~limited ~~million~~to: ~~acres~~market ofprices; ~~3-D~~national ~~seismic~~and ~~licensed~~international ~~and~~economic ~~interpreted by~~conditions; ~~GulfSlope.~~import ~~Under~~and ~~the~~export ~~terms~~quotas; availability of ~~the~~drilling ~~farm-out~~rigs, ~~letter~~casing, ~~agreement~~pipe, asand ~~amended,~~other weequipment ~~acquired~~and ~~contractual~~supplies; ~~rights~~availability toof aand ~~20%~~proximity ~~working~~to ~~interest~~pipelines and other intransportation 12facilities; ~~blocks~~the ~~covered~~supply inand 9price ~~prospects~~of ~~for~~competitive ~~$10,000,000~~fuels; ~~paid~~and tothe ~~date~~regulation ~~and~~of ~~$304~~prices,~~000~~ ~~due~~production, ontransportation, and ormarketing ~~prior~~by todomestic ~~April~~and 1,foreign ~~2018~~governmental authorities. WeAdditionally, ~~have~~we ~~agreed to~~may ~~pay~~not ~~our~~have ~~proportionate~~control ~~share~~over ofwhether the ~~net~~owner ~~rental~~or operator ~~costs~~of ~~related~~the tolease ~~the~~will ~~prospects.~~elect ~~GulfSlope~~to ~~has~~explore ~~conducted~~for ~~extensive~~oil ~~seismic~~and ~~work~~ gas on ~~all~~such ofproperties, ~~the~~or ~~prospects~~to ~~focusing~~develop on the ~~high~~properties ~~potential~~following ~~subsalt~~discoveries that ~~play~~may atoccur. ~~depths~~Each of ~~15,000’~~these tofactors ~~25,000’~~may ~~and~~affect ~~will~~the berate ~~the operator~~at ofwhich ~~record~~oil ~~for~~and ~~the~~gas ~~initial~~are ~~well~~produced, if ever, on ~~each~~properties ofin ~~the~~which ~~prospects~~we may have an interest.

In ~~May~~March ~~2016~~2014, we entered into a ~~letter~~farm ofout ~~intent~~letter agreement with GulfSlope ~~that~~Energy, ~~set~~Inc. ~~forth~~(“GulfSlope”) ~~terms~~relating to certain prospects GulfSlope bid on at the Central Gulf of Mexico Lease Sale 231, located within 2.2 million acres of 3-D seismic licensed and ~~conditions~~interpreted by GulfSlope. Under the terms of athe farm-out ~~arrangement~~letter toagreement, ~~develop~~as ~~certain~~amended, ~~shallow-depth oil~~we ~~and~~acquired ~~gas~~contractual ~~prospects~~rights ~~located~~to ona ~~offshore~~20% ~~Gulf~~working ofinterest in ~~Mexico~~12 blocks ~~currently~~covered ~~leased~~in by9 prospects for approximately $10,720,000 paid to GulfSlope. ~~The~~through ~~shallow~~September ~~prospects~~30, ~~were~~2018. ~~located~~We have agreed ~~above~~to ~~5,100~~pay ~~feet~~our ~~vertical~~proportionate ~~depth~~share onof the ~~Vermilion~~net ~~Area,~~rental ~~South~~costs ~~Addition~~related ~~Block~~to ~~378~~the ~~(“Canoe~~prospects. ~~Shallow”)~~GulfSlope ~~and~~has ~~Vermilion~~conducted ~~Area,~~extensive seismic work ~~South~~on ~~Addition~~all ~~Block~~of ~~375~~the ~~(“Selectron~~prospects ~~Shallow”,~~focusing ~~and~~on ~~collectively~~the ~~with~~high ~~Canoe~~potential ~~Shallow~~subsalt play at depths of 15,000’ ~~“Shallow~~to ~~Prospects”).~~25,000’ and will be the Atoperator ~~that~~of ~~time~~record wefor ~~owned~~the ainitial ~~70.7%~~well ~~working~~on ~~interest~~each inof the ~~Shallow~~prospects. ~~Prospects~~In ~~with~~August a2017, ~~third~~the ~~party~~Company ~~owning~~acquired a ~~16.8~~20% working interest ~~for~~from ~~which~~GulfSlope itin ~~paid~~Ship ~~$400,000~~Shoal ~~and~~Block ~~GulfSlope~~351 ~~retaining~~and ain ~~12.5%~~Ship ~~working~~Shoal ~~interest.~~Block ~~Texas~~336, ~~South~~which ~~acquired~~are ~~the~~collectively ~~interest~~referred into as the ~~two~~Tau ~~prospects in~~Prospect. ~~exchange~~In ~~for~~October 2017, ~~(i)~~the ~~cash~~Company ~~payments~~acquired ofa ~~$400,000,~~20% ~~(ii)~~working ~~the~~interest ~~payment~~from ofGulfSlope ~~annual~~in ~~rental~~Eugene ~~obligations~~Island ofBlock ~~$63,147,~~397 and ~~(iii)~~Green ~~the~~Canyon ~~agreement to~~Block ~~fund~~4, orwhich ~~cause~~are collectively referred to beas ~~funded,~~ the ~~costs~~Quark ~~for~~Prospect. In January 2018, the ~~drilling~~Company ofacquired ~~two~~a ~~shallow~~20% ~~wells~~working ~~prior~~interest toin ~~December~~the ~~31,~~Vermilion ~~2017.~~South Addition ~~The~~Block ~~farmout~~378 on(“Canoe ~~both prospects~~Prospect”) ~~from~~and ~~GulfSlope~~in ~~expired~~the byVermilion ~~its~~South ~~own~~Addition ~~terms~~Block on375 ~~December~~(“Corvette ~~31,~~Prospect”) from ~~2017~~GulfSlope.

~~On January 8, 2018, the Company entered into a participation agreement dated effective January~~ 1, 2018 (the “Agreement”) with Delek GOM Investments, LLC, a subsidiary of Delek Group Ltd. (“Delek”), and GulfSlope (collectively, the “Parties”) for the partial farm-out of the Company’s interests in its Gulf of Mexico oil and gas leases (the “Farm-out”). The Agreement sets out the terms and conditions of the Parties participation in the drilling of up to a nine well multi-phase exploration program targeting the Company’s prospects (the “Prospects”) located on the Company’s existing leases (the “Leases”).

On January 8, 2018, the Company entered into a participation agreement dated effective January 1, 2018 (the “Agreement”) with Delek GOM Investments, LLC, a subsidiary of Delek Group Ltd. (“Delek”), and GulfSlope (collectively, the “Parties”) for the partial farm-out of the Company’s interests in its Gulf of Mexico oil and gas leases (the “Farm-out”). The Agreement sets out the terms and conditions of the Parties participation in the drilling of up to a nine well multi-phase exploration program targeting the Company’s prospects (the “Prospects”) located on the Company’s existing leases (the “Leases”).

Under the terms of the Agreement, the Parties have committed to initially drill two of the Company’s ~~“Canoe”~~prospects ~~and~~in ~~“Tau” prospects~~Phase I (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In August 2017, the Company acquired a 20% working interest in Ship Shoal Block 351 and in Ship Shoal Block 336, which are collectively referred to as the Tau Prospect from GulfSlope and in January 2018, the Company acquired a 20% working interest in the Vermilion South Addition Block 378 (“Canoe Prospect”) from GulfSlope. In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated ~~with~~ with drilling each exploratory well. The Company will thus retain a 5% working interest while paying 2% of the exploratory costs ~~associated~~ associated with drilling each well. In addition, Delek will pay the Company $405,000 upon the filing of each exploration plan with BOEM and/or BSEE on a Prospect in each Phase. During March 2018 Delek made its first payment of $405,000 to the Company as the initial plan was filed. Delek made a second payment of $405,000 to the Company during May 2018. Also, each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated with the Prospects. GulfSlope will be the Operator during exploratory drilling of a Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Company’s common stock preceding the acquisition. This option will expire on January 8, 2020. The Company has not recorded any cost associated with the option due to the future performance obligation of Delek. If Delek meets the obligation and exercises its option the Company will record the option value at that time as an increase to Oil and Gas Properties. The likelihood of Delek exercising its options to purchase shares of the Company’s common stock will be dependent on the drilling results from Phase 1 and the Company’s operating results which will affect the price of the Company’s common stock. We currently do not anticipate Delek fully exercising this option before the expiration date. At December 31, 2018, the potential value of issuing 20% of our outstanding stock is approximately $5,800,000. The foregoing description of the Agreement does not purport to be a complete description of the terms, provisions ~~and~~ and conditions of such document, and represents only a summary of certain of the principal terms, provisions and conditions thereof.

The Company will assign a two-tenths of one percent of 8/8ths net profits interest in certain of the Company’s oil and gas leases to ~~include~~in ~~Vermilion~~the ~~Area,~~two ~~South~~Phase ~~Addition~~I ~~378,~~prospects ~~Ship Shoal Area, South Addition 336, and Ship Shoal Area, South Addition 351,~~ to Hi-View Investment Partners, LLC (“Hi-View”) in consideration for consulting services provided pursuant to a non-exclusive consulting engagement dated October 25, 2017, by and between Hi-View, the Company, and GulfSlope (the ”“Advisory Agreement”). Hi-View will be entitled to additional assignments on the same terms and conditions as described above related to any of Leases in which Delek elects to participate in the drilling of an exploratory well. In addition, the Company issued an aggregate of twenty million shares of its common stock to Hi-View in consideration for those consulting services provided pursuant to the Advisory Agreement. ~~In the event that Delek has not funded the $405,000 payment referenced above within six months of execution of this Agreement, then the common stock will be returned by Hi-View to the Company.~~

In accordance with ~~January~~the ~~2017,~~Delek Agreement and on behalf of the Company ~~entered~~and ~~into~~the another ~~asset~~working ~~purchase~~interest ~~agreement~~owners, ~~with~~GulfSlope ~~Sydson~~as ~~Energy~~operator, ~~Inc.~~spudded ~~(“Sydson~~the ~~Energy”) and~~OCS-G-35589 ~~Sydson~~# ~~Resources,~~1 ~~L.P.~~well ~~(“Sydson~~on ~~Resources”~~the ~~and~~Canoe ~~collectively~~Prospect ~~with~~on ~~Sydson~~Vermilion ~~Energy,~~Block ~~“Sydson”),~~378 where ~~Sydson assigned~~the toCompany usholds ~~certain~~a ~~onshore~~5% ~~oil~~working ~~and~~interest ~~gas~~in ~~assets~~July ~~and~~2018. ~~interests~~The well was drilled and ~~certain~~evaluated ~~tangible~~to ~~assets~~a ~~and~~total ~~additionally~~depth of 5,765’ ~~certain~~MD ~~employees and~~(5,700’ aTVD). ~~consultant~~Based ofon ~~Sydson~~logging-while-drilling ~~have~~(LWD) ~~agreed~~and toother test ~~become~~results, ~~employees~~thin ~~and~~oil abearing ~~consultant~~sands ofwere ~~the~~encountered ~~Company.~~which ~~Sydson~~require isfurther study. As a ~~private~~result, ~~oil~~open-hole ~~and~~plugs ~~gas~~were ~~company~~set across ~~with~~several ~~land~~intervals ~~operations~~ in ~~Texas~~accordance with governmental regulations and ~~Louisiana~~the ~~that~~well ~~has~~is ~~been~~now inplugged ~~business~~and ~~since~~abandoned ~~1982~~at this time. ~~The~~Since ~~oil~~the well ~~and~~is ~~gas~~equipped ~~assets~~with ~~include~~a ~~the~~mud-line ~~following:~~suspension system, it is available for future re-entry as warranted.

●At Inthe beginning of September 2018, the ~~Bayou~~Company ~~Bouillon~~and ~~Field~~the other working interest owners began drilling operations at the Tau Prospect on Ship Shoal Blocks 336 and 351 offshore Louisiana. The well, StOCS-G 36121 #1, is planned to test Miocene reservoirs beneath thick salt sheets in approximately 300’ of water depth. ~~Martin~~Operated ~~and~~by ~~Iberville~~GulfSlope, ~~Parishes~~the well is currently drilling below 14,500’ ~~Louisiana~~to an expected total depth below 16,500’ weTVD. ~~acquired~~As a 37result of drilling difficulties on the well there have been substantial cost over-runs to date which the Company has not yet fully funded.5% ~~working~~As ~~interest~~of March 15, 2019, the Company has been declared to be in default under the ~~Sugarberry~~terms ~~South~~of ~~Project~~its ~~comprising~~joint ~~420~~operating ~~acres~~agreement by the operator regarding the payment of $1,299,229 due as of February 12, 2019 with arespect ~~net~~to ~~revenue~~drilling the Tau Prospect. The operator of the Tau Prospect asserts that additional joint interest billings to the Company during the past 30 days have increased the total amount due to $1,915,304 as of ~~70%~~March 15, 2019. AsThe Company’s share of ~~December~~the 31original AFE to drill to 29,800’ ~~2017~~Measured Depth (MD) was approximately $800,000. Drilling of the Tau Prospect continues which will result in further amounts owed by the Company ~~only~~to ~~owns~~GulfSlope. The operating agreement grants a ~~50%~~lien ~~working~~and security interest on the Company’s interest in the ~~Sugarberry~~leases #6comprising ~~wellbore~~the Tau Prospect, ~~which~~and grants to the operator the right to pursue foreclosure of the lien and security interest. The Company is ~~not~~using ~~currently~~its ~~productive,~~best atefforts ~~Bayou~~to ~~Bouillon~~raise ~~Field~~capital asto afund ~~result~~its ofobligations ~~concerns~~under the operating agreement with GulfSlope regarding the ~~presence~~drilling of ~~H2S~~the inTau Prospect. If the ~~gas~~Company fails to raise needed capital and ~~with~~foreclosure ~~difficulties~~is ~~raising~~pursued ~~funding~~and ~~for~~is ~~our~~successful, ~~share~~this could result in a loss of all of the ~~development~~Company’s ~~commitments~~rights in the Tau Prospect.

● In Texas, we acquired a 50% working interest in the undrilled acreage above 4,500’ in the West Tuleta Field, Bee County, Texas comprised of approximately 1,800 gross acres and 900 net acres with a net revenue interest of approximately 75%. The primary drilling objectives are the Vicksburg and Hockley sands which are structurally high on this acreage compared to the prior downdip production.2

● In January 2017, the ~~adjacent~~Company ~~Ray~~entered ~~Field,~~into an ~~also~~asset inpurchase ~~Bee~~agreement ~~County,~~with ~~Texas~~Sydson Energy, weInc. ~~acquired~~(“Sydson aEnergy”) ~~50%~~and ~~working~~Sydson ~~interest~~Resources, inL.P. ~~the~~(“Sydson ~~undrilled,~~Resources” and ~~acreage~~collectively onwith ~~the~~Sydson ~~Walton~~Energy, ~~Campbell~~“Sydson”), where Sydson assigned to us certain onshore oil and ~~Ray~~gas ~~leases~~assets ~~comprising~~and interests ~~approximately~~and 75certain ~~gross~~tangible ~~acres~~assets ~~with~~and additionally, certain employees and a ~~net~~consultant ~~revenue~~of ~~interest~~Sydson have agreed to become employees and a consultant of ~~approximately~~the ~~75%~~Company. ~~The~~Sydson ~~primary~~is ~~drilling~~a ~~objectives~~private onoil ~~this~~and ~~acreage~~gas ~~are~~company ~~also~~with ~~the~~land ~~Vicksburg~~operations ~~and~~in ~~Hockley~~Texas ~~sands~~and ~~updip~~Louisiana tothat ~~prior~~has ~~production~~been in ~~above~~business ~~3,700’~~since 1982. The oil and gas assets include the following:

● ~~Southeast~~In ~~of San Antonio~~Texas, we ~~are~~acquired ~~acquiring~~a ~~leases~~50% ~~with~~ working interest ~~partners~~in ~~covering~~the ~~2,000~~undrilled ~~acres~~acreage orabove ~~more~~4,500’ ~~for~~in ~~horizontal~~the ~~projects~~West ~~above~~Tuleta 6Field,~~000’~~ inBee ~~the~~County, ~~Austin~~Texas ~~Chalk~~comprised of approximately 1,800 gross acres and ~~Buda~~900 ~~Lime~~net ~~formation~~acres with a net revenue interest of approximately 75%. ~~These~~The ~~projects~~primary drilling objectives are ~~adjacent~~the toVicksburg ~~substantial~~and ~~prior~~Hockley ~~production~~sands ~~and~~which ~~contain~~are ~~both~~structurally ~~conventional~~high ~~and~~on ~~unconventional~~this ~~oil~~acreage ~~targets~~compared to the prior downdip production.

● In ~~connection~~ ~~with~~ the ~~asset~~adjacent ~~acquisition~~Ray Field, ~~certain~~also ~~officers~~in ~~and~~Bee ~~employees~~County, ofTexas, ~~Sydson~~we ~~have~~acquired ~~become officers,~~ a ~~consultant~~50% ~~and~~working ~~employees of~~interest in the ~~Company~~undrilled, ~~including~~acreage ~~Michael~~on J.the ~~Mayell~~Walton, ~~as chief executive officer~~Campbell, ~~James~~and L.Ray ~~Gunderson~~leases ascomprising ~~manager~~approximately of75 ~~land,~~gross ~~Robert~~acres F.with ~~Goldstein as~~ a ~~geological~~net ~~consultant,~~revenue ~~and~~interest ~~Lecia~~of ~~Alexander~~approximately ~~as controller~~75%. ~~Certain~~The ~~other~~primary ~~non-executive~~drilling ~~employees~~objectives ~~and~~on ~~consultants~~this ofacreage ~~Sydson became~~are ~~at-will~~also ~~employees of~~ the ~~Company.~~Vicksburg ~~Also~~and atHockley ~~that~~sands ~~time,~~updip ~~John~~to B.prior ~~Connally~~production ~~III~~above ~~joined our Company board as chairman~~3,700’.

Mr. Mayell has over 45 years of experience in the oil and gas business. He began his career with Shell Oil Company in New Orleans, Louisiana in the drilling and production engineering groups responsible for drilling and producing fields both onshore and offshore South Louisiana. Mr. Mayell founded Sydson in 1982 and this entity has been in operation since that time. In 1985, Mr. Mayell co-founded The Meridian Resource Corporation (NYSE) and served as the president and chief operating officer of Meridian for over 20 years. Mr. Mayell received his Bachelor of Science degree in mechanical engineering from Clarkston University.

	●	Southeast of San Antonio at the Wilinda Project we are acquiring leases with working interest partners covering more than 4,400 acres for horizontal projects above 6,000’ in the Austin Chalk, Eagle Ford, and Buda Lime formation. These projects are adjacent to substantial prior production and contain both conventional and unconventional oil targets.

	●	In September of 2018, we commenced drilling on the TXSO Richter Unit #1H well. The well was drilled, cased and cemented to a depth of 9,442’ with a horizontal lateral exceeding 4,000’. The well was frac’d and is now being evaluated with flowback testing. During the flowback period, the well initially produced at rates exceeding 1,000 barrels of frac load water per day with minor amounts of oil and gas. Subsequently, the oil and gas rates did not improve and the Company now believes that the water production is from a deeper zone which is obstructing the oil and gas flow from the Austin Chalk completion zone. The Company plans to isolate the section of the lateral that appears to be the source of the extraneous water and produce the remaining part of the lateral, using a comparable procedure to that used on a nearby well that encountered a similar problem.

~~Mr. Connally~~In ~~presently~~connection ~~serves~~with asthe ~~chairman~~asset ofacquisition, certain ~~the~~officers ~~Texas~~and ~~Lt.~~employees ~~Governor’s~~of ~~Energy~~Sydson ~~Advisory~~have ~~Board.~~become ~~Mr.~~officers, ~~Connally~~a ~~has~~consultant ~~significant oil~~ and ~~gas~~employees ~~experience,~~of ~~both~~the asCompany, aincluding ~~practicing~~Michael ~~lawyer~~J. Mayell ~~and~~ as anchief executive. ~~Mr.~~officer, ~~Connally~~James ~~was~~L. aGunderson ~~founding~~as ~~shareholder~~manager of ~~Texas South and GulfSlope~~land, ~~and~~Robert aF. ~~founding~~Goldstein ~~director~~as ofa ~~Nuevo~~geological ~~Energy~~consultant, ~~Inc.,~~and Lecia ~~Endeavor~~Alexander ~~International~~as ~~Corp~~controller., ~~and~~Certain ~~Pure~~other ~~Energy Group (where he also served as chief~~ non-executive ~~officer)~~employees and ~~Pure~~consultants ~~Gas~~of ~~Partners.~~Sydson ~~Mr.~~became ~~Connally~~at-will ~~was~~employees aof ~~law~~the Company. ~~partner~~Also ~~with~~at ~~Baker~~that ~~Botts~~time, ~~and~~John ~~received~~B. ~~both~~Connally ~~his~~III ~~Bachelor of~~joined ~~Arts~~our ~~and~~Company JDboard ~~degrees~~as ~~from the University of Texas~~chairman.

Oil and Gas Industry

The oil and gas industry is a complex, multi-disciplinary sector that varies greatly across geographies. As a heavily regulated industry, operating conditions are subject to political regimes and changing legislation. Governments can either induce or deter investment in exploration and production, depending on legal requirements, fiscal and royalty structures and regulation. Beyond political considerations, exploration and production for hydrocarbons is an extremely risky business with multiple failure modes. Exploration and production wells require substantial capital investment and are long-term projects, sometimes exceeding twenty to thirty years. Regardless of the effort spent on an exploration or production prospect, success is difficult to attain. Even though modern equipment, including seismic equipment and advanced processing and evaluation software, has helped geologists find producing structures and map reservoirs, they do not guarantee any outcome. Drilling is the only method able to ultimately determine whether a prospect will be productive, and even then, many complications can arise during drilling (e.g., those relating to drilling depths, pressure, porosity, weather conditions, and the porosity and permeability of the formation and rock hardness).

Typically, there is a significant chance that exploratory wells will result in non-producing holes, leaving investors with the cost of leases, overhead, seismic data and a dry well which can total millions of dollars. Even if oil or gas is produced from a particular well, there is always the possibility that unforeseen treatment, at additional cost, may be required to make production commercially viable. Further, production profiles decline over time. In summary, oil and gas exploration and production is an industry with high risks and high entry barriers, but it is also potentially lucrative.

For any given rate of production and volume of hydrocarbons recovered, oil and gas prices determine the commercial feasibility of a project. Certain projects may become feasible with higher prices or, conversely, may falter with lower prices. Volatility in the price of oil, gas and other commodities has increased during the last few years, complicating the assessment of revenue projections. Most governments have enforced strict regulations to uphold high standards of environmental awareness; thus, holding companies to a high degree of responsibility vis-а-vis protecting the environment. Aside from such environmental factors, oil and gas drilling is often conducted near populated areas. For a company to be successful in its drilling endeavors, working relationships with local communities are often crucial to promote business strategies and avoid the repercussions of disputes that might arise over local business operations. As Atof ~~this time (~~December 31, ~~2017)~~2018, the Company does not have any production or proved oil or gas reserves.

Governmental Regulation

The operator of any oil and gas operations will be subject to various federal, state, and local governmental regulations. Matters subject to regulation include discharge permits for materials used in drilling operations, drilling and abandonment bonds, reports concerning operations, the spacing of wells, pooling of properties, and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas. The production, handling, storage, transportation, and disposal of oil and gas, by-products thereof, and other substances and materials produced or used in connection with oil and gas operations are also subject to regulation under federal, state, and local laws and regulations relating primarily to the protection of safety, human health and the environment. State and local laws and regulations may affect the prices at which owners are paid for their leases by requiring more stringent disclosure and certification requirements, adjusting interest rates for late payments, raising legal and administrative costs and imposing more costly default contractual terms. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their ultimate effect, if any, on the lessee to pay royalties.

Environmental laws provide for, among other things, restrictions and prohibitions on spills, releases, or emissions of various substances produced in association with oil and gas operations. The laws also require that wells and facility sites be operated, maintained, abandoned, and reclaimed to the satisfaction of the applicable regulatory authorities. Compliance with such laws can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability, and potentially increased capital expenditures and operating costs. The discharge of oil or gas or other pollutants into the air, soil, or water may give rise to liabilities to governments and third parties and may require the operator to incur costs to remedy such discharge. In addition, the operator and other working interest owners could incur fines, penalties or significant liability for damages, clean-up costs, and penalties in the event of discharges into the environment, environmental damage caused by the operator or previous owners of the property, or non-compliance with environmental laws or regulations. In addition to actions brought by governmental agencies, the operator and owners could face actions brought by private parties or citizens groups. There can be no assurance that the forgoing will not increase the cost of production, development, or exploration activities for the operator or otherwise adversely affect the payment of royalties on the property.

Environmental Regulation

The operator of our oil and gas interests (we intend to operate many of our onshore prospects) will be subject to numerous federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Applicable U.S. federal environmental laws include, but are not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), the Clean Water Act (“CWA”) and the Clean Air Act (“CAA”). ~~These~~ These laws and regulations govern environmental cleanup standards, require permits for air, water, underground injection, solid and hazardous waste disposal and set environmental compliance criteria. In addition, state and local laws and regulations set forth specific standards for drilling wells, the maintenance of bonding requirements in order to drill or operate wells, the spacing and location of wells, the method of drilling and casing wells, the surface use and restoration of properties upon which wells are drilled, the plugging and abandoning of wells, and the prevention and cleanup of pollutants and other matters. Typically, operators and owners maintain insurance against costs of clean-up operations, but may not be fully insured against all such risks. Additionally, Congress and federal and state agencies frequently revise the environmental laws and regulations, and any changes that result in delay or more stringent and costly permitting, waste handling, disposal and clean-up requirements for the oil and gas industry could have a significant impact on the operator’s costs.

The environmental laws and regulations that could have a material impact on the oil and natural gas exploration and production industry, including on the operators of our future oil and gas interests, thereby indirectly impacting our business, including the following:

Hazardous ~~Substances~~ Substances and Wastes. CERCLA, also known as the “Superfund law,” imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons that are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the owner or operator of the disposal site or sites where the release occurred and companies that transported or disposed or arranged for the transport or disposal of the hazardous substances found at the site. Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to joint and several liabilities for the costs of cleaning up the hazardous substances that have been released into the environment and for damages to natural resources, and it is not uncommon for neighboring landowners and other third parties to file corresponding ~~common~~ common law claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

Waste Discharge. The CWA and analogous state laws impose restrictions and strict controls with respect to the discharge of pollutants, ~~including~~ including spills and leaks of oil and other substances, into waters of the United States. The discharge of pollutants into regulated ~~waters~~ waters is prohibited, except in accordance with the terms of a permit issued by the United States Environmental Protection Agency (“EPA”) or an analogous state agency. The CWA and regulations implemented there under also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. Spill prevention, control and countermeasure requirements of federal laws require appropriate containment beams and similar structures to help prevent the contamination of navigable waters by a petroleum hydrocarbon tank spill, rupture or leak. In addition, the CWA and analogous state laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. Federal and state regulatory agencies can impose administrative, civil and criminal penalties as well as other enforcement mechanisms for noncompliance with discharge permits or other requirements of the CWA and analogous state laws and regulations.

Air Emissions. The CAA and associated state laws and regulations restrict the emission of air pollutants from many sources, including oil and gas operations. New facilities may be required to obtain permits before construction can begin, and existing facilities may be required to obtain additional permits and incur capital costs in order to remain in compliance. More stringent regulations ~~governing~~ governing emissions of toxic air pollutants and greenhouse gases (“GHGs”) have been developed by the EPA and may increase ~~the~~ the costs of compliance for some facilities.

Oil Pollution Act. The Oil Pollution Act of 1990, as amended (“OPA”) and regulations ~~thereunder~~there under impose a variety of requirements on “responsible parties” related to the prevention of oil spills and liability for damages resulting from such spills in United States waters. A “responsible party” includes the owner or operator of an onshore facility, pipeline or vessel, or the lessee or permittee of the area in which an offshore facility is located. OPA assigns liability to each responsible party for oil cleanup costs and a variety of public and private damages. While liability limits apply in some circumstances, a party cannot take advantage of liability limits if the spill was caused by gross negligence or willful misconduct or resulted from violation of a federal safety, construction or operating regulations. If the party fails to report a spill or to cooperate fully in the cleanup, liability limits likewise do not apply. Few defenses exist to the liability imposed by OPA. OPA imposes ongoing requirements on a responsible party, including the preparation of oil spill response plans and proof of financial responsibility to cover environmental cleanup and restoration costs that could be incurred in connection with an oil spill.

National ~~Environmental~~ Environmental Policy Act. Oil and natural gas exploration and production activities on federal lands are subject to the National ~~Environmental~~ Environmental Policy Act (“NEPA”). NEPA requires federal agencies, including the Department of Interior, to evaluate major agency actions having the potential to significantly impact the environment. The process involves the preparation of either an environmental assessment or environmental impact statement depending on whether the specific circumstances surrounding the proposed federal action will have a significant impact on the human environment. The NEPA process involves public input through comments which can alter the nature of a proposed project either by limiting the scope of the project or requiring resource-specific mitigation. NEPA decisions can be appealed through the court system by process participants. This process may result in delaying the permitting and development of projects, increase the costs of permitting and developing some facilities and could result in certain instances in the cancellation of existing leases.

Worker Safety. The Occupational Safety and Health Act (“OSHA”) and comparable state statutes regulate the protection of the health and safety of workers. The OSHA hazard communication standard requires maintenance of information about hazardous materials used or produced in operations and provision of such information to employees. Other OSHA standards regulate specific worker safety aspects. Failure to comply with OSHA requirements can lead to the imposition of penalties.

Safe Drinking Water Act. The Safe Drinking Water Act and comparable state statutes restrict the disposal, treatment or release of water produced or used during oil and gas development. Subsurface emplacement of fluids (including disposal wells or enhanced oil recovery) is governed by federal or state regulatory authorities that, in some cases, includes the state oil and gas regulatory authority or the state’s environmental authority. These regulations may increase the costs of compliance for some facilities.

Offshore Drilling. In 2011, the U.S. Department of Interior issued new rules designed to improve drilling and workplace safety in the U.S. Gulf of Mexico, and various congressional committees began pursuing legislation to regulate drilling activities and increase liability. The Bureau of Ocean Energy Management (“BOEM”), the Bureau of Safety and Environmental Enforcement (“BSEE”) and the Office of National Resources Revenue are expected to continue to issue new safety and environmental guidelines or regulations for drilling in the U.S. Gulf of Mexico, and other regulatory agencies could potentially issue new safety and environmental guidelines or regulations in other geographic regions, and may take other steps that could increase the costs of exploration and production, reduce the area of operations and result in permitting delays. We are monitoring legislation and regulatory developments; however, it is difficult to predict the ultimate impact of any new guidelines, regulations or legislation. A prolonged suspension of drilling activity or permitting delays in the U.S. Gulf of Mexico and new regulations and increased liability for companies operating in this sector, whether or not caused by a new incident in the region, could adversely affect the business and planned operations of oil and gas companies.

Effect of Existing or Probable Governmental Regulations on our Business

We are subject to the following regulations of the SEC and applicable securities laws, rules and regulations:

Smaller ~~Reporting~~ Reporting Company. We are subject to the reporting requirements of Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and subject to the disclosure requirements of Regulation S-K of the SEC, as a “smaller reporting company.” That designation relieves us of some of the informational requirements of Regulation S-K applicable to to larger companies.

Sarbanes/Oxley Act. Except Section 302 and 404, we are also subject to the Sarbanes/Oxley Act of 2002. The Sarbanes/Oxley Act created a strong and independent accounting oversight board to oversee the conduct of auditors of public companies and ~~strengthens~~strengthen auditor independence. It also requires steps to enhance the direct responsibility of senior members of management for financial reporting and for the quality of financial disclosures made by public companies; establishes clear statutory rules to limit, and to expose to public view, possible conflicts of interest affecting securities analysts; creates guidelines for audit committee members’ appointment, compensation and oversight of the work of public companies’ auditors; management’s assessment of our ~~internal~~ internal controls; prohibits certain insider trading during pension fund blackout periods; requires companies to evaluate internal ~~controls~~ controls and procedures; and establishes a federal crime of securities fraud, among other provisions. Compliance with the requirements of of the Sarbanes/Oxley Act has and will continue to substantially impact our legal and accounting costs.

Exchange Act Reporting Requirements. We are subject to the reporting requirements of Section 14 and 16 of the Exchange Act, are required to file annual reports on SEC Form 10-K and quarterly reports on SEC Form 10-Q with the SEC on a regular basis, and will be required to timely disclose certain material events (e.g., changes in corporate control and acquisitions or dispositions of a significant amount of assets other than in the ordinary course of business) in a current report on SEC Form 8-K.

Competition

The Company is competing with other oil companies for oil and gas leases and concessions. The oil and gas industry is highly competitive in all of its phases, with competition for favorable producing royalties, overriding royalties, and good oil and gas leases being ~~particularly~~ particularly intense. The Company believes that the exploration program, promised expenditures, geological and geophysical skill, and familiarity with an area of operations are primary competitive factors in the identification, selection, and acquisition of desirable leases. When attempting to purchase interests in such properties, the Company competes with independent operators and major oil companies, many of which possess and employ superior financial resources that allow them to obtain substantially greater technical and personnel resources than ours. Competitors may be able to evaluate and purchase a greater number of mineral rights or royalty interests than our financial or personnel resources permit. Competitors may also be able to pay more for prospects than we are able or willing to pay. If we are unable to compete successfully in these areas in the future, our future growth may be diminished or restricted.

5Employees

~~Employees~~As of April 1, 2019, the Company has six employees and one consultant.

AsHistorical ~~of March 27, 2018, the Company has five employees and one consultant.~~Background

~~Historical~~The Company was incorporated ~~Background~~under the laws of the State of Nevada on March 15, 2010, as “INKA Productions Corp.” In September 2013, we changed our business to an oil and gas company focused primarily on properties in the Gulf Coast Region and changed the name of the Company from “INKA Productions, Corp.” to “Texas South Energy, Inc.”

~~The Company~~In ~~was~~January ~~incorporated~~2017, ~~under~~we issued ~~the~~Mr. ~~laws~~Mayell of100,000,000 ~~the~~shares ~~State~~ of ~~Nevada~~common onstock ~~March~~in ~~15,~~connection ~~2010,~~with asthe ~~“INKA~~Sydson ~~Productions~~transaction, ~~Corp~~and Mr.” ~~The Company~~Mayell ~~became~~was anappointed ~~SEC~~president, chief ~~reporting~~executive ~~company~~officer inand ~~2012, when~~ a ~~registration~~director. ~~statement~~Mr. ~~for~~Connally ~~its~~was ~~common~~appointed ~~stock~~as ~~was~~chairman ~~declared~~of ~~effective under~~ the ~~Exchange~~board ~~Act.~~and Atentered ~~that~~into ~~time,~~an ~~the~~employment ~~Company~~agreement whereby ~~was~~we ~~engaged~~issued inhim ~~the~~65,100,000 ~~business~~shares of ~~producing~~common ~~and~~stock. ~~performing~~Mr. ~~traditional~~Askew ~~Peruvian~~resigned ~~dances in~~as ~~Peru~~an ~~and~~executive ~~the~~officer ~~United~~and ~~States.~~as Ina ~~September~~director ~~2013,~~and weentered into ~~changed~~a ~~our~~consulting ~~business~~agreement pursuant to anwhich ~~oil~~he ~~and~~was ~~gas~~issued ~~company~~27,000,000 ~~focused~~shares ~~primarily~~of oncommon ~~properties in the Gulf Coast Region~~stock.

In ~~September~~ ~~2013~~January 2017, ~~certain~~pursuant to ~~shareholders~~the laws of the ~~Company~~State ~~sold an aggregate~~ of 7Texas,~~900,000~~ ~~shares of~~ the Company’s ~~common~~formed ~~stock at~~Texas aSouth ~~price~~Operating ofCompany, $0Inc.~~001~~ ~~per~~as ~~share to certain accredited investors, which resulted in~~ a ~~change~~wholly ofowned ~~control~~subsidiary ~~and change~~ of ~~management~~the Company. ~~Following~~Texas ~~the~~South ~~change of control~~Energy, inInc. ~~November~~and ~~2013~~Texas ~~the~~South ~~Company~~Operating ~~amended its certificate of incorporation to: (i) increase the~~ Company~~’s authorized shares of common stock from 75~~,~~000,000~~ ~~shares~~Inc. ~~to 950,000,000 shares;~~ (~~ii) authorize the issuance of 50~~collectively,~~000,000~~ ~~shares of blank check preferred stock; (iii) effect a 3-for-1 forward stock split of~~ the “Company’s”) ~~common~~began ~~stock;~~filing ~~and (iv) change~~consolidated ~~the~~financial ~~name~~statements ofeffective with the ~~Company~~March ~~from “INKA Productions~~31, ~~Corp.”~~2017 ~~to “Texas South Energy, Inc~~filing.”

In January 2017, we issued Mr. Mayell 100,000,000 shares of common stock in connection with the Sydson transaction, and Mr. Mayell was appointed president, chief executive officer and a director. Mr. Connally was appointed as chairman of the board and entered into an employment agreement whereby we issued him 65,100,000 shares of common stock. Mr. Askew resigned as an executive officer and as a director and entered into a consulting agreement pursuant to which he was issued 27,000,000 shares of common stock.6

In January 2017, pursuant to the laws of the State of Texas, the Company formed Texas South Operating Company, Inc. as a wholly owned subsidiary of the Company. Texas South Energy, Inc. and Texas South Operating Company, Inc. (collectively, the “Company”) began filing consolidated financial statements effective with the March 31, 2017 filing.General

~~General~~Our address is 4550 Post Oak Place Dr., Suite 300, Houston, TX 77027 and our telephone number is (713) 820-6300 and our corporate website is Texasouth.com. Our SEC filings are accessible through the Company’s website for dates after January 4, 2017 and through the SEC’s web site (http:www.sec.gov) prior to that date. This site contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC.

~~Our address~~ITEM ~~is 4550 Post Oak Place Dr~~1A., ~~Suite~~RISK 300, Houston, TX 77027 and our telephone number is (713) 820-6300 and our corporate website is Texasouth.com. Our SEC filings are accessible through the Company’s website for dates after January 4, 2017 and through the SEC’s web site (http:www.sec.gov) prior to that date. This site contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC.FACTORS

~~ITEM 1A. RISK~~Risks ~~FACTORS~~Related to Our Business and Financial Condition

~~Risks Related~~We tohave ~~Our~~no ~~Business~~proved reserves as of December 31, 2018, and our ~~Financial~~planned ~~Condition~~drilling operations may not yield any oil or gas in commercial quantity or quality.

We have no proved reserves as of December 31, ~~2017~~2018. While, based on available seismic and ~~our~~geological ~~planned~~information, we believe the potential presence of oil or gas exists. We have commenced drilling ~~operations~~on our prospects. Some of our current prospects may require additional seismic data, including reprocessing and interpretation. Even when properly used and interpreted, seismic data and visualization techniques are only tools used to assist geoscientists in identifying structures and hydrocarbon indicators and do not ~~yield~~enable the interpreter to have certainty as to whether hydrocarbons are, in fact, present in those structures. We do not know if any such prospect will contain oil or gas in ~~commercial quantity~~sufficient quantities or quality to recover drilling and completion costs or to be economically viable. Even if oil or gas is found on our prospects, development, facility construction and transportation costs may prevent such prospects from being economically viable. Accordingly, there is no assurance we will ever report proved reserves in our SEC filings.

~~We have~~Areas nothat ~~proved reserves as of December 31, 2017. While, based on available seismic and geological information,~~ we ~~believe~~decide ~~the potential presence of oil or gas exists,~~ to ~~date~~drill ~~we have not commenced drilling on our prospects. Some of our current prospects~~ may require additional seismic data, including reprocessing and interpretation. Even when properly used and interpreted, seismic data and visualization techniques are only tools used to assist geoscientists in identifying structures and hydrocarbon indicators and do not ~~enable~~yield ~~the interpreter to have certainty as to whether hydrocarbons are, in fact, present in those structures. We do not know if any such prospect will contain~~ oil orand natural gas in ~~sufficient~~commercial quantities or quality, ~~to recover drilling and completion costs~~ or toat ~~be economically viable~~all. Even if oil or gas is found on our prospects, development, facility construction and transportation costs may prevent such prospects from being economically viable. Accordingly, there is no assurance we will ever report proved reserves in our SEC filings.

~~Areas~~As of April 1, 2019, we currently own 12 blocks in nine offshore prospects in the Gulf of Mexico in conjunction with GulfSlope, in water depths between 300’ and 450’. The Company currently owns a 5% working interest in the Canoe and Tau offshore prospects and a 20% working interest in the others. Leases on eight of the prospects will expire on June 20, 2019 if no drilling activity or other activity to extend the leases is undertaken. GulfSlope, as operator, has filed an exploration permit on the Corvette Prospect in Vermillion Block 375 and is planning to extend that welease ~~decide~~by drilling. There can be no assurance that the commencement of drilling will actually occur prior to ~~drill~~the ~~may~~expiration ~~not~~of ~~yield~~the ~~oil~~lease. Further, the lease at the Canoe prospect on Vermillion Block 378, which has been tested and ~~natural~~plugged ~~gas~~and abandoned in the section down to 6,000’, expires in mid-2020. The Tau Prospect is currently drilling and includes the leases on Ship Shoal Blocks 336 and 351. Unless the well encounters commercial ~~quantities~~oil orand ~~quality~~gas pay, the lease on Ship Shoal Block 336 will expire on June 30, 2019. There can be no assurance that there will be commercial oil or atgas production ~~all~~in the Canoe Prospect and/or the Tau Prospect. Other lease expirations occur between June of 2020 and August of 2022.

~~As of March 27, 2018, we currently own 12 blocks in nine offshore prospects in the Gulf of Mexico in conjunction with GulfSlope, in water depths between 300’ and 450’.~~ The ~~Company currently owns 20% working interest in seven of the offshore~~ prospects ~~and a 5% working interest~~ in ~~two of~~ the ~~prospects. The prospects in the~~ Gulf of Mexico were identified based on available seismic and geological information that indicates the potential presence of oil and natural gas. Additionally, we plan to acquire onshore oil and gas interests in Texas. However, the areas we decide to drill may not yield oil and natural gas in commercial quantities or quality, or at all. At the Wilinda project in Wilson County, Texas, the Company has drilled the initial well, the TXSO Richter Unit 1H but has not yet been able to establish nor can there be any assurance we will establish commercial oil or gas production. Even when properly used and interpreted, 2-D and 3-D seismic data and visualization techniques are only tools used to assist geoscientists in identifying subsurface structures and hydrocarbon indicators and do not enable the interpreter to know whether hydrocarbons are, in fact, present in those structures. Accordingly, we do not know if any of our prospects will contain oil and natural gas in sufficient quantities or quality to recover drilling and completion costs or to be economically viable. Even if oil and natural gas is found on our prospects in commercial quantities, construction costs of pipelines and other transportation costs may prevent such prospects from being economically viable. If one or more of our prospects do not prove to be successful, our business, financial condition and results of operations may be materially adversely affected and we may be forced to curtail operations.

6We may lose our interest in the Tau Prospect.

~~Our~~In September 2018, the ~~business~~Company ~~plan~~and ~~requires~~the other working interest owners began drilling operations at the Tau Prospect on Ship Shoal Blocks 336 and 351 offshore Louisiana. As a result of drilling difficulties on the well there have been substantial ~~additional~~cost ~~capital,~~over-runs to date which wethe ~~may~~Company has benot ~~unable~~yet fully funded. As of March 15, 2019, the Company has been declared to ~~raise~~be onin ~~acceptable~~default under the terms of its joint operating agreement by the operator regarding the payment of $1,299,229 ifdue atas ~~all~~of February 12, in2019 with respect to drilling the Tau Prospect. ~~future~~The operator of the Tau Prospect asserts that additional joint interest billings to the Company during the past 30 days have increased the total amount due to $1,915,304 as of March 15, 2019. The Company’s share of the original AFE to drill to 29,800’ Measured Depth (MD) was approximately $800,000. Drilling of the Tau Prospect continues which ~~may~~will result in ~~turn~~further ~~limit~~amounts ~~our~~owed by ~~ability~~the Company to ~~execute~~GulfSlope. ~~our~~The ~~business~~operating ~~strategy~~agreement grants a lien and security interest on the Company’s interest in the leases comprising the Tau Prospect, and grants to the operator the right to pursue foreclosure of the lien and security interest. The Company is using its best efforts to raise capital to fund its obligations under the operating agreement with GulfSlope regarding the drilling of the Tau Prospect. If the Company fails to raise needed capital and foreclosure is pursued and is successful, this could result in a loss of all of the Company’s rights in the Tau Prospect. Accordingly, there can be no assurance that the Company will be able to maintain its interest in the Tau Prospect and, the failure of which, could have a material adverse effect on the Company.

As of March 27, 2018, we believe that we have sufficient cash on hand (or expected to be available) to fund near-term operations. We have budgeted required capital expenditures and other operating expenses during calendar 2018 of approximately $6 million. These estimates are projections only and will vary depending upon a number of factors, including timing of and actual drilling operations commenced and maintained, completion and transportation costs, bonding and insurance costs, seismic expenses, other customary and ordinary drilling costs that are difficult to estimate, farm-in and farm-out arrangements, and ability to attract partners that are willing to bear some or all of our portion of the costs of conducting exploration drilling activities on offshore prospects. Additionally, depending upon the execution of our business plan, we may determine to acquire additional leasehold interests and fund the acquisition of additional seismic data and seismic processing. All of these expenditures will be funded through future revenues, best-efforts equity offerings, debt offerings or a combination of all.7

~~Of the~~Our $6business ~~million~~plan ofrequires ~~budgeted~~substantial additional ~~expenditures~~capital, inwhich ~~calendar~~we ~~2018,~~may ~~approximately~~be ~~$2.5~~unable ~~million~~to ~~are~~raise ~~expected~~on toacceptable ~~cover~~terms, ~~salaries~~if at all, ~~consulting and~~in ~~professional~~the ~~services~~future, ~~and~~which ~~required~~may ~~working~~in ~~capital~~turn ~~needs~~limit our ability to execute our business strategy.

~~The~~As of April 1, 2019, we ~~proposed~~believe that we have sufficient cash on hand to fund limited operations. We have budgeted required capital expenditures ~~for~~and ~~the~~other operating expenses during calendar ~~year~~2019 ~~2018~~of approximately $7.5 million. These estimates are ~~subject~~projections toonly ~~change~~and ~~based~~will onvary ~~the~~depending upon ~~execution~~a number of ~~our~~factors, ~~business~~including ~~plan~~timing of and actual drilling operations commenced and maintained, ~~any~~completion ~~potential~~and transportation ~~competition~~costs, ~~for~~bonding ~~leasehold~~and ~~interests~~insurance costs, seismic expenses, other customary and ~~our~~ordinary drilling costs that are difficult to estimate, farm-in and farm-out arrangements, and ability to ~~obtain~~attract ~~additional~~partners ~~funding.~~that ~~This~~are ~~represents~~willing ~~our~~to ~~current~~bear ~~best~~some ~~estimate~~or all of our ~~capital~~portion ~~needs~~of ~~through~~the costs ~~December~~of 31conducting exploration drilling activities on offshore prospects. Additionally, ~~2018~~depending upon the execution of our business plan, we may determine to acquire additional leasehold interests and fund the acquisition of additional seismic data and seismic processing. WeIt ~~currently~~is doexpected, but not ~~anticipate~~guaranteed, that ~~any~~these ~~drilling~~expenditures ~~activity~~ will ~~commence~~be onfunded ~~any~~through ~~offshore~~future revenues, best-efforts equity ~~prospects~~offerings, ~~until~~debt ~~early~~offerings, ~~third~~future ~~quarter~~production ~~2018~~revenues from planned drilling activity, or a combination of all.

~~Future equity~~Of ~~financings~~the ~~may be dilutive to our stockholders~~$7.5 ~~Alternative forms~~ million of ~~future~~budgeted ~~financings~~expenditures ~~may~~in ~~include~~calendar ~~preferences~~2019, orapproximately ~~rights superior to our common stock~~$2.5 ~~Debt~~million ~~financings~~is ~~may~~budgeted ~~involve~~to acover ~~pledge~~salaries, ofconsulting ~~assets~~ and ~~will rank senior to our common stock. We have~~professional ~~historically~~services, ~~financed~~other ~~our~~G&A ~~operations~~expenses, ~~through~~and ~~best~~required ~~efforts~~working ~~private~~capital ~~equity~~needs. ~~and~~Approximately ~~debt financings~~$3.25 Wemillion dois ~~not~~budgeted ~~have~~for ~~any~~the ~~credit or equity~~completion ~~facilities~~of ~~available~~the ~~with~~Tau ~~financial~~Prospect ~~institutions,~~in ~~stockholders~~the orGulf ~~third~~of ~~party~~Mexico ~~investors,~~ and ~~will continue to rely on best efforts financings~~$1.75 ~~There~~million is nobudgeted ~~assurance~~for ~~that~~additional weonshore ~~can~~drilling ~~raise~~at the ~~capital~~Wilinda ~~necessary~~project. The toexact ~~fund~~amounts ~~our~~of ~~business~~capital ~~plan.~~ultimately ~~Failure~~allocated to ~~raise~~each ~~the~~of ~~required capital~~these toprojects ~~fund~~will ~~operations,~~depend onupon ~~favorable~~available ~~terms or at all~~capital, ~~will~~proposals ~~have~~from working ainterest ~~material~~owners, ~~adverse~~success ~~effect~~of onprior ~~our~~drilling operations, ~~and~~problems ~~will~~encountered ~~likely cause~~while usdrilling toand/or ~~curtail~~completing orexisting ~~cease~~wells and ~~operations~~other factors.

~~Our~~The proposed expenditures ~~2017~~for ~~audited~~the ~~financial~~calendar ~~statements~~year ~~contain~~2019 aare ~~going-concern~~subject ~~qualification~~to change based on the execution of our business plan, ~~raising~~actual ~~questions~~drilling asexpenses that exceed our budget, any potential competition for leasehold interests and our ability to obtain additional funding. This represents our current ~~continued~~best ~~existence~~estimate of our capital needs through December 31, 2019. Drilling activity commenced on the onshore and the offshore prospects during the third quarter 2018 and is ongoing in both areas at this time.

~~The Company’s~~Future ~~financial~~equity ~~statements~~financings may ~~are~~be ~~prepared~~dilutive ~~in accordance with generally accepted accounting principles applicable~~ to ~~a going~~our ~~concern~~stockholders. ~~This~~Alternative ~~contemplates~~forms ~~the realization~~ of ~~assets~~future ~~and~~financings ~~the~~may ~~liquidation~~include ofpreferences ~~liabilities~~or inrights ~~the~~superior ~~normal~~to ~~course~~our ~~of business.~~common ~~Currently,~~stock. ~~the~~Debt ~~Company~~financings ~~does~~may ~~not~~involve ~~have sufficient cash, nor does it have operations or~~ a ~~source~~pledge of ~~revenue~~assets ~~sufficient to cover its operation costs~~ and ~~allow~~will itrank senior to ~~continue~~our ascommon ~~a going concern~~stock. ~~The~~We ~~Company~~have ~~has~~historically ~~accumulated~~financed ~~a net loss since inception (March 15,~~our ~~2010)~~operations through ~~December~~best ~~31,~~efforts ~~2017,~~private ofequity ~~$12,876,760.~~and ~~Further~~debt ~~losses~~financings. ~~are~~We ~~anticipated~~do asnot wehave ~~continue~~any incredit ~~the~~or ~~development~~equity ~~stage~~facilities ofcurrently ~~our~~available ~~business.~~with Wefinancial ~~will~~institutions, bestockholders ~~dependent~~or ~~upon~~third ~~the~~party ~~raising~~investors, ~~of additional capital through placement of our equity~~ and~~/or~~ ~~debt~~will ~~securities~~continue ~~in order~~ to ~~implement~~rely ~~our~~on ~~business~~best ~~plan~~efforts financings. There is ~~can be~~ no assurance that we ~~will~~can beraise ~~successful~~the incapital ~~either~~necessary ~~situation~~to infund ~~order~~our tooperations ~~continue as~~and abusiness ~~going concern~~plan. Failure to raise the required capital to fund operations ~~(including the exploitation of our contractual rights to working interests in the Gulf of Mexico and our working interests onshore)~~, on favorable terms or at all, will have a material adverse effect on our operations, and will likely cause us to curtail or cease operations.

~~As a~~Our ~~result,~~2018 inaudited ~~their~~financial ~~audit report contained in this Annual Report, our independent auditors expressed substantial doubt about our~~statements ~~ability~~contain ~~to continue as~~ a going -concern. ~~As of the date of this Annual Report~~qualification, weraising ~~will~~questions ~~require~~as ~~additional funds for calendar year 2018. If we cannot raise these funds, we may be required~~ to ~~cease business operations or alter~~ our ~~business~~continued ~~plan~~existence. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

WeThe Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern. This contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Currently, the Company does not have sufficient cash, nor does it have operations or a source of revenue sufficient to cover its operation costs and allow it to continue as a going concern. The Company has accumulated a net loss since inception (March 15, 2010) through December 31, 2018, of $15,987,504. Further losses are anticipated as we continue in the development stage of our business. We will be dependent onupon Mrthe raising of additional capital through placement of our equity and/or debt securities in order to implement our business plan. ~~Mayell~~There can be no assurance that we will be successful in either situation in order to continue as a going concern. Failure to raise the required capital to fund operations (including the exploitation of, and actual funding of drilling expenses with respect to, our ~~chief~~contractual ~~executive~~rights ~~officer~~to working interests in the Gulf of Mexico and our working interests onshore), on favorable terms or at all, will have a material adverse effect on our operations, and will likely cause us to curtail or cease operations.

~~Investors in~~As ~~our~~a ~~common stock must rely upon the ability~~result, ~~expertise,~~in ~~judgment~~their audit ~~and~~report ~~discretion~~contained ofin ~~Mr.~~this ~~Mayell~~Annual Report, our ~~chief~~independent ~~executive~~auditors ~~officer. The~~expressed ~~loss~~substantial ofdoubt ~~Mr.~~about ~~Mayell~~our ~~could~~ability ~~be detrimental~~ to ~~our~~continue as ~~future~~a ~~success~~going concern. InAs ~~making~~of athe ~~decision~~date toof ~~invest~~this inAnnual ~~our common stock~~Report, ~~you~~we ~~must be~~will ~~willing~~require toadditional ~~rely~~funds tofor acalendar ~~significant~~year ~~extent~~2019. onIf ~~our~~we ~~management’s~~cannot raise ~~discretion~~these ~~and~~funds, ~~judgment.~~we ~~The~~may ~~loss~~be ofrequired ~~Mr.~~to ~~Mayell~~cease ~~would~~business ~~have a~~operations ~~material~~or ~~adverse~~alter ~~effect on~~ our ~~results~~business ofplan. ~~operations~~These ~~and~~ financial ~~condition,~~statements asdo ~~well as on the market price of our common stock.~~not Weinclude ~~may~~any ~~not~~adjustments berelating ~~able~~ to ~~find~~the ~~replacement~~recoverability ~~personnel~~and ~~with~~classification ~~comparable~~of ~~skills.~~recorded Ifasset weamounts, ~~are~~or ~~unable~~amounts ~~to attract~~ and ~~retain key personnel,~~classification ~~our~~of ~~business~~liabilities ~~may~~that bemight ~~adversely~~result ~~affected.~~from Wethis ~~do not currently maintain key-man insurance on the life of Mr~~uncertainty. ~~Mayell.~~

7We are dependent on Mr. Mayell, our chief executive officer.

WeInvestors in our common ~~are~~stock must rely upon the ability, expertise, judgment and discretion of Mr. Mayell, our chief executive officer. The loss of Mr. Mayell could be detrimental to our future success. In making a ~~development~~decision ~~stage~~to ~~company~~invest ~~with~~in ~~limited~~our ~~operating~~common ~~history~~stock, you must be willing to rely to a significant extent on our management’s discretion and ~~there~~judgment. ~~can~~The loss of Mr. Mayell would have a material adverse effect on our results of operations and financial condition, as well as on the market price of our common stock. We may not be able noto ~~assurance~~find ~~that~~replacement personnel with comparable skills. If we ~~will~~are beunable ~~successful~~to inattract ~~executing~~ and retain key personnel, our business ~~plan~~may be adversely affected. We ~~may~~do ~~never~~not ~~attain~~currently ~~profitability~~maintain key-man insurance on the life of Mr. Mayell.

We commenced our business activity in September 2013 and we intend to engage in the drilling, development, and production of oil and natural gas from our working interests onshore and offshore. As we are a relatively new business, we are subject to all the risks and uncertainties which are characteristic of a new business enterprise, including the substantial problems, expenses and other difficulties typically encountered in the course of its business, in addition to normal business risks, as well as those risks that are specific to the oil and gas industry. Investors should evaluate us in light of the delays, expenses, problems and uncertainties frequently encountered by undercapitalized companies in the oil and gas sector. We may never overcome these obstacles. Failure to raise the required capital to fund operations, on favorable terms or at all, will have a material adverse effect on our operations, and will likely cause us to curtail or cease operations.8

We ~~may~~ beare ~~unable~~a todevelopment ~~access~~stage ~~the~~company with ~~capital~~limited ~~markets~~operating tohistory, ~~obtain~~and ~~additional~~there ~~capital~~can be no assurance that we will ~~require~~be tosuccessful ~~implement~~in executing our business plan~~, which~~. ~~would~~We ~~restrict~~may never ~~our~~attain ~~ability to grow~~profitability.

~~Our current~~We ~~capital~~commenced onour ~~hand~~business activity isin ~~insufficient~~September to2013 ~~enable~~and uswe intend to ~~fully~~engage ~~execute our business strategy~~ in ~~calendar~~the ~~2018.~~drilling, Wedevelopment, ~~will~~and ~~need~~production ~~to raise~~of ~~significant~~oil ~~additional~~and ~~funds~~natural ingas ~~order~~from toour working ~~fully~~interests ~~execute~~onshore ~~our~~and ~~business strategy~~offshore. ~~Because~~As we are a ~~development~~relatively ~~stage~~new ~~company with limited resources~~business, we ~~may~~are ~~not~~subject ~~be able~~ to ~~compete~~all in the ~~capital~~risks ~~markets~~and ~~with much larger, established companies that have~~uncertainties ~~ready~~which ~~access~~are tocharacteristic ~~capital.~~of ~~Our~~a ~~ability~~new tobusiness ~~obtain~~enterprise, ~~needed~~including ~~financing~~the ~~may~~substantial beproblems, ~~impaired~~expenses byand ~~conditions~~other ~~and~~difficulties ~~instability~~typically encountered in the ~~capital~~course ~~markets (both~~of ~~generally~~its ~~and~~business, in ~~the~~addition ~~oil~~to ~~and~~normal ~~gas~~business ~~industry in particular)~~risks, ~~our~~as ~~status~~well as athose ~~new~~risks ~~enterprise~~that ~~without~~are aspecific ~~demonstrated~~to ~~operating~~the ~~history,~~oil ~~the location of our prospects~~ and~~/or~~ ~~the~~gas ~~loss of key consultants and management~~industry. ~~Further,~~Investors ifshould ~~oil~~evaluate ~~and/or~~us ~~natural~~in ~~gas~~light ~~prices on~~of the ~~commodities markets decrease~~delays, ~~then potential revenues~~expenses, ifproblems ~~any,~~and ~~will~~uncertainties ~~decrease,~~frequently ~~this~~encountered by ~~may~~undercapitalized ~~increase~~companies ~~our~~in ~~requirements for capital. Some of~~ the ~~future~~oil ~~contractual~~and ~~arrangements~~gas ~~governing~~sector. ~~our~~We ~~operations~~ may ~~require~~never usovercome tothese ~~maintain~~obstacles. ~~minimum~~Failure ~~capital~~to ~~(both~~raise ~~from~~the arequired ~~legal~~capital ~~and~~to ~~practical~~fund ~~perspective)~~operations, ~~and~~on wefavorable ~~may~~terms ~~lose our working interests and/~~or ~~contractual~~at ~~rights~~all, towill ~~working interests if we do not~~ have ~~the~~a ~~required~~material ~~minimum~~adverse ~~capital.~~effect Ifon ~~the~~our ~~amount of capital we can raise is not sufficient~~operations, weand ~~may~~will belikely ~~required~~cause us to curtail or cease ~~our~~ operations.

We ~~have~~ amay ~~limited~~be ~~operating~~unable ~~history~~to ~~with~~access ~~significant~~the ~~losses~~capital markets ~~and~~to ~~expect~~obtain ~~losses~~additional capital that we will require to ~~continue~~implement ~~for~~our ~~the~~business ~~foreseeable~~plan, ~~future~~which would restrict our ability to grow.

WeOur current capital on hand is limited and insufficient to enable us to fully execute our business strategy ~~have~~in ~~incurred~~calendar ~~annual~~year ~~operating~~2019. ~~losses~~We ~~since~~will need to raise significant additional funds in order to fully execute our ~~inception~~business strategy and our drilling expenses. AsBecause we are a ~~result,~~development atstage ~~December~~company ~~31,~~with ~~2017~~limited resources, we ~~had~~may annot ~~accumulated~~be ~~deficit~~able ofto compete in the capital ~~$12~~markets with much larger,~~876,760~~ established companies that have ready access to capital. WeOur ~~had~~ability ~~nominal~~to ~~revenues~~obtain needed financing may be impaired by conditions and instability in ~~2017~~the capital markets (both generally and doin ~~not~~the ~~anticipate~~oil ~~receiving~~and ~~significant~~gas ~~revenues~~industry in ~~2018~~particular), ~~unless~~our status weas ~~are~~a ~~successful~~new enterprise without a demonstrated operating history, and the location of our prospects and/or the loss of key consultants inand ~~developing~~management. ~~economically~~Further, ~~recoverable~~if oil and/or natural gas ~~reserves~~prices ~~with~~on ~~respect~~the tocommodities ~~certain~~markets ofdecrease, then potential revenues, if any, will decrease, this may increase our ~~onshore~~requirements ~~working~~for ~~interests~~capital. WeSome ~~expect~~of the future contractual arrangements governing our operations ~~that~~may require us to maintain minimum capital (both from a legal and practical perspective), and we may lose our ~~operating~~working ~~expenses~~interests and/or ~~will~~contractual ~~increase~~rights into ~~future~~working ~~periods~~interests if we do not have the required minimum capital. WeIf ~~expect~~the ~~continued~~amount ~~but~~of ~~diminishing~~capital ~~losses~~we incan raise ~~2018~~is not sufficient, we may be required to curtail or cease our operations.

~~Our lack~~We ofhave ~~diversification~~a ~~increases~~limited ~~the~~operating ~~risk~~history with ofsignificant anlosses ~~investment~~and inexpect ~~our~~losses ~~common~~to ~~stock~~continue for the foreseeable future.

~~Our business~~We ~~will~~have ~~focus~~incurred onannual ~~the~~operating ~~oil~~losses ~~and~~since ~~gas~~our ~~industry~~inception. inAs ~~Texas~~a ~~and~~result, ~~the~~at ~~Gulf~~December 31, 2018, we had an accumulated deficit of ~~Mexico~~$15,987,504. ~~Larger~~We ~~companies~~had ~~have~~nominal ~~the~~revenues ~~ability~~in to2018 ~~manage~~and ~~their risk~~do bynot ~~diversification.~~anticipate ~~However,~~receiving wesignificant ~~lack~~revenues ~~substantial~~in 2019 ~~diversification,~~unless inwe ~~terms~~are ofsuccessful ~~both~~in ~~the~~developing ~~nature~~economically ~~and~~recoverable ~~geographic~~oil ~~scope~~or ofgas ~~our business.~~reserves Aswith arespect ~~result,~~to ~~factors~~certain ~~affecting~~of our ~~industry,~~onshore working orinterests. ~~the~~We ~~regions~~expect inthat ~~which~~our weoperating ~~operate,~~expenses will ~~likely~~increase ~~impact~~in usfuture ~~more~~periods. ~~acutely than~~We ifexpect ~~our~~continued ~~business~~losses ~~was~~in ~~more diversified~~2019.

~~Strategic relationships~~Our ~~upon~~lack ~~which~~of wediversification ~~rely~~increases the ~~are~~risk ~~subject~~of toan ~~change,~~investment ~~which~~in ~~may diminish~~ our ~~ability~~common ~~to conduct our operations~~stock.

Our ~~ability~~ tobusiness ~~successfully~~will ~~bid~~ focus on the oil and ~~acquire~~gas ~~interests~~industry in ~~prospects,~~Texas toand ~~discover~~the ~~resources,~~Gulf of Mexico. Larger companies have the ability to ~~participate~~manage intheir ~~drilling~~risk ~~opportunities~~by diversification. ~~through~~However, ~~farm-~~we lack substantial diversification, in ~~arrangements~~terms ~~and~~of toboth ~~identify~~the nature and ~~enter~~geographic ~~into~~scope ~~commercial~~of ~~arrangements~~our ~~with~~business. ~~customers~~As ~~and~~a ~~partners~~result, ~~depends~~factors affecting onour ~~developing and~~industry, ~~maintaining~~or ~~close~~the ~~working~~regions ~~relationships~~in ~~with~~which ~~industry~~we ~~participants~~operate, ~~and~~will onlikely ~~our~~impact ~~ability~~us tomore ~~select~~acutely ~~and~~than ~~evaluate~~if ~~suitable~~our ~~properties~~business was more diversified. ~~Further~~Moreover, wethe ~~must~~failure ~~consummate~~of ~~transactions~~any inone adrilling ~~highly~~project ~~competitive~~will ~~environment.~~be ~~These~~significant ~~realities are subject~~ to ~~change~~the Company and ~~may~~likely ~~impair our~~adversely ~~ability~~affect ~~to grow~~us.

~~To develop~~Strategic ~~our business, we will endeavor to use the~~ relationships ofupon ~~our management to enter into strategic relationships,~~ which may take the form of working interest acquisitions, joint ventures with other private parties or contractual arrangements with other oil and gas companies, including those that supply equipment and other resources that we ~~will~~rely ~~use~~are insubject ~~our business. We may not be able~~ to ~~establish these strategic relationships~~change, orwhich ~~if established, we~~ may not be able to maintain them. In addition, the dynamics of our relationships with strategic partners may require that we incur expenses or undertake activities we would not otherwise incur or undertake in order to fulfill our obligations to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects may be limited, which could diminish our ability to conduct our operations.

~~Competition~~Our ability to successfully inbid ~~obtaining~~on and acquire interests in ~~mineral~~prospects, ~~rights~~to discover resources, to participate in drilling opportunities through farm-in arrangements and ~~existing~~to ~~royalties~~identify and enter into commercial arrangements with customers and partners, depends on our ability to obtain adequate capital to fund our commitments (historically this has been difficult), developing and maintaining close working relationships with industry participants and on our ability to select and evaluate suitable properties. Further, we must consummate transactions in a highly competitive environment. These realities are subject to change and may impair our ~~business~~ability to grow. Our historic undercapitalization has negatively impacted our ability to develop and maintain strategic relationships.

~~The oil~~To ~~and~~develop ~~gas~~our ~~industry~~business, iswe ~~extremely~~will ~~competitive.~~endeavor ~~Present~~to ~~levels~~use ofthe ~~competition~~relationships ~~for~~of ~~oil~~our ~~and~~management ~~gas~~to ~~interests~~enter ~~are~~into ~~high~~strategic relationships, ~~worldwide.~~which ~~Other oil~~may ~~and~~take ~~gas~~the ~~companies~~form ~~with~~of ~~greater~~working ~~resources~~interest ~~may~~acquisitions, ~~compete~~joint ventures with usother inprivate ~~acquiring~~parties or contractual arrangements with other oil and gas ~~interests. Additionally~~companies, including those that supply equipment and other ~~companies may~~resources ~~compete~~that ~~with~~we uswill use in ~~obtaining~~our business. ~~capital~~We ~~from~~may ~~investors.~~not ~~Competitors~~be ~~include~~able ~~larger,~~to ~~established~~establish ~~exploration~~these ~~and~~strategic ~~production~~relationships, ~~companies~~or if established, ~~which~~ ~~have~~we ~~access~~may not be able to ~~greater~~maintain ~~financial~~them. In ~~and~~addition, ~~other~~the ~~resources~~dynamics ~~than~~of weour ~~have~~relationships ~~currently,~~with ~~and~~strategic partners may berequire ~~more~~that ~~successful~~we inincur ~~the~~expenses ~~recruitment and~~or ~~retention~~undertake ofactivities we ~~qualified~~would ~~employees.~~not Inotherwise ~~addition,~~incur ~~actual~~ or ~~potential~~undertake ~~competitors~~in ~~may~~order beto ~~strengthened~~fulfill ~~through~~our ~~the~~obligations ~~acquisition of~~to ~~additional~~these ~~assets~~partners ~~and~~or ~~interests~~maintain our relationships. If ~~Because~~our ofstrategic ~~some~~relationships orare ~~all~~not ofestablished ~~these~~or ~~factors~~maintained, weour ~~may~~business ~~not~~prospects may be ~~able~~limited, which could diminish our ability to ~~compete~~conduct ~~effectively~~our operations and result in the curtailment of our business.

8Competition in obtaining interests in mineral rights and existing royalties may impair our business.

WeThe oil and gas industry is extremely competitive. Present levels of competition for oil and gas interests are high worldwide. Other oil and gas companies with greater resources may ~~not~~compete bewith ~~able~~us toin ~~effectively~~acquiring ~~manage~~oil ~~our~~and ~~growth~~gas interests. Additionally, other companies may compete with us in obtaining capital from investors. Competitors include larger, established exploration and production companies, which have access to greater financial and other resources than we have currently, and may ~~harm~~be ~~our~~more ~~profitability~~successful in the recruitment and retention of qualified employees. In addition, actual or potential competitors may be strengthened through the acquisition of additional assets and interests. Because of some or all of these factors, we may not be able to compete effectively.

Our strategy envisions building and expanding our business. If we fail to effectively manage our growth, our financial results will be adversely affected. Growth may place a strain on our management systems and resources. We must continue to refine and expand our business development capabilities, our systems, processes, and our access to financing sources. As we grow, we must continue to hire, train, supervise and manage new employees. While our recent transaction with Sydson is an intended step in this direction, we still cannot assure that we will be able to:9

●We ~~expand~~may ~~our~~not ~~systems~~be able to effectively manage orour ~~efficiently~~growth, orwhich inmay aharm ~~timely~~our ~~manner;~~profitability.

●Our ~~optimally~~strategy ~~allocate~~envisions building and expanding our ~~human~~business. If we fail to effectively manage our growth, our financial results will be adversely affected. Growth may place a strain on our management systems and resources;. orWe must continue to refine and expand our business development capabilities, our systems, processes, and our access to financing sources. As we grow, we must continue to hire, train, supervise and manage new employees. While our recent transaction with Sydson is an intended step in this direction, we still cannot assure that we will be able to:

● ~~identify~~expand ~~and~~our ~~hire~~systems ~~qualified~~effectively ~~employees~~or efficiently or ~~retain~~in ~~valued~~a ~~employees.~~timely manner;

~~If we~~● ~~are~~optimally ~~unable~~allocate ~~to manage~~ our ~~growth~~human ~~and~~resources; ~~our operations, our financial results could be adversely affected, which could prevent us from ever attaining profitability.~~or

~~Any change~~● toidentify ~~government~~and ~~regulation/administrative~~hire ~~practices~~qualified ~~may~~employees ~~have~~or aretain ~~negative~~valued ~~impact on our ability to operate and profitability~~employees.

~~The laws,~~If ~~regulations, policies or current administrative practices of any government body, organization or regulatory agency impacting any jurisdiction where~~ we ~~might~~are ~~conduct~~unable ~~our business activities, including the BOEM, may be changed, applied or interpreted in a manner which may fundamentally alter the ability of the Company~~ to ~~conduct~~manage ~~business.~~our ~~The~~growth ~~actions, policies or regulations, or~~and ~~changes~~our ~~thereto~~operations, ~~of any government body or regulatory agency or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on~~ our ~~ability~~financial toresults ~~operate~~could ~~profitably. Additionally, certain bonding and/or insurance may~~ be ~~required~~adversely inaffected, ~~jurisdictions in~~ which wecould ~~chose~~prevent tous ~~have~~from ~~operations,~~ever ~~increasing~~attaining ~~our costs to operate~~profitability.

~~Risks Related~~Any change to ~~the~~government ~~Industry~~regulation/administrative practices inmay ~~Which~~have Wea ~~Intend~~negative impact on our ability to ~~Compete~~operate and profitability.

~~Current~~The laws, regulations, ~~volatile~~policies ~~market~~or ~~conditions~~current ~~and~~administrative ~~significant~~practices ~~fluctuations~~of inany ~~energy~~government ~~prices~~body, organization or regulatory agency impacting any jurisdiction where we might conduct our business activities, including the BOEM, may ~~continue~~be ~~indefinitely~~changed, ~~negatively~~applied ~~affecting~~or ~~our~~interpreted in a manner which may fundamentally alter the ability of the Company to conduct business. The actions, policies or regulations, or changes thereto, of ~~prospects~~any government body or regulatory agency or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate profitably. Additionally, certain bonding and/or ~~viability~~insurance may be required in jurisdictions in which we chose to have operations, increasing our costs to operate.

~~The oil~~Risks ~~and~~Related ~~gas markets are very volatile, and we cannot predict future oil and natural gas prices. Historically, oil and natural gas prices have been volatile and are subject~~ to ~~fluctuations~~the inIndustry ~~response to changes~~ in ~~supply and demand, market uncertainty~~Which ~~and~~We aIntend variety of additional factors that are beyond our control. Any substantial decline in the price of oil and natural gas will likely have a material adverse effect on our planned operations and financial condition. The amount of revenue we receive, if any, from the production of oil and gas from our oil and gas interests will depend on numerous factors beyond our control. These factors include, but are not limited to, ~~the following:~~Compete

●Current ~~changes~~volatile inmarket ~~global~~conditions and ~~supply~~significant ~~and~~fluctuations ~~demand~~in ~~for~~energy ~~oil~~prices ~~and~~may ~~natural~~continue ~~gas~~indefinitely, bynegatively ~~both~~affecting ~~refineries~~our ~~and~~business ~~end~~prospects ~~users;~~and viability.

●The ~~the~~oil ~~ability~~and ofgas ~~the~~markets are ~~members~~very ofvolatile, ~~the~~and ~~Organization~~we ofcannot ~~Petroleum~~predict ~~Exporting~~future ~~Countries~~oil and natural gas prices. Historically, oil and natural gas prices have been volatile and are subject to ~~agree~~fluctuations in response to changes in supply and ~~maintain~~demand, ~~oil~~market uncertainty and a variety of additional factors that are beyond our control. Any substantial decline in the price of oil and natural gas will likely have a material adverse effect on our planned operations and financial condition. The amount of revenue we receive, if any, from the production ~~controls;~~of oil and gas from our oil and gas interests will depend on numerous factors beyond our control. These factors include, but are not limited to, the following:

● ~~the~~changes ~~price~~in ~~and~~global ~~volume~~supply ofand ~~imports~~demand offor ~~foreign~~ oil and natural gas by both refineries and end users;

● ~~political~~the ~~and~~ability ~~economic~~of ~~conditions,~~the ~~including~~members ~~embargoes,~~of inthe ~~oil-producing~~Organization ~~countries~~of orPetroleum ~~affecting~~Exporting ~~other~~Countries to agree to and maintain oil~~-producing~~ ~~activity~~price and production controls;

● the ~~level~~price ofand ~~global~~volume ~~oil~~of ~~and~~imports ~~gas~~of ~~exploration~~foreign oil and ~~production~~natural ~~activity~~gas;

● ~~the~~political ~~level~~and ofeconomic ~~global~~conditions, including embargoes, in oil-producing ~~and~~countries ~~gas~~or ~~inventories~~affecting other oil-producing activity;

● ~~weather~~the ~~conditions~~level of global oil and gas exploration and production activity;

● ~~technological~~the ~~advances~~level ~~affecting~~of ~~energy~~global ~~consumption~~oil and gas inventories;

● ~~domestic~~weather ~~and foreign governmental regulations and taxes~~conditions;

● ~~proximity~~technological ~~and~~advances ~~capacity~~affecting ofenergy ~~oil and gas pipelines and other transportation facilities~~consumption;

9● domestic and foreign governmental regulations and taxes;

● ~~the~~proximity ~~price~~ and ~~availability~~capacity of ~~competitors’ supplies of~~ oil and gas inpipelines ~~captive~~and ~~market~~other ~~areas~~transportation facilities;

~~● the introduction, price and availability of alternative forms of fuel to replace or compete with oil and natural gas;~~10

● ~~import~~the ~~and~~price ~~export regulations for LNG~~ and~~/or~~ ~~refined~~availability ~~products~~of ~~derived~~competitors’ ~~from~~supplies of oil and gas ~~production~~in ~~from~~captive ~~the~~market USareas;

● ~~speculation in~~ the introduction, price and availability of ~~commodities~~alternative informs ~~the~~of ~~commodity~~fuel ~~futures~~to ~~market~~replace or compete with oil and natural gas;

● ~~the~~import ~~availability~~and ofexport ~~drilling~~regulations ~~rigs~~for LNG and/or ~~completion~~refined ~~equipment;~~products derived from oil and gas production from the US;

● speculation in the ~~overall~~price ~~economic~~of ~~environment.~~commodities in the commodity futures market;

~~Further, oil~~● ~~and natural gas prices do not necessarily fluctuate in direct relationship to each other. The price of oil has been extremely volatile, and we expect this volatility to continue for~~ the ~~foreseeable~~availability ~~future. Recent volatility during the last three years has seen WTI oil prices drop from a high~~ of ~~$107.26~~drilling onrigs ~~June 20, 2014, to a price dipping below $27 in intra-day trading on January 20, 2016. This near-term volatility may affect future prices in 2018~~ and ~~beyond.~~completion ~~The~~equipment; ~~volatility of the energy markets makes it difficult to predict future oil~~ and ~~natural gas price movements with any certainty.~~

~~Exploration for~~● ~~oil~~the ~~and~~overall ~~natural~~economic ~~gas is risky and may not be commercially successful, impairing our ability to generate revenues~~environment.

~~Oil~~ Further, oil and natural gas ~~exploration~~prices ~~involves~~do not anecessarily ~~high~~fluctuate ~~degree of risk. These risks are more acute~~ in ~~the~~direct ~~early~~relationship ~~stages~~to ofeach ~~exploration~~other. ~~We may~~The ~~not~~price ~~discover~~of oil orhas ~~natural~~been ~~gas~~extremely ~~in commercially viable quantities~~volatile, ifand atwe ~~all.~~expect ~~It is difficult to project the costs of implementing~~this ~~our~~volatility ~~drilling program due~~ to ~~the~~continue ~~inherent~~for ~~uncertainties of drilling in unknown formations,~~ the ~~costs~~foreseeable ~~associated~~future. ~~with~~Recent ~~encountering various~~volatility ~~drilling~~during ~~conditions, such as over pressured zones and tools lost in~~ the ~~hole,~~last ~~and~~three ~~changes~~years inhas ~~drilling~~seen ~~plans,~~WTI ~~locations as a result of prior exploratory wells or additional seismic data and interpretations thereof, and final commercial terms negotiated with partners. Developing developmental and exploratory~~ oil ~~and~~prices ~~gas~~drop ~~properties requires significant capital expenditures and involves~~from a high ~~degree~~ of ~~financial risk~~$107.26 ~~The~~on ~~budgeted~~June ~~costs of drilling~~20, ~~completing~~2014, ~~and~~to ~~operating~~a ~~exploratory~~price ~~wells~~dipping ~~are~~below ~~often~~$27 ~~exceeded and~~in ~~can~~intra-day ~~increase~~trading ~~significantly~~on ~~when~~January ~~drilling~~20, ~~costs rise~~2016. ~~Drilling~~This ~~may~~near-term ~~be unsuccessful for many reasons, including title problems,~~volatility ~~weather,~~may ~~cost~~affect ~~overruns,~~future ~~equipment~~prices ~~shortages,~~in 2019 and ~~mechanical difficulties~~beyond. ~~There~~The isvolatility noof ~~assurance that we will successfully complete any wells or if successful, that~~ the ~~wells~~energy ~~would~~markets bemakes ~~economically~~it ~~successful.~~difficult ~~Moreover,~~to ~~the~~predict ~~successful~~future ~~drilling or completion of any~~ oil ~~or gas well does not ensure a profit on investment. Exploratory wells bear a much greater risk of loss than development wells. We cannot assure that our exploration, exploitation~~ and ~~development activities will result in profitable operations, the~~ ~~result~~natural ofgas ~~which~~price ~~will~~movements ~~materially~~with ~~adversely~~any ~~affect our business~~certainty.

~~Oil and~~Exploration ~~gas~~for ~~operations~~oil ~~are~~and ~~subject~~natural togas is ~~comprehensive~~risky ~~regulation~~and ~~which~~ may ~~cause~~not ~~substantial~~be ~~delays~~commercially ~~or require capital outlays in excess of those anticipated~~successful, ~~causing~~impairing anour ~~adverse~~ability ~~effect~~to ongenerate ~~the Company~~revenues.

Oil and natural gas exploration ~~operations~~involves ~~are~~a ~~subject~~high todegree ~~national~~of ~~and~~risk. ~~local~~These ~~laws~~risks ~~relating~~are tomore acute in the ~~protection~~early stages of ~~the~~exploration. ~~environment,~~We ~~including~~may ~~laws~~not ~~regulating~~discover ~~removal~~oil ofor natural ~~resources~~gas ~~from~~in commercially viable quantities, if at all. It is difficult to project the ~~ground~~costs ~~and~~of implementing our drilling program due to the ~~discharge~~inherent uncertainties of ~~materials~~drilling ~~into~~in unknown formations, the ~~environment.~~costs ~~Oil~~associated with encountering various drilling conditions, such as over pressured zones and ~~gas~~tools ~~operations~~lost ~~are~~in ~~also~~the hole, and changes in drilling plans, locations as a result of prior ~~subject~~exploratory towells ~~national~~or additional seismic data and ~~local~~interpretations ~~laws~~thereof, and ~~regulations~~final ~~which~~commercial ~~seek~~terms tonegotiated ~~maintain~~with ~~health~~partners. Developing developmental and ~~safety~~exploratory ~~standards~~oil byand ~~regulating~~gas ~~the~~properties ~~design~~ requires significant capital expenditures and ~~use~~involves a high degree of financial risk. The budgeted costs of drilling, ~~methods~~completing, and ~~equipment.~~operating ~~Environmental~~exploratory ~~standards~~wells ~~imposed~~are byoften ~~national~~exceeded orand ~~local~~can ~~authorities~~increase significantly when drilling costs rise. Drilling may be ~~changed~~unsuccessful ~~and~~for many reasons, including title problems, weather, cost ~~any~~overruns, ~~such~~equipment ~~changes~~shortages, ~~may~~and ~~have~~mechanical ~~material~~difficulties. ~~adverse~~There ~~effects~~is onno ~~our~~assurance ~~potential~~that ~~royalties~~we will successfully complete any wells or if successful, that the wells would be economically successful. Moreover, ~~compliance~~the ~~with~~successful ~~such~~drilling ~~laws~~or ~~may~~completion ~~cause~~of ~~substantial delays~~any oil or gas ~~require~~well ~~capital~~does ~~outlays~~not inensure ~~excess~~a profit on investment. Exploratory wells bear a much greater risk of ~~those~~loss ~~anticipated~~than development wells. We cannot assure that our exploration, ~~thus~~exploitation ~~causing~~and andevelopment ~~adverse~~activities ~~effect~~will onresult ~~any~~in ~~potential~~profitable ~~revenue~~operations, tothe usresult of which will materially adversely affect our business.

WeOil and gas operations are subject ~~will~~to becomprehensive ~~dependent~~regulation ~~upon~~which ~~the~~may ~~third~~cause ~~party~~substantial ~~operator~~delays or require capital outlays in excess of ~~our~~those ~~offshore~~anticipated, ~~oil~~causing an ~~and~~adverse ~~gas~~effect ~~interests~~on the Company.

~~While~~Oil and gas operations weare ~~intend~~subject to benational ~~the~~and ~~operator~~local ~~with~~laws ~~respect~~relating to ~~our~~the ~~onshore~~protection ~~drilling~~of ~~operations~~the environment, ~~when~~including ~~our~~laws ~~offshore~~regulating ~~prospects~~removal ~~proceed~~of ~~to drilling,~~natural ~~third~~resources ~~parties~~from ~~will~~the ~~act~~ground asand the ~~operators~~discharge ~~and~~of ~~control~~materials into the ~~drilling~~environment. Oil and ~~operating~~gas ~~activities~~operations are also subject to benational and ~~conducted~~local onlaws ~~our~~and ~~offshore~~regulations ~~properties.~~which seek to maintain health and safety standards by regulating the design and use of drilling ~~Therefore,~~methods weand equipment. Environmental standards imposed by national or local authorities may ~~have~~be ~~limited~~changed ~~control~~and ~~over~~any ~~certain~~such ~~decisions~~changes ~~related~~may have tomaterial ~~activities~~adverse effects on our ~~offshore~~potential ~~properties~~royalties. ~~relating~~Moreover, tocompliance ~~the timing,~~with ~~costs,~~such ~~procedure,~~laws ~~and~~may ~~location~~cause ofsubstantial ~~drilling~~delays or ~~production~~require capital ~~activities~~outlays in excess of those anticipated, ~~which~~thus ~~could~~causing ~~affect~~an ~~the~~adverse ~~Company’s~~effect ~~results~~on any potential revenue to us.

We ~~may~~ ~~not~~will be ~~able~~dependent toupon ~~develop~~the ~~oil~~third party ~~and~~operator ~~gas~~of ~~reserves~~our onoffshore anoil ~~economically~~and ~~viable~~gas ~~basis~~interests.

ToWhile we intend to be the ~~extent~~operator ~~that~~with werespect ~~succeed~~to inour ~~discovering~~onshore ~~oil~~drilling ~~and/or~~operations, ~~natural~~third ~~gas~~parties ~~reserves~~will onact ~~our~~as ~~prospects,~~the weoperators ~~cannot~~and ~~assure~~control ~~that~~the ~~these reserves~~drilling ~~will~~and operating activities to be ~~capable~~conducted ofon ~~production~~our ~~levels~~offshore properties. Therefore, we ~~project~~may orhave inlimited ~~sufficient~~control ~~quantities~~over certain decisions related to beactivities ~~commercially~~on ~~viable.~~our ~~Our~~offshore ~~future~~properties ~~reserves~~relating to the timing, ~~if any~~costs, ~~will~~procedure, ~~depend~~and ~~not~~location ~~only~~of ondrilling ~~our~~or ~~ability~~production activities, towhich ~~develop~~could ~~then-existing~~affect ~~properties,~~the ~~but~~Company’s ~~also~~results. onAs ~~our~~a ~~ability~~result toof ~~identify~~the ~~and~~high ~~acquire additional~~daily ~~suitable~~costs ~~producing~~involved ~~properties~~with oroffshore ~~prospects~~drilling, any tounexpected ~~find~~drilling ~~markets~~problems ~~for~~can ~~the~~very ~~oil~~quickly ~~and~~cause ~~natural~~cost ~~gas~~over-runs wethat ~~develop~~are ~~and~~multiples toof ~~effectively distribute~~the ~~our~~original ~~production~~cost ~~into~~estimate ~~markets~~to the Company’s interest.

~~Future oil~~We ~~and gas exploration~~ may ~~involve unprofitable efforts,~~ not ~~only~~be ~~from~~able ~~dry wells, but from wells that are productive but do not produce sufficient net revenues~~ to ~~return~~develop ~~a profit after drilling, operating~~ oil and ~~other~~gas ~~costs.~~reserves ~~Completion of a well does not assure a profit~~ on ~~the~~an ~~investment~~economically orviable ~~recovery of drilling, completion and operating costs~~basis. In addition, drilling hazards or environmental damage could greatly increase the cost of operations and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-downs of wells resulting from extreme weather conditions, problems in storage and distribution and adverse geological and mechanical conditions. While we will endeavor to effectively manage these conditions, we cannot be assured of doing so optimally, and we will not be able to eliminate them completely in any case. Therefore, these conditions could adversely impact our operations.

10To the extent that we succeed in discovering oil and/or natural gas reserves on our prospects, we cannot assure that these reserves will be capable of production levels we project or in sufficient quantities to be commercially viable. Our future reserves, if any, will depend not only on our ability to develop then-existing properties, but also on our ability to identify and acquire additional suitable producing properties or prospects, to find markets for the oil and natural gas we develop and to effectively distribute our production into markets.

~~Risks~~Future oil and gas ~~Related~~exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-downs of wells resulting from extreme weather conditions, problems in storage and distribution and adverse geological and mechanical conditions. While we will endeavor to effectively manage these conditions, we cannot be assured of doing so optimally, and we will not be able to eliminate them completely in any case. Therefore, these conditions could adversely impact our ~~Common~~operations ~~Stock~~and result in the cessation or curtailment of our operations.

~~There is not now, and there may never be, an active market for our common stock.~~11

~~Shares of~~Risks ~~our~~Related ~~common~~to ~~stock have historically been thinly traded. Currently there is a limited market for~~ our ~~common~~Common stock and no increased market for our common stock may develop in the future. As a result, our stock price as quoted in the over-the-counter market may not reflect an actual or perceived value. Moreover, several days may pass before any shares are traded; meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including, but not limited to:Stock

●There ~~we are a small company that~~ is ~~relatively~~not ~~unknown to stock analysts~~now, ~~stock brokers, institutional investors~~ and ~~others~~there inmay ~~the~~never be, ~~investment~~an ~~community~~active ~~that~~market ~~generate~~for orour ~~influence~~common ~~sales volume; and~~stock.

●Shares ~~stock~~of ~~analysts,~~our common stock ~~brokers~~have ~~and~~historically ~~institutional~~been ~~investors~~thinly ~~may~~traded. beCurrently ~~risk-averse~~there is a limited market for our common stock and ~~reluctant~~no toincreased ~~follow~~market afor our ~~company~~common ~~such~~stock asmay ~~ours~~develop ~~that~~in ~~faces~~the ~~substantial~~future. ~~doubt~~As ~~about~~a ~~its~~result, ~~ability~~our tostock ~~continue~~price as aquoted ~~going~~in ~~concern~~the orover-the-counter tomarket ~~purchase~~may not reflect an actual or ~~recommend~~perceived value. Moreover, several days may pass before any shares are traded; meaning that the ~~purchase~~number of persons interested in purchasing our common shares ~~until~~at ~~such~~or near ask prices at any given time asmay webe ~~become~~relatively ~~more~~small ~~viable~~or non-existent. This situation is attributable to a number of factors, including, but not limited to:

~~As a~~● ~~result,~~we anare ~~investor~~a ~~may~~small ~~find~~company itthat ~~difficult~~is torelatively ~~dispose~~unknown ~~of, or~~ to ~~obtain accurate quotations of the price of our common~~ stock~~. Accordingly~~ analysts, ~~investors must assume they may have to bear the economic risk of an investment in our common~~ stock ~~for~~brokers, aninstitutional ~~indefinite period~~investors ~~of time,~~ and ~~may~~others ~~lose~~in ~~their~~the ~~entire~~ investment. ~~There~~community ~~can be no assurance~~ that agenerate ~~more active market for our common stock will develop,~~ or ifinfluence ~~one~~sales ~~should~~volume; ~~develop, there is no assurance that it will be sustained. This severely limits the liquidity of our common stock~~ and ~~would likely have a material adverse effect on the market price of our common stock and on our ability to raise additional capital.~~

~~We cannot~~● ~~assure~~stock ~~that~~analysts, ~~our~~stock ~~common~~brokers ~~stock~~and ~~will~~institutional ~~become~~investors ~~liquid~~may orbe risk-averse and reluctant to follow a company such as ours that itfaces ~~will~~substantial bedoubt ~~listed~~about onits ability to continue as a ~~national~~going ~~securities~~concern ~~exchange~~or to purchase or recommend the purchase of our shares until such time as we become more viable.

~~Until our~~As ~~common~~a ~~stock~~result, isan ~~listed~~investor onmay afind ~~national~~it ~~securities~~difficult to ~~exchange~~dispose ~~such~~of, asor ~~the~~to ~~NASDAQ~~obtain ~~Capital~~accurate ~~Market~~quotations orof the ~~NYSE,~~price weof ~~expect~~ our common stock. toAccordingly, ~~remain~~investors ~~eligible~~must ~~for~~assume ~~quotation~~they onmay ~~the~~have to ~~over-~~bear the~~-counter~~ ~~market.~~economic Ifrisk weof ~~fail~~an toinvestment ~~meet~~in ~~the~~our ~~criteria~~common ~~set~~stock ~~forth~~for inan ~~SEC~~indefinite ~~regulations~~period of time, ~~various~~ ~~requirements~~and ~~govern~~may ~~the~~lose ~~conduct~~their ofentire ~~broker-dealers~~investment. There ~~who~~can ~~sell~~be ~~our~~no ~~securities~~assurance tothat ~~persons~~a ~~other~~more ~~than~~active ~~established~~market ~~customers and~~for ~~accredited~~our ~~investors.~~common ~~Consequently~~stock will develop, ~~such~~or ~~regulations~~if ~~may~~one ~~deter~~should ~~broker-dealers~~develop, ~~from~~there ~~recommending~~is orno ~~selling~~assurance that ~~our~~it ~~common~~will ~~stock, which~~be ~~may~~sustained. ~~further~~This ~~affect~~severely limits the liquidity of our common stock. ~~This~~and would ~~also~~likely ~~make~~have ita ~~more~~material ~~difficult~~adverse ~~for~~effect on usthe market price of our common stock and on our ability to raise additional capital.

We ~~may~~ ~~issue~~cannot ~~preferred~~assure that our common stock will become liquid or that it will be listed on a national securities exchange.

~~Our Articles~~Until ofour ~~Incorporation~~common ~~authorizes~~stock is ~~the~~listed ~~issuance~~on ofa upnational tosecurities 50exchange ~~million~~such ~~shares~~as ofthe ~~“blank~~NASDAQ ~~check”~~Capital ~~preferred~~Market ~~stock~~or ~~with designations~~the NYSE, ~~rights~~we ~~and~~expect ~~preferences~~our ~~determined~~common ~~from~~stock ~~time~~ to ~~time~~remain eligible byfor ~~the~~quotation ~~Board~~on ofthe ~~Directors~~over-the-counter market. ~~Accordingly,~~If ~~our~~we ~~Board~~fail ~~of Directors is empowered, without stockholder approval,~~ to ~~issue~~meet ~~preferred~~the ~~stock~~criteria ~~with~~set ~~dividend,~~forth ~~liquidation,~~in ~~conversion,~~SEC ~~voting~~regulations, orvarious ~~other~~requirements ~~rights~~govern ~~which could adversely affect~~ the ~~voting~~conduct ~~power~~of orbroker-dealers ~~other~~who ~~rights~~sell ofour ~~the~~securities ~~holders~~to ofpersons ~~the~~other ~~common~~than ~~stock.~~established Incustomers ~~the~~and ~~event~~accredited ~~of issuance,~~investors. ~~the~~Consequently, ~~preferred~~such ~~stock~~regulations ~~could~~may bedeter ~~utilized,~~broker-dealers ~~under~~from ~~certain~~recommending ~~circumstances,~~or asselling aour ~~method~~common ~~of discouraging~~stock, ~~delaying~~which ormay ~~preventing~~further ~~a change~~affect ~~in control of~~ the ~~Company.~~liquidity ~~Although we have no present intention to issue any shares~~ of ~~its~~our ~~authorized~~common ~~preferred~~ stock,. ~~there can~~This bewould noalso ~~assurance~~make ~~that~~it wemore ~~will~~difficult ~~not~~for dous soto inraise ~~the future~~capital.

~~Future sales~~We ofmay ~~our~~issue ~~common~~preferred stock ~~could lower our stock price~~.

WeOur Articles of Incorporation ~~will~~authorizes ~~likely~~the ~~sell~~issuance ~~additional~~of up to 50 million shares of ~~common~~“blank ~~stock~~check” topreferred ~~fund~~stock ~~working~~with ~~capital~~designations, ~~obligations~~rights inand ~~future~~preferences determined ~~periods.~~from Wetime ~~cannot~~to ~~predict~~time by the ~~size~~ Board of ~~future~~Directors. ~~issuances~~Accordingly, our Board of ~~our~~Directors ~~common~~is ~~stock~~empowered, orwithout ~~the~~stockholder ~~effect~~approval, to ifissue ~~any~~preferred stock with dividend, ~~that~~liquidation, ~~future~~conversion, ~~issuances~~voting, ~~and~~or ~~sales~~other ofrights ~~shares~~which ofcould ~~our~~adversely ~~common~~affect ~~stock~~the voting ~~will~~power ~~have~~or onother ~~the~~rights ~~market~~of ~~price~~the holders of ~~our~~the common stock. ~~Sales~~In ofthe ~~substantial~~event ~~amounts~~ of ~~our~~issuance, ~~common~~the preferred stock could be utilized, orunder certain ~~the~~circumstances, ~~perception~~as ~~that~~a ~~such sales~~method ~~could~~of ~~occur~~discouraging, ~~may~~delaying ~~adversely~~or ~~affect~~preventing ~~prevailing~~a ~~market~~change ~~prices~~in ~~for~~control ~~our~~of ~~common~~the ~~stock~~Company. ~~Moreover,~~Although ~~sales~~we have no present intention to issue any shares of ~~our~~its ~~common~~authorized preferred stock, ~~by existing~~there ~~shareholders~~can ~~could~~be ~~also~~no ~~depress~~assurance ~~the~~that ~~price~~we ofwill ~~our~~not ~~common~~do ~~stock~~so in the future.

~~Our common~~Future ~~stock~~sales ~~is subject to the “penny stock” rules~~ of ~~the SEC, which makes transactions in~~ our common stock ~~cumbersome and~~could ~~may~~lower ~~reduce~~our ~~the value of an investment in the~~ stock price.

~~The~~We will likely sell ~~SEC~~additional ~~has~~shares ~~adopted~~of ~~Rule~~common ~~15g-9~~stock ~~which~~to ~~establishes~~fund working capital obligations in future periods. We cannot predict the ~~definition~~size of afuture ~~“penny~~issuances of our common stock,” ~~for~~or the ~~purposes~~effect, ~~relevant~~if ~~to us~~any, ~~as any~~that ~~equity~~future ~~security~~issuances ~~that~~and ~~has~~sales aof ~~market~~shares of our common stock will have on the market price of ~~less~~our ~~than~~common $5stock.00 ~~per~~Sales ~~share~~of orsubstantial ~~with~~amounts anof ~~exercise~~our ~~price~~common ofstock, ~~less~~or ~~than~~the ~~$5.00~~perception ~~per~~that ~~share~~such sales could occur, may ~~subject~~adversely toaffect ~~certain~~prevailing ~~exceptions.~~market ~~For~~prices ~~any~~for ~~transaction~~our ~~involving~~common astock. ~~penny~~Moreover, sales of our common stock, ~~unless~~by ~~exempt,~~existing shareholders could also depress the ~~rules~~price ~~require:~~of our common stock.

●Our ~~that~~common astock ~~broker~~is orsubject ~~dealer~~to ~~approve~~the “penny astock” ~~person’s~~rules ~~account~~of ~~for~~the SEC, which makes transactions in ~~penny~~our ~~stocks;~~common stock cumbersome and may reduce the value of an investment in the stock.

11The SEC 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:

● ~~the~~that a broker or dealer ~~receives~~approve ~~from the investor~~ a ~~written~~person’s ~~agreement~~account tofor ~~the~~transactions ~~transaction,~~in ~~setting forth the identity and quantity of the~~ penny ~~stock~~stocks; ~~to be purchased.~~and

~~In order~~● tothe ~~approve~~broker aor ~~person’s~~dealer ~~account~~receives ~~for~~from ~~transactions~~the ininvestor ~~penny~~a ~~stocks~~written agreement to the transaction, setting forth the ~~broker~~identity orand ~~dealer~~quantity ~~must:~~of the penny stock to be purchased.

~~● obtain financial information and investment experience and objectives of the person; and~~12

●In ~~make~~order ato ~~reasonable~~approve ~~determination~~a ~~that~~person’s ~~the~~account for transactions in penny stocks, ~~are suitable for that person and~~ the ~~person~~broker ~~has~~or ~~sufficient~~dealer ~~knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.~~must:

~~The broker~~● orobtain ~~dealer~~financial ~~must~~information ~~also~~and ~~deliver,~~investment ~~prior~~experience toand ~~any~~objectives ~~transaction~~of ~~in a penny stock, a disclosure schedule prescribed by~~ the ~~SEC~~person; ~~relating to the penny stock market, which, in highlight form sets forth:~~and

● ~~the~~make ~~basis~~a onreasonable ~~which~~determination that the ~~broker~~transactions orin ~~dealer~~penny ~~made~~stocks are suitable for that person and the ~~suitability~~person ~~determination;~~has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

●The ~~that the~~ broker or dealer ~~received~~must also deliver, prior to any transaction in a ~~signed~~penny stock, ~~written~~a ~~agreement~~disclosure ~~from~~schedule prescribed by the ~~investor~~SEC ~~prior~~relating to the ~~transaction.~~penny stock market, which, in highlight form sets forth:

~~Generally, brokers~~● ~~may~~the bebasis ~~less~~on ~~willing~~which ~~to execute transactions in securities subject to~~ the ~~“penny~~broker ~~stock”~~or ~~rules.~~dealer ~~This~~made ~~may make it more difficult for investors to dispose of common stock and cause a decline in~~ the ~~market~~suitability ~~value~~determination; ~~of stock.~~and

~~Disclosure also~~● ~~has~~that ~~to be made about~~ the ~~risks~~broker ofor ~~investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-~~dealer ~~and~~received ~~the~~a ~~registered representative~~signed, ~~current~~written ~~quotations~~agreement ~~for~~from the ~~securities and the rights and remedies available to an~~ investor inprior ~~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~~transaction.

~~The~~Generally, brokers may be less willing ~~price~~to ofexecute ~~our~~transactions ~~common~~in securities subject to the “penny stock” isrules. ~~likely~~This tomay ~~remain~~make ~~volatile,~~it ~~which~~more ~~could~~difficult ~~lead~~for investors to ~~losses~~dispose byof ~~investors~~common stock and ~~costly~~cause ~~securities~~a ~~litigation~~decline in the market value of stock.

~~The~~Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading ~~price~~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 ~~our~~fraud ~~common~~in penny stock istransactions. ~~likely~~Finally, monthly statements have to be ~~highly~~sent ~~volatile~~disclosing recent ~~and~~price ~~could~~information ~~fluctuate~~for the penny stock held in ~~response~~the toaccount ~~factors~~and ~~such~~information ~~as:~~on the limited market in penny stocks.

●The ~~actual~~price orof ~~anticipated~~our ~~variations~~common instock ~~our~~is likely ~~operating~~to ~~results~~remain ~~including~~volatile, ~~but~~which ~~not~~could ~~limited~~lead to ~~leasing,~~losses ~~drilling,~~by investors and ~~discovery~~costly ofsecurities ~~oil and gas;~~litigation.

●The ~~announcements~~trading price of our ~~developments~~common bystock ~~us,~~is ~~our~~likely ~~strategic~~to ~~partners~~be orhighly ~~our~~volatile ~~competitors;~~and could fluctuate in response to factors such as:

● ~~announcements~~actual byor usanticipated orvariations in our ~~competitors~~operating ofresults ~~significant~~including ~~acquisitions,~~but ~~strategic~~not ~~partnerships~~limited to leasing, ~~joint~~drilling, ~~ventures~~and ordiscovery ~~capital~~of ~~commitments~~oil and gas;

● ~~adoption~~announcements of ~~new~~developments ~~accounting~~by ~~standards~~us, ~~affecting~~ our ~~Company’s~~strategic ~~industry~~partners or our competitors;

● ~~additions~~announcements by us or ~~departures~~our competitors of ~~key~~significant ~~personnel~~acquisitions, strategic partnerships, joint ventures or capital commitments;

● ~~sales~~adoption of ~~our~~new ~~common~~accounting ~~stock~~standards oraffecting ~~other~~our ~~securities~~Company’s ~~in the open market~~industry;

● ~~our~~additions ~~ability~~or todepartures ~~acquire~~of ~~seismic~~key ~~data and other intellectual property on commercially reasonable terms and to defend such intellectual property from third party claims~~personnel;

● ~~litigation;~~sales ~~and~~of our common stock or other securities in the open market;

● our ability to acquire seismic data and other ~~events~~intellectual orproperty ~~factors,~~on ~~many~~commercially ofreasonable ~~which~~terms ~~are~~and ~~beyond~~to ~~our~~defend ~~control.~~such intellectual property from third party claims;

~~The stock~~● ~~market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of companies’ securities, securities class action~~ litigation; ~~has often been initiated against those companies. Litigation initiated against us, whether or not successful, could result in substantial costs~~ and ~~diversion of our management’s attention and resources, which could harm our business and financial condition.~~

~~We do~~● ~~not~~other ~~anticipate~~events ~~paying~~or ~~any~~factors, ~~dividends~~many onof ~~our~~which ~~common~~are ~~stock~~beyond our control.

~~Cash dividends~~The ~~have~~stock ~~never~~market ~~been~~is ~~declared~~subject orto ~~paid~~significant price onand ~~our~~volume ~~common~~fluctuations. ~~stock,~~In ~~and~~the wepast, dofollowing ~~not~~periods ~~anticipate~~of ~~such~~volatility ain ~~declaration~~the ormarket ~~payment~~price ~~for~~of ~~the~~companies’ securities, ~~foreseeable~~securities ~~future.~~class Weaction ~~cannot~~litigation ~~assure~~has ~~stockholders~~often ofbeen ainitiated ~~positive~~against ~~return~~those oncompanies. ~~their~~Litigation ~~investment~~initiated ~~when~~against ~~they~~us, ~~sell~~whether ~~their~~or not ~~shares~~successful, ~~nor~~could ~~can we~~result ~~assure~~in ~~that~~substantial ~~stockholders~~costs ~~will~~and ~~not~~diversion ~~lose~~of ~~the~~our ~~entire~~management’s ~~amount~~attention ofand ~~their~~resources, ~~investment~~which incould harm ~~the~~our ~~Company~~business and financial condition.

12We do not anticipate paying any dividends on our common stock.

Cash dividends have never been declared or paid on our common stock, and we do not anticipate such a declaration or payment for the foreseeable future. We cannot assure stockholders of a positive return on their investment when they sell their shares, nor can we assure that stockholders will not lose the entire amount of their investment in the Company.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Office Space

We lease 4,360 square feet of office space pursuant to a lease that expires in December 2019, with lease obligations at market rate. We own limited office equipment, office furniture, and computer equipment.

Oil and Gas Properties

In March 2014, we ~~entered~~ entered into a farm out letter agreement with GulfSlope Energy, Inc. (“GulfSlope”) relating to certain prospects GulfSlope bid on at the Central Gulf of Mexico Lease Sale 231, located within 2.2 million acres of 3-D seismic licensed and interpreted by GulfSlope. Under the terms of the farm-out letter agreement, as amended, we acquired contractual rights to a 20% working interest in 12 blocks covered ~~by nine~~in 9 prospects for approximately $10,~~000~~720,000 paid to ~~date~~GulfSlope ~~and~~through ~~$304,000~~September ~~due on or prior to April 1~~30, 2018. We have agreed to pay our proportionate share of the net rental costs related to the prospects. GulfSlope has conducted extensive seismic work on all of the prospects focusing on the high potential subsalt play at depths of 15,000’ to 25,000’ and will be the operator of record for the initial well on each of the prospects. In August 2017, the Company acquired a 20% working interest from GulfSlope in Ship Shoal Block 351 and in Ship Shoal Block 336, which are collectively referred to as the Tau Prospect. In October 2017, the Company acquired a 20% working interest from GulfSlope in Eugene Island Block 397 and Green Canyon Block 4, which are collectively referred to as the Quark Prospect. In January 2018, the Company acquired a 20% working interest in the Vermilion South Addition Block 378 (“Canoe Prospect”) from GulfSlope.

InOn ~~May~~January ~~2016~~8, we2018, ~~entered~~the Company entered into a ~~letter~~participation ofagreement ~~intent~~dated ~~with~~effective ~~GulfSlope~~January ~~that~~1, ~~set~~2018 ~~forth~~ (the ~~terms and~~“Agreement”) ~~conditions~~with ofDelek aGOM ~~farm-out~~Investments, ~~arrangement~~LLC, ~~to develop the Shallow Prospects. At that time we owned~~ a ~~70.7% working interest in the~~ ~~Shallow~~subsidiary ~~Prospects~~of ~~with~~Delek aGroup ~~third party owning a 16~~Ltd.8% ~~working interest for which it paid $400~~(“Delek”),~~000~~ and GulfSlope ~~retaining~~(collectively, athe ~~12.5% working~~“Parties”) ~~interest.~~for ~~Texas South acquired~~ the ~~interest~~partial infarm-out of the ~~two~~Company’s ~~prospects~~interests in ~~exchange~~its ~~for~~Gulf ~~(i)~~of ~~cash~~Mexico ~~payments~~oil ofand ~~$400,000,~~gas ~~(ii)~~leases (the ~~payment~~ of“Farm-out”). ~~annual~~The ~~rental~~Agreement ~~obligations~~sets ofout the ~~$63,147,~~terms and ~~(iii)~~conditions of the ~~agreement~~Parties toparticipation ~~fund,~~in ~~or cause to be funded,~~ the ~~costs for the~~ drilling of ~~two~~up ~~shallow wells prior~~ to ~~December~~a ~~31,~~nine ~~2017.~~well ~~The~~multi-phase ~~farmout~~exploration onprogram ~~both~~targeting the Company’s prospects ~~from~~(the ~~GulfSlope~~“Prospects”) ~~expired~~located byon ~~its~~the ~~own~~Company’s ~~terms~~existing onleases ~~December 31,~~(the ~~2017~~“Leases”).

~~On January~~Under 8,the ~~2018~~terms of the Agreement, the Parties have committed to initially drill two of the Company’s ~~entered~~prospects ~~into~~in aPhase ~~participation~~I ~~agreement~~(the ~~dated~~“Initial ~~effective~~Phase”) ~~January~~with 1Delek having the option to participate in two additional two-well drilling phases and a final, ~~2018~~three-well drilling phase (collectively, the “~~Agreement~~Phases”). In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with ~~Delek~~drilling ~~GOM~~each ~~Investments~~exploratory well. The Company will thus retain a 5% working interest while paying 2% of the exploratory costs associated with drilling each well. In addition, ~~LLC~~Delek will pay the Company $405,000 upon the filing of each exploration plan with BOEM and/or BSEE on a ~~subsidiary~~Prospect in each Phase. During March 2018 Delek made its first payment of $405,000 to the Company as the initial plan was filed. Delek ~~Group~~made ~~Ltd~~a second payment of $405,000 to the Company during May 2018. Also, each Party will be responsible for its pro rata share (~~“Delek”~~based on working interest), ~~and~~of delay rentals associated with the Prospects. GulfSlope ~~(collectively~~will be the Operator during exploratory drilling of a Prospect, however, subsequent to a commercial discovery, Delek will have the ~~“Parties”)~~right to become the ~~for~~Operator. Delek will have the ~~partial~~right ~~farm-out~~to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s ~~interests~~common instock upon fulfilling its ~~Gulf~~obligation for each Phase (maximum of ~~Mexico~~20% ~~oil~~in the ~~and~~aggregate) ~~gas~~at ~~leases~~a (price per share equal to a 10% discount to the ~~“Farm~~30-~~out”).~~day weighted average closing price for the Company’s common stock preceding the acquisition. This option will expire on January 8, 2020. The ~~Agreement~~Company ~~sets~~has ~~out~~not recorded any cost associated with the ~~terms~~option ~~and~~due ~~conditions~~to the future performance obligation of Delek. If Delek meets the ~~Parties~~obligation ~~participation~~and inexercises its option the ~~drilling~~Company will ofrecord upthe option value at that time as an increase to aOil ~~nine~~and ~~well~~Gas ~~multi-phase~~Properties. The likelihood of Delek exercising its options ~~exploration~~to ~~program~~purchase ~~targeting~~shares of the Company’s ~~prospects~~common ~~(the~~stock ~~“Prospects”)~~will ~~located~~be dependent on the drilling results from Phase 1 and the Company’s operating ~~existing~~results which will affect the price of the Company’s common stock. We currently do not anticipate Delek fully exercising ~~leases~~this (option before the ~~“Leases”)~~expiration date. At December 31, 2018, the potential value of issuing 20% of our outstanding stock is approximately $5,800,000. The foregoing description of the Agreement does not purport to be a complete description of the terms, provisions and conditions of such document, and represents only a summary of certain of the principal terms, provisions and conditions thereof.

~~Under~~In ~~the~~accordance ~~terms~~with of the ~~agreement,~~ ~~the~~Delek ~~parties~~Agreement and ~~have~~on ~~committed~~behalf toof ~~initially drill~~ the Company’s ~~“Canoe”~~ and ~~“Tau” prospects (~~the ~~“Initial~~other ~~Phase”)~~working ~~with~~interest ~~Delek having the option to participate in two additional two-well drilling phases and a final~~owners, ~~three-well~~GulfSlope ~~drilling~~as ~~phase (collectively~~operator, ~~the~~spudded ~~“Phases”). In August 2017,~~ the ~~Company~~OCS-G-35589 ~~acquired~~# a1 ~~20%~~well ~~working~~on ~~interest in Ship Shoal Block 351 and in Ship Shoal Block 336, which are collectively referred to as~~ the ~~Tau~~Canoe Prospect ~~from~~on ~~GulfSlope and in January 2018, the Company acquired a 20% working interest in the~~ Vermilion ~~South Addition~~ Block 378 ~~(“Canoe~~where ~~Prospect”) from GulfSlope. In each Phase, Delek will earn a 75% working interest upon paying 90% of~~ the ~~exploratory costs associated with drilling each exploratory well. The~~ Company ~~will~~holds ~~thus retain~~ a 5% working interest ~~while~~in ~~paying~~July 2%2018. ofThe ~~the exploratory costs associated with drilling each~~ well. Inwas ~~addition,~~drilled ~~Delek will pay the Company $405,000 upon the filing of each exploration plan with BOEM~~ and~~/or~~ ~~BSEE~~evaluated onto a ~~Prospect~~total indepth ~~each~~of ~~Phase. Also~~5,765’ ~~each~~MD ~~Party will be responsible for its pro rata share~~ (~~based~~5,700’ ~~on working interest~~TVD) ~~of delay rentals associated with the Prospects~~. ~~GulfSlope~~Based ~~will~~on beLWD ~~the~~and ~~Operator~~other ~~during~~test ~~exploratory drilling of a Prospect~~results, ~~however,~~thin ~~subsequent to~~oil abearing ~~commercial~~sands ~~discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement~~were atencountered ~~the~~which ~~conclusion~~require offurther ~~any drilling Phase~~study. ~~Delek~~As ~~will~~a ~~also~~result, ~~have~~open-hole ~~the~~plugs ~~option~~were toset ~~purchase~~across upseveral tointervals ~~5% of the Company’s common stock upon fulfilling its obligation for each Phase (maximum of 20%~~ in ~~the~~accordance ~~aggregate)~~with ~~at a price per share equal to a 10% discount to~~governmental ~~the~~regulations ~~30-day~~and ~~weighted average closing price for~~ the ~~Company’s~~well ~~common~~is ~~stock~~now ~~preceding~~plugged ~~the~~and ~~acquisition.~~abandoned ~~This~~at ~~option~~this ~~will expire on January 8, 2020~~time. ~~The~~Since ~~foregoing description of~~ the ~~Agreement~~well ~~does~~is ~~not~~equipped ~~purport~~with ~~to be~~ a ~~complete~~mud-line ~~description~~suspension ~~of the terms~~system, ~~provisions~~ ~~and~~it ~~conditions~~is ofavailable ~~such~~for ~~document,~~future ~~and~~re-entry ~~represents~~as ~~only a summary of certain of the principal terms, provisions and conditions thereof~~warranted.

The Company will assign a two-tenths of one percent of 8/8ths net profits interest in certain of the Company’s oil and gas leases to include Vermilion Area, South Addition 378, Ship Shoal Area, South Addition 336, and Ship Shoal Area, South Addition 351, to Hi-View in consideration for consulting services provided pursuant to a non-exclusive consulting engagement dated October 25, 2017, by and between Hi-View, the Company, and GulfSlope. Hi-View will be entitled to additional assignments on the same terms and conditions as described above related to any of Leases in which Delek elects to participate in the drilling of an exploratory well. In addition, the Company issued an aggregate of twenty million shares of its common stock to Hi-View in consideration for those consulting services provided pursuant to the Advisory Agreement. In the event that Delek has not funded the $405,000 payment referenced above within six months of execution of this Agreement, then the common stock will be returned by Hi-View to the Company. 14

InAt the beginning of ~~January~~September ~~2017~~2018, the Company ~~entered~~and ~~into~~the another ~~asset~~working ~~purchase~~interest ~~agreement~~owners ~~with~~began ~~Sydson~~drilling operations at the Tau Prospect on Ship Shoal Blocks 336 and 351 offshore Louisiana. The well, ~~where~~OCS-G ~~Sydson~~36121 ~~assigned~~#1, is planned to ustest ~~certain~~Miocene ~~onshore~~reservoirs ~~oil~~beneath thick salt sheets in approximately ~~and~~300’ ~~gas~~of ~~assets~~water ~~and~~depth. ~~interests~~Operated ~~and~~by ~~certain~~GulfSlope, ~~tangible~~the ~~assets~~well ~~and~~is ~~additionally~~currently drilling below 14,500’ ~~certain~~to ~~employees~~an ~~and~~expected total depth below 16,500’ TVD. As a ~~consultant~~result of ~~Sydson~~drilling difficulties on the well there have ~~agreed~~been substantial cost over-runs to date which the Company has not yet fully funded. As of March 15, 2019, the Company has been declared to ~~become~~be ~~employees~~in ~~and~~default aunder ~~consultant~~the terms of its joint operating agreement by the operator regarding the payment of $1,299,229 due as of February 12, 2019 with respect to drilling the Tau Prospect. The operator of the Tau Prospect asserts that additional joint interest billings to the Company during the past 30 days have increased the total amount due to $1,915,304 as of March 15, 2019. ~~Sydson~~The isCompany’s share of the original AFE to drill to 29,800’ MD was approximately $800,000. Drilling of the Tau Prospect continues which will result in further amounts owed by the Company to GulfSlope. The operating agreement grants a ~~private~~lien ~~oil~~and security interest on the Company’s interest in the leases comprising the Tau Prospect, and ~~gas~~grants ~~company~~to the operator the right to pursue foreclosure of the lien and security interest. The Company is using its best efforts to raise capital to fund its obligations under the operating agreement with ~~land~~GulfSlope ~~operations~~regarding the indrilling ~~Texas~~of the Tau Prospect. If the Company fails to raise needed capital and foreclosure is pursued and is successful, this ~~Louisiana~~could ~~that~~result ~~has~~in ~~been~~a loss of all of the Company’s rights in ~~business~~the ~~since~~Tau ~~1982~~Prospect.

13The Company will assign a two-tenths of one percent of 8/8ths net profits interest in certain of the Company’s oil and gas leases in the two Phase I prospects to Hi-View Investment Partners, LLC (“Hi-View”) in consideration for consulting services provided pursuant to a non-exclusive consulting engagement dated October 25, 2017, by and between Hi-View, the Company, and GulfSlope (the “Advisory Agreement”). Hi-View will be entitled to additional assignments on the same terms and conditions as described above related to any of Leases in which Delek elects to participate in the drilling of an exploratory well. In addition, the Company issued an aggregate of twenty million shares of its common stock to Hi-View in consideration for those consulting services provided pursuant to the Advisory Agreement

In ~~connection~~ ~~with~~January 2017, the Company entered into an asset ~~acquisition~~purchase agreement with Sydson Energy, ~~the~~Inc. ~~Company~~(“Sydson ~~acquired~~Energy”) aand ~~variety~~Sydson ofResources, ~~proprietary~~L.P. ~~seismic~~(“Sydson ~~data~~Resources” and collectively with Sydson Energy, ~~computer~~“Sydson”), ~~equipment~~where Sydson assigned to us certain onshore oil and gas assets and interests and certain tangible assets and additionally, ~~furniture~~certain employees and a consultant of Sydson have agreed to become employees and ~~fixtures~~a consultant of the Company. Sydson is a private oil and ~~other~~gas ~~office~~company ~~equipment~~with land operations in Texas and Louisiana that has been in business since 1982. The oil and gas assets include the following:

~~The consideration~~● ~~payable~~In byTexas, ~~the~~we ~~Company~~acquired toa ~~Sydson~~50% ~~and~~working ~~affiliates~~interest ~~was~~in ~~(i)~~the ~~100~~undrilled ~~million~~acreage ~~shares~~above of4,500’ ~~Company~~in ~~common~~the ~~stock~~West toTuleta ~~Michael~~Field, ~~J. Mayell~~Bee ~~valued~~County, atTexas ~~$845~~comprised of approximately 1,~~000~~800 gross acres and ~~(ii)~~900 ~~$250,000~~net ~~through~~acres with a ~~promissory~~net ~~note~~revenue ~~originally~~interest ~~due~~of ~~March~~approximately 5,75%. ~~2017,~~The primary drilling objectives are the Vicksburg and ~~was~~Hockley ~~amended~~sands which are structurally high on this acreage compared to ~~January 1,~~the ~~2019~~prior downdip production.

● In ~~conjunction~~ ~~with~~ the ~~acquisition,~~adjacent ~~the~~Ray ~~Company~~Field, ~~agreed~~also toin ~~pay~~Bee $1County,~~250~~ Texas,~~000~~ ofwe ~~Sydson’s~~acquired ~~future~~a ~~development~~50% ~~costs~~working ~~attributable to~~interest ~~its~~in ~~retained~~the ~~working~~undrilled, ~~interests~~acreage inon the ~~oil~~Walton, Campbell, and ~~gas~~Ray ~~prospects~~leases ~~conveyed~~comprising toapproximately ~~the~~75 ~~Company~~gross ~~and carried~~acres ~~interests~~with toa ~~casing~~net ~~point for~~revenue ~~Sydson’s~~interest ~~working~~of ~~interests~~approximately on75%. ~~the~~The ~~first~~primary ~~well~~drilling inobjectives ~~each~~on ofthis acreage are also the ~~West~~Vicksburg ~~Tuleta~~and ~~prospect,~~Hockley ~~Ray~~sands ~~Field~~updip ~~prospect~~to ~~and~~prior ~~the~~production ~~Wilinda prospect~~above 3,700’.

The purchase price of this asset acquisition is summarized below:

	●	Southeast of San Antonio at the Wilinda Project we are acquiring leases with working interest partners covering more than 4,400 acres for horizontal projects above 6,000’ in the Austin Chalk, Eagle Ford, and Buda Lime formation. These projects are adjacent to substantial prior production and contain both conventional and unconventional oil targets.

	●	In September of 2018, we commenced drilling on the TXSO Richter Unit #1H well. The well was drilled, cased and cemented to a depth of 9,442’ with a horizontal lateral exceeding 4,000’. The well was frac’d and is now being evaluated with flowback testing. During the flowback period, the well initially produced at rates exceeding 1,000 barrels of frac load water per day with minor amounts of oil and gas. Subsequently, the oil and gas rates did not improve and the Company now believes that the water production is from a deeper zone which is obstructing the oil and gas flow from the Austin Chalk completion zone. The Company plans to isolate the section of the lateral that appears to be the source of the extraneous water and produce the remaining part of the lateral, using a comparable procedure to that used on a nearby well that encountered a similar problem.

Furniture & Fixtures, Software, Equipment	$	35,556
Deposit – office rent		8,340
Prepaid expenses		27,616
Note Payable – insurance		(6,822	)
Leasehold rights		1,030,310
Total purchase price	$	1,095,000

ITEM 3. LEGAL PROCEEDINGS

~~ITEM~~From time to time, the 3Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. ~~LEGAL~~ ~~PROCEEDINGS~~No legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve the Company.

~~From time~~ITEM ~~to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business~~4. NoMINE ~~legal~~SAFETY ~~proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve the Company.~~DISCLOSURES

~~ITEM 4. MINE~~Not ~~SAFETY DISCLOSURES~~applicable.

~~Not applicable.~~15

14PART II

~~ITEM 5. MARKET~~Market ~~FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~Information

~~Market~~Our common shares are ~~Information~~quoted on the OTCPK under the symbol “TXSO”. Shares of our common stock have historically been thinly traded, and currently there is no active trading market for our common stock. As a result, our stock price as quoted by the OTCPK may not reflect an actual or perceived value.

~~Our common~~The ~~shares~~following ~~are~~table sets ~~quoted~~forth on the ~~OTCPK~~approximate ~~under~~high ~~the~~and ~~symbol~~low ~~“TXSO”.~~bid ~~Shares~~prices offor our common stock ~~have~~as ~~historically~~reported ~~been~~by ~~thinly traded,~~the ~~and~~OTCPK ~~currently there is no active trading market~~ for ~~our~~the ~~common~~periods ~~stock~~indicated. AsThe quotations areflect ~~result~~inter-dealer prices, ~~our~~without ~~stock~~retail ~~price~~mark-up, asmark-down ~~quoted~~or bycommission ~~the~~and ~~OTCPK~~ may not ~~reflect~~represent an actual ~~or perceived value~~transactions.

The following table sets forth the approximate high and low bid prices for our common stock as reported by the OTCPK for the periods indicated. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Period	High Bid		Low Bid

October 1, 2018 through December 31, 2018	$	0.026	$	0.013
July 1, 2018 through September 30, 2018		0.048		0.010
April 1, 2018 through June 30, 2018		0.029		0.015
January 1, 2018 through March 31, 2018		0.055		0.015

October 1, 2017 through December 31, 2017	$	0.11	$	0.02
July 1, 2017 through September 30, 2017		0.03		0.01
April 1, 2017 through June 30, 2017		0.02		0.01
January 1, 2017 through March 31, 2017		0.09		0.02

Period	High Bid		Low Bid
October 1, 2017 through December 31, 2017	$	0.11	$	0.02
July 1, 2017 through September 30, 201		0.03		0.01
April 1, 2017 through June 30, 2017		0.02		0.01
January 1, 2017 through March 31, 2017		0.09		0.02
October 1, 2016 through December 31, 2016	$	0.05	$	0.02
July 1, 2016 through September 30, 2016		0.08		0.05
April 1, 2016 through June 30, 2016		0.09		0.03
January 1, 2016 through March 31, 2016		0.06		0.04

Holders

~~Holders~~The number of record holders of the Company’s common stock, as of April 1, 2019, is approximately 185.

~~The number of record holders of the Company’s common stock, as of March 27, 2018, is approximately 220.~~Dividends

~~Dividends~~The Company has not declared any dividends with respect to its common stock and does not intend to declare any dividends in the foreseeable future. The future dividend policy of the Company cannot be ascertained with any certainty. There are no material restrictions limiting the Company’s ability to pay cash dividends on its common stock.

~~The Company~~Securities ~~has~~Authorized ~~not~~for ~~declared~~Issuance ~~any~~Under ~~dividends~~Equity ~~with respect to its common stock and does not intend to declare any dividends in the foreseeable~~Compensation future. The future dividend policy of the Company cannot be ascertained with any certainty. There are no material restrictions limiting the Company’s ability to pay cash dividends on its common stock.Plans

~~Securities~~At the September 6, 2018 ~~Authorized~~annual ~~for~~meeting, ~~Issuance~~the ~~Under~~stockholders ~~Equity~~approved ~~Compensation~~the ~~Plans~~adoption of the Texas South Energy, Inc. 2018 Omnibus Incentive Plan (the “2018 Plan”), effective July 28, 2018. The 2018 Plan authorizes the issuance of 100,000,000 shares of common stock prior to its expiration on July 28, 2028. Incentives under the 2018 Plan may be granted to employees, directors, and consultants of the Company in any one or a combination of the following forms: incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards or performance stock awards which are valued in whole or in part by reference to, or otherwise based on, our common stock, including its appreciation in value. As of April 1, 2019, no awards have been granted.

~~None.~~Recent Sales of Unregistered Securities

~~Recent Sales~~None ofto ~~Unregistered Securities~~report.

~~During~~ITEM ~~October~~6. ~~2017, the~~SELECTED ~~Company~~FINANCIAL ~~issued 22,500,000 shares in connection with the conversion of $450,000 of indebtedness.~~ DATA

~~The~~Not ~~Company~~required ~~has~~for ~~agreed~~smaller toreporting ~~issue 1,250,000 shares of common stock to two investors who have purchased these shares at a price of $0~~companies.~~02 per share during January 2018. (Shares are not reflected as outstanding as of March 27, 2018.)~~

~~In February 2018, the Company issued 10,000,000 million shares of common stock to a third party for a purchase price of $0.02 per share.~~16

~~The~~ITEM ~~Company has agreed to issue 8,000,000 shares of common stock to third parties who have purchased these shares at a price of $0~~7.02 ~~per~~MANAGEMENT’S ~~share~~DISCUSSION ~~during March~~AND ~~2018.~~ANALYSIS ~~(Shares~~OF ~~are~~FINANCIAL ~~not~~CONDITION ~~reflected~~AND asRESULTS ~~outstanding~~OF ~~as of March 27, 2018.)~~OPERATION

The ~~Company~~following ~~has agreed~~discussion tohighlights ~~issue~~the ~~3,022,480~~principal ~~shares~~factors that have affected our financial condition and results of ~~common~~operations ~~stock~~as towell ~~certain~~as ~~employees~~our liquidity and acapital ~~consultant~~resources for ~~services~~the ~~rendered~~periods ~~through~~described. ~~February~~This ~~2018~~discussion contains forward-looking statements. ~~(Shares~~Please see “Forward-Looking Statements” above for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. The following discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared on the accrual basis of accounting, whereby revenues are ~~not~~recognized ~~reflected~~when asearned, ~~outstanding~~and asexpenses are recognized when incurred. This management’s discussion and analysis of ~~March~~our 27financial condition and results of operations should be read in conjunction with our historical financial statements included elsewhere in this Annual Report. In addition to the impact of the matters discussed in “Risk Factors,” ~~2018~~our future results could differ materially from our historical results due to a variety of factors, many of which are out of our control.)

The sales and issuances of the securities described above were made pursuant to the exemptions from registration contained in to Section 4(a)(2) of the Securities Act, Regulation D under the Securities Act and Regulation S under the Securities Act. Each purchaser represented that such purchaser’s intention to acquire the shares for investment only and not with a view toward distribution. We requested our stock transfer agent to affix appropriate legends to the stock certificate issued to each purchaser and the transfer agent affixed the appropriate legends. Each purchaser was given adequate access to sufficient information about us to make an informed investment decision. Except as described in this prospectus, none of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved.Overview

~~ITEM~~See Item 2 “Oil 6and Gas Properties” of this report for a detailed discussion of our participation agreements and various terms of these agreements under which the Company is currently operating. ~~SELECTED~~ ~~FINANCIAL~~During ~~DATA~~2018 drilling operations began both offshore and onshore and are discussed below.

~~Not~~In accordance with the Delek Agreement and ~~required~~on behalf of the Company and the other working interest owners, GulfSlope as operator spudded the OCS-G-35589 # 1 well on the Canoe Prospect on Vermilion Block 378 where the Company holds a 5% working interest in July 2018. The well was drilled and evaluated to a total depth of 5,765’ MD (5,700’ TVD). Based on LWD and other test results, thin oil bearing sands were encountered which require further study. As a result, open-hole plugs were set across several intervals in accordance with governmental regulations and the well is now plugged and abandoned at this time. Since the well is equipped with a mud-line suspension system, it is available for ~~smaller~~future ~~reporting~~re-entry ~~companies~~as warranted.

At the beginning of September 2018, the Company and the other working interest owners began drilling operations at the Tau Prospect on Ship Shoal Blocks 336 and 351 offshore Louisiana. The well, OCS-G 36121 #1, is planned to test Miocene reservoirs beneath thick salt sheets in approximately 300’ of water depth. Operated by GulfSlope, the well is currently drilling below 14,500’ to an expected total depth below 16,500’ TVD. As a result of drilling difficulties on the well there have been substantial cost over-runs to date which the Company has not yet fully funded. As of March 15, 2019, the Company has been declared to be in default under the terms of its joint operating agreement by the operator regarding the payment of $1,299,229 due as of February 12, 2019 with respect to drilling the Tau Prospect. The operator of the Tau Prospect asserts that additional joint interest billings to the Company during the past 30 days have increased the total amount due to $1,915,304 as of March 15, 2019. The Company’s share of the original AFE to drill to 29,800’ MD was approximately $800,000. Drilling of the Tau Prospect continues which will result in further amounts owed by the Company to GulfSlope. The operating agreement grants a lien and security interest on the Company’s interest in the leases comprising the Tau Prospect, and grants to the operator the right to pursue foreclosure of the lien and security interest. The Company is using its best efforts to raise capital to fund its obligations under the operating agreement with GulfSlope regarding the drilling of the Tau Prospect. If the Company fails to raise needed capital and foreclosure is pursued and is successful, this could result in a loss of all of the Company’s rights in the Tau Prospect.

~~ITEM~~In September of 2018, we commenced drilling on the TXSO Richter Unit #1H well. The well was drilled, cased 7and cemented to a depth of 9,442’ with a horizontal lateral exceeding 4,000’. ~~MANAGEMENT~~The well was frac’Sd ~~DISCUSSION~~and ~~AND~~is ~~ANALYSIS~~now being OFevaluated ~~FINANCIAL~~with ~~CONDITION~~flowback ~~AND~~testing. ~~RESULTS~~During OFthe ~~OPERATION~~flowback period, the well initially produced at rates exceeding 1,000 barrels of frac load water per day with minor amounts of oil and gas. Subsequently, the oil and gas rates did not improve and the Company now believes that the water production is from a deeper zone which is obstructing the oil and gas flow from the Austin Chalk completion zone. The Company plans to isolate the section of the lateral that appears to be the source of the extraneous water and produce the remaining part of the lateral, using a comparable procedure to that used on a nearby well that encountered a similar problem.

The ~~following~~ ~~discussion~~Company ~~highlights~~has ~~the~~incurred ~~principal~~accumulated ~~factors~~losses ~~that~~for ~~have~~the ~~affected~~period ~~our~~from ~~financial~~inception ~~condition~~to ~~and~~December ~~results~~31, 2018 of ~~operations as~~approximately ~~well~~$15,987,504. asFurther ~~our~~losses ~~liquidity~~are ~~and~~anticipated ~~capital~~in ~~resources~~developing ~~for~~its ~~the~~business. ~~periods~~As ~~described.~~a ~~This~~result, ~~discussion~~the ~~contains~~Company’s ~~forward-looking~~auditors ~~statements.~~have ~~Please~~expressed ~~see~~substantial ~~“Forward-Looking~~doubt ~~Statements”~~about ~~above~~our ~~for~~ability to continue as a ~~discussion~~going concern. As of ~~the~~December ~~uncertainties~~31, ~~risks~~2018, ~~and~~the ~~assumptions~~Company ~~associated~~had ~~with these~~$1,501,766 ~~forward-looking~~of ~~statements~~cash on hand. ~~The~~As ~~following~~of ~~discussion~~the ~~and~~date ~~analysis~~ of ~~our~~this ~~financial~~Annual ~~condition~~Report, ~~and~~we ~~results~~will require additional funds for the balance of ~~operations~~2019. isThe Company plans to finance ~~based~~the onCompany ~~our~~through best-efforts equity and/or debt financings. The financial statements, ~~which~~do ~~have~~not ~~been~~include ~~prepared~~any onadjustments ~~the~~that ~~accrual~~might result ~~basis~~from the outcome of ~~accounting,~~this ~~whereby~~uncertainty. ~~revenues~~Of ~~are~~the ~~recognized when~~$7.5 ~~earned,~~million ~~and~~of ~~expenses~~budgeted ~~are~~expenditures ~~recognized~~in ~~when~~calendar ~~incurred~~2019, approximately $2.5 million ~~This~~is ~~management’s~~budgeted ~~discussion~~to cover salaries, consulting and ~~analysis~~professional ofservices, ~~our~~other ~~financial~~G&A ~~condition~~ expenses, and ~~results~~required ofworking ~~operations~~capital needs. ~~should~~Approximately be$3.25 ~~read~~million inis ~~conjunction~~budgeted ~~with~~for ~~our~~the ~~historical~~completion ~~financial~~of ~~statements~~the ~~included~~Tau ~~elsewhere~~Prospect in ~~this~~the ~~Annual Report~~Gulf of Mexico and $1.75 Inmillion ~~addition~~is budgeted tofor ~~the~~additional ~~impact~~onshore ofdrilling at the ~~matters~~Wilinda ~~discussed~~project. inThe ~~“Risk~~exact ~~Factors,”~~amounts ~~our~~of ~~future~~capital ~~results~~ultimately ~~could~~allocated ~~differ~~to ~~materially~~each of these ~~from~~projects ~~our~~will ~~historical~~depend ~~results~~upon ~~due~~available tocapital, aproposals ~~variety~~from ofworking ~~factors~~interest owners, ~~many~~success of ~~which~~prior ~~are~~drilling, ~~out~~problems ofencountered while ~~our~~drilling ~~control~~and/or completing existing wells and other factors.

~~Overview~~17

InSignificant ~~March~~Accounting 2014, we entered into a farm out letter agreement with GulfSlope relating to certain prospects GulfSlope bid on at the Central Gulf of Mexico Lease Sale 231, located within 2.2 million acres of 3-D seismic licensed and interpreted by GulfSlope. Under the terms of the farm-out letter agreement, as amended, we acquired contractual rights to a 20% working interest in 12 blocks covered by nine prospects for $10,000,000 paid to date and $304,000 due on or prior to April 1, 2018. We have agreed to pay our proportionate share of the net rental costs related to the prospects. GulfSlope has conducted extensive seismic work on all of the prospects focusing on the high potential subsalt play at depths of 15,000’ to 25,000’ and will be the operator of record for the initial well on each of the prospects. Policies

InInvestment May 2016, we entered into a letter of intent with GulfSlope that set forth the terms and conditions of a farm-out arrangement to develop the Shallow Prospects. At that time we owned a 70.7% working interest in the Shallow Prospects with a third party owning a 16.8% working interest for which it paid $400,000 and GulfSlope retaining a 12.5% working interest. Texas South acquired the interest in the two prospects in exchange for (i) cash payments of $400,000, (ii) the payment of annual rental obligations of $63,147, and (iii) the agreement to fund, or cause to be funded, the costs for the drilling of two shallow wells prior to December 31, 2017. The farmout on both prospects from GulfSlope expired by its own terms on December 31, 2017. Securities

OnThe ~~January 8, 2018, the~~ Company ~~entered~~no ~~into a participation agreement dated effective January 1, 2018 with Delek and GulfSlope (collectively, the “Parties”)~~longer ~~for~~owns ~~the~~any ~~partial~~investment ~~farm-out of the Company’s interests in its Gulf of Mexico oil and gas leases (the “Farm-out”)~~securities. The Agreement sets out the terms and conditions of the Parties participation in the drilling of up to a nine well multi-phase exploration program targeting the Company’s prospects (the “Prospects”) located on the Company’s existing leases (the “Leases”).

~~Under the~~Use ~~terms~~ of ~~the~~Estimates ~~Agreement, the Parties have committed to initially drill the Company’s “Canoe”~~ and “Tau” prospects (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In August 2017, the Company acquired a 20% working interest in Ship Shoal Block 351 and in Ship Shoal Block 336, which are collectively referred to as the Tau Prospect from GulfSlope and in January 2018, the Company acquired a 20% working interest in the Vermilion South Addition Block 378 (“Canoe Prospect”) from GulfSlope. In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company will thus retain a 5% working interest while paying 2% of the exploratory costs associated with drilling each well. In addition, Delek will pay the Company $405,000 upon the filing of each exploration plan with BOEM and/or BSEE on a Prospect in each Phase. Also, each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated with the Prospects. GulfSlope will be the Operator during exploratory drilling of a Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Company’s common stock preceding the acquisition. This option will expire on January 8, 2020. The foregoing description of the Agreement does not purport to be a complete description of the terms, provisions and conditions of such document, and represents only a summary of certain of the principal terms, provisions and conditions thereof.Assumptions

The ~~Company~~preparation ~~will assign a two-tenths~~ of ~~one~~financial statements ~~percent of 8/8ths net profits interest~~ in ~~certain~~conformity ofwith ~~the~~U.S. ~~Company’s~~GAAP ~~oil~~requires ~~and~~management ~~gas leases~~ to ~~include~~ ~~Vermilion~~make ~~Area,~~estimates ~~South Addition 378, Ship Shoal Area, South Addition 336,~~ and ~~Ship~~assumptions ~~Shoal~~that ~~Area,~~affect ~~South~~the ~~Addition~~reported ~~351, to~~amounts ~~Hi-View~~of inassets ~~consideration~~and ~~for~~liabilities ~~consulting~~and ~~services~~disclosure ~~provided~~of ~~pursuant~~contingent toassets ~~a non-exclusive consulting engagement dated October 25, 2017, by~~ and ~~between~~liabilities ~~Hi-View,~~at the ~~Company,~~date ~~and~~of ~~GulfSlope.~~the ~~Hi-View~~financial ~~will~~statements beand ~~entitled to additional assignments on~~ the ~~same~~reported ~~terms~~amounts ~~and conditions as described above related to any~~ of ~~Leases~~revenues inand ~~which~~expenses ~~Delek~~during ~~elects to participate in~~ the ~~drilling~~reporting ~~of an exploratory well~~period. InWhile ~~addition,~~management ~~the~~believes ~~Company~~that ~~issued~~such anestimates ~~aggregate~~are ofreasonable ~~twenty million shares of its common stock to Hi-View during~~when ~~January~~considered ~~2018~~ in ~~consideration~~conjunction ~~for~~with ~~those consulting services provided pursuant to~~ the ~~Advisory~~financial ~~Agreement.~~position Inand ~~the~~results ~~event that~~of ~~Delek~~operations ~~has~~taken ~~not~~as ~~funded~~a ~~the $405~~whole,~~000~~ ~~payment~~actual ~~referenced~~results ~~above~~could ~~within~~differ ~~six~~from those ~~months of execution of this Agreement~~estimates, ~~then~~and ~~the common~~such ~~stock~~differences ~~will~~may be ~~returned~~material ~~by Hi-View~~ to the ~~Company~~financial statements.

InBasic ~~January 2017, the Company entered into an asset purchase agreement with Sydson, where Sydson assigned to us certain onshore oil~~ and ~~gas~~Diluted ~~assets~~Net ~~and~~Loss ~~interests and~~per certain tangible assets and additionally, certain employees and a consultant of Sydson have agreed to become employees and a consultant of the Company. Sydson is a private oil and gas company with land operations in Texas and Louisiana that has been in business since 1982. Share

16The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.

~~The Company~~Fair has incurred accumulated losses for the period from inception to December 31, 2017 of approximately $12,876,760. Further losses are anticipated in developing its business. As a result, the Company’s auditors have expressed substantial doubt about our ability to continue as a going concern. As of December 31, 2017, the Company had $455 of cash on hand. As of the date of this Annual Report, we will require additional funds for the balance of 2018. The Company plans to finance the Company through best-efforts equity and/or debt financings. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Value

~~Significant~~In accordance with the ~~Accounting~~requirements ~~Policies~~of ASC 825 and ASC 820, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.

~~Investment Securities~~Income Taxes

The Company ~~previously~~has ~~owned~~adopted ASC ~~investment~~740 ~~securities~~for ~~that~~reporting ~~were~~purposes. ~~composed~~As of ~~GulfSlope~~December ~~common~~31, ~~stock~~2018, ~~and~~the ~~were~~Company ~~classified~~had asnet ~~“available-for-sale”. Available-for-sale~~operating ~~securities~~loss ~~are~~carryforwards ~~adjusted~~of toapproximately ~~their~~$12,800,000 that ~~fair~~may ~~market~~be ~~value~~available ~~with~~to ~~unrealized~~reduce ~~gains~~future ~~and~~years’ ~~losses,~~taxable ~~net~~income ofand ~~tax,~~will ~~recorded~~begin ~~as a~~to ~~component~~expire ofin ~~accumulated other comprehensive income~~2028. ~~Upon~~Availability ~~disposition~~ of ~~these~~loss ~~investments, the specific identification method~~usage is ~~used~~subject to ~~determine~~change ~~the~~of ~~cost~~ownership ~~basis~~limitations inunder ~~computing~~Internal ~~realized~~Revenue ~~gains~~Code or382. ~~losses,~~Future ~~which~~tax ~~are~~benefits ~~reported~~which inmay ~~other~~arise ~~income~~as ~~and~~a ~~expense. Declines~~result inof ~~value~~these ~~that~~losses ~~are~~have ~~judged~~not tobeen berecognized ~~other~~in ~~than~~these ~~temporary~~financial ~~are~~statements, ~~reported~~as intheir ~~other~~realization ~~comprehensive~~is ~~income~~determined ~~and~~not ~~expense.~~likely ~~During~~to ~~the year ended~~occur ~~December~~and 31accordingly, ~~2016,~~ the Company has recorded a ~~realized~~valuation ~~loss~~allowance offor ~~$218,000 to adjust~~ the ~~investment~~tax ~~securities~~loss ~~to fair market value~~carryforwards. ~~The GulfSlope shares were sold in February 2016 to a third party for $50,000. The Company no longer owns any investment securities.~~

~~Use of~~Stock-based ~~Estimates and Assumptions~~Compensation

~~The~~At the September 6, 2018 ~~preparation~~annual ofmeeting, ~~financial~~the ~~statements~~stockholders inapproved ~~conformity~~the ~~with~~adoption ~~U.S.~~of ~~GAAP~~the ~~requires~~Texas ~~management~~South toEnergy, ~~make~~Inc. ~~estimates~~2018 ~~and~~Omnibus ~~assumptions~~Incentive ~~that~~Plan ~~affect~~(the “2018 Plan”), effective July 28, 2018. The 2018 Plan authorizes the ~~reported~~issuance ~~amounts~~of 100,000,000 shares of ~~assets~~common ~~and~~stock ~~liabilities~~prior ~~and~~to ~~disclosure~~its expiration ofon ~~contingent~~July ~~assets~~28, ~~and~~2028. ~~liabilities~~Incentives atunder the ~~date~~2018 Plan may be granted to employees, directors, and consultants of the ~~financial~~Company ~~statements~~in ~~and~~any ~~the~~one ~~reported~~or ~~amounts~~a combination of ~~revenues~~the ~~and~~following ~~expenses~~forms: ~~during~~incentive ~~the~~stock ~~reporting~~options, ~~period.~~nonqualified ~~While~~stock ~~management~~options, ~~believes~~stock ~~that~~appreciation ~~such~~rights, ~~estimates~~restricted ~~are~~stock ~~reasonable~~awards ~~when~~or ~~considered~~performance instock ~~conjunction~~awards ~~with~~which ~~the~~are ~~financial~~valued ~~position~~in ~~and~~whole ~~results~~or ofin ~~operations~~part ~~taken~~by asreference ato, ~~whole~~or otherwise based on, ~~actual~~our ~~results~~common ~~could~~stock, ~~differ~~including ~~from~~its ~~those~~appreciation ~~estimates,~~in ~~and~~value. ~~such~~As ~~differences~~of ~~may~~April be1, ~~material~~2019, tono ~~the~~awards ~~financial~~have ~~statements~~been granted.

~~Basic~~In December 2004, the Financial Accounting Standards Board (“FASB”) issued ASC 718 “Compensation - Stock Compensation” and ~~Diluted~~505-50 “Equity-Based ~~Net~~Payments ~~Loss~~to ~~per~~Non-Employees.” ~~Share~~This statement requires a public entity to expense the cost of services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted ASC 718 and 505-50 upon creation of the company and expenses share based costs in the period incurred.

~~The Company~~Accounting ~~computes~~for ~~loss~~Oil ~~per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic~~ and ~~diluted~~Gas earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.Properties

~~Fair~~The Company utilizes ~~Value~~the full cost method to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs, professional fees incurred for the lease acquisitions, capitalized interest costs relating to properties, geological expenditures, and tangible and intangible development costs (including direct internal costs), are capitalized into the full cost pool. When the Company commences production from established proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, will be depleted on the units-of-production method using estimates of proven reserves. Investments in unproved properties and major development projects, including capitalized interest if any, are not depleted until proven reserves associated with the projects can be determined. If the future exploration of unproven properties is determined to be uneconomical, the amount of such properties is added to the capital costs to be depleted. As of December 31, 2018, the Company’s oil and gas properties consisted of capitalized acquisition costs for unproved mineral rights and tangible and intangible drilling and completion costs.

In accordance with the requirements of ASC 825 and ASC 820, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.18

~~Income Taxes~~RESULTS OF OPERATIONS

~~The Company~~Results ~~has~~of ~~adopted~~Operations ~~ASC 740~~ for ~~reporting~~the ~~purposes.~~Year ~~As of~~ Ended December 31, ~~2017,~~2018 ~~the~~compared ~~Company had net operating loss carryforwards of approximately $9,700,000 that may be available~~ to ~~reduce~~December future years’ taxable income and will begin to expire in 2028. Availability of loss usage is subject to change of ownership limitations under Internal Revenue Code 382. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements31, ~~as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the tax loss carryforwards.~~2017

~~Stock-based~~We had no revenues during ~~Compensation~~the years ended December 31, 2018 and December 31, 2017. General and administrative expenses were $2,482,209 for the year ended December 31, 2018, compared to $3,513,294 for the year ended December 31, 2017. The decrease in general and administrative expenses of $1,031,085 was primarily attributed to a decrease in consulting fees, compensation, and dues expenses. Consulting expenses in 2017 totaling $884,635 were non cash since stock was issued in exchange for the services rendered and those consulting expenses did not occur in 2018. Interest expense for 2018 totaled $152,214 of which $116,107 was accrued as of yearend.

~~The~~We had a net loss of ~~Company~~$3,110,744 ~~has~~for ~~not~~the ~~adopted~~year ended December 31, 2018, compared to a ~~stock~~net ~~option~~loss ~~plan~~of ~~and~~$3,842,467 ~~has~~for ~~not~~the ~~granted~~year ~~any~~ended ~~stock~~December ~~options~~31, 2017. ~~Common~~The decrease ~~stock~~in ~~has~~net ~~been~~loss ~~granted~~of $731,723 was due to ~~numerous~~a ~~third~~decrease of $1,031,085 in general and administrative expenses, a decrease in interest ~~parties~~expense of approximately $58,000, and ~~employees~~offset ~~for~~by ~~services~~an increase of approximately $296,000 in impairment expenses.

~~In December~~The ~~2004,~~basic ~~the Financial Accounting Standards Board (“FASB”) issued ASC 718 “Compensation - Stock Compensation”~~ and ~~505-50 “Equity-Based Payments to Non-Employees.” This statement requires a public entity to expense the cost of~~diluted ~~services~~loss ~~received~~per inshare ~~exchange~~ for anthe ~~award~~years ofended ~~equity~~December ~~instruments.~~31, ~~This~~2018 ~~statement also provides guidance on valuing~~ and ~~expensing these~~December ~~awards~~31, as2017 ~~well~~was ~~as disclosure requirements of these equity arrangements~~$(0.00) ~~The~~each ~~Company adopted ASC 718 and 505-50 upon creation of the company and expenses share based costs in the period incurred~~year.

17As of December 31, 2018, the Company’s cash balance was $1,501,766, compared to a cash balance of $455 as of December 31, 2017. As of December 31, 2018, the Company’s assets consisted of cash of $1,501,766, prepaid expenses of $33,300, accounts receivable of $1,262,311, related party accounts receivable of $4,302, net equipment and oil and gas properties of $14,122,615, and deposits of $8,340. As of December 31, 2017, the Company’s assets consisted of cash of $455, prepaid expenses of $29,555, accounts receivable of $3,261, net equipment and oil and gas properties of $11,811,977, and deposits of $8,340.

~~Accounting for~~Cash ~~Oil~~flow ~~and~~from ~~Gas~~Operating ~~Properties~~Activities

~~The Company~~During ~~utilizes~~ the ~~full~~year ~~cost~~ended ~~method to account for its investment in oil and gas properties. Accordingly~~December 31, ~~all costs associated with acquisition~~2018, ~~exploration~~we ~~and~~provided ~~development~~cash of ~~oil and gas reserves~~$1, ~~including such costs as leasehold acquisition costs~~968,303 ~~professional fees incurred~~ for ~~the~~operating ~~lease~~activities ~~acquisitions,~~as ~~capitalized~~compared ~~interest costs relating~~ to ~~properties,~~a ~~geological~~use ~~expenditures,~~of ~~and~~cash ~~tangible and~~of ~~intangible development costs (including direct internal costs)~~$1, ~~are capitalized into the full cost pool. When the Company commences production from established proven oil and gas reserves~~127,982 ~~capitalized~~during ~~costs, including estimated future costs to develop~~ the ~~reserves~~year ~~and estimated abandonment costs, will be depleted on the units-of-production method using estimates of proven reserves.~~ended ~~Investments~~December ~~in unproved properties and major development projects~~31, ~~including capitalized interest if any, are not depleted until proven reserves associated with the projects can be determined~~2017. IfThe ~~the~~decrease ~~future~~in ~~exploration~~cash ofused ~~unproven~~for ~~properties~~operating isactivities ~~determined to~~during ~~be uneconomical,~~ the ~~amount~~year ofwas ~~such~~primarily ~~properties~~due ~~is added~~ to the ~~capital~~increase ~~costs~~in toaccounts payable beand ~~depleted.~~accrued Asexpenses ofincurred ~~December~~during ~~31, 2017,~~ the ~~Company’s oil~~year ~~and~~instead ~~gas properties consisted~~ of ~~capitalized~~using ~~acquisition costs for unproved mineral rights~~cash.

~~RESULTS OF~~Cash ~~OPERATIONS~~flow from Investing Activities

~~Results~~During the year ended December of31, ~~Operations~~2018 ~~for~~we used $2,803,772 to pay leases and acquire oil and gas properties. During the ~~Year~~year ~~Ended~~ended December 31, 2017, ~~compared~~we used $758,272 to ~~December~~pay 31leases and acquire oil and gas properties. During 2018 we received $810,000 ~~2016~~from Delek for the offshore operations and $80,000 for settlement of a dispute to reimburse expenses.

~~We had~~Cash ~~revenues~~flow offrom $0Financing and $7,631 during the years ended December 31, 2017 and December 31, 2016. General and administrative expenses were $3,513,294 for the year ended December 31, 2017, compared to $1,316,112 for the year ended December 31, 2016. The increase in general and administrative expenses of approximately $2,200,000 was primarily attributed to an increase in consulting fees, compensation, professional fees, and travel expenses. Consulting expenses in 2017 totaling $884,635 were non cash since stock was issued in exchange for the services rendered. Expenses in 2017 totaling approximately $1,600,000 were not paid in 2017 but were recorded in accrued liabilities or accounts payable as of year end. Interest expense for 2017 totaled $210,277 of which $210,174 was accrued as of year end.Activities

~~We had~~During ~~a net loss of $3,842,467 for~~ the year ended December 31, ~~2017~~2018, ~~compared~~we toreceived a$1,166,999 ~~net~~related ~~loss~~to the sale of the Company’s common stock and $221,~~111,203~~081 ~~for~~from the ~~year~~proceeds ~~ended~~of ~~December~~short ~~31,~~term ~~2016~~debt. The ~~increase~~Company inmade ~~net~~payments ~~loss~~on ofshort term debt totaling $148,~~723,633~~928 ~~was~~during ~~due~~2018. toDuring anthe ~~increase~~year ofwe ~~approximately~~received advances from working interest partners of $25,~~200~~062,~~000~~059 inand ~~general~~applied ~~and~~$4,754,431 ~~administrative expenses~~of ~~offset~~those byadvances aagainst ~~decrease~~the injoint interest ~~expense~~bills. ofDuring ~~approximately~~the ~~$170~~year ended December 31,~~000~~ 2017, awe received $~~200~~665,000 ~~impairment~~related ~~recorded~~to on the ~~mineral~~sale ~~interests sold~~of inthe ~~2016,~~Company’s ~~and~~common astock, $~~218~~837,000 ~~loss~~from ~~realized~~the onproceeds of ~~the~~short 5term ~~million~~debt ~~shares~~and $70,777 from the proceeds of ~~GulfSlope~~long ~~common~~term ~~stock~~debt. The ~~sold~~Company inmade ~~February~~payments ~~2016~~on short term debt totaling $11,157 during 2017.

~~The basic~~Liquidity and ~~diluted~~Capital ~~loss per share for the years ended December 31, 2017 and December 31, 2016 was $(0.00) each year.~~Resources

As of December 31, ~~2017~~2018, we ~~the~~had ~~Company’s cash balance was $455, compared to~~ a cash balance of $~~325~~1,~~089 as of December 31~~501,766 ~~2016. As~~and ofa ~~December~~working ~~31,~~capital ~~2017,~~deficit ~~the Company’s assets consisted~~ of ~~cash of~~ $~~455~~4, ~~prepaid expenses of $29~~087,~~555,~~299. ~~accounts~~Our ~~receivable of $3,261 and~~ net ~~property~~loss ~~and equipment~~ of $113,~~811~~110,~~977.~~744 Asfor ofthe year ended December 31, ~~2016,~~2018 ~~the~~was ~~Company’s~~primarily ~~assets~~funded ~~consisted~~by ofproceeds ~~cash of~~raised ~~$325,089,~~from ~~prepaid~~equity ~~expenses of $47~~financings,~~927,~~ ~~note~~payments ~~receivable~~from ofworking ~~$68~~interest owners,~~498~~ and ~~undeveloped~~loans from ~~oil~~related ~~and gas properties of $10,214,004~~parties.

~~Cash~~As of April 1, 2019, we ~~flow~~believe that we have sufficient cash on hand to fund limited operations. We have budgeted required capital expenditures and other operating expenses during calendar 2019 of approximately $7.5 million. These estimates are projections only and will vary depending upon a number of factors, including timing of and actual drilling operations commenced and maintained, completion and transportation costs, bonding and insurance costs, seismic expenses, other customary and ordinary drilling costs that are difficult to estimate, farm-in and farm-out arrangements, and ability to attract partners that are willing to bear some or all of our portion of the costs of conducting exploration drilling activities on offshore prospects. Additionally, depending upon the execution of our business plan, we may determine to acquire additional leasehold interests and fund the acquisition of additional seismic data and seismic processing. It is expected, but not guaranteed, that these expenditures will be funded through future revenues, best-efforts equity or debt offerings, future production revenues from ~~Operating~~planned ~~Activities~~drilling activity, or a combination of all.

During the year ended December 31, 2017, we used cash of $1,127,982 for operating activities as compared to a use of cash of $1,341,322 during the year ended December 31, 2016. The decrease in cash used for operating activities during the year was primarily due to the increase in the accrual of general and administrative expenses incurred during the year instead of using cash.19

~~Cash~~The proposed expenditures ~~flow~~for ~~from~~the ~~Investing~~calendar ~~Activities~~year 2019 are subject to change based on the execution of our business plan, actual drilling expenses that exceed our budget, any potential competition for leasehold interests and our ability to obtain additional funding. This represents our current best estimate of our capital needs through December 31, 2019. Drilling activity commenced on the onshore and the offshore prospects during the third quarter 2018 and is ongoing in both areas at this time.

~~During~~Future equity financings ~~the~~may ~~year~~be ~~ended~~dilutive ~~December~~to ~~31,~~our ~~2017~~stockholders. weAlternative ~~used~~forms ~~$758,272~~of future financings may include preferences or rights superior to ~~pay~~our ~~leases~~common stock. Debt financings may involve a pledge of assets and ~~acquire~~will ~~oil~~rank senior to our common stock. We have historically financed our operations through best efforts private equity and ~~gas~~debt ~~properties~~financings. ~~During~~We ~~the~~do ~~year~~not ~~ended~~have any credit or equity facilities currently available ~~December~~with ~~31,~~financial ~~2016~~institutions, westockholders ~~received~~or ~~$50~~third party investors,~~000~~ and will continue to rely on ~~the~~best ~~sale~~efforts offinancings. There is no assurance that we can raise the ~~GulfSlope~~capital ~~marketable~~necessary ~~securities~~to fund our operations and ~~used~~business ~~$63,147~~plan. Failure to ~~pay~~raise ~~leases~~the required capital to fund operations, on favorable terms or at all, will have a material adverse effect on our operations, and will likely ~~mineral~~cause ~~interests~~us to curtail or cease operations.

~~Cash flow~~Off-Balance ~~from~~Sheet ~~Financing Activities~~Arrangements

~~During the~~As ~~year~~of ~~ended~~ December 31, ~~2017~~2018, we ~~received~~had ~~$665,000~~no ~~related~~off-balance tosheet ~~the~~transactions ~~sale~~that ofhave ~~the~~or ~~Company’s~~are ~~common~~reasonably ~~stock,~~likely ~~$837,000~~to ~~from the~~have ~~proceeds~~a ofcurrent ~~short~~or ~~term~~future ~~debt~~effect ~~and $70,777 from the proceeds of long term debt. The Company made payments~~ on ~~short~~our ~~term debt~~financial ~~totaling $11~~condition,~~157~~ ~~during~~changes ~~2017.~~in ~~During~~our ~~the~~financial ~~year ended December 31~~condition, ~~2016~~revenues weor ~~received $1~~expenses,~~542,500~~ ~~related~~results ~~to the sale~~ of ~~the Company’s common stock~~operations, ~~$153~~liquidity,~~000~~ ~~from~~capital ~~the~~expenditures ~~proceeds of short term debt and oil and gas assets were given for debt forgiveness of $170,000.~~or ~~Cash~~capital ~~was used to repay $153,000 of short term debt and we advanced $68,498 on a note receivable during 2016~~resources.

~~Liquidity and~~Recent ~~Capital~~Accounting ~~Resources~~Pronouncements

~~As of~~We ~~December~~have 31reviewed all recently issued, ~~2017~~but not yet adopted, weaccounting ~~had~~standards ain ~~cash~~order ~~balance~~to ofdetermine ~~$455~~their ~~and~~effects, aif ~~working~~any, ~~capital~~on ~~deficit~~our results of $1operation,~~687,473~~ financial position or cash flows. ~~Our~~With ~~net~~the ~~loss~~exception of $3the pronouncements listed below,~~842,467~~ ~~for the~~these ~~year~~recently ~~ended~~issued ~~December~~pronouncements ~~31,~~are not ~~2017~~expected ~~was~~to ~~primarily~~have ~~funded~~a bymaterial ~~proceeds~~impact ~~raised~~on ~~from~~our ~~equity~~financial ~~financings~~position, ~~and~~results ~~loans~~of ~~from~~operations, ~~related~~or ~~parties~~cash flows.

~~As of~~In ~~March~~May 272014, ~~2018,~~the weFASB issued ~~believe~~its ~~that~~final westandard ~~have~~on ~~sufficient~~revenue ~~cash~~from oncontracts ~~hand~~with ~~(or~~customers. ~~expected~~The tostandard, beissued ~~available)~~as toASU ~~fund~~No. ~~near~~2014-~~term~~09: ~~operations.~~Revenue from Contracts Wewith ~~have~~Customers ~~budgeted~~(Topic ~~required~~606) ~~capital~~by ~~expenditures~~the ~~and~~FASB, ~~other~~outlines ~~operating~~a ~~expenses~~single ~~during~~comprehensive ~~calendar~~model ~~year~~for ~~2018~~entities ofto ~~approximately~~use $6in ~~million.~~accounting for revenue ~~These~~arising ~~estimates~~from ~~are~~contracts ~~projections~~with ~~only~~customers and ~~will~~supersedes ~~vary~~most ~~depending~~current ~~upon~~revenue arecognition ~~number of factors~~guidance, including ~~timing~~industry-specific ~~of and actual drilling~~guidance. ~~operations~~The ~~commenced~~core ~~and~~principle ~~maintained,~~of ~~completion~~the ~~and~~revenue ~~transportation~~model ~~costs,~~is ~~bonding~~that ~~and~~“an ~~insurance~~entity ~~costs,~~recognizes ~~seismic~~revenue ~~expenses,~~to ~~other customary~~depict ~~and~~the ~~ordinary~~transfer ~~drilling~~of ~~costs~~promised ~~that~~goods ~~are~~or services ~~difficult~~ to ~~estimate,~~customers ~~farm-~~in ~~and~~an ~~farm-out~~amount ~~arrangements,~~that ~~and~~reflects ~~ability~~the consideration to ~~attract partners~~which ~~that~~the ~~are~~entity ~~willing~~expects to ~~bear~~be ~~some~~entitled in exchange for those goods or ~~all~~services.” ofASU ~~our~~2014-09 ~~portion~~becomes ofeffective ~~the~~for ~~costs~~reporting ofperiods ~~conducting~~(including ~~exploration~~interim ~~drilling~~periods) ~~activities~~beginning onafter ~~offshore~~December ~~prospects. Additionally~~15, ~~depending~~2017. ~~upon~~Early ~~the~~application ~~execution~~is ofpermitted ~~our~~for ~~business~~reporting ~~plan,~~periods we(including ~~may~~interim ~~determine~~periods) tobeginning ~~acquire~~after ~~additional~~December ~~leasehold~~15, ~~interests~~2016. This ~~and~~new ~~fund~~standard permits the ~~acquisition~~use of ~~additional~~either ~~seismic~~the ~~data~~retrospective ~~and~~or ~~seismic~~cumulative ~~processing.~~effect ~~All~~transition ofmethod. ~~these~~Because ~~expenditures~~we ~~will~~have beno ~~funded~~active ~~through future~~revenues, ~~best-efforts~~the ~~equity~~new ~~offerings,~~guidance ~~debt~~is ~~offerings~~not orexpected to have a ~~combination~~material ofimpact ~~both~~on our financial statements and related disclosures.

18ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Of the~~Not $6required ~~million of budgeted expenditures~~ for ~~calendar 2018, approximately $2.5 million are expected to cover salaries, consulting~~smaller ~~and~~reporting ~~professional services, and required working capital needs~~companies.

The proposed expenditures for the calendar year 2018 are subject to change based on the execution of our business plan, any potential competition for leasehold interests and our ability to obtain additional funding. This represents our current best estimate of our capital needs through December 31, 2018. We currently anticipate offshore drilling activity to commence on or before June 1, 2018. We currently do not anticipate that any drilling activity will commence on any onshore prospects until early third quarter of 2018.20

~~We will~~ITEM ~~need to raise additional funds to cover planned 2018 expenditures, as well as any additional expenditures that we may encounter in future years~~8. ~~Future~~FINANCIAL ~~equity~~STATEMENTS ~~financings~~AND ~~may~~SUPPLEMENTARY be dilutive to our stockholders. Alternative forms of future financings may include preferences or rights superior to our common stock. Debt financings may involve a pledge of assets and will rank senior to our common stock. We have historically financed our operations through best-efforts private equity and debt financings. We do not have any credit or equity facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts financings. The failure to raise sufficient capital could cause us to cease operations.DATA

~~Off-Balance Sheet~~Texas ~~Arrangements~~South Energy, Inc.

~~As of~~Consolidated ~~December~~Financial 31, 2017, we had no off-balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.Statements

~~Recent Accounting~~December ~~Pronouncements~~31, 2018

~~We have~~TABLE ~~reviewed~~OF all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on our results of operation, financial position or cash flows. With the exception of the pronouncements listed below, these recently issued pronouncements are not expected to have a material impact on our financial position, results of operations, or cash flows.CONTENTS

In May 2014, the FASB issued its final standard on revenue from contracts with customers. The standard, issued as ASU No. 2014-09: Revenue from Contracts with Customers (Topic 606) by the FASB, outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ASU 2014-09 becomes effective for reporting periods (including interim periods) beginning after December 15, 2017. Early application is permitted for reporting periods (including interim periods) beginning after December 15, 2016. This new standard permits the use of either the retrospective or cumulative effect transition method. Because we have no active revenues, the new guidance is not expected to have a material impact on our financial statements and related disclosures.

	Page
Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets as of December 31, 2018 and 2017	F-3

Consolidated Statements of Operations for the years ended December 31, 2018 and 2017	F-4

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2018 and 2017	F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017	F-6

Notes to the Consolidated Financial Statements	F-7

~~ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~F-1

~~Not required~~Report ~~for~~of ~~smaller~~Independent ~~reporting~~Registered ~~companies.~~Public Accounting Firm

19To the Board of Directors and Stockholders of

~~ITEM 8.~~Texas ~~FINANCIAL~~South ~~STATEMENTS~~Energy, ~~AND SUPPLEMENTARY DATA~~Inc.

~~Texas South~~Opinion ~~Energy,~~on ~~Inc.~~the Financial Statements

~~Consolidated~~We have audited the accompanying consolidated ~~Financial~~balance ~~Statements~~sheets of Texas South Energy, Inc. and its wholly owned subsidiary Texas South Operating Company, Inc. (the “Company”) as of December 31, 2018 and 2017, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2018 and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America.

~~December 31,~~Basis ~~2017~~for Opinion

~~TABLE~~These consolidated financial statements OFare ~~CONTENTS~~the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

	Page
Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets as of December 31, 2017 and 2016	F-3
Consolidated Statements of Operations for the years ended December 31, 2017 and 2016	F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017 and 2016	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2017 and 2016	F-6
Notes to the Consolidated Financial Statements	F-7

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, 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.

~~F-1~~Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~Report~~As discussed in Note 3 to the consolidated financial statements, the Company’s absence of ~~Independent~~significant ~~Registered~~revenues, ~~Public~~recurring ~~Accounting~~losses ~~Firm~~from operations, and its need for additional financing in order to fund its projected loss in 2019 raise substantial doubt about its ability to continue as a going concern. The 2018 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~To the~~/s/ ~~Board~~LBB of& ~~Directors~~Associates ~~and~~Ltd., ~~Stockholders of~~LLP

~~Texas South~~LBB ~~Energy,~~& ~~Inc~~Associates Ltd., LLP

~~Opinion on~~We have served as the ~~Financial~~Company’s ~~Statements~~ auditor since October 2013.

~~We have audited the accompanying consolidated balance sheets of Texas South Energy~~Houston, ~~Inc. and its wholly owned subsidiary~~ Texas South Operating Company, Inc. (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2017 and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

~~Basis for~~April ~~Opinion~~1, 2019

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.F-2

~~We conducted~~Texas ~~our~~South audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatementEnergy, ~~whether due to error or fraud~~Inc. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, 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.

~~Our audits~~CONSOLIDATED ~~included~~BALANCE performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.SHEETS

As discussed in Note 3 to the consolidated financial statements, the Company’s absence of significant revenues, recurring losses from operations, and its need for additional financing in order to fund its projected loss in 2018 raise substantial doubt about its ability to continue as a going concern. The 2017 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	December 31, 2018			December 31, 2017
ASSETS

CURRENT ASSETS
Cash	$	1,501,766		$	455
Prepaid expenses		33,300			29,555
Accounts receivable – joint interest billings		1,262,311			3,261
Accounts receivable – related party		4,302			-
TOTAL CURRENT ASSETS		2,801,679			33,271

PROPERTY AND EQUIPMENT
Oil and gas properties, full cost method, net		14,094,438			11,779,201
Furniture, fixtures and equipment		43,195			39,712
Less: accumulated depreciation		(15,018	)		(6,936	)
TOTAL PROPERTY AND EQUIPMENT, NET		14,122,615			11,811,977

OTHER ASSETS		8,340			8,340

TOTAL ASSETS	$	16,932,634		$	11,853,588

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	4,739,908		$	159,512
Accounts payable – related party		-			201,812
Accrued expenses		34,154			77,279
Accrued expenses – related party		805,000			385,000
Accrued interest – related party		183,515			40,693
Advances from working interest owners		307,628			-
Notes payable		9,773			9,620
Convertible notes payable – related party		809,000			837,000
Due to related party		-			9,828
TOTAL CURRENT LIABILITIES		6,888,978			1,720,744

LONG TERM LIABILITIES
Convertible notes payable		-			1,118,355
Convertible notes payable – related party		300,000			50,000
Notes payable – related party		-			250,000
Asset retirement obligations		40,380			-
Accrued expenses		1,798,543			894,272
Accrued interest		-			403,636
Accrued interest – related party		-			26,178
TOTAL LONG TERM LIABILITIES		2,138,923			2,742,441

TOTAL LIABILITIES		9,027,901			4,463,185

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ EQUITY
Preferred stock
50,000,000 shares preferred stock authorized, none issued and outstanding		-			-
Common stock
1,500,000,000 shares common stock authorized, $0.001 par value, 998,449,769 and 821,790,670 shares of common stock issued and outstanding at December 31, 2018 and December 31, 2017		998,449			821,790
Additional paid-in capital		22,893,788			19,445,373
Accumulated deficit		(15,987,504	)		(12,876,760	)
Total stockholders’ equity		7,904,733			7,390,403
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	16,932,634		$	11,853,588

~~/s/~~The accompanying notes are an integral ~~LBB~~part &of ~~Associates~~these ~~Ltd.,~~consolidated ~~LLP~~financial statements.

~~LBB & Associates Ltd., LLP~~F-3

~~We have~~Texas ~~served~~South asEnergy, ~~the Company’s auditor since October 2013~~Inc.

~~Houston, Texas~~CONSOLIDATED STATEMENTS OF OPERATIONS

March 27, 2018

	Twelve months ended
	December 31, 2018			December 31, 2017

REVENUE	$	--		$	--

EXPENSES
Depreciation expense		8,082			6,936
Impairment expense		452,018			156,082
Accretion expense		414			--
Workover expense		27,625			--
General and administrative expense		2,482,209			3,513,294
TOTAL EXPENSES		2,970,348			3,676,312

LOSS FROM OPERATIONS		(2,970,348	)		(3,676,312	)

OTHER INCOME / (EXPENSE)
Other income		11,818			44,122
Interest expense, net		(152,214	)		(210,277	)
TOTAL OTHER INCOME / (EXPENSE)		(140,396	)		(166,155	)

NET LOSS	$	(3,110,744	)	$	(3,842,467	)

NET LOSS PER COMMON SHARE
Basic and diluted	$	(0.00	)	$	(0.00	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		927,954,828			786,768,478

~~F-2~~The accompanying notes are an integral part of these consolidated financial statements.

~~Texas South Energy, Inc.~~F-4

~~CONSOLIDATED BALANCE~~Texas ~~SHEETS~~South Energy, Inc.

	December 31, 2017			December 31, 2016
ASSETS
CURRENT ASSETS
Cash	$	455		$	325,089
Prepaid expenses		29,555			47,927
Accounts receivable, net		3,261			--
Note receivable		--			68,498
TOTAL CURRENT ASSETS		33,271			441,514
PROPERTY AND EQUIPMENT
Oil and gas properties, undeveloped		11,779,201			10,214,004
Furniture, fixtures and equipment		39,712			--
Less: accumulated depreciation		(6,936	)		--
TOTAL PROPERTY AND EQUIPMENT, NET		11,811,977			10,214,004
OTHER ASSETS		8,340			--
TOTAL ASSETS	$	11,853,588		$	10,655,518
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	159,512		$	77,848
Accounts payable – related party		201,812			--
Accrued expenses		77,279			437,283
Accrued expenses – related party		385,000			--
Accrued interest – related party		40,693			--
Notes payable		9,620			1,700,000
Convertible notes payable – related party		837,000			--
Due to related party		9,828			52,152
TOTAL CURRENT LIABILITIES		1,720,744			2,267,283
LONG TERM LIABILITIES
Convertible notes payable		1,118,355			--
Convertible notes payable – related party		50,000			--
Notes payable – related party		250,000			--
Accrued expenses – related party		894,272			--
Accrued interest		403,636			--
Accrued interest – related party		26,178			--
TOTAL LONG TERM LIABILITIES		2,742,441			--
TOTAL LIABILITIES		4,463,185			2,267,283
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Preferred stock		--			--
50,000,000 shares preferred stock authorized, none issued and outstanding
Common stock
950,000,000 shares common stock authorized, $0.001 par value, 821,790,670 and 553,490,670 shares of common stock issued and outstanding at December 31, 2017 and December 31, 2016		821,790			553,490
Additional paid-in capital		19,445,373			16,869,038
Accumulated deficit		(12,876,760	)		(9,034,293	)
Total stockholders’ equity		7,390,403			8,388,235
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	11,853,588		$	10,655,518

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

The accompanying notes are an integral part of these consolidated financial statements.

	Common Stock				Additional Paid-in		Accumulated
	Number of Shares		Amount		Capital		Deficit			Total

Balance, December 31, 2016		553,490,670	$	553,490	$	16,869,038	$	(9,034.293	)	$	8,388,235

Stock issued for cash		33,250,000		33,250		631,750		-			665,000
Stock issued for services		112,550,000		112,550		772,085		-			884,635
Stock issued for Sydson acquisition		100,000,000		100,000		745,000		-			845,000
Stock issued to extinguish other debt		22,500,000		22,500		427,500		-			450,000
Net loss for the year ended December 31, 2017		-		-		-		(3,842,467	)		(3,842,467	)

Balance, December 31, 2017		821,790,670		821,790		19,445,373		(12,876,760	)		7,390,403

Stock issued for cash		66,683,350		66,683		1,100,316		-			1,166,999
Stock issued for services		26,177,602		26,178		464,944		-			491,122
Stock issued for settlements		20,600,000		20,600		391,400		-			412,000
Stock issued to extinguish other debt		63,198,147		63,198		1,491,755		-			1,554,953
Net loss for the year ended December 31, 2018		-		-		-		(3,110,744	)		(3,110,744	)
Balance, December 31, 2018		998,449,769	$	998,449	$	22,893,788	$	(15,987,504	)	$	7,904,733

~~F-3~~The accompanying notes are an integral part of these consolidated financial statements.

~~Texas South Energy, Inc.~~F-5

~~CONSOLIDATED STATEMENTS~~Texas OFSouth ~~OPERATIONS~~Energy, Inc.

	Twelve months ended
	December 31, 2017			December 31, 2016
REVENUE	$	--		$	7,631
EXPENSES
Depreciation expense		6,936			--
Impairment expense		156,082			200,000
General and administrative expense		3,513,294			1,316,112
TOTAL EXPENSES		3,676,312			1,516,112
LOSS FROM OPERATIONS		(3,676,312	)		(1,508,481	)
OTHER INCOME / (EXPENSE)
Other income		44,122			--
Realized loss on sale of investment securities		--			(218,000	)
Interest expense, net		(210,277	)		(384,722	)
TOTAL OTHER INCOME / (EXPENSE)		(166,155	)		(602,722	)
NET LOSS	$	(3,842,467	)	$	(2,111,203	)
NET LOSS PER COMMON SHARE
Basic and diluted	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		786,768,478			484,199,345

CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these consolidated financial statements.

	Year ended December 31,
	2018			2017
Net loss	$	(3,110,744	)	$	(3,842,467	)
Adjustments to reconcile net loss to net cash used in operating activities
Impairment expense		452,018			156,082
Accretion		414			-
Depreciation		8,082			6,936
Gain on disposal of debt		(9,828	)		(42,324	)
Stock compensation		86,121			884,635
Changes in operating assets and liabilities:
Change in accounts receivable		(1,259,050	)		(3,261	)
Change in accounts receivable – related party		(5,502	)		-
Change in prepaid expenses		(3,745	)		45,988
Change in accounts payable and accrued expenses		4,537,271			118,474
Change in accounts payable and accrued expenses – related party		338,819			1,547,955
Change in accrued liabilities, long term		904,271			-
Change in accrued interest		30,176			-

NET CASH (USED) PROVIDED IN OPERATING ACTIVITIES		1,968,303			(1,127,982	)

Proceeds from participation agreements		810,000			-
Proceeds from reimbursement of operating costs		80,000			(4,156	)
Acquisition of equipment and oil and gas properties		(2,803,772	)		(754,116	)
NET CASH USED IN INVESTING ACTIVITIES		(1,913,772	)		(758,272	)

Proceeds from issuance of notes payable		21,081			70,777
Repayment of notes payable		(48,928	)		(11,157	)
Proceeds from issuance of notes payable – related party		-			837,000
Advances from joint interest owners		5,062,059			-
Advances applied against joint interest bills		(4,754,431	)		-
Proceeds from sale of common stock (issued)		1,166,999			665,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,446,780			1,561,620

NET INCREASE/(DECREASE) IN CASH		1,501,311			(324,634	)

CASH, BEGINNING OF PERIOD		455			325,089

CASH, END OF PERIOD	$	1,501,766		$	455

Cash paid for:
Interest	$	-		$	-
Income taxes	$	-		$	-

Non-cash activity:
Convert note payable and accrued interest into common stock	$	1,554,953		$	450,000
Issuance of common stock and note payable for assets	$	-		$	1,095,000
Issuance of common stock for assets	$	405,000			-
Issuance of common stock for settlements	$	412,000			-
Assignment of note receivable for note payable	$	-		$	131,645

~~F-4~~The accompanying notes are an integral part of these consolidated financial statements.

~~Texas South Energy, Inc.~~F-6

~~CONSOLIDATED STATEMENTS~~Texas OFSouth ~~STOCKHOLDERS’~~Energy, ~~EQUITY~~Inc.

	Common Stock				Additional Paid-in		Additional Paid-in Capital Shares to			Accumulated Other Comprehensive			Accumulated
	Number of Shares		Amount		Capital		be Issued			Income			Deficit			Total
Balance, December 31, 2015		427,865,670		427,865		14,480,646		100,000			(81,000	)		(6,923,090	)		8,004,421
Imputed interest		--		--		1,517		--			--			--			1,517
Stock issued for cash		82,125,000		82,125		1,560,375		(100,000	)		--			--			1,542,500
Stock issued for services		16,000,000		16,000		304,000		--			--			--			320,000
Stock issued for accrued compensation		14,000,000		14,000		266,000		--			--			--			280,000
Stock issued to extinguish other debt		13,500,000		13,500		256,500		--			--			--			270,000
Securities available for sale – marked to fair value		--		--		--		--			(73,500	)		--			(73,500	)
Securities sold		--		--		--		--			154,500			--			154,500
Net loss for the year ended December 31, 2016		--		--		--		--			--			(2,111,203	)		(2,111,203	)
Balance, December 31, 2016		553,490,670		553,490		16,869,038		--			-			(9,034,293	)		8,388,235
Stock issued for cash		33,250,000		33,250		631,750		--			--			--			665,000
Stock issued for services		112,550,000		112,550		772,085		--			--			--			884,635
Stock issued for Sydson acquisition		100,000,000		100,000		745,000		--			--			--			845,000
Stock issued to extinguish other debt		22,500,000		22,500		427,500		--			--			--			450,000
Net loss for the year ended December 31, 2017		--		--		--		--			--			(3,842,467	)		(3,842,467	)
Balance, December 31, 2017		821,790,670	$	821,790	$	19,445,373	$	--		$	--		$	(12,876,760	)	$	7,390,403

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~The accompanying~~December ~~notes~~31, ~~are~~2018 ~~an integral part of these consolidated financial statements.~~

~~F-5~~NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Texas South Energy, Inc. (the “Company”) was incorporated pursuant to the laws of the State of Nevada on March 15, 2010. The Company is engaged in the oil and gas business, generating or acquiring oil and gas projects, drilling and operating the wells and producing the oil and gas reserves.

~~CONSOLIDATED~~On January 11, 2017, pursuant to the laws ~~STATEMENTS~~of OFthe ~~CASH~~State ~~FLOWS~~of Texas, the Company formed Texas South Operating Company, Inc. as a wholly owned subsidiary of the Company. Texas South Energy, Inc. and Texas South Operating Company, Inc. (collectively, the “Company”) now file consolidated financial statements effective with the March 31, 2017 filing. The consolidated financial statements reflect our accounts after elimination of all significant intercompany transactions and balances.

	Year ended December 31,
	2017			2016
Net loss	$	(3,842,467	)	$	(2,111,203	)
Adjustments to reconcile net loss to net cash used in operating activities
Loss on securities		--			218,000
Impairment expense		156,082			200,000
Non-cash interest		--			1,517
Depreciation		6,936			--
Gain on disposal of debt		(42,324	)		--
Common stock paid for interest expense		--			200,000
Stock compensation		884,635			120,000
Changes in operating assets and liabilities:
Change in accounts receivable		(3,261	)		--
Change in prepaid expenses		45,988			(47,927	)
Change in accounts payable and accrued expenses		118,474			324,396
Change in accounts payable and accrued expenses – related party		1,547,955			(246,105	)
NET CASH USED IN OPERATING ACTIVITIES		(1,127,982	)		(1,341,322	)
Sale of marketable securities		--			50,000
Purchase of equipment		(4,156	)		--
Acquisition of oil and gas properties		(754,116	)		(63,147	)
NET CASH USED IN INVESTING ACTIVITIES		(758,272	)		(13,147	)
Proceeds from issuance of notes payable		70,777			153,000
Repayment of notes payable		(11,157	)		(153,000	)
Proceeds from issuance of notes payable – related party		837,000			--
Oil and gas assets given for debt forgiveness		--			170,000
Issuance of demand promissory note receivable		--			(68,498	)
Proceeds from sale of common stock (issued)		665,000			1,542,500
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,561,620			1,644,002
NET INCREASE/(DECREASE) IN CASH		(324,634	)		289,533
CASH, BEGINNING OF PERIOD		325,089			35,556
CASH, END OF PERIOD	$	455		$	325,089
Cash paid for:
Interest	$	--		$	--
Income taxes	$	--		$	--
Non-cash activity:
Convert portion of note payable into common stock	$	450,000		$	--
Issuance of common stock and notes payable for assets	$	1,095,000		$	--
Assignment of note receivable for note payable	$	131,645		$	--

While the Company had previously established a fiscal year end of October 31, on March 3, 2017 the Company adopted a year end of December 31. A transition 10-K was filed for the period November 2016 through December 2016 to report the change in our year end.

~~The accompanying~~NOTE ~~notes~~2 ~~are~~– anSUMMARY ~~integral~~OF ~~part~~SIGNIFICANT ACCOUNTING ~~of these consolidated financial statements.~~POLICIES

~~F-6~~Consolidation and Basis of Presentation

~~Texas~~The accompanying audited consolidated financial ~~South~~statements ~~Energy~~have been prepared in all material respects in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for financial information. Intercompany accounts and transactions are eliminated. The accompanying audited consolidated financial statements have been prepared on the same basis as the audited financial statements for the transition report ended December 31, ~~Inc~~2017.

~~NOTES~~There have been no changes in the Company’s TOsignificant ~~THE~~accounting ~~CONSOLIDATED~~policies ~~FINANCIAL~~from ~~STATEMENTS~~those that were disclosed in the Company’s 2017 Annual Report.

~~December 31,~~Cash ~~2017~~and Cash Equivalents

~~NOTE~~The Company considers all highly liquid 1instruments –with ~~NATURE~~a OFmaturity ~~OPERATIONS~~of ~~AND~~three ~~BASIS~~months OFor ~~PRESENTATION~~less at the time of issuance to be cash equivalents.

~~Texas South~~Use ~~Energy, Inc. (the “Company”) was incorporated pursuant to the laws~~ of ~~the~~Estimates ~~State of Nevada on March 15, 2010. The Company is engaged in the oil~~ and ~~gas business, generating or acquiring oil and gas projects, drilling and operating the wells and producing the oil and gas reserves.~~Assumptions

OnThe preparation of consolidated financial ~~January~~statements ~~11,~~in ~~2017,~~conformity ~~pursuant~~with U.S. GAAP requires management to ~~the~~make ~~laws~~estimates ofand assumptions that affect the ~~State~~reported amounts of ~~Texas,~~assets ~~the~~and ~~Company~~liabilities ~~formed~~and ~~Texas~~disclosure ~~South~~of ~~Operating~~contingent ~~Company,~~assets ~~Inc.~~and asliabilities aat ~~wholly owned~~the ~~subsidiary~~date of the ~~Company.~~financial ~~Texas~~statements ~~South~~and ~~Energy,~~the ~~Inc.~~reported amounts of revenues and ~~Texas~~expenses ~~South~~during ~~Operating~~the ~~Company,~~reporting ~~Inc~~period. ~~(collectively,~~While ~~the~~management ~~“Company”) now~~believes ~~file~~that ~~consolidated~~such ~~financial~~estimates ~~statements~~are ~~effective~~reasonable when considered in conjunction with the ~~March~~financial ~~31,~~position ~~2017~~and ~~filing.~~results ~~The~~of ~~consolidated~~operations ~~financial~~taken ~~statements~~as ~~reflect~~a whole, actual results could differ from ~~our~~those ~~accounts~~estimates, ~~after~~and ~~elimination~~such ofdifferences ~~all~~may ~~significant~~be ~~intercompany~~material ~~transactions~~to ~~and~~the ~~balances~~financial statements.

~~While the~~Basic ~~Company~~and ~~had~~Diluted ~~previously~~Net ~~established~~Loss aper fiscal year end of October 31, on March 3, 2017 the Company adopted a year end of December 31. A transition 10-K was filed for the period November 2016 through December 2016 to report the change in our year end.Share

~~NOTE~~The Company computes loss per share in 2accordance –with ~~SUMMARY~~ASC OF260, ~~SIGNIFICANT~~“Earnings ~~ACCOUNTING~~per ~~POLICIES~~Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.

~~Consolidation and~~Fair ~~Basis of Presentation~~Value

~~The accompanying~~In ~~audited consolidated financial statements have been prepared in all material respects in~~ accordance with ~~United~~the ~~States~~requirements of ~~generally~~ASC ~~accepted~~825 ~~accounting principles (“U.S. GAAP”) for financial information. Intercompany accounts~~ and ~~transactions are~~ASC ~~eliminated.~~820, ~~The~~the ~~accompanying~~Company ~~audited~~has ~~consolidated~~determined ~~financial statements have been prepared on~~ the ~~same~~estimated ~~basis~~fair asvalue ~~the~~of ~~audited~~ financial ~~statements~~instruments ~~for~~using ~~the~~available ~~transition~~market ~~report~~information and ~~ended~~appropriate ~~December~~valuation ~~31, 2016~~methodologies. The ~~exception~~fair ~~being~~value ~~that~~of ~~the~~financial ~~2016~~instruments ~~financial~~classified ~~statements were~~as ~~not~~current ~~consolidated~~assets ~~with~~or ~~Texas~~liabilities ~~South~~approximate their ~~Operating~~carrying ~~Company,~~value ~~Inc.~~due ~~since~~to the ~~Company~~short-term ~~had~~maturity ~~not~~of ~~yet~~the ~~been organized~~instruments.

~~There have~~Income been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s 2016 Annual Report or the transition report for the two months ended December 31, 2016.Taxes

~~Cash~~The Company has adopted ASC 740 for reporting purposes. As of December 31, 2018, the Company had net operating loss carryforwards of approximately $12,800,000 that may be available to reduce future years’ taxable income and ~~Cash~~will ~~Equivalents~~begin to expire in 2028. Availability of loss usage is subject to change of ownership limitations under Internal Revenue Code 382. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carryforwards. The Company believes that its income tax filing positions and deductions will more-likely-than-not be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company is subject to income tax examinations by the U.S federal, state, or local tax authorities for years since inception to date.

~~The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.~~F-7

~~Use of~~Stock-based ~~Estimates and Assumptions~~Compensation

~~The~~At the September 6, 2018 annual meeting, the ~~preparation~~stockholders ofapproved ~~consolidated~~the ~~financial~~adoption ~~statements~~of inthe ~~conformity~~Texas ~~with~~South UEnergy, Inc.S. ~~GAAP~~2018 ~~requires~~Omnibus ~~management~~Incentive toPlan ~~make~~(the ~~estimates~~“2018 ~~and assumptions~~Plan”), ~~that~~effective ~~affect~~July 28, 2018. The 2018 Plan authorizes the ~~reported~~issuance ~~amounts~~of 100,000,000 shares of ~~assets~~common ~~and~~stock ~~liabilities~~prior ~~and~~to ~~disclosure~~its ofexpiration ~~contingent~~on July ~~assets~~28, ~~and~~2028. ~~liabilities~~Incentives atunder the ~~date~~2018 ~~of the~~Plan ~~financial~~may ~~statements~~be granted to employees, directors, and consultants of the ~~reported~~Company ~~amounts~~in ofany ~~revenues~~one or ~~and~~a ~~expenses~~combination ~~during~~of the ~~reporting~~following ~~period.~~forms: ~~While~~incentive ~~management~~stock ~~believes~~options, nonqualified stock options, stock appreciation rights, restricted ~~that~~stock ~~such~~awards ~~estimates~~or performance stock awards which are ~~reasonable~~valued ~~when~~in ~~considered~~whole or in ~~conjunction~~part ~~with~~by ~~the~~reference ~~financial~~to, ~~position~~or ~~and~~otherwise ~~results~~based ofon, ~~operations~~our ~~taken~~common asstock, aincluding ~~whole,~~its ~~actual~~appreciation ~~results~~in ~~could~~value. ~~differ~~As ~~from~~of ~~those~~April ~~estimates~~1, ~~and~~2019, ~~such~~no ~~differences~~awards ~~may~~were begranted. ~~material~~Common stock has been granted to ~~the~~employees and ~~financial~~third ~~statements~~parties for services rendered (see Note 5 – Common Stock).

~~Basic~~In December 2004, the Financial Accounting Standards Board (“FASB”) issued ASC 718 “Compensation - Stock Compensation” and ~~Diluted~~505-50 ~~Net~~“Equity-Based Payments ~~Loss~~to ~~per~~Non-Employees.” ~~Share~~This statement requires a public entity to expense the cost of services received in exchange for an award of equity instruments. This statement also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted ASC 718 and 505-50 upon creation of the Company and expenses share based costs in the period incurred.

~~The Company~~Accounting ~~computes~~for ~~loss~~Oil ~~per share in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic~~ and ~~diluted~~Gas earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.Properties

~~Fair~~The Company utilizes the full cost method ~~Value~~to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs, professional fees incurred for the lease acquisitions, capitalized interest costs relating to properties, geological expenditures, and tangible and intangible development costs (including direct internal costs), are capitalized into the full cost pool. When the Company commences production from established proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, will be depleted on the units-of-production method using estimates of proven reserves. Investments in unproved properties and major development projects, including capitalized interest if any, are not depleted until proven reserves associated with the projects can be determined. If the future exploration of unproven properties is determined to be uneconomical, the amount of such properties is added to the capital costs to be depleted. As of December 31, 2018, the Company’s oil and gas properties consisted of capitalized acquisition costs for unproved mineral rights and tangible and intangible drilling and completion costs.

~~In accordance~~Investment with the requirements of ASC 825 and ASC 820, the Company has determined the estimated fair value of financial instruments using available market information and appropriate valuation methodologies. The fair value of financial instruments classified as current assets or liabilities approximate their carrying value due to the short-term maturity of the instruments.Securities

~~Income Taxes~~Not applicable.

~~The Company~~Asset ~~has~~Retirement adopted ASC 740 for reporting purposes. As of December 31, 2017, the Company had net operating loss carryforwards of approximately $9,700,000 that may be available to reduce future years’ taxable income and will begin to expire in 2028. Availability of loss usage is subject to change of ownership limitations under Internal Revenue Code 382. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the future tax loss carryforwards. The Company believes that its income tax filing positions and deductions will more-likely-than-not be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on the Company’s financial condition, results of operations or cash flows. Therefore, no reserves for uncertain income tax positions have been recorded. The Company is subject to income tax examinations by the U.S federal, state, or local tax authorities for years since inception to date.Obligations

~~F-7~~We record liabilities (asset retirement obligations “ARO”) for the future costs of plugging, dismantlement and abandonment of our wells. There is also an associated increase in the carrying amount of the tangible assets for which the liabilities were recorded. The fair values of new asset retirement obligations are estimated using expected future costs discounted to present value. The cost of the tangible asset, including the asset retirement cost, is depleted over the useful life of the asset. Accretion expense is recorded as the discounted liability is accreted to its expected settlement value. Asset retirement obligations are revised primarily for changes to the estimated date of the retirement and the estimated cost of the retirement.

~~Stock-based Compensation~~Recent Accounting Pronouncements

In May 2014, the FASB issued its final standard on revenue from contracts with customers. The standard, issued as ASU No. 2014-09: Revenue from Contracts with Customers ~~Company~~(Topic ~~has~~606) ~~not~~by ~~adopted~~the FASB, outlines a ~~stock~~single ~~option~~comprehensive ~~plan~~model for entities to use in accounting for revenue arising from contracts with customers and ~~has~~supersedes ~~not~~most ~~granted~~current ~~any~~revenue ~~stock~~recognition ~~options~~guidance, including industry-specific guidance. ~~Common~~The ~~stock~~core ~~has~~principle of ~~been~~the ~~granted~~revenue model is that “an entity recognizes revenue to ~~employees~~depict the transfer of promised goods or services to customers ~~and~~in ~~third~~an ~~parties~~amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ASU ~~rendered~~2014-09 ~~(see~~becomes ~~Note~~effective 5for –reporting ~~Common~~periods ~~Stock~~(including interim periods) beginning after December 15, 2017. This new standard permits the use of either the retrospective or cumulative effect transition method. Because the Company has no revenues, the new guidance is not expected to have a material impact on its financial statements and related disclosures.

In ~~December~~ ~~2004~~September 2015, ~~the Financial Accounting Standards Board (“~~FASB”) issued ~~ASC~~an ~~718 “Compensation - Stock Compensation”~~accounting ~~and~~standards ~~505-50~~update for “~~Equity-Based~~Business ~~Payments to Non-Employees.~~Combinations”, ~~This~~which ~~statement~~ requires athat ~~public~~an ~~entity~~acquirer torecognize ~~expense~~adjustments ~~the~~to ~~cost of~~provisional ~~services~~amounts ~~received~~that inare ~~exchange~~identified ~~for~~during anthe ~~award~~measurement ofperiod ~~equity~~in ~~instruments.~~the ~~This~~reporting ~~statement~~period ~~also~~in ~~provides~~which ~~guidance~~the onadjustment ~~valuing~~amounts ~~and~~are ~~expensing~~determined. ~~these~~We ~~awards, as well as disclosure requirements of these equity arrangements. The Company~~ adopted ~~ASC~~this ~~718~~new ~~and~~guidance ~~505-50~~prospectively ~~upon~~in ~~creation of~~ the ~~Company~~first ~~and~~quarter ~~expenses~~of ~~share based costs in the period incurred~~2016.

~~Accounting~~Other new pronouncements issued but not ~~for~~effective ~~Oil~~until ~~and~~after ~~Gas~~December ~~Properties~~31, 2018 are not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

The Company utilizes the full cost method to account for its investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs, professional fees incurred for the lease acquisitions, capitalized interest costs relating to properties, geological expenditures, and tangible and intangible development costs (including direct internal costs), are capitalized into the full cost pool. When the Company commences production from established proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, will be depleted on the unitsF-of-production method using estimates of proven reserves. Investments in unproved properties and major development projects, including capitalized interest if any, are not depleted until proven reserves associated with the projects can be determined. If the future exploration of unproven properties is determined to be uneconomical, the amount of such properties is added to the capital costs to be depleted. As of December 31, 2017, the Company’s oil and gas properties consisted of capitalized acquisition costs for unproved mineral rights.8

~~Investment Securities~~NOTE 3 – GOING CONCERN

The Company’s ~~previously~~consolidated ~~owned~~financial statements ~~investment~~are ~~securities~~prepared ~~composed~~in ofaccordance 5with ~~million~~generally ~~shares~~accepted ofaccounting ~~GulfSlope~~principles ~~common~~applicable ~~stock,~~to ~~which~~a ~~were~~going ~~classified~~concern. asThis contemplates ~~“available-for-sale”.~~the ~~Available-for-sale~~realization ~~securities~~of ~~are~~assets ~~adjusted~~and tothe ~~their~~liquidation ~~fair~~of ~~market~~liabilities ~~value~~in ~~with~~the ~~unrealized~~normal ~~gains and~~course ~~losses~~of business. Currently, ~~net~~the ofCompany ~~tax~~does not have sufficient cash, ~~recorded~~nor asdoes it have operations or a ~~component~~source of ~~accumulated~~revenue ~~other~~sufficient ~~comprehensive~~to ~~income.~~cover ~~Upon~~its ~~disposition~~operation ofcosts ~~these~~and ~~investments,~~allow it to ~~the~~continue ~~specific~~as ~~identification~~a ~~method~~going isconcern. ~~used~~The toCompany ~~determine~~has ~~the~~accumulated ~~cost~~losses ~~basis~~as inof ~~computing~~December ~~realized~~31, ~~gains~~2018, orof ~~losses~~$15,987,504. ~~which~~The ~~are~~Company ~~reported in~~will ~~other~~be ~~income~~dependent upon ~~and~~the ~~expense.~~raising ~~Declines~~of inadditional ~~value~~capital ~~that~~through ~~are~~the ~~judged~~best-efforts toplacement beof ~~other~~its ~~than~~equity ~~temporary~~and/or ~~are~~debt ~~reported~~securities in ~~other~~order ~~comprehensive~~to implement ~~income~~its ~~and~~business ~~expense~~plan. ~~During~~There ~~the~~can ~~year~~be ~~ended~~no ~~December~~assurance ~~31,~~that ~~2016,~~ the Company ~~recorded~~will abe ~~realized~~successful ~~loss~~in ofeither ~~$218,000~~situation in order to ~~adjust~~continue ~~the~~as ~~investment~~a ~~securities~~going concern. These factors raise substantial doubt regarding the Company’s ability to ~~fair~~continue ~~market~~as ~~value~~a going concern. InThese consolidated ~~February~~financial ~~2016,~~statements ~~the~~do ~~GulfSlope~~not ~~shares~~include ~~were~~any ~~sold~~adjustments relating to athe ~~third~~recoverability ~~party~~and ~~for~~classification ~~$50~~of recorded asset amounts,~~000.~~ ~~The~~or ~~Company~~amounts ~~no longer~~and ~~owns~~classification ~~any~~of ~~investment~~liabilities ~~securities~~that might result from this uncertainty.

~~Recent Accounting~~NOTE ~~Pronouncements~~4 – PROPERTY & EQUIPMENT

~~In May~~Oil 2014, the FASB issued its final standard on revenue from contracts with customers. The standard, issued as ASU No. 2014-09: Revenue from Contracts with Customers (Topic 606) by the FASB, outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and ~~supersedes~~Gas most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” ASU 2014-09 becomes effective for reporting periods (including interim periods) beginning after December 15, 2017. Early application is permitted for reporting periods (including interim periods) beginning after December 15, 2016. This new standard permits the use of either the retrospective or cumulative effect transition method. Because the Company has no revenues, the new guidance is not expected to have a material impact on its financial statements and related disclosures.Properties

~~In September~~The ~~2015,~~Company’s ~~FASB~~capitalized ~~issued~~oil ~~an accounting standards update for “Business Combinations”, which requires that an acquirer~~and ~~recognize~~gas ~~adjustments~~properties tocomprised ~~provisional amounts that are identified during~~ the ~~measurement period in the reporting period in which the adjustment amounts are determined. We adopted this new guidance prospectively in the first quarter of 2016.~~following:

Other new pronouncements issued but not effective until after December 31, 2017 are not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

	December 31, 2018		December 31, 2017

Unproved leasehold costs	$	12,659,884	$	11,779,201
Uncompleted wells, equipment and facilities		1,434,554		-
Total costs	$	14,094,438	$	11,779,201

~~F-8~~The majority of the assets are undeveloped offshore leases in the Gulf of Mexico. Included are onshore properties which were acquired during the Sydson acquisition. Both are currently being developed. At December 31, 2018, the properties were evaluated for impairment and the Company recorded $452,018 to impairment expense for the Canoe Prospect.

~~NOTE 3~~Participation ~~– GOING CONCERN~~Agreement

~~The Company’s~~On ~~consolidated~~January ~~financial~~8, ~~statements~~2018, ~~are~~the ~~prepared~~Company ~~in accordance with generally accepted accounting principles applicable~~entered tointo a ~~going~~participation ~~concern.~~agreement ~~This~~dated ~~contemplates~~effective ~~the~~January ~~realization~~1, of2018 ~~assets and~~ (the ~~liquidation~~“Agreement”) ofwith ~~liabilities~~Delek inGOM ~~the normal course of business. Currently~~Investments, ~~the Company does not have sufficient cash~~LLC, ~~nor does it have operations or~~ a subsidiary ~~source~~ of ~~revenue~~Delek ~~sufficient~~Group ~~to cover its operation costs and allow it to continue as a going concern~~Ltd. ~~The Company has accumulated losses as of December 31~~(“Delek”), ~~2017,~~and ofGulfSlope ~~$12~~(collectively,~~876,760. The~~ ~~Company~~the ~~will~~“Parties”) befor ~~dependent upon~~ the ~~raising~~partial farm-out of ~~additional~~the ~~capital~~Company’s ~~through~~interests ~~the~~in ~~best-efforts~~its ~~placement~~Gulf of ~~its~~Mexico ~~equity~~oil and~~/or~~ ~~debt securities~~gas inleases ~~order~~(the to“Farm-out”). ~~implement~~The ~~its~~Agreement ~~business~~sets ~~plan.~~out the ~~There~~terms ~~can~~and beconditions noof ~~assurance that~~ the ~~Company~~Parties ~~will~~participation ~~be successful~~ in ~~either~~the ~~situation in~~drilling ~~order~~of up to ~~continue as~~ a ~~going~~nine ~~concern.~~well ~~These~~multi-phase ~~factors~~exploration ~~raise~~program ~~substantial doubt regarding~~ targeting the Company’s ~~ability~~prospects to(the ~~continue as~~“Prospects”) alocated ~~going~~on ~~concern.~~the ~~These~~Company’s ~~consolidated~~existing ~~financial~~leases ~~statements do not include any adjustments relating to~~ (the ~~recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty~~“Leases”).

~~NOTE~~Under the terms of the Agreement, the Parties 4have –committed ~~PROPERTY~~to &initially ~~EQUIPMENT~~drill two of the Company’s prospects in Phase I (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company will thus retain a 5% working interest while paying 2% of the exploratory costs associated with drilling each well. Also, each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated with the Prospects. GulfSlope will be the Operator during exploratory drilling of a Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Company’s common stock preceding the acquisition. This option will expire on January 8, 2020. The Company has not recorded any cost associated with the option due to the future performance obligation of Delek. If Delek meets the obligation and exercises its option the Company will record the option value at that time as an increase to Oil and Gas Properties. The likelihood of Delek exercising its options to purchase shares of the Company’s common stock will be dependent on the drilling results from Phase 1 and the Company’s operating results which will affect the price of the Company’s common stock. We currently do not anticipate Delek fully exercising this option before the expiration date. At December 31, 2018, the potential value of issuing 20% of our outstanding stock is approximately $5,800,000. The foregoing description of the Agreement does not purport to be a complete description of the terms, provisions and conditions of such document, and represents only a summary of certain of the principal terms, provisions and conditions thereof.

The Company ~~has~~will ~~$11,779,201~~assign ofa ~~undeveloped~~two-tenths of one percent of 8/8ths net profits interest in certain of the Company’s oil and gas ~~properties~~leases in the two Phase I prospects to Hi-View Investment Partners, LLC (“Hi-View”) in consideration for consulting services provided pursuant to a non-exclusive consulting engagement dated October 25, 2017, by and between Hi-View, the Company, and GulfSlope (the “Advisory Agreement”). Hi-View ~~The~~will ~~majority~~be ofentitled to additional assignments on the ~~assets~~same ~~are~~terms ~~offshore~~and ~~leases~~conditions as described above related to any of Leases in which Delek elects to participate in the ~~Gulf~~drilling of ~~Mexico~~an exploratory well. ~~Included~~In ~~are~~addition, ~~onshore~~the ~~properties~~Company ~~which~~issued an aggregate of twenty ~~were~~million ~~acquired~~shares ~~during~~of ~~the~~its ~~Sydson~~common ~~acquisition~~stock to Hi-View in consideration for those consulting services provided pursuant to the Advisory Agreement.

In January 2017, the Company entered into an asset purchase agreement with Sydson, where Sydson assigned to us certain onshore oil and gas assets and interests and certain tangible assets and additionally, certain employees and a consultant of Sydson have agreed to become employees and a consultant of the Company. Sydson is a private oil and gas company with land operations in Texas and Louisiana that has been in business since 1982. F-9

~~In connection with the asset acquisition, the Company acquired a variety of proprietary seismic data, computer equipment, furniture and fixtures and other office equipment.~~Acquisition

~~The~~In ~~consideration~~January ~~payable~~2017, by the Company entered into toan asset purchase agreement with Sydson, ~~and~~where ~~affiliates~~Sydson ~~was~~assigned ~~(i)~~to ~~100~~us ~~million~~certain ~~shares~~onshore ofoil ~~Company~~and ~~common~~gas ~~stock~~assets toand ~~Michael~~interests J.and ~~Mayell~~certain tangible ~~valued~~assets atand ~~$845~~additionally,~~000~~ certain employees and ~~(ii)~~a ~~$250,000~~consultant of Sydson have agreed to become employees and a consultant ~~through~~of the Company. Sydson is a ~~promissory~~private ~~note~~oil ~~originally~~and ~~due~~gas ~~March~~company 5,with ~~2017,~~land operations in Texas and ~~was~~Louisiana ~~amended~~that tohas ~~January~~been 1,in ~~2019~~business since 1982.

In ~~conjunction~~connection with the asset acquisition, ~~the~~ ~~Company agreed to pay $1,250,000 of Sydson’s future development costs attributable to its retained working interests in~~ the ~~oil~~ ~~and gas prospects conveyed to the~~ Company ~~and carried~~acquired ~~interests~~a tovariety ~~casing point for Sydson’s working interests on the first well in each~~ of ~~the~~proprietary ~~West~~seismic ~~Tuleta~~data, ~~prospect~~computer equipment, ~~Ray~~furniture ~~Field~~and ~~prospect~~fixtures and ~~the~~other ~~Wilinda~~office ~~prospect~~equipment.

The ~~purchase~~consideration ~~price~~payable by the Company to Sydson and affiliates was (i) 100 million shares of ~~this~~Company ~~asset~~common ~~acquisition~~stock to Michael J. Mayell valued at $845,000 and (ii) $250,000 isthrough ~~summarized~~a ~~below:~~promissory note originally due March 5, 2017, was extended to January 1, 2019, and recently extended to January 1, 2020.

Furniture & Fixtures, Software, Equipment	$	35,556
Deposit – office rent		8,340
Prepaid expenses		27,616
Note Payable – insurance		(6,822	)
Leasehold rights		1,030,310
Total purchase price	$	1,095,000

In conjunction with the acquisition, the Company agreed to pay $1,250,000 of Sydson’s future development costs attributable to its retained working interests in the oil and gas prospects conveyed to the Company and carried interests to casing point for Sydson’s working interests on the first well in each of the West Tuleta prospect, Ray Field prospect and the Wilinda prospect.

~~At December~~The ~~31,~~purchase ~~2017,~~price ~~the~~of ~~properties~~this ~~were~~asset ~~evaluated for impairment~~acquisition ~~and~~is ~~the~~summarized ~~Company recorded $156,082 to impairment expense.~~below:

The Company has $39,712 of furniture and fixtures, software and equipment. The majority of the assets were acquired during the Sydson acquisition in January 2017. The accumulated depreciation as of December 31, 2017 is $6,936. Depreciation is being recorded using the straight line method of depreciation.

Furniture & Fixtures, Software, Equipment	$	35,556
Deposit – office rent		8,340
Prepaid expenses		27,616
Note Payable – insurance		(6,822	)
Leasehold rights		1,030,310
Total purchase price	$	1,095,000

~~NOTE 5~~Other ~~– COMMON STOCK~~Property

The Company has ~~950,000,000 shares of common stock authorized with a par value of~~ $~~0.001. As of December 31~~43,195 ~~2017 the Company has 821,790,670 shares~~ of ~~common~~furniture ~~stock issued~~ and ~~outstanding. During the year ended December 31~~ fixtures, ~~2017,~~software ~~the~~and ~~Company sold 33,250,000 shares of stock at a price of $~~equipment.02 ~~per~~The ~~share for~~majority ~~a total~~ of ~~$665,000,~~the ~~and~~assets ~~issued~~were ~~22,500,000~~acquired ~~shares~~during ofthe ~~common~~Sydson ~~stock~~acquisition ~~upon~~in ~~conversion~~January ~~of $450,000 of convertible debt~~2017. The ~~Company~~accumulated ~~issued~~depreciation ~~112,550,000~~as ~~shares~~ of ~~stock~~December ~~for~~31, ~~services~~2018 ~~rendered~~is ~~valued between~~ $~~0.005 and $0.00845~~15, ~~including 65~~018.1 ~~million~~Depreciation ~~shares~~is ~~to Mr.~~being ~~Connally~~recorded ~~and~~using 27the ~~million~~straight ~~shares~~line tomethod ~~Mr.~~of ~~Askew~~depreciation. ~~Mr. Mayell was issued 100,000,000 shares in January, 2017 in connection with the asset purchase from Sydson.~~

~~As of~~NOTE ~~December~~5 ~~31,~~– ~~2017,~~COMMON ~~the Company has not granted any stock options.~~STOCK

~~F-9~~The Company has 1,500,000,000 shares of common stock authorized with a par value of $0.001. As of December 31, 2018 the Company has 998,449,769 shares of common stock issued and outstanding. During the year ended December 31, 2018, the Company sold 66,683,350 shares of stock at a price of $.02 per share for a total of $1,166,999. During the year ended December 31, 2018 the Company also issued 20,000,000 shares in exchange for lease brokerage fees valued at $400,000, issued 250,000 shares in exchange for consulting fees totaling $5,000, issued 63,198,147 shares in exchange for the conversion of $1,554,953 of debt and accrued interest, issued 20,600,000 shares in exchange for settlements valued at $412,000 and issued 5,927,602 shares to three employees and a consultant for services rendered for $86,121.

~~NOTE 6~~As –of ~~RELATED~~December ~~PARTY~~31, ~~TRANSACTIONS~~2018, the Company has not granted any stock options.

During the year ended December 31, 2016, the Company made cash payments and issued Mr. James Askew (former CEO) 14 million shares of common stock in exchange for $280,000 of the accrued compensation. Additionally, in accordance with the employment agreement, the Company paid Mr. Askew $420,000 for compensation and a $50,000 bonus for the fiscal year ended October 31, 2016. During the two month period ending December 31, 2016, the Company paid him $105,000 in compensation, $9,000 in bonuses and $38,030 for expense reimbursements. A prepayment of the January 2017 consulting agreement of $35,000 was included in the $105,000 compensation payments as of December 31, 2016.F-10

~~Mr. Askew,~~NOTE ~~our~~6 ~~former~~– ~~chief~~RELATED ~~executive~~PARTY ~~officer and director for over three years, is currently a consultant to the Company. He resigned~~TRANSACTIONS effective January 3, 2017 and signed a consulting agreement which is discussed in more detail in footnote 12 “Commitments and Contingencies”. As of December 31, 2017, the Company has accrued eleven months of Mr. Askew’s consulting agreement totaling $385,000. This accrual is reported on the balance sheet as “Accrued expenses – related party”.

~~The Company~~As ~~had~~of ~~received~~December ~~unsecured~~31, ~~advances~~2018, ~~prior~~Sydson toowes ~~2014 from a former director in~~ the Company ~~amount of~~ $524,~~152.~~302 ~~The~~which ~~amount~~is ofreported ~~$42,324~~on ~~due to~~ the ~~related~~balance ~~party~~sheet ~~was written off during the quarter ended March 31, 2017 and recorded~~ as “~~Other~~Accounts ~~Income”~~receivable as- ~~a result of the expiration of the applicable statute of limitations. The remaining balance of $9,828 is recorded within the ‘Due to~~ related party~~’ line on the balance sheet~~”.

~~In March~~Mr. ~~2014~~Askew, ~~the~~our ~~Company acquired 5,000,000 shares of restricted GulfSlope common stock from the Company’s~~ former ~~sole~~chief executive officer and director ~~James Askew~~ for aover ~~purchase~~three ~~price of $268~~years,~~000.~~ Atis ~~the~~currently ~~time~~a ofconsultant to the ~~acquisition, Mr~~Company. ~~Askew~~He ~~was also a director of GulfSlope. Mr. Askew~~ resigned ~~as a director of GulfSlope~~ effective ~~March~~January 273, ~~2014.~~2017 ~~During~~and ~~the~~signed ~~year~~a consulting ~~ended~~agreement ~~December~~and ~~31,~~was ~~2016,~~issued ~~the~~27 ~~Company~~million ~~recorded an~~shares ~~unrealized~~which ~~loss~~is ofdiscussed ~~$185,000~~in tomore ~~adjust~~detail ~~the~~in ~~investment~~footnote ~~securities~~12 to“Commitments ~~fair~~and ~~market value~~Contingencies”. As Inof ~~February~~December ~~2016~~31, 2018, the Company ~~sold~~has ~~the 5,000,000~~accrued ~~shares~~twenty-three months of ~~GulfSlope~~Mr. ~~common~~Askew’s ~~stock~~consulting ~~with~~agreement atotaling ~~cost value of~~ $~~268~~805,000. This ~~for~~accrual ~~cash~~is ~~proceeds~~reported ofon ~~$50,000~~the ~~and~~balance ~~recorded~~sheet aas ~~realized loss~~“Accrued ofexpenses ~~$218,000~~– related party”.

~~Mr.~~The ~~Mayell,~~Company ~~our~~had ~~current~~received ~~chief~~unsecured ~~executive officer~~advances ~~and~~prior ~~director~~to ~~effective~~2014 ~~January~~from 4,a ~~2017,~~former isdirector ~~President~~in ~~of Sydson Energy, Inc. and Managing Partner of~~ the ~~General~~amount ~~Partner~~ of ~~Sydson Resources~~$52, ~~LP (“Sydson”)~~152. ~~During~~The ~~the~~amount ~~year~~of ~~ended December 31~~$42,324 ~~2017,~~due ~~Sydson and Mr. Mayell paid invoices on behalf of the Company and advanced loans~~ to the ~~Company.~~related Onparty ~~August~~was ~~11,~~written ~~2017~~off ~~the Company signed a note payable agreement with Sydson for~~during ~~$70,000 which represents a portion of~~ the ~~balance~~quarter ~~owed~~ended toMarch ~~Sydson~~31, ~~with~~2017 ~~the~~and ~~remainder~~recorded ~~reported~~ as “~~Accounts~~Other ~~Payable – related party~~Income” onas ~~the balance sheet. Also on August 11, 2017 the Company signed~~ a ~~note~~result ~~payable agreement with Mr. Mayell for $47,000 which represents some~~ of the ~~advances~~expiration ~~Mr. Mayell made to the Company. As~~ of ~~December 31, 2017,~~ the ~~Company~~applicable ~~owes Sydson~~statute ~~$42,759 and Mr. Mayell $159,053 which are reported on the balance sheet as “Accounts payable - related party” for a total~~ of ~~$201,812~~limitations. The ~~note~~remaining ~~payable~~balance ~~balances as~~ of ~~December 31, 2017 are~~ $709,~~000~~828 towas ~~Sydson~~written ~~and~~off ~~$47,000~~during ~~to Mr. Mayell and are reported on~~ the ~~balance~~quarter ~~sheet~~ended ~~under~~March ~~current liabilities as “Convertible notes payable – related party”. The accrued interest on these notes is $4,560 as of December~~ 31, ~~2017, $2,728 payable to Sydson and $1,832 payable to Mr~~2018. ~~Mayell.~~

~~The~~Mr. Mayell, our current chief executive ~~Company~~officer ~~has~~and ~~$420~~director effective January 4,~~000~~ 2017, is President of ~~compensation~~Sydson ~~accrued~~Energy, toInc. and Managing Partner of the General Partner of Sydson Resources, LP (“Sydson”). During the year ended December 31, 2017, Sydson and Mr. Mayell paid invoices on behalf of the Company and advanced loans to the Company. On August 11, 2017 the Company signed a note payable agreement with Sydson for $~~410~~70,000 which represents a portion of the balance owed to ~~Mr.~~Sydson, ~~Connally~~with the remainder reported as of“Accounts ~~December~~Payable 31– related party” on the balance sheet. Also on August 11, 2017 ~~totaling~~ the Company signed a note payable agreement with Mr. Mayell for $~~830~~47,000. ~~Payroll~~which ~~taxes~~represents ~~totaling~~some ~~$64,272~~of ~~related~~the advances Mr. Mayell made to the ~~accrued~~Company. ~~compensation~~The ~~have~~note ~~been~~payable ~~accrued.~~balances ~~These~~as ~~accruals~~of ~~total~~December ~~$894~~31,~~272~~ ~~and~~2018 are ~~reported~~$70,000 ~~within~~to ~~“Accrued~~Sydson ~~expenses~~and –$47,000 ~~related~~to ~~party”~~Mr. asMayell ~~long~~and ~~term~~are ~~liabilities~~reported on the balance sheet under current liabilities as “Convertible notes payable – related party”. The ~~due~~ ~~dates~~accrued ~~for~~interest on these ~~liabilities~~notes ~~are~~is $16,260 as of December 31, ~~2019~~2018, as$9,728 apayable to ~~result~~Sydson ofand ~~amendments~~$6,532 ~~dated~~payable ~~March~~to 1,Mr. ~~2017~~Mayell. toDuring ~~the~~March ~~compensation~~2019 ~~agreements. The~~the Company ~~has~~ paid ~~Mr.~~Sydson ~~Connally~~$46,333 ~~approximately~~on the $~~100~~70,000 ~~for~~note ~~expense~~payable ~~reimbursements~~balance and $1,167 of accrued interest.

~~In January~~As ~~2017~~discussed in Note 8, the Company ~~issued~~owes Sydson ~~shares~~$250,000 ofplus ~~stock~~accrued tointerest ~~the~~totaling ~~following~~$55,098 ~~related~~on ~~parties:~~a ~~Mr.~~note ~~Askew~~related 27to ~~million~~the ~~shares,~~acquisition Mrof Sydson assets. ~~Mayell~~During ~~100~~January 2019 ~~million~~the ~~shares~~interest ~~and~~accrued ~~Mr.~~as ~~Connally~~of ~~65.1~~December ~~million~~31, ~~shares.~~2018 ~~See~~was ~~note~~paid 10and ~~“Commitments~~the ~~and~~terms ~~contingencies”~~were ~~for~~extended ~~additional~~to ~~information~~January 1, 2020.

As Also discussed in Note 78, Mr. Mayell and JTB Energy LLC, a company managed by Mr. Mayell, have each loaned the Company ~~owes~~$250,000. ~~Sydson~~During 2018 $~~250~~28,000 ~~plus~~was ~~accrued~~paid ~~interest~~to –Mr. ~~long~~Mayell on ~~term~~his ~~totaling~~notes payable leaving a balance of $26222,~~178~~000. onInterest aexpense ~~note~~has ~~related~~been accrued as of December 31, 2018 for $39,044 to Mr. Mayell and $40,556 to ~~the~~JTB ~~acquisition~~Energy LLC. JTB Energy LLC is a related party of ~~Sydson~~Mr. ~~assets~~Mayell.

Also discussed in Note 8, Mr. Mayell ~~and~~loaned the ~~JTB~~Company ~~Energy~~a ~~LLC,~~total aof ~~company~~$220,000 ~~managed~~during byOctober Mr2017. ~~Mayell,~~The ~~have~~accrued ~~each~~interest ~~loaned~~on ~~the~~these ~~Company~~notes ~~$250,000.~~payable ~~Interest expense~~total of $1527,~~556~~021 ~~to each has been accrued~~ as of December 31, ~~2017~~ 2018. ~~JTB Energy LLC is a related party of Mr. Mayell.~~

~~Also discussed~~Listed inbelow ~~Note~~is 8,a ~~Mr.~~table ~~Mayell~~summarizing ~~loaned~~ the amounts ~~Company~~owed ato ~~total of $220,000 during October 2017~~Mr. ~~The~~Mayell ~~accrued~~and ~~interest~~his onrelated ~~these notes payable total $5,022 as of December 31, 2017~~parties.

During December 2017, the Company received a loan of $50,000 from a shareholder. The note and interest is due January 1, 2019 with an interest rate of 10% per annum. During the outstanding period, the note is convertible at the option of the investor up to the outstanding principal and unpaid interest into common shares at $0.02 per share. The note is reported as “Convertible Notes Payable – related party” under long term liabilities on the balance sheet.

Name of Related Party	Original Amount		Amount repaid			Balance owed 12/31/18		Accrued Interest		Total owed		Interest rate			Convertible into Shares of Stock
Mr. Michael Mayell		686,630		(197,630	)		489,000		72,597		561,597		10	%		Yes
Sydson Energy, Inc.		360,115		(295,617	)		64,498		9,728		74,226		10	%		Partial
Sydson Resources, LP		382,500		(131,300	)		251,200		55,098		306,298		10	%		Yes
JTB Energy, LLC		250,000		0			250,000		40,556		290,556		10	%		Yes
Total	$	1,679,245	($	624,547	)	$	1,054,698	$	177,979	$	1,232,677

F-During December 2017, the Company received a loan of $50,000 from a shareholder. The note and interest was due January 1, 2019 with an interest rate of 10% per annum, however the note was extended to January 1, 2020. During the outstanding period, the note is convertible at the option of the investor up to the outstanding principal and unpaid interest into common shares at $0.02 per share. The note is reported as “Convertible Notes Payable – related party” under long term liabilities on the balance sheet.

~~NOTE 7 – NOTES PAYABLE~~F-11

~~The Company~~NOTE ~~had~~7 ~~received~~– ~~unsecured~~NOTES advances prior to 2014 from a former director in the amount of $52,152. The amount of $42,324 due to the related party was written off during the quarter ended March 31, 2017 and recorded as “Other Income” as a result of the expiration of the applicable statute of limitations. The remaining balance of $9,828 is recorded within the ‘Due to related party’ line on the balance sheet as a current liability.PAYABLE

~~In connection~~The ~~with~~Company ~~the~~had ~~Sydson~~received ~~asset~~unsecured ~~acquisition,~~advances prior ~~part~~to of2014 ~~the~~from ~~consideration~~a ~~was~~former andirector ~~unsecured~~in ~~$250,000~~the ~~note~~amount ~~payable~~of ~~to Sydson due March 1~~$52, ~~2017~~152. The ~~note~~amount ~~has~~of ~~been~~$42,324 ~~amended~~due ~~effective~~to ~~March~~the ~~23,~~related ~~2017~~party towas ~~extend~~written off during the ~~due~~quarter ~~date~~ended toMarch ~~January 1~~31, ~~2019~~2017 and torecorded ~~charge~~as “Other Income” as a ~~fixed~~result ~~rate~~ of ~~10%~~the ~~interest~~expiration onof the ~~note~~applicable statute of limitations. The remaining balance of $~~250~~9,~~000~~828 iswas ~~included~~written inoff ~~“Notes~~during ~~payable-related party” in~~ the ~~long~~quarter ~~term section~~ended ofMarch ~~the~~31, ~~balance sheet~~2018.

~~The company~~In ~~financed~~connection with the ~~current~~Sydson ~~year~~asset ~~insurance~~acquisition, part ~~premiums~~of ~~and~~the ~~that~~consideration ~~note~~was ~~has~~an aunsecured ~~balance of~~ $9250,~~620~~000 asnote ofpayable ~~December~~to 31Sydson due March 1, 2017. This note payable is ~~reported~~now asa ~~“Notes~~convertible note ~~payable”~~and ~~under~~is ~~current~~disclosed ~~liabilities~~in onNote ~~the~~8 ~~balance~~– ~~sheet~~Convertible Notes Payable.

~~NOTE~~The company financed the current year insurance 8premiums –and ~~CONVERTIBLE~~that ~~NOTES~~note ~~PAYABLE~~has a balance of $9,773 as of December 31, 2018. This note is reported as “Notes payable” under current liabilities on the balance sheet.

~~Effective March~~NOTE ~~23,~~8 ~~2017~~– ~~the~~CONVERTIBLE ~~Company~~NOTES extended an unsecured promissory note with an accredited investor in the amount of $1,700,000 to a payment date of January 1, 2019. The note was reduced by the assignment of a $131,645 note receivable from EnerGulf Resources to the investor. On September 18, 2017 the Company converted $450,000 of the principal amount of the note into 22,500,000 shares of the Company’s common stock at a conversion price of $0.02 per share. As of December 31, 2017 the outstanding principal balance is $1,118,355 and is reported as “Convertible Notes Payable” under long term liabilities on the balance sheet. Subsequent to yearend the Company converted an additional $400,000 of the principal balance into 15,000,000 shares of the Company’s common stock. The principal balance of $200,000 was converted at a conversion price of $0.02 and the principal balance of $200,000 was converted at a conversion price of $0.04. The amended note agreement now states that the note is convertible into common shares at $0.04 per share at the option of the investor up to $600,000 of the outstanding principal and accrued interest. The due date of the note payable was also extended to January 1, 2020.PAYABLE

~~During April~~Effective ~~2017~~March 23, 2017 the Company ~~received~~extended an aunsecured ~~loan~~promissory note with an accredited investor in the amount of $~~125~~1,700,000 ~~from~~to Mra payment date of January 1, 2019. ~~Mayell~~The note ~~and~~was areduced ~~loan~~by the assignment of a $~~125~~131,~~000~~645 note receivable from ~~JTB~~EnerGulf ~~Energy,~~Resources ~~LLC~~to the investor. ~~Both~~On ~~loans~~September ~~are~~18, 2017 ~~secured~~the byCompany aconverted 5%$450,000 ~~interest~~of inthe principal amount of the ~~$10~~note into 22,~~000~~500,000 ~~offshore~~shares ~~leases,~~of ~~payable~~the ~~upon~~Company’s ~~demand~~common ~~with~~stock ~~interest~~at a ~~rates~~conversion price of ~~10%~~$0.02 per ~~annum~~share. ~~During~~ As of December 31, 2017 the outstanding ~~period~~principal balance was $1,118,355 and was reported as “Convertible Notes Payable” under long term liabilities on the ~~notes~~balance ~~are~~sheet. During ~~convertible~~the atquarter ending March 31, 2018, the ~~option~~Company converted an additional $400,000 of the ~~investor~~principal upbalance tointo 15,000,000 shares of the ~~outstanding~~Company’s common stock. The transaction was broken down as follows, the principal ~~and~~balance ~~accrued~~of ~~interest into~~$200,000 ~~common~~was ~~shares~~converted at a conversion price of $0.02 and ~~per~~the ~~share~~principal balance of $200,000 was converted at a conversion price of $0.04. ~~These~~During ~~loans~~the ~~are~~second ~~both~~quarter ~~considered~~of ~~related~~2018 ~~party~~another ~~transactions~~$200,000 of the principal balance was converted into 10,000,000 share of common stock at a conversion price of $0. 02. The ~~notes~~amended ~~are~~note ~~reported~~agreement asnow ~~“Convertible~~states ~~notes~~that ~~payable~~the –note ~~related~~is ~~party”~~convertible ~~under~~into ~~current~~common ~~liabilities~~shares at an average calculated price not to be below $0.02 or to exceed $0.04 per share. The ~~notes~~conversion ~~are~~is ~~convertible~~at the option of the investor up to the balance of the outstanding principal and accrued interest. Effective July 20, 2018, the remaining principal balance of $518,355 plus the accrued interest of $436,599 was converted into ~~common~~38,198,147 shares of the Company’s common stock at a conversion rate of $0.02025 per share.

~~During June~~In ~~2017,~~connection with the ~~Company~~Sydson ~~received~~asset anacquisition, part ~~additional~~of ~~loan~~the ofconsideration was an unsecured $~~125~~250,000 ~~from~~note ~~Mr.~~payable ~~Mayell~~to ~~and~~Sydson andue ~~additional~~March ~~loan~~1, of2017. ~~$125,000~~The ~~from~~note ~~JTB~~was ~~Energy,~~amended effective March ~~LLC.~~23, ~~Both~~2017 ~~loans~~to ~~are~~extend ~~secured~~the bydue date to January 1, 2019 and to charge a 5fixed rate of 10% interest inon the ~~$10~~note. During January 2019,~~000,000~~ the ~~offshore~~due ~~leases~~date was extended to January 1, ~~all~~2020 ~~payable~~and ~~upon~~the ~~demand~~note ~~with~~was ~~interest~~amended ~~rates~~to allow for the conversion of ~~10%~~ ~~per~~the ~~annum~~note into shares of common stock. During the outstanding period, the ~~notes~~note ~~are~~is convertible at the option of the ~~investor~~Sydson up to the outstanding principal and ~~accrued~~ unpaid interest into common shares at $0.02 per share. ~~These~~The ~~loans~~balance ~~are~~of ~~both~~$250,000 ~~considered~~is ~~related~~included ~~party~~in ~~transactions. The notes are reported as~~ “Convertible ~~notes~~Notes payable – -related party” ~~under~~in ~~current~~the ~~liabilities.~~long ~~The~~term ~~notes~~section ~~are~~of ~~convertible up to~~ the ~~outstanding~~balance ~~principal and accrued interest into common shares at $0~~sheet.~~02 per share.~~

During ~~August~~ April 2017, the Company ~~converted~~ received a ~~portion~~loan of ~~the~~$125,000 ~~accounts~~from ~~payable balances owed to Sydson and~~ Mr. Mayell toand ~~note~~a ~~payable~~loan ~~agreements~~of $125, ~~charging~~000 ~~interest~~from atJTB ~~10%~~Energy, ~~per annum~~LLC. Both ~~Sydson~~loans ~~and~~are ~~Mr.~~secured ~~Mayell~~by ~~had~~a ~~advanced~~5% ~~money~~interest toin the ~~Company and paid invoices on behalf of~~ ~~the Company~~$10,000,000 ~~which~~offshore ~~had~~leases, ~~previously~~payable ~~been~~upon ~~reported~~demand aswith ~~“Accounts~~interest ~~payable~~rates –of ~~related~~10% ~~party”~~per annum. ~~The~~During ~~Company~~the ~~converted $70~~outstanding period,~~000~~ ~~into~~the anotes are ~~note~~convertible ~~payable~~at tothe ~~Sydson~~option ~~and~~of ~~$47,000~~the ~~into~~investor aup ~~note~~to ~~payable~~the tooutstanding ~~Mr.~~principal ~~Mayell.~~and ~~The~~accrued ~~remaining~~interest ~~balances~~into ~~owed~~common toshares ~~them~~at ~~will~~$0.02 ~~continue~~per toshare. beThese ~~reported~~loans asare ~~“Accounts~~both ~~payable~~considered – related party”. transactions. The notes are reported as “Convertible ~~notes~~ notes payable – related party” under current liabilities. ~~The~~During ~~notes~~June ~~are~~2018 ~~convertible~~the upCompany topaid ~~the~~$18,000 ~~outstanding~~and ~~principal~~during July 2018 ~~and~~the ~~accrued~~Company ~~interest~~paid ~~into~~an ~~common~~additional ~~shares~~$10,000 aton this note payable leaving a balance of $~~0.02~~97,000 ~~per~~as ~~share~~of December 31, 2018.

During ~~October~~ June 2017, the Company received an ~~loans~~additional loan of $~~170~~125,000 from Mr. Mayell and an additional loan of $50125,000 from ~~Mr.~~JTB ~~Mayell~~Energy, LLC. Both loans are secured by a 5% interest in the $10,000,000 offshore leases, all payable upon demand with interest rates of 10% per annum. During the outstanding period, the notes are convertible at the option of the investor up to the outstanding principal and accrued interest into common shares at $0.02 per share. These loans are both considered related party transactions. ~~and~~The notes are reported as “Convertible notes payable – related party” under current liabilities.

During ~~December~~August 2017, the Company ~~received~~ converted a ~~loan~~portion of ~~$50,000~~the ~~from~~accounts apayable ~~shareholder~~balances owed to Sydson and Mr. ~~The~~Mayell to note payable agreements, charging interest at 10% per annum. Both Sydson and ~~interest~~Mr. isMayell ~~due~~had ~~January~~advanced 1,money ~~2019~~to ~~with~~the anCompany ~~interest~~and ~~rate~~paid invoices on behalf of ~~10%~~the ~~per~~Company, ~~annum~~which had previously been reported as “Accounts payable – related party”. ~~During~~The ~~the~~Company ~~outstanding~~converted ~~period~~$70,000 ~~the~~into a note ispayable ~~convertible~~to Sydson atand ~~the~~$47,000 ~~option~~into ofa ~~the~~note ~~investor~~payable to Mr. Mayell. The notes are reported as “Convertible notes payable – related party” under current liabilities. The notes are convertible up to the outstanding principal and ~~unpaid~~accrued interest into common shares at $0.02 per share. ~~The~~During ~~note is~~March ~~reported~~2019 asthe ~~“Convertible~~Company ~~Notes~~paid ~~Payable~~Sydson –$46,333 ~~related~~on ~~party”~~the ~~under~~$70,000 ~~long~~note ~~term~~payable ~~liabilities~~balance onand ~~the~~$1,167 ~~balance~~of ~~sheet~~accrued interest.

~~F-11~~During October 2017, the Company received loans of $170,000 and $50,000 from Mr. Mayell. Both loans are secured by a 5% interest in the $10,000,000 offshore leases, payable upon demand with interest rates of 10% per annum. During the outstanding period, the notes are convertible at the option of the investor up to the outstanding principal and accrued interest into common shares at $0.02 per share. These loans are both considered related party transactions and are reported as “Convertible notes payable – related party under current liabilities.

~~NOTE~~During December 2017, the Company received 9a loan of $50,000 from a shareholder. The note and interest was due January 1, 2019 with an interest rate of 10% per annum, however during January 2019, the terms were extended to January 1, 2020. During the outstanding period, the note is convertible at the option of the investor up to the outstanding principal and unpaid interest into common shares at $0.02 per share. The note is reported as “Convertible Notes Payable – ~~NOTES~~related ~~RECEIVABLE~~party” under long term liabilities on the balance sheet.

In October 2016, the Company loaned the principal amount of $47,138 to a third party under an interest free, demand promissory note agreement for the purpose of travel expenses and rentals. Subsequent to October 2016, the note was further increased to $68,498 as of December 31, 2016. During March 2017, the note was further increased to $131,645 and then assigned to an investor as a reduction in the note payable balance leaving a notes receivable balance of zero as of December 31, 2017. See note 8 for further information.F-12

NOTE 10 9 – ~~INCOME~~NOTES ~~TAXES~~RECEIVABLE

~~The Company~~In ~~follows~~October ~~ASC~~2016, ~~740.~~the ~~Deferred~~Company ~~income~~loaned ~~taxes reflect~~ the principal ~~net~~amount ~~effect~~ of ~~(a)~~$47,138 ~~temporary~~to ~~difference~~a ~~between~~third ~~carrying~~party ~~amounts~~under ~~of assets~~an ~~and~~interest ~~liabilities~~free, ~~for~~demand ~~financial~~promissory ~~purposes~~note ~~and~~agreement for the ~~amounts~~purpose ~~used~~of ~~for~~travel expenses ~~income~~and ~~tax~~rentals. ~~reporting~~Subsequent ~~purposes,~~to ~~and~~October ~~(b)~~2016, ~~net~~the ~~operating~~note ~~loss carryforwards.~~was Nofurther ~~net~~increased ~~provision~~to ~~for~~$68,498 ~~refundable~~as ~~Federal~~of ~~income~~December ~~tax~~31, ~~has~~2016. ~~been~~During ~~made~~March 2017, in the ~~accompanying~~note ~~statement~~was offurther ~~loss~~increased ~~because no~~to ~~recoverable~~$131,645 ~~taxes~~and ~~were~~then ~~paid~~assigned ~~previously.~~to ~~Similarly,~~an noinvestor ~~deferred~~as ~~tax~~a ~~asset~~reduction ~~attributable~~in to the ~~net~~note ~~operating~~payable ~~loss~~balance ~~carryforward~~leaving ~~has~~a ~~been~~notes ~~recognized,~~receivable balance of zero as itof isDecember ~~not~~31, ~~deemed~~2018. ~~likely~~See tonote be8 ~~realized~~for further information.

~~The provision~~NOTE ~~for~~10 ~~refundable~~– ~~federal~~INCOME ~~income tax consists of the following for the periods ending:~~TAXES

	December 31, 2017			December 31, 2016
Federal income tax benefit at the statutory rate:
Net loss	$	(693,000	)	$	(715,000	)
Effect of rate change		715,000			—
Change in valuation allowance		(22,000	)		715,000
Net benefit	$	—		$	—

The Company follows ASC 740. Deferred income taxes reflect the net effect of (a) temporary difference between carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carryforwards. No net provision for refundable Federal income tax has been made in the accompanying statement of loss because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carryforward has been recognized, as it is not deemed likely to be realized.

The ~~cumulative~~provision ~~tax~~for ~~effect~~refundable atfederal ~~the~~income tax ~~expected~~consists ~~rate~~ of ~~34%~~the offollowing ~~significant~~for ~~items~~the ~~comprising~~periods ~~our net deferred tax amount is as follows~~ending:

	December 31, 2017			December 31, 2016
	December 31, 2018			December 31, 2017
Deferred tax attributed:
Federal income tax benefit at the statutory rate:
Net operating loss carryover	$	3,300,000		$	2,041,000
Federal income tax at statutory rate of 21%	$	(540,000	)	$	(693,000	)
Effect of rate change		~~(2,607,000~~—	)		—715,000
Less: valuation allowance		(693,000	)		(2,041,000	)
Change in valuation allowance		540,000			(22,000	)
Net deferred tax asset	$	—		$	—
Net benefit	$	—		$	—

AtThe significant ~~December~~items ~~31,~~comprising ~~2017,~~our ~~the Company had an unused~~ net ~~operating~~deferred ~~loss~~tax ~~carryforward~~amount ~~approximating $9,700,000 that~~ is ~~available to~~as offset future taxable income; the loss carryforward will start to expire in 2028. The Company’s tax returns are open to audit under the statute of limitations for the years ending 2014 through 2016 for federal tax purposes.follows:

Effect of New Federal Tax Reform Legislation

	December 31, 2018			December 31, 2017
Deferred tax attributed:
Net operating loss carryover	$	2,700,000		$	3,300,000
Effect of rate change		—			(2,607,000	)
Less: valuation allowance		(2,700,000	)		(693,000	)
Net deferred tax asset	$	—		$	—

OnAt December 2231, ~~2017~~2018, ~~new federal tax reform legislation was enacted in~~ the ~~United~~Company ~~States (the “2017~~had ~~Tax~~an ~~Act”),~~unused ~~resulting~~net inoperating ~~significant~~loss ~~changes~~carryforward ~~from~~approximating ~~previous~~$12,800,000 ~~tax~~that ~~law.~~is ~~The~~available ~~2017~~to ~~Tax~~offset ~~Act~~future ~~reduces~~taxable income; the ~~federal corporate income~~loss ~~tax~~carryforward ~~rate~~will start to ~~21%~~expire ~~from~~in ~~35% effective January 1, 2018~~2028. The ~~rate~~Company’s ~~change,~~tax ~~along~~returns ~~with~~are ~~certain~~open ~~immaterial~~to ~~changes~~audit inunder ~~tax~~the ~~basis~~statute ~~resulting~~of limitations ~~from~~for the ~~2017~~years ~~Tax~~ending ~~Act,~~2016 ~~resulted~~through in2018 afor ~~reduction~~federal ~~of the Company’s deferred~~ tax ~~assets of $7,947,029 and a corresponding reduction in the valuation allowance~~purposes.

F-1213

NOTE 11 – FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company adopted the FASB standard related to fair value measurement at inception. The standard defines fair value, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The standard applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. The standard clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The recorded values of long-term debt approximate their fair values, as interest approximates market rates. As a basis for considering such assumptions, the standard established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows.

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The Company’s financial instruments are cash and accounts payable. The recorded values of cash and accounts payable approximate their fair values based on their short-term nature.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

See Note 6 for a discussion of Mr. Askew’s employment agreement and the Company’s financial obligations with respect thereto. Mr. Askew resigned as an executive officer and director of Texas South in January 2017 and entered into a consulting agreement with the Company that began on January 5, ~~2017~~ 2017 and terminates on December 31, 2020, and such term shall be extended for an additional one-year period upon December 31 of ~~each~~ each calendar year, provided that neither the Company nor consultant notify the other on or prior to 90 days before the applicable ~~December~~ December 31st that either party does not intend to extend this agreement. The Company shall pay to Mr. Askew $35,000 net per month and issued Mr. Askew 27 million shares of Company common stock. Upon termination of Mr. Askew by the Company other than for cause, Mr. Askew is entitled to receive three years of his then consulting compensation as severance.

The Company entered into an employment ~~agreement~~ agreement with John B. Connally III to serve as chairman of the board that began on January 5, 2017 and terminates on December 31, 2020. The Company issued 65.1 million common shares to Mr. Connally. Upon December 31 of each calendar year, the term shall be extended for one additional year, provided that neither the Company nor Mr. Connally notify the other on or prior to 90 days before the applicable December 31st date that either party does not intend to extend this agreement. The Company shall pay to Mr. Connally a base salary of $420,000 per annum, issued him 65.1 million shares, and Mr. Connally shall be entitled to standard and customary benefits. Mr. Connally has agreed to standard non-disclosure provisions. Upon termination of Mr. Connally by the Company other than for cause, Mr. Connally is entitled to receive three years of his then compensation as severance.

The Company entered into an employment ~~agreement~~ agreement with Mr. Mayell on January 4, 2017 that terminates on December 31, 2020. The Company issued Mr. Mayell 100 million common shares. Upon December 31 of each calendar year, the term shall be extended for one additional year, provided that neither the Company nor Mr. Mayell notify the other on or prior to 90 days before the applicable December 31st date that either party does not intend to extend this agreement. The Company shall pay to Mr. Mayell a base salary of $420,000 per annum and Mr. Mayell shall be entitled to standard and customary benefits. Mr. Mayell has agreed to standard non-disclosure and non-competition provisions. Upon termination of Mr. Mayell by the Company other than for cause, Mr. Mayell is entitled to receive three years of his then compensation as severance.

Effective March 1, 2017 the above mentioned employment agreements with Mr. Connally and Mr. Mayell were amended to extend the due dates. The payments are now due at the end of the terms of the agreements, which is December 31, 2020. These liabilities are accrued in the financial statements for the ~~year~~ year ended December 31, ~~2017~~2018 however they are now reported as long term on the balance sheet.

~~F-13~~In April 2018, the employment agreements for Mr. Mayell and Mr. Connally were amended, whereby all or a portion of the compensation owed to Mr. Mayell and Mr. Connally for the period from January 2017 through April 30, 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at $0.02 per share. In October 2018, the employment agreements for Mr. Mayell and Mr. Connally were amended, whereby all or a portion of the compensation owed to Mr. Mayell and Mr. Connally for the period from May 2018 through September 30, 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at $0.02 per share. In January 2019, the employment agreements for Mr. Mayell and Mr. Connally were amended, whereby all or a portion of the compensation owed to Mr. Mayell and Mr. Connally for the period from October 2018 through December 31, 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at $0.02 per share. As of the filing date of this report, neither has elected to convert the compensation owed into common stock. If all of the compensation owed was converted into shares of stock, Mr. Mayell would receive 42,000,000 shares and Mr. Connally would receive 41,500,000 shares.

~~NOTE~~In July 2018, the consulting agreement 13for –Mr. ~~SUBSEQUENT~~Askew ~~EVENTS~~was amended, whereby all or a portion of the compensation owed to Mr. Askew for the period from February 2017 through April 30, 2018 can be paid by the Company, at the option of the consultant, in restricted shares of the Company’s common stock valued at $0.02 per share. The total owed to Mr. Askew for that period was $525,000. If all of the compensation owed was converted into shares of stock, Mr. Askew would receive 26,250,000 shares of common stock. Mr. Askew has not elected to convert the currently owed compensation.

OnUnder the terms of the Agreement, the Parties ~~January~~have 12committed to initially drill two of the Company’s prospects in Phase I (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, ~~2018~~three-well drilling phase (collectively, the “Phases”). In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company ~~converted~~will thus retain a 5% working interest while paying 2% of the exploratory costs associated with drilling each well. In addition, Delek will pay the Company $~~400~~405,000 ofupon the ~~principal~~filing ~~amount~~ of each exploration plan with BOEM and/or BSEE on a ~~long-term~~Prospect ~~note~~in ~~payable~~each ~~into~~Phase. 15During March 2018 Delek made its first payment of $405,000 to the Company as the initial plan was filed. Delek made a second payment of $405,000 ~~shares~~to the Company during May 2018. Also, each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated with the Prospects. GulfSlope will be the Operator during exploratory drilling of a Prospect, however, subsequent to a commercial discovery, Delek will have the right to become the Operator. Delek will have the right to terminate this Agreement at the conclusion of any drilling Phase. Delek will also have the option to purchase up to 5% of the Company’s common stock upon fulfilling its obligation for each Phase (maximum of 20% in the aggregate) at a ~~conversion~~price per share equal to a 10% discount to the 30-day weighted average closing price offor ~~$200~~the Company’s common stock preceding the acquisition. This option will expire on January 8,~~000~~ ~~principal~~2020. ~~amount~~The Company has not recorded any cost associated with the option due to the future performance obligation of Delek. If Delek meets the obligation and exercises its option the Company will record the option value at $0that time as an increase to Oil and Gas Properties.02 ~~per~~The ~~share~~likelihood of Delek exercising its options to purchase shares of the Company’s common stock will be dependent on the drilling results from Phase 1 and the Company’s operating results which will affect the price of the Company’s common stock. We currently do not anticipate Delek fully exercising this option before the expiration date. At December 31, 2018, the potential value of issuing 20% of our outstanding stock is approximately $~~200~~5,800,000. ~~principal~~The foregoing description of the Agreement does not purport to be a complete description of the terms, provisions and ~~amount~~conditions atof ~~$0.04~~such ~~per~~document, ~~share.~~and ~~(See~~represents ~~footnote~~only 8a ~~“Convertible~~summary ~~notes~~of ~~payable”~~certain ~~for~~of ~~additional~~the ~~information~~principal terms, provisions and conditions thereof.)

~~During January 2018 Mr. Mayell loaned the Company $7,250 which is recorded as accounts payable.~~F-14

OnNOTE ~~January~~13 8,– ~~2018,~~ASSET ~~the~~RETIREMENT ~~Company~~OBLIGATIONS entered into a participation agreement dated effective January 1, 2018 (the “Agreement”) with Delek GOM Investments, LLC, a subsidiary of Delek Group Ltd. (“Delek”), and GulfSlope (collectively, the “Parties”) for the partial farm-out of the Company’s interests in its Gulf of Mexico oil and gas leases (the “Farm-out”). The Agreement sets out the terms and conditions of the Parties participation in the drilling of up to a nine well multi-phase exploration program targeting the Company’s prospects (the “Prospects”) located on the Company’s existing leases (the “Leases”).

~~Under~~During the ~~terms~~fourth quarter of ~~the~~2018 ~~agreement,~~ the ~~parties have committed to initially drill the~~ Company’s ~~“Canoe”~~began ~~and “Tau” prospects (the “Initial Phase”)~~recording ~~with~~liabilities ~~Delek~~for ~~having~~ the ~~option~~estimated tocost participate in two additional two-well drilling phases and a final, three-well drilling phase (collectively, the “Phases”). In August 2017, the Company acquired a 20% working interest in Ship Shoal Block 351 and in Ship Shoal Block 336, which are collectively referred to ~~as the Tau Prospect from GulfSlope and in January 2018~~plug, ~~the~~dismantle Company acquired a 20% working interest in the Vermilion South Addition Block 378 (“Canoe Prospect”) from GulfSlope. In each Phase, Delek will earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. The Company will thus retain a 5% working interest while paying 2% of the exploratory costs associated with drilling each well. In addition, Delek will pay the Company $405,000 upon the filing of each exploration plan with BOEM and~~/or~~ ~~BSEE~~abandon onour ~~a Prospect in each Phase~~wells. ~~Also,~~ ~~each~~These ~~Party~~liabilities will be ~~responsible~~adjusted ~~for~~annually ~~its pro rata share (~~based on ~~working~~changes ~~interest)~~to ~~of delay rentals associated with~~ the ~~Prospects. GulfSlope~~estimated ~~will~~date ~~be the Operator during exploratory drilling of a Prospect, however, subsequent~~ to aretire ~~commercial~~the ~~discovery,~~assets ~~Delek will~~or ~~have~~changes ~~the right~~ to ~~become~~ the ~~Operator.~~estimated ~~Delek~~costs ~~will have the right~~ to ~~terminate~~retire ~~this Agreement at~~ the ~~conclusion~~assets. ofAccretion ~~any drilling~~expense ~~Phase.~~is ~~Delek~~recorded ~~will~~quarterly ~~also~~as ~~have~~ the ~~option~~discounted toliability ~~purchase~~is upaccreted to ~~5% of the Company’s common stock upon fulfilling~~ its ~~obligation for~~expected ~~each~~settlement ~~Phase (maximum of 20% in the aggregate) at a price per share equal to a 10% discount to the 30-day weighted average closing price for the Company’s common stock preceding the acquisition~~value. A ~~This~~summary ~~option will expire on January 8, 2020. The foregoing description~~ of the ~~Agreement does not purport to be a complete description of the terms, provisions and conditions of such document,~~changes ~~and~~in ~~represents~~our ~~only~~asset aretirement ~~summary~~obligation ofis ~~certain~~included ofin the ~~principal~~table ~~terms, provisions and conditions thereof.~~ below:

Asset Retirement Obligations	Year Ended December 31, 2018		Year Ended December 31, 2017

Balance, beginning of year	$	--	$	--
Liabilities recorded		39,966		--
Accretion expense		414		--
Balance, end of year		40,380		--
Less: Current portion		--		--
Long-term portion	$	40,380	$	--

~~During~~NOTE ~~January~~14 1,– ~~2018~~SUBSEQUENT ~~through~~EVENTS ~~March 27, 2018 the Company sold an aggregate of 19,900,000 shares of common stock for $398,000 at a purchase price of $0.02 per share.~~

~~During~~ On January ~~2018~~31, 2019, the Company issued 20 750,000~~,000~~ shares ~~of common stock~~ to ~~Hi-View~~an employee for ~~consulting~~ services ~~provided pursuant to the Advisory Agreement dated October 25, 2017~~rendered. ~~These shares were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 (“Securities Act”).~~

~~During~~Effective ~~February~~January ~~and~~1, ~~March~~2019 ~~2018~~ the Company agreed ~~sold~~to ~~interests~~pay inaccrued ~~the~~interest ~~Wilinda~~totaling ~~prospect~~$5,536 ~~located~~on ~~in Texas. The Company’s share of~~ the ~~proceeds totaled~~ $~~251~~50,~~250.~~000 ~~Leases~~shareholder ~~are being~~note ~~acquired~~payable ~~and~~balance. ~~the~~The ~~Company~~due ~~hopes~~date towas ~~begin~~also ~~drilling~~extended into ~~late~~January 1, ~~2018~~2020.

~~On March~~Effective ~~15,~~January ~~2018~~1, 2019 the Company ~~issued~~extended the andue ~~aggregate~~date to January 1, 2020 on the note payable balance of 3$250,~~022~~000 to Sydson Resources,~~480~~ ~~shares~~LP. The terms were also amended to allow ~~certain~~that ~~employees~~during the outstanding period, the note is convertible at the option of Sydson Resources, LP up to the outstanding principal and aunpaid ~~consultant~~interest into common shares at $0.02 per share. During January 2019 interest totaling $55,098 was paid for ~~services~~accrued ~~rendered~~interest through December 31, 2018.

During January 1and February 2019, ~~2018~~the ~~through~~Company paid ~~March~~Mr. 27Mayell interest totaling $72,598 ~~2018~~on ~~the~~his ~~Company~~note payable balances and paid MrSydson Energy, Inc. ~~Mayell~~interest totaling $809,~~000~~728 ofon its ~~the~~$70,000 ~~accounts~~note payable balance. ~~owed~~These tototals ~~him~~represent asthe oftotal accrued interest through December 31, ~~2017~~2018.

~~F-14~~Effective March 4, 2019 an employee / shareholder of the Company loaned the Company $80,000, payable on demand with an interest rate of 10%. The terms allow the principal and unpaid interest to be convertible at the option of the employee / shareholder into common shares at $0.02 per share.

~~ITEM 9.~~During ~~CHANGES~~March IN2019 ~~AND~~the ~~DISAGREEMENTS~~Company ~~WITH~~paid ~~ACCOUNTANTS~~Sydson ON$46,333 on ~~ACCOUNTING~~the ~~AND~~$70,000 ~~FINANCIAL~~note ~~DISCLOSURE~~payable balance and $1,167 of accrued interest.

~~None~~As of March 15, 2019, the Company has been declared to be in default under the terms of its joint operating agreement with GulfSlope Energy, Inc. regarding the payment of $1,299,229 due as of February 12, 2019 with respect to drilling the Tau Prospect in the Gulf of Mexico Outer Continental Shelf. GulfSlope, the Operator of the Tau Prospect, asserts that additional billings by GulfSlope to the Company during the past 30 days have increased the total amount due to $1,915,304 as of March 15, 2019. Drilling of the Tau Prospect continues which will result in further amounts owed by the Company to GulfSlope. The operating agreement grants a lien and security interest on the Company’s interest in the leases comprising the Tau Prospect, and grants to the operator the right to pursue foreclosure of the lien and security interest. The Company is using its best efforts to raise capital to fund its obligations under the operating agreement with GulfSlope regarding the drilling of the Tau Prospect. If the Company fails to raise needed capital and foreclosure is pursued and is successful, this could result in a loss of all of the Company’s rights in the Tau Prospect.

~~ITEM 9A. CONTROLS AND PROCEDURES~~F-15

~~Evaluation of~~ITEM ~~Disclosure~~9. ~~Controls~~CHANGES ~~and~~IN ~~Procedures~~AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer (who also serves as our principal financial officer) of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the period covered by this Annual ReportNone. Based upon that evaluation, our principal executive officer (who also serves as our principal financial officer) concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

~~Management’s Report~~ITEM on9A. ~~Internal~~CONTROLS ~~Control~~AND ~~over Financial Reporting~~ PROCEDURES

~~Our management,~~Evaluation including our principal executive officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of ~~the~~Disclosure ~~control~~Controls ~~system are met. Further, the design of a control system must reflect the fact that there are resource constraints~~ and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.Procedures

~~Changes~~We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer (who also serves as our principal financial officer) of the effectiveness of our disclosure controls and procedures (as defined in ~~Internal~~Exchange ~~Control~~Act Rules ~~over~~13a-15(e) ~~Financial~~and ~~Reporting~~15d-15(e)) as of the period covered by this Annual Report. Based upon that evaluation, our principal executive officer (who also serves as our principal financial officer) concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure.

~~There have~~Management’s ~~been~~Report noon ~~changes~~Internal Control ~~in internal control~~ over ~~financial~~Financial ~~reporting.~~Reporting

~~ITEM~~Our management, including 9Bour principal executive officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or fraud. ~~OTHER~~A ~~INFORMATION~~control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Accordingly, management believes that the consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

~~None.~~Changes in Internal Control over Financial Reporting

20There have been no changes in internal control over financial reporting.

~~PART III~~ITEM 9B. OTHER INFORMATION

~~ITEM 10~~None. ~~DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE~~

~~Identification of Directors and Executive Officers~~21

~~Our executive~~PART ~~officer and directors as of March 27, 2018, and their respective ages, position and biographical information are set forth below.~~III

Name	Age		Title
Michael J. Mayell		70	Chief Executive Officer, Chief Financial Officer and Director
John B. Connally, III		71	Chairman of the Board

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

~~Mr. Mayell~~Identification ~~has served as our chief executive officer and director since January 2017 and he has over 45 years~~ of ~~experience~~Directors ~~in the oil~~ and ~~gas~~Executive business. Mr. Mayell founded Sydson in 1982 and has served as an officer and director of Sydson since 1987. In 1985, Mr. Mayell co-founded the Meridian Resource Corporation (NYSE) and served as the president and chief operating officer of Meridian for over 20 years. Mr. Mayell began his career with Shell Oil Company in New Orleans, La. in the drilling and production engineering groups responsible for drilling and producing fields both onshore and offshore South Louisiana. Mr. Mayell received his Bachelor of Science degree in mechanical engineering from Clarkston University.Officers

~~Mr. Connally~~Our ~~presently~~executive ~~serves as chairman of the Texas Lt. Governor’s Energy Advisory Board. Mr. Connally was a founding shareholder~~officer ~~of Texas South~~ and ~~GulfSlope~~directors ~~Energy,~~as ~~Inc., and a founding director~~ of ~~Nuevo~~April ~~Energy~~1, ~~Inc~~2019, ~~Endeavor International Corp, Pure Energy Group (where he also served as chief executive officer),~~ and ~~Pure~~their ~~Gas~~respective ~~Partners. Mr. Connally was a law partner with Baker Botts~~ages, ~~and~~ ~~received~~position ~~both his Bachelor of Arts~~ and JDbiographical ~~from~~information ~~the~~are ~~University~~set offorth ~~Texas~~below. ~~Mr. Connally has been involved in private business endeavors for over the last five years.~~

Key Employees and Consultants

Name	Age		Title
Michael J. Mayell		71	Chief Executive Officer, Chief Financial Officer and Director
John B. Connally, III		72	Chairman of the Board

~~Key~~Mr. Mayell has served ~~employees~~as our chief executive officer and ~~consultants~~director since January 2017 and he has over 46 years of experience in the oil and gas business. Mr. Mayell founded Sydson in 1982 and has served as an officer and director of ~~March~~Sydson 27since 1987. In 1985, ~~2018~~Mr. ~~are:~~Mayell co-founded The Meridian Resource Corporation (NYSE) and served as the president and chief operating officer of Meridian for over 20 years. Mr. Mayell began his career with Shell Oil Company in New Orleans, La. in the drilling and production engineering groups responsible for drilling and producing fields both onshore and offshore South Louisiana. Mr. Mayell received his Bachelor of Science degree in mechanical engineering from Clarkson University.

Mr. Connally presently ~~Gunderson,~~serves ~~Land~~as ~~Manager,~~chairman ~~has~~of ~~held~~the ~~land~~Texas ~~positions~~Lt. ~~with~~Governor’s ~~public~~Energy Advisory Board. Mr. Connally was a founding shareholder of Texas South and ~~independent~~GulfSlope ~~producers~~Energy, ~~including~~Inc., ~~Chevron~~and a founding director of Nuevo Energy, ~~Murphy~~Inc, ~~Cities~~Endeavor International Corp, ~~Ladd~~Pure Energy Group (where he also served as chief executive officer), and ~~Meridian~~Pure ~~Resources~~Gas Partners. Mr. ~~Gunderson~~Connally ~~has~~was ~~been~~a law partner with ~~Sydson~~Baker ~~since~~Botts, ~~2009~~and received both his Bachelor of Arts and JD from the University of Texas. Mr. ~~Gunderson~~Connally ~~received~~has abeen ~~BBA~~involved ~~degree~~ in ~~petroleum~~private ~~land~~business ~~management~~endeavors for ~~from~~over the ~~University~~last offive ~~Oklahoma~~years.

~~Mrs. Alexander,~~Key ~~Controller,~~Employees ~~began her career in accounting with Arthur Andersen before moving into corporate accounting in 1985. She later opened her consulting practice focusing on the healthcare~~ and ~~oil and gas industries and has been Sydson’s lead accountant since 2010. Mrs. Alexander received her Bachelor in Accountancy degree from the University of Mississippi in 1980.~~Consultants

~~Mr. Goldstein,~~Key ~~Geologist,~~employees ~~has served as a consultant to Sydson for over 10 years~~ and ~~has over 40 years of experience in Gulf Coast~~consultants ~~geology interpretation. Mr. Goldstein has served~~ as aof ~~geologist~~April ~~with Amerada Hess~~1, ~~Houston~~2019 Oil and Minerals and Meridian Resources. Mr. Goldstein received his Bachelor of Arts – Geology degree from Rutgers University and received his Master’s degree in Geology from Florida State University.are:

Mr. Gunderson, Land ~~Askew~~Manager, ~~our~~has ~~former~~held ~~chief~~land ~~executive~~positions ~~officer~~with public and ~~director~~independent ~~for~~producers ~~over~~including ~~three~~Chevron, ~~years~~Murphy, isCities, ~~currently~~Ladd and Meridian Resources. Mr. Gunderson has been with Sydson since 2009. Mr. Gunderson received a ~~consultant~~BBA todegree in petroleum land management from the ~~Company.~~University of Oklahoma

~~Board~~Mrs. Alexander, Controller, ~~Committees~~began her career in accounting with Arthur Andersen before moving into corporate accounting in 1985. She later opened her consulting practice focusing on the healthcare and ~~Meetings~~oil and gas industries and has been Sydson’s lead accountant since 2010. Mrs. Alexander received her Bachelor in Accountancy degree from the University of Mississippi in 1980.

~~The Company~~Mr. ~~does~~Goldstein, ~~not~~Geologist, has ~~maintain~~served anas ~~audit~~a ~~committee,~~consultant ~~compensation~~to ~~committee~~Sydson orfor ~~nominating~~over ~~committee,~~10 years and ~~the~~has ~~Board~~over ~~performs~~40 ~~the~~years ~~functions~~ of ~~such~~experience ~~committees.~~in ~~The~~Gulf ~~Board~~Coast ~~has~~geology ~~determined~~interpretation. Mr. ~~that~~Goldstein ithas isserved ~~not~~as ~~necessary~~a togeologist ~~have~~with aAmerada ~~standing~~Hess, ~~nominating~~Houston ~~committee~~Oil orand ~~procedures~~Minerals ~~for submitting~~and ~~shareholder~~Meridian ~~nominations~~Resources. ~~Furthermore,~~Mr. weGoldstein ~~have~~received his ~~not~~Bachelor ~~designated any member~~ of ~~the~~Arts ~~Board~~– ofGeology ~~Directors~~degree asfrom anRutgers ~~audit~~University ~~committee financial~~and ~~expert~~received ~~because~~his weMaster’s ~~are~~degree ~~not~~in ~~required~~Geology tofrom doFlorida State ~~so at this time~~University.

~~The Company~~Mr. ~~has~~Askew, noour ~~formal~~former chief ~~policy~~executive ~~with~~officer ~~regard to Board members’ attendance at annual meetings of security holders~~ and ~~the~~director ~~Company did~~for ~~not~~over ~~hold~~three ~~an annual meeting during the~~ years ~~ended December 31~~, ~~2017~~is ~~and~~currently ~~2016.~~a ~~The~~consultant ~~Board~~to ofthe ~~Directors did not hold any meetings and acted by written consent~~Company.

~~Independent Directors~~Board Committees and Meetings

~~We currently~~The doCompany does not maintain ~~have~~an ~~any~~audit ~~directors~~committee, ~~who~~compensation ~~are~~committee ~~considered~~or ~~“independent”~~nominating ascommittee, ~~such~~and ~~term~~the isBoard ~~defined~~performs in the ~~NASDAQ~~functions ~~Global Market~~of ~~listing~~such ~~standards~~committees. The WeBoard ~~believe~~has determined that ~~retaining~~it ~~an independent director or directors at this time would be overly costly and burdensome and~~ is not ~~warranted~~necessary into ~~our~~have ~~circumstances~~a ~~given~~standing ~~the~~nominating ~~stage~~committee ofor ~~our~~procedures ~~development.~~for ~~Moving~~submitting ~~forward, at such time the Board~~shareholder ofnominations. ~~Directors deems independent directors desirable~~Furthermore, ~~or that~~ we ~~are required to~~ have ~~independent~~not ~~directors,~~designated ~~either~~any asmember ~~a result~~ of ~~our listing on NASDAQ,~~ the ~~NYSE~~Board orof aDirectors ~~similar~~as ~~market~~an oraudit ~~exchange,~~committee orfinancial ~~that~~expert because we are ~~otherwise~~not required ~~by applicable law~~ to ~~have independent~~do ~~director,~~so weat ~~will~~this ~~promptly take steps to appoint such independent directors~~time.

21The Company has no formal policy with regard to Board members’ attendance at annual meetings of security holders. The Company held an annual meeting on September 6, 2018. The Board of Directors did not hold any meetings during the year and acted by written consent.

~~Section 16(a)~~Independent ~~Beneficial Ownership Reporting Compliance~~Directors

~~Section~~We ~~16(a)~~currently ofdo not ~~the~~have ~~Exchange~~any ~~Act requires our~~ directors, ~~executive~~who ~~officers~~are ~~and~~considered ~~beneficial~~“independent” ~~owners~~as ofsuch ~~more~~term ~~than~~is ~~10%~~defined ofin ~~our common stock to file with~~ the ~~SEC~~NASDAQ ~~reports~~Global ofMarket ~~their~~listing ~~holdings of, and transactions in, our common stock~~standards. ~~Based solely upon our review of copies~~ ofWe ~~such~~believe ~~reports and written representations from reporting persons~~ that ~~were~~retaining ~~provided~~an toindependent ~~us,~~director weor ~~believe that our officers,~~ directors ~~and~~at ~~10%~~this ~~stockholders~~time ~~complied~~would ~~with~~be ~~these~~overly ~~reporting~~costly ~~requirements~~and ~~with~~burdensome ~~respect~~and tois ~~the~~not ~~twelve months ended~~warranted ~~December 31, 2017 except as set forth below. Mr. Mayell was late~~ in ~~filing~~our acircumstances ~~Form~~given ~~4 (subsequently filed on March 22, 2018) reflecting~~ the ~~following~~stage ~~acquisition~~ of ~~shares~~our ~~of common stock: (i) in April 2017 Mr~~development. ~~Mayell~~Moving ~~and an affiliate loaned the Company $250~~forward,~~000,~~ ~~payable~~at onsuch ~~demand,~~time ~~convertible into 12,500,000 shares of Company common stock; (ii) on June 23, 2017, Mr. Mayell and an affiliate loaned~~ the ~~Company~~Board ~~$250,000, payable on demand, convertible into 12,500,000 shares~~ of ~~Company~~Directors ~~common stock;~~deems ~~(iii) on August 11, 2017, Mr. Mayell and an affiliate loaned the Company $117,000, payable on demand, convertible into~~independent ~~5,850,000~~directors ~~shares of Company common stock; (iv) in October 2017~~desirable, ~~Mr.~~or ~~Mayell~~that ~~loaned~~we ~~the~~are ~~Company~~required anto ~~aggregate~~have ofindependent ~~$220~~directors,~~000, payable~~ oneither ~~demand,~~as ~~convertible~~a ~~into~~result ~~11,000,000 shares~~ of ~~Company~~our ~~common~~listing ~~stock; and (v)~~ on ~~January 28~~NASDAQ, ~~2018,~~the ~~an affiliate of~~NYSE ~~Mr.~~or ~~Mayell acquired 500,000 shares of Company common stock at~~ a ~~purchase~~similar ~~price~~market ofor ~~$0.02~~exchange, ~~per~~or ~~share. Mr.~~that ~~Connally~~we ~~was late~~are inotherwise ~~filing~~required aby ~~Form~~applicable 4law ~~(subsequently~~to ~~filed~~have onindependent ~~March 23~~director, ~~2018)~~we ~~reflecting~~will ~~the following gifts of shares of common stock: (i)~~promptly intake ~~May~~steps ~~2017, Mr. Connally gifted 20,000,000 shares of common stock~~ to aappoint ~~third~~such ~~party;~~independent ~~and (ii) in September 2017, Mr~~directors. ~~Connally gifted 20,000,000 shares of common stock to third parties.~~

~~Code of~~Section ~~Ethics~~16(a) Beneficial Ownership Reporting Compliance

WeSection 16(a) of the Exchange ~~have~~Act ~~adopted~~requires aour ~~written~~directors, ~~code~~executive officers and beneficial owners of ~~ethics~~more ~~and~~than ~~whistleblower~~10% ~~policy~~of (our common stock to file with the ~~“Code~~SEC reports of ~~Ethics”)~~their ~~that~~holdings ~~applies~~of, toand transactions in, our ~~principal~~common stock. Based solely upon our review of copies of such reports and ~~executive~~written ~~officer,~~representations ~~principal~~from ~~financial~~reporting ~~officer~~persons that were provided to us, ~~principal~~we ~~accounting~~believe ~~officer~~that orour ~~controller~~officers, directors and ~~persons~~10% ~~performing~~stockholders complied ~~similar~~with ~~functions~~these reporting requirements with respect to the twelve months ended December 31, 2018, except for Mr. Connally who Wehas ~~believe~~not ~~that~~filed a Form 4 to reflect (i) the ~~Code~~gift of ~~Ethics~~15,000,000 isshares ~~reasonably~~in ~~designed~~June to2018, ~~deter~~the ~~wrongdoing~~gift of 6,850,000 shares in November 2018; and ~~promote~~the ~~honest~~gift of 9,200,000 shares in December 2018 and ~~ethical~~(ii) ~~conduct;~~the ~~provide~~grant by the Company, approved by the board of directors, in May ~~full~~2018 of the right to convert past accrued compensation from January 4, ~~fair~~2017 through April 30, ~~accurate~~2018 into 27,500,000 ~~timely~~shares, ~~and~~the grant ~~understandable~~by ~~disclosure~~the Company, approved by the board of directors, in ~~public~~October ~~reports;~~2018 ~~comply~~of ~~with~~the ~~applicable~~right ~~laws;~~to ~~ensure~~convert ~~prompt~~past ~~internal~~accrued compensation from ~~reporting~~May of1, ~~code~~2018 ~~violations;~~through ~~and~~September ~~provide~~30, ~~accountability~~2018 ~~for~~into ~~adherence~~8,750,000 shares, the grant by the Company, approved by the board of directors, in January 2019 of the right to convert past accrued compensation from October 1, 2018 through December 31, 2018 into 5,250,000 shares. Mr. Connally has not sold any shares of the ~~code~~Company stock during the past twelve months.

~~Involvement in Certain Legal Proceedings~~22

~~There are~~Code ~~currently no material pending legal proceedings to which the Company is a party or~~ of which any of its property is the subject, in which any of the above referenced directors or officers is a party adverse to the Company or has a material interest adverse to the Company. Furthermore, during the past ten years, none of the Company’s officers or directors described above were involved in any legal proceedings that are material to an evaluation of the ability or integrity of such directors and officers.Ethics

~~ITEM~~We have adopted a written 11code of ethics and whistleblower policy (the “Code of Ethics”) that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. ~~EXECUTIVE~~We ~~COMPENSATION~~believe that the Code of Ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

~~Compensation to~~Involvement ~~Officers~~in ofCertain ~~the~~Legal ~~Company~~Proceedings

~~The~~There are currently ~~following~~no ~~table~~material ~~contains~~pending ~~compensation~~legal ~~data~~proceedings ~~for~~to ~~our~~which ~~named~~the ~~executive~~Company ~~officers~~is asa party or of which any of its property is the ~~years~~subject, ~~ended~~in ~~December~~which any 31of the above referenced directors or officers is a party adverse to the Company or has a material interest adverse to the Company. Furthermore, ~~2017~~during the past ten years, none of the Company’s officers or directors described above were involved in any legal proceedings that are material to an evaluation of the ability or integrity of such directors and ~~2016:~~officers.

~~Summary~~ITEM ~~Compensation~~11. ~~Table~~EXECUTIVE COMPENSATION

Name and Principal Position	Year		Salary		Bonus		Stock Awards		Stock Option Awards		All Other Compensation		Total
Michael J. Mayell, CEO *		2017	$	420,000	$	--	$	—	$	—	$	—	$	420,000
John B. Connally III, Chairman of the Board *		2017	$	420,000			$		$		$		$	420,000
James Askew, former CEO		2016	$	420,000	$	59,000	$	—	$	—	$	—	$	479,000

Compensation to Officers of the Company

*The ~~Mr.~~following ~~Mayell’s~~table contains ~~and~~compensation ~~Mr.~~data ~~Connally’s~~for ~~salaries~~our ~~for~~named ~~2017~~executive ~~have~~officers ~~not~~as ~~been~~of ~~paid,~~the ~~but~~years ~~were~~ended ~~accrued~~December ~~during~~31, ~~the~~2018 ~~year.~~and 2017:

~~Employment and~~Summary ~~Consulting~~Compensation ~~Arrangements~~Table

The Company entered into an employment agreement with Mr. Mayell that terminates on December 31, 2020. Upon December 31 of each calendar year, the term shall be extended for one additional year, provided that neither the Company nor Mr. Mayell notify the other on or prior to 90 days before the applicable December 31st date that either party does not intend to extend this agreement. The Company shall pay to Mr. Mayell a base salary of $420,000 per annum and Mr. Mayell shall be entitled to standard and customary benefits. Mr. Mayell has agreed to standard non-disclosure and non-competition provisions. Upon termination of Mr. Mayell by the Company other than for cause, Mr. Mayell is entitled to receive three years of his then compensation as severance. In March 2017, the due dates of the compensation payments were extended to the end of the term.

Name and Principal Position	Year		Salary		Bonus	Stock Awards	Stock Option Awards	All Other Compensation	Total

Michael J. Mayell, CEO *		2018	$	420,000	$	$	$	$	$	420,000
John B. Connally III, Chairman of the Board *		2018	$	420,000	$	$	$	$	$	420,000
Michael J. Mayell, CEO*		2017	$	420,000	$	$	$	$	$	420,000
John B. Connally III, Chairman of the Board*		2017	$	420,000	$	$	$	$	$	420,000

~~The~~* Company entered into an employment agreement with John B. Connally III to serve as chairman of the board that terminates on December 31, 2020. Upon December 31 of each calendar year, the term shall be extended for one additional year, provided that neither the Company nor Mr. ~~Connally~~ ~~notify~~Mayell’s the other on or prior to 90 days before the applicable December 31st date that either party does not intend to extend this agreement. The Company shall pay to Mr. Connally a base salary of $420,000 per annum, issued him 65.1 million shares, and Mr. Connally’s ~~shall~~salaries befor ~~entitled~~2018 ~~to standard~~ and ~~customary~~2017 ~~benefits.~~have ~~Mr.~~not ~~Connally~~been ~~has agreed to standard non-disclosure provisions. Upon termination of Mr. Connally by the Company other than for cause~~paid, ~~Mr.~~but ~~Connally is entitled to receive three years of his then compensation as severance. In March 2017, the due dates of the compensation payments~~ were ~~extended to the end of the term~~accrued.

22Employment and Consulting Arrangements

~~Mr.~~The ~~Askew~~Company ~~resigned as an executive officer and director of Texas South in January 2017 and~~ entered into aan ~~consulting~~employment agreement with ~~the~~Mr. ~~Company~~Mayell that terminates on December 31, 2020,. ~~and~~Upon ~~such~~December 31 of each calendar year, the term shall be extended for anone additional ~~one-~~year ~~period upon December 31 of each calendar year~~, provided that neither the Company nor ~~consultant~~Mr. Mayell notify the other on or prior to 90 days before the applicable December 31st date that either party does not intend to extend this agreement. The Company shall pay to Mr. ~~Askew~~Mayell a base salary of $35420,000 ~~net~~ per ~~month~~ annum and ~~issued~~Mr. Mayell shall be entitled to standard and customary benefits. Mr. ~~Askew~~Mayell 27has ~~million~~agreed ~~shares~~to ofstandard ~~Company~~non-disclosure ~~common~~and ~~stock~~non-competition provisions. Upon termination of Mr. ~~Askew~~Mayell by the Company other than for cause, Mr. ~~Askew~~Mayell is entitled to receive three years of his then ~~consulting~~ compensation as severance. In March 2017, the due dates of the compensation payments were extended to the end of the term. During 2018 the employment agreement for Mr. Mayell was amended, whereby all or a portion of the compensation owed to Mr. Mayell for the period from January 2017 through December 31, 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at $0.02 per share. As of the filing date of this report, Mr. Mayell has not elected to convert any of the compensation owed into common stock. If all of the compensation owed was converted into shares of stock, Mr. Mayell would receive 42,000,000 shares.

InThe Company entered ~~January~~into ~~2017~~an employment agreement with John B. Connally III to serve as chairman of the board that terminates on December 31, 2020. Upon December 31 of each calendar year, the ~~Company~~term ~~entered~~shall ~~into~~be aextended ~~two-~~for one additional year, ~~agreement~~provided ~~with~~that ~~Ernest~~neither ~~Miller~~the toCompany nor ~~provide~~Mr. ~~financial~~Connally ~~consulting~~notify ~~services~~the other on or prior to 90 days before the applicable December 31st date that either party does not intend to extend this agreement. The Company ~~for~~shall uppay to 20Mr. ~~hours~~Connally a base salary of $420,000 per ~~month~~annum, ~~pursuant~~issued him 65.1 million shares, and Mr. Connally shall be entitled to ~~which~~standard and customary benefits. Mr. Connally has agreed to standard non-disclosure provisions. Upon termination of Mr. Connally by the Company ~~paid~~other than for cause, Mr. ~~Miller~~Connally 5is ~~million~~entitled to receive three years of his then compensation as severance. In March 2017, the due dates of the compensation payments were extended to the end of the term. During 2018 the employment agreement for Mr. Connally was amended, whereby all or a portion of the compensation owed to Mr. Connally for the period from January 2017 through December 31, 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at $0.02 per share. As of the filing date of this report, Mr. Connally has not elected to convert any of the compensation owed into common stock. If all of the compensation owed was converted into shares of stock, Mr. Connally would receive 41,500,000 shares.

~~Grants~~Mr. Askew resigned as an executive officer and director of ~~Plan~~Texas South in January 2017 and entered into a consulting agreement with the Company that terminates on December 31, 2020, and such term shall be extended for an additional one-~~Based~~year ~~Awards~~period upon December 31 of each calendar year, provided that neither the Company nor consultant notify the other on or prior to 90 days before the applicable December 31st that either party does not intend to extend this agreement. The Company shall pay to Mr. Askew $35,000 net per month and issued Mr. Askew 27 million shares of Company common stock. Upon termination of Mr. Askew by the Company other than for cause, Mr. Askew is entitled to receive three years of his then consulting compensation as severance. During 2018 the employment agreement for Mr. Askew was amended, whereby all or a portion of the compensation owed to Mr. Askew for the period from February 2018 through April 30, 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at $0.02 per share. As of the filing date of this report, Mr. Askew has not elected to convert any of the compensation owed into common stock. If all of the compensation owed was converted into shares of stock, Mr. Askew would receive 26,250,000 shares.

~~No plan-based awards were granted to any of our named executive officers during the twelve months ended December 31, 2017.~~23

~~Outstanding~~In January 2017, the ~~Equity~~Company ~~Awards~~entered atinto ~~Year~~a ~~End~~two-year agreement with Ernest Miller to provide financial consulting services to the Company for up to 20 hours per month pursuant to which the Company paid Mr. Miller 5 million shares of Company common stock. This agreement expired effective January 2019.

~~No unexercised~~Grants ~~options or warrants were held by any~~ of ~~our~~Plan-Based ~~named executive officers at December 31, 2017.~~Awards

~~Compensation~~No plan-based awards ~~Policies~~were ~~and~~granted ~~Practices~~to asany ~~they~~of ~~Relate~~our tonamed executive officers during the ~~Company’s~~twelve ~~Risk~~months ~~Management~~ended December 31, 2018.

~~We conducted~~Outstanding aEquity ~~review~~Awards ofat ~~our~~Year compensation policies and procedures as they relate to an overall risk management policy. We have concluded that our compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.End

~~Director~~No unexercised options ~~Compensation~~or warrants were held by any of our named executive officers at December 31, 2018.

~~During the~~Compensation ~~years~~Policies ~~ended 2017~~ and ~~2016,~~Practices as ~~the~~they ~~director~~Relate ofto the Company’s ~~was~~Risk ~~not compensated for his services as director.~~Management

~~ITEM~~We conducted a review 12of our compensation policies and procedures as they relate to an overall risk management policy. ~~SECURITY~~We ~~OWNERSHIP~~have OFconcluded ~~CERTAIN~~that ~~BENEFICIAL~~our ~~OWNERS~~compensation policies ~~AND~~and ~~MANAGEMENT~~practices ~~AND~~are ~~RELATED~~not ~~STOCKHOLDER~~reasonably ~~MATTERS~~likely to have a material adverse effect on the Company.

~~Principal Stockholders~~Director Compensation

~~The~~During ~~following~~the ~~table~~years ~~sets~~ended ~~forth~~2018 ~~the number~~ and ~~percentage~~2017, ~~of outstanding shares of common stock owned by: (a) each person who is known by us to be~~ the ~~beneficial owner~~director of ~~more than 5% of our outstanding shares of common stock; (b) each of our directors; (c)~~ the ~~named~~Company ~~executive~~was ~~officers~~not ~~as defined~~compensated infor ~~Item~~his ~~402~~services ~~of Regulation S-K; and (d) all current directors and executive officers,~~ as ~~a group as of the date of this Annual Report~~director. ~~As of March 27, 2018, there were 867,440,670 shares of common stock deemed issued and outstanding.~~

~~Unless~~ITEM ~~otherwise stated, beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act~~12. ~~Under~~SECURITY ~~this~~OWNERSHIP ~~rule,~~OF ~~certain~~CERTAIN ~~shares may~~BENEFICIAL beOWNERS ~~deemed~~AND toMANAGEMENT beAND ~~beneficially~~RELATED ~~owned~~STOCKHOLDER by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person or group of persons, the number of shares beneficially owned by such person or group of persons is deemed to include the number of shares beneficially owned by such person or the members of such group by reason of such acquisition rights, and the total number of shares outstanding is also deemed to include such shares (but not shares subject to similar acquisition rights held by any other person or group) for purposes of that calculation. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The address for each of the beneficial owners is the Company’s address, except footnoted below. MATTERS

Name of Beneficial Owner	Number of Shares of Common Stock Beneficially Owned			Percentage of Class Beneficially Owned
Named Executive Officers and Directors:
Michael J. Mayell		143,350,000	(1)		15.77	%
John B. Connally III		61,000,000			7.03	%
All directors & executive officers as a group (2 persons)		204,350,000			22.47	%
5% or Greater Shareholders
Desertaire Enterprises, LP(2)		60,000,000	(3)		6.90	%
James M. Askew		101,000,000			11.64	%

Principal Stockholders

~~(1)~~The ~~Comprised~~following table sets forth the number and percentage of outstanding shares of common stock owned by: (ia) ~~101,500,000~~each person who is known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock; ~~issued~~(b) ~~and~~each ~~outstanding,~~of our directors; (c) the named executive officers as defined in Item 402 of Regulation S-K; and (iid) 41all current directors and executive officers,~~850~~ as a group as of the date of this Annual Report. As of April 1,~~000~~ 2019, there were 999,199,769 shares of common stock ~~issuable~~deemed ~~upon~~issued ~~conversion~~and of outstanding ~~indebtedness~~.

(2)	Address is 3 Strawberry Canyon, The Woodlands, TX 77382.
(3)	Comprised of (i) 57,500,000 shares of common stock issued and outstanding, and (ii) 2,500,000 shares of common stock issuable upon conversion of outstanding indebtedness.

Unless otherwise stated, beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person or group of persons, the number of shares beneficially owned by such person or group of persons is deemed to include the number of shares beneficially owned by such person or the members of such group by reason of such acquisition rights, and the total number of shares outstanding is also deemed to include such shares (but not shares subject to similar acquisition rights held by any other person or group) for purposes of that calculation. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date. To our knowledge, except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. The address for each of the beneficial owners is the Company’s address, except footnoted below.

Name of Beneficial Owner	Number of Shares of Common Stock Beneficially Owned			Percentage of Class Beneficially Owned

Named Executive Officers and Directors:
Michael J. Mayell		190,050,025	⁽¹⁾		17.39	%
John B. Connally III		71,450,000	⁽²⁾		6.87	%
All directors & executive officers as a group (2 persons)		261,500,025			23.05	%
5% or Greater Shareholders

Desertaire Enterprises, LP⁽³⁾		71,016,675	⁽³⁾		7.09	%
James M. Askew		108,386,000	⁽⁴⁾		10.57	%

Description of Capital Stock

⁽¹⁾	Comprised of (i) 96,416,675 shares of common stock issued and outstanding, and (ii) 93,633,350 shares of common stock issuable upon conversion of outstanding indebtedness and compensation agreements.
⁽²⁾	Comprised of (i) 29,950,000 shares of common stock issued and outstanding, and (ii) 41,500,000 shares of common stock issuable upon conversion of compensation agreements.
⁽³⁾	Address is 3 Strawberry Canyon, The Woodlands, TX 77382. Comprised of (i) 68,516,675 shares of common stock issued and outstanding, and (ii) 2,500,000 shares of common stock issuable upon conversion of outstanding indebtedness.
⁽⁴⁾	Comprised of (i) 82,136,000 shares of common stock issued and outstanding, and (ii) 26,250,000 shares of common stock issuable upon conversion of outstanding indebtedness.

We are authorized to issue 950,000,000 shares of common stock, par value $0.001, of which 867,440,670 shares are issued and outstanding as of March 27, 2018. We are also authorized to issue 50,000,000 shares of blank check preferred stock, none of which have been issued as of the date of this Annual Report. 24

~~Common~~ Description of Capital Stock

~~The holders~~We ~~of common stock~~ are ~~entitled~~authorized to ~~one vote per share with respect to all matters required by law to be submitted to stockholders.~~issue ~~The~~1,500,000,000 ~~holders~~shares of common stock, ~~have~~par ~~the~~value ~~sole~~$0.001, ~~right~~of towhich ~~vote~~999,199,769 ~~except~~shares asare ~~otherwise~~issued ~~provided~~and byoutstanding ~~law~~as ~~or by our articles~~ of ~~incorporation~~April 1, ~~including provisions governing any preferred stock~~2019. ~~The~~We ~~common~~are ~~stock~~also ~~does~~authorized ~~not~~to ~~have~~issue ~~any cumulative voting~~50, ~~preemptive~~000,000 ~~subscription or~~shares ~~conversion rights. Election~~ of ~~directors~~blank ~~requires~~check ~~the~~preferred ~~affirmative~~stock, ~~vote~~none of awhich ~~plurality~~have ofbeen ~~shares~~issued ~~represented~~as ~~at a meeting, and other general stockholder action requires the affirmative vote~~ of ~~a majority of shares represented at a meeting in which a quorum~~the isdate ~~represented. The outstanding shares~~ of ~~common~~this ~~stock~~Annual ~~are validly issued, fully paid and non-assessable~~Report.

~~Subject to~~Common the rights of any outstanding shares of preferred stock, the holders of common stock are entitled to receive dividends, if declared by our board of directors, out of funds legally available. In the event of liquidation, dissolution or winding up of the affairs of the Company, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding.Stock

The ~~authorized~~ ~~but~~holders ~~unissued shares~~ of ~~our~~ common stock are ~~available~~entitled ~~for~~to ~~future~~one ~~issuance~~vote ~~without~~per ~~stockholder~~share ~~approval.~~with ~~These~~respect ~~additional shares~~to ~~may~~all matters required by law to be ~~used~~submitted ~~for~~to astockholders. ~~variety~~The holders of ~~corporate~~common ~~purposes,~~stock ~~including~~have ~~future~~the ~~public~~sole ~~offering~~right to ~~raise~~vote, ~~additional~~except ~~capital~~as otherwise provided by law or by our articles of incorporation, ~~corporate~~including ~~acquisitions~~provisions ~~and~~governing ~~employee~~any ~~benefit~~preferred ~~plans~~stock. The ~~existence~~common stock does not have any cumulative voting, preemptive, subscription or conversion rights. Election of ~~authorized~~directors ~~but~~requires ~~unissued~~the ~~shares~~affirmative vote of ~~common~~a ~~stock~~plurality ~~may~~of ~~enable~~shares ~~our~~represented ~~Board~~at a meeting, and other general tostockholder ~~issue~~action ~~shares~~requires the affirmative vote of ~~stock~~a tomajority ~~persons~~of ~~friendly~~shares torepresented ~~existing~~at ~~management,~~a meeting in which ~~may~~a ~~deter~~quorum oris ~~frustrate~~represented. The aoutstanding ~~takeover~~shares of ~~the~~common ~~Company~~stock are validly issued, fully paid and non-assessable.

~~Preferred~~Subject to the rights ~~Stock~~of any outstanding shares of preferred stock, the holders of common stock are entitled to receive dividends, if declared by our board of directors, out of funds legally available. In the event of liquidation, dissolution or winding up of the affairs of the Company, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment or provision for all liabilities and any preferential liquidation rights of any preferred stock then outstanding.

~~We are~~The authorized tobut ~~issue 50 million~~ unissued shares of ~~“blank~~our ~~check”~~common ~~preferred~~ stock, ~~none of which~~ are ~~issued~~available ~~and outstanding. We have no present plans~~ for ~~the~~future issuance ~~thereof. Our board of directors has the authority,~~ without ~~action~~stockholder ~~by our stockholders, to designate and issue preferred stock in one or more series~~approval. ~~Our~~These ~~board~~additional ofshares ~~directors~~ may ~~also~~be ~~designate the rights, preferences,~~used ~~and~~for ~~privileges~~a ofvariety ~~each series~~ of ~~preferred~~corporate ~~stock~~purposes, ~~any~~including orfuture ~~all~~public ofoffering ~~which~~to ~~may~~raise beadditional ~~greater~~capital, ~~than~~corporate ~~the~~acquisitions ~~rights~~and ofemployee benefit ~~the common stock~~plans. ItThe ~~is not~~existence ~~possible to state the actual effect~~ of ~~the~~authorized ~~issuance~~but ofunissued ~~any~~ shares of ~~preferred~~common stock onmay ~~the~~enable ~~rights~~our ofBoard ~~holders~~to issue shares of ~~the~~stock ~~common~~to ~~stock~~persons ~~until~~friendly ~~the~~to ~~board~~existing ofmanagement, ~~directors~~which ~~determines~~may ~~the~~deter ~~specific~~or ~~rights~~frustrate ofa ~~the~~takeover ~~holders~~ of the ~~preferred stock~~Company. ~~However, these effects might include:~~

●Preferred ~~restricting dividends on the common stock;~~Stock

●We ~~diluting~~are authorized to issue 50 million shares of “blank check” preferred stock, none of which are issued and outstanding. We have no present plans for the ~~voting~~issuance ~~power~~thereof. Our board of directors has the authority, without action by our stockholders, to designate and issue preferred stock in one or more series. Our board of directors may also designate the rights, preferences, and privileges of each series of preferred stock, any or all of which may be greater than the rights of the common stock;. It is not possible to state the actual effect of the issuance of any shares of preferred stock on the rights of holders of the common stock until the board of directors determines the specific rights of the holders of the preferred stock. However, these effects might include:

● ~~impairing~~restricting ~~the~~dividends ~~liquidation~~on ~~rights of~~ the common stock; ~~and~~

● ~~delaying~~diluting orthe ~~preventing~~voting apower ~~change~~of ~~in control without further action by~~ the ~~stockholders.~~common stock;

~~Indemnification~~ ● impairing the liquidation rights of ~~Directors~~the ~~and~~common ~~Officers~~stock; and

~~Section 718.7502~~● ofdelaying ~~the Nevada Revised Statutes (“NRS”) provides, in general, that a corporation incorporated under the laws of the State of Nevada, as we are, may indemnify any person who was~~ or ispreventing a ~~party~~change ~~or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than a derivative action by or~~ in ~~the~~control ~~right~~without offurther the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action~~, suit~~ or proceeding if such person (a) is not liable pursuant to Section 73.138 of the NRS, and (b) acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of a derivative action, a Nevada corporation may indemnify any such person against expenses (including attorneys’ fees) actually and reasonably incurred by ~~such person in connection with~~ the ~~defense or settlement of such action or suit if such person (a) is not liable pursuant to Section 73~~stockholders.~~138 of the NRS, and (b) acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation.~~

~~Our Articles~~Indemnification of ~~Incorporation~~Directors and Bylaws provide that we will indemnify our directors, officers, employees and agents to the extent and in the manner permitted by the provisions of the NRS, as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders’ or directors’ resolution or by contract. In addition, our director and officer indemnification agreements with each of our directors and officers provide, among other things, for the indemnification to the fullest extent permitted or required by Nevada law. Any repeal or modification of these provisions approved by our stockholders will be prospective only and will not adversely affect any limitation on the liability of any of our directors or officers existing as of the time of such repeal or modification. We are also permitted to maintain insurance on behalf of any director, officer, employee or other agent for liability arising out of his actions, whether or not the NRS would permit indemnification.Officers

24Section 718.7502 of the Nevada Revised Statutes (“NRS”) provides, in general, that a corporation incorporated under the laws of the State of Nevada, as we are, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person (a) is not liable pursuant to Section 73.138 of the NRS, and (b) acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of a derivative action, a Nevada corporation may indemnify any such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person (a) is not liable pursuant to Section 73.138 of the NRS, and (b) acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation.

~~Anti-Takeover~~Our Articles of Incorporation ~~Effect~~and Bylaws provide that we will indemnify our directors, officers, employees and agents to the extent and in the manner permitted by the provisions of the NRS, as amended from time to time, subject to any permissible expansion or limitation of such indemnification, as may be set forth in any stockholders’ or directors’ resolution or by contract. In addition, our director and officer indemnification agreements with each of our directors and officers provide, among other things, for the indemnification to the fullest extent permitted or required by Nevada ~~Law~~law. Any repeal or modification of these provisions approved by our stockholders will be prospective only and will not adversely affect any limitation on the liability of any of our directors or officers existing as of the time of such repeal or modification. We are also permitted to maintain insurance on behalf of any director, officer, employee or other agent for liability arising out of his actions, whether or not the NRS would permit indemnification.

~~Business Combinations~~25

~~The “business~~Anti-Takeover ~~combination”~~Effect ~~provisions~~ of ~~Sections 78.411 to 78.444, inclusive, of the~~ Nevada Revised Statutes, or NRS, prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder: for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status; or after the expiration of the three-year period, unless:Law

●Business ~~the transaction is approved by the board of directors or a majority of the voting power held by disinterested stockholders, or~~Combinations

●The ~~the~~“business combination” ~~consideration~~provisions toof beSections ~~paid~~78.411 byto ~~the~~78.444, ~~interested~~inclusive, ~~stockholder~~of isthe atNevada ~~least~~Revised ~~equal~~Statutes, toor ~~the~~NRS, ~~highest~~prohibit ~~of: (~~a) ~~the~~Nevada corporation ~~highest~~with ~~price~~at ~~per~~least ~~share~~200 ~~paid~~stockholders byfrom ~~the~~engaging ~~interested~~in ~~stockholder~~various ~~within~~“combination” ~~the~~transactions ~~three~~with ~~years~~any ~~immediately~~interested stockholder: ~~preceding~~for ~~the~~a ~~date~~period of ~~the~~three ~~announcement~~years ofafter the ~~combination~~date orof in the transaction in which itthe person became an interested stockholder, unless ~~whichever is higher, (b)~~ the ~~market~~transaction ~~value~~is ~~per~~approved ~~share~~by ~~of common stock on~~ the ~~date~~board of ~~announcement~~directors ofprior ~~the~~to ~~combination and~~ the date the interested stockholder ~~acquired~~obtained ~~the~~such ~~shares, whichever is higher,~~ status; or ~~(c)~~after ~~for holders of preferred stock,~~ the ~~highest~~expiration ~~liquidation value~~ of the ~~preferred~~three-year ~~stock~~period, ~~if it is higher.~~unless:

~~A “combination”~~● isthe ~~defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one~~ transaction oris aapproved ~~series~~by ~~of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more of~~ the ~~aggregate~~board ~~market value~~ of ~~the~~directors ~~assets of the corporation, (b) an aggregate market value equal to 5%~~ or ~~more~~a ofmajority ~~the aggregate market value~~ of ~~all outstanding shares of~~ the ~~corporation,~~voting ~~or (c) 10% or more of the earning~~ power orheld ~~net~~by ~~income~~disinterested ofstockholders, ~~the corporation.~~or

~~In general,~~● anthe “consideration to be paid by the interested stockholder” is at least equal to the highest of: (a) ~~person~~the ~~who,~~highest ~~together~~price ~~with~~per ~~affiliates~~share ~~and~~paid ~~associates,~~by ~~owns~~the ~~(or~~interested stockholder within the three years, ~~did~~immediately ~~own)~~preceding ~~10%~~the ordate ~~more~~ of athe ~~corporation’s~~announcement ~~voting~~of ~~stock.~~the ~~The~~combination ~~statute~~or ~~could~~in ~~prohibit~~the ortransaction ~~delay~~in ~~mergers~~which orit ~~other~~became ~~takeover or~~an ~~change~~interested instockholder, ~~control~~whichever ~~attempts~~is ~~and~~higher, ~~accordingly,~~(b) ~~may~~the ~~discourage~~market ~~attempts~~value toper ~~acquire~~share ~~our~~of ~~company~~common ~~even~~stock ~~though~~on ~~such~~the adate ~~transaction may~~of ~~offer~~announcement ~~our~~of ~~stockholders~~the combination and the ~~opportunity~~date tothe ~~sell~~interested ~~their~~stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, atthe ahighest ~~price~~liquidation ~~above~~value of the ~~prevailing~~preferred ~~market~~stock, ~~price~~if it is higher.

~~Control~~A “combination” ~~Share~~is ~~Acquisitions~~defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, or (c) 10% or more of the earning power or net income of the corporation.

~~The “control~~In ~~share” provisions of Sections 78.378 to 78.3793~~general, ~~inclusive,~~an ~~of the NRS, which apply only to Nevada corporations~~“interested ~~with~~stockholder” atis ~~least~~a ~~200~~person ~~stockholders~~who, ~~including~~together atwith ~~least~~affiliates ~~100~~and ~~stockholders of record who are Nevada residents~~associates, ~~and~~owns ~~which conduct business directly~~ (or ~~indirectly~~within inthree ~~Nevada~~years, ~~prohibit~~did anown) ~~acquirer,~~10% ~~under~~or ~~certain circumstances, from voting its shares~~ more of a ~~target~~ corporation’s ~~stock~~ ~~after~~voting ~~crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders~~stock. The statute ~~specifies~~could ~~three~~prohibit ~~thresholds: one-fifth~~ or ~~more~~delay ~~but~~mergers ~~less~~or ~~than~~other ~~one-third,~~takeover ~~one-third but less than a majority, and a majority~~ or ~~more,~~change ~~of the outstanding voting power. Once an acquirer crosses one of the above thresholds, those shares~~ in ~~an offer or acquisition and acquired within 90 days thereof become “~~control ~~shares”~~ attempts and, ~~such~~accordingly, ~~control shares~~may ~~are~~discourage ~~deprived~~attempts ~~of the right~~ to ~~vote~~acquire ~~until~~our ~~disinterested~~company ~~stockholders~~even ~~restore~~though ~~the~~such ~~right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired~~ a ~~majority~~transaction ormay ~~more~~offer ofour ~~all voting power, all other~~ stockholders ~~who do not vote in favor of authorizing voting rights to~~ the opportunity ~~control shares are entitled~~ to ~~demand~~sell ~~payment for the fair value of~~ their ~~shares~~stock inat ~~accordance~~a ~~with~~price ~~statutory~~above ~~procedures~~the ~~established~~prevailing ~~for~~market ~~dissenters’ rights~~price.

Our Articles of Incorporation state that we have elected not to be governed by the “~~control~~business ~~share~~combination” provisions, therefore, they currently do not apply to us.

~~Transfer Agent~~Control Share Acquisitions

The “control share” ~~transfer~~provisions ~~agent~~of Sections 78.378 to 78.3793, inclusive, of the NRS, which apply only to Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and ~~registrar~~which ~~for~~conduct ~~our~~business ~~common~~directly or indirectly in Nevada, prohibit an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock isafter ~~Island~~crossing certain ~~Stock~~ownership ~~Transfer~~threshold percentages, ~~whose~~unless ~~address~~the isacquirer ~~15500~~obtains ~~Roosevelt~~approval ~~Boulevard~~of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, ~~Suite~~one-third but less than a majority, and a majority ~~301~~or more, ~~Clearwater~~of the outstanding voting power. Once an acquirer crosses one of the above thresholds, ~~Florida~~those ~~33760~~shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.

~~ITEM~~Our Articles of Incorporation ~~13:~~state ~~CERTAIN~~that ~~RELATIONSHIPS~~we ~~AND~~have ~~RELATED~~elected ~~TRANSACTIONS~~not to be governed by the “control share” provisions, ~~AND~~therefore, ~~DIRECTOR~~they ~~INDEPENDENCE~~currently do not apply to us.

~~In connection~~Derivative with the Sydson transaction, as disclosed in detail in Item 1, “Business – The Company,” the Company entered into employment agreements with Messrs. Mayell and Connally, and a consulting agreement with Mr. Askew, as disclosed in Item 11, “Executive Compensation-Employment and Consulting Agreements.”Securities

~~In December~~An ~~2016,~~aggregate ~~the~~of ~~Company~~165,200,000 shares ~~paid~~of ~~Mr.~~common ~~Askew~~stock aunderlie ~~bonus~~derivative ofsecurities ~~$9,000~~outstanding ~~cash.~~as Inof ~~November and~~ December ~~2016~~31, ~~Mr.~~2018, ~~Askew~~comprised ~~was~~of ~~paid $105~~109,750,000 ~~in compensation~~shares ~~pursuant~~of tocommon stock ~~his~~underlie employment/consulting ~~agreement~~agreements ~~for~~and ~~the~~55,450,000 ~~months~~shares of ~~November~~common ~~2016~~stock ~~through~~underlie ~~January~~convertible ~~2017~~notes.

25Transfer Agent

~~In November~~The ~~and~~transfer ~~December 2016, the Company paid aggregate bonuses to Mr. Connally in the amount of $144,000~~ agent and ~~consulting~~registrar ~~fees~~for ~~of $20,000.~~our ~~Mr.~~common ~~Connally~~stock ~~was~~is ~~paid~~Transhare ~~aggregate consulting fees of $120~~Corporation,~~000~~ ~~per~~whose ~~year~~address ~~for~~is ~~fiscal~~15500 ~~years~~Roosevelt ~~2015 and 2016 and a bonus of $5~~Boulevard,~~000 during~~ ~~fiscal~~Suite ~~year 2016. During 2017 the Company reimbursed Mr. Connally approximately $100~~302,~~000~~ ~~for expenses incurred on behalf~~Clearwater, ofFlorida ~~the Company~~33760.

~~During the~~ITEM ~~year~~13: ~~ended~~CERTAIN ~~December~~RELATIONSHIPS ~~31,~~AND ~~2016,~~RELATED ~~the Company’s former chief executive officer and sole director James Askew paid numerous vendors on behalf of the Company. The Company accrued the amount owed to Mr. Askew and as of December 31~~TRANSACTIONS, ~~2017 and 2016 this balance~~ ~~was~~AND ~~zero~~DIRECTOR ~~since he had been reimbursed for all amounts owed.~~INDEPENDENCE

~~During~~In connection with the ~~fiscal~~Sydson ~~year~~transaction, ~~ended~~as ~~2013,~~disclosed ~~Roxana~~in ~~Gloria~~detail ~~Candela~~in ~~Calixto~~Item 1, a“Business ~~prior~~– ~~director~~The Company,” ~~advanced~~ the Company aentered ~~total~~into employment ofagreements ~~$52,152~~with Messrs. ~~The~~Mayell ~~amount of~~and ~~$42~~Connally,~~324~~ ~~was~~and ~~written~~a ~~off~~consulting ~~during~~agreement ~~the~~with ~~quarter~~Mr. ~~ended March 31~~Askew, ~~2017~~as ~~and~~disclosed ~~recorded~~in asItem 11, “~~Other~~Executive Compensation-Employment ~~Income”~~and asConsulting aAgreements.” ~~result~~The ofshares ~~the expiration~~ of ~~the~~common ~~applicable~~stock ~~statute~~originally ofissued ~~limitations~~to Messrs. ~~The~~Mayell, ~~balance~~Connally and ofAskew ~~$9,828~~were ~~remains~~issued atfor ~~December~~nominal ~~31, 2017~~consideration.

~~Members~~In connection with the Wilinda Prospect, Mr. Askew acquired a 1% working interest and purchased 500,000 shares of the Company’s ~~legal~~common ~~counsel~~stock. Desertaire Enterprises, ~~Thomas~~L.P. Cacquired a 5.83% ~~Pritchard~~working interest and purchased 2,916,675 Pshares of the Company’s common stock.C Sydson Resources, L.P., ~~own~~ an ~~aggregate~~affiliate of 4Mr.5 ~~million~~Mayell, acquired a 1% working interest and purchased 500,000 shares of the Company’s common stock,. ~~issued for~~All ~~nominal~~these ~~consideration~~acquisitions were made on the same terms and agreements as the remaining working interest owners.

~~ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES~~26

~~The~~During 2018 the Company ~~following~~reimbursed isMr. aConnally ~~summary~~approximately $55,000 for expenses incurred on behalf of the ~~fees~~Company. ~~billed~~Desertaire toEnterprises, usL.P. byloaned the ~~our~~Company ~~principal accountants~~$50,000 ~~LBB~~during &2017 ~~Associates~~and ~~Ltd~~Mr., ~~LLP,~~Mayell ~~during~~and his related affiliates loaned the ~~years ended~~Company ~~December~~a 31total of $1,679,245 during 2017 and 2018. See Footnote 6 “Related Party Transactions” and ~~2016~~Footnote 8 “Convertible Notes Payable” for a complete discussion of these notes.

		2017				2016
Total audit fees		$	65,250			$	67,950

During the fiscal year ended 2013, Roxana Gloria Candela Calixto, a prior director, advanced the Company a total of $52,152. The amount of $42,324 was written off during the quarter ended March 31, 2017 and recorded as “Other Income” as a result of the expiration of the applicable statute of limitations. The remaining balance of $9,828 was written off during the quarter ended March 31, 2018.

~~Audit Fees~~Members ~~- Consists~~ of ~~fees~~the ~~for~~Company’s legal ~~professional~~counsel, ~~services~~Thomas ~~rendered~~C. byPritchard, ~~our~~P.C., ~~principal~~own ~~accountants~~an ~~for~~aggregate ~~the audit~~ of ~~our~~4.5 ~~annual~~million ~~financial statements~~shares ~~and review~~ of ~~the~~common ~~financial~~stock, ~~statements~~issued ~~included~~for innominal ~~our Forms 10-Q or services that are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements~~consideration.

~~Audit-related Fees~~ITEM -14: ~~Consists~~PRINCIPAL ofACCOUNTING ~~fees~~FEES ~~for~~AND assurance and related services by our principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “Audit fees.”SERVICES

~~Tax Fees~~The -following ~~Consists~~is a summary of the fees ~~for~~billed ~~professional~~to ~~services~~us ~~rendered~~ by our principal accountants, ~~for~~LBB ~~tax~~& ~~compliance~~Associates Ltd., ~~tax~~LLP, ~~advice~~during ~~and~~the ~~tax~~years ended December 31, 2018 ~~planning~~and 2017.

All Other Fees - Consists of fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.

	2018		2017

Total audit fees	$	77,550	$	65,250

~~Policy on~~ Audit ~~Committee~~Fees ~~Pre~~-~~Approval~~ Consists of ~~Audit~~fees for professional services rendered by our principal accountants for the audit of our annual financial statements and ~~Permissible~~review of ~~Non~~the financial statements included in our Forms 10-~~Audit~~Q ~~Services~~or ofservices ~~Independent~~that ~~Auditors~~are normally provided by our principal accountants in connection with statutory and regulatory filings or engagements.

~~We have~~Audit-related ~~not~~Fees ~~adopted~~- Consists anof ~~Audit~~fees ~~Committee;~~for ~~therefore,~~assurance ~~there~~and isrelated noservices ~~Audit~~by ~~Committee~~our ~~policy~~principal inaccountants ~~this~~that ~~regard.~~are ~~All~~reasonably ~~services~~related ~~rendered~~to bythe ~~our~~performance ~~principal~~of ~~accountant~~the ~~are~~audit ~~performed~~or ~~pursuant~~review toof aour ~~written~~financial ~~engagement~~statements ~~letter~~and ~~between~~are usnot ~~and~~reported ~~the~~under ~~principal~~“Audit ~~accountant~~fees.”

26Tax Fees - Consists of fees for professional services rendered by our principal accountants for tax compliance, tax advice and tax planning.

~~PART~~All Other Fees - Consists IVof fees for products and services provided by our principal accountants, other than the services reported under “Audit fees,” “Audit-related fees,” and “Tax fees” above.

~~ITEM~~Policy on Audit Committee Pre-Approval ~~15:~~of ~~EXHIBITS,~~Audit ~~FINANCIAL~~and ~~STATEMENT~~Permissible ~~SCHEDULES~~Non-Audit Services of Independent Auditors

~~Exhibits.~~We have not adopted ~~The~~an ~~following~~Audit ~~exhibits~~Committee; ~~are~~therefore, ~~filed~~there asis ~~part~~no ofAudit Committee policy in this ~~Annual~~regard. ~~Report:~~All services rendered by our principal accountant are performed pursuant to a written engagement letter between us and the principal accountant.

Exhibit No.		Description
3.1		Amended and Restated Articles of Incorporation of Texas South Energy, Inc. incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed November 27, 2013.
3.2		Amended and Restated Bylaws of Texas South Energy, Inc. incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K filed November 12, 2013.
4.1		Common Stock Specimen incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.1*		Employment Agreement, by and between the Company and James M. Askew incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.2		Consulting Agreement by and between the Company and John Connally incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.3		Contract For Sale, dated effective January 22, 2014, incorporated by reference to Exhibit 10.1 of Form 8-K filed January 27, 2014.
10.4		Form of Subscription Agreement, incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.5		Farm-Out Letter Agreement, incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed March 21, 2014.
10.6		Note Agreement, as amended, incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q filed March 21, 2014.
10.7		Amendment No. 1 to Employment Agreement, incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q filed March 21, 2014.
10.8		Indemnification Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Form 10-Q filed March 21, 2014.
10.9		Amendment No. 2 to Employment Agreement, incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q filed March 21, 2014
10.10		Amendment to Consulting Agreement by and between the Company and John Connally, incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.11 (1)		Purchase Agreement by and between the Company and Littleton E. Walker dated February 18, 2016.
10.12 (1)		Amendment of $1,100,000 Note to Extend Maturity.
10.13		Asset Purchase Agreement by and among Texas South Energy, Inc., Sydson Resources, L.P., and Sydson Energy, Inc., dated January 4, 2017, incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed January 10, 2017
10.14*		Employment Agreement by and between the Company and Michael J. Mayell dated January 4, 2017, incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed January 10, 2017.
10.15*		Consulting Agreement by and between the Company and James M. Askew dated January 5, 2017, incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed January 10, 2017.
10.16*		Employment Agreement by and between the Company and John B. Connally, III dated January 5, 2017, incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed January 10, 2017.
10.17		Participation Agreement by and between the Company and Delek GOM Investments, LLC, incorporated by reference to Exhibit 99.2 of the Company’s Form 8-K filed January 12, 2018.
14.1		Code of Ethics, incorporated by reference to Exhibit 14.1 of the Company’s Form 10-K filed February 13, 2014.
31.1 (1)		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1 (1)		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		The following financial information from our Annual Report on Form 10-K for the year ended September 30, 2013 formatted in Extensible Business Reporting language (XBRL); (i) Condensed Balance Sheets, (ii) Condensed Statements of Operations, (iii) Condensed Statements of Cash Flows and (iv) Notes to the Condensed Financial Statements (1)
* Management contract or compensatory plan or arrangement.

~~(1)~~PART ~~Filed herewith.~~IV

~~Item 16~~ITEM 15: ~~Form~~EXHIBITS, ~~10-K~~FINANCIAL ~~Summary~~STATEMENT SCHEDULES

~~None~~ Exhibits. The following exhibits are filed as part of this Annual Report:

Exhibit No.		Description

3.1		Amended and Restated Articles of Incorporation of Texas South Energy, Inc. incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed November 27, 2013.
3.2		Amended and Restated Bylaws of Texas South Energy, Inc. incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K filed November 12, 2013.
3.3		Amended and Restated Articles of Incorporation of Texas South Energy, Inc. incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed September 11, 2018.
4.1		Common Stock Specimen incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.1*		Employment Agreement, by and between the Company and James M. Askew incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.2		Consulting Agreement by and between the Company and John Connally incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.3		Contract For Sale, dated effective January 22, 2014, incorporated by reference to Exhibit 10.1 of Form 8-K filed January 27, 2014.
10.4		Form of Subscription Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Form 10-K filed February 13, 2014.
10.5		Farm-Out Letter Agreement, incorporated by reference to Exhibit 10.1 of the Company’s Form 10-Q filed March 24, 2014.
10.6		Note Agreement, as amended, incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q filed March 24, 2014.
10.7		Amendment No. 1 to Employment Agreement, incorporated by reference to Exhibit 10.3 of the Company’s Form 10-Q filed March 24, 2014.
10.8		Indemnification Agreement, incorporated by reference to Exhibit 10.4 of the Company’s Form 10-Q filed March 24, 2014.
10.10		Amendment to Consulting Agreement by and between the Company and John Connally, incorporated by reference to Exhibit 10.1 of the Company’s Form 10-K filed February 13, 2014.
10.13		Asset Purchase Agreement by and among Texas South Energy, Inc., Sydson Resources, L.P., and Sydson Energy, Inc., dated January 4, 2017, incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed January 10, 2017
10.14*		Employment Agreement by and between the Company and Michael J. Mayell dated January 4, 2017, incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed January 10, 2017.
10.15*		Consulting Agreement by and between the Company and James M. Askew dated January 5, 2017, incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed January 10, 2017.
10.16*		Employment Agreement by and between the Company and John B. Connally, III dated January 5, 2017, incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed January 10, 2017.
10.17		Participation Agreement by and between the Company and Delek GOM Investments, LLC, incorporated by reference to Exhibit 99.2 of the Company’s Form 8-K filed January 12, 2018.
14.1		Code of Ethics, incorporated by reference to Exhibit 14.1 of the Company’s Form 10-K filed February 13, 2014.
31.1 (1)		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1 (1)		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 18 U.S.C. Section 1350, adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		The following financial information from our Annual Report on Form 10-K for the year ended September 30, 2013 formatted in Extensible Business Reporting language (XBRL); (i) Condensed Balance Sheets, (ii) Condensed Statements of Operations, (iii) Condensed Statements of Cash Flows and (iv) Notes to the Condensed Financial Statements

~~SIGNATURES~~* Management contract or compensatory plan or arrangement.

~~Pursuant to the requirements of Section 13 or 15~~(d1) ofFiled ~~the Securities Exchange Act of 1934, the Company has duly caused this Transition Report to be signed on its behalf by the undersigned, thereunto duly authorized~~herewith.

		Texas South Energy, Inc.
Date:	March 27, 2018	By:	/s/ Michael J. Mayell
			Michael J. Mayell
			Chief Executive Officer, President, and Director

Item 16: Form 10-K Summary

28None

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this Transition Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Texas South Energy, Inc.

Date: April 1, 2019	By:	/s/ Michael J. Mayell
		Michael J. Mayell
		Chief Executive Officer, President, and Director

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