UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

For the quarterly period ended ~~September 30~~March 31, ~~2018~~2019

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

For the transition period from ______________________ to ______________________

Commission file number 333-171064

TEXAS SOUTH ENERGY, INC.

(Exact name of registrant as specified in its charter)

Nevada		99-0362471
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4550 Post Oak Place, Suite 300 Houston, Texas		77027
(Address of principal executive offices)		(Zip Code)

(713) 820-6300

(Registrant’s telephone number)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require 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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 7(a)(2)(B) of the Securities Act. ☐

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

AsSecurities ofregistered ~~November~~pursuant ~~14,~~to ~~2018, the registrant’s~~Section ~~outstanding~~12(b) ~~common stock consisted~~ of ~~997,949,769~~the ~~shares.~~Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock		TXSO		OTCPK

As of May 20, 2019, the registrant’s outstanding common stock consisted of 999,199,769 shares.

TEXAS SOUTH ENERGY, INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017 (Unaudited)	F-2
	Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 (Unaudited)	F-2
	Consolidated Statements of Operations for the Three months Ended September 30, 2018 and 2017 and the Nine months Ended September 30, 2018 and 2017 (Unaudited)	F-3
	Consolidated Statements of Operations for the Three months Ended March 31, 2019 and 2018 (Unaudited)	F-3
	Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2018 and 2017 (Unaudited)	F-4
	Consolidated Statements of Cash Flows for the Three months Ended March 31, 2019 and 2018 (Unaudited)	F-4
	Notes to Consolidated Financial Statements (Unaudited)	F-5
Item 2.	Management Discussion and Analysis of Financial Condition and Results of Operations	2
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	56
Item 4.	Controls and Procedures	56
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
Item 3.	Defaults Upon Senior Securities	78
Item 4.	Mine Safety Disclosures	78
Item 5.	Other Information	78
Item 6.	Exhibits	78
Item 7.	Signatures	89

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

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.

In January, 2017 Texas South Energy, Inc. formed Texas South Operating Company, Inc as a wholly owned subsidiary of the Company. It was incorporated pursuant to the laws of the State of Texas on January 11, 2017.

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. The consolidated financial statements reflect our accounts after elimination of all significant intercompany transactions and balances.

The accompanying unaudited consolidated financial statements have been prepared in all material respects in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements for the year ended December 31, ~~2017~~2018.

Because certain information and footnote disclosures have been condensed or omitted, these unaudited consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended December 31, ~~2017~~ 2018, which are included in the Company’s annual report for the year ended December 31, ~~2017~~2018 (the “~~2017~~2018 Annual Report”). In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included. Management believes that the disclosures made in these unaudited financial statements are adequate to make the information not misleading. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s 2018 ~~2017~~ Annual Report.

TEXAS SOUTH ENERGY, INC.

CONSOLIDATED FINANCIAL STATEMENTS

~~September 30~~March 31, ~~2018~~2019

UNAUDITED CONSOLIDATED BALANCE SHEETS	Page F-2
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS	Page F-3
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS	Page F-4
UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	Page F-5

F-1

TEXAS SOUTH ENERGY, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2018			December 31, 2017
	March 31, 2019			December 31, 2018
ASSETS
CURRENT ASSETS
Cash	$	3185,~~222,908~~169		$	~~455~~1,501,766
Accounts receivable, net		34,852			3,261
Prepaid expenses		19,758			33,300
Prepaid expenses		49,778			29,555
Accounts receivable – joint interest billings		583,246			1,262,311
TOTAL CURRENT ASSETS		3,307,538			33,271
Accounts receivable – related party		4,315			4,302
TOTAL CURRENT ASSETS		792,488			2,801,679
PROPERTY AND EQUIPMENT
Oil and gas properties		13,126,125			11,779,201
Oil and gas properties, full cost method, net		13,902,187			14,094,438
Furniture, fixtures and equipment		43,195			3943,~~712~~195
Less: Accumulated depreciation		(1217,~~844~~099	)		(615,~~936~~018	)
TOTAL PROPERTY AND EQUIPMENT, NET		13,~~156~~928,~~476~~283			1114,~~811~~122,~~977~~615
OTHER ASSETS		8,340			8,340
TOTAL ASSETS	$	1614,~~472~~729,~~354~~111		$	1116,~~853~~932,~~588~~634
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	14,~~239~~676,~~189~~786		$	~~159~~4,~~512~~739,908
Accounts payable – related party		66,810			201,812
Accrued expenses		102,039			34,154
Accrued expenses		12,407			77,279
Accrued expenses – related party		910,000			805,000
Advances from joint interest owners		2,608,129			--
Accrued interest – related party		67,606			183,515
Accrued expenses – related party		700,000			385,000
Advances from joint interest owners		296,809			307,628
Accrued interest – related party		159,680			40,693
Notes payable		3,947			9,773
Notes payable		15,484			9,620
Convertible notes payable – related party		1,142,667			809,000
Notes payable – related party		250,000			--
TOTAL CURRENT LIABILITIES		7,199,854			6,888,978
Secured convertible notes payable – related party		859,000			837,000
Due to related party		--			9,828
TOTAL CURRENT LIABILITIES		5,910,699			1,720,744
LONG TERM LIABILITIES
Convertible notes payable – related party		--			1300,~~168,355~~000
Notes payable – related party		--			250,000
Asset retirement obligations		43,632			40,380
Accrued expenses		1,~~572~~952,~~476~~766			~~894~~1,~~272~~798,543
Accrued interest – related party		--			429,814
TOTAL LONG TERM LIABILITIES		1,996,398			2,138,923
TOTAL LONG TERM LIABILITIES		1,572,476			2,742,441
TOTAL LIABILITIES		9,196,252			9,027,901
TOTAL LIABILITIES		7,483,175			4,463,185
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, 990,199,769 and 821,790,670 shares of common stock issued and outstanding at September 30, 2018 and December 31, 2017, respectively.		990,199			821,790
Common stock 1,500,000,000 shares common stock authorized, $0.001 par value, 999,199,769 and 998,449,769 shares of common stock issued and outstanding at March 31, 2019 and December 31, 2018, respectively.		999,199			998,449
Additional paid-in capital		22,~~903~~900,~~706~~688			1922,~~445~~893,~~373~~788
Accumulated deficit		(1418,~~904~~367,~~726~~028	)		(1215,~~876~~987,~~760~~504	)
Total stockholders’ equity		85,~~989~~532,~~179~~859			7,~~390~~904,~~403~~733
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1614,~~472~~729,~~354~~111		$	1116,~~853~~932,~~588~~634

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

F-2

TEXAS SOUTH ENERGY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended						~~Nine months ended~~
	September 30, 2018			September 30, 2017			September 30, 2018			September 30, 2017
	March 31, 2019			March 31, 2018
REVENUE	$	--		$	--		$	--		$	--
EXPENSES
Workover expense		1537,~~835~~221			--			~~15,835~~			--
Depreciation expense		2,020			1,700			5,907			5,099
Impairment expense		1,778,000			--
Impairment expense		--			--			25,079			--
Depreciation expense		2,081			1,907
General and administrative expense		607,336			688,788			1,869,488			2,905,456
Accretion expense		3,252			--
LOSS FROM OPERATIONS		(625,191	)		(690,488	)		(1,916,309	)		(2,910,555	)
General and administrative expense		530,721			597,427
OTHER INCOME (EXPENSE)
LOSS FROM OPERATIONS		(2,351,275	)		(599,334	)
Other income		747			904			11,384			44,069
OTHER INCOME (EXPENSE)
Interest expense		(31,875	)		(58,601	)		(123,041	)		(154,809	)
Other income		81			10,230
TOTAL OTHER INCOME (EXPENSE)		(31,128	)		(57,697	)		(111,657	)		(110,740	)
Interest expense		(28,330	)		(48,382	)
NET LOSS	$	(656,319	)	$	(748,185	)	$	(2,027,966	)	$	(3,021,295	)
TOTAL OTHER INCOME (EXPENSE)		(28,249	)		(38,152	)
NET LOSS PER COMMON SHARE
NET LOSS	$	(2,379,524	)	$	(637,486	)
Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
NET LOSS PER COMMON SHARE
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted	$	(0.00	)	$	(0.00	)
Basic and diluted		959,747,887			789,839,583			905,039,867			777,409,351
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted		999,191,436			859,137,337

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

F-3

TEXAS SOUTH ENERGY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30,
	Three months ended March 31,
	2018			2017
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(2,~~027~~379,~~966~~524	)	$	(3637,~~021,295~~486	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense		5,907			5,099
Impairment expense		1,778,000			--
Impairment expense		25,079			--
Depreciation expense		2,081			1,907
Common stock awarded to employees in lieu of cash compensation		86,121			--
Accretion expense		3,252			--
Gain on disposal of debt		(9,828	)		(42,324	)
Common stock awarded to employees in lieu of cash compensation		7,650			39,610
Stock compensation		--			884,635
Gain on disposal of debt		--			(9,828	)
Changes in operating assets and liabilities:
Change in accounts receivable		~~(31~~679,~~591~~052	)		~~(3,260~~--	)
Change in prepaid expenses		~~(20~~13,~~223~~542	)		30(14,~~543~~458	)
Change in accounts payable and accrued expenses		14,~~014,805~~763			(~~303~~11,~~544~~098	)
Change in current accrued liabilities - related party		~~275~~(10,~~594~~909	)		~~369~~160,~~559~~426
Change in long term accrued liabilities – related party		~~678~~154,~~204~~223			~~668~~226,~~204~~068
Change in long term accrued interest - related party		30,176			392,528
Change in long term accrued interest		--			16,606
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		26,278			(1,019,855	)
Change in long term accrued interest - related party		--			(26,178	)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		252,130			(254,431	)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from participation agreements		~~810,000~~--			--485,000
Proceeds from reimbursement of g&g costs		80,000			--
Acquisition of oil and gas properties		(1,585,749	)		(125,711	)
Acquisition of oil and gas properties		(1,453,485	)		(451,619	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		(1,585,749	)		359,289
NET CASH USED IN INVESTING ACTIVITIES		(563,485	)		(451,619	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on short term debt		(4352,~~217~~159	)		(5,~~526~~737	)
Proceeds from issuance of notes payable		2180,~~081~~000			~~637,777~~--
Advances from joint interest owners		~~2,608,129~~--			--251,250
Proceeds from sale of common stock		1,173,667			520,000
Advances applied against joint interest bills		(10,819	)		--
NET CASH PROVIDED BY FINANCING ACTIVITIES		3,759,660			1,152,251
Proceeds from sale of common stock		--			213,000
NET INCREASE (DECREASE) IN CASH		3,222,453			(319,223	)
Proceeds from sale of common stock (to be issued)		--			185,000
CASH, BEGINNING OF PERIOD	$	455		$	325,089
NET CASH PROVIDED BY FINANCING ACTIVITIES		17,022			643,513
CASH, END OF PERIOD	$	3,222,908		$	5,866
NET INCREASE (DECREASE) IN CASH		(1,316,597	)		748,371
CASH, BEGINNING OF PERIOD	$	1,501,766		$	455
CASH, END OF PERIOD	$	185,169		$	748,826
Supplemental cash flow information and noncash financing activities:
Cash paid for:
Interest	$	--144,127		$	--
Income taxes	$	--		$	--
Noncash activities:
Assignment of note receivable for note payable	$	--		$	131,645
Issuance of common stock for assets	$	--		$	400,000
Issuance of common stock for assets	$	400,000		$	--
Conversion of note payable into common stock and accrued interest	$	--		$	400,000
Issuance of common stock for settlements	$	412,000			--
Conversion of note payable into common stock and accrued interest	$	1,554,954		$	450,000
Issuance of common stock and note payable for assets	$	--		$	1,095,000

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

F-4

Texas South Energy, Inc.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

~~September 30~~March 31, ~~2018~~2019

(Unaudited)

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.

In January 2017, The Company formed Texas South Operating Company, Inc as a wholly owned subsidiary of the Company. It was incorporated pursuant to the laws of the State of Texas on January 11, 2017.

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. The consolidated financial statements reflect our accounts after elimination of all significant intercompany transactions and balances.

The Company has limited operating history and has devoted its activities to the acquisition of oil and gas assets.

The Company had established a fiscal year end of October 31; however, 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.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in all material respects in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Intercompany accounts and transactions are eliminated. Pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying unaudited consolidated financial statements have been prepared on the same basis as the audited financial statements for the year ended December 31, ~~2017~~2018.

Because certain information and footnote disclosures have been condensed or omitted, these unaudited consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended December 31, ~~2017~~ 2018, which are included in the Company’s annual report for the year ended December 31, ~~2017~~2018 (the “~~2017~~2018 Annual Report”). In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included. Management believes that the disclosures made in these unaudited consolidated financial statements are adequate to make the information not misleading. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

There have been no changes in the Company’s significant accounting policies from those that were disclosed in the Company’s 2018 ~~2017~~ Annual Report.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While management believes that such estimates are reasonable when considered in conjunction with the financial position and results of operations taken as a whole, actual results could differ from those estimates, and such differences may be material to the financial statements.

F-5

Basic and Diluted Net Loss per Share

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. Because the Company is operating at a loss, it has no potential dilutive instruments and accordingly basic loss and diluted loss per share are the same.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued its final standard on revenue from contracts with customers. The standard, issued as Accounting Standards Update (“ASU”) No. 2014-09: Revenue from Contracts with Customers (Topic 606), 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 the Company has no revenue, the new guidance is not expected to have a material impact on its financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which relates to the accounting for leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than twelve months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are evaluating the impact the adoption of ASU 2016-02 will have on our consolidated financial statements.

Other new pronouncements issued but not effective until after ~~September~~March 3031, ~~2018~~2019 are not expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

NOTE 3 - GOING CONCERN

The 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 operational costs in order to allow it to continue as a going concern. The Company has accumulated losses as of ~~September~~March 3031, ~~2018~~2019, of $1418,~~904~~367,~~726~~028. The Company will be dependent ~~upon~~ upon the raising of additional capital through the best-efforts placement of its equity and/or debt securities in order to implement its business plan. There can be no assurance that the Company will be successful in either situation in order to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. 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.

~~NOTE 4~~ F- ~~OIL & GAS PROPERTIES~~6

~~In March 2014, we entered into a farm out~~NOTE ~~letter~~4 ~~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~~OIL ~~licensed~~& ~~and~~GAS 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 in 9 prospects for approximately $10,720,000 paid to GulfSlope through September 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.PROPERTIES

~~F-6~~Oil and Gas Properties

~~On January 8, 2018, the Company entered~~The 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~~capitalized ~~in its Gulf of Mexico~~ oil and gas ~~leases~~properties ~~(the~~comprised ~~“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”).following:

Under the terms of the Agreement, the Parties have committed 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, 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. 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 September 30, 2018, the potential value of issuing 20% of our outstanding stock is approximately $6,000,000. 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.

	March 31, 2019		December 31, 2018

Unproved leasehold costs	$	13,307,670	$	12,659,884
Uncompleted wells, equipment and facilities		594,517		1,434,554
Total costs	$	13,902,187	$	14,094,438

The ~~Company~~majority ~~will assign a two-tenths~~ of ~~one~~ ~~percent of 8/8ths net profits interest in certain of~~ the ~~Company’s~~assets ~~oil~~are ~~and~~undeveloped offshore ~~gas~~ leases in the ~~two~~Gulf ~~Phase~~of IMexico. ~~prospects~~Included ~~to Hi-View~~are ~~Investment~~onshore ~~Partners,~~properties ~~LLC~~which ~~(“Hi-View”)~~were inacquired ~~consideration~~during ~~for~~the ~~consulting~~Sydson ~~services~~acquisition. ~~provided~~Both are ~~pursuant~~currently tobeing adeveloped. ~~non-exclusive consulting~~At ~~engagement~~December ~~dated October 25~~31, ~~2017~~2018, bythe ~~and~~properties ~~between~~were ~~Hi-View,~~evaluated for ~~the~~impairment ~~Company,~~ and ~~GulfSlope (~~the ~~“Advisory~~Company ~~Agreement”).~~recorded ~~Hi-View~~$452,018 ~~will be entitled~~ to ~~additional~~impairment ~~assignments~~expense onprimarily for the ~~same~~Canoe ~~terms~~Prospect. ~~and~~Additional ~~conditions~~impairment ~~as described above related to any~~ of ~~Leases in~~$1,778,000 ~~which~~was ~~Delek~~recorded ~~elects~~during ~~to participate in~~ the ~~drilling~~first quarter of an2019 ~~exploratory~~due ~~well.~~to ~~In addition,~~ the ~~Company~~subsequent ~~issued~~activity ~~an aggregate~~ of ~~twenty million~~the ~~shares~~Tau ofdrilling ~~its common stock to Hi-View in consideration for those consulting services provided pursuant to the Advisory Agreement~~prospect.

~~In January 2017, the Company entered into~~Participation an asset purchase agreement with Sydson Energy, Inc. (“Sydson Energy”) and Sydson Resources, L.P. (“Sydson Resources” and collectively with Sydson Energy, “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. The oil and gas assets include the following:Agreement

●On January In8, ~~Texas~~2018, wethe ~~acquired~~Company entered into a ~~50%~~participation ~~working~~agreement ~~interest~~dated ineffective January 1, 2018 (the ~~undrilled~~“Agreement”) with ~~acreage~~Delek ~~above~~GOM 4Investments,~~500’~~ inLLC, ~~the~~a ~~West~~subsidiary ~~Tuleta~~of ~~Field~~Delek Group Ltd. (“Delek”), ~~Bee~~and ~~County~~GulfSlope (collectively, ~~Texas~~the ~~comprised~~“Parties”) for the partial farm-out of ~~approximately~~the ~~1,800~~Company’s ~~gross~~interests ~~acres~~in its Gulf of Mexico oil and ~~900~~gas ~~net~~leases ~~acres~~(the ~~with~~“Farm-out”). The aAgreement ~~net~~sets ~~revenue~~out ~~interest~~the terms and conditions of ~~approximately~~the ~~75%.~~Parties ~~The~~participation ~~primary~~in the drilling ~~objectives~~of ~~are~~up ~~the~~to ~~Vicksburg~~a ~~and~~nine ~~Hockley~~well ~~sands~~multi-phase exploration ~~which~~program ~~are~~targeting ~~structurally~~the ~~high~~Company’s onprospects ~~this~~(the ~~acreage~~“Prospects”) ~~compared~~located toon the ~~prior~~Company’s ~~downdip~~existing leases ~~production~~(the “Leases”).

●Under the Interms of the ~~adjacent~~Agreement, ~~Ray~~the ~~Field,~~Parties ~~also~~have committed to initially drill two of the Company’s prospects in ~~Bee~~Phase ~~County~~I (the “Initial Phase”) with Delek having the option to participate in two additional two-well drilling phases and a final, three-well ~~Texas~~drilling phase (collectively, wethe ~~acquired~~“Phases”). In each Phase, Delek will earn a 5075% working interest inupon paying 90% of the ~~undrilled~~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, ~~acreage~~each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated with the ~~Walton~~Prospects. GulfSlope will be the Operator during exploratory drilling of a Prospect, ~~Campbell~~however, ~~and~~subsequent ~~Ray~~to ~~leases~~a ~~comprising~~commercial ~~approximately~~discovery, 75Delek ~~gross~~will ~~acres~~have ~~with~~the aright ~~net~~to ~~revenue~~become the ~~interest~~Operator. Delek will have the right to terminate this Agreement at the conclusion of ~~approximately~~any 75drilling 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 ~~primary~~Company ~~drilling~~has ~~objectives~~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 ~~acreage~~option ~~are~~before ~~also~~the expiration date. At March 31, 2019, the ~~Vicksburg~~potential ~~and~~value ~~Hockley~~of ~~sands~~issuing ~~updip~~20% of our outstanding stock is approximately $5,800,000. The foregoing description of the Agreement does not purport to ~~prior~~be ~~production~~a ~~above~~complete 3description of the terms,~~700’~~ provisions and conditions of such document, and represents only a summary of certain of the principal terms, provisions and conditions thereof.

●The Company ~~Southeast~~will assign a two-tenths of ~~San~~one ~~Antonio,~~percent weof ~~are~~8/8ths ~~acquiring~~net profits interest in certain of the Company’s oil and gas leases in ~~with~~the ~~working~~two ~~interest~~Phase ~~partners~~I ~~covering~~prospects ~~more~~to ~~than~~Hi-View 4Investment Partners,~~400~~ ~~acres~~LLC (“Hi-View”) in consideration for ~~horizontal~~consulting ~~projects~~services provided ~~above~~pursuant 6to a non-exclusive consulting engagement dated October 25,~~000’~~ in2017, ~~the~~by ~~Austin~~and ~~Chalk~~between Hi-View, ~~Eagle~~the ~~Ford~~Company, and ~~Buda~~GulfSlope (the ~~Lime~~“Advisory ~~formation~~Agreement”). ~~These~~Hi-View ~~projects~~will ~~are~~be ~~adjacent~~entitled to ~~substantial~~additional ~~prior~~assignments ~~production~~on the same terms and ~~contain~~conditions ~~both~~as described ~~conventional~~above ~~and~~related ~~unconventional~~to ~~oil~~any ~~targets.~~of WeLeases ~~began~~in ~~drilling~~which ~~operations~~Delek onelects to participate in the ~~first~~drilling of an exploratory well. ~~during~~In addition, the ~~third~~Company ~~quarter~~issued an aggregate of ~~2018~~twenty million shares of its common stock to Hi-View in consideration for those consulting services provided pursuant to the Advisory Agreement.

F-7

~~NOTE 5 - COMMON STOCK~~Acquisition

~~The Company had 950,000,000 shares of common~~In ~~stock~~January ~~authorized with a par value of $0.001~~2017, ~~however during April 2018~~ the ~~holders~~Company ofentered ainto ~~majority~~an ofasset ~~the~~purchase ~~issued~~agreement ~~and~~with ~~outstanding shares~~Sydson, ofwhere ~~common~~Sydson ~~stock~~assigned ~~consented~~ to ~~action~~us ~~via~~certain ~~written~~onshore ~~consent~~oil and togas ~~adopt~~assets anand ~~amendment~~interests ~~to our amended~~ and ~~restated~~certain ~~articles~~tangible ofassets ~~incorporation to~~and ~~increase the number of authorized shares of common stock from 950~~additionally,~~000,000~~ tocertain ~~1,350,000,000.~~employees ~~The Company filed a Schedule 14C information statement with the Securities~~ and ~~Exchange Commission and mailed~~ a ~~copy~~consultant ~~to each holder~~ of ~~common~~Sydson ~~stock~~have ~~of record disclosing~~agreed ~~this consent~~ to ~~take~~become ~~action~~employees ~~without~~and a ~~shareholders’~~consultant ~~meeting.~~of ~~The amendment became effective after (i) 20 days from~~ the ~~mailing of~~Company. ~~the~~Sydson ~~information~~is ~~statement~~a toprivate ~~the~~oil ~~common~~and ~~stock~~gas ~~holders~~company ofwith ~~record~~land ~~(May~~operations ~~15,~~in ~~2018)~~Texas and Louisiana ~~(ii)~~that ~~once~~has itbeen isin ~~filed~~business ~~with~~since ~~the Nevada Secretary of State (May 17, 2018)~~1982.

OnIn connection ~~August~~with 1,the ~~2018~~asset acquisition, the Company ~~filed~~acquired a ~~preliminary proxy~~variety ~~statement requesting shareholders to vote on increasing the authorized shares~~ of ~~common~~proprietary ~~stock~~seismic ~~from 1~~data,~~350,000,000~~ tocomputer 1equipment,~~500,000,000.~~ furniture Weand ~~filed~~fixtures ~~a definitive proxy statement on August 14, 2018~~ and ~~the~~other ~~proposal~~office ~~passed~~equipment.

AsThe consideration ofpayable ~~September~~by ~~30, 2018,~~ the Company ~~had 990,199,769~~to ~~shares~~Sydson ~~of common stock issued~~ and ~~outstanding.~~affiliates ~~During~~was ~~the~~(i) ~~nine~~100 ~~months~~million ~~ended~~shares ~~September~~of ~~30, 2018 the~~ Company ~~sold~~common ~~58,683,350 shares of~~ stock atto aMichael ~~price of $~~J.02 Mayell ~~per~~valued ~~share~~at ~~for a total of~~ $1845,~~173,667. During the nine months ended September 30, 2018 the Company issued 20,~~000~~,000~~ ~~shares~~and in(ii) ~~exchange for lease brokerage fees valued at~~ $~~400~~250,000, ~~issued~~through ~~63,198,147~~a ~~shares~~promissory innote ~~exchange~~originally ~~for~~due ~~the conversion~~March ~~of $1~~5,~~554,954~~ ~~of debt and accrued interest~~2017, ~~issued~~was ~~20,600,000~~extended ~~shares~~to inJanuary ~~exchange for settlements valued at $412~~1,~~000~~ ~~and issued 5~~2019,~~927,602~~ ~~shares to three employees~~ and arecently ~~consultant~~extended ~~for~~to ~~services~~January ~~rendered for $86~~1,~~121~~ 2020.

~~NOTE~~In conjunction 6with -the ~~RELATED~~acquisition, ~~PARTY~~the ~~TRANSACTIONS~~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.

~~Mr. Askew, our former chief executive officer~~The ~~and~~purchase ~~director~~price for over three years, is currently a consultant to the Company. He resigned effective January 3, 2017 and signed a consulting agreement which is discussed in more detail in footnote 10 “Commitments and Contingencies”. As of ~~September 30,~~this ~~2018,~~asset ~~the~~acquisition ~~Company has accrued $700,000 for Mr. Askew’s consulting expenses. This accrual~~ is ~~reported~~summarized ~~on the balance sheet under current liabilities as “Accrued expenses – related party”.~~below:

The Company had received unsecured 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 was written off during the quarter ended March 31, 2018.

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

~~Mr. Mayell, our current chief executive~~Other officer and director effective January 4, 2017, is President of Sydson Energy, Inc. and Managing Partner of the General Partner of Sydson Resources, LP (“Sydson”). Since the Sydson acquisition on January 4, 2017, Sydson and Mr. Mayell have 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 $70,000 which represents a portion of the balance owed to Sydson, with the remainder reported as “Accounts Payable – related party” on the balance sheet. Also on August 11, 2017, the Company signed a note payable agreement with Mr. Mayell for $47,000 which represents some of the advances Mr. Mayell made to the Company. The note payable balances as of September 30, 2018 are $70,000 to Sydson and $47,000 to Mr. Mayell and are reported on the balance sheet under current liabilities as “Convertible notes payable – related party”. The accrued interest on these notes as of September 30, 2018 is $7,978 payable to Sydson and $5,357 payable to Mr. Mayell.Property

~~During~~The Company ~~the~~has ~~nine~~$43,195 ~~months~~of ~~ended September~~furniture ~~30,~~and ~~2018~~fixtures, ~~the~~software ~~Company~~and ~~has paid Mr~~equipment. ~~Mayell~~The inmajority ~~full~~of athe ~~total~~assets ofwere ~~$169,630~~acquired ~~toward~~during the ~~outstanding~~Sydson acquisition ~~accounts~~in ~~payable balance,~~January ~~leaving~~2017. aThe ~~zero~~accumulated ~~balance.~~depreciation Asas of ~~September~~March 3031, ~~2018,~~2019 ~~the~~is ~~Company owes Sydson~~ $1417,~~606~~099. ~~which~~Depreciation is ~~reported~~being onrecorded using the ~~balance sheet~~straight asline ~~“Accounts~~method ~~payable~~of ~~- related party”~~depreciation.

F-8

~~During the nine months ended September~~NOTE ~~30,~~5 ~~2018~~- ~~the~~COMMON Company sold interests in some prospects to several investors, of which the Company owes Sydson Resources, LP its 25% share of the proceeds. Sydson’s share totaled $164,167. The Company made payments to Sydson for $29,963 and applied $82,000 for Sydson’s purchase of a 1% interest in the prospect, so the balance owed to Sydson as of September 30, 2018 was $52,204 and is included in the $66,810 reported as “Accounts payable – related party”.STOCK

InThe Company ~~January~~had ~~2017~~950,000,000 shares of common stock authorized with a par value of $0.001, however during April 2018 the ~~Company~~holders of a majority of the issued and outstanding shares of common stock consented to ~~the~~action ~~following~~via ~~related~~written ~~parties:~~consent ~~Mr.~~to ~~Askew~~adopt 27an ~~million~~amendment to our amended and restated articles of incorporation to increase the number of authorized shares of common stock from 950,000,000 to Mr1,350,000,000. ~~Mayell~~The ~~100~~Company ~~million~~filed ~~shares~~a Schedule 14C information statement with the Securities and ~~Mr.~~Exchange ~~Connally~~Commission ~~65.1~~and ~~million~~mailed ~~shares~~a copy to each holder of common stock of record disclosing this consent to take action without a shareholders’ meeting. The ~~See~~amendment ~~note~~became 10effective ~~“Commitments~~after ~~and~~(i) ~~contingencies”~~20 ~~for~~days ~~additional~~from the mailing of the information statement to the common stock holders of record (May 15, 2018) and (ii) once it is filed with the Nevada Secretary of State (May 17, 2018).

AsOn August ~~discussed~~1, in2018 ~~Note~~the 7,Company filed a preliminary proxy statement requesting shareholders to vote on increasing the ~~Company~~authorized ~~owes~~shares ~~Sydson~~of ~~$250~~common stock from 1,350,000,000 ~~plus~~to ~~accrued~~1,500,000,000. ~~interest~~We –filed ~~short~~a ~~term~~definitive ~~totaling~~proxy ~~$47,596~~statement on aAugust ~~note~~14, ~~related~~2018 toand the ~~acquisition of Sydson assets~~proposal passed.

~~Also~~As ~~discussed~~of inMarch ~~Note~~31, 82019, ~~Mr.~~the ~~Mayell~~Company ~~and JTB~~had ~~Energy LLC~~999,199,769 shares aof ~~company~~common ~~managed~~stock byissued Mrand outstanding. ~~Mayell,~~January ~~have~~2019 ~~each loaned~~ the Company ~~$250~~issued 750,000. ~~Total~~shares ~~interest expense~~ of ~~$67,800~~common ~~has~~stock ~~been accrued~~to asan ofemployee ~~September~~for services ~~30,~~totaling ~~2018~~$7,650. ~~JTB Energy LLC is a related party of Mr. Mayell.~~

~~Also discussed in Note 8, Mr. Mayell loaned~~NOTE ~~the~~6 ~~Company~~- ~~amounts~~RELATED ofPARTY ~~$170,000 and $50,000 for a total of $220,000 during October 2017. The accrued interest on these notes payable total $21,522 as of September 30, 2018.~~TRANSACTIONS

~~During December 2017~~Mr. Askew, ~~the Company~~our ~~received~~former achief ~~loan~~executive ofofficer ~~$50,000~~and ~~from~~director afor ~~shareholder.~~over ~~The~~three ~~note~~years, ~~and interest~~ is ~~due~~currently ~~January~~a 1,consultant ~~2019~~to ~~with~~the anCompany. ~~interest~~He ~~rate of~~resigned ~~10%~~effective ~~per~~January ~~annum.~~3, ~~During~~2017 ~~the~~and ~~outstanding~~signed ~~period,~~a ~~the~~consulting ~~note~~agreement which is ~~convertible~~discussed atin ~~the~~more ~~option~~detail ofin ~~the~~footnote ~~investor~~10 up“Commitments and toContingencies”. ~~the~~As ~~outstanding principal~~of ~~and~~March ~~unpaid~~31, ~~interest~~2019, ~~into~~the ~~common~~Company ~~shares~~has ataccrued $~~0.02~~910,000 ~~per~~for ~~share~~Mr. ~~The~~Askew’s ~~note~~consulting isexpenses. ~~reported as “Secured~~This ~~convertible~~accrual ~~Notes~~is ~~Payable~~reported –on ~~related~~the ~~party”~~balance sheet under ~~short~~current ~~term~~ liabilities onas ~~the~~“Accrued ~~balance~~expenses ~~sheet~~– related party”.

AsMr. ~~discussed~~Mayell, inour ~~Note~~current 8chief executive officer and director effective January 4, an2017, ~~accredited~~is ~~investor~~President of Sydson Energy, Inc. and Managing Partner of the General Partner of Sydson ~~loaned~~Resources, LP (“Sydson”). Since the Sydson acquisition on January 4, 2017, Sydson and Mr. Mayell have 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 $170,~~700~~000. Also on August 11, 2017, the Company signed a note payable agreement with Mr. Mayell for $47,000 which ~~has~~represents some ~~been~~of ~~fully~~the ~~converted~~advances ~~into~~Mr. ~~shares~~Mayell ofmade to the Company’s. ~~common~~The ~~stock~~note payable balances as of March 31, 2019 are $23,667 to Sydson and $47,000 to Mr. Mayell as discussed further in Note 8. The accrued interest on these notes as of March 31, 2019 is $421 payable to Sydson and $1,175 payable to Mr. Mayell. On April 8, 2019 the remaining balance on this $70,000 note payable and the accrued interest was paid to Sydson.

~~Listed~~During ~~below~~the isthree amonths ~~table~~ended ~~summarizing~~March 31, 2019, the ~~amounts~~ ~~owed~~Company tohas paid Mr. Mayell $72,598, Sydson Energy $10,895 and ~~his~~Sydson ~~related~~Resources, ~~parties~~LP $55,097 toward the accrued interest balances.

Name of Related Party	Original Amount		Amount repaid			Balance owed 9/30/18		Accrued Interest		Total owed		Interest rate			Convertible into Shares of Stock
Mr. Michael Mayell		686,630		(197,630	)		489,000		60,373		549,373		10	%	Yes
Sydson Energy, Inc.		325,354		(240,748	)		84,606		7,978		92,584		10	%	Partial
Sydson Resources, LP		380,000		(77,796	)		302,204		47,596		349,800		10	%	No
JTB Energy, LLC		250,000		0			250,000		34,306		284,306		10	%	Yes
Total	$	1,641,984	($	516,174	)	$	1,125,810	$	150,253	$	1,276,063

F-9

As discussed in Note: No8, ~~interest~~the ~~expense~~Company ~~has~~owes ~~been~~Sydson Resources, ~~paid~~LP $250,000 on a note related to ~~date~~the acquisition of Sydson assets. The accrued interest on ~~the~~this ~~above~~note is $6,302 as of ~~balances~~March 31, 2019.

~~NOTE~~Also 7discussed -in ~~NOTES~~Note ~~PAYABLE~~8, Mr. Mayell and JTB Energy LLC, a company managed by Mr. Mayell, have each loaned the Company $250,000. As of March 31, 2019, the balance on the notes total $472,000. The accrued interest on these notes total $52,356 as of March 31, 2019.

~~The~~Also ~~Company~~discussed ~~had received advances during 2014 and prior from a prior director~~ in ~~the~~Note ~~amount of $52~~8,~~152~~ Mr. ~~The~~Mayell ~~amount of $42,324 due to the related party was written off during~~loaned the ~~quarter~~Company ~~ended~~amounts ~~March~~of 31$170,000 ~~2017~~ and ~~recorded~~$50,000 asfor ~~“Other income” as~~ a ~~result~~total of ~~the expiration of the applicable statute of limitations. During the quarter ended March 31, 2018, the remaining balance of~~ $9220,~~828~~000 ~~was~~during ~~written~~October ~~off and recorded as “Other income”~~2017. ~~These~~The ~~advances~~accrued ~~were~~interest ~~previously recorded within the “Due to related party” line~~ on ~~the~~these ~~balance~~notes ~~sheet~~payable ~~and~~total ~~now~~$5,500 ~~have~~as aof ~~zero~~March ~~balance~~31, 2019.

InAlso ~~connection~~discussed ~~with~~in ~~the~~Note ~~Sydson asset acquisition~~8, ~~part~~during ofDecember 2017, the ~~consideration~~Company ~~was~~received ana ~~unsecured~~loan of $~~250~~50,000 ~~note~~from ~~payable~~a ~~to Sydson due March 1, 2017~~shareholder. The ~~note~~accrued ~~has been amended effective March 23, 2017 to extend the due date to January 1, 2019 and to charge a fixed rate of 10%~~ interest on ~~the~~ this note. ~~The~~totals ~~balance of~~ $~~250~~1,~~000~~250 isas ~~included in “Notes payable-related party” in the current liabilities section~~ of ~~the~~ ~~balance~~March ~~sheet~~31, 2019.

~~The~~Also ~~company~~discussed ~~financed~~in ~~the~~Note ~~current~~8, ~~year~~during ~~insurance~~March 2019, ~~premiums~~the ~~and~~Company ~~that~~received ~~note has~~ a ~~balance~~loan of $1580,~~484~~000 asfrom ofa ~~September 30, 2018~~shareholder/employee. ~~This~~The ~~note~~accrued isinterest ~~reported~~on asthis ~~“Notes~~note ~~payable” under~~totals ~~current~~$602 ~~liabilities~~as onof ~~the~~March ~~balance sheet~~31, 2019.

~~F-9~~Listed below is a table summarizing the amounts owed to Mr. Mayell and his related parties.

NOTE 8 - CONVERTIBLE NOTES PAYABLE

Name of Related Party	Original Amount		Amount repaid			Balance owed 3/31/19		Accrued Interest		Total owed		Interest rate			Convertible into Shares of Stock
Mr. Michael Mayell		686,630		(197,630	)		489,000		12,225		501,225		10	%		Yes
Sydson Energy, Inc.		363,116		(339,449	)		23,667		421		24,088		10	%		Yes
Sydson Resources, LP		381,300		(131,300	)		250,000		6,302		256,302		10	%		Yes
JTB Energy, LLC		250,000		0			250,000		46,806		296,806		10	%		Yes
Total	$	1,681,046	($	668,379	)	$	1,012,667	$	65,754	$	1,078,421

~~Effective March 23, 2017 the Company extended~~NOTE an7 ~~unsecured~~- ~~promissory~~NOTES 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 was $1,118,355 and was reported as “Convertible Notes Payable” under long term liabilities on the balance sheet. During the quarter ending March 31, 2018, the Company converted an additional $400,000 of the principal balance into 15,000,000 shares of the Company’s common stock. The transaction was broken down as follows, 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. During the second quarter of 2018 another $200,000 of the principal balance was converted into 10,000,000 share of common stock at a conversion price of $0.02. The amended note agreement now states that the note is convertible into common shares at an average calculated price not to be below $0.02 or to exceed $0.04 per share. The conversion is 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 38,198,147 shares of the Company’s common stock at a conversion rate of $0.025 per share.PAYABLE

~~During~~The ~~April~~Company ~~2017,~~financed the ~~Company~~ ~~received~~current ayear ~~loan~~insurance premiums ofand ~~$125,000~~that ~~from~~note ~~Mr.~~has ~~Mayell and~~ a ~~loan~~balance of $~~125~~3,~~000~~947 ~~from~~as ~~JTB Energy, LLC. Both loans are secured by a 5% interest in the majority~~ of ~~the~~March ~~offshore leases~~31, ~~payable upon demand with interest rates of 10% per annum~~2019. ~~During~~This ~~the outstanding~~note ~~period,~~is 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. The notes are reported as “~~Convertible~~Notes ~~notes~~ payable ~~– related party~~” under current liabilities. ~~The notes are convertible up to the outstanding principal and accrued interest into common shares at $0.02 per share. During June 2018 the Company paid $18,000~~ on ~~one of Mr. Mayell’s notes payable, leaving a balance of $107,000 as of June 30, 2018. During July 2018~~ the ~~Company paid an additional $10,000 on this note payable leaving a~~ balance ~~of $97,000 as of September 30, 2018~~sheet.

During June 2017, the Company received an additional loan of $125,000 from Mr. Mayell and an additional loan of $125,000 from JTB Energy, LLC. Both loans are secured by a 5% interest in the majority of the offshore leases, all payable upon demand with interest rates of F-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. The notes are reported as “Secured convertible notes payable – related party” under current liabilities. The notes are convertible up to the outstanding principal and accrued interest into common shares at $0.02 per share.

~~During August 2017, the Company~~NOTE ~~converted~~8 a- ~~portion~~CONVERTIBLE ofNOTES the accounts payable balances owed to Sydson and Mr. Mayell to note payable agreements, charging interest at 10% per annum. Both Sydson and Mr. Mayell had advanced money to the Company and paid invoices on behalf of the Company, which had previously been reported as “Accounts payable – related party”. The Company converted $70,000 into a note payable to Sydson and $47,000 into a note payable to Mr. Mayell. The remaining balances owed to them will continue to be reported as “Accounts payable – related party”. The notes are reported as “Secured convertible notes payable – related party” under current liabilities. The notes are convertible up to the outstanding principal and accrued interest into common shares at $0.02 per share.PAYABLE

~~During~~In ~~October~~connection ~~2017,~~with the ~~Company received~~Sydson ~~loans~~asset acquisition, part of ~~$170,000~~the ~~and~~consideration was an unsecured $50250,000 ~~from~~note ~~Mr.~~payable ~~Mayell~~to Sydson due March 1, 2017. ~~Both~~The ~~loans~~note ~~are~~was ~~secured~~amended byeffective March 23, 2017 to extend the due date to January 1, 2019 and to charge a 5fixed rate of 10% interest inon the ~~majority~~note. ofDuring ~~the~~January 2019, ~~offshore~~the ~~leases~~due date was extended to January 1, ~~payable~~2020 ~~upon~~and ~~demand~~the ~~with~~note ~~interest~~was ~~rates~~amended to allow for the conversion of ~~10%~~the ~~per~~note ~~annum~~into shares of common stock. During the outstanding period, the ~~notes are~~note 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 and are reported as~~ “~~Secured~~Convertible ~~convertible notes~~Notes payable – -related party” under current liabilities on the balance sheet.

During ~~December~~April 2017, the Company received a loan of $50125,000 from Mr. Mayell and a ~~shareholder~~loan of $125,000 from JTB Energy, LLC. ~~The~~Both ~~note~~loans ~~and~~are secured by a 5% interest isin ~~due~~the ~~January~~majority of 1the offshore leases, ~~2019~~payable ~~with~~upon andemand with interest ~~rate~~rates of 10% per annum. During the outstanding period, the ~~note~~notes is are convertible at the option of the investor up to the outstanding principal and ~~unpaid~~accrued interest into common shares at $0.02 per share. The ~~note~~notes isare reported as “~~Secured~~Convertible ~~convertible~~notes ~~Notes~~payable ~~Payable~~ – related party” under current liabilities on the balance sheet. The notes are convertible up to the outstanding principal and accrued interest into common shares at $0.02 per share. During June 2018 the Company paid $18,000 on one of Mr. Mayell’s notes payable, leaving a balance of $107,000 as of June 30, 2018. During July 2018 the Company paid an additional $10,000 on this note payable leaving a balance of $97,000 as of March 31, 2019.

~~NOTE 9~~ F- ~~FAIR VALUE OF FINANCIAL INSTRUMENTS~~11

~~The~~During June 2017, the Company’s ~~financial~~received ~~instruments~~an additional ~~are~~loan ~~cash~~of $125,000 from Mr. Mayell and ~~accounts~~an additional loan of $125,000 from JTB Energy, LLC. Both loans are secured by a 5% interest in the majority of the offshore leases, all payable upon demand with interest rates of 10% per annum. ~~The~~During ~~recorded~~the ~~values~~outstanding period, the notes are convertible at the option of ~~cash~~the investor up to the outstanding principal and ~~accounts~~accrued interest into common shares at $0.02 per share. The notes are reported as “Convertible notes payable ~~approximate~~– ~~their~~related ~~fair~~party” ~~values~~under ~~based~~current liabilities on ~~their~~the ~~short-term~~balance sheet. The notes are convertible up to the outstanding principal and accrued interest into common shares at $0.02 ~~nature~~per share.

F-During August 2017, the Company converted a portion of the accounts payable balances owed to Sydson and Mr. Mayell to note payable agreements, charging interest at 10% per annum. Both Sydson and Mr. Mayell had advanced money to the Company and paid invoices on behalf of the Company. The Company converted $70,000 into a note payable to Sydson and $47,000 into a note payable to Mr. Mayell. The notes are reported as “Convertible notes payable – related party” under current liabilities on the balance sheet. The notes are convertible up to the outstanding principal and accrued interest into common shares at $0.02 per share.

~~NOTE~~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 majority of the offshore leases, payable upon demand with interest rates of 10% -per ~~COMMITMENTS~~annum. ~~AND~~During ~~CONTINGENCIES~~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 reported as “Convertible notes payable – related party” under current liabilities on the balance sheet.

~~See~~During ~~Note~~December 62017, ~~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~~received ~~and~~a ~~director~~loan of ~~Texas~~$50,000 ~~South~~from ~~in January 2017 and entered into~~ a ~~consulting~~shareholder. ~~agreement~~The ~~with~~note ~~the~~and ~~Company~~interest ~~that~~is ~~began~~due on January 51, ~~2017 and terminates on December 31,~~ 2020, ~~and~~with ~~such term shall be extended for~~ an ~~additional~~interest ~~one-year~~rate ~~period~~of ~~upon~~10% ~~December~~per 31annum. ~~of each~~During ~~calendar~~the ~~year~~outstanding ~~provided~~period, ~~that neither~~ the ~~Company~~note ~~nor~~is ~~consultant~~convertible ~~notify~~at the ~~other~~option onof ~~or prior to 90 days before~~ the ~~applicable~~investor ~~December 31st~~up ~~that either party does not intend~~ to ~~extend~~the ~~this~~outstanding ~~agreement.~~principal ~~The~~and ~~Company~~unpaid ~~shall~~interest into ~~pay~~common toshares ~~Mr.~~at ~~Askew~~ $~~35,000~~0.02 ~~net~~ per ~~month~~ ~~and issued Mr~~share. ~~Askew~~The 27note ~~million~~is ~~shares~~reported ofas ~~Company~~“Convertible ~~common~~Notes ~~stock.~~Payable ~~Upon~~– ~~termination~~related ofparty” ~~Mr.~~under current ~~Askew~~liabilities byon the ~~Company~~balance ~~other than for cause, Mr~~sheet. ~~Askew is entitled to receive three years of his then consulting compensation as severance.~~

~~The~~During ~~Company~~March ~~entered~~2019, ~~into an employment agreement with John B. Connally III to serve as chairman of~~ the ~~board~~Company ~~that~~received ~~began~~a ~~on January 5, 2017 and terminates on December~~loan ~~31, 2020. Upon December 31~~ of ~~each calendar year~~$80,000 ~~the~~from ~~term~~a ~~shall~~shareholder/employee. beThe ~~extended~~note ~~for~~carries ~~one~~an ~~additional~~interest ~~year,~~rate ~~provided~~of ~~that~~10% ~~neither~~per ~~the Company nor Mr~~annum. ~~Connally~~The ~~notify~~note ~~the~~is ~~other~~convertible onat ~~or prior to 90 days before~~ the ~~applicable December 31st date that either~~option ~~party~~of ~~does~~the ~~not~~investor ~~intend~~up to ~~extend~~the ~~this~~outstanding ~~agreement.~~principal ~~The~~and ~~Company~~unpaid ~~shall~~interest ~~pay~~into tocommon ~~Mr.~~shares ~~Connally~~at ~~a base salary of~~ $~~420,000~~0.02 per ~~annum, issued him 65~~share.1 ~~million~~The ~~shares,~~note ~~and~~is ~~Mr.~~reported as ~~Connally~~“Convertible ~~shall~~Notes bePayable ~~entitled~~– torelated ~~standard~~party” ~~and~~under ~~customary~~current ~~benefits.~~liabilities ~~Mr.~~on ~~Connally has agreed to standard non-disclosure provisions. Upon termination of Mr. Connally by~~ the ~~Company~~balance ~~other than for cause, Mr~~sheet. ~~Connally is entitled to receive three years of his then compensation as severance.~~

~~The Company entered into an employment~~NOTE ~~agreement~~9 with Mr. Mayell on January 4, 2017 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~~FAIR ~~non-competition~~VALUE ~~provisions.~~OF ~~Upon~~FINANCIAL ~~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.~~INSTRUMENTS

~~During the first quarter of fiscal~~The ~~2017,~~Company’s ~~the~~financial ~~above~~instruments ~~mentioned~~are ~~agreements~~cash ~~with Mr. Connally~~ and ~~Mr.~~accounts ~~Mayell were amended to extend the due dates~~payable. The ~~payments~~recorded ~~are now~~values ~~due at the end~~ of ~~the~~cash ~~terms~~and ofaccounts ~~the~~payable ~~agreements, which is December 31, 2020. These liabilities are accrued in the financial~~approximate ~~statements~~their ~~and~~fair ~~included~~values inbased ~~the~~on ~~caption~~their ~~“Accrued expenses” as long~~ short-term ~~liabilities on the balance sheet~~nature.

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. 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 28,000,000 shares and Mr. Connally would receive 27,500,000 shares.F-12

InNOTE ~~July~~10 ~~2018,~~- ~~the~~COMMITMENTS ~~consulting~~AND agreement for Mr. Askew 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.CONTINGENCIES

~~NOTE~~See 11Note –6 ~~STOCK~~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 and terminates on December 31, 2020, and such term shall be extended for an additional one-~~BASED~~year ~~INCENTIVE~~period ~~PLAN~~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.

AtThe ~~the~~Company ~~September~~entered 6,into ~~2018~~an ~~annual~~employment agreement ~~meeting,~~with ~~the stockholders~~John ~~approved~~B. ~~the~~Connally ~~adoption~~III to serve as chairman of the ~~Texas~~board ~~South~~that ~~Energy~~began on January 5, ~~Inc~~2017 and terminates on December 31, 2020. ~~2018~~Upon ~~Omnibus~~December ~~Incentive~~31 ~~Plan~~of ~~(the~~each ~~“2018~~calendar ~~Plan”)~~year, ~~effectively~~ ~~July~~the ~~28,~~term ~~2018.~~shall ~~The~~be ~~2018~~extended ~~Plan~~for ~~authorizes~~one additional year, provided that neither the Company ~~issuance~~nor ofMr. ~~100,000,000~~Connally ~~share~~notify ofthe ~~common~~other ~~stock~~on or prior to ~~its~~90 ~~expiration on~~days ~~July~~before ~~28,~~the ~~2028.~~applicable ~~Incentives~~December ~~under~~31st ~~the~~date ~~2018~~that ~~Plan~~either party ~~may~~does benot ~~granted~~intend to ~~employees,~~extend ~~directors,~~this ~~and~~agreement. ~~consultants~~The ofCompany ~~the~~shall ~~Company~~pay into ~~any one~~Mr. orConnally a ~~combination~~base salary of ~~the~~$420,000 ~~following~~per ~~forms:~~annum, ~~incentive~~issued him ~~stock~~65.1 ~~options~~million shares, ~~nonqualified~~and ~~stock~~Mr. ~~options,~~Connally ~~stock~~shall ~~appreciation~~be ~~rights,~~entitled ~~restricted stock~~to ~~awards~~standard orand ~~performance~~customary ~~stock~~benefits. ~~awards~~Mr. ~~which~~Connally ~~are~~has ~~valued~~agreed into ~~whole~~standard non-disclosure orprovisions. inUpon ~~part~~termination byof ~~reference~~Mr. ~~to,~~Connally orby ~~otherwise~~the ~~based~~Company ~~on,~~other ~~our~~than ~~common stock~~for cause, ~~including~~Mr. ~~its~~Connally ~~appreciation~~is inentitled ~~value.~~to Asreceive three years of ~~September~~his ~~30,~~then ~~2018,~~compensation noas ~~awards were granted~~severance.

~~NOTE~~The 12Company entered into an employment agreement with Mr. Mayell on January 4, 2017 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 ~~SUBSEQUENT~~and ~~EVENTS~~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.

~~The~~During ~~employment~~the ~~agreements~~first ~~between~~quarter ~~the~~of ~~Company~~fiscal 2017, ~~and~~the ~~Mr.~~above ~~Michael~~mentioned ~~Mayell~~agreements ~~and~~with Mr. ~~John~~ Connally ~~III~~and ~~were amended effective October 16, 2018~~Mr. ~~Supplement~~Mayell ~~number~~were ~~three~~amended to ~~the~~extend ~~employment agreements added~~ the ~~following~~due ~~sentence:~~dates. ~~Employee~~The ~~has~~payments ~~the~~are ~~right,~~now ~~at his option, to receive restricted shares of Company common~~due ~~stock valued~~ at ~~a price per share equal to~~ the ~~greater~~end of ~~(i) $0.02 and (ii)~~ the ~~average~~terms ~~closing price~~ of ~~Company common stock during~~ the ~~calendar~~agreements, ~~month in~~ which ~~the~~is ~~accrued~~December ~~salary being converted was earned~~31, in2020. ~~lieu~~These ofliabilities ~~cash,~~are ~~for~~accrued ~~all~~in orthe afinancial ~~portion of the~~statements ~~compensation~~and ~~owed~~included toin ~~Employee for~~ the ~~period~~caption ~~between~~“Accrued ~~May~~expenses” 1,as ~~2018~~long ~~and~~term ~~ended~~liabilities ~~September~~on ~~30, 2018. The total owed to Mr. Mayell during this period was $175,000 and~~ the ~~total~~balance ~~owed to Mr~~sheet. ~~Connally III was $175,000. If these totals were converted into shares of stock, each would receive 8,750,000 shares of common stock.~~

~~During~~In ~~October~~ April 2018, the ~~Company~~employment ~~sold~~agreements for 5Mr. Mayell and Mr. Connally were amended,~~000~~ whereby all or a portion of the compensation owed to Mr. Mayell and Mr. Connally for the period from January 2017 through April 30,~~000~~ 2018 can be paid by the Company, at the option of the employee, in restricted shares of the Company’s common stock valued at a$0.02 ~~price~~ per share. In October 2018, the employment agreements for Mr. Mayell and Mr. Connally were amended, whereby all or a portion of $0the compensation owed to Mr.02 Mayell and Mr. Connally for athe ~~total~~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 $~~100~~0.02 per share. In January 2019,~~000~~ the employment agreements for Mr. Mayell and ~~issued~~Mr. Connally ~~250~~were amended,~~000~~ ~~shares~~whereby toall or a ~~consultant~~portion of the compensation owed to Mr. Mayell and Mr. Connally for ~~services~~the period from October ~~provided~~2018 through December 31, 2018 can be paid by the Company, at athe ~~price~~option ~~per~~of ~~share~~the employee, in restricted shares of the Company’s common stock valued at $0.02 ~~for~~per ashare. ~~total~~As of $5the 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 ~~for~~shares and ~~services~~Mr. Connally would receive 41,500,000 shares.

~~During~~In ~~November~~July 2018, ~~through~~the ~~our~~consulting ~~Form~~agreement for ~~10Q~~Mr. Askew was amended, whereby all or a portion of the compensation owed to Mr. Askew for the period from February 2017 through ~~filing~~April ~~date~~30, 2018 can be paid by the Company, ~~sold~~at 2the option of the consultant,~~500,000~~ in restricted shares of ~~common~~the Company’s common stock valued at a$0.02 ~~price~~ per share. ofThe $0total owed to Mr.02 Askew for athat ~~total~~period ofwas $50525,000. 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.

FOn 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-11out 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”).

~~ITEM~~Under the terms of the Agreement, the Parties have committed 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, 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. ~~MANAGEMENT~~In ~~DISCUSSION~~addition, ~~AND~~Delek ~~ANALYSIS~~will OFpay ~~FINANCIAL~~the ~~CONDITION~~Company ~~AND~~$405,000 ~~RESULTS~~upon OFthe ~~OPERATIONS~~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 March 31, 2019, 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 following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with (i) the accompanying unaudited financial statements and notes thereto for the nine months ended September 30, 2018 and 2017, and with our audited financial statements and notes thereto for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10F-~~K (the “2017 Annual Report”) and (ii) the discussion under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2017 Annual Report.~~13

~~Forward Looking~~NOTE ~~Statements~~11 – STOCK-BASED INCENTIVE PLAN

~~This report~~At onthe ~~Form~~September ~~10-Q~~6, ~~contains~~2018 ~~certain~~annual ~~forward-looking~~meeting, the ~~statements.~~stockholders ~~All~~approved ~~statements~~the ~~other~~adoption ~~than~~of ~~statements~~the ofTexas ~~historical~~South ~~fact~~Energy, ~~are~~Inc. 2018 Omnibus Incentive Plan (the “~~forward-looking statements~~2018 Plan”), effectively ~~for~~July ~~purposes~~28, of2018. ~~these~~The ~~provisions,~~2018 ~~including~~Plan ~~any~~authorizes ~~projections~~the issuance of ~~earnings~~100, ~~revenues~~000,000 orshare ~~other~~of ~~financial~~common ~~items;~~stock prior to its expiration on ~~any~~July ~~statements~~28, of2028. Incentives under the ~~plans~~2018 Plan may be granted to employees, ~~strategies~~directors, and ~~objectives~~consultants of ~~management~~the ~~for~~Company ~~future~~in ~~operation;~~ any ~~statements~~one or ~~concerning~~a ~~proposed new~~combination ~~products,~~of ~~services~~the following forms: incentive stock options, ornonqualified ~~developments;~~stock ~~any~~options, ~~statements~~stock ~~regarding~~appreciation ~~future~~rights, ~~economic~~restricted stock ~~conditions~~awards or performance; ~~statements~~stock ofawards ~~belief; and~~which ~~any~~are ~~statement~~valued ofin ~~assumptions~~whole ~~underlying~~or ~~any~~in ofpart ~~the~~by ~~foregoing.~~reference ~~Such~~to, ~~forward-looking~~or ~~statements~~otherwise ~~are~~based ~~subject~~on, toour ~~inherent risks~~common ~~and uncertainties~~stock, ~~and~~including ~~actual~~its ~~results~~appreciation ~~could~~in ~~differ~~value. ~~materially~~As ~~from~~of ~~those~~March ~~anticipated~~31, by2019, ~~the~~no ~~forward-looking~~awards ~~statements~~were granted.

~~Business Overview~~ NOTE 12 – ASSET RETIREMENT OBLIGATIONS

~~Our~~During the fourth quarter of 2018 the Company ~~business~~began ~~plan~~recording asliabilities anfor ~~oil~~the estimated cost to plug, dismantle and ~~gas~~abandon ~~company~~our iswells. toThese ~~focus~~liabilities ~~primarily~~will be adjusted annually based on ~~properties~~changes into the ~~Gulf~~estimated ~~Coast~~date ~~Region.~~to Weretire ~~plan~~the assets or changes to ~~obtain~~the ~~and~~estimated ~~manage~~costs to retire the assets. Accretion ~~working~~expense ~~and~~is ~~non-working~~recorded ~~interests~~quarterly inas ~~oil~~the ~~and~~discounted ~~gas~~liability ~~properties~~is accreted to its expected settlement value. A summary of the changes in our asset retirement obligation is included in the table below:

We are in the business of exploring for, drilling and producing oil and gas. Our business is subject to multiple factors effecting the production of oil and gas, including, but not limited to: market prices; national and international economic conditions; import and export quotas; availability of drilling rigs, casing, pipe, and other equipment and supplies; availability of and proximity to pipelines and other transportation facilities; the supply and price of competitive fuels; and the regulation of prices, production, transportation, and marketing by domestic and foreign governmental authorities. Additionally, we may not have control over whether the owner or operator of the lease will elect to explore for oil and gas on such properties, or to develop them following discoveries that may occur. Each of these factors may affect the rate at which oil and gas are produced, if ever, on properties in which we may have an interest.

Asset Retirement Obligations	Quarter Ended March 31, 2019		Quarter Ended March 31, 2018

Balance, beginning of quarter	$	40,380	$	--
Liabilities recorded		--		--
Accretion expense		3,252		--
Balance, end of quarter		43,632		--
Less: Current portion		--		--
Long-term portion	$	43,632	$	--

~~Our Current~~NOTE ~~Mineral~~13 ~~Interests~~- SUBSEQUENT EVENTS

~~In March~~On ~~2014,~~April ~~we entered into a farm out letter agreement with GulfSlope Energy~~8, ~~Inc.~~2019 ~~relating to certain prospects GulfSlope bid on at~~ the ~~Central~~remaining ~~Gulf~~balance 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 in 9 prospects and have paid approximately~~ $1023,~~720,000~~667 ~~to GulfSlope through September 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~~$70,000’ tonote ~~25,000’~~payable ~~and~~to ~~will~~Sydson ~~be the operator of record for the initial well on each of the prospects. In August 2017~~Energy, ~~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~~Inc. ~~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~~accrued ~~Prospect. In January 2018, the Company acquired a 20% working~~ interest inof ~~the~~$473 ~~Vermilion~~were ~~South Addition Block 378 (“Canoe Prospect”) from GulfSlope~~paid.

~~On January~~During 8,April ~~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~~May ~~(collectively,~~2019 the ~~“Parties”) for the partial farm-out of the~~ Company’s ~~interests~~paid ~~in its Gulf of Mexico oil and gas leases (the “Farm-out”)~~Mr. ~~The~~Mayell ~~Agreement sets out~~ the ~~terms~~principal ~~and~~balance ~~conditions~~ of the ~~Parties~~$50,000 ~~participation~~note inpayable ~~the~~dated ~~drilling~~October ~~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”)~~2017.

2During April and May 2019 the Company paid Mr. Mayell $10,500 of the principal balance of the $47,000 note payable dated August 2017.

~~Under the~~As ~~terms~~ of ~~the~~April ~~Agreement~~30, the Parties have committed 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 final2019, ~~three-well~~ ~~drilling~~Texas ~~phase~~South ~~(collectively~~Energy, Inc. (the “~~Phases~~Company”). Inhas ~~each~~received ~~Phase, Delek will earn~~ a ~~75%~~Default ~~working~~Notice ~~interest~~and ~~upon paying~~Demand ~~90%~~for ofPayment under the ~~exploratory~~terms ~~costs associated with drilling each exploratory well. The Company will thus retain a 5% working interest while paying 2%~~ of ~~the~~its ~~exploratory~~joint ~~costs~~operating ~~associated~~ agreement with ~~drilling~~GulfSlope ~~each~~Energy, ~~well~~Inc. In(“GulfSlope”) ~~addition,~~and Delek ~~will~~GOM ~~pay the Company $405~~Investments,~~000~~ ~~upon~~LLC ~~the~~as ~~filing of each exploration plan with BOEM and/or BSEE on~~ a ~~Prospect~~result inof ~~each Phase. During March 2018 Delek made~~ its ~~first~~ payment offailure ~~$405,000 to the Company as the initial plan was filed. Delek made a second payment~~ of $~~405~~2,~~000 to the Company during May 2018. Also~~870, ~~each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated~~183 ~~with~~due ~~the~~as ~~Prospects. GulfSlope will be the Operator during exploratory drilling~~ of aApril ~~Prospect~~18, ~~however,~~2019 ~~subsequent~~with torespect ~~a commercial discovery, Delek will have the right~~ to ~~become~~drilling the ~~Operator.~~Tau ~~Delek~~Prospect ~~will~~in ~~have~~ the ~~right~~Gulf ~~to terminate this Agreement at the conclusion~~ of ~~any~~Mexico ~~drilling~~Outer ~~Phase~~Continental Shelf. ~~Delek~~GulfSlope, ~~will also have~~ the ~~option to purchase up to 5% of the Company’s common stock upon fulfilling~~ ~~its~~operator ~~obligation for each Phase (maximum~~ of ~~20% in~~ the ~~aggregate)~~Tau atProspect, apreviously ~~price~~informed ~~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~~February 812, ~~2020. The~~2019 ~~Company~~of ~~has~~an ~~not~~event ~~recorded~~of ~~any~~default ~~cost associated~~ with ~~the~~respect ~~option due~~ to the ~~future~~payment failure ~~performance obligation~~ of ~~Delek.~~$1,299,229, Ifwhich ~~Delek~~amount ~~meets the~~is ~~obligation~~included ~~and~~in ~~exercises its option~~ the ~~Company will record the option value at that time as an increase to Oil and Gas Properties. At September 30~~$2, ~~2018~~870,183 ~~the~~amount ~~potential~~due ~~value~~as of ~~issuing~~April ~~20% of our outstanding stock is approximately $6~~18,~~000,000~~ 2019. The ~~foregoing description~~Company offiled ~~the Agreement does not purport to be~~ a ~~complete~~Form ~~description~~8-K on ofMay ~~the terms~~6, ~~provisions~~2019 ~~and~~with ~~conditions~~respect ofto ~~such~~this ~~document, and represents only a summary of certain of the principal terms, provisions and conditions thereof~~event.

~~The Company~~On ~~will~~May ~~assign~~13, a2019 ~~two-tenths~~GulfSlope ofprovided ~~one~~an ~~percent~~update on ofdrilling ~~8/8ths~~the ~~net~~Tau ~~profits~~Prospect ~~interest~~on inShip ~~certain~~Shoal ofblocks ~~the~~336 ~~Company’s~~and ~~oil~~351. ~~and~~Their ~~gas~~press ~~leases in~~release ~~the~~stated ~~two~~that ~~Phase~~they Ihad ~~prospects~~elected to ~~Hi-View~~abandon ~~Investment Partners, LLC (“Hi-View”) in consideration for consulting services~~this ~~provided~~well ~~pursuant~~due to avarious ~~non-exclusive~~factors ~~consulting~~but ~~engagement~~that ~~dated~~they ~~October~~may ~~25, 2017, by and between Hi~~re-~~View,~~enter ~~the~~at ~~Company,~~a ~~and~~later ~~GulfSlope (the “Advisory Agreement”)~~time. ~~Hi-View~~As ~~will~~a beresult ~~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~~performance, the Company ~~issued~~has anrecognized impairment ~~aggregate~~expense of ~~twenty~~$1,778,000 ~~million shares~~ of ~~its~~the ~~common~~drilling ~~stock~~costs toas ~~Hi-View~~of inMarch ~~consideration~~31, ~~for those consulting services provided pursuant to the Advisory Agreement~~2019.

~~In January~~On ~~2017~~May 15, 2019, the Company ~~entered~~received ~~into~~a anloan ~~asset purchase agreement with Sydson Energy~~of $50,000 ~~Inc.~~from ~~(“Sydson~~a ~~Energy”) and Sydson Resources, L~~shareholder.P. ~~(“Sydson~~The ~~Resources”~~note and ~~collectively~~interest ~~with~~is ~~Sydson~~due ~~Energy,~~May ~~“Sydson”)~~14, ~~where~~2020 ~~Sydson assigned~~with toan usinterest ~~certain~~rate ~~onshore~~of ~~oil~~10% ~~and~~per ~~gas~~annum. ~~assets~~During ~~and~~the ~~interests~~outstanding period, ~~and~~the ~~certain~~note ~~tangible~~is ~~assets~~convertible ~~and~~at ~~additionally,~~the ~~certain~~option ~~employees and a consultant~~ of ~~Sydson~~the ~~have~~investor ~~agreed~~up to ~~become employees and a consultant of~~ the ~~Company.~~outstanding ~~Sydson~~principal isand aunpaid ~~private~~interest ~~oil~~into ~~and~~common ~~gas company~~shares ~~with~~at ~~land operations in Texas and Louisiana that has been in business since 1982~~$0.01 ~~The~~per ~~oil and gas assets include the following:~~share.

●On InMay ~~Texas~~16, we2019 ~~acquired a 50% working interest in~~ the ~~undrilled~~Company ~~acreage~~was ~~above~~authorized ~~4,500’~~to inissue ~~the West Tuleta Field~~10, ~~Bee County~~000,000 ~~Texas~~shares ~~comprised~~ of ~~approximately~~its ~~1,800~~common ~~gross~~stock ~~acres~~to ~~and 900 net acres with~~ a ~~net~~company for ~~revenue~~services ~~interest~~rendered, ofhowever ~~approximately 75%. The primary drilling objectives are~~ the ~~Vicksburg~~shares ~~and~~have ~~Hockley~~not ~~sands~~yet ~~which~~been ~~are~~issued ~~structurally~~as ~~high~~of ~~on this acreage compared to~~ the ~~prior~~date ~~downdip~~of ~~production~~this report.

● In the adjacent Ray Field, also in Bee County, Texas, we acquired a 50% working interest in the undrilled, acreage on the Walton, Campbell, and Ray leases comprising approximately 75 gross acres with a net revenue interest of approximately 75%. The primary drilling objectives on this acreage are also the Vicksburg and Hockley sands updip to prior production above 3,700’.F-14

●ITEM Southeast of San Antonio, we have acquired leases with working interest partners covering approximately 4,400 acres for horizontal projects above 6,000’ in the Austin Chalk, Eagle Ford, and Buda Lime formation2. ~~These~~MANAGEMENT ~~projects~~DISCUSSION ~~are~~AND ~~adjacent~~ANALYSIS toOF ~~substantial~~FINANCIAL ~~prior~~CONDITION ~~production~~AND ~~and~~RESULTS ~~contain~~OF both conventional and unconventional oil targets. We began drilling operations on the first well, the TXSO Richter Unit 1H, to a total depth of 9,447’ measured depth (MD) during the third quarter of 2018. The well has been completed with 5 ½” casing set at 9,439’ MD and is waiting on a frac treatment scheduled for November 2018.OPERATIONS

3The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with (i) the accompanying unaudited financial statements and notes thereto for the three months ended March 31, 2019 and 2018, and with our audited financial statements and notes thereto for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K (the “2018 Annual Report”) and (ii) the discussion under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2018 Annual Report.

~~Business and~~Forward ~~Acquisition~~Looking ~~Strategy~~Statements

~~Our~~This report on Form 10-Q contains certain ~~primary~~forward-looking ~~business~~statements. ~~strategy~~All ~~includes~~statements ~~acquiring~~other ~~both~~than ~~working~~statements ~~and~~of ~~non~~historical fact are “forward-~~working~~looking ~~interests~~statements” for inpurposes ~~oil~~of ~~and~~these ~~gas~~provisions, ~~properties~~including ~~throughout~~any ~~the~~projections ~~Gulf~~of earnings, revenues, or other financial items; any statements of ~~Coast~~the ~~Region~~plans, strategies, and ~~Texas~~objectives of management for future operation; any statements concerning proposed new products, ~~including~~services, or ~~offshore~~developments; ~~prospects.~~any Westatements ~~will~~regarding ~~consider~~future ~~acquisitions~~economic ~~that~~conditions ~~serve~~or asperformance; astatements ~~platform~~of ~~for~~belief; ~~complementary~~and any statement of ~~operations.~~assumptions Inunderlying ~~January,~~any ~~2017~~of the ~~Company~~foregoing. ~~acquired~~Such ~~assets~~forward-looking ~~from~~statements ~~Sydson~~are ~~Energy,~~subject ~~Inc.~~to ~~and~~inherent ~~Sydson~~risks ~~Resources~~and uncertainties, LPand actual results could differ materially from those anticipated by the forward-looking statements.

~~The cost~~Business of implementing the forgoing programs will depend on what oil and gas interests are identified and available on terms acceptable to us. Even if we identify oil and gas interests that are available, the cost of pursuing and acquiring them could be significant. Our ability to pursue any such opportunities will be dependent on our ability to obtain financings through private equity, debt financings or agreements with joint venture partners. We can provide no assurance that we have the necessary cash available or will be able to successfully obtain the necessary financing or joint venture partners to pursue such opportunities.Overview

~~We have~~Our ~~incurred~~business ~~losses~~plan ~~since~~as ~~our~~an ~~inception~~oil and ~~expect~~gas company is to ~~incur~~focus ~~losses~~primarily on properties in ~~future~~the ~~periods~~Gulf Coast Region. We ~~currently~~plan ~~rely~~to ~~primarily~~obtain ~~upon~~and ~~the~~manage ~~sale of~~working ~~our~~and ~~equity~~non-working ~~securities~~interests toin oil ~~fund~~and ~~operations~~gas properties.

~~Liquidity~~We are in the business of exploring for, drilling and ~~Capital~~producing ~~Resources~~oil and gas. Our business is subject to multiple factors effecting the production of oil and gas, including, but not limited to: market prices; national and international economic conditions; import and export quotas; availability of drilling rigs, casing, pipe, and other equipment and supplies; availability of and proximity to pipelines and other transportation facilities; the supply and price of competitive fuels; and the regulation of prices, production, transportation, and marketing by domestic and foreign governmental authorities. Additionally, we may not have control over whether the owner or operator of the lease will elect to explore for oil and gas on such properties, or to develop them following discoveries that may occur. Each of these factors may affect the rate at which oil and gas are produced, if ever, on properties in which we may have an interest.

~~As of September 30, 2018, we had a cash balance of $3,222,908 and a working capital deficit of $2,603,161.~~ Our ~~accumulated~~Current ~~deficit~~Mineral ~~from~~Interests inception (March 15, 2010) to September 30, 2018 was $14,904,726. For the nine months ended September 30, 2018, our net loss of $2,027,966 was mostly funded by proceeds raised from equity financings. During the nine months ended September 30, 2018, our cash position increased by $3,222,453 as a result of the sale of some of our interests in our prospects, receiving prepaid costs from our participation agreement on the Wilinda project, and the sale of the Company’s common stock.

~~During~~In March 2014, we entered ~~the~~into ~~nine~~a ~~months~~farm ~~ended~~out ~~September~~letter ~~30,~~agreement ~~2018~~with GulfSlope Energy, weInc. ~~issued~~(“GulfSlope”) ~~168,409,099~~relating ~~shares~~to certain prospects GulfSlope bid on at the Central Gulf of ~~common~~Mexico ~~stock~~Lease Sale 231, located within 2.2 million acres of ~~which~~3-D ~~58,683,350~~seismic ~~shares~~licensed ~~were~~and ~~issued~~interpreted by ~~for~~GulfSlope. ~~cash~~Under in the ~~amount~~terms of $1the farm-out letter agreement,~~173~~ as amended,~~667,~~ we acquired contractual rights to a 20~~,000,000~~% ~~shares~~working ~~were~~interest in ~~issued~~12 ~~for~~blocks ~~lease~~covered ~~brokerage~~in ~~fees~~9 ~~valued~~prospects atfor approximately $~~400~~10,~~000~~720,000 63paid to GulfSlope through September 30,~~198,147~~ ~~shares~~2018. We have agreed ~~were~~to ~~issued~~pay our proportionate share of the net rental costs related to ~~convert~~the ~~$1,554,954~~prospects. GulfSlope has conducted extensive seismic work on all of ~~debt~~the ~~and~~prospects ~~accrued~~focusing ~~interest~~on ~~into~~the ~~common~~high ~~stock~~potential subsalt play at depths of 15,000’ 20to 25,~~600,~~000’ ~~shares~~and ~~were~~will ~~issued~~be inthe operator ~~exchange~~of record for ~~settlements~~ ~~value~~the atinitial ~~$412~~well on each of the prospects. In August 2017,~~000~~ the Company acquired a 20% working interest from GulfSlope in Ship Shoal Block 351 and 5in Ship Shoal Block 336,~~927,602~~ ~~shares~~which ~~were~~are ~~issued~~collectively referred to ~~three~~as ~~employees~~the ~~and~~Tau Prospect. In October 2017, the Company acquired a ~~consultant~~20% ~~for~~working ~~services~~interest ~~rendered~~from GulfSlope in ~~lieu~~Eugene Island Block 397 and Green Canyon Block 4, which are ofcollectively ~~cash~~referred ~~for~~to ~~$86~~as the Quark Prospect. In January 2018,~~121~~ the Company acquired a 20% working interest in the Vermilion South Addition Block 378 (“Canoe Prospect”) from GulfSlope.

We will need additional financing to carry out our business plan. Specifically, we will need cash to fund our obligations with respect to (i) drilling the Canoe and Tau Prospects in Phase I of the offshore program (ii) funding our drilling obligations with respect to the Wilinda project, and (iii) funding our contingent liabilities under the Sydson agreement. Obtaining additional financing will be subject to a number of factors including market conditions, investor acceptance of our business plan, and other conditions outside of our control. These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us. If we cannot raise additional funds, we will not be able to carry out our business plans and may cease operations.2

~~Results~~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 ~~Operations~~Delek Group Ltd. (“Delek”), and GulfSlope (collectively, the “Parties”) for the ~~Three~~partial ~~months~~farm-out ~~Ended~~of ~~September~~the ~~30,~~Company’s ~~2018~~interests ~~compared~~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 ~~Three~~Company’s ~~months~~prospects ~~ended~~(the ~~September~~“Prospects”) ~~30,~~located ~~2017~~on the Company’s existing leases (the “Leases”).

WeUnder the terms of ~~earned~~the ~~revenue~~Agreement, the Parties have committed to initially drill two of $0the ~~during~~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 ~~months~~drilling phase ~~ended~~(collectively, ~~September~~the 30“Phases”). In each Phase, ~~2018~~Delek ~~and~~will ~~2017~~earn a 75% working interest upon paying 90% of the exploratory costs associated with drilling each exploratory well. ~~Workover~~The ~~expenses~~Company ~~for~~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 $15405,~~835~~000 ~~were~~upon ~~recorded~~the filing of each ~~during~~exploration ~~the~~plan ~~three~~with ~~months~~BOEM ~~ended~~and/or ~~September~~BSEE ~~30,~~on a Prospect in each Phase. During March 2018 ~~and~~Delek ~~zero~~made ~~for~~its first payment of $405,000 to the ~~three~~Company ~~months~~as ~~ended~~the ~~September~~initial ~~30,~~plan ~~2017~~was filed. ~~General~~Delek ~~and administrative~~made ~~expenses~~a ~~were~~second payment of $~~607~~405,~~336~~000 ~~($324~~to the Company during May 2018. Also,~~053~~ ~~non-cash)~~each Party will be responsible for its pro rata share (based on working interest) of delay rentals associated with the ~~three~~Prospects. ~~months~~GulfSlope will ~~ended~~be ~~September~~the 30Operator during exploratory drilling of a Prospect, ~~2018~~however, ~~compared~~subsequent to ~~$688~~a commercial discovery,~~788~~ 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 (~~$315,000~~maximum ~~non-cash~~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 ~~three~~Company’s ~~months~~common ~~ended~~stock ~~September~~preceding ~~30,~~the ~~2017~~acquisition. ~~Interest~~This ~~expense~~option ~~was~~will ~~$31~~expire on January 8,~~875~~ ~~for~~2020. The Company has not recorded any cost associated with the ~~three~~option ~~months~~due ~~ended~~to the future performance obligation of Delek. If Delek meets the obligation and ~~September~~exercises 30its 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 March 31, ~~2018~~2019, ~~compared~~the topotential value of issuing 20% of our outstanding stock is approximately $585,~~601~~800,000. ~~for~~The foregoing description of the ~~three~~Agreement ~~months~~does ~~ended~~not ~~September~~purport 30to be a complete description of the terms, ~~2017~~provisions and conditions of such document, and represents only a summary of certain of the principal terms, provisions and conditions thereof.

WeIn accordance with ~~had~~the aDelek ~~net~~Agreement ~~loss~~and on behalf of ~~$656,319~~the ~~for~~Company and the ~~three~~other ~~months~~working ~~ended~~interest ~~September~~owners, 30GulfSlope 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,. ~~compared~~The well was drilled and evaluated to ~~$748~~a total depth of 5,~~185~~765’ ~~for~~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 ~~three~~well ~~months~~is ~~ended~~now ~~September~~plugged and abandoned at this time. Since the well is equipped with a mud-line 30suspension system, ~~2017~~it is available for future re-entry as warranted.

~~The basic and diluted loss per share for the three months ended September 30, 2018 and 2017 was $(0.00).~~3

~~Results~~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 ~~Operations~~water ~~for~~depth. Operated by GulfSlope, the ~~Nine~~well ~~months~~is ~~Ended~~currently ~~September~~drilling 30below 14,500’ ~~2018~~to ~~compared~~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 ~~Nine~~Company ~~months~~has ~~ended~~not ~~September~~yet fully funded. As of April 30, ~~2017~~2019, Texas South Energy, Inc. (the “Company”) has received a Default Notice and Demand for Payment under the terms of its joint operating agreement with GulfSlope Energy, Inc. (“GulfSlope”) and Delek GOM Investments, LLC as a result of its payment failure of $2,870,183 due as of April 18, 2019 with respect to drilling the Tau Prospect in the Gulf of Mexico Outer Continental Shelf. GulfSlope, the operator of the Tau Prospect, previously informed the Company on February 12, 2019 of an event of default with respect to the payment failure of $1,299,229, which amount is included in the $2,870,183 amount due as of April 18, 2019. The Company filed a Form 8-K on May 6, 2019 with respect to this event. 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, however on May 13, 2019 GulfSlope announced that they had abandoned the well in a manner that would allow for re-entry at a later time. As a result of that announcement, the Company recorded $1,778,000 of impairment related to the Tau prospect. 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.

~~We earned~~The ~~revenue~~Company ofwill $0assign a ~~during~~two-tenths ~~the~~of ~~nine~~one ~~months~~percent ~~ended~~of ~~September~~8/8ths ~~30,~~net ~~2018~~profits ~~and~~interest ~~2017. Included~~ in ~~“Other~~certain ~~income”~~of is the ~~write off~~Company’s ofoil ~~the~~and ~~shareholder~~gas ~~note~~leases ~~payable~~in ~~for~~the ~~$42,324~~two ~~during~~Phase I ~~the~~prospects ~~quarter~~to ~~ended~~Hi-View ~~March~~Investment 31Partners, ~~2017~~LLC ~~and~~(“Hi-View”) ~~$9,828~~in ~~during~~consideration ~~the~~for ~~quarter~~consulting ~~ended~~services ~~March~~provided pursuant ~~31,~~to ~~2018.~~a ~~General~~non-exclusive ~~and~~consulting ~~administrative~~engagement ~~expenses~~dated ~~were~~October $125,~~869,488~~ ~~($1~~2017,~~031,122~~ ~~non-cash)~~by ~~for~~and ~~the~~between ~~nine~~Hi-View, ~~months~~the ~~ended September 30~~Company, ~~2018, compared~~and toGulfSlope ~~$2,905,456~~ (~~$1,760,340~~the ~~non-cash~~“Advisory Agreement”). ~~for~~Hi-View ~~the~~will ~~nine~~be ~~months~~entitled ~~ended~~to ~~September~~additional ~~30,~~assignments ~~2017.~~on ~~Interest~~the ~~expense~~same ~~was~~terms ~~$123,041~~and ~~for~~conditions ~~the~~as described above related ~~nine~~to ~~months~~any ~~ended~~of ~~September~~Leases ~~30,~~in ~~2018,~~which ~~compared~~Delek elects to ~~$154,809~~participate ~~for~~in the ~~nine~~drilling ~~months~~of ~~ended~~an ~~September~~exploratory ~~30, 2017~~well. ~~The~~In ~~decrease~~addition, inthe ~~interest expense~~Company isissued ~~primarily~~an aggregate ~~a result~~ of ~~the~~twenty ~~decrease~~million inshares ~~the~~of ~~note~~its ~~payable~~common ~~balances~~stock asto aHi-View ~~result~~in ofconsideration ~~the~~for ~~conversion~~those ofconsulting ~~debt~~services ~~into~~provided ~~shares of~~pursuant ~~common~~to ~~stock.~~the Advisory Agreement

4In January 2017, the Company entered into an asset purchase agreement with Sydson Energy, Inc. (“Sydson Energy”) and Sydson Resources, L.P. (“Sydson Resources” and collectively with Sydson Energy, “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. The oil and gas assets include the following:

~~Off-Balance Sheet~~● ~~Arrangements~~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.

~~As of~~● ~~September~~In 30the adjacent Ray Field, ~~2018~~also in Bee County, Texas, we ~~had~~acquired noa ~~off~~50% ~~balance~~working ~~sheet~~interest ~~transactions~~in ~~that~~the ~~have~~undrilled, oracreage ~~are~~on ~~reasonably~~the ~~likely~~Walton, toCampbell, ~~have~~and Ray leases comprising approximately 75 gross acres with a ~~current~~net orrevenue ~~future effect~~interest onof ~~our~~approximately ~~financial~~75%. ~~condition,~~The ~~changes~~primary indrilling ~~our~~objectives ~~financial~~on ~~condition,~~this ~~revenues~~acreage orare ~~expenses,~~also ~~results~~the ofVicksburg ~~operations,~~and ~~liquidity, capital~~Hockley ~~expenditures~~sands orupdip ~~capital~~to ~~resources~~prior production above 3,700’.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

	●	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.

As of September 30, 2018, our exposure to market risk is limited. We do not expect unfavorable changes in concentration of credit risk and interest rates impacting our current balances as of September 30, 2018.4

~~ITEM 4.~~Business ~~CONTROLS~~and ~~AND~~Acquisition ~~PROCEDURES~~Strategy

~~Evaluation~~Our primary business strategy includes ofacquiring ~~Disclosure~~both ~~Controls~~working and ~~Procedures~~non-working interests in oil and gas properties throughout the Gulf Coast Region and Texas, including offshore prospects. We will consider acquisitions that serve as a platform for complementary operations. In January, 2017 the Company acquired assets from Sydson Energy, Inc. and Sydson Resources, LP.

~~We carried~~The ~~out~~cost anof ~~evaluation,~~implementing ~~under~~ the ~~supervision~~forgoing ~~and~~programs will ~~with~~depend ~~the~~on ~~participation~~what ofoil ~~our~~and ~~management,~~gas ~~including~~interests ~~our~~are ~~principal~~identified ~~executive officer~~and ~~(who~~available ~~also~~on ~~serves~~terms asacceptable ~~our~~to ~~principal~~us. ~~financial~~Even ~~officer)~~if ofwe ~~the~~identify ~~effectiveness~~oil ~~of our disclosure controls~~ and ~~procedures (as~~gas ~~defined~~interests inthat ~~Exchange~~are ~~Act~~available, ~~Rules~~the ~~13a-15(e)~~cost ~~and 15d-15(e)) as~~ of ~~the~~pursuing ~~period~~and ~~covered~~acquiring bythem ~~this~~could ~~Form~~be ~~10-Q~~significant. ~~Based~~Our ~~upon~~ability ~~that~~to ~~evaluation, our~~pursue ~~principal~~any ~~executive~~such ~~officer~~opportunities will ~~(who~~be ~~also~~dependent ~~serves~~on as our ~~principal~~ability ~~financial~~to ~~officer)~~obtain ~~concluded~~financings ~~that~~through private equity, asdebt offinancings ~~the~~or ~~end~~agreements ofwith ~~the~~joint ~~period~~venture ~~covered~~partners. inWe ~~this~~can ~~report,~~provide ~~our~~no ~~disclosure~~assurance ~~controls~~that ~~and~~we ~~procedures~~have ~~were~~the ~~effective~~necessary tocash ~~ensure~~available ~~that~~or ~~information~~will ~~required to~~ be ~~disclosed in~~able ~~reports~~to ~~filed~~successfully byobtain ~~us under~~ the ~~Exchange Act is recorded, processed, summarized and reported within the required time periods~~necessary ~~and~~financing isor ~~accumulated~~joint ~~and~~venture ~~communicated~~partners to ~~our~~pursue ~~management~~such ~~as appropriate to allow timely decisions regarding required disclosure~~opportunities.

~~Our management,~~We ~~including~~have ~~our~~incurred ~~principal~~losses ~~executive~~since ~~officer, does not expect that~~ our ~~disclosure controls and procedures or our internal~~inception ~~controls will prevent all errors or fraud. A control system, no matter how well conceived~~ and ~~operated,~~expect ~~can~~to ~~provide~~incur ~~only~~losses ~~reasonable, not~~in ~~absolute,~~future ~~assurance that the objectives of the control system are met~~periods. ~~Further,~~We ~~the~~currently ~~design~~rely ofprimarily aupon ~~control system must reflect~~ the ~~fact~~sale ~~that there are resource constraints and the benefits~~ of ~~controls~~our ~~must~~equity besecurities ~~considered relative~~ to ~~their~~fund 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 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~~.

~~Management’s Interim~~Liquidity ~~Report~~and onCapital ~~Internal Control over Financial Reporting~~Resources

~~Our management~~As isof ~~responsible~~March ~~for~~31, ~~establishing~~2019, ~~and~~we ~~maintaining~~had ~~adequate~~a ~~internal~~cash ~~control~~balance ~~over~~of ~~financial~~$185,169 ~~reporting~~and ~~(as~~a ~~defined~~working incapital ~~Rule~~deficit of $6,407,366. Our accumulated ~~13a-15(f)~~deficit ~~under~~from ~~the~~inception ~~Exchange~~(March ~~Act~~15, 2010). ~~Our~~to ~~internal~~March ~~control~~31, ~~over~~2019 ~~financial~~was ~~reporting~~$18,367,028. isFor athe ~~process~~three ~~designed~~months toended ~~provide~~March ~~reasonable~~31, ~~assurance regarding~~2019, ~~the~~our ~~reliability~~net loss of ~~financial~~$2,379,524 ~~reporting~~was mostly funded by loans and ~~the~~payments ~~preparation~~from ofworking ~~financial~~interest ~~statements~~owners. ~~for~~During ~~external~~the ~~purposes~~three inmonths ~~accordance~~ended March 31, 2019, ~~with~~our ~~accounting~~cash ~~principles~~position ~~generally~~decreased ~~accepted~~by in$1,316,597 as a result of no sales of common stock during the ~~United~~quarter ~~States~~and the payment of our expenses.

~~Because of~~January ~~its inherent limitations~~2019, ~~internal~~we ~~control~~issued ~~over~~175,000 ~~financial~~shares ~~reporting~~of ~~may not prevent or detect misstatements. Therefore, even~~common ~~those~~stock ~~systems determined~~ to bean ~~effective~~employee ~~can~~for ~~provide~~services ~~only reasonable assurance of achieving their control objectives~~rendered.

~~Changes~~We will need additional financing to carry out our business plan. Specifically, we will need cash to fund our obligations with respect to (i) drilling the Canoe and Tau Prospects in ~~Internal~~Phase ~~Control~~I ~~over~~of ~~Financial~~the ~~Reporting~~offshore program (ii) funding our drilling obligations with respect to the Wilinda project, and (iii) funding our contingent liabilities under the Sydson agreement. Obtaining additional financing will be subject to a number of factors including market conditions, investor acceptance of our business plan, and other conditions outside of our control. These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us. If we cannot raise additional funds, we will not be able to carry out our business plans and may cease operations.

~~There~~Results of Operations for the Three ~~have~~months ~~been~~Ended noMarch ~~changes~~31, in2019 ~~internal~~compared ~~control~~to ~~over~~the ~~financial~~Three ~~reporting.~~months ended March 31, 2018

5We earned revenue of $0 during the three months ended March 31, 2019 and 2018. Workover expenses for $37,221 were recorded during the three months ended March 31, 2019 and zero for the three months ended March 31, 2018. Impairment expense of $1,778,000 was recorded during the three months ended March 31, 2019 and zero for the three months ended March 31, 2018. General and administrative expenses were $530,721 ($338,718 non-cash) for the three months ended March 31, 2019, compared to $597,427 ($331,068 non-cash) for the three months ended March 31, 2018. Interest expense was $28,330 for the three months ended March 31, 2019, compared to $48,382 for the three months ended March 31, 2018.

~~PART~~We had a net loss of $2,379,524 for the three IImonths -ended ~~OTHER~~March ~~INFORMATION~~31, 2019, compared to $637,486 for the three months ended March 31, 2018.

~~ITEM~~The basic and diluted loss per share for 1.the ~~LEGAL~~three ~~PROCEEDINGS~~months ended March 31, 2019 and 2018 was $(0.00).

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party against us. None of our directors, officers or affiliates are (i) a party adverse to us in any legal proceedings, or (ii) have an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings that have been threatened against us.5

~~ITEM 2.~~Off-Balance ~~UNREGISTERED~~Sheet ~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~Arrangements

~~The~~As ~~Company~~of ~~sold~~March ~~shares~~31, of2019, ~~stock~~we ~~for~~had ~~cash~~no ~~and/or~~off balance ~~converted~~sheet ~~note~~transactions ~~payable~~that ~~balances~~have ~~that~~or ~~were~~are ~~not~~reasonably ~~reported~~likely onto have a ~~Current~~current ~~Report~~or onfuture ~~Form~~effect ~~8-K~~on ,our infinancial ~~Part II~~condition, ~~Item~~changes ~~5 of the Annual report~~in onour ~~Form~~financial ~~10-K~~condition, revenues or ~~Part II~~expenses, ~~Item~~results 2 of ~~Form~~operations, ~~10Q’s~~liquidity, ~~and~~capital ~~such~~expenditures ~~transactions~~or ~~are~~capital ~~being reported hereby, as follows~~resources.

~~During~~ITEM ~~August~~3. ~~14,~~QUANTITATIVE ~~2018~~AND ~~through~~QUALITATIVE ~~September~~DISCLOSURES ~~30, 2018~~ABOUT ~~investors~~MARKET ~~purchased 24,333,350 shares of common stock for a purchase price of $.02 per share totaling $486,667.~~RISK

~~During~~As ~~August~~of ~~2018~~March ~~the~~31, ~~Company~~2019, ~~issued~~our aexposure ~~total~~to market ofrisk ~~437,329~~is ~~shares~~limited. atWe ~~$0.0207~~do ~~under~~not anexpect ~~employment~~unfavorable ~~agreement~~changes toin anconcentration ~~employee~~of ~~for~~credit ~~services~~risk ~~rendered~~and interest rates impacting our current balances as of March 31, 2019.

~~During~~ITEM ~~October 2018, the Company sold 5,000,000 shares of common stock at a price per share of $0~~4.02 ~~for~~CONTROLS aAND ~~total of $100,000 and issued 250,000 shares to a consultant for services provided at a price per share of $0.02 for a total of $5,000 for services.~~PROCEDURES

~~The~~Evaluation employment agreements between the Company and Mr. Michael Mayell and Mr. John Connally III were amended effective October 16, 2018. Supplement number three to the employment agreements added the following sentence: Employee has the right, at his option, to receive restricted shares of ~~Company~~Disclosure ~~common stock~~Controls ~~valued at a price per share equal to the greater of (i) $0.02~~ and ~~(ii) the average closing price of Company common stock~~ during the calendar month in which the accrued salary being converted was earned, in lieu of cash, for all or a portion of the compensation owed to Employee for the period between May 1, 2018 and ended September 30, 2018. The total owed to Mr. Mayell during this period was $175,000 and the total owed to Mr. Connally III was $175,000. If these totals were converted into shares of stock, each would receive 8,750,000 shares of common stock.Procedures

~~During~~We ~~November~~carried ~~2018,~~out ~~through~~an ~~our~~evaluation, ~~Form~~under ~~10Q~~the ~~filing~~supervision ~~date,~~and with the ~~Company~~participation ~~sold~~of 2our management,~~500,000~~ ~~shares~~including our principal executive officer (who also serves as our principal financial officer) of ~~common~~the ~~stock~~effectiveness atof aour ~~price~~disclosure ~~per~~controls ~~share~~and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of $0the period covered by this Form 10-Q.02 ~~for~~Based aupon ~~total~~that evaluation, our principal executive officer (who also serves as our principal financial officer) concluded that, as of ~~$50~~the end of the period covered in this report,~~000~~ 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.

~~The~~Our ~~issuances~~management, ofincluding ~~these~~our ~~securities~~principal executive ~~did~~officer, does not ~~involve~~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 ~~payment~~objectives of ~~any~~the ~~sales~~control ~~commissions~~system are met. Further, the design of a control system must reflect the fact that there are resource constraints and ~~were~~the ~~exempt~~benefits ~~pursuant~~of controls must be considered relative to ~~Section~~their ~~4(a)(2)~~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 ~~Securities~~financial ~~Act~~statements included in this report fairly present in all material respects our financial condition, results of ~~1933~~operations and cash flows for the periods presented.

6Management’s Interim Report on Internal Control over Financial Reporting

~~ITEM~~Our management is responsible for establishing 3and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). ~~DEFAULTS~~Our ~~UPON~~internal control ~~SENIOR~~over ~~SECURITIES~~ financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

~~None~~Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

~~ITEM 4.~~Changes ~~MINE~~in ~~SAFETY~~Internal ~~DISCLOSURES~~ Control over Financial Reporting

~~None~~There have been no changes in internal control over financial reporting.

~~ITEM 5. OTHER INFORMATION~~ 6

~~None.~~PART II - OTHER INFORMATION

ITEM 6 1. ~~EXHIBITS~~LEGAL PROCEEDINGS

Exhibit Number		Exhibit Description
31.1 (1)		Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 (1)		Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS (1)		XBRL INSTANCE DOCUMENT
101.SCH (1)		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
101.CAL (1)		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
101.DEF (1)		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
101.LAB (1)		XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
101.PRE (1)		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT

~~(1)~~ITEM ~~Filed herewith~~2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

7The Company issued shares of stock that were not reported on a Current Report on Form 8-K or in Part II, Item 5 of the Annual report on Form 10-K, as follows.

~~SIGNATURES~~January 2019 the Company issued 750,000 shares of common stock to an employee for services totaling $7,650.

~~Pursuant to~~On May 16, 2019 the ~~requirements~~Company ofwas ~~Section~~authorized 13to issue or10,000,000 ~~15(d)~~shares of ~~the~~its ~~Exchange~~common ~~Act,~~stock ~~the~~to ~~Registrant~~a ~~has~~company ~~duly~~for ~~caused~~services ~~this~~rendered, ~~Quarterly~~however ~~Report~~the toshares behave ~~signed on~~not ~~its~~yet ~~behalf~~been byissued as of the ~~undersigned~~date ~~thereunto~~of ~~duly~~this ~~authorized~~report.

	TEXAS SOUTH ENERGY, INC.
Date: November 14, 2018	By:	/s/ Michael J. Mayell
		Michael J. Mayell
		Chief Executive Officer and Principal Financial Officer

The issuances of these securities did not involve the payment of any sales commissions and were exempt pursuant to Section 4(a)(2) of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit Number		Exhibit Description
31.1 (1)		Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 (1)		Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS (1)		XBRL INSTANCE DOCUMENT
101.SCH (1)		XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
101.CAL (1)		XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
101.DEF (1)		XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
101.LAB (1)		XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
101.PRE (1)		XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT

(1)

Filed herewith.

SIGNATURES

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

	TEXAS SOUTH ENERGY, INC.

Date: May 20, 2019	By:	/s/ Michael J. Mayell
		Michael J. Mayell
		Chief Executive Officer and Principal Financial Officer

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