UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended September 30, ~~2015~~2016

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 333-178437

West Texas Resources, Inc.

(Exact name of registrant as specified in its charter)

Nevada				99-0365272
(State or Other Jurisdiction of Incorporation or Organization)				(I.R.S. Employer Identification Number)

5729 Lebanon Road, Suite 144

Frisco, Texas 75034

(Address of principal executive offices)

(~~214~~972) ~~868~~712-~~3939~~2154

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

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

None

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

Indicate by check mark if the registrant is is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes oxNo ~~No x~~ o

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

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

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company (as defined in Rule 12b-2 of the Act):

Large accelerated filer o		Accelerated filer o

Non-accelerated filer o		Smaller reporting company x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes o No x

State the aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently ~~completed~~ completed second fiscal quarter: $23,~~949~~205,~~200~~224.

The number of shares of the registrant’s common stock outstanding as of ~~December 28~~February 8, ~~2015~~2017 was 1417,~~515~~083,~~400~~908.

TABLE OF CONTENTS

		Page
~~PART I~~	PART I
Item 1.	Business	1
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	1314
Item 2.	Properties	14
Item 3.	Legal Proceedings	15
Item 4.	Mine Safety Disclosures	15
~~PART II~~	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities	16
Item 6.	Selected Financial Data	17
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	1918
Item 8.	Financial Statements and Supplementary Data	2019
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
Item 9A.	Controls and Procedures	20
Item 9B.	Other Information	20
~~PART III~~	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	21
Item 11.	Executive Compensation	22
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	24
Item 13.	Certain Relationships and Related Transactions and Director Independence	25
Item 14.	Principal Accountant Fees and Services	25
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	26
Signatures		28

CAUTIONARY NOTICE

This annual report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those forward-looking statements include our expectations, beliefs, intentions and strategies regarding the future. Such forward-looking statements relate to, among other things, our market, strategy, competition, development plans, financing, revenues, operations and compliance with applicable laws. These and other factors that may affect our financial results are discussed more fully in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this report. Market data used throughout this report is based on published third party reports or the good faith estimates of management, which estimates are presumably based upon their review of internal surveys, independent industry publications and other publicly available information. Although we believe that such sources are reliable, we do not guarantee the accuracy or completeness of this information, and we have not independently verified such information. We caution readers not to place undue reliance on any forward-looking statements. We do not undertake, and specifically disclaim any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur, and we urge readers to review and consider disclosures we make in this and other reports that discuss factors germane to our business. See in particular our reports on Forms 10-K, 10-Q, and 8-K subsequently filed from time to time with the Securities and Exchange Commission.

PART I

Item 1.

Business

Overview

West Texas Resources, Inc. (the “company” or “we”) was incorporated under the laws of Nevada on December 9, 2010. We are ~~engaged~~ engaged in the business of oil and gas exploration and development in North America. From inception to date, our activities have ~~focused~~ focused on the raising of capital and the investigation and acquisition of our initial oil and gas properties. We commenced revenue producing oil and gas operations effective as of April 1, 2013.

Our ~~Strategy~~executive offices are located at 5729 Lebanon Road, Suite 144, Frisco, Texas 75034; our telephone number is (972) 712-2154. Our website is located at www.westtexasresources.com. The information on or accessible through our website is not part of this report.

Our objective is to become an independent energy company engaged in the acquisition, development and exploitation of oil and gas properties in North America in partnership with oil and gas producers. We will pursue strategic acquisitions of interests in oil and gas properties, including prospects with proven and unproven reserves, which we believe to have development potential. We intend to target both new and existing fields and producing wells to be revitalized.Strategy

AtOur ~~the~~objective ~~present~~is ~~time, we~~to ~~have~~become ~~one~~an ~~employee,~~independent ~~our~~energy ~~chief~~company ~~executive~~engaged ~~officer and chief financial officer, John Kerr, who has limited experience~~ in the ~~oil~~acquisition, ~~and gas~~development ~~exploration~~ and ~~development~~exploitation ~~business. Subject to our receipt~~ of ~~significant additional capital, we intend to hire senior management and staff with experience in~~ oil and gas ~~exploration~~properties ~~and~~in ~~development. Until such time, we intend to pursue an operating strategy~~North ~~that~~America ~~is based on our participation~~ in ~~exploration~~partnership ~~prospects~~with ~~as a non-operator. Based on that strategy, we intend to pursue the acquisition of~~ oil and ~~natural~~ gas ~~interests~~producers ~~in partnership~~ with ~~other companies with~~ exploration, development and production expertise. We ~~will~~intend ~~also~~to ~~pursue~~target ~~alliances~~both new ~~with partners in the areas of geological~~ and ~~geophysical~~existing ~~services~~fields and ~~prospect~~producing ~~generation,~~wells ~~evaluation and~~to ~~prospect~~be ~~leasing~~revitalized. ~~Pursuant~~We tohold ~~this~~operating ~~strategy,~~licenses wein ~~intend~~Texas toand ~~engage~~Louisiana and ~~rely~~intend onto apply ~~third~~for ~~party~~additional ~~geologists~~operating ~~and~~licenses ~~geophysicists,~~as ~~among others,~~circumstances towarrant. ~~review~~We ~~the~~have ~~available~~developed ~~data~~an ~~concerning~~operating ~~each~~strategy ~~potential~~that ~~acquisition~~is based on our participation ~~behalf.~~in Inexploration ~~each~~prospects ~~case,~~with wea ~~expect~~preference ~~that~~to ~~the~~serving ~~operator of~~as the ~~prospect~~operator ~~will~~for ~~assemble~~ the ~~appropriate~~prospect, ~~data~~however, ~~and~~we ~~conduct~~will ~~the~~also ~~appropriate~~participate as ~~studies~~a ~~and~~non-operator ~~that~~from ~~our~~time ~~consultants~~to ~~will~~time. ~~conduct~~As ~~an independent~~a ~~review~~non-operator ofworking ~~the~~interest ~~operator’s~~owner, ~~data~~we ~~and~~will ~~studies~~rely ~~for~~on ~~purposes~~outside ofoperators ~~advising~~to usdrill, ofproduce and ~~the~~market ~~merits~~our ofnatural ~~each~~gas ~~potential~~and ~~acquisition~~oil.

Oil and Gas Interests

Wolfcamp Field

In June and July 2014, we acquired non-operating leases covering approximately 1,070 gross mineral acre leases in the Wolfcamp field located in Hale County, Texas. The leases were acquired for cash payments of $45,484. The leases have a primary term of five years with our option to extend the term for another five years. The leased properties constitute the surface acreage comprising a natural gas prospect, for which we hold 50% of the working interest and 40% net revenue interest. The leased properties are subject to a 20% royalty interest held by by the owners and a third party. We are currently evaluating our options for the exploitation of the leased properties, ~~including~~ including our sale of the leases or our farm-out of the leases to a natural gas operator.

~~Sunshine~~Stansell ~~Prospect~~ Field

We hold a 151% ~~(14.25% net~~working ~~revenue~~ interest) in aan ~~non-operating~~ oil ~~and gas~~ prospect located in ~~Landry~~Floyd ~~Parish~~County, ~~Louisiana~~Texas. The working interest ~~concerns~~comprises ~~248 gross~~15,000 leased acres ~~and~~in ~~net~~the ~~acres~~southern section inof the ~~Sunshine~~Palo ~~Prospect~~Duro basin. The initial project will be the re-entry of the Stansell #1-A well, an existing wellbore that was drilled in 2006. The original drilling encountered oil shows in three separate reservoirs and the operator intends to ~~drill~~re-enter and anrecomplete ~~initial~~the ~~well~~Stansell #1-A using current fracture stimulation technology. We have a carried 1% working interest in the ~~prospect~~Stansell #1-A well through the tanks. The operator reentered the Stansell #1-A well in ~~2016~~the first quarter of 2015 and the well is currently producing oil at a cash breakeven rate to us.

~~Stansell~~Kiowa ~~Field~~Oil Leases: On September 30, 2015, we agreed to lease from Kiowa Oil Company 100% of the interests, for a period of five years, of properties held by Kiowa Oil Company in North Dakota, Florida, Illinois, and Kentucky. The total price for the subject interests under this lease agreement is $5,000 and a 15% royalty interest in all the subject interests leased. The total price will be paid in by us through our issuance of common shares at the per share price of $0.50.

TW Lee Field: We hold a 125% working interest in an(18.75% net revenue interest) in oil ~~prospect~~and gas properties located in ~~Floyd~~Gregg County, Texas. The ~~working~~property is ~~interest~~known ~~comprises~~as ~~15,000 leased acres in~~ the ~~southern~~T.W. ~~section~~Lee ~~of the Palo Duro basin~~field. The ~~initial~~purchase ~~project~~price ~~will~~for be the ~~re-entry~~subject ofinterests ~~the~~under ~~Stansell~~this ~~#1-A~~agreement ~~well~~is $25,000, anwhich ~~existing~~will ~~well~~be ~~bore that was drilled~~paid in ~~2006.~~our ~~The~~common ~~original~~shares ~~drilling~~at ~~encountered~~the ~~oil~~per ~~shows~~share inprice ~~three~~of ~~separate~~$0.25. ~~reservoirs~~The ~~and the~~ operator ~~intends~~has tosuccessfully ~~re-enter~~drilled ~~and recomplete the Stansell #1-A using current fracture stimulation technology. We have~~ a ~~carried~~well 1%on ~~working interest in~~ the ~~Stansell~~property ~~#1-A~~and ~~well~~expects ~~through~~to ~~the~~commence ~~tanks.~~production ~~The operator commenced the re-entry~~ of ~~the~~oil ~~Stansell #1-A well~~ in ~~January 2015 and is currently evaluating~~ the ~~drilling~~ ~~results~~fourth quarter.

~~Kiowa~~T.A. ~~Properties~~Greer Lease: We hold a 25% working interest (19.5% net revenue interest) in an East Texas oil and gas property. The property is known as the T.A. Greer lease and includes two tracts of land totaling approximately 470 acres in Panola County, Texas. We acquired the property from an unaffiliated party in consideration of our payment of $10,000 and issuance of 60,000 shares of our common stock. The operator has successfully drilled a well on the property and expects to commence production of oil in the fourth quarter.

OnSubject ~~September~~to ~~30,~~our ~~2015,~~receipt ~~we leased 100%~~ of ~~interests~~additional capital, ~~for~~we aintend ~~period~~to ofpursue ~~five~~the ~~years,~~acquisition of ~~properties~~additional equity interests in ~~North~~other ~~Dakota,~~oil ~~Florida, Illinois,~~ and ~~Kentucky.~~gas ~~The total~~properties ~~price~~in ~~for~~North ~~the~~America. ~~subject interests under this lease agreement is $5~~However,~~000~~ ~~and~~as aof ~~15% royalty interest in all~~ the ~~subject~~date ~~interests~~of ~~leased. The~~this $5report,~~000~~ ~~purchase~~we ~~price~~have ~~will~~no beunderstandings ~~paid~~or byagreements us in place concerning our ~~common~~acquisition ~~shares~~of atan ~~the~~interest ~~per~~in ~~share~~any ~~price~~other ~~of $0~~properties.~~50, or 10,000 common shares.~~

~~Subject~~Marketing ~~to our receipt of additional capital, we intend to pursue the acquisition of additional equity interests in other oil~~ and ~~gas properties in North America. However, as of the date of this report, we have no understandings or agreements in place concerning our acquisition of an interest in any other properties.~~Pricing

~~Marketing~~We derive revenue principally from the sale of oil and ~~Pricing~~natural gas. As a result, our revenues are determined, to a large degree, by prevailing prices for crude oil and natural gas. Our operating partners sell our oil and natural gas on the open market at prevailing market prices. The market price for oil and natural gas is dictated by supply and demand, and we cannot accurately predict or control the price we may receive for our oil and natural gas.

WePrice ~~derive~~decreases ~~revenue principally~~would ~~from~~adversely ~~the~~affect ~~sale of oil and natural gas. As a result,~~ our revenues ~~are determined~~, toprofits ~~a large degree, by prevailing prices for crude oil~~ and ~~natural~~the ~~gas.~~value ~~Our~~of ~~operating partners sell~~ our ~~oil~~proved ~~and~~reserves. ~~natural~~Historically, ~~gas on~~ the ~~open market at prevailing market~~ prices. ~~The~~received ~~market price~~ for oil and natural gas ishave ~~dictated~~fluctuated bywidely. ~~supply~~Among ~~and demand, and we cannot accurately predict or control~~ the ~~price~~factors wethat ~~may~~can ~~receive for~~cause ~~our~~these ~~oil~~fluctuations ~~and natural gas.~~are:

~~Price~~● ~~decreases~~The ~~would~~domestic ~~adversely affect our revenues, profits~~ and ~~the~~foreign ~~value~~supply of ~~our proved reserves. Historically, the prices received for oil and~~ natural gas ~~have fluctuated~~and ~~widely. Among the factors that can cause these fluctuations are:~~oil

● ~~The~~Overall ~~domestic~~economic ~~and foreign supply of natural gas and oil~~conditions

● ~~Overall~~The ~~economic~~level ~~conditions~~of consumer product demand

● ~~The~~Weather ~~level of consumer product demand~~conditions

~~● Weather conditions~~2

●

The price and availability of competitive fuels such as heating oil and coal

2● Political conditions in the Middle East and other natural gas and oil producing regions

● ~~Political~~The ~~conditions~~level inof ~~the~~oil ~~Middle East~~ and ~~other~~ natural gas ~~and oil producing regions~~imports

● ~~The~~Domestic ~~level of oil~~ and ~~natural~~foreign ~~gas~~governmental ~~imports~~regulations

● ~~Domestic~~Potential ~~and~~price ~~foreign governmental regulations~~controls

●We ~~Potential~~may ~~price~~enter ~~controls~~into hedging arrangements to reduce our exposure to decreases in the prices of oil and natural gas. Hedging arrangements may expose us to risk of significant financial loss in some circumstances including circumstances where:

We● ~~may~~There ~~enter~~is ~~into~~a ~~hedging arrangements~~change ~~to reduce our exposure to decreases~~ in the ~~prices~~expected ofdifferential ~~oil~~between ~~and~~the ~~natural~~underlying ~~gas.~~price ~~Hedging~~in ~~arrangements~~the ~~may~~hedging ~~expose~~agreement usand toactual ~~risk of~~prices ~~significant financial loss in some circumstances including circumstances where:~~received

● ~~There~~Our isproduction aand/or ~~change~~sales inof ~~the~~natural ~~expected~~gas ~~differential~~are ~~between~~less ~~the~~than ~~underlying price in the hedging agreement and actual prices received~~expected

● ~~Our~~Payments ~~production~~owed ~~and/or~~under ~~sales~~derivative ofhedging ~~natural~~contracts ~~gas~~typically ~~are~~come ~~less~~due ~~than~~prior ~~expected~~to receipt of the hedged month’s production revenue

● ~~Payments~~The ~~owed~~other ~~under~~party ~~derivative hedging contracts typically come due prior~~ to ~~receipt~~the ofhedging ~~the~~contract ~~hedged~~defaults ~~month’s~~on ~~production~~its ~~revenue~~contract obligations

●In ~~The~~addition, hedging arrangements limit the benefit we would receive from increases in the prices for oil and natural gas. We cannot assure you that any hedging transactions we may enter into will adequately protect us from declines in the prices of oil and natural gas. On the other ~~party~~hand, we may choose not to ~~the~~engage in hedging ~~contract~~transactions ~~defaults~~in onthe ~~its~~future. ~~contract~~As ~~obligations~~a result, we may be more adversely affected by changes in oil and natural gas prices than our competitors who engage in hedging transactions.

In addition, hedging arrangements limit the benefit we would receive from increases in the prices for oil and natural gas. We cannot assure you that any hedging transactions we may enter into will adequately protect us from declines in the prices of oil and natural gas. On the other hand, we may choose not to engage in hedging transactions in the future. As a result, we may be more adversely affected by changes in oil and natural gas prices than our competitors who engage in hedging transactions.Competition

~~Competition~~The oil and gas industry is highly competitive and inherent difficulties exist for any new company seeking to enter an established field. Our proposed business will encounter numerous companies more experienced, better financed, and operationally organized to conduct acquisitions, development and exploration activities in the oil and gas industry in North America. Additionally, a small “start-up” such as us, with insignificant resources, is at a serious disadvantage against established competitors, including major oil companies.

~~The~~Government oil and gas industry is highly competitive and inherent difficulties exist for any new company seeking to enter an established field. Our proposed business will encounter numerous companies more experienced, better financed, and operationally organized to conduct acquisitions, development and exploration activities in the oil and gas industry in North America. Additionally, a small “start-up” such as us, with insignificant resources, is at a serious disadvantage against established competitors, including major oil companies.Regulations

~~Government~~The ~~Regulations~~following is a summary of the more significant existing environmental, health and safety laws and regulations applicable to the oil and natural gas industry and for which compliance may have a material adverse impact on the development or success of our proposed oil and gas operations.

Federal Income Tax. Federal income tax laws will significantly affect our operations. The ~~following~~principal isprovisions athat ~~summary~~will affect us are those that ofpermit ~~the~~us, ~~more~~subject ~~significant~~to ~~existing~~certain ~~environmental~~limitations, ~~health~~to deduct as incurred, rather than to capitalize and ~~safety~~amortize, ~~laws~~our share of the domestic “intangible drilling and ~~regulations~~development ~~applicable~~costs” and to ~~the~~claim depletion on a portion of our domestic oil and natural gas ~~industry~~ properties based on 15% of our oil and ~~for~~natural ~~which~~gas ~~compliance~~gross ~~may~~income ~~have~~from asuch ~~material~~properties ~~adverse~~(up ~~impact~~to onan ~~the~~aggregate ~~development~~of or1,000 ~~success~~Bbls per day of ~~our~~domestic ~~proposed~~crude oil and/or ~~gas~~equivalent ~~operations~~units of domestic natural gas).

~~Federal~~Environmental ~~Income Tax~~Regulation. The ~~Federal~~exploration, ~~income~~development ~~tax~~and ~~laws~~production ~~will~~of ~~significantly~~oil ~~affect~~and ~~our~~natural ~~operations.~~gas ~~The~~are ~~principal~~subject ~~provisions~~to ~~that~~federal, ~~will~~state ~~affect~~and uslocal ~~are~~laws ~~those~~and ~~that~~regulations ~~permit~~governing ~~us,~~the ~~subject~~discharge toof ~~certain~~materials ~~limitations,~~into the environment or otherwise relating to ~~deduct~~environmental asprotection. These ~~incurred~~laws and regulations may, ~~rather~~among ~~than~~other things, require permits to ~~capitalize~~conduct drilling, water withdrawal and ~~amortize,~~waste ~~our~~disposal ~~share~~operations; govern the amounts and types of substances that may be disposed or released into the ~~domestic~~environment; ~~“intangible~~ limit or prohibit construction or drilling ~~and~~activities in ~~development~~sensitive ~~costs”~~areas ~~and~~such toas ~~claim~~wetlands, ~~depletion~~wilderness onareas aor ~~portion~~areas ofinhabited ~~our~~by ~~domestic~~endangered ~~oil~~or threatened species; require investigatory and ~~natural~~remedial ~~gas~~actions ~~properties~~to ~~based on~~mitigate ~~15%~~pollution ofconditions ~~our~~arising from oil and ~~natural~~ gas ~~gross~~operations ~~income~~or ~~from~~attributable ~~such~~to ~~properties~~former ~~(up~~operations; and impose obligations to anreclaim ~~aggregate~~and abandon well sites and pits. Failure to comply with these laws and regulations may result in the assessment of 1sanctions,~~000~~ ~~Bbls~~including ~~per~~monetary ~~day~~penalties, the imposition of ~~domestic~~remedial ~~crude oil~~obligations and~~/or~~ ~~equivalent~~the ~~units~~ issuance of ~~domestic~~orders ~~natural~~enjoining ~~gas)~~operations in affected areas.

Environmental Regulation. The exploration, development and production of oil and natural gas are subject to federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may, among other things, require permits to conduct drilling, water withdrawal and waste disposal operations; govern the amounts and types of substances that may be disposed or released into the environment; limit or prohibit construction or drilling activities in sensitive areas such as wetlands, wilderness areas or areas inhabited by endangered or threatened species; require investigatory and remedial actions to mitigate pollution conditions arising from oil and gas operations or attributable to former operations; and impose obligations to reclaim and abandon well sites and pits. Failure to comply with these laws and regulations may result in the assessment of sanctions, including monetary penalties, the imposition of remedial obligations and the issuance of orders enjoining operations in affected areas.3

3The clear trend in environmental regulation is to place more restrictions and limitations on activities that may affect the environment, and thus, any changes in environmental laws and regulations or re-interpretation of enforcement policies that result in more stringent and costly construction, drilling, water management, completion, waste handling, storage, transport, disposal, or remediation requirements or emission or discharge limits could have a material adverse effect on the development or success of our proposed oil and gas operations. Moreover, accidental releases or spills may occur in the course of our proposed oil and gas operations, and there can be no assurance that we will not incur significant costs and liabilities as a result of such releases or spills, including any third party claims for damage to property and natural resources or personal injury.

Hazardous Substances and Wastes. The ~~clear~~Comprehensive ~~trend~~Environmental inResponse, ~~environmental~~Compensation and Liability Act, as amended ("CERCLA"), ~~regulation~~also isknown toas ~~place~~the ~~more~~Superfund ~~restrictions~~law and ~~limitations~~comparable onstate ~~activities~~laws ~~that~~impose ~~may~~joint ~~affect~~and ~~the~~several ~~environment~~liability, ~~and~~without ~~thus~~regard to fault or legality of conduct, ~~any~~on ~~changes~~certain inclasses of persons who are considered to be responsible for the release of a "hazardous substance" ~~environmental~~into ~~laws~~the environment. These persons include current and ~~regulations~~prior owners or ~~re-interpretation~~operators of ~~enforcement~~the ~~policies~~site where the release occurred and entities that ~~result~~disposed inor ~~more~~arranged ~~stringent~~for ~~and~~the ~~costly~~disposal ~~construction~~of the hazardous substances found at the site. Under CERCLA, ~~drilling,~~these ~~water~~"responsible ~~management,~~persons" ~~completion,~~may ~~waste~~be ~~handling,~~subject ~~storage,~~to ~~transport,~~strict ~~disposal,~~joint orand ~~remediation~~several ~~requirements~~liability orfor ~~emission~~the ~~or discharge~~costs ~~limits~~of ~~could~~cleaning ~~have~~up athe ~~material~~hazardous substances ~~adverse~~that ~~effect~~have onbeen released into the ~~development~~environment, orfor ~~success~~damages ofto ~~our~~natural ~~proposed~~resources ~~oil~~and for the costs of certain environmental and ~~gas~~health ~~operations~~studies. ~~Moreover~~In addition, it is not uncommon for neighboring landowners and other third parties to file claims ~~accidental~~for ~~releases~~personal orinjury ~~spills~~and ~~may~~property ~~occur~~damage inallegedly caused by the ~~course~~release of ~~our~~hazardous ~~proposed~~substances ~~oil~~into the environment. CERCLA also authorizes the EPA and, ~~gas~~in ~~operations~~some instances, ~~and~~third ~~there~~parties ~~can~~to beact noin ~~assurance~~response ~~that we~~to ~~will~~threats ~~not~~to ~~incur~~the ~~significant~~public ~~costs~~health or the environment and ~~liabilities~~to asseek ato ~~result~~recover from the responsible classes of ~~such~~persons ~~releases~~the orcosts ~~spills,~~they ~~including~~incur. We ~~any~~may ~~third~~generate ~~party~~materials ~~claims~~in ~~for~~the ~~damage~~course toof ~~property~~our ~~and~~proposed ~~natural~~operations ~~resources~~that ormay ~~personal~~be ~~injury~~regulated as hazardous substances.

~~Hazardous~~We ~~Substances~~may also generate ~~and~~wastes ~~Wastes.~~that ~~The~~are ~~Comprehensive~~subject ~~Environmental~~to ~~Response,~~the ~~Compensation~~requirements of the Resource Conservation and ~~Liability~~Recovery Act, as amended ("~~CERCLA~~RCRA"), ~~also known as the Superfund law~~ and comparable state ~~laws~~statutes. ~~impose~~RCRA ~~joint~~imposes ~~and~~strict ~~several~~requirements ~~liability,~~on ~~without~~the ~~regard~~generation, totransportation, ~~fault~~treatment, orstorage, ~~legality~~disposal ofand ~~conduct,~~cleanup ~~on certain classes~~ of ~~persons~~hazardous ~~who~~and ~~are~~non-hazardous ~~considered~~wastes. toDrilling befluids, ~~responsible~~produced ~~for~~waters ~~the~~and ~~release~~most of athe ~~"hazardous~~other ~~substance"~~wastes associated ~~into~~with the ~~environment.~~exploration, ~~These~~production ~~persons include current~~ and ~~prior~~development ~~owners or operators~~ of ~~the~~crude ~~site~~oil ~~where the release occurred~~ and ~~entities that~~natural ~~disposed~~gas orare ~~arranged~~currently ~~for~~exempt ~~the~~from ~~disposal~~regulation ofas ~~the~~ hazardous wastes ~~substances~~under ~~found at the site~~RCRA. ~~Under CERCLA~~However, ~~these~~it ~~"responsible persons"~~is ~~may~~possible bethat ~~subject~~certain tooil ~~strict joint~~ and ~~several~~natural ~~liability~~gas ~~for~~exploration ~~the~~and ~~costs~~production ofwastes ~~cleaning~~now upclassified as ~~the~~ non-hazardous ~~substances~~could ~~that~~be ~~have been~~classified ~~released~~as ~~into~~hazardous ~~the~~wastes ~~environment,~~in ~~for~~the ~~damages~~future. toIn ~~natural~~September 2010, ~~resources and for~~ the ~~costs~~Natural ~~of certain environmental and health studies.~~Resources InDefense ~~addition,~~Council itfiled isa ~~not~~petition ~~uncommon~~with ~~for~~the ~~neighboring~~EPA ~~landowners~~requesting ~~and~~them ~~other~~to ~~third~~reconsider ~~parties~~the toRCRA ~~file~~exemption ~~claims~~ for ~~personal~~exploration, ~~injury~~production, and ~~property~~ ~~damage~~development ~~allegedly~~wastes. ~~caused~~To bydate, the ~~release~~EPA ofhas ~~hazardous~~not ~~substances~~taken ~~into~~any action on the ~~environment~~petition. ~~CERCLA~~Any ~~also~~change ~~authorizes~~in the ~~EPA~~RCRA ~~and, in some~~exemption ~~instances,~~for ~~third~~such ~~parties~~wastes tocould ~~act~~result in ~~response~~an toincrease ~~threats~~in costs to ~~the~~manage ~~public~~and ~~health~~dispose orof ~~the~~wastes, ~~environment~~which ~~and~~could tohave ~~seek~~a tomaterial ~~recover~~adverse ~~from the~~effect ~~responsible~~on ~~classes of persons~~ the ~~costs~~development ~~they~~or ~~incur.~~success ~~We may generate materials in the course~~ of our proposed ~~operations~~oil ~~that~~and ~~may be~~gas ~~regulated as hazardous substances~~operations.

WeAir ~~may also generate wastes~~Emissions. The ~~that~~Clean ~~are~~Air ~~subject to the requirements of the Resource Conservation and Recovery~~ Act, as amended ~~("RCRA")~~, and comparable state ~~statutes.~~laws ~~RCRA~~and ~~imposes~~regulations ~~strict~~restrict ~~requirements on~~ the ~~generation,~~emission ~~transportation, treatment, storage, disposal and cleanup~~ of ~~hazardous~~ ~~and~~air ~~non-hazardous~~pollutants ~~wastes.~~from ~~Drilling~~many ~~fluids, produced waters and most of the other wastes associated with the exploration,~~sources ~~production~~ and ~~development~~also ofimpose ~~crude~~various ~~oil~~monitoring and ~~natural~~reporting ~~gas are currently exempt from regulation as hazardous wastes under RCRA~~requirements. These ~~However, it~~laws ~~is possible that certain oil~~ and ~~natural~~regulations ~~gas~~may ~~exploration~~require ~~and~~our ~~production~~operating partners ~~wastes~~to ~~now~~obtain ~~classified as non~~pre-~~hazardous~~approval ~~could~~for ~~be classified as hazardous wastes in~~ the ~~future.~~construction Inor ~~September 2010,~~modification ~~the~~of ~~Natural~~certain ~~Resources~~projects ~~Defense~~or ~~Council~~facilities ~~filed~~expected ato ~~petition~~produce ~~with~~or ~~the EPA~~significantly ~~requesting~~increase ~~them~~air ~~to reconsider the RCRA exemption for exploration~~emissions, ~~production,~~obtain and ~~development~~strictly ~~wastes.~~comply Towith ~~date,~~air ~~the~~permit ~~EPA~~requirements ~~has~~or ~~not taken~~utilize ~~any~~specific ~~action~~equipment onor ~~the~~technologies ~~petition~~to control emissions. ~~Any~~Obtaining ~~change~~permits inhas the ~~RCRA~~potential ~~exemption for such wastes could result in an increase in costs~~ to ~~manage and~~delay ~~dispose of wastes, which could have a material adverse effect on~~ the development ~~or success~~ of ~~our proposed~~ oil and natural gas ~~operations~~projects.

~~Air~~Water ~~Emissions~~Discharges. The ~~Clean~~Federal ~~Air~~Water Pollution Control Act, as amended ("Clean Water Act"), and ~~comparable~~analogous state laws impose restrictions and strict ~~regulations~~controls ~~restrict~~regarding the ~~emission~~discharge of ~~air~~ pollutants ~~from~~into ~~many~~navigable ~~sources and~~waters. Pursuant ~~also~~to ~~impose~~the ~~various~~Clean ~~monitoring~~Water Act and ~~reporting~~analogous state ~~requirements.~~laws, ~~These~~permits ~~laws~~must be obtained to discharge produced waters and ~~regulations~~sand, ~~may~~drilling ~~require~~fluids, ~~our~~drill ~~operating~~cuttings ~~partners~~and toother substances ~~obtain~~related ~~pre-approval~~to ~~for~~ the ~~construction~~oil orand ~~modification~~gas ofindustry ~~certain~~into ~~projects~~onshore, orcoastal ~~facilities~~and ~~expected~~offshore towaters ~~produce~~of the United States or ~~significantly~~state waters. Any ~~increase~~such ~~air~~discharge ~~emissions,~~of ~~obtain~~pollutants ~~and~~into ~~strictly~~regulated ~~comply~~waters must be performed in accordance with ~~air~~the terms of the permit ~~requirements~~issued by EPA or the ~~utilize~~analogous ~~specific~~state ~~equipment~~agency. Spill orprevention, ~~technologies~~control toand countermeasure requirements under federal law require appropriate ~~control~~containment ~~emissions.~~berms ~~Obtaining~~and ~~permits~~similar ~~has~~structures to help prevent the ~~potential~~contamination toof ~~delay~~navigable waters in the ~~development~~event of ~~oil~~a petroleum hydrocarbon tank spill, rupture or leak. In addition, the Clean Water Act and ~~natural~~analogous ~~gas~~state ~~projects~~laws require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities.

~~Water~~Climate ~~Discharges~~Change. In ~~The~~December 2009, ~~Federal~~the ~~Water~~EPA ~~Pollution~~published ~~Control~~its ~~Act,~~findings asthat ~~amended~~emissions ~~("Clean~~of ~~Water~~carbon ~~Act")~~dioxide, methane and ~~analogous~~certain ~~state~~other ~~laws~~GHGs ~~impose~~present ~~restrictions~~an endangerment to public health and ~~strict~~the ~~controls~~environment ~~regarding~~because emissions of such gases are, according to the ~~discharge~~EPA, contributing to warming of ~~pollutants~~the ~~into~~earth's ~~navigable~~atmosphere ~~waters~~and other climatic changes. ~~Pursuant~~These tofindings allow the ~~Clean~~EPA ~~Water~~to ~~Act~~adopt and ~~analogous~~implement regulations ~~state~~that ~~laws,~~restrict ~~permits~~emissions ~~must~~of beGHGs ~~obtained~~under toexisting ~~discharge~~provisions ~~produced~~of ~~waters~~the ~~and~~federal ~~sand,~~Clean ~~drilling~~Air ~~fluids~~Act. Accordingly, ~~drill~~the ~~cuttings~~EPA ~~and~~has ~~other substances~~adopted ~~related~~regulations tothat ~~the~~require ~~oil~~a ~~and~~reduction ~~gas~~in ~~industry~~emissions ~~into~~of ~~onshore,~~GHGs ~~coastal~~from motor vehicles and ~~offshore~~also ~~waters~~trigger ofpermit ~~the~~review ~~United~~for ~~States~~GHG oremissions from ~~state~~certain ~~waters~~large stationary sources. The ~~Any~~EPA's ~~such~~rules ~~discharge~~ relating to emissions of ~~pollutants~~GHGs ~~into~~from ~~regulated~~large ~~waters~~stationary ~~must~~sources beof emissions ~~performed~~are incurrently ~~accordance~~subject ~~with~~to ~~the~~a ~~terms~~number of legal challenges, but the ~~permit~~federal ~~issued~~courts byhave thus far declined to issue any injunctions to prevent the EPA from implementing, or ~~the~~requiring ~~analogous~~ state ~~agency.~~environmental ~~Spill~~agencies ~~prevention~~to implement, ~~control~~the ~~and~~rules. In ~~countermeasure~~addition, Congress ~~requirements~~has ~~under~~actively ~~federal~~considered ~~law~~legislation ~~require~~to ~~appropriate~~reduce ~~containment~~emissions ~~berms~~ of GHGs and ~~similar~~almost ~~structures~~one-half of the states have begun taking actions to ~~help~~control ~~prevent~~and/or ~~the~~reduce ~~contamination~~emissions of ~~navigable~~GHGs, ~~waters~~primarily inthrough the ~~event~~planned development of aGHG ~~petroleum~~emission ~~hydrocarbon~~inventories ~~tank~~and/or ~~spill,~~regional ~~rupture~~GHG orcap ~~leak~~and trade programs. InThe ~~addition~~adoption and implementation of any regulations imposing reporting obligations on, ~~the~~or ~~Clean~~limiting ~~Water~~emissions of ~~Act~~GHG ~~and~~gases ~~analogous~~from, ~~state~~our ~~laws~~equipment and operations could require ~~individual~~our ~~permits~~operators orto ~~coverage~~incur ~~under~~costs ~~general permits~~to ~~for~~reduce ~~discharges~~emissions of ~~storm~~GHGs ~~water~~associated with ~~runoff~~our ~~from~~proposed ~~certain~~operations ~~types~~or ofcould ~~facilities~~adversely affect demand for the oil and natural gas we produce.

Climate Change. In December 2009, the EPA published its findings that emissions of carbon dioxide, methane and certain other GHGs present an endangerment to public health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the earth's atmosphere and other climatic changes. These findings allow the EPA to adopt and implement regulations that restrict emissions of GHGs under existing provisions of the federal Clean Air Act. Accordingly, the EPA has adopted regulations that require a reduction in emissions of GHGs from motor vehicles and also trigger permit review for GHG emissions from certain large stationary sources. The EPA's rules relating to emissions of GHGs from large stationary sources of emissions are currently subject to a number of legal challenges, but the federal courts have thus far declined to issue any injunctions to prevent the EPA from implementing, or requiring state environmental agencies to implement, the rules. In addition, Congress has actively considered legislation to reduce emissions of GHGs and almost one-half of the states have begun taking actions to control and/or reduce emissions of GHGs, primarily through the planned development of GHG emission inventories and/or regional GHG cap and trade programs. The adoption and implementation of any regulations imposing reporting obligations on, or limiting emissions of GHG gases from, our equipment and operations could require our operators to incur costs to reduce emissions of GHGs associated with our proposed operations or could adversely affect demand for the oil and natural gas we produce.4

4Endangered Species. The federal Endangered Species Act ("ESA") restricts activities that may affect endangered or threatened species or their habitats. The designation of previously unidentified species as endangered or threatened on properties where we operate could subject us to additional costs or cause our oil and gas activities to be subject to operating restrictions or bans.

~~Endangered~~Employee ~~Species~~Health and Safety. Our proposed operations are subject to a number of federal and state laws and regulations, including ~~The~~the federal ~~Endangered~~Occupational ~~Species~~Safety and Health Act, as amended ("~~ESA~~OSHA"), ~~restricts~~and ~~activities~~comparable ~~that~~state ~~may~~statutes, ~~affect~~whose ~~endangered~~purpose oris to ~~threatened~~protect ~~species~~the orhealth ~~their habitats~~and safety of workers. In ~~The~~addition, ~~designation~~the ofOSHA ~~previously~~hazard ~~unidentified~~communication ~~species~~standard, asthe ~~endangered~~EPA orcommunity right-to-know ~~threatened~~regulations onunder ~~properties~~Title III ~~where~~of wethe ~~operate~~federal ~~could~~Superfund ~~subject~~Amendment and Reauthorization Act and comparable state usstatutes torequire ~~additional~~that ~~costs~~information be maintained concerning hazardous materials used or ~~cause~~produced ~~our~~in oil and gas ~~activities~~operations toand that this information be ~~subject~~provided to ~~operating~~employees, ~~restrictions~~state orand ~~bans~~local government authorities and citizens.

~~Employee~~State ~~Health~~Regulation. Texas regulates the drilling for, and ~~Safety.~~ ~~Our~~the ~~proposed~~production ~~operations~~and ~~are~~gathering ~~subject~~of, oil, natural gas and natural gas liquids, including requirements relating to adrilling ~~number~~permits, the location, spacing and density of ~~federal~~wells, unitization and ~~state~~pooling ~~laws~~of interests, the method of drilling, casing and ~~regulations~~equipping of wells, ~~including~~the protection of fresh water sources, the ~~federal~~orderly ~~Occupational~~development of common sources of supply of oil, ~~Safety~~natural gas and ~~Health~~natural ~~Act~~gas liquids, asthe ~~amended~~operation ~~("OSHA")~~of wells, allowable rates of production, the use of fresh water in oil, natural gas and ~~comparable~~natural ~~state~~gas ~~statutes~~liquids operations, ~~whose~~saltwater ~~purpose~~injection isand todisposal ~~protect~~operations, the ~~health~~plugging and ~~safety~~ abandonment of ~~workers.~~wells Inand the ~~addition~~restoration of surface properties, the ~~OSHA~~prevention ~~hazard~~of ~~communication~~waste ~~standard~~of oil, ~~the~~natural ~~EPA~~gas ~~community~~and ~~right-to-know~~natural ~~regulations~~gas ~~under~~liquids ~~Title III~~resources, the protection of the ~~federal~~correlative ~~Superfund~~rights ~~Amendment~~of ~~and~~oil, ~~Reauthorization~~natural ~~Act~~gas and ~~comparable~~natural ~~state~~gas ~~statutes~~liquids ~~require~~owners ~~that~~and, ~~information~~where benecessary ~~maintained concerning~~to ~~hazardous~~avoid ~~materials~~unfair, ~~used~~unjust or ~~produced~~discriminatory service, inthe ~~oil~~fees, terms and conditions for the gathering of natural gas. ~~operations~~The ~~and~~effect ~~that~~of ~~this~~these ~~information~~regulations may be ~~provided~~ to limit ~~employees~~the number of wells that our operating partners may drill, ~~state~~impact the locations at which our operating partners may drill wells, restrict the amounts of oil and ~~local~~natural ~~government~~gas ~~authorities~~that may be produced from wells drilled by our operating partners and ~~citizens~~increase the costs of operations.

~~State~~Hydraulic ~~Regulation~~Fracturing. We ~~Texas~~expect ~~regulates~~to ~~the~~participate ~~drilling~~in ~~for,~~exploration and ~~the~~drilling ~~production~~projects ~~and~~that ~~gathering~~seek ~~of,~~to recover oil, ~~natural gas~~ and natural gas ~~liquids,~~through ~~including~~the ~~requirements relating~~use toof ~~drilling~~hydraulic fracturing. Hydraulic ~~permits~~fracturing, ~~the~~which ~~location,~~involves ~~spacing~~the ~~and~~injection ~~density~~ of ~~wells~~water, ~~unitization~~sand and ~~pooling~~chemicals ofunder ~~interests,~~pressure into formations to fracture the ~~method~~surrounding ofrock ~~drilling~~and stimulate production, ~~casing~~ ~~and~~is ~~equipping~~typically ofregulated ~~wells,~~by ~~the~~state ~~protection~~oil ofand ~~fresh~~gas ~~water~~commissions. ~~sources~~However, the ~~orderly~~EPA ~~development~~recently ofasserted ~~common~~federal ~~sources~~regulatory ofauthority ~~supply~~over ofcertain ~~oil~~hydraulic fracturing practices. Also, legislation ~~natural~~has ~~gas~~been ~~and~~introduced ~~natural~~in ~~gas~~Congress ~~liquids,~~to ~~the~~provide ~~operation~~for offederal ~~wells,~~regulation ~~allowable~~of ~~rates~~hydraulic offracturing ~~production,~~and ~~the~~to ~~use~~require disclosure of ~~fresh~~the ~~water~~chemicals used in ~~oil~~the fracturing process. In addition, ~~natural gas~~some states have adopted, and ~~natural~~other ~~gas~~states ~~liquids~~are ~~operations~~considering adopting, ~~saltwater~~regulations that ~~injection~~could ~~and~~restrict ~~disposal~~hydraulic ~~operations~~fracturing in certain circumstances. For instance, ~~the~~in ~~plugging~~June ~~and~~2011, ~~abandonment~~Texas ofadopted ~~wells~~a ~~and~~law that requires disclosure to the ~~restoration~~Railroad Commission of ~~surface~~Texas ~~properties,~~of the ~~prevention~~additives ofand ~~waste~~other ofchemicals ~~oil,~~contained ~~natural~~in ~~gas~~hydraulic ~~and~~fracturing fluids ~~natural~~used ~~gas~~in ~~liquids~~the ~~resources~~state, ~~the~~subject ~~protection of~~to ~~the~~certain ~~correlative~~trade ~~rights~~secret ofprotections. ~~oil,~~If ~~natural~~new ~~gas~~laws ~~and~~or ~~natural~~regulations ~~gas~~that ~~liquids~~significantly restrict ~~owners~~hydraulic ~~and,~~fracturing ~~where~~are ~~necessary~~adopted toat ~~avoid~~the ~~unfair~~Texas state level, ~~unjust~~such legal requirements could make it more difficult or ~~discriminatory~~costly ~~service,~~for ~~the~~our ~~fees,~~operating ~~terms~~partners to perform fracturing to stimulate production in the play and ~~conditions~~thereby ~~for~~affect the ~~gathering~~determination of ~~natural~~whether a ~~gas.~~well ~~The~~is ~~effect~~commercially ofviable. ~~these~~In ~~regulations~~addition, ~~may~~if behydraulic tofracturing ~~limit~~is regulated at the ~~number of~~federal ~~wells~~level, ~~that~~fracturing ~~our~~activities could ~~operating~~become ~~partners~~subject ~~may~~to ~~drill,~~additional ~~impact~~permit ~~the~~requirements ~~locations~~or atoperational ~~which~~restrictions ~~our~~and ~~operating~~also ~~partners~~to ~~may~~associated ~~drill~~permitting ~~wells,~~delays ~~restrict~~and potential increases in costs. Restrictions on hydraulic fracturing could also reduce the ~~amounts~~amount of oil ~~and~~or natural gas and natural gas liquids that ~~may~~our beoperating ~~produced~~partners ~~from~~are ~~wells~~ultimately ~~drilled~~able byto ~~our~~produce ~~operating~~in ~~partners~~commercial ~~and~~quantities ~~increase~~from ~~the~~our ~~costs~~oil ~~of operations~~and gas properties.

Hydraulic Fracturing. We expect to participate in exploration and drilling projects that seek to recover oil and natural gas through the use of hydraulic fracturing. Hydraulic fracturing, which involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production, is typically regulated by state oil and gas commissions. However, the EPA recently asserted federal regulatory authority over certain hydraulic fracturing practices. Also, legislation has been introduced in Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the fracturing process. In addition, some states have adopted, and other states are considering adopting, regulations that could restrict hydraulic fracturing in certain circumstances. For instance, in June 2011, Texas adopted a law that requires disclosure to the Railroad Commission of Texas of the additives and other chemicals contained in hydraulic fracturing fluids used in the state, subject to certain trade secret protections. If new laws or regulations that significantly restrict hydraulic fracturing are adopted at the Texas state level, such legal requirements could make it more difficult or costly for our operating partners to perform fracturing to stimulate production in the play and thereby affect the determination of whether a well is commercially viable. In addition, if hydraulic fracturing is regulated at the federal level, fracturing activities could become subject to additional permit requirements or operational restrictions and also to associated permitting delays and potential increases in costs. Restrictions on hydraulic fracturing could also reduce the amount of oil or natural gas and natural gas liquids that our operating partners are ultimately able to produce in commercial quantities from our oil and gas properties.Employees

~~Employees~~As of the date of this report, we have two employees, our chief executive officer and chief financial officer. For the foreseeable future, we intend to use the services of independent consultants and contractors to perform various professional services related to our oil and gas operations. Subject to our receipt of significant additional capital, we intend to hire additional senior management and staff with experience in oil and gas exploration and development. Until such time, we intend to rely on third party consultants to advise and assist us on our oil and gas operations.

As of the date of this report, we have one employee, our chief executive officer and chief financial officer. For the foreseeable future, we intend to use the services of independent consultants and contractors to perform various professional services related to our oil and gas operations. Subject to our receipt of significant additional capital, we intend to hire senior management and staff with experience in oil and gas exploration and development. Until such time, we intend to rely on third party consultants to advise and assist us on our oil and gas operations.5

Available Information

Our website is located at www.westtexasresources.com. The information on or accessible through our website is not part of this annual report on Form 10-K. A copy of this annual report on Form 10-K is located at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that contains reports and other information regarding our filings at www.sec.gov.

5Glossary of Oil and Natural Gas Terms

~~Glossary~~The following is a description of ~~Oil~~the meanings of some of the oil and ~~Natural~~natural ~~Gas~~gas ~~Terms~~industry terms used in this report.

~~The~~bbl. ~~following~~Stock istank barrel, aor ~~description of~~42 ~~the~~U.S. ~~meanings~~gallons ofliquid ~~some~~volume, ofused ~~the~~in ~~oil~~this ~~and~~report ~~natural~~in ~~gas~~reference ~~industry~~to ~~terms~~crude ~~used~~oil inor ~~this~~other ~~report~~liquid hydrocarbons.

~~bbl~~bcf. ~~Stock tank~~Billion ~~barrel,~~cubic orfeet 42of ~~U.S.~~natural ~~gallons liquid volume, used in this report in reference to crude oil or other liquid hydrocarbons~~gas.

~~bcf~~boe. ~~Billion cubic~~Barrels ~~feet~~of crude oil equivalent, determined using the ratio of six mcf of natural gas to one bbl of crude oil, condensate or natural gas liquids.

boe/d. ~~Barrels~~boe ofper ~~crude oil equivalent, determined using the ratio of six mcf of natural gas to one bbl of crude oil, condensate or natural gas liquids~~day.

~~boe/d~~btu. ~~boe~~The ~~per~~British thermal ~~day~~unit, a traditional unit of energy equal to about 1055 joules. It is the amount of energy needed to cool or heat one pound of water by one degree Fahrenheit (Physical analogue; one four inch, wooden kitchen match consumed completely generates 1 btu).

~~btu~~Completion. The ~~British~~process ~~thermal unit,~~of treating a ~~traditional~~drilled ~~unit~~well offollowed ~~energy~~by ~~equal~~the toinstallation ~~about~~of ~~1055~~permanent ~~joules.~~equipment Itfor is the ~~amount~~production of ~~energy~~natural ~~needed~~gas toor oil, ~~cool~~ or ~~heat~~in ~~one~~the ~~pound~~case of ~~water by~~a ~~one~~dry ~~degree Fahrenheit (Physical analogue; one four inch~~hole, ~~wooden~~the ~~kitchen~~reporting ~~match~~of ~~consumed~~abandonment ~~completely~~to ~~generates~~the 1appropriate ~~btu)~~agency.

~~Completion~~Condensate. ~~The~~ ~~process~~Hydrocarbons ofwhich ~~treating~~are ain ~~drilled well followed by~~ the ~~installation~~gaseous ofstate ~~permanent~~under ~~equipment~~reservoir ~~for~~conditions ~~the~~and ~~production~~which ofbecome ~~natural~~liquid ~~gas~~when ortemperature ~~oil,~~ or inpressure ~~the~~is reduced. ~~case~~A ofmixture ~~a dry hole, the reporting~~ of ~~abandonment~~pentanes toand ~~the~~higher ~~appropriate agency~~hydrocarbons.

~~Condensate.~~Development ~~Hydrocarbons~~well. ~~which~~A ~~are~~well indrilled within the ~~gaseous~~proved ~~state~~area ~~under~~of ~~reservoir~~a ~~conditions~~natural ~~and~~gas ~~which~~or ~~become~~oil ~~liquid~~reservoir ~~when~~to ~~temperature~~the ordepth ~~pressure~~of isa ~~reduced.~~stratigraphic Ahorizon ~~mixture of~~known ~~pentanes~~to ~~and~~be ~~higher hydrocarbons~~productive.

~~Development~~Drilling ~~well~~locations. ATotal ~~well~~gross ~~drilled~~locations ~~within~~specifically quantified by management to be included in the ~~proved~~Company’s ~~area~~multi-year ofdrilling aactivities on ~~natural~~existing ~~gas~~acreage. orThe ~~oil~~Company’s ~~reservoir~~actual todrilling activities may change depending on the ~~depth~~availability of acapital, ~~stratigraphic~~regulatory approvals, ~~horizon~~seasonal ~~known~~restrictions, tooil beand ~~productive~~natural gas prices, costs, drilling results and other factors.

~~Drilling~~Dry ~~locations~~hole. A ~~Total~~well ~~gross~~found ~~locations specifically quantified by management~~ to be ~~included~~incapable inof ~~the~~producing ~~Company’s~~either ~~multi-year~~oil ~~drilling~~or ~~activities on~~gas ~~existing~~in ~~acreage.~~sufficient ~~The~~quantities ~~Company’s~~to ~~actual~~justify ~~drilling~~completion ~~activities~~as ~~may~~an ~~change depending on the availability of capital, regulatory approvals, seasonal restrictions,~~ oil ~~and~~or ~~natural~~ gas ~~prices, costs, drilling results and other factors~~well.

~~Dry~~Exploratory ~~hole~~well. A well ~~found~~ drilled to befind ~~incapable~~and ofproduce ~~producing~~natural ~~either~~gas or oil orreserves ~~gas~~not classified as proved, to find a new reservoir in ~~sufficient~~a ~~quantities~~field previously found to ~~justify~~be ~~completion~~productive asof annatural gas or oil in another reservoir or ~~gas~~to ~~well~~extend a known reservoir.

~~Exploratory well~~Field. A ~~well~~An ~~drilled~~area consisting toof ~~find~~either ~~and~~a ~~produce~~single ~~natural~~reservoir ~~gas~~ or ~~oil~~multiple ~~reserves not classified as proved~~reservoirs, toall ~~find~~grouped aon ~~new~~or ~~reservoir~~related ~~in a field previously found~~ to bethe ~~productive~~same ofindividual ~~natural~~geological ~~gas~~structural feature and/or ~~oil~~stratigraphic ~~in another reservoir or to extend a known reservoir~~condition.

~~Field~~Formation. An identifiable ~~area~~layer ~~consisting~~ of ~~either~~rocks anamed ~~single~~after ~~reservoir~~its orgeographical ~~multiple~~location ~~reservoirs, all grouped on or related to the same individual geological structural feature~~ and~~/or~~ ~~stratigraphic~~dominant ~~condition~~rock type.

~~Formation.~~Fracture Anor ~~identifiable~~fracturing. ~~layer~~Hydraulic fracturing, a common practice that is used to stimulate production of ~~rocks~~oil ~~named~~and ~~after~~natural ~~its~~gas ~~geographical~~from ~~location~~dense subsurface rock formations. The hydraulic fracturing process involves the injection of water, sand and ~~dominant~~chemicals under pressure into a formation to fracture the surrounding rock ~~type~~and stimulate production.

~~Fracture~~Lease. orA ~~fracturing.~~legal ~~Hydraulic~~contract ~~fracturing,~~that aspecifies ~~common~~the ~~practice~~terms ~~that~~of isthe ~~used~~business torelationship ~~stimulate~~between ~~production~~an ofenergy ~~oil~~company and ~~natural~~a ~~gas~~landowner ~~from~~or ~~dense~~mineral ~~subsurface~~rights ~~rock~~holder ~~formations.~~on ~~The~~a ~~hydraulic~~particular ~~fracturing~~tract ~~process involves the injection~~ of ~~water,~~land ~~sand~~ and ~~chemicals~~typically ~~under~~grants ~~pressure~~to ~~into~~the aenergy ~~formation to~~company ~~fracture~~a ~~the~~fee ~~surrounding~~simple ~~rock~~determinable ~~and~~estate ~~stimulate~~in ~~production~~the minerals.

Lease. A legal contract that specifies the terms of the business relationship between an energy company and a landowner or mineral rights holder on a particular tract of land and typically grants to the energy company a fee simple determinable estate in the minerals.6

Leasehold. Mineral rights leased in a certain area to form a project area.

mbbls. Thousand barrels of crude oil or other liquid hydrocarbons.

mboe. Thousand ~~barrels~~ barrels of crude oil equivalent, determined using the ratio of six mcf of natural gas to one bbl of crude oil, condensate or natural ~~gas~~ gas liquids

6mcf. Thousand cubic feet of natural gas.

~~mcf~~mcfe. Thousand ~~cubic~~ cubic feet equivalent, determined using the ratio of six mcf of natural gas to one bbl of crude oil, condensate or natural gas liquids.

~~mcfe~~mmbbls. ~~Thousand cubic~~Million ~~feet~~barrels ~~equivalent, determined using the ratio~~ of ~~six mcf of natural gas to one bbl of~~ crude oil, ~~condensate~~ or ~~natural~~other ~~gas~~liquid ~~liquids~~hydrocarbons.

~~mmbbls~~mmboe. Million barrels of crude oil orequivalent, ~~other~~determined ~~liquid~~using ~~hydrocarbons~~the ratio of six mcf of natural gas to one bbl of crude oil, condensate or natural gas liquids.

~~mmboe~~mmbtu. Million ~~barrels~~ ofBritish ~~crude~~Thermal ~~oil equivalent, determined using the ratio of six mcf of natural gas to one bbl of crude oil, condensate or natural gas liquids~~Units.

~~mmbtu~~mmcf. Million ~~British~~ ~~Thermal~~cubic ~~Units~~feet of natural gas.

~~mmcf.~~Net ~~Million~~acres, ~~cubic~~net wells, ~~feet~~or net reserves. The sum of ~~natural~~the ~~gas~~fractional working interest owned in gross acres, gross wells, or gross reserves, as the case may be.

~~Net~~ngl. ~~acres,~~Natural gas ~~net wells~~liquids, or ~~net~~liquid ~~reserves.~~hydrocarbons ~~The~~found ~~sum of the fractional working interest owned~~ in ~~gross~~association ~~acres,~~with ~~gross~~natural ~~wells, or gross reserves, as the case may be~~gas.

~~ngl~~Overriding royalty interest. ~~Natural~~Is similar to a basic royalty interest except that it is created out of the working interest. For example, an operator possesses a standard lease providing for a basic royalty to the lessor or mineral rights owner of 1/8 of 8/8. This then entitles the operator to retain 7/8 of the total oil and natural gas produced. The 7/8 in this case is the 100% working interest the operator ~~liquids~~owns. This operator may assign his working interest to another operator subject to a retained 1/8 overriding royalty. This would then result in a basic royalty of 1/8, an overriding royalty of 1/8 and a working interest of 3/4. Overriding royalty interest owners have no obligation or ~~liquid~~responsibility ~~hydrocarbons~~for ~~found~~developing inand ~~association~~operating ~~with~~the ~~natural~~property. The only expenses borne by the overriding royalty owner are a share of the production or severance taxes and sometimes costs incurred to make the oil or gas salable.

~~Overriding~~Plugging ~~royalty~~and ~~interest~~abandonment. IsRefers ~~similar~~ to ~~a basic royalty interest except that it is created out of~~ the ~~working~~sealing ~~interest.~~off ~~For example, an operator possesses a standard lease providing for a basic royalty to the lessor or mineral rights owner~~ of ~~1/8~~fluids ~~of 8/8. This then entitles the operator to retain 7/8 of the total oil and natural gas produced. The 7/8~~ in ~~this case is~~ the ~~100%~~strata ~~working~~penetrated ~~interest~~by ~~the operator owns. This operator may assign his working interest to another operator subject to~~ a ~~retained~~well ~~1/8~~so ~~overriding~~that ~~royalty.~~the ~~This~~fluids ~~would~~from ~~then~~one ~~result in~~stratum awill ~~basic~~not ~~royalty~~escape ~~of 1/8, an overriding royalty of 1/8 and a working interest of 3/4. Overriding royalty interest owners have~~into noanother ~~obligation~~ or ~~responsibility~~to ~~for developing and operating~~ the ~~property~~surface. ~~The~~Regulations ~~only~~of ~~expenses~~all ~~borne~~states byrequire ~~the~~plugging ~~overriding royalty owner are a share~~ of ~~the~~abandoned ~~production or severance taxes and sometimes costs incurred to make the oil or gas salable~~wells.

~~Plugging~~Present ~~and~~value ~~abandonment.~~of ~~Refers~~future net revenues (PV-10). The present value of estimated future revenues to be generated from the ~~sealing~~production ~~off~~of proved reserves, before income taxes, of ~~fluids~~proved reserves calculated in ~~the~~accordance ~~strata~~with ~~penetrated~~Financial byAccounting aStandards ~~well~~Board soguidelines, ~~that~~net ~~the~~of ~~fluids~~estimated production ~~from~~and ~~one~~future ~~stratum~~development ~~will~~costs, ~~not~~using ~~escape~~prices ~~into~~and costs as of the date of estimation without future escalation, without ~~another~~giving oreffect to ~~the~~hedging ~~surface.~~activities, ~~Regulations~~non-property ofrelated ~~all~~expenses ~~states~~such ~~require~~a ~~plugging~~general ofand ~~abandoned~~administrative ~~wells~~expenses, debt service and depreciation, depletion and amortization, and discounted using an annual discount rate of 10%.

~~Present value of future net revenues (PV-10)~~Production. ~~The present value of estimated future revenues to be generated from the production of proved reserves,~~ ~~before~~Natural ~~income taxes~~resources, ofsuch ~~proved~~as ~~reserves~~oil ~~calculated~~or ~~in accordance with Financial Accounting Standards Board guidelines~~gas, ~~net~~taken ofout ~~estimated production and future development costs, using prices and costs as~~ of the date of estimation without future escalation, without giving effect to hedging activities, non-property related expenses such a general and administrative expenses, debt service and depreciation, depletion and amortization, and discounted using an annual discount rate of 10%ground.

~~Production.~~Proved ~~Natural~~oil and gas ~~resources,~~reserves. ~~such~~Proved asoil and gas reserves are the estimated quantities of crude oil, ornatural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be economically recoverable in future years from known reservoirs under existing economic conditions, ~~taken~~operating ~~out~~methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the ~~ground~~estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

~~Proved~~(i) ~~oil~~Reservoirs ~~and~~are ~~gas~~considered ~~reserves. Proved~~proved ~~oil~~if ~~and~~economic ~~gas~~producibility ~~reserves~~is ~~are~~supported ~~the~~by ~~estimated~~either ~~quantities~~actual ofproduction ~~crude~~or ~~oil,~~conclusive ~~natural~~formation ~~gas~~test. ~~and~~The ~~natural~~area ~~gas~~of ~~liquids~~a ~~which~~reservoir ~~geological~~considered ~~and engineering~~proved ~~data~~includes ~~demonstrate~~(A) ~~with~~that ~~reasonable~~portion ~~certainty~~delineated toby bedrilling ~~economically~~and ~~recoverable~~defined inby ~~future~~gas-oil ~~years~~and/or ~~from~~oil-water ~~known reservoirs under existing economic conditions~~contacts, ~~operating~~if ~~methods,~~any; and ~~government~~(B) ~~regulations—prior to~~ the ~~time~~immediately atadjoining ~~which~~portions ~~contracts~~not ~~providing the~~yet ~~right to operate expire~~drilled, ~~unless~~but ~~evidence~~which ~~indicates~~can ~~that~~be ~~renewal is~~ reasonably ~~certain,~~judged ~~regardless~~as ofeconomically ~~whether~~productive ~~deterministic or~~on ~~probabilistic~~the ~~methods~~basis ~~are~~of ~~used~~available ~~for~~geological ~~the~~and ~~estimation~~engineering data. ~~The~~In ~~project to extract~~ the ~~hydrocarbons~~absence ~~must~~of ~~have~~information ~~commenced~~on orfluid contacts, the ~~operator must~~lowest beknown ~~reasonably~~structural ~~certain~~occurrence ~~that~~of ithydrocarbons ~~will~~controls ~~commence~~ the ~~project~~lower ~~within~~proved alimit ~~reasonable~~of ~~time~~the reservoir.

(i) Reservoirs are considered proved if economic producibility is supported by either actual production or conclusive formation test. The area of a reservoir considered proved includes (A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (B) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir.7

(ii)

Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based.

7(iii) Estimates of proved reserves do not include the following: (A) oil that may become available from known reservoirs but is classified separately as "indicated additional reserves"; (B) crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors; C) crude oil, natural gas, and natural gas liquids, that may occur in undrilled prospects; and (D) crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal, gilscnite, and other such sources.

~~(iii)~~Proved ~~Estimates~~developed oil ofand ~~proved~~gas reserves. doProved ~~not~~developed ~~include~~oil ~~the~~and ~~following:~~gas ~~(A)~~reserves ~~oil~~are reserves that ~~may~~can ~~become~~be ~~available~~expected ~~from~~to ~~known~~be ~~reservoirs~~recovered ~~but~~through isexisting wells ~~classified~~with ~~separately~~existing asequipment ~~"indicated~~and ~~additional~~operating ~~reserves";~~methods. ~~(B)~~Additional ~~crude~~ oil, ~~natural~~and gas, ~~and~~expected ~~natural~~to ~~gas~~be ~~liquids,~~obtained through the ~~recovery~~application of fluid ~~which~~injection isor ~~subject~~other toimproved ~~reasonable~~recovery ~~doubt~~techniques ~~because~~for ofsupplementing ~~uncertainty~~the asnatural toforces ~~geology,~~and ~~reservoir~~mechanisms ~~characteristics,~~of orprimary ~~economic~~recovery ~~factors;~~should be C)included ~~crude~~as ~~oil,~~"proved ~~natural~~developed ~~gas,~~reserves" ~~and~~only ~~natural~~after ~~gas~~testing ~~liquids,~~by ~~that~~a ~~may~~pilot ~~occur~~project inor ~~undrilled~~after ~~prospects;~~the ~~and~~operation ~~(D)~~of ~~crude~~an ~~oil,~~installed program ~~natural~~has ~~gas,~~confirmed ~~and~~through ~~natural~~production ~~gas~~response ~~liquids,~~ that ~~may~~increased berecovery ~~recovered~~will ~~from~~be ~~oil shales, coal, gilscnite, and other such sources~~achieved.

Proved ~~developed oil~~undeveloped ~~and gas~~ reserves. Proved ~~developed~~undeveloped oil and gas reserves are reserves that ~~can~~are be expected to be recovered ~~through~~from ~~existing~~ new wells ~~with~~on undrilled acreage, or from existing ~~equipment~~wells ~~and~~where ~~operating~~a ~~methods~~relatively major expenditure is required for recompletion. ~~Additional~~Reserves ~~oil~~on ~~and~~undrilled ~~gas~~acreage shall ~~expected~~be limited to bethose ~~obtained~~drilling ~~through~~units ~~the~~offsetting ~~application~~productive units that are reasonably certain of ~~fluid~~ ~~injection~~production orwhen drilled. Proved reserves for other ~~improved~~undrilled ~~recovery~~units ~~techniques~~can ~~for~~be ~~supplementing~~claimed ~~the~~only ~~natural~~where ~~forces~~it ~~and~~can ~~mechanisms~~be demonstrated with certainty that there is continuity of production ~~primary~~from ~~recovery~~the existing productive formation. Under no circumstances should be ~~included~~estimates asfor "proved ~~developed~~undeveloped reserves" ~~only~~be ~~after~~attributable to ~~testing~~any byacreage afor ~~pilot~~which ~~project~~an application of fluid injection or ~~after~~other ~~the~~improved ~~operation~~recovery oftechnique anis ~~installed~~contemplated, unless such techniques ~~program~~have ~~has~~been ~~confirmed~~proved ~~through~~effective ~~production~~by ~~response~~actual ~~that~~tests ~~increased~~in ~~recovery~~the ~~will~~area beand ~~achieved~~in the same reservoir.

~~Proved~~Productive ~~undeveloped reserves~~well. ~~Proved~~A ~~undeveloped~~well ~~oil and gas reserves are reserves~~ that ~~are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure~~ is ~~required~~found ~~for recompletion. Reserves on undrilled acreage shall be limited~~ to ~~those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units can~~ be ~~claimed~~capable ~~only where it can be demonstrated with certainty that there is continuity~~ of ~~production~~producing ~~from the~~either ~~existing~~oil ~~productive~~or ~~formation.~~gas ~~Under~~in nosufficient ~~circumstances~~quantities ~~should estimates for proved undeveloped reserves be attributable~~ to ~~any acreage~~justify ~~for~~completion ~~which~~as an ~~application~~oil ~~of fluid injection~~ or ~~other improved recovery technique is contemplated, unless such techniques~~gas ~~have been proved effective by actual tests in the area and in the same reservoir~~well.

~~Productive well~~Project. A ~~well~~targeted development ~~that~~area iswhere ~~found~~it tois beprobable ~~capable~~that ~~of producing either~~ oil or natural gas incan ~~sufficient~~be ~~quantities~~produced tofrom ~~justify~~new ~~completion as an oil or gas well~~wells.

~~Project~~Prospect. A ~~targeted~~ ~~development~~specific geographic area ~~where~~which, itbased ison ~~probable~~supporting ~~that~~geological, ~~oil~~geophysical or ~~natural~~other ~~gas~~data ~~can~~and bealso ~~produced~~preliminary ~~from~~economic ~~new~~analysis using ~~wells~~reasonably anticipated prices and costs, is deemed to have potential for the discovery of commercial hydrocarbons.

~~Prospect~~Recompletion. The Aprocess ~~specific geographic~~of ~~area~~re-entering ~~which,~~an ~~based~~existing onwell ~~supporting~~bore ~~geological,~~that ~~geophysical~~is either producing or ~~other~~not ~~data~~producing and ~~also~~completing ~~preliminary~~new ~~economic~~reservoirs ~~analysis~~in ~~using reasonably~~an ~~anticipated~~attempt ~~prices and costs, is deemed~~ to ~~have~~establish ~~potential~~or ~~for~~increase ~~the~~existing ~~discovery of commercial hydrocarbons~~production.

~~Recompletion~~Reserves. ~~The~~Oil, ~~process~~natural ofgas ~~re-entering an existing well bore that is either producing or not producing~~ and ~~completing~~gas ~~new~~liquids ~~reservoirs~~thought ~~in an attempt~~ to ~~establish~~be oraccumulated ~~increase~~in ~~existing~~known ~~production~~reservoirs.

~~Reserves~~Reservoir. ~~Oil,~~A porous and permeable underground formation containing a natural accumulation of producible nature gas and/or ~~gas~~oil ~~liquids~~that ~~thought~~is toconfined by beimpermeable ~~accumulated~~rock inor ~~known~~water barriers and is separate from other reservoirs.

~~Reservoir.~~Secondary Recovery. A ~~porous and~~recovery ~~permeable~~process ~~underground~~that ~~formation~~uses ~~containing~~mechanisms aother than the natural ~~accumulation~~pressure of ~~producible~~the ~~nature~~reservoir, ~~gas~~such ~~and/or~~as ~~oil~~gas ~~that~~injection isor ~~confined~~water ~~by impermeable~~flooding, ~~rock~~to orproduce ~~water~~residual ~~barriers~~oil and isnatural ~~separate~~gas ~~from~~remaining ~~other~~after ~~reservoirs~~the primary recovery phase.

~~Secondary Recovery~~Shut-in. A ~~recovery process~~ well that ~~uses~~has ~~mechanisms~~been ~~other~~capped ~~than~~(having the ~~natural~~valves ~~pressure~~locked ofshut) ~~the~~for ~~reservoir,~~an ~~such~~undetermined asamount ~~gas~~of ~~injection~~time. orThis ~~water~~could ~~flooding~~be for additional testing, could be to ~~produce~~wait ~~residual~~for ~~oil~~pipeline ~~and~~or ~~natural~~processing ~~gas~~facility, ~~remaining~~or ~~after~~a ~~the~~number ~~primary~~of ~~recovery~~other ~~phase~~reasons.

~~Shut-in~~Standardized measure. The Apresent ~~well~~value of estimated future cash inflows from proved oil and natural gas reserves, less future development, abandonment, ~~that~~production ~~has~~and ~~been~~income ~~capped~~tax ~~(having~~expenses, ~~the~~discounted ~~valves~~at ~~locked~~10% ~~shut)~~per ~~for~~annum anto ~~undetermined~~reflect ~~amount~~timing of ~~time.~~future ~~This~~cash ~~could~~flows beand ~~for~~using ~~additional~~the ~~testing,~~same pricing ~~could~~assumptions beas were used to ~~wait~~calculate ~~for~~PV-10. ~~pipeline~~Standardized ormeasure ~~processing~~differs ~~facility,~~from orPV-10 abecause ~~number~~standardized measure includes the effect of ~~other~~future ~~reasons~~income taxes.

Standardized measure. The present value of estimated future cash inflows from proved oil and natural gas reserves, less future development, abandonment, production and income tax expenses, discounted at 10% per annum to reflect timing of future cash flows and using the same pricing assumptions as were used to calculate PV-10. Standardized measure differs from PV-10 because standardized measure includes the effect of future income taxes.8

Successful. A well is determined to be successful if it is producing oil or natural gas, or awaiting hookup, but not abandoned or plugged.

Undeveloped acreage. Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

Water flood. A method of secondary recovery in which water is injected into the reservoir formation to displace residual oil and enhance hydrocarbon recovery.

Working interest. The operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and receive a share of production and requires the owner to pay a share of the costs of drilling and production operations.

8Item 1A. Risk Factors

~~Item~~There 1Aare numerous and varied risks, known and unknown, that may prevent us from achieving our goals. If ~~Risk~~any ~~Factors~~of these risks actually occur, our business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of our common stock could decline and investors could lose all or part of their investment.

~~There~~We are ~~numerous~~an ~~and~~early ~~varied~~stage ~~risks,~~company ~~known~~and have limited assets. We were formed in 2010 and ~~unknown,~~commenced ~~that~~revenue ~~may~~producing ~~prevent~~oil usand ~~from~~gas ~~achieving~~operations ~~our~~effective as ~~goals~~of April 1, 2013. IfAs ~~any~~an ofearly ~~these~~stage company, we are subject to all risks ~~actually~~inherent ~~occur,~~in ~~our~~a ~~business, financial~~new ~~condition~~venture. orThe ~~results~~likelihood of ~~operation~~our ~~may~~success must be ~~materially~~considered ~~adversely~~in ~~affected.~~light Inof ~~such~~problems, ~~case~~expenses, ~~the~~complications ~~trading~~and ~~price~~delays offrequently ~~our~~encountered ~~common~~in connection with the development ~~stock~~of ~~could~~a ~~decline~~new business. We do not have a significant operating history and, ~~investors~~as ~~could~~a ~~lose~~result, ~~all~~there oris ~~part~~a limited amount of ~~their~~information about us on which to make an investment decision.

We ~~are~~will anrequire additional ~~early~~capital ~~stage company~~in order to achieve commercial success and, if necessary, to finance future losses from operations as we endeavor to build revenue, but we do not have ~~limited~~any ~~assets~~commitments to obtain such capital. WeThe ~~were~~business ~~formed~~of inoil ~~2010~~and gas acquisition, drilling and ~~commenced~~development ~~revenue~~is ~~producing~~capital intensive and the level of operations attainable by an oil and gas ~~operations~~company ~~effective~~is directly linked to and aslimited ofby ~~April~~the 1,amount ~~2013~~of available capital. As anof ~~early~~September ~~stage~~30, ~~company~~2016, we ~~are~~had ~~subject~~total tocurrent ~~all~~assets ~~risks~~of ~~inherent~~$13,209 inand a ~~new~~working ~~venture~~capital deficit of $(235,007). ~~The~~We ~~likelihood~~believe ofthat our ability to achieve commercial success ~~must~~ and our continued growth will be ~~considered~~dependent inon our ~~light~~ability to access capital either through the additional sale of ~~problems~~our equity or debt securities, ~~expenses~~bank lines of credit, ~~complications~~project financing or cash generated from oil and ~~delays~~gas ~~frequently~~operations. Therefore, ~~encountered~~a inprincipal ~~connection~~part ~~with~~of our plan of operations is to acquire the additional capital required to finance the acquisition of such properties and our share of the development costs. We will seek additional working capital through the sale of aour ~~new~~securities ~~business.~~and, Wesubject doto ~~not~~the ~~have~~successful adeployment ~~significant~~of ~~operating~~our ~~history~~cash on hand, we will endeavor to obtain additional capital through bank lines of credit and project financing. However, as aof ~~result~~the date of this report, ~~there~~we ishave ano ~~limited~~commitments ~~amount~~for the sale of ~~information~~our ~~about~~securities or our acquisition of additional capital through any other usmeans nor can there be any assurance that any funds will be available on ~~which~~commercially toreasonable ~~make~~terms, anif ~~investment~~at ~~decision~~all.

We will require additional capital in order to achieve commercial success and, if necessary, to finance future losses from operations as we endeavor to build revenue, but we do not have any commitments to obtain such capital. The ~~business~~report of ~~oil~~our ~~and gas acquisition, drilling and~~independent ~~development~~registered ispublic ~~capital~~accounting ~~intensive~~firm ~~and~~for the ~~level~~fiscal ofyear ~~operations~~ended ~~attainable by an oil and gas company is directly linked to and limited by the amount of available capital. As of~~ September 30, ~~2015,~~2016 westates ~~had total current assets of $142,762 and a working capital deficit of $(133,600). We believe~~ that ~~our~~due ~~ability~~ to ~~achieve commercial success and~~ our ~~continued~~losses ~~growth will be dependent on our ability to access capital either through the additional sale of our equity or debt securities, bank lines of credit, project financing or cash generated~~ from ~~oil and gas~~ operations~~. Therefore,~~ ~~a principal part of our plan of operations is to acquire the additional~~and ~~capital~~lack ~~required to finance the acquisition~~ of ~~such properties and our share of the development costs. We will seek additional~~ working capital ~~through~~there ~~the~~is ~~sale~~substantial ofdoubt ~~our~~about ~~securities and, subject to the successful deployment of~~ our ~~cash~~ability ~~on hand, we will endeavor~~ to ~~obtain~~continue ~~additional capital through bank lines of credit and project financing. However,~~ as ofa ~~the~~going date of this report, we have no commitments for the sale of our securities or our acquisition of additional capital through any other means nor can there be any assurance that any funds will be available on commercially reasonable terms, if at allconcern.

~~The~~Market ~~report~~conditions for ofoil and natural gas, and particularly the recent decline in prices for oil and natural gas, could adversely affect our ~~independent~~revenue, ~~registered~~cash ~~public~~flows, ~~accounting~~profitability ~~firm~~and growth. Our project revenue, cash flows, profitability and future rate of growth depend substantially upon prevailing prices for oil and natural gas. Prices also affect the ~~fiscal~~amount ~~year~~of ~~ended~~cash ~~September~~flow ~~30,~~available for ~~2015~~capital ~~states~~expenditures ~~that~~and ~~due~~our ability to borrow money or raise additional capital. Lower prices may also make it uneconomical for our operating ~~losses~~partners ~~from~~to ~~operations~~commence or continue production levels of natural gas and crude oil. Over ~~lack~~the six months preceding the date of ~~working~~this ~~capital~~report, ~~there~~the isNYMEX ~~substantial~~settled ~~doubt~~prices ~~about~~for ~~our~~oil ~~ability~~and natural gas have decreased by approximately 50%. For example, during 2013 and 2014, the price of oil per bbl was consistently in the range of $85 to ~~continue~~$90 asper bbl, and hit a two ~~going~~year ~~concern~~high of $101 per bbl on June 21, 2014. However, since then the prices of oil and natural gas have significantly decreased due to an over-supply and decreasing demand, and experts believe that the prices of oil and natural gas will stay suppressed for some time from the price levels experienced during the last few years.

Market conditions for oil and natural gas, and particularly the recent decline in prices for oil and natural gas, could adversely affect our revenue, cash flows, profitability and growth. Our project revenue, cash flows, profitability and future rate of growth depend substantially upon prevailing prices for oil and natural gas. Prices also affect the amount of cash flow available for capital expenditures and our ability to borrow money or raise additional capital. Lower prices may also make it uneconomical for our operating partners to commence or continue production levels of natural gas and crude oil. Over the six months preceding the date of this report, the NYMEX settled prices for oil and natural gas have decreased by approximately 50%. For example, during 2013 and 2014, the price of oil per bbl was consistently in the range of $85 to $90 per bbl, and hit a two year high of $101 per bbl on June 21, 2014. However, since then the prices of oil and natural gas have significantly decreased due to an over-supply and decreasing demand, and experts believe that the prices of oil and natural gas will stay suppressed for some time from the price levels experienced during the last few years.9

Lower oil and natural ~~gas~~ gas prices will reduce our revenues and may ultimately reduce the amount of oil and natural gas that is economic to produce from ~~our~~ our oil and gas properties. As a result, our operating partners could determine during periods of low oil and natural gas prices to shut in or curtail production from any operating wells. In addition, our operating partners could determine during periods of low oil and natural gas prices to plug and abandon marginal wells that otherwise may have been allowed to continue to produce for a longer period under conditions of higher prices. Specifically, our operating partners may abandon any well or property if it reasonably believes that the well or property can no longer produce oil or natural gas in commercially economic quantities. This could result in termination of our portion of the royalty interest relating to the abandoned well or property.

~~Our~~We ~~management~~have ~~has~~ limited management ~~experience~~and instaff ~~operating~~and anwill ~~oil~~be ~~and~~dependent ~~gas~~for ~~business.~~the Atforeseeable ~~the~~future ~~present~~upon ~~time,~~consultants weand partnering arrangements. We have ~~one~~developed ~~employee,~~an ~~our~~operating ~~chief~~strategy ~~executive officer~~that ~~and~~is based on our ~~chief~~participation ~~financial~~in ~~officer,~~exploration ~~John~~prospects D.in ~~Kerr.~~North ~~Mr.~~America ~~Kerr~~with ~~has~~a ~~limited~~preference to ~~experience~~serving inas the ~~oil~~operator ~~and~~for ~~gas~~the ~~business.~~prospect, Wehowever, ~~intend~~we ~~to expand~~will ~~our~~also ~~management~~participate ~~team~~as ~~and~~a ~~board~~non-operator offrom ~~directors~~time ~~with~~to ~~personnel~~time. ~~who~~We ~~have~~intend ~~experience~~to use in the ~~oil~~services of independent consultants and ~~gas~~contractors ~~business~~to perform various professional services, ~~however~~including wereservoir ~~have~~engineering, noland, ~~agreements~~legal, orenvironmental ~~understandings~~and intax ~~place~~services. asWe ofwill ~~the~~also ~~date~~pursue ofalliances ~~this~~with ~~report~~partners ~~concerning~~in the ~~appointment~~areas of ~~any~~geological ~~additional~~and ~~officers or~~geophysical ~~directors.~~services Weand doprospect ~~not~~generation, ~~expect~~evaluation toand beprospect ~~able~~leasing. toWhere ~~attract~~we ~~senior~~participate ~~management~~as ora ~~directors~~non-operator ~~with~~working ~~significant~~interest ~~oil~~owner, we ~~and~~intend ~~gas~~to ~~experience~~rely ~~until such~~on ~~time~~outside asoperators weto ~~raise~~drill, ~~significant~~produce ~~additional~~and ~~capital. Until~~market ~~such~~our ~~time,~~natural ifgas ~~ever,~~and asoil. weOur ~~do,~~dependence ~~the~~on ~~success~~third ofparty ~~our company~~consultants, ~~will~~service beproviders ~~dependent~~and onoperators ~~the~~creates ~~decisions~~a ~~and~~number ~~actions~~of ~~undertaken~~risks, byincluding ~~Mr.~~but ~~Kerr.~~not limited to:

9· the possibility that such third parties may not be available to us as and when needed; and

We· ~~have~~the ~~limited~~risk ~~management and~~that ~~staff~~we ~~and~~may ~~will~~not be ~~dependent~~able ~~for~~to ~~the~~properly ~~foreseeable~~control ~~future upon consultants and partnering arrangements. At~~ the ~~present time,~~timing ~~we have one employee, our chief executive officer~~ and ~~our~~quality chief financial officer, John D. Kerr. We have developed an operating strategy that is based on our participation in exploration prospects in North America as a non-operator for the foreseeable future. We intend to use the services of ~~independent~~work ~~consultants~~conducted ~~and contractors to perform various professional services, including reservoir engineering, land, legal, environmental and tax services. We will also pursue alliances~~ with ~~partners~~respect ~~in the areas of geological and geophysical services and prospect generation, evaluation and prospect leasing. As a non-operator working interest owner, we intend~~ to ~~rely on outside operators to drill, produce and market~~ our ~~natural gas and oil~~projects. ~~Our dependence on third party consultants, service providers and operators creates a number of risks, including but not limited to:~~

●Shortages or increases in costs of equipment, services and qualified personnel could delay the ~~possibility~~drilling ~~that~~of ~~such~~exploratory ~~third~~wells ~~parties~~and ~~may~~adversely affect ~~not~~our befuture ~~available~~results of operations and the price of our common stock. The demand for qualified and experienced personnel to usconduct field operations, geologists, geophysicists, engineers and other professionals in the oil and natural gas industry can fluctuate significantly, often in correlation with oil and natural gas prices, causing periodic shortages. Historically, there have been shortages of drilling rigs and other equipment as demand for rigs and ~~when~~equipment ~~needed;~~has increased along with the number of wells being drilled. These factors also cause significant increases in costs for equipment, services and personnel. Higher oil and natural gas prices generally stimulate demand and result in increased prices for drilling rigs, crews and associated supplies, equipment and services. Shortages of field personnel and equipment or price increases could significantly hinder the ability of our operating partners to conduct drilling operations, which could adversely affect our results of operations and stock price.

●Our ~~the~~industry ~~risk~~is ~~that~~highly wecompetitive which may ~~not~~adversely beaffect ~~able~~our performance, including our ability to ~~properly~~participate in ~~control~~ready ~~the~~to ~~timing~~drill prospects. Oil and ~~quality~~gas ofexploration ~~work~~and ~~conducted~~development ~~with~~companies operate ~~respect~~in toa ~~our~~highly ~~projects~~competitive environment. In addition to capital, the principal resources necessary for the exploration and production of oil and natural gas are:

~~Shortages~~· orleasehold ~~increases in~~prospects ~~costs~~under ofwhich equipment, services and qualified personnel could delay the drilling of exploratory wells and adversely affect our future results of operations and the price of our common stock. The demand for qualified and experienced personnel to conduct field operations, geologists, geophysicists, engineers and other professionals in the oil and natural gas ~~industry~~reserves ~~can fluctuate~~may ~~significantly,~~be often in correlation with oil and natural gas prices, causing periodic shortages. Historically, there have been shortages of drilling rigs and other equipment as demand for rigs and equipment has increased along with the number of wells being drilled. These factors also cause significant increases in costs for equipment, services and personnel. Higher oil and natural gas prices generally stimulate demand and result in increased prices for drilling rigs, crews and associated supplies, equipment and services. Shortages of field personnel and equipment or price increases could significantly hinder the ability of our operating partners to conduct drilling operations, which could adversely affect our results of operations and stock price.discovered;

~~Our~~· ~~industry~~drilling isrigs ~~highly competitive which may adversely affect our performance, including our ability to participate in ready to drill prospects. Oil~~ and ~~gas exploration~~related ~~and~~equipment ~~development companies operate in a highly competitive environment. In addition~~ to ~~capital,~~explore ~~the principal resources necessary~~ for ~~the~~such ~~exploration~~reserves; and ~~production of oil and natural gas are:~~

●· ~~leasehold~~knowledgeable ~~prospects~~personnel ~~under~~to ~~which~~conduct all phases of oil and natural gas ~~reserves may be discovered;~~operations.

●Numerous ~~drilling~~large, well-financed ~~rigs~~firms with large cash reserves are engaged in the acquisition of oil and ~~related~~gas ~~equipment~~properties in North America. We and our operating partners will face competition in acquisitions, development, exploration and production from major oil companies, numerous independents, individual proprietors and others. We expect competition to ~~explore~~be intense for ~~such~~available ~~reserves;~~target oil and gas properties. Such competition could have a material adverse effect on our financial condition and operating results. We and our operating partners may not be able to compete successfully against current and future competitors and competitive pressures faced by us may materially adversely affect our business, financial condition, and results of operations.

~~● knowledgeable personnel to conduct all phases of oil and natural gas operations.~~10

~~Numerous large,~~Drilling ~~well-financed~~for ~~firms~~and ~~with~~producing ~~large~~oil ~~cash~~and ~~reserves~~natural gas are ~~engaged~~high inrisk activities with many uncertainties that could delay the ~~acquisition~~anticipated drilling ofschedule ~~oil~~for exploratory wells and ~~gas~~adversely ~~properties~~affect inour ~~North~~future ~~America~~results of operations and stock price. WeThe drilling and completion of exploratory wells are subject to numerous risks beyond our ~~operating~~control or the control of our operating partners, including risks that could delay the proposed drilling schedules and the risk that drilling will ~~face~~not ~~competition~~result in commercially ~~acquisitions,~~viable ~~development,~~oil ~~exploration~~ and natural gas production. ~~from~~Drilling ~~major~~ for oil ~~companies,~~and ~~numerous~~natural ~~independents,~~gas ~~individual~~can ~~proprietors~~be unprofitable if dry wells are drilled and ~~others~~if productive wells do not produce sufficient revenues to return a profit. WeThe ~~expect~~decisions ~~competition~~by us and our operating partners to bedevelop ~~intense~~or ~~for~~otherwise ~~available~~exploit certain prospects will depend in part on the evaluation of data ~~target~~obtained ~~oil~~through geophysical and ~~gas~~geological ~~properties.~~analyses, ~~Such~~production ~~competition~~data ~~could~~and ~~have~~engineering astudies, ~~material~~the ~~adverse~~results ~~effect~~of onwhich ~~our~~are ~~financial~~often inconclusive ~~condition~~or subject to varying interpretations. The costs of drilling, completing and operating wells are ~~results~~often uncertain before drilling commences. WeOverruns ~~and~~in ~~our~~budgeted ~~operating~~expenditures ~~partners~~are ~~may~~common ~~not~~risks bethat ~~able~~can tomake ~~compete~~a particular project uneconomical. Even if an exploratory well is successfully ~~against~~completed, ~~current~~it ~~and~~may ~~future~~not ~~competitors~~pay ~~and~~out the ~~competitive~~capital ~~pressures~~costs ~~faced~~spent byto usdrill ~~may~~it. ~~materially~~Drilling ~~adversely~~and ~~affect~~production ~~our~~operations ~~business,~~on ~~financial~~an ~~condition~~exploratory well may be curtailed, delayed ~~and~~or ~~results~~canceled as a result of ~~operations.~~ various factors, including the following:

~~Drilling~~· ~~for~~delays ~~and producing~~imposed oil and natural gas are high risk activities with many uncertainties that could delay the anticipated drilling schedule for exploratory wells and adversely affect our future results of operations and stock price. The drilling and completion of exploratory wells are subject to numerous risks beyond our control or the control of our operating partners, including risks that could delay the proposed drilling schedules and the risk that drilling will not result in commercially viable oil and natural gas production. Drilling for oil and natural gas can be unprofitable if dry wells are drilled and if productive wells do not produce sufficient revenues to return a profit. The decisions by ~~us and our operating partners to develop~~ or ~~otherwise~~resulting ~~exploit~~from ~~certain prospects~~compliance ~~will~~with ~~depend~~regulatory inrequirements part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. The costs of drilling, completing and operating wells are often uncertain before drilling commences. Overruns in budgeted expenditures are common risks that can make a particular project uneconomical. Even if an exploratory well is successfully completed, it may not pay out the capital costs spent to drill it. Drilling and production operations on an exploratory well may be curtailed, delayed or canceled as a result of various factors, including ~~the following:~~permitting;

· ~~delays~~unusual ~~imposed by~~ or ~~resulting~~unexpected ~~from~~geological ~~compliance~~formations ~~with~~and ~~regulatory requirements including permitting~~miscalculations;

· ~~unusual~~shortages of or ~~unexpected~~delays ~~geological~~in ~~formations~~obtaining equipment and ~~miscalculations~~qualified personnel;

· ~~shortages of or delays in obtaining~~ equipment ~~and~~malfunctions, ~~qualified~~failures ~~personnel~~or accidents;

· ~~equipment~~lack ~~malfunctions,~~of ~~failures~~available gathering facilities or ~~accidents~~delays in construction of gathering facilities;

· lack of available ~~gathering~~capacity ~~facilities~~on orinterconnecting ~~delays~~transmission ~~in construction of gathering facilities~~pipelines;

· lack of ~~available~~adequate ~~capacity~~electrical ~~on interconnecting transmission pipelines~~infrastructure;

10· unexpected operational events and drilling conditions;

· ~~lack~~pipe ofor ~~adequate~~cement ~~electrical~~failures ~~infrastructure~~and casing collapses;

· ~~unexpected~~pressures, ~~operational~~fires, ~~events~~blowouts, and ~~drilling conditions~~explosions;

· ~~pipe~~lost or ~~cement~~damaged ~~failures~~drilling and ~~casing~~service ~~collapses~~tools;

· ~~pressures,~~loss ~~fires,~~of ~~blowouts,~~drilling ~~and~~fluid ~~explosions~~circulation;

· ~~lost~~uncontrollable orflows ~~damaged~~of ~~drilling~~oil, natural gas and ~~service~~natural ~~tools~~gas liquids water or drilling fluids;

· ~~loss~~natural ~~of drilling fluid circulation~~disasters;

· ~~uncontrollable~~environmental ~~flows~~hazards, ofsuch as oil, natural gas and natural gas liquids ~~water~~leaks, orpipeline ~~drilling~~ruptures and discharges of toxic gases or fluids;

· ~~natural~~adverse ~~disasters~~weather conditions such as extreme cold, fires caused by extreme heat or lack of rain, and severe storms or tornadoes;

· ~~environmental~~reductions ~~hazards,~~in ~~such as~~ oil, natural gas and natural gas liquids ~~leaks, pipeline ruptures and discharges of toxic gases or fluids~~prices;

· ~~adverse~~oil ~~weather~~and ~~conditions~~natural ~~such~~gas asproperty ~~extreme~~title ~~cold,~~problems; ~~fires caused by extreme heat or lack of rain,~~ and ~~severe storms or tornadoes;~~

· ~~reductions~~market inlimitations for oil, natural gas and natural gas liquids ~~prices;~~.

·If ~~oil~~any ~~and~~of ~~natural~~these ~~gas~~or other similar industry operating risks occur, we could have substantial losses. Substantial losses also may result from injury or loss of life, severe damage to or destruction of property, ~~title~~clean-up ~~problems;~~responsibilities, regulatory investigation and penalties and suspension of operations.

·Investigations of ~~market~~oil ~~limitations~~and ~~for~~gas properties do not eliminate the risks associated with the selection and the acquisition of such properties. Although we will engage third-party consultants to perform a review of the oil and properties proposed to be acquired, ~~natural~~such ~~gas~~reviews are subject to uncertainties. It generally is not feasible to review in detail every individual property involved in an acquisition. Even a detailed review of all properties and ~~natural~~records ~~gas~~may ~~liquids~~not reveal existing or potential problems; nor will it permit our consultants to become sufficiently familiar with the properties to assess fully their deficiencies and capabilities. Inspections are not always performed on every well, and potential problems, such as mechanical integrity of equipment and environmental conditions that may require significant remedial expenditures, are not necessarily observable even when an inspection is undertaken.

IfOil ~~any~~and gas exploration and development is subject to complex federal, state, local and other laws and regulations that could adversely affect the cost, manner or feasibility of ~~these~~conducting our operations or ~~other~~expose ~~similar~~us ~~industry~~to ~~operating~~significant liabilities. Our proposed oil ~~risks~~and ~~occur,~~natural wegas ~~could~~exploration ~~have~~and ~~substantial~~production ~~losses~~operations are subject to complex and stringent laws and regulations. ~~Substantial~~In ~~losses~~order ~~also~~to ~~may~~conduct operations ~~result~~in compliance with these laws and regulations, oil and gas operators must obtain and maintain numerous permits, approvals and certificates from ~~injury~~various orfederal, ~~loss~~state and local governmental authorities. Substantial costs may be incurred by our operating partners in order to maintain compliance with these existing laws and regulations. Further, in light of the ~~life~~explosion and fire on the drilling rig Deepwater Horizon in the Gulf of Mexico, ~~severe~~as ~~damage~~well as recent incidents involving the release of oil and natural gas and fluids as a result of drilling activities in the United States, there has been a variety of regulatory initiatives at the federal and state level to restrict oil and natural gas drilling operations in certain locations. Any increased regulation or ~~destruction~~suspension of ~~property~~oil and natural gas exploration and production, ~~clean-up~~or ~~responsibilities~~revision or reinterpretation of existing laws and regulations, ~~regulatory~~that ~~investigation~~arises out of these incidents or otherwise could result in delays and ~~penalties~~higher operating costs, which will be passed along to us by way of our equity interest in the property. Such costs or significant delays could have a material adverse effect on our business, financial condition and ~~suspension~~results of operations.

Investigations of oil and gas properties do not eliminate the risks associated with the selection and the acquisition of such properties. Although we will engage third-party consultants to perform a review of the oil and properties proposed to be acquired, such reviews are subject to uncertainties. It generally is not feasible to review in detail every individual property involved in an acquisition. Even a detailed review of all properties and records may not reveal existing or potential problems; nor will it permit our consultants to become sufficiently familiar with the properties to assess fully their deficiencies and capabilities. Inspections are not always performed on every well, and potential problems, such as mechanical integrity of equipment and environmental conditions that may require significant remedial expenditures, are not necessarily observable even when an inspection is undertaken.11

~~Oil~~Laws and ~~gas exploration and development is subject to complex federal, state, local and other laws and~~ regulations ~~that could adversely affect the cost,~~ ~~manner~~governing ~~or feasibility of conducting our operations or expose us to significant liabilities. Our proposed~~ oil and natural gas exploration and production ~~operations~~may ~~are~~also ~~subject~~affect toproduction ~~complex and stringent laws and regulations~~levels. Oil ~~In order to conduct operations in compliance with these laws~~ and ~~regulations, oil and~~ gas operators ~~must obtain and maintain numerous permits, approvals~~are ~~and~~required ~~certificates~~to ~~from~~comply ~~various~~with federal, ~~state~~ and ~~local~~state ~~governmental authorities. Substantial costs may be incurred by our operating partners in order to maintain compliance with these existing~~ laws and regulations. ~~Further,~~governing inconservation ~~light~~matters, ofincluding ~~the~~provisions ~~explosion~~related ~~and fire~~to on the ~~drilling~~unitization ~~rig~~or ~~Deepwater~~pooling ~~Horizon~~of in the ~~Gulf of Mexico~~oil, asnatural ~~well~~gas asand ~~recent~~natural ~~incidents~~gas ~~involving~~liquids properties; the ~~release~~establishment of ~~oil~~maximum ~~and~~rates ~~natural~~of production ~~gas~~from ~~and~~wells; ~~fluids~~the asspacing ~~a result~~ of ~~drilling~~wells; ~~activities~~and in the ~~United~~plugging ~~States,~~and ~~there~~abandonment ~~has~~of ~~been~~wells. aThese ~~variety~~and ofother ~~regulatory~~laws ~~initiatives~~and atregulations ~~the~~can ~~federal~~limit ~~and~~the ~~state~~amount ~~level~~of ~~to restrict~~ oil and natural gas ~~drilling~~operators ~~operations~~can inproduce ~~certain~~from ~~locations.~~their ~~Any~~wells, ~~increased~~limit ~~regulation~~the ornumber ~~suspension~~ of ~~oil~~wells ~~and~~they ~~natural~~can ~~gas exploration and production~~drill, or ~~revision or reinterpretation of existing laws and regulations, that arises~~limit ~~out~~the oflocations ~~these~~at ~~incidents~~which orthey ~~otherwise~~can ~~could~~conduct ~~result~~drilling ~~in delays and higher operating costs~~operations, which ~~will be passed along to us by way of our equity interest~~ in ~~the~~turn ~~property. Such costs or significant delays~~ could ~~have~~negatively aimpact ~~material adverse effect on~~ our business, financial condition and results of operations.

~~Laws~~New ~~and~~laws ~~regulations~~or ~~governing~~regulations, ~~oil~~or ~~and~~changes ~~natural~~to ~~gas~~existing ~~exploration~~laws ~~and~~or ~~production~~regulations may ~~also~~unfavorably ~~affect~~impact ~~production~~our ~~levels.~~proposed ~~Oil~~operations, ~~and~~could ~~gas~~result ~~operators~~in ~~are~~increased ~~required to comply~~operating ~~with~~costs ~~federal~~ and ~~state~~have ~~laws~~a ~~and~~material ~~regulations~~adverse ~~governing~~effect ~~conservation~~on ~~matters,~~our ~~including~~financial ~~provisions~~condition ~~related~~and toresults ~~the unitization or pooling~~ of ~~the~~operations. ~~oil~~For example, ~~natural~~Congress ~~gas~~is ~~and~~currently considering ~~natural~~legislation ~~gas~~that, ~~liquids~~if ~~properties;~~adopted ~~the~~in ~~establishment~~its ofproposed ~~maximum~~form, ~~rates~~would ofsubject ~~production~~companies ~~from~~involved ~~wells; the~~in ~~spacing~~oil ~~of wells;~~ and ~~the~~natural ~~plugging~~ exploration and ~~abandonment~~production ofactivities ~~wells.~~to, ~~These~~among ~~and~~ other ~~laws~~items, ~~and~~additional ~~regulations~~regulation ~~can limit the amount~~ of ~~oil~~ and ~~natural~~restrictions ~~gas~~on ~~operators~~hydraulic ~~can~~fracturing ~~produce~~of ~~from their~~ wells, ~~limit~~ the elimination ~~number~~ of ~~wells~~most ~~they~~U.S. ~~can~~federal ~~drill,~~tax orincentives ~~limit~~and ~~the~~deductions ~~locations~~available atto ~~which they~~oil ~~can~~and ~~conduct~~natural ~~drilling~~gas ~~operations~~exploration and production activities, and ~~which~~the inprohibition ~~turn~~or ~~could~~additional ~~negatively~~regulation ~~impact~~of ~~our~~private ~~business,~~energy ~~financial~~commodity ~~condition~~derivative and ~~results~~hedging ~~of operations~~activities.

~~New~~These ~~laws~~and orother ~~regulations,~~potential orregulations ~~changes~~could toincrease ~~existing~~operating ~~laws~~costs, orreduce ~~regulations~~revenue, ~~may~~delay ~~unfavorably impact our~~ proposed operations, ~~could~~increase ~~result~~direct ~~in increased operating costs~~ and ~~have~~third aparty ~~material~~post ~~adverse~~production costs ~~effect~~associated onwith ~~our~~the ~~financial~~oil ~~condition~~ and ~~results~~gas ofproperties ~~operations.~~or ~~For~~otherwise ~~example,~~alter ~~Congress~~the ~~is currently considering legislation that, if adopted in its~~ proposed ~~form,~~operations ~~would~~of ~~subject companies involved in~~ oil and ~~natural~~gas ~~exploration and~~properties ~~production~~in ~~activities~~which we ~~to,~~hold ~~among~~an ~~other~~equity ~~items~~interest, ~~additional~~which ~~regulation~~could ofhave ~~and~~a ~~restrictions~~material onadverse ~~hydraulic~~effect ~~fracturing~~on ofour ~~wells,~~financial ~~the elimination of most U.S. federal tax incentives and deductions available to oil and natural gas exploration and production activities~~condition, ~~and~~ ~~the~~results ~~prohibition or additional regulation~~ of ~~private~~operations ~~energy commodity derivative~~ and ~~hedging activities~~stock price.

11Oil and gas operations are subject to environmental laws and regulations that could adversely affect the cost, manner or feasibility of conducting operations or result in significant costs and liabilities. Oil and natural gas exploration and production operations are subject to stringent and comprehensive federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations that are applicable to the operation of the properties in which we hold an interest including the acquisition of a permit before conducting drilling; water withdrawal or waste disposal activities; the restriction of types, quantities and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; and the imposition of substantial liabilities for pollution resulting from operations. Numerous governmental authorities, such as the U.S. Environmental Protection Agency ("EPA") and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions. Failure to comply with these laws and regulations may result in the assessment of administrative, civil or criminal penalties; the imposition of investigatory or remedial obligations; and the issuance of injunctions limiting or preventing some or all of the proposed operations.

~~These~~There ~~and~~is ~~other~~inherent ~~potential~~risk ~~regulations~~of ~~could~~incurring ~~increase~~significant ~~operating~~environmental costs and liabilities in the performance of oil and gas operations due to the handling of petroleum hydrocarbons and wastes, ~~reduce~~because ~~revenue~~of air emissions and wastewater discharges related to such operations, ~~delay~~and ~~proposed~~as a result of historical industry operations and waste disposal practices. Under certain environmental laws and regulations, ~~increase~~our operating ~~direct~~partner could be subject to joint and ~~third~~several ~~party~~strict ~~post~~liability ~~production~~for the removal or remediation of previously released ~~costs~~materials ~~associated~~or property contamination regardless of whether our operating partner was responsible for the release or contamination or if the operations were in compliance with all applicable laws at the ~~oil~~time ~~and~~those ~~gas~~actions were taken. Private parties, including the owners of properties upon which our operating partners intend to drill wells and facilities where petroleum hydrocarbons or ~~otherwise~~wastes ~~alter~~are taken for reclamation or disposal may also have the ~~proposed~~right ~~operations~~to pursue legal actions to enforce compliance, as well as to seek damages for contamination even in the absence of ~~oil~~non-compliance, with environmental laws and ~~gas~~regulations ~~properties~~or infor ~~which~~personal weinjury ~~hold~~or anproperty damage. In addition, the risk of accidental spills or releases could expose our operating partners to significant liabilities. All of the foregoing costs and liabilities of our operating partners may be passed along to us by way of our equity interest on the subject oil and gas property, which in turn could have a material adverse effect on our financial condition, results of operations and stock price. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly construction, drilling, water management, completion, waste handling, storage, transport, disposal or cleanup requirements could require our operating partners to make significant expenditures to attain and maintain compliance. We would be responsible for our pro rata share of such costs, which may have a material adverse effect on our results of operations, financial condition or stock price.

Oil and gas operations are subject to environmental laws and regulations that could adversely affect the cost, manner or feasibility of conducting operations or result in significant costs and liabilities. Oil and natural gas exploration and production operations are subject to stringent and comprehensive federal, state and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may impose numerous obligations that are applicable to the operation of the properties in which we hold an interest including the acquisition of a permit before conducting drilling; water withdrawal or waste disposal activities; the restriction of types, quantities and concentration of materials that can be released into the environment; the limitation or prohibition of drilling activities on certain lands lying within wilderness, wetlands and other protected areas; and the imposition of substantial liabilities for pollution resulting from operations. Numerous governmental authorities, such as the U.S. Environmental Protection Agency ("EPA") and analogous state agencies, have the power to enforce compliance with these laws and regulations and the permits issued under them, often requiring difficult and costly actions. Failure to comply with these laws and regulations may result in the assessment of administrative, civil or criminal penalties; the imposition of investigatory or remedial obligations; and the issuance of injunctions limiting or preventing some or all of the proposed operations.12

~~There~~Climate change islaws ~~inherent~~and ~~risk~~ regulations restricting emissions of ~~incurring~~"greenhouse ~~significant~~gases" ~~environmental~~could result in increased operating costs and reduced demand for oil and ~~liabilities~~natural ingas while the ~~performance~~physical effects of ~~oil~~climate change could disrupt production and ~~gas~~cause our ~~operations~~operating ~~due~~partners to incur significant costs in preparing for or responding to those effects. On December 15, 2009, the ~~handling~~EPA ~~of petroleum~~published ~~hydrocarbons~~its ~~and~~findings ~~wastes,~~that ~~because~~emissions of ~~air~~carbon ~~emissions~~dioxide, methane and ~~wastewater~~other greenhouse ~~discharges~~gases ~~related~~("GHGs") present a danger to ~~such~~public ~~operations,~~health and asthe aenvironment. These ~~result~~findings allow ofthe ~~historical~~agency ~~industry~~to ~~operations~~adopt and ~~waste~~implement ~~disposal~~regulations ~~practices~~that restrict emissions of GHGs under existing provisions of the federal Clean Air Act. ~~Under~~ Accordingly, ~~certain~~the ~~environmental~~EPA ~~laws~~has ~~and~~adopted regulations, ~~our operating~~that ~~partner~~require ~~could~~a bereduction ~~subject~~in toemissions ~~joint~~of GHGs from motor vehicles and ~~several~~also ~~strict~~trigger ~~liability~~permit review for ~~the~~GHG ~~removal~~emissions orfrom ~~remediation~~certain oflarge ~~previously~~stationary ~~released~~sources. The EPA's rules ~~materials~~relating orto ~~property~~emissions ~~contamination~~of ~~regardless~~GHGs from large stationary sources of ~~whether~~emissions ~~our~~are ~~operating~~currently ~~partner~~subject ~~was~~to ~~responsible~~a ~~for~~number of political and legal challenges, but the ~~release~~federal courts have thus far declined to issue any injunctions to prevent EPA from implementing, or requiring ~~contamination~~state environmental agencies to implement, the rules. In addition, on October 30, 2009, the EPA orpublished ifa final rule requiring the ~~operations~~reporting ~~were~~of inGHG ~~compliance~~emissions ~~with~~from ~~all~~specified ~~applicable~~large ~~laws~~GHG atemission sources in the ~~time~~United States, ~~those~~beginning ~~actions~~in ~~were~~2011 ~~taken~~for emissions occurring in 2010. On ~~Private~~November 30, ~~parties~~2010, ~~including~~ the ~~owners~~EPA ofpublished ~~properties~~a ~~upon~~final rule ~~which~~that ~~our~~expands ~~operating~~its ~~partners~~October ~~intend~~2009 final rule on reporting of GHG emissions to ~~drill~~require ~~wells~~certain owners and ~~facilities~~operators ~~where~~of onshore ~~petroleum~~oil ~~hydrocarbons~~and ~~or wastes~~natural ~~are~~gas ~~taken~~production ~~for~~to ~~reclamation~~monitor orgreenhouse ~~disposal~~gas ~~may~~emissions ~~also~~beginning ~~have~~in ~~the~~2011 ~~right~~and to ~~pursue~~report ~~legal~~those ~~actions~~emissions beginning toin ~~enforce~~2012. Both ~~compliance,~~houses asof ~~well~~Congress as have from time to ~~seek~~time ~~damages~~considered ~~for~~legislation ~~contamination~~to ~~even~~reduce inemissions ~~the~~of GHGs ~~absence~~and almost one-half of ~~non~~the states, either individually or through multi-~~compliance~~state regional initiatives, ~~with~~already ~~environmental~~have ~~laws~~begun implementing legal measures to reduce emissions of GHGs. The adoption and ~~regulations~~implementation orof ~~for~~any ~~personal~~regulations ~~injury~~imposing reporting obligations on, or ~~property~~limiting ~~damage.~~emissions Inof ~~addition,~~GHGs from the ~~risk~~equipment ofand ~~accidental~~operations ~~spills~~of orour ~~releases~~operating partners could ~~expose~~require our operating partners to ~~significant~~incur costs to reduce emissions of GHGs associated with our operations or could ~~liabilities.~~adversely affect demand for the oil and natural gas. All of the foregoing costs and liabilities of our operating partners may be passed along to us by way of our equity interest on the subject oil and gas property, which in turn could have a material adverse effect on our financial condition, results of operations and stock price. ~~Changes in environmental laws and regulations occur frequently~~Finally, ~~and~~it ~~any~~should ~~changes~~be noted that ~~result~~some inscientists ~~more stringent~~have orconcluded ~~costly~~that ~~construction,~~increasing ~~drilling,~~concentrations ~~water~~of ~~management,~~greenhouse ~~completion,~~gases ~~waste~~in ~~handling,~~the ~~storage,~~Earth's ~~transport,~~atmosphere ~~disposal~~may ~~or cleanup~~produce ~~requirements~~climate ~~could~~change ~~require~~that ~~our~~could ~~operating~~have ~~partners~~significant tophysical ~~make~~effects, ~~significant~~such ~~expenditures~~as toincreased ~~attain~~frequency and ~~maintain~~severity ~~compliance.~~of Westorms, ~~would~~droughts, beand ~~responsible~~floods ~~for~~and ~~our~~other ~~pro~~climatic ~~rata~~events; ~~share~~if ofany such ~~costs~~effects were to occur, ~~which~~they ~~may~~could have aan ~~material~~ adverse effect on our ~~results~~assets ~~of operations, financial~~and ~~condition or stock price~~operations.

~~Climate~~Federal ~~change~~and ~~laws~~state legislative and ~~regulations~~regulatory ~~restricting~~initiatives ~~emissions~~relating ofto ~~"greenhouse~~hydraulic ~~gases"~~fracturing could result in increased ~~operating~~ costs and ~~reduced~~additional ~~demand~~operating ~~for~~restrictions ~~oil~~or ~~and~~delays ~~natural~~as ~~gas~~well ~~while~~as ~~the~~adversely ~~physical~~affect ~~effects~~our results of ~~climate~~operations, ~~change~~financial ~~could~~condition ~~disrupt~~or ~~production~~stock ~~and~~price. Our ~~cause our~~ operating partners to ~~incur~~may ~~significant~~from ~~costs~~time into ~~preparing~~time ~~for~~engage orin ~~responding~~a toproduction ~~those~~technique ~~effects.~~known Onas ~~December 15,~~hydraulic ~~2009~~fracturing, ~~the~~an ~~EPA~~important ~~published~~and common ~~its~~practice ~~findings~~used ~~that~~to ~~emissions~~stimulate production of ~~carbon~~hydrocarbons ~~dioxide,~~from ~~methane~~tight ~~and~~formations, ~~other~~such ~~greenhouse~~as ~~gases~~shales. ~~("GHGs")~~The ~~present~~process ~~a danger to public~~involves ~~health and~~ the ~~environment.~~injection ~~These~~of ~~findings~~water ~~allow~~or ~~the~~other ~~agency~~liquids, tosand ~~adopt~~ and ~~implement~~chemicals ~~regulations~~under ~~that~~pressure ~~restrict~~into ~~emissions~~formations ofto ~~GHGs under~~fracture ~~existing provisions of~~ the ~~federal~~surrounding ~~Clean~~rock ~~Air~~and stimulate ~~Act~~production. The ~~Accordingly,~~process ~~the~~is ~~EPA~~typically ~~has~~regulated ~~adopted~~by ~~regulations~~state ~~that~~oil ~~require a reduction in emissions of GHGs from motor vehicles~~ and ~~also~~gas ~~trigger~~commissions. However, ~~permit~~the ~~review~~EPA recently ~~for~~asserted ~~GHG~~federal ~~emissions~~regulatory ~~from~~authority over certain ~~large~~hydraulic ~~stationary~~fracturing ~~sources~~practices. Also, ~~The~~legislation has been ~~EPA's~~introduced ~~rules~~into ~~relating~~Congress to ~~emissions~~provide offor ~~GHGs~~federal ~~from~~regulation ~~large stationary sources~~ of ~~emissions~~hydraulic ~~are~~fracturing ~~currently~~and ~~subject~~ to arequire ~~number~~disclosure of ~~political and legal challenges, but~~ the ~~federal~~chemicals ~~courts have thus far declined to issue any injunctions to prevent EPA from implementing,~~used orin ~~requiring state environmental agencies to implement,~~ the ~~rules~~fracturing process. In addition, onsome ~~October 30,~~states ~~2009~~have adopted, ~~the~~and ~~EPA~~other ~~published~~states aare ~~final rule~~considering ~~requiring~~adopting, ~~the~~regulations that ~~reporting~~could ofrestrict ~~GHG~~hydraulic ~~emissions~~fracturing ~~from specified large GHG emission sources~~ in ~~the~~certain ~~United~~circumstances. ~~States~~For instance, ~~beginning~~ in ~~2011 for~~June ~~emissions occurring in 2010. On November 30~~2011, ~~2010,~~Texas ~~the~~adopted ~~EPA published~~ a ~~final~~law ~~rule~~ that ~~expands its October 2009 final~~ ~~rule~~requires ondisclosure ~~reporting of GHG emissions~~ to ~~require~~the ~~certain~~Railroad ~~owners~~Commission ~~and~~of ~~operators~~Texas of ~~onshore~~the ~~oil~~additives and ~~natural~~other ~~gas~~chemicals ~~production~~contained ~~to monitor greenhouse gas emissions beginning~~ in ~~2011~~hydraulic ~~and~~fracturing fluids toused ~~report those emissions beginning~~ in ~~2012. Both houses of Congress have from time to time considered legislation to reduce emissions of GHGs and almost one-half of~~ the ~~states, either individually or through multi-~~state ~~regional initiatives~~, ~~already~~subject ~~have begun implementing legal measures~~ to ~~reduce~~certain ~~emissions~~trade ofsecret ~~GHGs~~protections. If ~~The~~new ~~adoption~~laws ~~and~~or ~~implementation of any~~ regulations ~~imposing~~that ~~reporting~~significantly restrict ~~obligations on,~~ or ~~limiting~~regulate ~~emissions~~hydraulic offracturing ~~GHGs~~are ~~from~~adopted, ~~the~~such ~~equipment~~legal ~~and~~requirements ~~operations of our operating partners~~ could ~~require~~make ~~our~~it ~~operating~~more ~~partners~~difficult ~~to incur costs to reduce emissions of GHGs associated with our operations~~ or ~~could adversely~~costly ~~affect demand~~ for ~~the oil and natural gas. All of the foregoing costs and liabilities of~~ our operating partners ~~may~~to ~~be passed~~perform ~~along~~fracturing to usstimulate byproduction ~~way~~from of our ~~equity interest on the subject~~ oil and gas ~~property,~~interests ~~which~~and inthereby ~~turn~~affect ~~could~~the ~~have~~determination aof ~~material adverse~~whether ~~effect~~a onwell ~~our~~is ~~financial~~commercially ~~condition, results of operations and stock price~~viable. ~~Finally,~~ itRestrictions ~~should~~on behydraulic ~~noted~~fracturing ~~that~~could ~~some~~also ~~scientists have~~reduce ~~concluded that increasing concentrations of greenhouse gases in~~ the ~~Earth's~~amount ~~atmosphere may produce climate change that could have significant physical effects, such as increased frequency and severity~~ of ~~storms,~~oil ~~droughts,~~ and ~~floods~~natural ~~and~~gas ~~other~~our ~~climatic~~operating ~~events;~~partners ifare ~~any~~ultimately ~~such~~able ~~effects were~~ to ~~occur,~~produce ~~they~~in ~~could~~commercial ~~have~~quantities anfrom ~~adverse effect on~~ our ~~assets~~oil and ~~operations~~gas interests.

12Hydraulic fracturing operations may result environmental contamination and other operational risks that could subject us to significant costs, liabilities and loss of investment. Hydraulic fracturing is a process that involves the injection of water or other liquids, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production. The process involves the risk that liquids and chemicals injected into the well may migrate into and contaminate water aquifers and wells or surrounding land. The process also involves the risk that water and liquids that are retrieved from the fractured well may be improperly disposed of, thus creating another potential for water or ground contamination. Our operating partners face the possibility of significant costs and liabilities in the event of any environmental contamination resulting from the hydraulic fracturing of wells in which we have an interest, in which event we may become liable for our pro rata share of such costs and liabilities. Also, even in the absence of any actual contamination, we can face significant costs if the operator is required to defend any lawsuits or investigations that allege contamination. Finally, any actual or alleged environmental contamination resulting from a drilling operation on an oil and gas property in which we have an interest can lead to the suspension or abandonment of that property and the loss of our entire investment in such property.

~~Federal~~No ~~and state~~Dividends. We ~~legislative~~do ~~and~~not ~~regulatory~~expect ~~initiatives relating~~ to ~~hydraulic~~pay ~~fracturing~~cash ~~could~~dividends ~~result~~on ~~in increased costs and additional operating restrictions or delays as well as adversely affect~~ our ~~results~~common ~~of operations, financial condition or~~ stock ~~price. Our operating partners may from time to time engage~~ in ~~a production technique known as hydraulic fracturing, an important and common practice used to stimulate production of hydrocarbons from tight formations, such as shales. The process involves~~ the ~~injection of~~foreseeable ~~water or other liquids, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production~~future. The process is typically regulated by state oil and gas commissions. However, the EPA recently asserted federal regulatory authority over certain hydraulic fracturing practices. Also, legislation has been introduced into Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the fracturing process. In addition, some states have adopted, and other states are considering adopting, regulations that could restrict hydraulic fracturing in certain circumstances. For instance, in June 2011, Texas adopted a law that requires disclosure to the Railroad Commission of Texas of the additives and other chemicals contained in hydraulic fracturing fluids used in the state, subject to certain trade secret protections. If new laws or regulations that significantly restrict or regulate hydraulic fracturing are adopted, such legal requirements could make it more difficult or costly for our operating partners to perform fracturing to stimulate production from our oil and gas interests and thereby affect the determination of whether a well is commercially viable. Restrictions on hydraulic fracturing could also reduce the amount of oil and natural gas our operating partners are ultimately able to produce in commercial quantities from our oil and gas interests.

~~Hydraulic~~No ~~fracturing~~Active Trading ~~operations~~market. ~~may~~Our ~~result~~common ~~environmental~~shares ~~contamination~~are ~~and~~traded ~~other~~on ~~operational~~the ~~risks~~OTC ~~that~~Market ~~could~~under ~~subject~~the ussymbol to“WTXR.” ~~significant costs~~However, ~~liabilities and~~we ~~loss~~consider ofour ~~investment. Hydraulic~~common stock ~~fracturing~~to isbe a“thinly ~~process~~traded” ~~that~~and ~~involves~~any ~~the~~last ~~injection~~reported ofsale ~~water~~prices ormay ~~other~~not ~~liquids, sand~~be ~~and~~a ~~chemicals~~true ~~under~~market-based ~~pressure~~valuation ~~into~~of ~~formations to fracture~~ the ~~surrounding rock and stimulate production~~common stock. ~~The~~Also, ~~process involves~~ the ~~risk~~present ~~that~~volume ~~liquids~~of ~~and~~trading ~~chemicals~~in ~~injected~~our ~~into~~common ~~the~~stock ~~well~~ may ~~migrate~~not ~~into~~provide ~~and~~investors ~~contaminate~~sufficient ~~water~~liquidity ~~aquifers~~in ~~and~~the ~~wells~~event ~~or surrounding~~you ~~land.~~wish ~~The~~to ~~process~~sell ~~also~~your ~~involves~~common ~~the~~shares. ~~risk~~There ~~that~~can ~~water~~be ~~and~~no ~~liquids~~assurance that ~~are~~an ~~retrieved~~active ~~from~~market ~~the fractured well may be improperly disposed of, thus creating another potential~~ for ~~water~~our orcommon ~~ground~~stock ~~contamination~~will develop. ~~Our~~In ~~operating partners face~~ addition, the ~~possibility~~stock ofmarket ~~significant costs and liabilities~~ in ~~the~~general, ~~event~~and ofearly ~~any~~stage ~~environmental~~public ~~contamination~~companies ~~resulting~~in ~~from~~particular, ~~the~~have ~~hydraulic~~experienced ~~fracturing~~extreme ofprice ~~wells~~and involume ~~which~~fluctuations wethat have anoften ~~interest,~~been inunrelated ~~which~~or ~~event~~disproportionate weto ~~may~~the ~~become~~operating ~~liable~~performance ~~for our pro rata share~~ of such ~~costs and liabilities~~companies. ~~Also,~~If ~~even in the absence of any actual contamination,~~ we ~~can~~are ~~face~~unable ~~significant costs if the operator is required~~ to ~~defend~~develop a ~~any~~market ~~lawsuits~~for orour ~~investigations that~~common ~~allege contamination. Finally~~shares, ~~any~~you ~~actual~~may ornot ~~alleged~~be ~~environmental~~able ~~contamination~~to ~~resulting~~sell ~~from~~your acommon ~~drilling~~shares ~~operation~~at onprices ~~an oil~~you ~~and~~consider ~~gas property in which we have an interest can lead~~ to ~~the~~be ~~suspension~~fair or ~~abandonment~~at oftimes that are ~~property~~convenient ~~and~~for ~~the~~you, ~~loss~~or ofat ~~our entire investment in such property~~all.

~~No Dividends. We do not expect to pay cash dividends on our common stock in the foreseeable future.~~13

~~No Active Trading market.~~ Our common ~~shares~~stock may ~~are~~be ~~traded~~considered onto ~~the~~be ~~OTC~~a ~~Market~~“penny ~~under~~stock” ~~the~~and, ~~symbol~~as ~~“WTXR.” However~~such, weany ~~consider~~the market for our common stock tomay be ~~“thinly~~further ~~traded”~~limited ~~and~~by certain ~~any~~SEC ~~last~~rules ~~reported~~applicable ~~sale~~to ~~prices~~penny ~~may~~stocks. To ~~not~~the beextent athe ~~true~~price ~~market-based valuation~~ of ~~the~~our common stock remains below $5.00 per ~~Also,~~share ~~the~~or ~~present~~we ~~volume~~have a net tangible assets of ~~trading~~$2,000,000 inor less, our common ~~stock~~shares ~~may~~will ~~not~~be ~~provide~~subject ~~investors~~to ~~sufficient~~certain ~~liquidity~~“penny instock” rules promulgated by the ~~event~~SEC. Those ~~you wish~~rules toimpose ~~sell~~certain ~~your~~sales ~~common~~practice ~~shares.~~requirements ~~There~~on ~~can~~brokers bewho nosell ~~assurance~~penny ~~that~~stock to anpersons ~~active~~other ~~market~~than ~~for~~established ~~our~~customers ~~common~~and ~~stock~~accredited ~~will~~investors ~~develop.~~(generally Ininstitutions ~~addition~~with assets in excess of $5,000,000 ~~the~~or ~~stock~~individuals ~~market~~with net worth in ~~general~~excess of $1,000,000). For ~~and~~transactions ~~early~~covered ~~stage~~by ~~public~~the ~~companies~~penny instock ~~particular~~rules, ~~have~~the ~~experienced~~broker must ~~extreme~~make ~~price~~a special suitability determination for the purchaser and ~~volume~~receive ~~fluctuations that~~the ~~have~~purchaser’s ~~often~~written ~~been~~consent ~~unrelated~~to orthe ~~disproportionate~~transaction prior to the ~~operating~~sale. Furthermore, ~~performance~~the ofpenny ~~such~~stock ~~companies.~~rules Ifgenerally werequire, ~~are~~among ~~unable~~other tothings, ~~develop~~that brokers engaged in asecondary ~~market~~trading ~~for~~of ~~our~~penny ~~common~~stocks ~~shares~~provide customers with written disclosure documents, ~~you~~monthly ~~may~~statements ~~not~~of bethe ~~able~~market tovalue ~~sell~~of penny ~~your~~stocks, ~~common~~disclosure ~~shares~~of atthe bid and asked prices ~~you~~and ~~consider~~disclosure of the compensation to bethe ~~fair~~brokerage orfirm atand ~~times~~disclosure ~~that~~of ~~are~~the ~~convenient~~sales ~~for~~person ~~you,~~working orfor atthe ~~all~~brokerage firm. These rules and regulations adversely the affect the ability of brokers to sell our common shares and limit the liquidity of our securities.

~~Our~~Item ~~common stock may be considered to be a “penny stock” and, as such, any the market for our common stock may be further limited by certain SEC rules applicable to penny stocks~~1B. ToUnresolved ~~the~~Staff extent the price of our common stock remains below $5.00 per share or we have a net tangible assets of $2,000,000 or less, our common shares will be subject to certain “penny stock” rules promulgated by the SEC. Those rules impose certain sales practice requirements on brokers who sell penny stock to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000). For transactions covered by the penny stock rules, the broker must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale. Furthermore, the penny stock rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices and disclosure of the compensation to the brokerage firm and disclosure of the sales person working for the brokerage firm. These rules and regulations adversely the affect the ability of brokers to sell our common shares and limit the liquidity of our securities.Comments

~~Item~~Not 1Bapplicable. ~~Unresolved Staff Comments~~

~~Not~~Item ~~applicable~~2. Properties

13Company Executive Offices

~~Item~~Our 2executive offices are located in 5729 Lebanon Road., ~~Properties~~Suite 144, Frisco, Texas 75034. We believe that our current facilities are adequate for our foreseeable needs.

~~Company~~Oil ~~Executive~~and ~~Offices~~Gas Interests

~~Our~~Eastland ~~executive offices are located in 5729 Lebanon~~County ~~Road., Suite 144, Frisco, Texas 75034. We believe that our current facilities are adequate for our foreseeable needs.~~Field

~~Oil~~In September 2011, we acquired our initial property consisting of a 31.25% working interest in an exploratory oil and ~~Gas~~gas ~~Interests~~drilling prospect covering 120 acres in Eastland County, Texas. The Eastland County prospect includes two exploratory wells, known as Rutherford #1 and C.M. Knott #1, that had been operating at a minimum level required to maintain the lease rights. In October 2011, the operator reentered the Rutherford #1 well and conducted drilling and casing activities, which were completed in November 2011. In January 2012, a third party conducted the fracture stimulation of the Rutherford #1. In February 2013, the operator placed a pump jack on the Rutherford #1 well, however no meaningful revenue has been derived from the well to date. During the three months ended June 30, 2013, we determined that our investment in the Eastland County prospect was impaired due to an unsuccessful fracture stimulation of the Rutherford #1. Accordingly, we recorded an impairment loss of $108,373 to write off the capitalized fracture stimulation costs. The operator has undertaken no further activity on the Eastland County prospect as of the date of this report.

~~Eastland~~Port ~~County~~Hudson Field

In ~~September~~August ~~2011~~2013, we ~~acquired~~ ~~our~~acquired ~~initial~~a ~~property~~7.24625% ~~consisting~~working ofinterest ~~a 31~~(5.2565158% ~~working~~net revenue interest) in anthe ~~exploratory~~ oil and gas ~~drilling~~leases, ~~prospect~~wells ~~covering~~and ~~120~~attendant ~~acres~~production in ~~Eastland~~the ~~County,~~Port ~~Texas.~~Hudson ~~The~~field, ~~Eastland~~Baton ~~County~~Rouge ~~prospect~~Parish, ~~includes~~Louisiana. ~~two~~On ~~exploratory~~April ~~wells~~15, ~~known~~2014, aswe ~~Rutherford~~sold ~~#1 and C~~44.~~M. Knott #~~1~~, that~~% ~~had~~of ~~been~~our ~~operating~~original atworking ainterest ~~minimum~~in ~~level required to maintain~~ the Port ~~lease~~Hudson ~~rights.~~field Infor ~~October 2011,~~ the ~~operator~~total ~~reentered~~consideration ~~the~~of ~~Rutherford #1 well and conducted drilling and casing activities~~$290,000, ~~which~~less ~~were~~any ~~completed~~payments inreceived ~~November~~by ~~2011.~~us Infor ~~January~~production ~~2012,~~from athe ~~third~~Port ~~party conducted~~Hudson ~~the~~field ~~fracture~~occurring ~~stimulation~~after ofJanuary ~~the Rutherford #~~1, 2014. InOn ~~February~~April ~~2013~~6, ~~the~~2015, ~~operator~~we ~~placed~~entered ainto ~~pump~~an ~~jack~~agreement onwith ~~the~~Hi-Tech ~~Rutherford #1 well~~Exploration, ~~however no~~LLC ~~meaningful~~to ~~revenue~~sell ~~has~~to Hi-Tech ~~been~~our ~~derived~~entire ~~from~~4.0506% ~~the~~working ~~well~~interest ~~to date~~(3.1595% ~~During~~net ~~the~~revenue ~~three~~interest) ~~months ended June 30, 2013, we determined that our investment~~ in the ~~Eastland~~Port ~~County~~Hudson ~~prospect~~field ~~was~~for ~~impaired due to an unsuccessful fracture stimulation of~~ the ~~Rutherford #1. Accordingly,~~total ~~we recorded an impairment loss~~ consideration of $~~108~~205,~~373~~000, toless ~~write~~any ~~off~~payments ~~the~~received ~~capitalized~~by ~~fracture~~us ~~stimulation~~for ~~costs.~~production ~~The~~from ~~operator has undertaken no further activity on~~ the ~~Eastland~~Port ~~County~~Hudson ~~prospect~~field asoccurring ofafter ~~the~~March ~~date~~1, ~~of this report~~2015.

~~Port~~West ~~Hudson~~Cam 225 Field

In ~~August~~September 2013, we acquired a 710.~~24625~~0167% working interest (57.~~65158~~2120% net revenue interest) in ~~the~~an offshore oil and gas ~~leases, wells and attendant production in the Port Hudson~~ field, ~~Baton~~known ~~Rouge~~as ~~Parish,~~West ~~Louisiana.~~Cam ~~On April 15~~225, located ~~2014, we sold 44.1% of our original working interest~~ in the ~~Port~~shallow ~~Hudson field~~waters ~~for~~of the ~~total~~Gulf ~~consideration~~ of ~~$290,000,~~Mexico ~~less~~near ~~any payments received by us for production from the Port Hudson field occurring after January 1~~Cameron, ~~2014~~Louisiana. On April 6, 2015, we entered into an agreement with Hi-Tech ~~Exploration, LLC~~ to sell to Hi-Tech our entire 4 10.~~0506~~0167% working interest (37.~~1595~~2118% net revenue interest) in the ~~Port~~West ~~Hudson~~Cam ~~field~~225 property for the total consideration of $~~205~~130,~~000,~~500. ~~less any~~We ~~payments~~had ~~received~~acquired byour usworking ~~for~~interest ~~production~~in ~~from~~ the ~~Port~~West ~~Hudson~~Cam ~~field~~225 ~~occurring~~in ~~after~~September ~~March 1, 2015~~2013.

~~West~~Wolfcamp ~~Cam 225~~ Field

In ~~September~~June ~~2013,~~and July 2014, we acquired a ~~10.0167%~~non-operating ~~working~~leases ~~interest~~covering ~~(7.2120%~~approximately ~~net~~1,070 ~~revenue~~gross ~~interest)~~mineral acre leases in anthe ~~offshore~~Wolfcamp ~~oil~~field ~~and~~located ~~gas~~in ~~field~~Hale County, Texas. ~~known~~The asleases ~~West~~were ~~Cam~~acquired ~~225~~for cash payments of $45,484. ~~located~~The ~~in the~~leases ~~shallow~~have ~~waters~~a primary term of ~~the~~five ~~Gulf~~years ofwith ~~Mexico~~our ~~near~~option ~~Cameron,~~to ~~Louisiana~~extend the term for another five years. OnThe ~~April~~leased 6,properties ~~2015,~~constitute wethe ~~entered~~surface ~~into~~acreage ancomprising ~~agreement~~a ~~with~~natural ~~Hi-Tech~~gas ~~to sell~~prospect, ~~Hi-Tech~~for ~~our~~which we ~~entire~~hold ~~10.0167~~50% of the working interest ~~(7.2118~~and 40% net revenue interest). inThe leased properties are subject to a 20% royalty interest held by the ~~West~~owners ~~Cam~~and ~~225~~a ~~property~~third party. We are currently evaluating our options for the ~~total~~exploitation ~~consideration~~ of ~~$130~~the leased properties,~~500.~~ Weincluding our ~~had~~sale ~~acquired~~of ~~our~~the ~~working~~leases ~~interest~~or inour farm-out of the ~~West~~leases ~~Cam~~to ~~225~~a innatural ~~September~~gas ~~2013~~operator.

~~Wolfcamp Field~~14

InStansell June and July 2014, we acquired non-operating leases covering approximately 1,070 gross mineral acre leases in the Wolfcamp field located in Hale County, Texas. The leases have a primary term of five years with our option to extend the term for another five years. The leased properties constitute the surface acreage comprising a natural gas prospect, for which we hold 50% of the working interest and 40% net revenue interest. The leased properties are subject to a 20% royalty interest held by the owners and a third party. We are currently evaluating our options for the exploitation of the leased properties, including our sale of the leases or our farm-out of the leases to a natural gas operator.Field

~~Sunshine~~We ~~Prospect~~hold a 1% working interest in an oil prospect located in Floyd County, Texas. The working interest comprises 15,000 leased acres in the southern section of the Palo Duro basin. The initial project will be the re-entry of the Stansell #1-A well, an existing wellbore that was drilled in 2006. The original drilling encountered oil shows in three separate reservoirs and the operator intends to re-enter and recomplete the Stansell #1-A using current fracture stimulation technology. We have a carried 1% working interest in the Stansell #1-A well through the tanks. The operator reentered the Stansell #1-A well in the first quarter of 2015 and the well is currently producing oil at a cash breakeven rate to us.

WeKiowa ~~hold~~Oil aLeases: On ~~15%~~September ~~(14.25~~30, 2015, we agreed to lease from Kiowa Oil Company 100% ~~net revenue~~of ~~interest)~~the ininterests, for a ~~non-operating~~period ~~oil~~of ~~and~~five ~~gas~~years, ~~prospect~~of ~~located~~properties held by Kiowa Oil Company in ~~Landry~~North ~~Parish~~Dakota, ~~Louisiana~~Florida, Illinois, and Kentucky. The ~~working~~total ~~interest~~price ~~concerns~~for ~~248~~the subject interests under this ~~gross~~lease ~~acres~~agreement is $5,000 and ~~net~~a ~~acres~~15% royalty interest in all the ~~Sunshine~~subject ~~Prospect~~interests leased. The ~~operator~~total ~~intends~~price towill ~~drill~~be anpaid ~~initial~~in ~~well~~by inus through our issuance of common shares at the ~~prospect~~per inshare ~~2016~~price of $0.50.

~~Stansell~~TW Lee Field: We hold a 25% working interest (18.75% net revenue interest) in oil and gas properties located in Gregg County, Texas. The property is known as the T.W. Lee field. The purchase price for the subject interests under this agreement is $25,000, which will be paid in our common shares at the per share price of $0.25. The operator has successfully drilled a well on the property and expects to commence production of oil in the fourth quarter.

T.A. Greer Lease: We hold a 125% working interest in an(19.5% ~~oil~~net ~~prospect~~revenue ~~located~~interest) in ~~Floyd~~an ~~County,~~East Texas. ~~The~~oil ~~working~~and ~~interest~~gas ~~comprises~~property. ~~15,000~~The ~~leased~~property ~~acres~~is inknown ~~the southern section of~~as the ~~Palo Duro basin~~T.A. ~~The~~Greer ~~initial~~lease ~~project~~and ~~will~~includes betwo ~~the~~tracts ~~re-entry~~ of ~~the~~land ~~Stansell~~totaling ~~#1-A~~approximately ~~well,~~470 anacres ~~existing~~in ~~well~~Panola ~~bore~~County, ~~that was drilled in 2006~~Texas. ~~The~~We ~~original~~acquired ~~drilling~~the property ~~encountered~~from ~~oil~~an ~~shows~~unaffiliated party in ~~three~~consideration ~~separate~~of ~~reservoirs~~our ~~and~~payment ~~the~~of ~~operator~~$10,000 ~~intends to re-enter~~ and ~~recomplete the~~issuance ~~Stansell~~of ~~#1-A~~60,000 ~~using~~shares ~~current~~of ~~fracture~~our ~~stimulation~~common ~~technology~~stock. The Weoperator ~~have~~has asuccessfully ~~carried~~drilled 1%a ~~working~~well ~~interest~~on in the ~~Stansell~~property ~~#1-A~~and ~~well through~~expects ~~the~~to ~~tanks.~~commence ~~The~~production ~~operator commenced the re-entry~~ of ~~the~~oil ~~Stansell #1-A well~~ in ~~January 2015 and is currently evaluating~~ the ~~drilling~~ ~~results~~fourth quarter.

14Subject to our receipt of additional capital, we intend to pursue the acquisition of additional equity interests in other oil and gas properties in North America. However, as of the date of this report, we have no understandings or agreements in place concerning our acquisition of an interest in any other properties.

~~Kiowa~~Estimated ~~Properties~~Proved Reserves and Operating Wells

OnWe ~~September~~have ~~30,~~no ~~2015, we~~proved ~~leased~~developed ~~100%~~or ~~of interests, for a period of five years, of properties in North Dakota, Florida, Illinois, and Kentucky. The total~~undeveloped ~~price~~reserves ~~for~~or ~~the~~operating ~~subject~~wells ~~interests~~as ~~under this lease agreement is $5,000 and a 15% royalty interest in all the subject interests leased. The $5,000 purchase price will be paid by us in our common shares at the per share price~~ of ~~$0.50,~~September ~~or 10~~30,~~000~~ ~~common shares~~2016.

~~Subject~~Drilling ~~to our receipt of additional capital, we intend to pursue the acquisition of additional equity interests in other oil~~ and ~~gas~~Other ~~properties~~Exploratory ~~in North America. However, as of the date of this report, we have no understandings or agreements in place concerning our acquisition of an interest in any other properties.~~Activities

~~Estimated~~We ~~Proved~~were ~~Reserves~~incorporated in December 2010 and ~~Operating~~did ~~Wells~~not participate in any drilling, or other exploratory or development, activity during the fiscal year ended September 30, 2011. In October 2011, we participated in our first drilling operation, which took place at our initial prospect, located in Eastland County, Texas. The Eastland County prospect includes two wells, known as Rutherford #1 and C.M. Knott #1, that had been operating at a minimum level required to maintain the lease rights. In October 2011, the operator of the prospect reentered the Rutherford #1 well and conducted drilling and casing activities, which were completed in November 2011. In January 2012, a third party conducted the fracture stimulation of the Rutherford #1. In February 2013, the operator placed a pump jack on the Rutherford #1 well, however no meaningful revenue has been derived from the well to date. Our activity on the Rutherford #1 represents our only participation in drilling, exploratory or development activity to date. As of the date of this report, we have no wells in the process of drilling or completion other than the Rutherford #1.

WeItem ~~have~~3. noLegal ~~proved developed or undeveloped reserves or operating wells as of September 30, 2015.~~Proceedings

~~Drilling~~As ~~and~~of ~~Other~~the ~~Exploratory~~date ~~Activities~~of this report, there are no pending legal proceedings to which we or our properties are subject, except for routine litigation incurred in the normal course of business.

WeItem ~~were incorporated in December 2010 and did not participate in any drilling, or other exploratory or development, activity during the fiscal year ended September 30, 2011~~4. InMine ~~October~~Safety 2011, we participated in our first drilling operation, which took place at our initial prospect, located in Eastland County, Texas. The Eastland County prospect includes two wells, known as Rutherford #1 and C.M. Knott #1, that had been operating at a minimum level required to maintain the lease rights. In October 2011, the operator of the prospect reentered the Rutherford #1 well and conducted drilling and casing activities, which were completed in November 2011. In January 2012, a third party conducted the fracture stimulation of the Rutherford #1. In February 2013, the operator placed a pump jack on the Rutherford #1 well, however no meaningful revenue has been derived from the well to date. Our activity on the Rutherford #1 represents our only participation in drilling, exploratory or development activity to date. As of the date of this report, we have no wells in the process of drilling or completion other than the Rutherford #1.Disclosures

~~Item 3~~Inapplicable. ~~Legal Proceedings~~

~~As of the date of this report, there are no pending legal proceedings to which we or our properties are subject, except for routine litigation incurred in the normal course of business.~~15

~~Item~~PART ~~4. Mine Safety Disclosures~~II

~~Inapplicable~~Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities

15Market Information

~~PART~~Our IIcommon stock is quoted on the OTC Market under the symbol “WTXR” Our common stock trades only sporadically and has experienced in the past, and is expected to experience in the future, significant price and volume volatility. The following table shows the reported high and low closing prices per share for our common stock based on information provided by the OTC Market for the periods indicated.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Repurchases of Equity Securities

Fiscal Year Ended September 30, 2016	High	Low
Fourth Quarter	$0.68	$0.33
Third Quarter	$0.54	$0.24
Second Quarter	$0.36	$0.18
First Quarter	$0.40	$0.10

Market Information

Fiscal Year Ended September 30, 2015	High	Low
Fourth Quarter	$0,60	$0.20
Third Quarter	$0.60	$0.20
Second Quarter	$0.50	$0.21
First Quarter	$0.70	$0.32

~~Our~~Holders ~~common~~of stock is quoted on the OTC Market under the symbol “WTXR” Our common stock trades only sporadically and has experienced in the past, and is expected to experience in the future, significant price and volume volatility. The following table shows the reported high and low closing prices per share for our common stock based on information provided by the OTC Market for the periods indicated. Record

Fiscal Year Ended September 30, 2015	High	Low
Fourth Quarter	$0,60	$0.20
Third Quarter	$0.60	$0.20
Second Quarter	$0.50	$0.21
First Quarter	$0.70	$0.32

As of February 8, 2017, there were 177 holders of record of our common stock.

Fiscal Year Ended September 30, 2014	High	Low
Fourth Quarter	$1.00	$0.76
Third Quarter	$0.90	$0.64
Second Quarter	$0.89	$0.51
First Quarter	$1.15	$0.70

Dividend Policy

~~Holders~~We have never declared or paid cash dividends on our common stock. We presently intend to retain earnings to finance the operation and expansion of ~~Record~~our business.

AsEquity ofCompensation ~~December~~Plan ~~28, 2015, there were 159 holders of record of our common stock.~~Information

~~Dividend~~We ~~Policy~~have adopted the West Texas Resources, Inc. 2011 Stock Incentive Plan providing for the grant of non-qualified stock options and incentive stock options to purchase shares of our common stock and for the grant of restricted and unrestricted share grants. We have reserved 3,000,000 shares of our common stock under the plan. All officers, directors, employees and consultants to our company are eligible to participate under the plan. The purpose of the plan is to provide eligible participants with an opportunity to acquire an ownership interest in our company.

WeThe ~~have~~following ~~never declared~~table orsets ~~paid~~forth ~~cash~~certain ~~dividends~~information onas ~~our~~of ~~common~~September ~~stock.~~30, We2016 ~~presently~~about ~~intend~~our tostock ~~retain~~plans ~~earnings~~under towhich ~~finance~~our ~~the~~equity ~~operation~~securities ~~and~~are ~~expansion of our~~authorized ~~business~~for issuance.

Equity Compensation Plan Information

	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options		(b) Weighted-Average Exercise Price of Outstanding Options		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a))
Equity compensation plans approved by security holders		897,223	$	0.43		2,102,777
Equity compensation plans not approved by security holders		–		–		–
Total		897,223	$	0.43		2,102,777

We have adopted the West Texas Resources, Inc. 2011 Stock Incentive Plan providing for the grant of non-qualified stock options and incentive stock options to purchase shares of our common stock and for the grant of restricted and unrestricted share grants. We have reserved 3,000,000 shares of our common stock under the plan. All officers, directors, employees and consultants to our company are eligible to participate under the plan. The purpose of the plan is to provide eligible participants with an opportunity to acquire an ownership interest in our company.16

16Unregistered Sales of Equity Securities and Use of Proceeds

~~The~~During ~~following~~the ~~table~~fiscal ~~sets~~year ~~forth~~ended ~~certain~~September ~~information~~30, as2016, ofwe ~~September~~conducted 30the private placement sale of 291,000 ~~2015~~shares ~~about~~of our common stock ~~plans~~at the offering price of $0.25 per share for the gross proceeds of $72,750. The issuances were exempt under ~~which~~Section 4(a)(2) of the Securities Act of 1933 and Rule 506 there under. All of the investors were accredited investors, as such term is defined in Rule 501 under the Securities Act. The offering was conducted by our ~~equity~~management. ~~securities~~No ~~are~~sales ~~authorized~~commissions ~~for~~or ~~issuance~~finders’ fees were paid by us or anyone else.

				(c)
				Number of Securities
	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options	(b) Weighted-Average Exercise Price of Outstanding Options		Remaining Available for
				Future Issuance Under
				Equity Compensation
				Plans
				(Excluding Securities
Plan Category				Reflected In Column (a))
Equity compensation plans approved by security holders	897,223	$	0.43	2,102,777
Equity compensation plans not approved by security holders	–		–	–
Total	897,223	$	0.43	2,102,777

Item 6.

Selected Financial Data

~~Unregistered~~Not ~~Sales of Equity Securities and Use of Proceeds~~applicable.

~~During~~Item ~~the fiscal year ended September 30, 2015, we conducted the private placement sale of 100,000 shares of our common stock at the offering price of $0~~7.25 ~~per~~Management’s ~~share~~Discussion ~~for~~and ~~the~~Analysis ~~gross proceeds~~ of ~~$100,000.~~Financial ~~The~~Condition ~~issuances were exempt under Section 4(a)(2) of the Securities Act of 1933~~ and ~~Rule~~Results ~~506 there under. All~~ of the investors were accredited investors, as such term is defined in Rule 501 under the Securities Act. The offering was conducted by our management. No sales commissions or finders’ fees were paid by us or anyone else.Operations

On September 30, 2015, our controlling shareholder, Mr. Gary Bryant, agreed to convert $501,754 of indebtedness underlying two convertible promissory notes, including $455,146 of principal and $46,608 of accrued interest, into shares of our common stock at the rate of $0.50 per share.General

~~Item~~We 6were formed on December 9, 2010 under the laws of Nevada for the purpose of oil and gas exploration and development in North America. ~~Selected~~We ~~Financial~~commenced ~~Data~~revenue producing oil and gas operations effective as of April 1, 2013. From April 1, 2013 to December 2014, all of our revenue was derived from our working interest in the Port Hudson field. Commencing in January 2014, we also derived revenue from our working interest in the West Cam 225 field.

~~Not~~On ~~applicable~~April 6, 2015, we sold our entire working interest in the Port Hudson field for the total consideration of $205,000, less any payments received by us for production from the Port Hudson field occurring after March 1, 2015, and on same day we also sold our entire working interest in the West Cam 225 property for the total consideration of $130,500. Since our sale of the Port Hudson and West Cam 225 properties, we do not have any oil and gas properties that produce revenue in any meaningful amounts.

17Results of Operations

~~Item~~During 7.the ~~Management’s~~fiscal ~~Discussion~~years ended September 30, 2015 and ~~Analysis~~2016, we had $81,231 and $657 of ~~Financial~~revenue, ~~Condition~~respectively. Our revenue during the fiscal year ended September 30, 2015 consisted of revenue in the amount of $47,289 from our working interest in the Port Hudson field and ~~Results~~revenue in the amount of ~~Operations~~$33,942 from our working interest in the West Cam 225 field. Our revenue decreased from fiscal 2015 to fiscal 2016 due to our sale of the Port Hudson and West Cam 225 properties in April 2015.

~~General~~For the fiscal year ended September 30, 2015, we had general and administrative expenses of $374,742 compared to general and administrative expenses of $223,575 during the 2016 fiscal year. The decrease in expenses is attributable to the lower level of acquisition and development activity.

WeFor ~~were~~the ~~formed~~fiscal ~~on December~~year 9ended September 30, ~~2010~~2015, ~~under~~we ~~the~~had ~~laws~~other expenses of ~~Nevada~~$809,412 ~~for~~compared ~~the~~to ~~purpose~~other expenses of ~~oil~~$1,470 ~~and~~during ~~gas~~the ~~exploration~~2016 ~~and~~fiscal ~~development~~year. The decrease in ~~North~~other ~~America.~~expenses Wewas ~~commenced~~due ~~revenue producing~~primarily ~~oil~~to ~~and~~amortization ~~gas~~of ~~operations~~debt ~~effective~~discount asduring offiscal ~~April 1,~~2015 ~~2013.~~relating ~~From~~to ~~April~~debt 1,that ~~2013~~we torepaid in ~~December~~fiscal ~~2014~~2015, ~~all~~a ofloss ~~our~~on ~~revenue~~the ~~was derived~~sale ~~from~~of ~~our~~an ~~working~~oil ~~interest~~and gas property in the ~~Port~~amount ~~Hudson~~of ~~field.~~$150,050 ~~Commencing~~during infiscal ~~January~~2015 ~~2014,~~and wean ~~also~~impairment ~~derived~~loss on ~~revenue~~an ~~from~~oil ~~our~~and ~~working interest~~gas property in the ~~West~~amount ~~Cam~~of ~~225~~$317,876 ~~field~~during fiscal 2015.

OnFor ~~April~~the 6,fiscal ~~2015, we sold~~years ~~our~~ended ~~entire~~September ~~working~~30, ~~interest~~2015 inand ~~the~~2016, ~~Port~~we ~~Hudson~~incurred ~~field~~a ~~for~~net ~~the~~loss ~~total consideration~~ of $~~205~~(1,~~000~~102,923) ~~less~~and ~~any payments received by us for production from the Port Hudson field occurring after March 1~~$(224, ~~2015~~388), ~~and~~respectively. onThe ~~same~~decrease ~~day~~in ~~we also sold~~ our ~~entire working interest~~net inloss ~~the~~was ~~West Cam 225 property for~~ the ~~total~~result ~~consideration~~ of ~~$130,500.~~a ~~Since~~decreased ~~our~~expenses ~~sale~~during offiscal ~~the~~2015 ~~Port~~compared ~~Hudson~~to ~~and~~the ~~West~~2016 ~~Cam~~fiscal ~~225 properties, we do not have any oil and gas properties that produce revenue in any meaningful amounts~~year.

~~Results~~Subject to our receipt of ~~Operations~~additional capital, our plan of operations over the next 12 months is to pursue the acquisition of additional equity interests in oil and gas properties to be thereafter exploited by us in conjunction with other oil and gas producers. As of the date of this report, we have no understandings or agreements in place concerning our acquisition of an interest in any other properties.

~~During~~At the ~~fiscal~~present ~~years~~time, ~~ended~~we ~~September~~have 30two employees, ~~2015~~our ~~and~~chief ~~2014~~executive officer, weWilliam ~~had~~A. ~~$81~~Sawyer,~~231~~ and ~~$304,289~~our ofchief ~~revenue~~financial officer, ~~respectively~~John D. ~~Our~~Kerr. ~~revenue~~Subject ~~during~~to our ~~the~~receipt ~~fiscal~~of ~~year~~significant ~~ended September~~additional 30capital, ~~2015~~we ~~consisted~~intend ofto ~~revenue~~hire additional senior management and staff with experience in ~~the~~oil and ~~amount~~gas ofexploration. ~~$47,289~~We ~~from~~intend ~~our~~to ~~working~~pursue ~~interest~~an inoperating ~~the~~strategy ~~Port~~that ~~Hudson~~is ~~field~~based ~~and~~on ~~revenue~~ our participation in exploration prospects with a preference to serving as the ~~amount~~operator offor ~~$33~~the prospect,~~942~~ ~~from~~however, ~~our~~we ~~working~~will ~~interest~~also inparticipate ~~the~~as ~~West~~a ~~Cam~~non-operator ~~225~~from ~~field~~time to time. Based ~~Our~~on ~~revenue~~that ~~for~~strategy, our plan of operations over the ~~fiscal~~next ~~year~~12 ~~ended~~months ~~September~~is ~~30, 2014~~to ~~consisted~~pursue the acquisition of ~~revenue~~oil and natural gas interests in ~~the~~partnership ~~amount~~with ofother ~~$260~~companies with exploration,~~179~~ ~~from~~development ~~our~~and ~~working~~production ~~interest~~expertise. We will also pursue alliances with partners in the ~~Port~~areas ~~Hudson~~of ~~field~~geological and ~~revenue~~geophysical inservices ~~the~~and ~~amount of~~prospect ~~$44~~generation,~~110~~ ~~from~~evaluation ~~our~~and ~~working~~prospect ~~interest~~leasing. inPursuant to ~~the~~this ~~West~~strategy, ~~Cam~~we ~~225~~intend ~~field.~~to ~~Our~~engage ~~revenue~~and ~~decreased~~rely ~~from~~on ~~fiscal~~third ~~2014~~party togeologists ~~fiscal~~and ~~2015~~geophysicists, ~~due~~among others, to ~~our~~review the available ~~sale~~data ofconcerning ~~the~~each ~~Port~~potential ~~Hudson~~acquisition. ~~and~~In ~~West~~each ~~Cam~~case, ~~225~~we ~~properties~~or inthe ~~April~~operator ~~2015~~of ~~along~~the ~~with~~prospect will assemble the ~~decline~~appropriate indata and ~~price~~conduct ~~for~~the ~~oil~~appropriate studies and ~~natural~~that ~~gas~~our inconsultants will conduct an independent review of the data and studies for purposes ~~second~~of ~~half~~advising us of the ~~calendar~~merits ~~year~~of ~~2014~~each potential acquisition.

For the fiscal year ended September 30, 2015, we had general and administrative expenses of $374,742 compared to general and administrative expenses of $742,870 during the prior year. The decrease in expenses is attributable to the higher level of activity during the 2014 and our incursion of $232,256 of stock-based compensation during the 2014 fiscal year compared to $47,041 of stock-based compensation during the current year.17

~~For~~The ~~the~~business ~~fiscal~~of ~~year ended~~oil ~~September~~and ~~30,~~gas ~~2015~~acquisition, wedrilling ~~had~~and ~~other~~development ~~expenses~~is capital intensive and the level of ~~$809,412~~operations ~~compared~~attainable toby ~~other~~an ~~expenses~~oil ofand ~~$294,530~~gas ~~during~~company is directly linked to and limited by the ~~prior~~amount ~~year~~of available capital. ~~The~~Therefore, ~~increase in~~a ~~other~~principal ~~expenses~~part ~~was~~of ~~due~~our ~~primarily~~plan of operations is to aacquire ~~loss~~the onadditional capital required to finance the ~~sale~~acquisition of ansuch ~~oil~~properties and ~~gas~~our ~~property~~share inof the ~~amount~~development ofcosts. As ~~150~~explained under “Financial Condition” below,~~050~~ ~~and~~we anwill ~~impairment loss~~seek onadditional anworking ~~oil~~capital ~~and~~through ~~gas~~the ~~property~~sale inof our securities and, subject to the ~~amount~~successful deployment of ~~$317~~our cash on hand,~~876~~ ~~during~~we ~~2015~~will endeavor to obtain additional capital through bank lines of credit and project financing.

~~For~~Financial the fiscal years ended September 30, 2015 and 2014, we incurred a net loss of $(1,102,923) and $(733,111), respectively. The increase in our net loss was the result of an increase in expenses during 2015 compared to the prior year.Condition

~~Subject~~As toof ~~our~~September ~~receipt~~30, of2016, ~~additional~~we ~~capital~~had total assets of $293,842 ~~our~~and ~~plan~~negative working capital of ~~operations~~$(235,007). ~~over~~Our ~~the~~ability ~~next~~to 12achieve ~~months~~commercial success is dependent on our ability to ~~pursue~~obtain additional capital either through the ~~acquisition~~additional sale of ~~additional~~our equity ~~interests~~or debt securities, bank inlines of credit, project financing or cash generated from oil and gas ~~properties~~operations. We believe that our ability to achieve commercial success and our continued growth will be ~~thereafter~~dependent ~~exploited~~on byour usability into ~~conjunction~~access ~~with~~capital ~~other~~either through the additional sale of our equity or debt securities, bank lines of credit, project financing or cash generated from oil and gas ~~producers~~operations. Therefore, Asa principal part of our plan of operations is to acquire the ~~date~~additional capital required to finance the acquisition of ~~this~~such properties and ~~memorandum~~our share of the development costs. We will seek additional working capital through the sale of our securities and, subject to the successful deployment of our cash on hand, we ~~have~~will endeavor to obtain additional capital through bank lines of credit and project financing. There can be no ~~understandings~~assurance orthat ~~agreements~~we will be able to obtain additional capital on a timely basis in ~~place~~order ~~concerning~~to complete our acquisition of anadditional ~~interest~~oil inand ~~any~~gas ~~other properties~~interests.

AtThe ~~the~~report ~~present~~of ~~time,~~our weindependent ~~have~~registered ~~one~~public ~~employee,~~accounting ~~our~~firm ~~chief~~for ~~executive officer and chief financial officer, John D. Kerr, who has limited experience in~~ the ~~oil and~~fiscal ~~gas~~year ~~exploration~~ended ~~and~~September ~~development business. Subject to our receipt of significant additional capital~~30, we2016 ~~intend~~states tothat ~~hire~~due ~~senior management and staff with experience in oil and gas exploration. Until such time, we intend~~ to ~~pursue an operating strategy that is based on~~ our ~~participation~~losses infrom ~~exploration prospects as a non-operator. Based on that strategy, our plan of~~ operations ~~over the next 12 months is to pursue the acquisition of oil~~ and ~~natural gas interests in partnership with other companies with exploration,~~ ~~development~~lack ~~and production expertise. We will also pursue alliances with partners in the areas~~ of ~~geological~~working ~~and~~capital ~~geophysical~~there ~~services and~~is ~~prospect~~substantial ~~generation,~~doubt ~~evaluation~~about ~~and~~our ~~prospect~~ability ~~leasing. Pursuant~~ to ~~this~~continue ~~strategy,~~as wea ~~intend~~going ~~to engage and rely on third party geologists and geophysicists, among others, to review the available data concerning each potential acquisition~~concern. In each case, we expect that the operator of the prospect will assemble the appropriate data and conduct the appropriate studies and that our consultants will conduct an independent review of the operator’s data and studies for purposes of advising us of the merits of each potential acquisition.

~~The~~Off-Balance ~~business~~Sheet of oil and gas acquisition, drilling and development is capital intensive and the level of operations attainable by an oil and gas company is directly linked to and limited by the amount of available capital. Therefore, a principal part of our plan of operations is to acquire the additional capital required to finance the acquisition of such properties and our share of the development costs. As explained under “Financial Condition” below, we will seek additional working capital through the sale of our securities and, subject to the successful deployment of our cash on hand, we will endeavor to obtain additional capital through bank lines of credit and project financing.Arrangements

18We do not have any off-balance sheet financing arrangements.

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

~~As of September 30, 2015,~~Not ~~we had total assets of $360,195 and negative working capital of $(133,600)~~applicable. Our ability to achieve commercial success is dependent on our ability to obtain additional capital either through the additional sale of our equity or debt securities, bank lines of credit, project financing or cash generated from oil and gas operations. We believe that our ability to achieve commercial success and our continued growth will be dependent on our ability to access capital either through the additional sale of our equity or debt securities, bank lines of credit, project financing or cash generated from oil and gas operations. Therefore, a principal part of our plan of operations is to acquire the additional capital required to finance the acquisition of such properties and our share of the development costs. We will seek additional working capital through the sale of our securities and, subject to the successful deployment of our cash on hand, we will endeavor to obtain additional capital through bank lines of credit and project financing. There can be no assurance that we will be able to obtain additional capital on a timely basis in order to complete our acquisition of additional oil and gas interests.

The report of our independent registered public accounting firm for the fiscal year ended September 30, 2015 states that due to our losses from operations and lack of working capital there is substantial doubt about our ability to continue as a going concern.18

~~Off-Balance~~Item ~~Sheet~~8. ~~Arrangements~~Financial Statements and Supplementary Data

WeIndex doTo ~~not~~Financial ~~have any off-balance sheet financing arrangements.~~Statements

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

	Page

Report of Independent Registered Public Accounting Firm	F-1

Balance Sheets at September 30, 2016 and 2015	F-2

Statements of Operations for the Years Ended September 30, 2016 and 2015	F-3

Statements of Changes In Shareholders’ Equity for the Years Ended September 30, 2016 and 2015	F-4

Statements of Cash Flows for the Years Ended September 30, 2016 and 2015	F-5

Notes to Financial Statements	F-6

~~Not applicable.~~19

19REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~Item~~To 8.the ~~Financial~~Board ~~Statements~~of Directors and Stockholders ~~Supplementary~~of ~~Data~~West Texas Resources, Inc.

~~Index~~We Tohave ~~Financial~~audited ~~Statements~~the accompanying balance sheets of West Texas Resources, Inc. as of September 30, 2016 and 2015, and the related statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2016. West Texas Resources, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

	Page
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets at September 30, 2015 and 2014	F-2
Statements of Operations for the Years Ended September 30, 2015 and 2014	F-3
Statements of Changes In Shareholders’ Equity for the Years Ended September 30, 2015 and 2014	F-4
Statements of Cash Flows for the Years Ended September 30, 2015 and 2014	F-5
Notes to Financial Statements	F-6

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

20In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of West Texas Resources, Inc. as of September 30, 2016 and 2015, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2016, in conformity with accounting principles generally accepted in the United States of America.

~~REPORT~~The OFaccompanying ~~INDEPENDENT~~financial ~~REGISTERED~~statements ~~PUBLIC~~have been ~~ACCOUNTING~~prepared ~~FIRM~~assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has not earned any significant revenues since inception and has an accumulated deficit of $2,604,720 which raises substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.

ToFarber ~~the~~Hass ~~Board~~Hurley ~~of Directors and Stockholders of West Texas Resources, Inc.~~LLP

~~We have audited the accompanying balance sheets of West Texas Resources~~Chatsworth, Inc. as of September 30, 2015 and 2014, and the related statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2015. West Texas Resources, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.California

WeFebruary conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have10, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.2017

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of West Texas Resources, Inc. as of September 30, 2015 and 2014, and the results of its operations and its cash flows the years ended September 30, 2015 in conformity with accounting principles generally accepted in the United States of America.F-1

~~The~~West ~~accompanying~~Texas ~~financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements~~Resources, ~~the Company has not earned any significant revenues since inception and has an accumulated deficit of $2,380,332 which raises substantial doubt about its ability to continue as a going concern~~Inc. ~~The financial statements do not include any adjustment that might result from the outcome of this uncertainty.~~

~~/s/~~CONSOLIDATED ~~Farber~~BALANCE ~~Hass Hurley LLP Chatsworth, California December 30, 2015~~SHEETS

F-1

	September 30,			September 30,
	2016			2015

ASSETS
Current Assets
Cash	$	13,209		$	142,762
Total Current Assets		13,209			142,762

Equipment		13,200			–

Oil and gas properties, using successful efforts accounting		267,433			217,433

TOTAL ASSETS	$	293,842		$	360,195


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
Accrued expenses	$	148,165		$	161,370
Payroll liabilities		4,000			978
Investment payable		13,600			13,600
Lease payable		5,000			5,000
Equipment loan		6,000			–
Asset retirement obligation		10,000			10,000
Shareholder advances		13,442			45,000
Other payable		48,009			40,414

Total Current Liabilities		248,216			276,362

Commitments and Contingencies		–			–

Shareholders' Equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding		–			–
Common stock, $0.001 par value; 200,000,000 shares authorized; 16,289,908 and 14,515,400 shares issued and outstanding at September 30, 2016 and September 30, 2015, respectively		16,290			14,515
Additional paid-in capital		2,609,056			1,947,896
Common stock issuable		25,000			501,754
Accumulated deficit		(2,604,720	)		(2,380,332	)
Total Shareholders' Equity		45,626			83,833

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	293,842		$	360,195

~~West Texas~~See ~~Resources,~~accompanying ~~Inc.~~notes to these consolidated financial statements

~~BALANCE SHEETS~~F-2

	September 30,			September 30,
	2015			2014
ASSETS
Current Assets
Cash	$	142,762		$	144,506
Accounts receivable		–			45,055
Total Current Assets		142,762			189,561
Oil and gas properties, using successful efforts accounting		217,433			885,810
TOTAL ASSETS	$	360,195		$	1,075,371
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accrued expenses	$	161,370		$	159,255
Payroll liabilities		978			3,499
Investment payable		13,600			13,600
Lease payable		5,000			–
Asset retirement obligation		10,000			10,000
Shareholder advances		45,000			35,000
Interest payable		–			19,303
Notes payable - related parties, net of discount		–			183,384
Other payable		40,414			38,369
Total Current Liabilities		276,362			462,410
Commitments and Contingencies		–			–
Shareholders' Equity
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding		–			–
Common stock, $0.001 par value; 200,000,000 shares authorized; 14,515,400 and 14,415,400 shares issued and outstanding at September 30, 2015 and September 30, 2014, respectively		14,515			14,415
Additional paid-in capital		1,947,896			1,875,955
Common stock issuable		501,754			–
Accumulated deficit		(2,380,332	)		(1,277,409	)
Total Shareholders' Equity		83,833			612,961
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	360,195		$	1,075,371

West Texas Resources, Inc.

~~See accompanying~~CONSOLIDATED ~~notes~~STATEMENTS toOF ~~these financial statements~~ OPERATIONS

F-2

	For the Year Ended September 30,
	2016			2015
Revenues
Oil and gas sales	$	657		$	81,231

General and administrative expenses		223,575			374,742
Operating Loss		(222,918	)		(293,511	)

Other income (expenses)
Interest expense		(1,470	)		(33,719	)
Amortization of debt discount		–			(337,767	)
Loss on sale of oil and gas interest		–			(150,050	)
Impairment loss on oil and gas properties		–			(317,876	)
Other income		–			30,000
Loss Before Income Taxes		(224,388	)		(1,102,923	)

Tax provision		–			–
Net Loss	$	(224,388	)	$	(1,102,923	)

Loss per share
Basic and diluted weighted average number of common shares outstanding		15,544,974			14,424,989

Basic and diluted net loss per share	$	(0.01	)	$	(0.08	)

~~West~~See ~~Texas~~accompanying ~~Resources,~~notes ~~Inc.~~to these consolidated financial statements

~~STATEMENTS OF OPERATIONS~~F-3

	For the Year Ended September 30,
	2015			2014
Revenues
Oil and gas sales	$	81,231		$	304,289
General and administrative expenses		374,742			722,887
Operating Loss		(293,511	)		(418,598	)
Other income (expenses)
Interest expense		(33,719	)		(40,923	)
Amortization of debt discount		(337,767	)		(253,607	)
Loss on sale of oil and gas interest		(150,050	)		(19,983	)
Impairment loss on oil and gas properties		(317,876	)		–
Other income		30,000			–
Loss Before Income Taxes		(1,102,923	)		(733,111	)
Tax provision		–			–
Net Loss	$	(1,102,923	)	$	(733,111	)
Loss per share
Basic and diluted weighted average number of common shares outstanding		14,424,989			14,182,984
Basic and diluted net loss per share	$	(0.08	)	$	(0.05	)

West Texas Resources, Inc.

~~See accompanying~~CONSOLIDATED ~~notes~~STATEMENTS toOF ~~these~~SHAREHOLDERS' ~~financial statements~~EQUITY

~~F-3~~For the Years Ended September 30, 2016 and 2015

West Texas Resources, Inc.

	Common Stock				Options		Additional		Common						Total
	Number				Number		Paid-in		Stock			Accumulated			Shareholders’
	of Shares		Amount		of Options		Capital		Issuable			Deficit			Equity
Balance, September 30, 2014		14,415,400	$	14,415		800,000	$	1,875,955	$	–		$	(1,277,409	)	$	612,961

Issuance of common stock for cash		100,000		100				24,900								25,000

Conversion of notes and interest payable										501,754						501,754

Stock based compensation						200,000		47,041								47,041

Net loss										0			(1,102,923	)		(1,102,923	)
Balance, September 30, 2015		14,515,400	$	14,515		1,000,000	$	1,947,896	$	501,754		$	(2,380,332	)	$	83,833

Issuance of common stock for cash		1,774,508		1,775				629,729		(476,754	)					154,750

Stock based compensation								31,431								31,431

Net loss										–			(224,388	)		(224,388	)
Balance, September 30, 2016		16,289,908	$	16,290		1,000,000	$	2,609,056	$	25,000		$	(2,604,720	)	$	45,626

~~STATEMENTS~~See OFaccompanying ~~SHAREHOLDERS'~~notes ~~EQUITY~~to these consolidated financial statements

~~For the Years Ended September 30, 2015 and 2014~~ F-4

	Common Stock				Options		Additional		Common					Total
	Number				Number		Paid-in		Stock		Accumulated			Shareholders'
	of Shares		Amount		of Options		Capital		Issuable		Deficit			Equity
Balance, September 30, 2013		14,079,400	$	14,079		400,000	$	1,426,035	$	–	$	(544,298	)	$	895,816
Issuance of common stock for cash		336,000		336		–		167,664		–		–			168,000
Debt discount		–		–		–		50,000		–		–			50,000
Stock based compensation		–		–		400,000		232,256		–		–			232,256
Net loss		–		–		–		–		–		(733,111	)		(733,111	)
Balance, September 30, 2014		14,415,400	$	14,415		800,000	$	1,875,955	$	–	$	(1,277,409	)	$	612,961
Issuance of common stock for cash		100,000		100		–		24,900		–		–			25,000
Debt discount		–		–		–		–		–		–			–
Conversion of notes and interest payable		–		–		–		–		501,754		–			501,754
Stock based compensation		–		–		200,000		47,041		–		–			47,041
Net loss		–		–		–		–		–		(1,102,923	)		(1,102,923	)
Balance, September 30, 2015		14,515,400	$	14,515		1,000,000	$	1,947,896	$	501,754	$	(2,380,332	)	$	83,833

West Texas Resources, Inc.

~~See accompanying~~CONSOLIDATED ~~notes~~STATEMENTS toOF ~~these~~CASH ~~financial statements~~FLOWS

F-4

	For the Year Ended September 30,
	2016			2015
Cash flows from operating activities
Net loss	$	(224,388	)	$	(1,102,923	)
Adjustments to reconcile net loss to net cash from operating activities:
Stock-based compensation		31,431			47,041
Loss on sale of oil and gas interest		–			150,050
Impairment loss on investment		–			317,876
Depletion expense		–			20,000
Conversion of interest payable to common stock		–			46,608
Amortization of debt discount		–			337,767
Changes in operating assets and liabilities:
Accounts receivable		–			45,055
Payroll liabilities		3,022			(2,521	)
Lease payable		–			5,000
Other payable		7,595			2,045
Interest payable		–			(19,303	)
Accrued expenses		(13,205	)		2,115

Net cash used in operating activities		(195,545	)		(151,190	)

Cash flows from investing activities
Investments		(10,000	)		(5,000	)
Purchase of equipment		(7,200	)		–
Proceeds from sale of oil and gas interest		–			185,450

Net cash provided by (used for) investing activities		(17,200	)		180,450

Cash flows from financing activities
Proceeds from sale of common stock		72,750			25,000
Repayment on note payable		–			(66,004	)
Shareholder advances		10,442			10,000

Net cash provided by (used in) financing activities		83,192			(31,004	)

Net (decrease) in cash		(129,553	)		(1,744	)

Cash, beginning of period		142,762			144,506

Cash, end of period	$	13,209		$	142,762

Supplemental cash flow disclosure:
Interest paid	$	954		$	6,414
Income taxes paid	$	–		$	–

Supplemental disclosure of non-cash transactions:
Conversion of shareholder advances to common stock	$	42,000		$	–
Common stock issued for investments in oil and gas properties	$	40,000		$	–
Acquisition of equipment
Cost of equipment	$	13,200		$	–
Equipment loan		(6,000	)		–
Cash down payment for equipment	$	7,200		$	–
Conversion of notes payable - related parties to common stock	$	–		$	455,146

~~West~~See ~~Texas~~accompanying ~~Resources,~~notes ~~Inc.~~to these consolidated financial statements

~~STATEMENTS OF CASH FLOWS~~ F-5

	For the Year Ended September 30,
	2015			2014
Cash flows from operating activities
Net loss	$	(1,102,923	)	$	(733,111	)
Adjustments to reconcile net loss to net cash from operating activities:
Stock-based compensation		47,041			232,256
Loss on sale of oil and gas interest		150,050			19,983
Impairment loss on investment		317,876			–
Depletion expense		20,000			–
Conversion of interest payable to common stock		46,608			–
Amortization of debt discount		337,767			253,607
Changes in operating assets and liabilities:
Accounts receivable		45,055			123,895
Payroll liabilities		(2,521	)		(412	)
Investment payable		–			13,600
Lease payable		5,000			–
Other payable		2,045			38,369
Interest payable		(19,303	)		13,925
Accrued expenses		2,115			8,059
Net cash used in operating activities		(151,190	)		(29,829	)
Cash flows from investing activities
Investments		(5,000	)		(193,684	)
Proceeds from sale of oil and gas interest		185,450			290,000
Net cash provided by investing activities		180,450			96,316
Cash flows from financing activities
Proceeds from sale of common stock		25,000			168,000
Proceeds from notes payable		–			50,000
Repayment on note payable		(66,004	)		(176,612	)
Shareholder advances		10,000			20,000
Net cash provided by (used in) financing activities		(31,004	)		61,388
Net increase (decrease) in cash		(1,744	)		127,875
Cash, beginning of period		144,506			16,631
Cash, end of period	$	142,762		$	144,506
Supplemental cash flow disclosure:
Interest paid	$	6,414		$	26,998
Income taxes paid	$	–		$	–
Supplemental disclosure of non-cash transactions:
Conversion of notes payable - related parties to common stock	$	455,146		$	–

WEST TEXAS RESOURCES, INC.

~~See accompanying~~NOTES ~~notes~~TO toCONSOLIDATED ~~these~~FINANCIAL ~~financial statements~~STATEMENTS

~~F-5~~September 30, 2016 and 2015

~~WEST~~ ~~TEXAS~~1. Organization ~~RESOURCES,~~and ~~INC.~~Summary of Significant Accounting Policies

~~NOTES~~Organization TOand ~~FINANCIAL STATEMENTS~~ business

West Texas Resources, Inc. ~~September~~(the “Company”) was incorporated under the laws of Nevada on December 9, 2010 under the name Texas Resources Energy, Inc., a Texas corporation. On June 30, ~~2015~~2011, the Company changed its name to West Texas Resources, Inc. The Company intends to engage in the acquisition, exploration and ~~2014~~development of oil and gas properties in North America. From its inception, the Company has devoted its activities to developing a business plan, raising capital and acquiring operating assets. On August 5, 2016, the Company formed a wholly owned subsidiary in the State of Texas, WTXR Operating (Texas) Inc., to operate oil and gas wells in Texas. This subsidiary was incorporated to operate oil and gas wells in which West Texas Resources, Inc. owns interests. The subsidiary will begin with the operation of several leases in South Texas and a lease in East Texas, with operations to begin after the year ended September 30, 2016.

1.Going ~~Organization and Summary of Significant Accounting Policies~~concern

~~Organization~~The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) that contemplate continuation of the Company as a going concern. The Company has not earned any significant revenues since inception. During the years ended September 30, 2016 and ~~business~~2015, the Company incurred a net loss of $224,388 and $1,102,923, respectively. In addition, the Company had an accumulative deficit of $2,604,720 and $2,380,332, as of September 30, 2016 and September 30, 2015, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

~~West~~The Company ~~Texas~~will ~~Resources,~~require ~~Inc.~~up (to $1 million of additional capital in order to fund its proposed operations over the ~~“Company”)~~next 12 months. ~~was~~Management ~~incorporated~~plans ~~under~~to ~~the~~continue ~~laws~~to seek sources of ~~Nevada~~financing on ~~December~~favorable 9terms; however, ~~2010~~there ~~under~~are ~~the~~no ~~name~~assurances ~~Texas~~that ~~Resources~~any ~~Energy,~~such ~~Inc.~~financing can be obtained on favorable terms, aif ~~Texas~~at ~~corporation~~all. On ~~June~~Management ~~30,~~expects ~~2011,~~to monitor and control the Company’s ~~changed~~operating ~~its~~costs ~~name~~until cash tois ~~West~~available ~~Texas~~through ~~Resources,~~financing ~~Inc~~or operating activities. ~~The~~There are no assurances that the Company ~~intends~~will tobe ~~engage~~successful in ~~the acquisition,~~achieving ~~exploration~~these ~~and~~plans. ~~development~~The ofCompany ~~oil~~anticipates ~~and~~that ~~gas~~losses ~~properties~~will incontinue ~~North~~until ~~America.~~such ~~From~~time, ~~its~~if ~~inception~~ever, as the Company ~~has~~is ~~devoted~~able ~~its activities~~ to ~~developing~~generate asufficient revenues ~~business~~to ~~plan,~~support ~~raising~~its ~~capital and acquiring operating assets~~operations.

~~Going~~Oil ~~concern~~and gas properties

The ~~accompanying~~Company ~~financial~~uses ~~statements~~the ~~have~~successful ~~been~~efforts ~~prepared~~method inof ~~conformity with~~ accounting ~~principles~~for ~~generally~~oil ~~accepted~~and ingas ~~the~~producing ~~United~~activities. ~~States~~Costs ~~(GAAP)~~to ~~that~~acquire ~~contemplate~~mineral ~~continuation of~~interests ~~the~~in ~~Company~~oil asand agas ~~going~~properties, to ~~concern.~~drill ~~The~~and ~~Company~~equip ~~has~~exploratory ~~not~~wells ~~earned~~that ~~any~~find ~~significant~~proved ~~revenues~~reserves, ~~since~~to ~~inception.~~drill ~~During~~and ~~the~~equip ~~years~~development ~~ended September~~wells ~~30, 2015~~ and ~~2014,~~related ~~the~~asset ~~Company~~retirement costs ~~incurred~~are ~~a net loss of $1,102,923, and $733,111, respectively~~capitalized. InCosts ~~addition,~~to ~~the~~drill ~~Company had~~exploratory anwells ~~accumulative~~that ~~deficit~~do ofnot ~~$2,380,332~~find ~~and~~proved $1reserves,~~277,409,~~ asgeological ofand ~~September~~geophysical 30costs, ~~2015~~ and ~~2014, respectively. These factors raise~~ ~~substantial~~costs ~~doubt~~of ~~about~~carrying ~~the~~and ~~Company’s~~retaining ~~ability~~unproved toproperties ~~continue~~are ~~as a going concern~~expensed.

~~The~~Unproved ~~Company~~oil ~~will~~and ~~require~~gas ~~up to $1 million~~properties ofthat ~~additional~~are ~~capital~~individually insignificant ~~order~~are toperiodically ~~fund~~assessed ~~its~~for ~~proposed~~impairment ~~operations over the next 12 months. Management plans to continue to seek sources~~ of ~~financing on favorable terms; however~~value, ~~there~~and ~~are~~a noloss ~~assurances~~is ~~that~~recognized ~~any such financing can be obtained on favorable terms, if~~ at ~~all. Management expects to monitor and control~~ the ~~Company’s~~time ~~operating~~of ~~costs until~~impairment ~~cash~~by isproviding ~~available~~an ~~through~~impairment ~~financing~~allowance. orOther ~~operating~~unproved ~~activities.~~properties ~~There~~ are noamortized ~~assurances~~based ~~that~~on the Company's ~~will~~experience be of successful indrilling and ~~achieving~~average ~~these~~holding ~~plans~~period. ~~The~~Capitalized ~~Company~~costs ~~anticipates~~of ~~that~~producing ~~losses~~oil ~~will~~and ~~continue~~gas ~~until such time~~properties, ifafter ~~ever,~~considering asestimated ~~the~~residual salvage ~~Company~~values, isare ~~able~~depreciated toand ~~generate~~depleted ~~sufficient~~by ~~revenues~~the tounit-of-production ~~support its operations~~method.

~~Oil and gas properties~~F-6

~~The~~WEST ~~Company~~TEXAS ~~uses the successful efforts method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties~~RESOURCES, ~~to drill and equip exploratory wells that find proved reserves, to drill and equip development wells and related asset retirement costs are capitalized~~INC. ~~Costs to drill exploratory wells that do not find proved reserves, geological and geophysical costs, and costs of carrying and retaining unproved properties are expensed.~~

~~Unproved~~NOTES ~~oil~~TO ~~and~~CONSOLIDATED ~~gas~~FINANCIAL properties that are individually significant are periodically assessed for impairment of value, and a loss is recognized at the time of impairment by providing an impairment allowance. Other unproved properties are amortized based on the Company's experience of successful drilling and average holding period. Capitalized costs of producing oil and gas properties, after considering estimated residual salvage values, are depreciated and depleted by the unit-of-production method. STATEMENTS

OnSeptember ~~the sale or retirement of a complete unit of a proved property~~30, ~~the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property~~ ~~accounts,~~2016 and the resultant gain or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in income. On the sale of an entire interest in an unproved property for cash or cash equivalent, gain or loss on the sale is recognized, taking into consideration the amount of any recorded impairment if the property had been assessed individually. If a partial interest in an unproved property is sold, the amount received is treated as a reduction of the cost of the interest retained.2015

~~Impairment~~On the sale or retirement of ~~long-lived~~a ~~assets~~complete unit of a proved property, the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in income. On the sale of an entire interest in an unproved property for cash or cash equivalent, gain or loss on the sale is recognized, taking into consideration the amount of any recorded impairment if the property had been assessed individually. If a partial interest in an unproved property is sold, the amount received is treated as a reduction of the cost of the interest retained.

~~The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 360-10-35,~~ Impairment ~~or Disposal~~ of ~~Long-Lived Assets. In accordance with ASC 360-10-35,~~ long-lived assets are reviewed for events of changes in circumstances, which indicate that their carrying value may not be recoverable. During the year ended September 30, 2015, the Company recorded $317,876 of impairment on the Company’s investments in oil and gas properties.

FThe Company accounts for the impairment and disposition of long-6lived assets in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets. In accordance with ASC 360-10-35, long-lived assets are reviewed for events of changes in circumstances, which indicate that their carrying value may not be recoverable.

~~WEST~~Asset ~~TEXAS~~retirement ~~RESOURCES, INC.~~obligations

~~NOTES~~ASC TO410-20, ~~FINANCIAL~~Asset ~~STATEMENTS~~Retirement Obligations, clarifies that a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. ASC 410-20 requires a liability to be recognized for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated.

Except ~~September~~for 30the Eastland County investment, ~~2015~~the asset retirement obligations for the other properties are recognized by the operators of these properties and ~~2014~~deducted against the revenue interest of the Company.

~~Asset~~Cash, ~~retirement~~cash ~~obligations~~ equivalents, and other cash flow statement supplemental information

~~ASC 410-20, Asset Retirement Obligations,~~Cash ~~clarifies~~is ~~that~~commonly aconsidered ~~legal obligation~~ to ~~perform~~consist anof ~~asset~~currency ~~retirement~~and ~~activity~~demand in ~~which~~deposits. ~~the~~The ~~timing~~Company ~~and/or~~considers ~~method~~all ofliquid ~~settlement~~investments ~~are~~with ~~conditional~~an original onmaturity aof ~~future~~three ~~event~~months ~~that~~or ~~may~~less orthat ~~may~~are ~~not~~readily beconvertible ~~within~~into ~~the~~cash ~~control~~to ofbe ~~the~~cash ~~entity~~equivalents. The ~~obligation~~Company toplaces ~~perform~~its ~~the~~cash ~~asset~~with high ~~retirement~~credit ~~activity is~~quality ~~unconditional~~financial ~~even~~institutions. ~~though~~Accounts ~~uncertainty~~at ~~exists~~these ~~about~~institutions are insured by the ~~timing~~Federal ~~and/or~~Deposit ~~method~~Insurance ofCorporation (FDIC) ~~settlement~~up to $250,000. ~~ASC~~The ~~410-20~~Company ~~requires~~performs aongoing ~~liability~~evaluations ~~to be~~of ~~recognized~~these ~~for~~institutions ~~the~~to ~~fair~~limit ~~value~~its concentration of arisk ~~conditional~~exposure. Management ~~asset~~believes ~~retirement~~this ~~obligation~~risk ifis not significant due to the ~~fair~~financial ~~value~~strength of the ~~liability~~financial ~~can~~institutions beutilized ~~reasonably estimated~~by the Company.

~~Except for the Eastland County investment,~~Use ~~the asset retirement obligations for the other properties are recognized by the operators~~ of ~~these properties and deducted against the revenue interest of the Company.~~estimates

~~Cash,~~The preparation ~~cash~~of ~~equivalents,~~consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and ~~other~~assumptions ~~cash~~that ~~flow~~affect certain reported amounts and disclosures. Accordingly, ~~statement~~actual ~~supplemental~~results ~~information~~could differ from those estimates.

~~Cash~~Income is commonly considered to consist of currency and demand in deposits. The Company considers all liquid investments with an original maturity of three months or less that are readily convertible into cash to be cash equivalents. The Company places its cash with high credit quality financial institutions. Accounts at these institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. The Company performs ongoing evaluations of these institutions to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institutions utilized by the Company.taxes

~~Use~~The ofCompany ~~estimates~~reports certain expenses differently for financial and tax reporting purposes and, accordingly, provides for the related deferred taxes. Income taxes are accounted for under the liability method in accordance with ASC 740, Income Taxes.

~~The~~Management ~~preparation~~has ofconsidered its ~~financial~~tax ~~statements~~positions ~~in conformity~~and ~~with~~believes ~~accounting~~that ~~principles~~all ~~generally~~of ~~accepted~~the inpositions taken by the ~~United~~Company ~~States~~in ofits ~~America~~Federal ~~requires~~and ~~management~~State totax ~~make~~returns ~~estimates~~are more likely ~~and~~than ~~assumptions~~not ~~that~~to ~~affect~~be ~~certain~~sustained ~~reported~~upon ~~amounts~~examination. ~~and~~The ~~disclosures~~Company is subject to examination by U.S. ~~Accordingly,~~Federal ~~actual~~and ~~results~~State ~~could~~tax ~~differ~~authorities from ~~those~~2013 ~~estimates~~to the present, generally for three years after they are filed.

~~Income~~The ~~taxes~~Company has not filed its income tax return for fiscal year 2015. The Company plans to file this tax return in the second quarter 2016. The Company believes that it should not have a material impact on the financials because the Company did not have any tax liabilities due to net loss incurred in fiscal year 2015.

The Company reports certain expenses differently for financial and tax reporting purposes and, accordingly, provides for the related deferred taxes. Income taxes are accounted for under the liability method in accordance with ASC 740, Income Taxes.F-7

~~Management~~WEST ~~has~~TEXAS considered its tax positions and believes that all of the positions taken by the Company in its Federal and State tax returns are more likely than not to be sustained upon examination. The Company is subject to examination by U.S. Federal and State tax authorities from 2012 to the presentRESOURCES, ~~generally~~ ~~for three years after they are filed~~INC.

~~The~~NOTES ~~Company~~TO ~~has~~CONSOLIDATED ~~not~~FINANCIAL filed its income tax returns for fiscal years 2012 to 2014. The Company plans to file these tax returns in first quarter of 2016. The Company believes that it should not have any material impact on the financials because the Company did not have any tax liabilities due to net loss incurred for these years.STATEMENTS

~~Basic~~September 30, 2016 and ~~diluted net income (loss) per share~~2015

Basic ~~net~~and ~~income~~diluted ~~(loss) per share is based upon the weighted average number of common shares outstanding. Diluted~~ net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the years ended September 30, 2015 and 2014, all common stock equivalents were anti-dilutive.

~~Stock-~~Basic net income (loss) per share is based ~~payments~~upon the weighted average number of common shares outstanding. Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the years ended September 30, 2016 and 2015, all common stock equivalents were anti-dilutive.

~~Compensation costs for all share~~Stock-based awards are measured based on the grant date fair value and are recognized over the vesting period. The Company has no awards with market or performance conditions. Excess tax benefits will be recognized as an addition to additional paid-in-capital.payments

FCompensation costs for all share-7based awards are measured based on the grant date fair value and are recognized over the vesting period. The Company has no awards with market or performance conditions. Excess tax benefits will be recognized as an addition to additional paid-in-capital.

Revenue recognition

In accordance with the requirements ASC topic 605 “Revenue Recognition”, revenues are recognized at such time as (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the seller’s price to the buyer is fixed or determinable and (4) collectability is reasonably assured.

Fair value of financial instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash and other current ~~assets~~ assets and liabilities to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.

The Company has also adopted ASC 820-10 which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of September 30, ~~2015~~ 2016 and ~~2014~~September 30, 2015, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 820-10.

~~Certain reclassifications have been made to the prior year financial statements in order for them to be in conformity with the current year presentation.~~F-8

~~Recent~~WEST ~~accounting~~TEXAS ~~pronouncement~~RESOURCES, INC.

InNOTES ~~July~~TO ~~2013,~~CONSOLIDATED ~~the~~FINANCIAL Financial Accounting Standards Board (“FASB”) issued a new accounting standard that requires an unrecognized tax benefit to be presented as a decrease in a deferred tax asset where a net operating loss, a similar tax loss, or a tax credit carryforward exists and certain criteria are met. The new accounting standard is effective as of October 1, 2014 and is consistent with the Company’s present practice.STATEMENTS

InSeptember ~~May 2014~~30, ~~the FASB issued ASU No. 2014-09~~ "2016 Revenue from Contracts with Customers " (Topic 606). Topic 606 supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition”, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments create a new Subtopic 340-40, “Other Assets and Deferred Costs—Contracts with Customers”. In summary, the core principle of Topic 606 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. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. Management is currently evaluating the impact this guidance will have on Company’s financial position and statement of operations.2015

InRecent ~~June~~accounting 2014, the FASB issued ASU No. 2014-12, "Compensation - Stock Compensation (Topic 718)," which makes amendments to the codification topic 718, "Accounting for Share-Based Payments.” when the terms of an award provide that a performance target could be achieved after the requisite service period. The new guidance becomes effective for annual reporting periods beginning after December 15, 2015, early adoption is permitted. Management is currently evaluating the impact this guidance will have on our financial position and results of operations.pronouncement

In ~~August~~May 2014, the ~~FASB issued Accounting~~Financial Accounting Standards ~~Update~~Board (~~"ASU"~~“FASB”) issued ASU No. 2014-~~15,~~09 ~~“Presentation~~" ofRevenue ~~Financial~~from ~~Statements~~Contracts –with ~~Going~~Customers ~~Concern”,~~" ~~Subtopic~~(Topic ~~205-40,~~606). ~~“Disclosure~~Topic of606 ~~Uncertainties~~supersedes ~~about~~the anrevenue ~~Entity’s~~recognition ~~Ability~~requirements toin ~~Continue~~Topic as605, a“Revenue ~~Going Concern.~~Recognition”, ~~The~~including ~~amendments~~most inindustry-specific ~~this~~revenue ~~ASU~~recognition ~~apply~~guidance tothroughout ~~all~~the ~~entities~~Industry ~~and~~Topics ~~require~~of ~~management~~the ~~to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U~~Codification.S. ~~auditing~~In ~~standards. Specifically~~addition, the amendments ~~(1)~~create ~~provide~~ a ~~definition~~new ofSubtopic ~~the term substantial doubt~~340-40, ~~(2)~~“Other ~~require~~Assets anand ~~evaluation~~Deferred ~~every~~Costs—Contracts ~~reporting~~with ~~period~~Customers”. ~~including~~In ~~interim periods~~summary, ~~(3)~~ ~~provide principles for considering~~ the ~~mitigating~~core principle ~~effect~~ of ~~management’s~~Topic ~~plans,~~606 ~~(4)~~is ~~require~~that ~~certain~~an ~~disclosures~~entity ~~when substantial~~recognizes ~~doubt~~revenue isto ~~alleviated~~depict asthe atransfer ~~result~~ of ~~consideration~~promised ofgoods ~~management’s~~or ~~plans,~~services ~~(5)~~to ~~require~~customers in an ~~express~~amount ~~statement~~that ~~and other~~reflects ~~disclosures~~the ~~when~~consideration ~~substantial~~to ~~doubt~~which isthe ~~not~~entity ~~alleviated,~~expects ~~and~~to ~~(6)~~be ~~require~~entitled anin ~~assessment~~exchange for athose ~~period~~goods ofor ~~one~~services. ~~year~~For a ~~after~~public ~~the~~entity, ~~date that~~ the ~~financial statements are issued (or available to be issued). The~~ amendments in this Update are effective for ~~the~~ annual ~~period~~ ~~ending~~reporting periods beginning after December 15, ~~2016~~2017, ~~and~~including interim ~~for annual~~ periods ~~and~~within ~~interim~~that ~~periods~~reporting ~~thereafter~~period. Early application is not permitted. Management is currently evaluating the impact this guidance will have on the Company’s consolidated financial position and ~~results~~consolidated statement of operations.

FIn June 2014, the FASB issued ASU No. 2014-812, "Compensation - Stock Compensation (Topic 718)," which makes amendments to the codification topic 718, "Accounting for Share-Based Payments.” when the terms of an award provide that a performance target could be achieved after the requisite service period. The new guidance becomes effective for annual reporting periods beginning after December 15, 2015, early adoption is permitted. Management is currently evaluating the impact this guidance will have on the Company’s consolidated financial position and consolidated statement of operations.

~~WEST~~In ~~TEXAS~~August ~~RESOURCES~~2014, ~~INC~~the FASB issued Accounting Standards Update ("ASU") No. 2014-15, “Presentation of Financial Statements – Going Concern”, Subtopic 205-40, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The amendments in this ASU apply to all entities and require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management is currently evaluating the impact this guidance will have on Company’s financial position and results of operations.

~~NOTES~~In TOFebruary ~~FINANCIAL~~2016, ~~STATEMENTS~~the FASB issued ASU 2016-02 “Leases (Topic 842)” (“ASU 2016-02”). The FASB issued ASU 2016-02 to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Under ASU 2016-02, a lessee will recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-to-use asset representing its right to use the underlying asset for the lease term. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. ASU 2016-02 retains a distinction between finance leases (i.e. capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amendments of this ASU are effective for reporting periods beginning after December 15, 2018, with early adoption permitted. An entity will be required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Management is currently assessing the impact the adoption of ASU 2016-02 will have on the Company’s consolidated financial position and consolidated statement of operations.

In March 2016, the FASB ~~September~~issued 30Accounting Standards Update ("ASU") No. 2016-09, ~~2015~~“Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and ~~2014~~forfeitures. ASU 2016-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. The Company is currently evaluating the impact that the standard will have on the Company’s consolidated financial position and consolidated statement of operations.

~~2. Oil and Gas Properties~~F-9

~~Port~~WEST ~~Hudson~~TEXAS ~~Field~~RESOURCES, ~~Baton Rouge Parish, Louisiana~~INC.

~~Effective~~NOTES ~~April~~TO 1,CONSOLIDATED ~~2013,~~FINANCIAL the Company acquired a 7.24625% working interest in the oil and gas leases, wells and attendant production in the Port Hudson field, Baton Rouge Parish, Louisiana, for a total consideration of $702,900. The Company’s working interest was subject to certain overriding royalty interests, subject to which it had a 5.65158% net revenue interest in the Port Hudson Field.STATEMENTS

On April 5, 2014, the Company entered into an agreement with EnTek Partners, LLC for the sale of 44.1% of the Company’s working interest in the Port Hudson field for the total consideration of $290,000, less any payments received by the Company for production from the Port Hudson field occurring after January 1, 2014. Pursuant to the Company’s agreement with EnTek Partners, the Company sold to EnTek an undivided 3.1956% of 8/8th working interest (2.4926% net revenue interest) out of the working interests in the Port Hudson field owned by the Company at that time. The transactions under the Entek Partners agreement closed on April 16, 2014, with an effective date of January 1, 2014. After giving effect to the sale, the Company continued to hold a 4.0506% working interest (3.1595% net revenue interest) in Port Hudson field. During the year ended September 30, ~~2014, the Company recorded a loss on sale of the working interest~~ of2016 ~~$19,983.~~and 2015

~~Pursuant~~ to2. Oil the same agreement, EnTek Partners had also agreed to provide to the Company $275,000 in non-recourse financing to pay for its share of a dual recompletion in the D-1 well at West Cam 225 property in exchange for its agreement to provide EnTek Partners with 75% of the net profits derived by the Company from the West Cam 225 property until such time as EnTek Partners has recouped 100% of the recompletion costs advanced on the Company’s behalf and ~~50%~~Gas ~~of the net profits thereafter.~~Properties

~~West~~Eastland ~~Cam~~County ~~225, Louisiana~~Field

OnIn September ~~August 16~~2011, ~~2013,~~we ~~the~~acquired ~~Company~~our ~~entered~~initial ~~into an~~property ~~agreement~~consisting ~~with~~of ~~Enovation Resources, LLC to purchase~~ a 1031.~~0167~~25% working interest ~~(7.2120% net revenue interest)~~ in an ~~offshore~~ explanatory oil and gas ~~field~~drilling prospect covering 120 acres in Eastland County, ~~known~~Texas. After explanatory work was performed, we determined that, as ~~West~~of ~~Cam~~the ~~225~~three months ended June 30, ~~located~~2013, our investment in the ~~shallow~~Eastland ~~waters~~County ofprospect ~~the~~was ~~Gulf~~impaired ofdue ~~Mexico~~to ~~near~~an ~~Cameron,~~unsuccessful ~~Louisiana.~~fracture stimulation. The ~~Company’s purchase~~value ~~price~~of ~~for~~this ~~the~~property, ~~working~~subsequent ~~interest~~the impairment, was $5020,~~000~~449. InThe ~~addition~~operator tohas ~~the~~undertaken ~~purchase~~no ~~price,~~further ~~the~~activity ~~Company~~on ~~paid~~the ~~$230,459~~Eastland County prospect as ~~advance~~of ~~for costs~~the ~~for~~date ~~development~~of this report.

~~Sunshine~~Port ~~Prospect~~Hudson Field, ~~Landry~~Baton Rouge Parish, Louisiana

OnEffective ~~August~~April 1, ~~2014~~2013, the Company ~~entered~~acquired ~~into an agreement with Restech Resources, LLC to purchase~~ a ~~15% (14~~7.2524625% ~~net~~working ~~revenue~~ interest) in anthe oil and gas ~~prospect~~leases, ~~located~~wells and attendant production in the Port Hudson field, ~~Landry~~Baton Rouge Parish, Louisiana, for a total consideration of $702,900. The Company’s working interest ~~concerns~~was ~~248~~subject ~~gross~~to ~~acres~~certain overriding ~~and~~royalty ~~net~~interests, ~~acres~~subject into ~~the~~which ~~Sunshine~~it ~~Prospect~~had a 5.65158% ~~Our~~net ~~purchase~~revenue ~~price for~~interest in the ~~working~~Port ~~interest~~Hudson ~~was $76,500~~Field.

~~Birnie~~On April ~~Field~~5, ~~Motley~~2014, ~~County~~the Company entered into an agreement with EnTek Partners, ~~Texas~~LLC for the sale of 44.1% of the Company’s working interest in the Port Hudson field for the total consideration of $290,000, less any payments received by the Company for production from the Port Hudson field occurring after January 1, 2014. Pursuant to the Company’s agreement with EnTek Partners, the Company sold to EnTek an undivided 3.1956% of 8/8th working interest (2.4926% net revenue interest) out of the working interests in the Port Hudson field owned by the Company at that time. The transactions under the Entek Partners agreement closed on April 16, 2014, with an effective date of January 1, 2014. After giving effect to the sale, the Company continued to hold a 4.0506% working interest (3.1595% net revenue interest) in Port Hudson field. During the year ended September 30, 2014, the Company recorded a loss on sale of the working interest of $19,983.

OnPursuant to ~~September 17, 2014,~~ the ~~Company~~same ~~entered into an~~ agreement, ~~with~~EnTek ~~Escopeta~~Partners ~~Oil~~had ~~and~~also ~~Gas~~agreed ~~Corporation~~to provide to ~~purchase~~the aCompany ~~10%~~$275,000 ~~working~~in ~~interest~~non-recourse ~~(7.5%~~financing ~~net~~to ~~revenue~~pay ~~interest)~~for its inshare of a ~~natural gas~~dual ~~prospect~~recompletion ~~located~~ in the ~~Birnie~~D-1 ~~field~~well inat ~~Motley~~West ~~County,~~Cam ~~Texas.~~225 ~~The~~property ~~working~~in ~~interest~~exchange ~~concerns~~for ~~5,760~~its ~~leased~~agreement ~~acres~~to inprovide ~~the~~EnTek ~~Palo~~Partners ~~Duro~~with ~~Basin~~75% ~~prospect.~~of ~~Our purchase price for~~ the ~~working~~net ~~interest~~profits ~~was~~derived ~~$70,000.~~by ~~In 2014,~~ the ~~operator~~Company ~~drilled~~from ~~an initial well on~~ the ~~prospect,~~West ~~however~~Cam ~~the~~225 ~~drilling~~property ~~was~~until ~~unsuccessful~~such ~~and~~time ~~resulted~~as inEnTek aPartners ~~dry~~has ~~hole.~~recouped 100% ~~The~~of ~~operator~~the ~~agreed~~recompletion tocosts ~~provide~~advanced ~~us,~~on ~~for~~the noCompany’s ~~additional consideration,~~behalf aand 150% ~~working~~of ~~interest in~~ the ~~Stansell~~net ~~field~~profits ~~prospect described below~~thereafter.

~~Stansell~~West ~~Field,~~Cam ~~Floyd County~~225, ~~Texas~~Louisiana

WeOn August ~~hold~~16, a2013, 1%the ~~working~~Company ~~interest~~entered ininto an ~~oil~~agreement ~~prospect located~~with inEnovation ~~Floyd County~~Resources, ~~Texas.~~LLC ~~The~~to ~~working~~purchase ~~interest~~a ~~comprises~~10.0167% ~~15,000~~working ~~leased~~interest ~~acres in the southern section of the Palo Duro basin~~(7.2120% ~~The~~net ~~initial~~revenue ~~project~~interest) ~~will~~in bean ~~the~~offshore ~~re-entry~~oil ofand ~~the~~gas ~~Stansell #1-A well~~field, anknown ~~existing~~as ~~wellbore~~West ~~that~~Cam ~~was~~225, ~~drilled~~located in ~~2006. The original drilling encountered oil shows in three separate reservoirs and~~ the ~~operator~~shallow ~~intends~~waters toof ~~re-enter and recomplete~~ the ~~Stansell~~Gulf ~~#1-A~~of Mexico ~~the~~near ~~Companying~~Cameron, ~~current fracture stimulation technology~~Louisiana. WeThe ~~have~~Company’s apurchase ~~carried~~price 1%for the working interest inwas ~~the~~$50,000. ~~Stansell~~In ~~#1-A~~addition ~~well~~to ~~through~~ the ~~tanks. In April 2015~~purchase price, the ~~operator~~Company ~~has~~paid ~~started~~$230,459 ~~the~~as ~~re-entry~~advance offor ~~the~~costs ~~Stansell~~for ~~#1-A well~~ development.

~~F-9~~Sunshine Prospect, Landry Parish, Louisiana

~~WEST~~On August ~~TEXAS~~1, ~~RESOURCES~~2014, ~~INC~~the Company entered into an agreement with Restech Resources, LLC to purchase a 15% (14.25% net revenue interest) in an oil and gas prospect located in Landry Parish, Louisiana. The working interest concerns 248 gross acres and net acres in the Sunshine Prospect. Our purchase price for the working interest was $76,500.

~~NOTES~~Birnie TOField, ~~FINANCIAL~~Motley ~~STATEMENTS~~County, Texas

On September 3017, ~~2015~~2014, the Company entered into an agreement with Escopeta Oil and Gas Corporation to purchase a 10% working interest (7.5% net revenue interest) in a natural gas prospect located in the Birnie field in Motley County, Texas. The working interest concerns 5,760 leased acres in the Palo Duro Basin prospect. Our purchase price for the working interest was $70,000. In 2014, the operator drilled an initial well on the prospect, however the drilling was unsuccessful and resulted in a dry hole. The operator agreed to provide us, for no additional consideration, a 1% working interest in the Stansell field prospect described below.

~~Wolfcamp Field, Hale County, Texas~~F-10

InWEST ~~June~~TEXAS ~~and July 2014~~RESOURCES, ~~the Company acquired non-operating leases covering approximately 1,070 gross mineral acre leases in the Wolfcamp field located in Hale County, Texas~~INC. The leases were acquired for cash payments of $45,484. The leases have a primary term of five years with the Company option to extend the term for another five years. The leased properties constitute the surface acreage comprising a natural gas prospect, for which we hold 50% of the working interest and 40% net revenue interest. The leased properties are subject to a 20% royalty interest held by the owners and a third party. the Company is currently evaluating the Company options for the exploitation of the leased properties, including the Company sale of the leases or the Company farm-out of the leases to a natural gas operator.

~~Sale~~NOTES ofTO ~~Port~~CONSOLIDATED ~~Hudson~~FINANCIAL ~~Field and West Cam 225~~STATEMENTS

~~During~~September ~~the quarter ended March 31~~30, ~~2015, the~~ ~~Company~~2016 ~~decided to sell 100% of its interest in Port Hudson field~~ and West Cam 225. The net investment of $653,376 was reclassed as oil and gas properties held for sale and recorded at market value of $335,500. The Company recorded impairment loss of $317,876 due to reduction of the market value comparing to the cost of these investments.2015

~~On April 6, 2015, the Company entered into~~Stansell ~~agreements with Hi-Tech exploration~~Field, ~~LLC~~Floyd ~~to sell its entire interests in the Port Hudson field and the West Cam 225 for a total consideration of $335~~County,~~500.~~ ~~The Company completed the sale and paid $150,050 for outstanding costs and recorded it as loss on sale of oil and gas interest.~~Texas

~~Leased~~We hold ~~Properties~~a ~~from~~1% ~~Kiowa~~working ~~Oil~~interest ~~Company~~in an oil prospect located in Floyd County, Texas. The working interest comprises 15,000 leased acres in the southern section of the Palo Duro basin. The initial project will be the re-entry of the Stansell #1-A well, an existing wellbore that was drilled in 2006. The original drilling encountered oil shows in three separate reservoirs and the operator intends to re-enter and recomplete the Stansell #1-A the Companying current fracture stimulation technology. We have a carried 1% working interest in the Stansell #1-A well through the tanks. In April 2015, the operator has started the re-entry of the Stansell #1-A well.

OnWolfcamp ~~September 30~~Field, ~~2015,~~Hale ~~the Company entered into an agreement with Kiowa Oil Company to lease 100% of interests~~County, for a period of five years, of properties in North Dakota, Florida, Illinois, and Kentucky. The total price for the subject interests under this lease agreement is $5,000 and a 15% royalty interest in all the subject interests leased. The total price will be paid in the Company’s common shares at the per share price of $0.50.Texas

AsIn ofJune ~~September~~and 30July 2014, ~~2015~~the Company ~~and~~acquired ~~September~~non-operating 30leases covering approximately 1,070 gross mineral acre leases in the Wolfcamp field located in Hale ~~2014~~County, ~~total~~Texas. ~~oil~~The ~~and~~leases were acquired for cash payments of $45,484. The leases have a primary term of five years with the Company option to extend the term for another five years. The leased properties constitute the surface acreage comprising a natural gas prospect, for which we hold 50% of the working interest and 40% net revenue interest. The leased properties ~~amounted~~are subject to ~~$217,433~~a 20% royalty interest held by the owners and ~~$885~~a third party. The Company is currently evaluating the Company options for the exploitation of the leased properties,~~810,~~ ~~respectively~~including the Company sale of the leases or the Company farm-out of the leases to a natural gas operator.

3.Sale ~~Notes~~of ~~Payable~~Port –Hudson ~~Related~~Field ~~Parties~~and West Cam 225

OnDuring ~~August 14, 2013,~~ the ~~Company~~quarter ~~entered~~ended ~~into~~March ~~a loan agreement with a shareholder~~31, ~~Gary Bryant~~2015, ~~pursuant to which Mr. Bryant loaned~~ the Company ~~$417,762,~~decided ~~the proceeds of which were used~~ to ~~partially~~sell ~~finance~~100% ~~the~~of ~~acquisition~~its ofinterest ~~the~~in Port Hudson ~~interest~~field ~~described~~and inWest ~~Note~~Cam ~~2 above~~225. The ~~loan beared~~net ~~interest~~investment ~~on the unpaid principal amount at the rate~~ of 8%$653,376 was ~~per~~reclassed ~~annum.~~as ~~All~~oil ~~principal~~ and ~~interest~~gas ~~were~~properties ~~payable~~held ~~over~~for ~~a four~~sale ~~year~~and ~~period,~~recorded ~~commencing November 1, 2013,~~ at ~~the~~market ~~amortized~~value ~~rate~~ of $10335,~~198 per month~~500. The Company’s ~~obligations~~recorded impairment ~~under~~loss ~~the~~of ~~loan~~$317,876 ~~were~~due ~~secured~~to byreduction ~~our~~of ~~working~~the ~~interest~~market invalue comparing to the ~~Port~~cost ~~Hudson~~of ~~field~~these investments.

On April ~~September~~ 6, ~~2013~~2015, the Company entered into ~~another~~ ~~loan~~agreements ~~agreement~~ with ~~Mr.~~Hi-Tech ~~Gary Bryant~~exploration, ~~pursuant~~LLC to ~~which~~sell ~~Mr. Bryant loaned the Company $130,000, the proceeds of which were used to partially finance the Company’s payment of~~ its ~~allocable~~entire ~~expenses~~interests ~~associated with its working interest~~ in the ~~West Cam~~Port ~~225~~ Hudson field, ~~described in Note 2 above. The loan beared interest on the unpaid principal amount at the rate of 6% per annum. All principal~~ and ~~interest were payable on December 6, 2013 and were convertible into shares of~~ the ~~Company’s~~West ~~common~~Cam ~~stock, at~~225 ~~the~~for ~~option~~a oftotal ~~the~~consideration ~~holder, at the rate~~ of $~~0.50 per share. In December 2013~~335, Mr500. ~~Bryant and the Company entered to an agreement to extend the due date of the loan to February 6, 2016.~~ The Company’s ~~obligations~~completed ~~under~~ the ~~loan~~sale ~~were~~and ~~secured~~paid ~~by its working interest in the Port Hudson field. The Company also entered into an amendment to its loan agreement with Mr. Bryant dated August 14, 2013, in the original principal amount of~~ $~~417~~150,~~762,~~050 tofor ~~provide~~outstanding costs ~~that all principal~~ and ~~interest~~recorded ~~under~~it ~~that~~as ~~loan~~loss ~~agreement~~on ~~were convertible~~sale ~~into shares~~ of ~~the~~oil ~~Company’s~~and ~~common~~gas ~~stock, at the option of the holder, at the rate of $0~~interest.~~50 per share.~~

OnLeased ~~April~~Properties 3,from ~~2015,~~Kiowa ~~Mr.~~Oil ~~Bryant agreed to release the security interest in the Port Hudson field as the~~ Company ~~engaged in negotiations to sell the property.~~

~~F-10~~On September 30, 2015, the Company entered into an agreement with Kiowa Oil Company to lease 100% of interests, for a period of five years, of properties in North Dakota, Florida, Illinois, and Kentucky. The total price for the subject interests under this lease agreement is $5,000 and a 15% royalty interest in all the subject interests leased. The total price will be paid in the Company’s common shares at the per share price of $0.50.

~~WEST~~TW ~~TEXAS~~Lee ~~RESOURCES~~Field, ~~INC.~~Gregg County, Texas

~~NOTES~~On March TO3, ~~FINANCIAL~~2016, ~~STATEMENTS~~the Company entered into an agreement with Two Eagle Resources, a Texas corporation, to purchase 25% working interest (18.75% net revenue interest) in the properties located in Gregg County, Texas. The property is known as T.W. Lee. The purchase price for the subject interests under this agreement is $25,000, which will be paid in the Company’s common shares at the per share price of $0.25.

~~September~~T.A. ~~30,~~Greer ~~2015 and 2014~~Lease

On May ~~September 6~~10, ~~2013~~2016, the Company ~~entered~~acquired ~~into~~ a ~~second~~25% ~~loan~~working ~~agreement~~interest ~~with~~(19.5% anet ~~company~~revenue ~~controlled~~interest) byin ~~one~~an ofEast ~~the~~Texas ~~shareholders~~oil ~~pursuant~~and togas ~~which the lender loaned the Company $100,000~~property. The ~~proceeds~~property ofis ~~which~~known ~~were~~as ~~used to partially finance~~ the ~~Company’s~~T.A. ~~payment~~Greer oflease ~~its~~and ~~allocable~~includes ~~expenses~~two ~~associated~~tracts ~~with~~of ~~its working~~land ~~interest~~totaling inapproximately ~~the~~407 ~~West~~acres ~~Cam 225 field, described~~ in ~~Note~~Panola ~~2 above. The loan carried interest on the unpaid principal amount~~County, ~~at the rate of 6% per annum~~Texas.. ~~The~~We ~~Company’s~~acquired ~~obligations under~~ the ~~loan~~property ~~were~~from ~~secured~~an byunaffiliated ~~the~~party ~~Company’s working interest~~ in ~~the~~consideration ~~West~~of ~~Cam~~our ~~225~~payment ~~field.~~of ~~In connection with the loan~~$10,000 ~~the~~and ~~Company~~issuance ~~granted~~of ~~the lender a warrant to purchase 200~~60,000 shares of ~~the~~ ~~Company’s~~our common stock, at ~~an exercise price of~~ $0.5025 per share, ~~over~~for a ~~two~~total ~~year~~consideration ~~period~~of ~~expiring on September 5~~$25, ~~2015~~000. ~~This note was fully paid off in April 2014.~~

~~The~~As ~~Company~~of ~~determined~~September ~~that~~30, ~~the~~2016 ~~fair~~and ~~value~~September 30, of2015, ~~the~~total ~~above~~oil ~~conversion options~~ and ~~the~~gas ~~warrants~~properties ~~using~~amounted ~~the~~to ~~Black–Scholes~~$267,433 ~~model~~and ~~with~~$217,433, ~~the variables listed below:~~respectively.

~~· Volatility: 160%~~F-11

·WEST ~~Risk~~TEXAS ~~free~~RESOURCES, ~~rate of return: 0~~INC.~~01% to 0.875%~~

·NOTES ~~Expected~~TO ~~term:~~CONSOLIDATED ~~0.25~~FINANCIAL ~~to 4 years~~STATEMENTS

On September 1630, ~~2014, the Company entered~~ ~~into~~2016 a Note purchase agreement with Lake Oswego Oil Company, LLC, an Oregon limited liability company controlled by one of the shareholders, pursuant to which the Company sold a secured promissory note in the principal amount of $50,000, for a purchase price of $50,000. Interest accrues on the unpaid principal balance of the note at the rate of six percent per annum. This note was fully paid off in the quarter ended December 31, 2014. As an inducement to the note holder to enter into this agreement, the Company also granted the note holder a warrant to purchase 100,000 shares of the Company’s common stock, and ~~exercisable at $0.50 per share over a two year period expiring on September 16, 2019.~~2015

~~The~~ ~~Company~~3. Notes ~~determined~~Payable ~~that the fair value of the warrants using Black~~–~~Scholes~~ ~~model~~Related ~~with the variable listed below:~~Parties

·On August ~~Volatility:~~14, ~~340~~2013, the Company entered into a loan agreement with a shareholder, Gary Bryant, pursuant to which Mr. Bryant loaned the Company $417,762, the proceeds of which were used to partially finance the acquisition of the Port Hudson interest described in Note 2 above. The loan bore interest on the unpaid principal amount at the rate of 8% per annum. All principal and interest were payable over a four year period, commencing November 1, 2013, at the amortized rate of $10,198 per month. The Company’s obligations under the loan were secured by our working interest in the Port Hudson field.

·On September ~~Risk~~6, ~~free~~2013, ~~rate~~the Company entered into another loan agreement with Mr. Gary Bryant, pursuant to which Mr. Bryant loaned the Company $130,000, the proceeds of ~~return:~~which 1were used to partially finance the Company’s payment of its allocable expenses associated with its working interest in the West Cam 225 field, described in Note 2 above.~~688~~ The loan bore interest on the unpaid principal amount at the rate of 6% per annum. All principal and interest were payable on December 6, 2013 and were convertible into shares of the Company’s common stock, at the option of the holder, at the rate of $0.50 per share. In December 2013, Mr. Bryant and the Company entered to an agreement to extend the due date of the loan to February 6, 2016. The Company’s obligations under the loan were secured by its working interest in the Port Hudson field. The Company also entered into an amendment to its loan agreement with Mr. Bryant dated August 14, 2013, in the original principal amount of $417,762, to provide that all principal and interest under that loan agreement were convertible into shares of the Company’s common stock, at the option of the holder, at the rate of $0.50 per share.

·On April ~~Expected~~3, ~~term:~~2015, 2Mr. ~~years~~Bryant agreed to release the security interest in the Port Hudson field as the Company engaged in negotiations to sell the property.

OnThe ~~September~~Company ~~30,~~determined ~~2015, Mr. Bryant agreed to~~that ~~convert~~ the ~~outstanding~~fair ~~principal~~value ~~amounts~~ of ~~$325,146~~the ~~and~~above ~~$130,000~~conversion options and ~~accrued~~the ~~interest~~warrants tousing the ~~Company’s~~Black–Scholes ~~common~~model ~~stock~~with atthe ~~$0.50 per~~variables ~~share.~~listed below:

In· ~~connection~~Volatility: with the issuance of the above notes, the Company recorded a note discount of $50,000 and $647,762 for the years ended September 30, 2014 and 2013, respectively, which are to be amortized over the lives of the notes. On September 30, 2015, due to conversion of the full outstanding principal amount owed to Mr. Bryant, the related note discount was fully amortized. For the year ended September 30, 2015 and 2014, the Company recorded amortization of note discount of $337,767 and $253,607 as amortization of debt discount.160%

4· Risk free rate of return: 0.01% ~~Shareholder~~to ~~Advances~~0.875%

~~During~~· ~~the~~Expected ~~year~~term: ~~ended September 30, 2014 and 2013, a shareholder made advances to the Company to support its daily operations~~0.25 ~~These advances are due on demand and do not bear any interest. As of September 30, 2015 and September 30, 2014, the total outstanding amount due~~ to ~~the~~4 ~~shareholder was $35,000 and $35,000, respectively.~~years

~~During~~On September 16, 2014, the Company ~~year~~entered ~~ended~~into ~~September~~a 30Note purchase agreement with Lake Oswego Oil Company, ~~2015~~LLC, aan Oregon limited liability company controlled ~~shareholder~~by ~~paid~~one of the shareholders, pursuant to which the Company sold a ~~total~~secured promissory note in the principal amount of $1550,000, for a ~~payment~~purchase price of ~~legal~~$50,000. ~~fees~~Interest accrues on ~~behalf~~the unpaid principal balance of the ~~Company~~note ~~through~~at ~~his~~the ~~personal~~rate ~~credit~~of ~~line~~six percent per annum. ~~The~~This ~~Company~~note ~~repaid~~was ~~$5,000~~fully ~~during~~paid off in the ~~year~~quarter ended ~~September~~December 3031, ~~2015~~2014. ~~The~~As ~~outstanding~~an ~~balance~~inducement ofto ~~$10~~the note holder to enter into this agreement, the Company also granted the note holder a warrant to purchase 100,000 isshares ~~due~~of onthe ~~demand~~Company’s common stock, and ~~bears~~exercisable ~~variable~~at ~~interest~~$0.50 ofper 25share over a two year period expiring on September 16, 2019.~~99%.~~

~~F-11~~The Company determined that the fair value of the warrants using Black–Scholes model with the variable listed below:

~~WEST~~· ~~TEXAS~~Volatility: ~~RESOURCES, INC.~~340%

~~NOTES~~· TORisk ~~FINANCIAL~~free ~~STATEMENTS~~rate of return: 1.688%

~~September~~· ~~30,~~Expected ~~2015~~term: ~~and~~2 ~~2014~~years

5On September 30, 2015, Mr. Bryant ~~Shareholders~~agreed to convert the outstanding principal amounts of $325,146 and $130,000 and accrued interest to the Company’s common ~~Equity~~stock at $0.5 and $0.5 per share respectively.

~~The~~On ~~Company~~September is30, ~~authorized~~2015, todue ~~issue 200,000,000~~to ~~shares~~conversion of ~~common~~the ~~stock,~~full ~~par~~outstanding ~~value~~principal ofamount ~~$0.001,~~owed ~~and~~to 10Mr. Bryant,~~000,000~~ ~~shares~~the ofrelated ~~preferred~~note ~~stock,~~discount ~~par~~was ~~value~~fully ~~of $0~~amortized.~~001.~~

During the year ended September 30, 2014, the Company entered into various subscription agreements with accredited investors to sell 336,000 shares of the Company’s common stock at $0.50 per share. The total amount of $168,000 was received upon signing of the subscription agreements.F-12

InWEST ~~September~~TEXAS ~~2015~~RESOURCES, ~~the Company entered into a subscription agreement with an accredited investor to sell 100,000 shares of the Company’s common stock at $0~~INC.~~25 per share. The total amount of $25,000 was received and shares were issued in September 2015.~~

OnNOTES ~~September~~TO ~~30,~~CONSOLIDATED ~~2015,~~FINANCIAL Mr. Bryant, a shareholder and convertible note holder, agreed to convert the outstanding principal amounts of $325,146 and $130,000 due to him to the Company’s common stock at $0.50 per share. As of September 30, 2015, these shares had not been issued and was recorded as common stock payable.STATEMENTS

~~As of~~ September 30, ~~2015 and September 30,~~ ~~2014,~~2016 ~~the Company had 14,515,400~~ and ~~14,415,400 shares of common stock issued and outstanding and had not issued any of its preferred stock.~~2015

On ~~September 15, 2011, the Company adopted the West Texas Resources, Inc~~4. Shareholder 2011 Stock Incentive Plan (the “Plan”) providing for the grant of non-qualified stock options and incentive stock options to purchase its common stock and for grant of restricted and unrestricted grants. The Company has reserved 3,000,000 shares of its common stock under the Plan. All officers, directors, employees and consultants to the Company are eligible to participate under the Plan. The purpose of the Plan is to provide eligible participants with an opportunity to acquire an ownership interest in the Company.Advances

InDuring ~~2011,~~ the ~~Company~~year ~~granted~~ended ~~options to certain~~September ~~consultants to purchase 400~~30,~~000~~ ~~shares~~2014 ~~of the Company’s common stock. The options vest immediately~~ and ~~expire on September 15~~2013, ~~2016.~~a ~~The~~shareholder ~~fair~~made ~~value~~advances ofto ~~each share-based award was estimated using~~ the ~~Black-Scholes~~Company ~~option~~to ~~pricing~~support ~~model~~its ordaily ~~a lattice model~~operations. ~~The~~ ~~fair~~These ~~value~~advances ofwere ~~these~~due ~~options,~~on ~~determined to be $65,402, was included in general~~ demand and ~~administrative~~do ~~expenses~~not ~~for~~bear ~~the~~any ~~year ended September 30, 2011~~interest.

During the year ended September 30, 2015, a shareholder paid a total amount of $15,000 for payment of legal fees on behalf of the Company through his personal credit line. The ~~following~~outstanding ~~assumptions~~balance ~~were~~was ~~used~~due inon demand and bears variable interest of 25.99%. As of September 30, 2015, the ~~fair~~total ~~value~~outstanding ~~method~~amount ~~calculation:~~due to the shareholder was $45,000.

·The Company ~~Volatility:~~repaid ~~83%~~$6,558 during the six months ended March 31, 2016. In January 2016, the Company issued 450,000 shares of its common stock upon conversion of the outstanding amount of $45,000. In addition, the shareholder retired 30,000 shares in exchange for $3,000 overpayment made to him.

·During the ~~Risk~~year ~~free~~ended ~~rate~~September 30, 2016, a shareholder paid a total amount of ~~return:~~$17,000 1%for payment of legal fees on behalf of the Company through his personal credit line. The outstanding balance was due on demand and did not bear any interest. As of September 30, 2016, the total net outstanding amount due to the shareholder was $13,442.

· ~~Expected term:~~ 5. Shareholders’ ~~years~~Equity

OnThe ~~March 7, 2014, the~~ Company ~~granted options~~is authorized to ~~certain~~issue ~~consultants to purchase 1~~200,~~500~~000,000 shares of ~~the Company’s~~ common stock, ofpar ~~which~~value ~~200,000 options vested upon the date~~ of ~~grant~~$0.001, and ~~the balance of 1~~10,~~300~~000,000 ~~options~~shares ~~expired in October 2014 in connection with the termination~~ of ~~the~~preferred ~~consulting arrangement. The 200~~stock,~~000~~ ~~vested~~par ~~options expire on March 7, 2019. The fair~~ value of ~~the vested options for 200,000 shares, determined to be~~ $~~116,137, was recorded in general and administrative expenses for the year ended September 30, 2014~~0.001.

~~F-12~~In September 2015, the Company entered into a subscription agreement with an accredited investor to sell 100,000 shares of the Company’s common stock at $0.25 per share. The total amount of $25,000 was received and shares were issued in September 2015.

~~WEST~~On ~~TEXAS~~September ~~RESOURCES~~30, ~~INC~~2015, Mr. Bryant, a shareholder and convertible note holder, agreed to convert the outstanding principal amounts of $325,146 and $130,000 due to him to the Company’s common stock at $0.50 per share. The Company issued 1,003,508 shares in February 2016 as repayment of the outstanding principal and accrued interest.

~~NOTES~~In January TO2016, ~~FINANCIAL~~the ~~STATEMENTS~~Company issued 450,000 shares of its common stock upon conversion of the outstanding amount of shareholder advances of $45,000. In addition, the shareholder retired 30,000 shares in exchange for $3,000 overpayment made to him.

During the quarter ended ~~September~~March 3031, ~~2015~~2016, the Company entered into subscription agreements with various accredited investors to sell 191,000 shares of the Company’s common stock at $0.25 per share. The total amount of $47,750 was received and ~~2014~~shares were issued during May 2016.

On March 113, ~~2014~~2016, the Company entered ~~granted~~into ~~options to~~an ~~its~~agreement ~~officers~~with toTwo ~~purchase~~Eagle Resources, a ~~total~~Texas ~~of 200~~corporation,~~000~~ ~~shares~~to ofpurchase ~~the~~25% ~~Company’s~~working ~~common~~interest ~~stock~~/ 18.75% ~~The~~net ~~options~~revenue interest ~~expire~~in onthe ~~March~~properties ~~11,~~known ~~2019 and~~as ~~vest~~T.W. ~~immediately~~Lee located in Gregg County, Texas. The ~~fair~~purchase ~~value~~price offor ~~these~~the ~~options~~subject ~~determined~~interests tounder this beagreement is $~~116~~25,~~119~~000, ~~and~~which ~~was~~will ~~included~~be paid in ~~general~~the ~~and~~Company’s ~~administrative expenses~~common ~~for~~shares at the ~~year~~per ~~ended~~share ~~September~~price of $0.25. As of September 30, ~~2014~~2016, the shares had not been issued and were recorded as common stock issuable.

On May 10, 2016, the Company entered into an agreement with Two Eagle Resources, a Texas corporation, to purchase 25% working interest in the properties know as T.A. Greer located in Panola County, Texas. The ~~following~~purchase ~~assumptions~~price ~~were~~for ~~used~~the subject interests under this agreement is $10,000 in cash and $15,000, which will be paid in the Company’s common shares at the per share price of $0.25. The cash portion was ~~fair~~paid ~~value~~May ~~method~~12, ~~calculation:~~2016 and the shares were issued in August 2016.

·During ~~Volatility:~~the ~~190%~~quarter ended June 30, 2016 the Company entered into subscription agreements with various accredited investors to sell 100,000 shares of the Company’s common stock at $0.25 per share. The total amount of $25,000 was received and the shares were issued August 2016.

~~· Risk free rate of return: 1.5%~~F-13

·WEST ~~Expected~~TEXAS ~~term:~~RESOURCES, ~~5 years~~INC.

OnNOTES ~~April~~TO ~~16,~~CONSOLIDATED ~~2015,~~FINANCIAL the Company granted options to Mr. Paul Brogan, the Company’s director, to purchase a total of 200,000 shares of the Company’s common stock. The options have an exercise price of $0.5 per share and expire on April 16, 2020 and 66,667 shares vest immediately with the rest vest equally on April 16, 2016 and 2017. The fair value of these options determined to be $99,712 and $47,041was amortized and included in general and administrative expenses for the year ended September 30, 2015.STATEMENTS

~~The~~September ~~following assumptions were used in the~~30, ~~fair~~2016 ~~value~~and ~~method calculation:~~2015

·As ~~Volatility:~~of September ~~169%~~30, 2016 and September 30, 2015, the Company had 16,289,908 and 14,515,400 shares of common stock issued and outstanding and had not issued any of its preferred stock.

·On ~~Risk~~September ~~free~~15, ~~rate~~2011, the Company adopted the West Texas Resources, Inc. 2011 Stock Incentive Plan (the “Plan”) providing for the grant of ~~return:~~non-qualified stock 1options and incentive stock options to purchase its common stock and for grant of restricted and unrestricted grants.~~375%~~ The Company has reserved 3,000,000 shares of its common stock under the Plan. All officers, directors, employees and consultants to the Company are eligible to participate under the Plan. The purpose of the Plan is to provide eligible participants with an opportunity to acquire an ownership interest in the Company.

·In 2011, ~~Expected~~the ~~term:~~Company 5granted ~~years~~options to certain consultants to purchase 400,000 shares of the Company’s common stock. The options vest immediately and expire on September 15, 2016. The fair value of each share-based award was estimated using the Black-Scholes option pricing model or a lattice model. The fair value of these options, determined to be $65,402, was included in general and administrative expenses for the year ended September 30, 2011.

The following ~~information~~assumptions ~~applies~~were toused ~~all~~in ~~options~~the ~~outstanding~~fair atvalue ~~September~~method ~~30, 2015~~calculation:

· ~~Weighted average exercise price~~Volatility: ~~$0.43~~83%

· ~~Options~~Risk ~~outstanding~~free ~~and~~rate ~~exercisable~~of return: ~~897,223~~1%

· ~~Average~~Expected ~~remaining life~~term: ~~2.46~~5 years

6On March 7, 2014, the Company granted options to certain consultants to purchase 1,500,000 shares of the Company’s common stock, of which 200,000 options vested upon the date of grant and the balance of 1,300,000 options expired in October 2014 in connection with the termination of the consulting arrangement. ~~Income~~The ~~Taxes~~200,000 vested options expire on March 7, 2019. The fair value of the vested options for 200,000 shares, determined to be $116,137, was recorded in general and administrative expenses for the year ended September 30, 2014.

~~Based~~On onMarch ~~the~~11, ~~available~~2014, ~~information~~the ~~and other~~Company ~~factors,~~granted ~~management~~options ~~believes~~to itits isofficers ~~more~~to ~~likely~~purchase ~~than~~a ~~not~~total ~~that~~of ~~the~~200,000 ~~net~~shares ~~deferred~~of ~~tax~~the ~~assets~~Company’s atcommon ~~September~~stock. ~~30,~~The ~~2015~~options ~~and~~expire ~~2014 will not~~on beMarch ~~fully realizable. Accordingly~~11, ~~management~~2019 ~~has~~and ~~recorded~~vest aimmediately. ~~full~~The ~~valuation~~fair ~~allowance~~value ~~against~~of ~~its~~these ~~net~~options ~~deferred~~determined ~~tax~~to ~~assets~~be ~~at September 30~~$116,119 ~~2015~~ and ~~2014.~~was Asincluded ofin ~~September~~general ~~30, 2015~~ and administrative ~~2014,~~expenses for the ~~Company~~year ~~had~~ended ~~federal~~September ~~net operating loss carry-forwards of approximately $2~~30,~~400,000~~ ~~and $1,300,000, respectively, expiring beginning in 2032~~2014.

~~Deferred~~The ~~tax~~following ~~assets~~assumptions ~~consist~~were used ofin the ~~following components~~fair value method calculation:

	September 30,			September 30,
	2015			2014
Net loss carryforward	$	840,000		$	455,000
Valuation allowance		(840,000	)		(455,000	)
Total deferred tax assets	$	–		$	–

Volatility: 190%

7.· ~~Subsequent~~Risk ~~Event~~free rate of return: 1.5%

~~Events~~· ~~subsequent~~Expected toterm: ~~September~~5 30, 2015 have been evaluated through the date these financial statements were issued to determine whether they should be disclosed to keep the financial statements from being misleading. Management found no subsequent events that should be disclosed.years

FOn April 16, 2015, the Company granted options to Mr. Paul Brogan, the Company’s director, to purchase a total of 200,000 shares of the Company’s common stock. The options have an exercise price of $0.5 per share and expire on April 16, 2020 and 66,667 shares vest immediately with the rest vest equally on April 16, 2016 and 2017. The fair value of these options was determined to be $99,712, of which $31,431 was amortized and included in general and administrative expenses for the year ended September 30, 2016. As of September 30, 2016, the unrecognized compensation expense related the non-13vested stock options was $21,240 to be amortized over the vesting period.

~~Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~F-14

~~Not~~WEST ~~applicable~~TEXAS RESOURCES, INC.

~~Item~~NOTES ~~9A.~~TO ~~Controls~~CONSOLIDATED ~~and~~FINANCIAL ~~Procedures~~STATEMENTS

~~(a) Evaluation~~September ~~of Disclosure Controls~~30, 2016 and ~~Procedures.~~2015

~~Our~~The ~~management,~~following ~~with~~assumptions ~~the~~were ~~participation~~used ofin ~~our chief executive officer and chief financial officer evaluated~~ the ~~effectiveness~~fair ofvalue ~~our~~method disclosure controls and procedures pursuant to Rule 15a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our management, including our chief executive officer and chief financial officer, concluded that for the reasons described below our disclosure controls and procedures were not effective as of September 30, 2015 in ensuring all material information required to be filed has been made known in a timely manner.calculation:

~~(b) Changes~~· inVolatility: ~~internal control over financial reporting.~~266%

~~There~~· ~~were~~Risk nofree ~~changes~~rate ~~to our~~of ~~internal~~return: control over financial reporting, as defined in Rules 15a-15(f) under the Exchange Act that occurred during the fiscal quarter ended September 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting1.375%

~~(c) Management’s~~· ~~report~~Expected onterm: ~~internal controls~~5 ~~over financial reporting.~~years

~~Our~~The ~~management~~following isinformation ~~responsible~~applies for establishing and maintaining adequate internal controls over financial reporting, as defined under Rule 15a-15(f) under the Exchange Act. Our management has assessed the effectiveness of our internal controls over financial reporting as of September 30, 2015 based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our internal control system was designed to ~~provide~~all ~~reasonable~~options ~~assurance~~outstanding toat our management and board of directors regarding the preparation and fair presentation of published financial statements. An internal control material weakness is a significant deficiency, or aggregation of deficiencies, that does not reduce to a relatively low level the risk that material misstatements in financial statements will be prevented or detected on a timely basis by employees in the normal course of their work. Our management assessed the effectiveness of our internal control over financial reporting as of September 30, ~~2015, and this assessment identified the following material weaknesses in our internal control over financial reporting~~2016:

· ~~Due~~Weighted toaverage ~~our~~exercise ~~small~~price: size, we do not maintain effective internal controls to assure segregation of duties as we have only one employee who is responsible for initiating and approving of transactions, thereby creating the segregation of duties weakness; · Our board of directors does not have an audit committee or a financial expert to maintain effective oversight of our financial reporting process; and · Lack of formal policies or procedures to provide assurance that relevant information is identified, captured, processed, and reported in an appropriate and timely fashion$0.57

~~Based~~· onOptions ~~that~~outstanding ~~evaluation,~~and ~~management~~exercisable: ~~concluded that our internal control over financial reporting was not effective as of September 30~~563, ~~2015.~~889

~~This~~· ~~annual~~Average ~~report~~remaining ~~does not~~life: ~~include an attestation report of our registered public accounting firm regarding internal control over financial reporting~~2. ~~Management’s~~73 report was not subject to attestation by our registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.years

~~Item 9B~~6. Income ~~Other Information~~Taxes

~~Not~~Based on ~~applicable~~the available information and other factors, management believes it is more likely than not that the net deferred tax assets at September 30, 2016 and 2015 will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at September 30, 2016 and 2015. As of September 30, 2016 and 2015, the Company had federal net operating loss carry-forwards of approximately $2,605,000 and $2,380,000, respectively, expiring beginning in 2032.

20Deferred tax assets consist of the following components:

PART III

	September 30,			September 30,
	2016			2015
Net loss carryforward	$	920,000		$	840,000
Valuation allowance		(920,000	)		(840,000	)
Total deferred tax assets	$	–		$	–

~~Item 10~~7. Subsequent ~~Directors, Executive Officers and Corporate Governance~~Event

~~Set~~Events ~~forth~~subsequent ~~below~~to ~~are~~September ~~our~~30, 2016 have ~~directors~~been ~~and~~evaluated ~~officers~~through the date these consolidated financial statements were issued to determine whether they should be disclosed to keep the consolidated financial statements from being misleading. Management noted the following subsequent event that should be disclosed:

Name	Age	Position
John D. Kerr	48	President, Chief Executive Officer, Chief Financial Officer and Director
Paul Brogan	57	Director
Gordon Johnson	77	Director

On October 19, 2016, the Company appointed William A. Sawyer to serve as president and chief executive officer of West Texas Resources, Inc.

~~Mr.~~· ~~Kerr~~Between ~~has~~November ~~served~~2016 ~~as our~~and ~~chief~~January ~~financial~~2017, ~~officer~~the ~~and~~Company aentered ~~member~~into ofsubscription ~~our~~agreements ~~board~~with ofvarious ~~directors~~accredited ~~since~~investors ~~our~~to ~~founding~~sell ona ~~December~~total 9of 293,000 ~~2010~~shares ~~and~~of ~~has~~the ~~served~~Company’s ascommon ~~our president~~stock and ~~chief~~a ~~executive~~total ~~officer~~of ~~since~~293,000 ~~May~~warrants ~~2015~~at $0.30 ~~For~~per ~~over~~unit. ~~the~~A ~~past~~unit ~~five~~is ~~years,~~determined ~~Mr.~~to ~~Kerr~~be ~~has~~equal ~~served~~to as1 ashare ~~vice president~~ of ~~Newport~~ ~~Capital Consultants, Inc. Mr.. Kerr is~~ the ~~son-in-law~~Company’s ofcommon ~~Gary~~stock ~~Bryant,~~and ~~our~~1 ~~principal~~purchase ~~stockholder.~~warrant ~~Mr.~~which ~~Bryant~~ is ~~the~~exercisable ~~chief executive~~at ~~officer~~$0.50 ~~and~~per ~~owner~~share ofover ~~Newport~~a ~~Capital~~three ~~Consultants,~~year ~~Inc.~~period ~~Newport~~ending ~~Capital~~November ~~Consultants~~1, ~~Inc~~2019. ~~is an affiliate of our company.~~

~~Mr.~~· ~~Brogan~~During ~~has~~November ~~served as a member of our board of directors since April 2015. Since January 2015~~2016, Mr. Brogan has served as president of C-Bond Systems, LLC, a Houston based business co-founded by Mr. Brogan engaged in development of technologies designed to significantly strengthen glass, increase glass flexibility and enhance the ~~adhesion~~Company ofentered ~~glass-to-window~~into ~~film~~an ~~products.~~agreement ~~From January 2010~~ to ~~December~~purchase ~~2014, Mr. Brogan served as president and chief executive officer of Wintec Security, Inc.,~~ a ~~Houston~~70% ~~based~~working ~~business~~interest ~~engaged~~ in ~~the~~an ~~business of security products. Mr. Brogan has over 30 years of experience in the~~ oil and gas ~~industry.~~properties ~~From~~in ~~1999~~South ~~to 2010, Mr~~Texas. ~~Brogan~~The ~~served as~~total ~~president~~consideration ofwas ~~LEXCO Energy Corporation~~500,000 ashares ~~Houston~~of ~~based~~the ~~oil and Gas~~ Company.’s ~~From~~common ~~1998~~stock ~~to 1999, Mr. Brogan served on the advisory staff of R.A. Lenser~~ and ~~Associates~~5000,000 awarrants ~~petroleum~~at ~~engineering and geological consulting firm specializing in comprehensive oil and gas reserve reports, geological studies and 3-D seismic interpretation~~$0.30 ~~From~~per ~~January 2000 to 2003, Mr~~unit. ~~Brogan~~A ~~served~~unit asis andetermined ~~advisor~~ to ~~the~~be ~~Venezuelan~~equal ~~Ministry~~to of1 ~~Energy~~share ~~and Mines. From 1992 through 1998, Mr. Brogan was vice president~~ of ~~Rosneftegazstroy International,~~ the ~~former Ministry of Oil, Gas and Construction in Russia. Mr. Brogan initially started in the oil business in 1973 with Green Head Supply~~ Company,’s acommon ~~major~~stock ~~supplier of oil~~ and ~~gas~~1 ~~equipment,~~purchase ~~serving~~warrant inwhich ~~the~~is ~~capacity~~exercisable ofat ~~vice president responsible for financial planning, negotiations, marketing and public relations~~$0.50 ~~Mr.~~per ~~Brogan~~share ~~received~~over a ~~degree~~three inyear ~~Business~~period ~~Management~~ending ~~from~~November ~~Oklahoma~~1, ~~City University in 1970~~2019.

Mr. Johnson has served as a member of our board of directors since November 2015. Mr. Johnson has over 40 years of experience in the oil and gas industry. Following his graduation from University of Texas, Mr. Johnson was employed by two major and two large independent oil companies, receiving experience in Texas, New Mexico, Oklahoma, Montana, North Dakota, and Louisiana. Subsequently, he joined the ranks of the independent oil operators. He has since served as president of several oil and gas companies. During his career he has been responsible for generating geological prospects, acquisition of oil and gas leases and producing properties, generation of drilling funds, supervision of the drilling and completion of numerous oil and gas wells, and coordination of several mergers. Mr. Johnson is currently president of Bayside Corporation, a company engaged in acquiring existing wells for remediation and reF-~~completion as well as generating development drilling prospects.~~15

~~Audit~~Item 9. Changes in and ~~Compensation~~Disagreements ~~Committees~~with Accountants on Accounting and Financial Disclosure

WeNot ~~do not have an audit or compensation committee~~applicable.

~~Code~~Item of9A. ~~Ethics~~Controls and Procedures

~~We have adopted~~ (a) Evaluation ~~code~~ of ~~ethics~~Disclosure ~~for all our employees, including our chief executive officer, principal financial officer and principal accounting officer~~Controls ~~or controller,~~ and~~/or~~ ~~persons performing similar functions~~Procedures.

21Our management, with the participation of our chief executive officer and chief financial officer evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 15a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our management, including our chief executive officer and chief financial officer, concluded that for the reasons described below our disclosure controls and procedures were not effective as of September 30, 2016 in ensuring all material information required to be filed has been made known in a timely manner.

~~Limitation~~(b) Changes ofin ~~Liability~~internal ~~of Directors and Indemnification of Directors~~control ~~and~~over ~~Officers~~financial reporting.

~~Nevada~~There ~~corporate~~were ~~law~~no ~~provides~~changes ~~that~~to ~~corporations~~our ~~may~~internal ~~include~~control aover ~~provision~~financial inreporting, ~~their articles of incorporation relieving directors of monetary liability for breach of their fiduciary duty~~ as ~~directors,~~defined ~~provided~~in ~~that~~Rules ~~such provision shall not eliminate or limit the liability of a director~~ 15a-15(if) ~~for any~~ ~~breach~~under of the ~~director's~~Exchange ~~duty~~Act ofthat ~~loyalty~~occurred toduring the ~~corporation or its stockholders, (ii) for acts or omissions not in good~~ ~~faith~~fiscal ~~and~~quarter ~~which~~ended ~~involve~~September ~~a breach of the director’s duty to the corporation or intentional misconduct or a knowing violation of law~~30, ~~(iii) for~~2016 ~~unlawful~~that ~~payment~~have ofmaterially ~~a dividend or unlawful stock purchase or redemption~~affected, or ~~(iv) for any transaction from which the director derived an improper personal benefit. Our articles of incorporation provides that directors~~ are ~~not~~reasonably ~~liable to~~likely ~~us or our stockholders for monetary damages for breach of their fiduciary duty as directors~~ to ~~the~~materially ~~fullest extent permitted by Nevada law. In addition to the foregoing~~affect, our ~~bylaws provide that we may indemnify directors, officers, employees or agents~~internal tocontrol ~~the~~over ~~fullest~~financial ~~extent permitted by law and we have agreed to provide such indemnification to each of our directors~~reporting.

~~The~~(c) Management’s ~~above provisions in~~report ~~our~~on ~~articles~~internal ofcontrols ~~incorporation~~over ~~and~~financial bylaws and in the written indemnity agreements may have the effect of reducing the likelihood of derivative litigation against directors and may discourage or deter stockholders or management from bringing a lawsuit against directors for breach of their fiduciary duty, even though such an action, if successful, might otherwise have benefited us and our stockholdersreporting. ~~However, we believe that the foregoing provisions are necessary to attract and retain qualified persons as directors.~~

~~Insofar~~Our asmanagement ~~indemnification~~is responsible for ~~liabilities~~establishing ~~arising~~and maintaining adequate internal controls over financial reporting, as defined under ~~the~~Rule ~~Securities~~15a-15(f) under the Exchange Act. ~~may~~Our bemanagement ~~permitted~~has toassessed the effectiveness of our ~~directors~~internal controls over financial reporting as of September 30, 2016 ~~officers~~based ~~and~~on ~~controlling~~the ~~persons~~framework ~~pursuant~~established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our internal control system was designed to provide reasonable assurance to our management and board of directors regarding the ~~foregoing~~preparation ~~provisions~~and fair presentation of published financial statements. An internal control material weakness is a significant deficiency, or ~~otherwise~~aggregation of deficiencies, wethat ~~have~~does ~~been~~not ~~advised~~reduce to a relatively low level the risk that material misstatements in financial statements will be prevented or detected on a timely basis by employees in the ~~opinion~~normal course of their work. Our management assessed the ~~Securities~~effectiveness ~~and~~of ~~Exchange~~our ~~Commission,~~internal ~~such~~control over financial reporting ~~indemnification~~as isof ~~against~~September ~~public~~30, ~~policy~~2016, asand ~~expressed~~this inassessment identified the ~~Securities~~following ~~Act~~material ~~and~~weaknesses ~~is,~~in ~~therefore,~~our ~~unenforceable.~~internal control over financial reporting:

~~Item~~· ~~11.~~Due ~~Executive~~to ~~Compensation~~our small size, we do not maintain effective internal controls to assure segregation of duties as we have only two employees who are responsible for initiating and approving of transactions, thereby creating the segregation of duties weakness;

~~Summary~~· ~~Compensation~~Our ~~Table~~board of directors does not have an audit committee or a financial expert to maintain effective oversight of our financial reporting process; and

~~The~~· ~~following~~Lack ~~table~~of ~~sets forth~~formal ~~the~~policies ~~compensation~~or ~~paid~~procedures ~~by us~~ to ~~our~~provide ~~chief~~assurance ~~executive~~that ~~officer~~relevant ~~and~~information tois ~~all~~identified, ~~other executive officers for services rendered during the fiscal years ended September 30~~captured, ~~2015 and 2014. In reviewing the table~~processed, ~~please note that Mr. Jones served as our president~~ and ~~chief~~reported ~~executive~~in ~~officer~~an ~~through~~appropriate ~~May 2015, at which time Mr. Kerr was appointed to serve as our president~~ and ~~chief~~timely ~~executive officer~~fashion.

Name and Position (a)	Year (b)	Salary (c)	Bonus (d)	Stock Awards (e)	Option Awards (f)	All Other Compensation (g)	Total (h)
Stephen E. Jones, President and CEO	2015	$28,000	–	–	–	–	$28,000
	2014	$36,000	–	–	$58,060	–	$94,060
John D. Kerr, President, CEO and CFO	2015	$41,500	–	–	–	–	$41,500
	2014	$36,000	–	–	$58,060	–	$94,060

Based on that evaluation, management concluded that our internal control over financial reporting was not effective as of September 30, 2016.

~~The~~This ~~dollar~~annual ~~amounts in column (f) reflect~~report ~~the~~does ~~values~~not ofinclude ~~options~~an asattestation report of ~~the~~our ~~grant~~registered ~~date~~public ~~for~~accounting ~~the~~firm ~~year~~regarding ~~ended~~internal ~~September 30,~~control ~~2014,~~over infinancial ~~accordance~~reporting. Management’s ~~with~~report ~~ASC~~was ~~718,~~not ~~Compensation-Stock Compensation~~subject ~~and,~~to ~~therefore,~~attestation doby ~~not~~our ~~necessarily~~registered ~~reflect~~public ~~actual~~accounting ~~benefits~~firm ~~received~~pursuant byto the ~~individuals.~~rules ~~Assumptions~~of ~~used in~~ the ~~calculation~~Securities ofand ~~these~~Exchange ~~amounts~~Commission ~~are~~that ~~included~~permit inus ~~Note 5~~ to ~~our~~provide ~~audited~~only ~~financial~~management’s ~~statements~~report ~~for~~in ~~the~~this ~~year~~annual ~~ended September 30, 2015~~report.

~~Narrative~~Item ~~Disclosure~~9B. toOther ~~Summary Compensation Table~~Information

WeNot ~~have no employment agreements with executive management~~applicable. Our sole executive officer, John D. Kerr, receives a salary of $3,000 per month. Mr. Kerr is not entitled to receive any other compensatory benefits or consideration, such as medical or life insurance, car allowances or the like. At such time as Mr. Kerr provides his full business time to our company on a continuous basis, we expect to adjust upward the compensation and benefits payable to him appropriately. In March 2014, we granted to Mr. Jones and Mr. Kerr options to purchase 100,000 shares of our common stock, each, at an exercise price of $0.60 per share.

2220

~~Mr. Kerr has committed to provide his full time to our company, however from our inception to date, and~~PART until such time as we receive significant additional capital, his duties to our company will not require his full business time. Until such time as he is required to provide his full time to our company, Mr. Kerr will continue to provide services on a limited basis to Newport Capital Consultants, provided that his provision of services to Newport Capital Consultants does not interfere with or otherwise impair their provision of services to our company.III

~~Outstanding~~Item ~~Equity~~10. ~~Awards~~Directors, atExecutive ~~September~~Officers ~~30,~~and ~~2015~~Corporate Governance

Option Awards
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)	Number of Securities Underlying Unexercised Options (#) Unexercisable (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price (e)	Option Expiration Date (mm/dd/yyyy) (f)
John D. Kerr	200,000	–	–	$0.25	09/15/2016
John D. Kerr	100,000	–	–	$0.60	09/15/2016
Stephen E. Jones	100,000	–	–	$0.60	03/11/2019

Set forth below are our directors and officers.

Compensation of Directors

Name	Age	Position

William A. Sawyer	67	President, Chief Executive Officer and Director

John D. Kerr	50	Chief Financial Officer and Director

Paul Brogan	57	Director

Gordon Johnson	77	Director

~~Upon~~Mr. ~~their~~Sawyer ~~appointment~~has served toas our president and chief executive officer and a member of our board of directors, wesince ~~granted~~October to2016. ~~Paul~~Mr. ~~Brogan~~Sawyer ~~and~~has ~~Gordon~~over ~~Johnson~~40 years ~~options~~of todiverse ~~purchase~~experience ~~200~~in the energy industry,~~000~~ including engineering and ~~400,000~~management ~~shares~~positions ofwith ~~our~~such ~~common~~firms as Lucas Energy, ~~stock~~Inc., ~~respectively~~ARCO, Houston Oil & Minerals, and The Superior Oil Company. Mr. ~~Brogan’s~~Sawyer ~~and~~co-founded MrLucas Energy, Inc. ~~Johnson’s~~(NYSEMKT: ~~options~~LEI) ~~include~~and served ~~exercise~~as ~~prices~~its president, chief executive officer and member of $0its board of directors from 2009 to his retirement from the company in 2012.50 ~~and~~Previously, $0Mr.30 ~~per~~Sawyer ~~share~~served as the chief operating officer, ~~respectively.~~vice-president and member of the board of directors of Lucas ~~Both~~Energy ~~options~~from ~~have~~2004 ato ~~five~~2008. ~~year~~From ~~term~~2012 ~~and~~to ~~vest~~the inpresent, ~~equal~~Mr. ~~one-third~~Sawyer ~~installments~~has ~~commencing~~served onas the ~~date~~managing partner of ~~grant~~Third ~~and~~Coast ~~each~~Partners LLC, a private equity firm he founded. Mr. Sawyer has a Bachelor of ~~the~~Science ~~first~~in Chemical Engineering from Louisiana State University ~~two~~in ~~anniversaries~~1970 ofand ~~the~~his ~~date~~Masters of ~~grant~~Business Administration from Southern Methodist University in 1976.

~~Except~~Mr. asKerr ~~described~~has ~~above,~~served weas ~~have not paid any directors’ fees or other compensation to~~ our ~~directors~~chief ~~for~~financial ~~their~~officer ~~services~~and asa ~~directors.~~member ~~All~~ of our ~~directors receive reimbursement for out-of-pocket expenses for attending~~ board of directors ~~meetings.~~since Weour ~~intend~~founding toon ~~appoint~~December ~~additional members to the board of directors~~9, ~~including~~2010. ~~outside or non-officer members to the board~~Mr. ~~There~~Kerr ~~are~~also ~~no understandings or arrangements at~~served ~~this~~as ~~time concerning the appointment of additional directors to~~ our ~~board,~~chief ~~and~~executive weofficer dofrom ~~not~~May ~~expect~~2015 to beOctober ~~able~~2016. toFor ~~attract~~over ~~directors with~~the ~~significant~~past ~~oil~~five ~~and~~years, ~~gas~~Mr. ~~experience~~Kerr ~~until~~has ~~such~~served ~~time~~ as wea ~~raise~~vice ~~significant~~president of ~~additional~~Newport ~~capital.~~Capital ~~Any~~Consultants, ~~future~~Inc. ~~outside~~Mr. Kerr ~~directors may~~served ~~receive~~as ana ~~attendance~~member ~~fee for each meeting~~ of the board of directors. ~~From~~of ~~time~~Petro toResources ~~time we may also engage certain future outside~~Corporation ~~members~~(NYSE-MKT:PRC), ofan ~~the~~independent ~~board~~oil ofand ~~directors~~gas tocompany ~~perform~~now ~~services~~known onas ~~our~~Magnum ~~behalf~~Hunter ~~and~~Resources weCorp. ~~will~~(NYSE:MHR), ~~compensate~~from ~~such~~2002 ~~persons~~to ~~for the services which they perform~~2005.

~~Section~~Mr. Brogan has served as a member of our board of directors since April 2015. Since January 2015, Mr. ~~16(~~Brogan has served as president of C-Bond Systems, LLC, a Houston based business co-founded by Mr. Brogan engaged in development of technologies designed to significantly strengthen glass, increase glass flexibility and enhance the adhesion of glass-to-window film products. From January 2010 to December 2014, Mr. Brogan served as president and chief executive officer of Wintec Security, Inc., a Houston based business engaged in the business of security products. Mr. Brogan has over 30 years of experience in the oil and gas industry. From 1999 to 2010, Mr. Brogan served as president of LEXCO Energy Corporation, a Houston based oil and Gas Company. From 1998 to 1999, Mr. Brogan served on the advisory staff of R.A~~) Beneficial~~. ~~Ownership~~Lenser ~~Reporting~~and ~~Compliance~~Associates, a petroleum engineering and geological consulting firm specializing in comprehensive oil and gas reserve reports, geological studies and 3-D seismic interpretation. From January 2000 to 2003, Mr. Brogan served as an advisor to the Venezuelan Ministry of Energy and Mines. From 1992 through 1998, Mr. Brogan was vice president of Rosneftegazstroy International, the former Ministry of Oil, Gas and Construction in Russia. Mr. Brogan initially started in the oil business in 1973 with Green Head Supply Company, a major supplier of oil and gas equipment, serving in the capacity of vice president responsible for financial planning, negotiations, marketing and public relations. Mr. Brogan received a degree in Business Management from Oklahoma City University in 1970.

~~Because~~Mr. ~~our~~Johnson ~~common~~has ~~stock~~served isas ~~not~~a ~~registered~~member ~~under~~of our board of directors since November 2015. Mr. Johnson has over 40 years of experience in the ~~Exchange~~oil ~~Act,~~and ~~our~~gas ~~officers~~industry. Following his graduation from University of Texas, ~~directors~~Mr. Johnson was employed by two major and ~~10%~~two ~~stockholders~~large ~~are~~independent ~~not~~oil ~~required~~companies, receiving toexperience ~~file~~in ~~with~~Texas, New Mexico, Oklahoma, Montana, North Dakota, and Louisiana. Subsequently, he joined the ~~SEC~~ranks ~~beneficial~~of ~~ownership~~the ~~reports~~independent ~~under~~oil ~~Section~~operators. 16He has since served as president of several oil and gas companies. During his career he has been responsible for generating geological prospects, acquisition of oil and gas leases and producing properties, generation of drilling funds, supervision of the ~~Exchange~~drilling ~~Act~~and completion of numerous oil and gas wells, and coordination of several mergers. Mr. Johnson is currently president of Bayside Corporation, a company engaged in acquiring existing wells for remediation and re-completion as well as generating development drilling prospects.

2321

~~Item~~Audit ~~12 Security Ownership of Certain Beneficial Owners~~ and ~~Management~~Compensation ~~and Related Stockholder Matters~~Committees

~~The~~We ~~following~~do ~~table~~not ~~sets~~have ~~forth~~an ~~certain information~~audit ~~regarding~~or ~~the~~compensation ~~beneficial ownership of our common stock as of the date of this memorandum by:~~committee.

●Code ~~each person who is known by us to be the beneficial owner~~ of ~~more than five percent (5%) of our issued and outstanding shares of common stock;~~Ethics

●We ~~each~~have adopted a code of ethics for all our ~~directors~~employees, including our chief executive ~~officers~~officer, principal financial officer and ~~nominees~~principal toaccounting ~~become~~officer or ~~directors;~~controller, and/or persons performing similar functions.

●Limitation ~~all~~of ~~directors~~Liability ~~and~~of ~~executive~~Directors ~~officers~~and asIndemnification of aDirectors ~~group.~~and Officers

Name and Address	Number of Shares	Percentage Owned (1)
John D. Kerr (2)(3)	400,000	2.7%
Paul Brogan	266,667	1.8%
Gordon Johnson	133,333	0.9%
Gary Bryant (4)(5)	6,735,508	43.4%
Danilo Cacciamatta (6)	1,100,000	7.6%
Suzanne Bryant (4)	1,100,400	7.6%
Directors and executive officers as a group	800,000	5.4%

Nevada corporate law provides that corporations may include a provision in their articles of incorporation relieving directors of monetary liability for breach of their fiduciary duty as directors, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith and which involve a breach of the director’s duty to the corporation or intentional misconduct or a knowing violation of law, (iii) for unlawful payment of a dividend or unlawful stock purchase or redemption, or (iv) for any transaction from which the director derived an improper personal benefit. Our articles of incorporation provides that directors are not liable to us or our stockholders for monetary damages for breach of their fiduciary duty as directors to the fullest extent permitted by Nevada law. In addition to the foregoing, our bylaws provide that we may indemnify directors, officers, employees or agents to the fullest extent permitted by law and we have agreed to provide such indemnification to each of our directors.

~~(1)~~ The ~~percentage~~above ~~amounts~~provisions in our articles of incorporation and bylaws and in the written indemnity agreements may have the effect of reducing the likelihood of derivative litigation against directors and may discourage or deter stockholders or management from bringing a lawsuit against directors for ~~each~~breach ~~reported~~of ~~person~~their ~~are~~fiduciary ~~based~~duty, oneven 14though such an action,~~515~~ if successful,~~400~~ ~~common~~might ~~shares~~otherwise ~~issued~~have benefited us and our ~~outstanding~~stockholders. asHowever, ofwe believe that the ~~date~~foregoing ofprovisions ~~this~~are ~~report~~necessary to attract and retain qualified persons as directors.

~~(2)~~Insofar ~~The~~as ~~address~~ indemnification for liabilities arising under the ~~stockholder~~Securities isAct ~~5729~~may ~~Lebanon~~be ~~Road~~permitted to our directors, ~~Suite~~officers ~~144~~and controlling persons pursuant to the foregoing provisions, ~~Frisco~~or otherwise, ~~Texas~~we ~~75034~~have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

~~(3)~~Item ~~The shares for John D~~11. ~~Kerr~~Executive ~~include 300,000 shares underlying presently exercisable options.~~Compensation

~~(4)~~Summary ~~Gary~~Compensation ~~and Suzanne Bryant are married, however they disclaim any interest in the shares held by the other. The address for the Gary and Suzanne Bryant is 980 Noble Champions Way, Bartonville, Texas 76226.~~Table

~~(5)~~ The ~~shares~~following ~~for~~table sets ~~Gary~~forth ~~Bryant~~the ~~include~~compensation ~~1,003,508~~paid ~~shares~~by us to beour ~~issued~~chief executive officer and to ~~Mr.~~all ~~Bryant~~other ~~pursuant~~executive toofficers ~~his~~for ~~conversion~~services ofrendered during ~~$501,754~~the offiscal ~~debt~~years ~~underlying~~ended aSeptember ~~convertible~~30, ~~secured~~2016 ~~promissory~~and ~~note~~2015. atIn reviewing the ~~rate~~table, ofplease $0note that William A.50 ~~per~~Sawyer ~~share~~has served as our President and Chief Executive Officer since October 2016.

(6) The address for the Danilo Cacciamatta is 1360 Temple Hills Dr., Laguna Beach, CA 92651.

Name and Position

(a)

Year

(b)

Salary

(c)

Bonus

(d)

Stock

Awards

(e)

Option

Awards

(f)

All Other

Compensation

(g)

Total

(h)

John D. Kerr, President
and CEO

2016
2015

$48,000
$41,500

–

$–
–

–

$48,000
$41,500

24__________________

~~Item~~The ~~13.~~dollar ~~Certain~~amounts in ~~Relationships~~column ~~and~~(f) reflect ~~Related~~the ~~Transactions~~values of options as of the grant date for the year ended September 30, 2016, in accordance with ASC 718, Compensation-Stock Compensation and, ~~Director~~therefore, ~~Independence~~do not necessarily reflect actual benefits received by the individuals. Assumptions used in the calculation of these amounts are included in Note 5 to our audited financial statements for the year ended September 30, 2016.

~~Related Party Transactions, Promoters and Director Independence~~22

InNarrative ~~addition~~Disclosure to ~~our~~Summary ~~executive~~Compensation officers and directors, Mr. Gary Bryant may be deemed to be a promoter of our company. Mr. Bryant and his wife, Suzanne Bryant, each purchased 100,000 shares of our common stock, at a purchase price of $0.25 per share, in connection with our 2011 private placement of common shares. From time to time, Mr. Bryant provides us with advances of funds. The advances are unsecured and do not accrue interest on the principal amount. During the fiscal year ended September 30, 2013, Mr. Bryant agreed to convert $41,000 of advances into 82,000 shares of our common stock at the rate of $0.50 per share. At the same time, Mr. Bryant purchased 24,000 shares of our common at a price of $0.50 per share. As of September 30, 2015 and 2014, the total outstanding amount of advances from Mr. Bryant were $45,000 and $35,000, respectively.Table

InSawyer ~~addition~~Compensation Agreements. We have entered into a three year employment agreement with Mr. Sawyer pursuant to ~~the~~which ~~advances~~he serves as our ~~provided~~president byand Mrchief executive officer. ~~Bryant,~~Pursuant ~~during~~to the ~~fourth~~agreement, ~~fiscal~~we ~~quarter~~will ofpay ~~2013~~ Mr. ~~Bryant~~Sawyer ~~loaned~~receive us a ~~total~~minimum base salary of $~~547~~90,~~762~~000 per ~~for~~annum ~~purposes~~during ofthe ~~financing a~~term ~~portion~~ of ~~the~~this ~~Port~~agreement ~~Hudson~~payable ~~and~~in ~~West~~monthly ~~Cam~~increments ~~225~~of ~~acquisitions~~$7,500; ~~including~~provided athat ~~loan for~~ $~~417~~5,~~762,~~500 ~~which~~of ~~bears~~Mr. ~~interest~~Sawyer’s monthly onsalary ~~the~~shall ~~unpaid~~accrue ~~principal amount~~until atthe earlier of the ~~rate~~second anniversary of 8%the ~~per~~agreement ~~annum~~or ~~and~~such istime ~~payable~~as ~~over~~we raise a ~~four~~minimum ~~year~~of $1,000,000 ~~period~~of additional equity capital, at which time the ~~amortized~~accrued ~~rate~~portion of ~~$10,198~~Mr. ~~per~~Sawyer’s ~~month,~~salary ~~and~~shall ~~another loan~~decrease ~~for~~from $~~130~~5,~~000,~~500 per ~~which~~month ~~bears~~to ~~interest~~$3,500 onper ~~the~~month ~~unpaid~~until ~~principal~~the ~~amount~~earlier atof the ~~rate~~second anniversary of 6%the ~~per~~agreement ~~annum~~or ~~and~~such istime ~~payable~~as onwe ~~February~~raise a minimum of $6, ~~2016.~~000,000 ~~Our~~of ~~obligations~~additional ~~under~~equity ~~both~~capital ~~loans~~(inclusive ~~are~~of ~~secured~~the byinitial ~~our~~$1,000,000 ~~working~~of ~~interest~~capital). inAt ~~the~~such ~~Port~~time ~~Hudson~~as ~~field~~Mr. ~~and~~Sawyer’s ~~all~~monthly salary ~~principal~~is ~~and~~no ~~interest under~~longer ~~each~~subject ~~loan~~to ~~is convertible~~accrual, atwe ~~the~~shall ~~option~~commence ofpaying him the ~~holder,~~accrued ~~into~~portion ~~our~~of ~~common~~his ~~shares~~salary at the rate of $~~0.50~~500 per ~~share. On September~~ ~~30,~~month ~~2015,~~with ~~Mr.~~a ~~Bryant~~lump ~~converted~~sum ~~all~~payment ~~principal~~of ~~and~~the accrued ~~interest~~and ~~under~~unpaid ~~both~~portion ~~loans, totaling $501,754, into shares~~ of ~~our~~his ~~common stock~~salary aton the ~~rate~~third anniversary of ~~$0.50~~the ~~per share~~agreement.

OnWe ~~September~~have ~~30,~~also ~~2015,~~granted weMr. ~~entered~~Sawyer ~~into~~ an ~~agreement~~option ~~with~~to ~~Kiowa~~purchase ~~Oil~~up ~~Company~~ to ~~lease 100% of interests~~1, ~~for a period of five years~~500, ~~of properties in North Dakota, Florida, Illinois, and Kentucky. The total price for the subject interests under this lease agreement is $5,~~000 ~~and a 15% royalty interest in all the subject interests leased. The total price will be paid by us in~~ shares of our common stock at ~~the~~an ~~per share~~exercise price of $0.50. ~~Kiowa~~Mr. ~~Oil~~Sawyer’s ~~Company~~options shall isvest aand ~~privately-held~~first ~~investment~~and ~~company~~become ~~controlled~~exercisable byas ~~Mr. Bryant.~~follows:

~~Except~~· ~~for~~Options ~~above-mentioned transactions,~~to ~~and~~purchase ~~compensation~~375,000 ~~paid~~shares orof ~~payable~~common bystock usshall tovest ~~our executive officers~~ and ~~reported~~first ~~elsewhere~~become inexercisable ~~this~~upon ~~report,~~our wereceipt ~~have not entered into any other transactions~~ of ~~any~~a ~~value~~minimum ~~with any~~ of ~~our directors~~$1, ~~officers~~000,000 ~~principal stockholders, promoters or any~~ of ~~their~~additional ~~family~~equity ~~members~~capital orduring ~~affiliates,~~the ~~including~~twelve ~~entities~~(12) ofcalendar ~~which~~months ~~they~~following ~~are~~October ~~also officers or directors or in which they have a financial interest. We have~~18, ~~however,~~2016 ~~adopted a policy that any transactions that we might enter into with related parties or promoters will only be on terms consistent with industry standards and approved by a majority of~~ (the ~~disinterested~~date ~~directors~~ of ~~our board.~~grant);

~~Item~~· ~~14.~~Options ~~Principal~~to ~~Accountant~~purchase ~~Fees~~375,000 shares of common stock shall vest and ~~Services~~first become exercisable upon our completion of acquisition and/or financing of at least $10 million during twenty-four (24) calendar months following the date of grant (inclusive of the Minimum Raise);

~~The~~· ~~following~~Options ~~table~~to ~~sets forth~~purchase ~~the~~375,000 ~~aggregate~~shares ~~fees~~of ~~billed~~common tostock usshall ~~for~~vest ~~services~~and ~~rendered~~first tobecome usexercisable ~~for~~upon the ~~years~~closing ~~ended~~stock ~~September~~price ~~30,~~of ~~2015~~our ~~and~~common ~~2014~~stock bytrading ~~our~~above ~~independent registered~~of ~~public~~$2.00 ~~accounting~~per ~~firm~~share, ~~Farber~~with ~~Hass~~a ~~Hurley~~minimum ~~LLP,~~average ~~for~~daily ~~the~~trading ~~audit~~volume of ~~our~~10,000 ~~consolidated~~shares ~~financial~~(such ~~statements~~share ~~for~~and ~~the~~price ~~years ended~~figures ~~September~~subject ~~30,~~to ~~2015~~adjustment ~~and~~for ~~2014~~splits, combinations and ~~assistance with~~ the ~~reporting requirements thereof~~like), ~~the~~for ~~review~~twenty of ~~our~~thirty ~~condensed~~consecutive ~~consolidated financial~~trading ~~statements~~days ~~included~~within intwenty ~~our~~four ~~quarterly~~(24) ~~reports~~months onfollowing ~~Form 10-Q,~~ the ~~filing~~date of ~~our~~grant; ~~Form 8-K,~~ and ~~accounting and auditing assistance relative to acquisition accounting and reporting.~~

(amounts in thousands)	2015		2014
Audit Fees	$	54,000	$	56,030
Audit-Related Fees		–		–
	$	54,000	$	56,030

Options to purchase 375,000 shares of common stock shall vest and first become exercisable upon the increase in daily production to a level of 500 boepd within twenty-four (24) months following the date of grant.

25Kerr Compensation Agreements. Mr. Kerr receives a salary of $3,000 per month. Mr. Kerr is not entitled to receive any other compensatory benefits or consideration, such as medical or life insurance, car allowances or the like. Mr. Kerr has committed to provide his full time to our company, however from our inception to date, and until such time as we receive significant additional capital, his duties to our company will not require his full business time. At such time as Mr. Kerr provides his full business time to our company on a continuous basis, we expect to adjust upward the compensation and benefits payable to him. In March 2014, we granted to Mr. Kerr options to purchase 100,000 shares of our common stock, each, at an exercise price of $0.60 per share.

~~PART IV~~Outstanding Equity Awards at September 30, 2016

Item 15. Exhibits and Financial Statement Schedules

Option Awards
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)	Number of Securities Underlying Unexercised Options (#) Unexercisable (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price (e)	Option Expiration Date (mm/dd/yyyy) (f)
John D. Kerr	200,000	–	–	$0.25	09/15/2019
John D. Kerr	100,000	–	–	$0.60	09/15/2019

~~(a) Financial statements~~23

~~Reference~~Compensation isof ~~made to the Index and Financial Statements under Item 8 in Part II hereof where these documents are listed.~~Directors

~~(b) Financial~~Upon ~~statement~~their appointment ~~schedules~~to our board of directors, we granted to Paul Brogan and Gordon Johnson options to purchase 200,000 and 400,000 shares of our common stock, respectively. Mr. Brogan’s and Mr. Johnson’s options include exercise prices of $0.50 and $0.30 per share, respectively. Both options have a five year term and vest in equal one-third installments commencing on the date of grant and each of the first two anniversaries of the date of grant.

~~Financial~~Except ~~statement~~as ~~schedules~~described ~~are~~above, ~~either~~we have not ~~required~~paid any directors’ fees or other compensation to our directors for their services as directors. All of our directors receive reimbursement for out-of-pocket expenses for attending board of directors meetings. We intend to appoint additional members to the ~~required~~board ~~information~~of isdirectors, ~~included~~including inoutside or non-officer members to the ~~consolidated~~board. ~~financial~~There ~~statements~~are no understandings or ~~notes~~arrangements ~~thereto~~at ~~filed~~this time concerning the appointment of additional directors to our board, and we do not expect to be able to ~~under~~attract ~~Item~~directors 8with insignificant ~~Part II~~oil ~~hereof~~and gas experience until such time as we raise significant additional capital. Any future outside directors may receive an attendance fee for each meeting of the board of directors. From time to time we may also engage certain future outside members of the board of directors to perform services on our behalf and we will compensate such persons for the services which they perform.

Section 16(cA) ~~Exhibits~~ Beneficial Ownership Reporting Compliance

~~The~~Because ~~exhibits~~our tocommon stock ~~this~~is ~~Annual Report~~not onregistered ~~Form 10-K~~under ~~are~~the ~~set~~Exchange ~~forth~~Act, ~~below.~~our ~~The~~officers, ~~exhibit~~directors ~~index~~and ~~indicates~~10% ~~each~~stockholders ~~management~~are ~~contract~~not orrequired ~~compensatory~~to ~~plan~~file orwith ~~arrangement~~the ~~required~~SEC tobeneficial beownership ~~filed~~reports asunder anSection ~~exhibit~~16 of the Exchange Act.

Number	Exhibit Description	Method of Filing
3.1	Articles of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on December 9, 2011.
3.2	Amendment to Articles of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
3.3	Bylaws of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
10.1	West Texas Resources, Inc. 2011 Stock Incentive Plan*	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
10.2	Lease Agreement dated August 22, 2011 between Registrant and Bay Energy Services, Inc.	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
10.3	Form of Registration Rights Agreement dated January 24, 2011 between Registrant and Selling Stockholders	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
10.4	Assignment dated September 30, 2011 between Registrant and West Texas Royalties, Inc.	Incorporated by reference from the Amendment No. 1 to Registrant’s Registration Statement on S-1 filed on January 23, 2012.
10.5	Joint Operating Agreement between Registrant and West Texas Royalties, Inc.	Incorporated by reference from the Amendment No. 1 to Registrant’s Registration Statement on S-1 filed on January 23, 2012.
10.6	Letter Agreement dated July 3, 2013 between the Registrant and Wells Fargo Energy Capital, Inc.	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013
10.7	Letter Agreement dated August 1, 2013 between Registrant and Gulfex Resources, LLC	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013
10.8	Loan Agreement dated August 14, 2013 between Registrant and Gary Bryant	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

26The following table sets forth certain information regarding the beneficial ownership of our common stock as of the date of this report by:

10.9	Promissory Note dated August 14, 2013 made by Registrant in favor of Gary Bryant	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013
10.10	Letter Agreement dated August 16, 2013 between Registrant and Enovation Resources LLC.	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013
10.11	Loan Agreement dated September 5, 2013 between Registrant and Gary Bryant, as amended on January 10, 2014	Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on January14, 2014
10.12	Loan Agreement dated September 5, 2013 between Registrant and Lake Oswego Oil Company, LLC, as amended on January 10, 2014	Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on January14, 2014
10.13	Letter Agreement dated April 15, 2014 between the Registrant and EnTek Partners, LLC	Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on April 21, 2014
10.14	Lease Agreement dated September 30, 2015 between Registrant and Kiowa Oil Company	Filed electronically herewith
14.1	West Texas Resources, Inc. Code of Ethics	Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on January 14, 2013
21.1	List of subsidiaries of Registrant.	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
31.1	Certification under Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith.
31.2	Certification under Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith.
32.1	Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	Filed electronically herewith.
101.INS	XBRL Instance Document	Filed electronically herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed electronically herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed electronically herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed electronically herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed electronically herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed electronically herewith

each person who is known by us to be the beneficial owner of more than five percent (5%) of our issued and outstanding shares of common stock;

*· ~~Indicates~~each ~~management~~of ~~compensatory~~our ~~plan~~directors, ~~contract~~executive orofficers ~~arrangement.~~and nominees to become directors; and

27· all directors and executive officers as a group.

SIGNATURES

Name and Address	Number of Shares	Percentage Owned (1)
William A. Sawyer (2)(3)	--	--%
John D. Kerr (2)(4)	400,000	2.3%
Paul Brogan (2)(5)	333,333	2.0%
Gordon Johnson (2)(6)	264,000	1.5%
Gary Bryant (7)	6,735,508	39.4%
Danilo Cacciamatta (8)	1,100,000	6.4%
Suzanne Bryant (7)	1,100,400	6.4%
Directors and executive officers as a group	997,333	5.8%

~~Pursuant to the requirements of Section 13 or 15~~(d1) of ~~the~~The ~~Securities~~percentage ~~Exchange~~amounts ~~Act~~for ofeach ~~1934,~~reported ~~the~~person ~~Registrant~~are ~~has~~based ~~duly caused this annual report~~ on ~~Form 10-K~~17,083,908 tocommon ~~be signed~~shares onissued ~~its~~and ~~behalf~~outstanding byas of the ~~undersigned,~~date ~~thereunto~~of ~~duly~~this ~~authorized~~report.

	WEST TEXAS RESOURCES, INC.
Date: December 30, 2015	By:	/s/ John D. Kerr
		John D. Kerr,
		Chief Executive Officer

(2)

The address for the stockholder is 5729 Lebanon Road, Suite 144, Frisco, Texas 75034.

~~Pursuant~~(3) toDoes ~~the~~not ~~requirements~~include ofoptions ~~the~~to ~~Securities Exchange~~purchase ~~Act of 1934~~1,500,000 ~~this~~shares ~~report~~of ~~has~~our ~~been~~common ~~signed~~stock, ~~below~~all byof ~~the~~which ~~following~~are ~~persons~~subject onto ~~behalf~~vesting. ofSee ~~the~~“Management ~~registrant~~– ~~and~~Executive inCompensation ~~the~~– ~~capacities and~~Sawyer onCompensation ~~the dates indicated~~Agreements.”

Signature	Title	Date
/s/ John D. Kerr	Chief Executive Officer, Chief Financial Officer and Director	December 30, 2015
John D. Kerr	(Principal Executive and Financial Officer)
/s/Paul Brogan	Director	December 30, 2015
Paul Brogan
/s/Gordon Johnson	Director	December 30, 2015
Gordon Johnson

(4)

The shares for John D. Kerr include 300,000 shares underlying presently exercisable options.

28(5) The shares for Paul Brogan include 133,333 shares underlying presently exercisable options and exclude 66,667 shares underlying shares subject to vesting.

(6)

The shares for Gordon Johnson include 264,000 shares underlying presently exercisable options and exclude 136,000 shares underlying shares subject to vesting.

(7)

Gary and Suzanne Bryant are married, however they disclaim any interest in the shares held by the other. The address for the Gary and Suzanne Bryant is 980 Noble Champions Way, Bartonville, Texas 76226.

(8)

The address for the Danilo Cacciamatta is 1360 Temple Hills Dr., Laguna Beach, CA 92651.

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Related Party Transactions, Promoters and Director Independence

In addition to our executive officers and directors, Mr. Gary Bryant may be deemed to be a promoter of our company. Mr. Bryant and his wife, Suzanne Bryant, each purchased 100,000 shares of our common stock, at a purchase price of $0.25 per share, in connection with our 2011 private placement of common shares. From time to time, Mr. Bryant provides us with advances of funds. The advances are unsecured and do not accrue interest on the principal amount. During the fiscal year ended September 30, 2013, Mr. Bryant agreed to convert $41,000 of advances into 82,000 shares of our common stock at the rate of $0.50 per share. At the same time, Mr. Bryant purchased 24,000 shares of our common at a price of $0.50 per share. As of September 30, 2015 and 2014, the total outstanding amount of advances from Mr. Bryant were $45,000 and $35,000, respectively.

In addition to the advances provided by Mr. Bryant, during the fourth fiscal quarter of 2013 Mr. Bryant loaned us a total of $547,762 for purposes of financing a portion of the Port Hudson and West Cam 225 acquisitions, including a loan for $417,762, which bears interest on the unpaid principal amount at the rate of 8% per annum and is payable over a four year period at the amortized rate of $10,198 per month, and another loan for $130,000, which bears interest on the unpaid principal amount at the rate of 6% per annum and is payable on February 6, 2016. Our obligations under both loans are secured by our working interest in the Port Hudson field and all principal and interest under each loan is convertible, at the option of the holder, into our common shares at the rate of $0.50 per share. On September 30, 2015, Mr. Bryant converted all principal and accrued interest under both loans, totaling $501,754, into shares of our common stock at the rate of $0.50 per share.

On September 30, 2015, we entered into an agreement with Kiowa Oil Company to lease 100% of interests, for a period of five years, of properties in North Dakota, Florida, Illinois, and Kentucky. The total price for the subject interests under this lease agreement is $5,000 and a 15% royalty interest in all the subject interests leased. The total price will be paid by us in shares of our common stock at the per share price of $0.50. Kiowa Oil Company is a privately-held investment company controlled by Mr. Bryant.

Except for above-mentioned transactions, and compensation paid or payable by us to our executive officers and reported elsewhere in this report, we have not entered into any other transactions of any value with any of our directors, officers, principal stockholders, promoters or any of their family members or affiliates, including entities of which they are also officers or directors or in which they have a financial interest. We have, however, adopted a policy that any transactions that we might enter into with related parties or promoters will only be on terms consistent with industry standards and approved by a majority of the disinterested directors of our board.

Item 14.

Principal Accountant Fees and Services

The following table sets forth the aggregate fees billed to us for services rendered to us for the years ended September 30, 2016 and 2015 by our independent registered public accounting firm, Farber Hass Hurley LLP, for the audit of our consolidated financial statements for the years ended September 30, 2016 and 2015, and assistance with the reporting requirements thereof, the review of our condensed consolidated financial statements included in our quarterly reports on Form 10-Q, the filing of our Form 8-K, and accounting and auditing assistance relative to acquisition accounting and reporting.

(amounts in thousands)	2016		2015
Audit Fees	$	53,000	$	54,000
Audit-Related Fees		–		–
	$	53,000	$	54,000

PART IV

Item 15.

Exhibits and Financial Statement Schedules

(a) Financial statements

Reference is made to the Index and Financial Statements under Item 8 in Part II hereof where these documents are listed.

(b) Financial statement schedules

Financial statement schedules are either not required or the required information is included in the consolidated financial statements or notes thereto filed under Item 8 in Part II hereof.

The exhibits to this Annual Report on Form 10-K are set forth below. The exhibit index indicates each management contract or compensatory plan or arrangement required to be filed as an exhibit.

Number	Exhibit Description	Method of Filing

3.1	Articles of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on Form S-1 filed on December 9, 2011.

3.2	Amendment to Articles of Incorporation of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
3.3	Bylaws of the Registrant	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.
10.1	West Texas Resources, Inc. 2011 Stock Incentive Plan*	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.

10.2	Lease Agreement dated August 22, 2011 between Registrant and Bay Energy Services, Inc.	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.

10.3	Form of Registration Rights Agreement dated January 24, 2011 between Registrant and Selling Stockholders	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.

10.4	Assignment dated September 30, 2011 between Registrant and West Texas Royalties, Inc.	Incorporated by reference from the Amendment No. 1 to Registrant’s Registration Statement on S-1 filed on January 23, 2012.

10.5	Joint Operating Agreement between Registrant and West Texas Royalties, Inc.	Incorporated by reference from the Amendment No. 1 to Registrant’s Registration Statement on S-1 filed on January 23, 2012.

10.6	Letter Agreement dated July 3, 2013 between the Registrant and Wells Fargo Energy Capital, Inc.	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013

10.7	Letter Agreement dated August 1, 2013 between Registrant and Gulfex Resources, LLC	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013

10.8	Loan Agreement dated August 14, 2013 between Registrant and Gary Bryant	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013


10.9	Promissory Note dated August 14, 2013 made by Registrant in favor of Gary Bryant	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013

10.10	Letter Agreement dated August 16, 2013 between Registrant and Enovation Resources LLC.	Incorporated by reference from the Registrant’s Quarterly Report on Form 10-Q filed on August 19, 2013

10.11	Loan Agreement dated September 5, 2013 between Registrant and Gary Bryant, as amended on January 10, 2014	Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on January 14, 2014

10.12	Loan Agreement dated September 5, 2013 between Registrant and Lake Oswego Oil Company, LLC, as amended on January 10, 2014	Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on January 14, 2014

10.13	Letter Agreement dated April 15, 2014 between the Registrant and EnTek Partners, LLC	Incorporated by reference from the Registrant’s Current Report on Form 8-K filed on April 21, 2014

10.14	Lease Agreement dated September 30, 2015 between Registrant and Kiowa Oil Company	Filed electronically herewith

10.15	Employment Agreement dated October 18, 2016 between the Registration and William A. Sawyer*	Filed electronically herewith

14.1	West Texas Resources, Inc. Code of Ethics	Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed on January 14, 2013

21.1	List of subsidiaries of Registrant.	Incorporated by reference from the Registrant’s Registration Statement on S-1 filed on December 9, 2011.

31.1	Certification under Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith.

31.2	Certification under Section 302 of the Sarbanes-Oxley Act of 2002.	Filed electronically herewith.

32.1	Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.	Filed electronically herewith.

101.INS	XBRL Instance Document	Filed electronically herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed electronically herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed electronically herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed electronically herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed electronically herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed electronically herewith

___________________

* Indicates management compensatory plan, contract or arrangement.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

	WEST TEXAS RESOURCES, INC.


Date: February 10, 2017	By:	/s/ William A. Sawyer
		William A. Sawyer,
		Chief Executive Officer

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

Signature	Title	Date


/s/ William A. Sawyer	President, Chief Executive Officer and Director	February 10, 2017
William A. Sawyer	(Principal Executive Officer)


/s/ John D. Kerr	Chief Financial Officer and Director	February 10, 2017
John D. Kerr	(Principal Financial Officer)


/s/Paul Brogan	Director	February 10, 2017
Paul Brogan

/s/Gordon Johnson	Director	February 10, 2017
Gordon Johnson

Filing Compare · West Texas Resources, Inc.