UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

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

EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2009

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

EXCHANGE ACT OF 1934

Commission File No.: 333-141993

PETROCORP INC.
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(Exact Name of Registrant as Specified in Its Charter)

DELAWARE

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(State or Other Jurisdiction of Incorporation

or Organization)

20-5134664

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(I.R.S. Employer Identification No.)

1065 Dobbs Ferry Road, White Plains, New York 10607

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(Address of Principal Executive Offices)

(914) 674-4373

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(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: Common Stock, par value $.0001

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 not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form

10-K. 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 filer. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  Accelerated filer  Non-accelerated Filer  Smaller reporting company x

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

Yes  No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of March 31, 2010: $12,200,000.

The number of shares of the registrant’s common stock outstanding as of March 31, 2010: 22,680,000.

INDEX TO FORM 10-K ANNUAL REPORT

		Page
PART I
Item 1.	Business	3
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	14
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters
	and Issurer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	16
Item 7.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	16
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 8.	Financial Statements and Supplementary Data	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and
	Financial Disclosure	19
Item 9A(T)	Controls and Procedures	19
Item 9B	Other Information	22
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	23
Item 12.	Security Ownership of Certain Beneficial Owners and Management
	and Related Stockholder Matters	25
Item 13.	Certain Relationships and Related Transactions, and Director Independence	26
Item 14.	Principal Accountant Fees and Services	27
PART IV
Item 15.	Exhibits and Financial Statement Schedules	28
	Signatures	29
	Financial Statements	F-1

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts are forward-looking statements. You can find many of these statements by looking for words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” or similar expressions used in this report.

These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by us in those statements include, among others, the following:

	●	the quality of our properties with regard to, among other things, the existence of reserves in economic quantities;
	●	uncertainties about the estimates of reserves;

	●	our ability to increase our production and oil and natural gas income through exploration and development;
	●	the number of well locations to be drilled and the time frame within which they will be drilled;

	●	the timing and extent of changes in commodity prices for natural gas and crude oil;
	●	domestic demand for oil and natural gas;

	●	drilling and operating risks;
	●	the availability of equipment, such as drilling rigs and transportation pipelines;

	●	changes in our drilling plans and related budgets;
	●	the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity; and

●

other factors discussed under Item 1A Risk Factors with the heading “Risks Related To Our Business”.

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. You are cautioned not to place undue reliance on such statements, which speak only as of the date of this report.

PART I

References to “us”, “we” and “our” in this report refer to Petrocorp Inc. together with our subsidiaries.

ITEM 1. BUSINESS.

Background

We were incorporated as GD Conference Center, Inc. under the laws of Delaware on June 16, 2006. Prior to September 2007, the Company’s business model provided telephonic conferencing services to businesses, organizations and individuals in North America. Due to capital constraints and because its executives could no longer serve the Company without compensation, the Company decided to change directions.

On September 20, 2007, the Company entered the oil and gas exploration and production business with the acquisition of three separate farm-out agreements from James Fitzsimons. Mr. Fitzsimons also purchased 17,800,000 shares of the Company’s common stock from certain shareholders, resulting in him owning 84.5% of the Company’s then outstanding shares for $454,000. Mr. Fitzsimons was elected a director of the Company.

On October 19, 2007, the Company amended its certificate of incorporation changing its name to “Petrocorp Inc.” and effectuated a five for one forward stock split which increased the authorized common stock to 100,000,000 shares at $.0001 par value. On August 13, 2008, the Company’s board of directors approved a stock dividend on its outstanding common stock. The ratio for the stock dividend was four shares to each share owned (4:1). All share and per share amounts have been restated to reflect these common stock transactions.

During 2009 the Company changed its emphasis from an international oil and gas company primarily to a US focused company because of current world economic conditions and lack of debt/capital financing. The Company disposed of its foreign oil and gas leases/permits in two separate transactions described below. The Company completed an extensive review of its Alaska and Oklahoma oil and gas leases, operations and recorded impairment charges of $639,813.

On June 12, 2009, the Company exchanged its membership interest in Union Energy (Alberta) LLC, a Colorado limited liability company, that owned eight contiguous sections (totaling 5,120 acres) of oil sands leases in the Peace River Oil Sands Area of northern Alberta, Canada for 1,000,000 restricted shares of Tamm Oil and Gas Corp. The Company acquired these oil sands leases in May 2008 for $250,000.

On November 30, 2009, the Company sold oil and gas properties with a cost of $448,876 to Soladino Investments SA (“Soladino”), a Swiss corporation owned by our president, Mr. Fitzsimons for $596,551. The purchase price was paid by cash of $96,551 and cancellation of $500,000 of its notes to Soladino. The oil and gas properties were in Quebec, Canada and its wholly owned subsidiary Mac Oil SpA. The Company recorded the $147,675 gain as a capital contribution.

Our Current Business

We are a US exploration stage Company engaged in the acquisition, exploration and production, if warranted, development of prospective oil and gas properties. We plan to conduct exploration work on each of our current and future properties in order to ascertain whether any of them possess commercially exploitable quantities of oil and gas reserves. The Company currently has significant lease holdings on the North Slope of Alaska and oil and gas production in Oklahoma.

Alaska

On October 25, 2007, Union Energy (Alaska) LLC (“UEA”), our subsidiary, was the winning bidder for tracts 254, 258 and 259 in the North Slope Areawide 2007 Competitive Oil and Gas Lease Sale. The leases, covering 14,680 net acres, were issued on August 1, 2008, with a term of seven years and subject to a 12.5% royalty interest in favor of the State of Alaska. UEA paid a total of $380,021 to the State of Alaska in respect of the leases. These tracts are contiguous and the Company believes, based upon current available geological data and maps from the public domain, to contain the Kavik gas field, discovered in 1969, which has been evaluated in detail by the U.S. Department of the Interior, U.S Geological Survey ("USGS").

On February 27, 2008, UEA was the winning bidder for tracts 922, 923, 927, 988, 989, 990, 991, 992 and 925 in the State of Alaska North Slope Foothills Areawide 2008 Competitive Oil and Gas Lease Sale. The leases, covering 9,600 net acres, were issued on September 1, 2008, with a term of 10 years and subject to a 12.5% royalty interest in favor of the State of Alaska. UEA paid a total of $59,565 to the State of Alaska in respect of the leases. These tracts are contiguous and the Company believes, based upon current available geological data and maps from the public domain, to contain the East Kurupa gas field, discovered by Texaco in 1976. The USGS has been studying the potential for unconventional over-pressured, continuous gas deposits in the Colville basin that contains the Kurupa anticline and is now interpreting the East Kurupa well to have encountered a thick section of over-pressured gas in Brookian strata.

Furthermore, any gas recovered from our Alaska leases will not be salable unless or until a proposed North Slope gas pipeline is completed. We have retained Frontier Land Inc. (an established land firm and a member of the American Association of Professional Landmen) to conduct negotiations with other leaseholders regarding their acreage and to acquire other land interests within the vicinity of our tracts.

Oklahoma

On August 12, 2008, the Company acquired from its President, James Fitzsimons, a 50% working interest (41.25% net revenue interest) in the Snake Creek prospect, a 3,200 gross (3,022 net) acre gas development project located in northern Okmulgee County. The Company reimbursed Mr. Fitzsimons for his historic costs (acreage and drilling) by issuing a secured, non-interest bearing note, payable on demand for $210,917 and assumed responsibility for all further costs.

On November 30, 2008, the Company acquired from Mr. Fitzsimons, a 100% working interest (81.25% net revenue interest) in the Spanish Peak prospect, a 2,041 gross (900 net) acre gas development project located in Okmulgee County, Oklahoma. The Company reimbursed Mr. Fitzsimons for his historic costs (acreage) by issuing a secured, non-interest bearing note, payable on demand for $173,141 and assumed responsibility for all further costs.

On March 31, 2009, the Company purchased 171 oil and gas lease interests totaling 3,827 gross (2,666 net) acres in Okfuskee and Okmulgee Counties, Oklahoma from CH4 Energy, Inc., a company controlled by Soladino Investments SA at a cost of $583,823. The Company reimbursed Soladino for its historic costs (acreage) by issuing a secured, non-interest bearing note, payable on demand for $583,823 and assumed responsibility for all further costs.

The Oklahoma leases are in areas which the Company believes are promising for oil and gas production although the Company does not make any representations as to future profitable production, if any. We have retained Keith Summar (a member of the American Association of Petroleum Geologists) as a consultant to assist us in our Oklahoma operations.

Competition

We operate in a highly competitive industry, competing with major oil and gas companies, independent producers and institutional and individual investors, which are actively seeking oil and gas properties throughout the world together with the equipment, labor and materials required to operate properties. Most of our competitors have financial resources, staffs and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to acquire good acreage positions and drill wells to explore for oil and gas, then, if warranted, drill production wells and install production equipment. Competition for the acquisition of oil and gas acreage is intense. Therefore, we may not be successful in acquiring and developing profitable properties in the face of this competition. No assurance can be given that sufficient oil and gas acreage will be available for acquisition and development.

Government Regulation

Oil and gas exploration and development companies are subject to various federal, state and local governmental regulations, which may be changed from time to time in response to economic or political conditions and can have a significant impact upon overall operations. Matters subject to regulation include permits for drilling operations, drilling bonds, reports concerning operations, the spacing of wells, unitization and pooling of properties, taxation, abandonment and restoration and environmental protection. These laws and regulations are under constant review for amendment or expansion. Changes in these regulations could require us to expend significant resources to comply with new laws or regulations or changes to current requirements and could have a material adverse effect on us.

Oil and Gas Regulation

The governmental laws and regulations which could have a material impact on our Company are as follows:

Drilling and Production

These types of regulation include permit requirements for the drilling of wells, drilling bonds and reports concerning operations. Most states regulate one or more of the following: (i) the location of wells; (ii) the method of drilling and casing wells; (iii) the rates of production or "allowables"; (iv) the surface use and restoration of properties upon which wells are drilled; (v) the plugging and abandoning of wells; and (vi) notice to surface owners and other third parties.

State laws may regulate the size and shape of drilling and spacing units or proration units governing the pooling of oil and natural gas properties. Some states, including Oklahoma, allow forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be implemented by third parties and may reduce our interest in the unitized properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells, generally prohibit the venting or flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of natural gas and oil we can produce from our wells or limit the number of wells or the locations at which we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and natural gas liquids within its jurisdiction.

Environmental Regulation

Our activities will be subject to existing federal, state and local laws and regulations governing environmental quality and pollution control. Our operations will be subject to stringent environmental regulation by state and federal authorities including the Environmental Protection Agency ("EPA"). Such regulation can increase the cost of such activities. In most instances, the regulatory requirements relate to water and air pollution control measures.

Waste Disposal

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

Air Emissions

Our operations are subject to local, state and federal regulations for the control of emissions of air pollution. Major sources of air pollutants are subject to more stringent, federally imposed permitting requirements. Administrative enforcement actions for failure to comply strictly with air pollution regulations or permits are generally resolved by payment of monetary fines and correction of any identified deficiencies. Alternatively, regulatory agencies could require us to forego construction, modification or operation of certain air emission sources.

Clean Water Act

The Clean Water Act ("CWA") imposes restrictions and strict controls regarding the discharge of wastes, including produced waters and other oil and natural gas wastes, into waters of the United States, a term broadly defined. Permits must be obtained to discharge pollutants into federal waters. The CWA provides for civil, criminal and administrative penalties for unauthorized discharges of oil, hazardous substances and other pollutants. It imposes substantial potential liability for the costs of removal or remediation associated with discharges of oil or hazardous substances. State laws governing discharges to water also provide varying civil, criminal and administrative penalties and impose liabilities in the case of a discharge of petroleum or it derivatives, or other hazardous substances, into state waters. In addition, the EPA has promulgated regulations that may require us to obtain permits to discharge storm water runoff. In the event of an unauthorized discharge of wastes, we may be liable for penalties and costs.

Employees

We have no employees as of the date of this report and anticipate that our operations will be conducted primarily through third party consultants and contractors rather than by employees. We do not anticipate hiring a large number of employees.

Item 1A. Risk Factors.

You should carefully consider the risks described below, which constitute the material risks facing us. If any of the following risks actually occur, our business could be harmed. You should also refer to the other information about us contained in this Form 10-K, including our financial statements and related notes.

Risks Related to Our Business

Our exploratory drilling operations may not be successful, our business may fail and investors may lose their entire investment in our Company.

There can be no assurance that our future drilling activities will be successful. We may not recover all or any portion of our capital investment in the wells. Unsuccessful drilling activities would have a material adverse effect upon our results of operations and financial condition and would likely result in the ultimate failure of our business operations. The cost of drilling, completing, and operating wells is often uncertain, and a number of factors can delay or prevent drilling operations including: (i) unexpected drilling conditions; (ii) pressure or irregularities in formation; (iii) equipment failures or accidents; (iv) adverse weather conditions; and (iv) shortages or delays in availability of drilling rigs and delivery of equipment. If our exploratory drilling operations are not successful, our business may fail and investors may lose their entire investment in our Company.

Oil and gas exploration and development involves many operating risks. If we were to experience any of these problems, it could have a material, adverse effect on our operations and possibly cause us to go out of business and investors to lose their entire investment in our Company.

Our exploration activities will be subject to many risks, including the risk that we may not discover commercially productive reservoirs. Exploration for oil and natural gas can be unprofitable, not only from failing to discover reserves, but from productive wells that do not produce sufficient revenues to return a profit. In addition, our exploration activities may be curtailed, delayed or cancelled as a result of other factors, including:

•fires;

•explosions;

•blow-outs and surface cratering;

•uncontrollable flows of underground natural gas, oil, or formation water;

•natural disasters;

•facility and equipment failures;

•title problems;

•shortages or delays in the delivery of equipment and services;

•abnormal pressure formations; and,

•environmental hazards such as natural gas leaks, oil spills, pipeline ruptures and discharges of toxic gases.

If any of these events occur, we could incur substantial losses as a result of:

•injury or loss of life;

•severe damage to and destruction of property, natural resources or equipment;

•pollution and other environmental damage;

•clean-up responsibilities;

•regulatory investigation and penalties;

•suspension of our operations; or,

•repairs necessary to resume operations.

We may be affected by any of these events more than larger companies, since we have limited working capital. We have not obtained any liability insurance for our operations at this time. If we were to experience any of these problems, it could have a material, adverse effect on our operations and could cause us to go out of business and investors to lose their entire investment in our Company.

The operations and the potential profitability of oil and gas exploration and development companies often depend upon factors beyond our control. If our operations and potential profitability are negatively impacted because of these factors, our business could suffer and investors could lose all or part of their investment in our Company.

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile and potentially subject to governmental price fixing, pegging and controls, or any combination of these and other factors, responding to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds and other expenses have become increasingly difficult, if not impossible, to project. These and other changes and events may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas, which may be acquired or discovered will be affected by numerous factors beyond our control. These factors include, but are not limited to, the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. These factors cannot be accurately predicted. If our operations and potential profitability are negatively impacted because of these factors, our business could suffer and investors could lose all or part of their investment in our Company.

The oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring further oil and gas exploration prospects and hiring qualified personnel. If we do not compete successfully in these areas, our operations will likely suffer and our Company will likely be unsuccessful.

The oil and gas industry is intensely competitive, and we compete with other companies that have greater resources. Many of these companies not only explore for and produce oil and natural gas, but also carry on refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties and exploratory prospects or define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low oil and natural gas market prices. Our larger competitors may be able to absorb the burden of present and future laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. These companies also may be better able to attract the qualified personnel required to run a successful oil and gas exploration company.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on us.

Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, state, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend material amounts on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.

Oil and gas exploration and development activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations.

Our oil and gas exploration and development activities will be subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance.

Risks Related to Our Company

If we do not continue to obtain additional financing, our business will fail.

Our current operating funds are less than necessary to commence and complete all intended test wells on the Oklahoma and Alaska properties covered by our oil and gas leases. Therefore, we will need to obtain additional financing in order to complete our business plan. We currently have limited operations and we have minimal oil and gas sales.

As of December 31, 2009, we have cash on hand of approximately $38,510 representing the remaining proceeds of our six financing transactions and loans from our president. In order to commence and complete all intended test wells on the Oklahoma properties covered by the oil and gas leases, we anticipate that we will need to spend a minimum of $250,000. Exploration (and if successful, development) of the Alaska prospects is unlikely to commerce until the next decade and it is impossible to forecast these costs at this time. Nevertheless, we will require substantial additional financing to cover such costs. Furthermore, we will require additional financing to sustain our business operations if we are not successful in earning revenues once drilling is complete.

We do not currently have any arrangements for financing and may not be able to find such financing. Our ability to obtain additional financing will be subject to a number of factors, including the market price for oil and gas, the success of our initial test wells and general market conditions. These factors will make the timing, amount, terms or conditions of financing uncertain and additional financing may be unavailable to us. If we do not obtain additional financing, our business will fail.

We are a new entrant into the oil and gas industry without a profitable or long operating history. We do not have any significant income producing oil and gas properties and we have limited financial resources. We have not yet commenced our exploration activities nor have we generated any significant revenue since our incorporation. There is no means by which investors can evaluate our potential for success and there is no assurance that we will ever operate profitably.

We have a limited operating history and must be considered in the exploration stage. Our Company's operations will be subject to all the risks inherent in the establishment of an exploration stage enterprise and the uncertainties arising from the absence of a significant operating history. Potential investors should be aware of the difficulties normally encountered by oil and gas exploration and development companies and the high rate of failure of such enterprises, especially those with a limited operating history such as ours. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the oil and gas exploration that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates. The expenditures to be made by us in our oil and gas exploration may not result in the discovery of oil and gas reserves. If the results of our exploration do not reveal commercially viable oil or gas reserves, we may decide to abandon our leasehold interests and acquire new oil and gas interests for exploration or cease operations. The acquisition of additional oil and gas interests will be dependent upon us possessing capital resources in order to purchase such interests. If no funding is available, we may be forced to abandon our operations. No assurance can be given that we will ever operate on a profitable basis.

Potential investors should be aware of the difficulties normally encountered by new resource companies and the high rate of failure of such enterprises. There is a high risk that our business will fail.

Because our directors have other business interests, they may not be able or willing to devote a sufficient amount of time to our business operations, causing our business to suffer and possibly fail.

Our directors intend to spend a minority of their business time providing their services to us. While they presently possess adequate time to attend to our interests, it is possible that the demands on our directors from their other obligations could increase, or the demands of our business operations could increase, with the result that they would no longer be able to devote sufficient time to the management of our business. If this happens, our Company will not likely perform to its potential and may fail.

Prospects that we decide to drill may not yield natural gas or oil in commercially viable quantities. If this happens, our business will likely fail and investors would likely lose their entire investment in our Company.

None of our properties covered by the oil and gas leases/permits have yet been fully evaluated by the Company. We will not know for certain, prior to drilling and testing, whether natural gas or oil will be present in those properties or, if present, whether natural gas or oil will be present in sufficient quantities to recover drilling or completion costs or to be economically viable. The cost of drilling, completing and operating any well is uncertain and any wells we drill may not be productive. If we never find commercially viable resources of oil and gas, our business will fail and investors will likely lose their entire investment in our Company.

Our Alaska prospects are in areas believed to contain gas, but presently lacking gas transportation facilities.

While our Alaska prospects are in areas that are promising for gas discovery, there are no existing pipeline facilities available to transport any gas they may produce to market. Unless such facilities are built and available to us, our gas would be “stranded gas” with little or no market value. The Company believes that a pipeline facility will be built within the terms of our leases, however, whether a pipeline is built, the timing of the construction of the pipeline and whether and on what terms the pipeline is made available to transport our gas are all matters beyond our control which could have significant impacts on our future results.

James Fitzsimons, our president, owns Soladino Investments SA, a Swiss corporation, that owns approximately 78.5% of our common stock and this interest could conflict with other investors, which could cause other investors to lose all or part of their investment.

James Fitzsimons, our president and a director, owns Soladino Investments SA, a Swiss corporation that owns 17,800,000 shares of our common stock, or 78.5% of the Company’s issued and outstanding shares. Due to this stock ownership, James Fitzsimons is able to substantially influence all matters requiring shareholder approval, including the election of directors and approval of significant corporate transactions. Such concentration of ownership may also have the effect of delaying or preventing a change in control, which may be to the benefit of our management but not in the interest of the shareholders. This stock ownership and potential effective control on all matters relating to the business and operations of our Company could eliminate the possibility of shareholders changing the management in the event that the shareholders did not agree with the conduct of the officers and directors. Additionally, the shareholders would potentially not be able to obtain the necessary shareholder vote to effect any change in the course of business of our Company. This lack of shareholder control could prevent the shareholders from removing from the board of directors any directors who are not managing the Company with sufficient skill to make it profitable, which could prevent us from becoming profitable and cause investors to lose all or part of their investment in our Company.

Risks Related to Our Securities

If a liquid market for our common stock does not develop, shareholders may be unable to sell their shares.

There is currently no liquid market for our common stock and no certainty that a liquid market will develop. While our common stock is quoted for trading on the OTC Bulletin Board, there has only been sporadic trading of our common stock. If a liquid market is not developed for our shares, it will be difficult for shareholders to sell their stock.

A purchaser of our stock is purchasing penny stock which limits his or her ability to sell the stock.

Our shares of common stock are considered penny stock under the Exchange Act. The shares will remain penny stock for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, thus limiting investment liquidity. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in our Company will be subject to rules 15g-1 through 15g-10 of the Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stocks such as ours.

We do not intend to pay dividends and there will be less ways in which you can make a gain on any investment in our Company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may likely prohibit the payment of a dividend.

Our board of directors is authorized to issue shares of preferred stock, which may have rights and preferences detrimental to the rights of the holders of our common shares.

We are authorized to issue up to 1,000,000 shares of preferred stock, $.0001 par value. To date we have not issued any shares of preferred stock and have no plans to do so. Our preferred stock may bear such rights and preferences, including dividend and liquidation preferences, as the board of directors may fix and determine from time to time. Any such preferences may operate to the detriment of the rights of the holders of our common shares.

Our Articles of Incorporation provide for indemnification of officers and directors at our expense and limit their liability which may result in a major cost to us and hurt the interests of our shareholders because corporate resources may be expended for the benefit of officers and/or directors.

Our Articles of Incorporation and applicable Delaware law provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on our behalf. We will also bear the expenses of such litigation or any of our directors, officers, employees, or agents, upon such person's promise to repay us, therefore, if it is ultimately determined that any such person should not have been entitled to indemnification this indemnification policy could result in substantial expenditures by us, which we will be unable to recoup.

We have been advised that, in the opinion of the SEC, indemnification for liabilities arising under federal securities laws is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against these types of liabilities, other than the payment by us of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by a director, officer or controlling person in connection with the securities registered in our SB-2, we will (unless in the opinion of our counsel, the matter has been settled by controlling precedent) submit to a court of appropriate jurisdiction, the question whether indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The legal process relating to this matter if it were to occur is likely to be very costly and may result in us receiving negative publicity, either of which factors is are likely to materially reduce the market and price for our shares, if such a market ever develops.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None

ITEM 2. PROPERTIES.

Leasehold Acreage

The Company owns interests in oil and gas acreage in the locations set forth below as of December 31, 2009 and 2008. These ownership interests generally take the form of working interests in oil and gas leases or licenses that have varying terms.

	December 31, 2009				December 31, 2008
State or Country	Gross		Net		Gross			Net
Alaska		24,280		24,280		24,280			24,280
Oklahoma		7,204		4,929		6,379			2,809
Canada (1)		-		-		286,713			286,713
Italy (1)		-		-		-	(2)		-	(2)
Netherlands (1)		-		-		-	(3)		-	(3)
Total		31,484		29,209		317,372			313,802

(1) On November 30, 2009, the Company sold $448,876 of its foreign oil and gas leases to Soladino Investments SA, an entity owned and controlled by the president and the majority stockholder of the Company, for $596,551 by (i) the cancellation of $500,000 of notes and (ii) a cash payment of $96,551. The sales price over the cost basis of $147,675 was booked as additional paid in capital.

(2) On January 20, 2009, the Government of Italy made the preliminary awards of the competitive oil and gas exploration licenses, "Fiorenzuola D'Arda" located in the Po Valley and "Montottone" located in the Marche region, in favor of Mac Oil SpA, our former subsidiary. On March 24, 2009, the Government of Italy made the preliminary award of the competitive oil and gas exploration license, "Melzo" located in the Po Valley, also in favor of Mac Oil SpA. On September 17, 2009, the Government of Italy made the preliminary award of the competitive oil and gas exploration license, "San Grato" located in the Po Valley, again in favor of Mac Oil SpA. The four Italy licenses cover a net surface area of 132,900 hectares (328,181 acres).

The Company also had two competitive oil and gas exploration license applications pending awaiting adjudication by the Ministry of Economic Development in Italy covering a net surface area of 98,332 hectares (242,982 acres).

(3) The Company had one license application pending covering a net surface area of 45,037 hectares (111,288 acres).

Leasehold Acreage Costs

The Company has capitalized leasehold acreage costs in undeveloped oil and natural gas acreage in the locations set forth below:

	December 31,
	2009		2008
State or Country
Alaska	$	442,086	$	442,086
Oklahoma (1)		760,029		520,050
Canada (2), (3), (4)		-		277,130
Italy (3), (4)		-		228,867
Netherlands (3)		-		25,760
Total	$	1,202,115	$	1,493,893

(1) The Oklahoma oil and gas leasehold costs are net of a 2009 impairment charge of $622,966.

(2) On June 12, 2009, the Company exchanged its membership interest in Union Energy (Alberta) LLC, a Colorado limited liability company, that owned eight contiguous sections (totaling 5,120 acres) of oil sands leases in the Peace River Oil Sands Area of northern Alberta, Canada for 1,000,000 restricted shares of Tamm Oil and Gas Corp. The Company acquired these oil sands leases in May 2008 for $250,000.

(3) On November 30, 2009, the Company sold its foreign oil and gas leases with a cost of $448,876 to Soladino Investments SA for $596,551.

(4) At December 31, 2009, the Company wrote off $7,978 and $8,669 of remaining Canadian and Italian oil and gas leasehold costs as an impairment charge, respectively.

Oil and Gas Drilling Activity

We own working interests in five gross producing oil wells and seven gross producing gas wells at December 31, 2009. Of the five gross producing oil wells two were dual completions (oil and gas). At December 31, 2009, we had no wells in progress. The Company currently does not have sufficient production records to compute the quantities of proved oil and gas reserves as required by SEC Regulation S-X, Rule 4-10(a).

Corporate Offices

Our office is located at 1065 Dobbs Ferry Road, White Plains, NY 10607 and our telephone number is (914) 674-4373. Should we require a regular permanent office we will attempt to locate one in the vicinity of our leases and we believe that suitable properties are available at reasonable costs.

ITEM 3. LEGAL PROCEEDINGS.

We currently have no legal proceedings pending nor have any legal proceeding been threatened against us or any of our officers, directors or control persons of which we are aware.

PART II

ITEM 5. MARKET for REGISTRANT’S COMMON EQUITY and ISSURER PURCHASES of EQUITY SECURITIES.

Stock Split/ Dividends

On August 13, 2008, the Company’s board of directors approved a stock dividend on its outstanding common stock. The ratio for the stock dividend was four shares to each share owned (4:1).

Market Information

Our common stock trades on the Over the Counter Bulletin Board under the symbol “PTCP”. The following table sets forth for the periods indicated the high and low prices per share of our common stock as quoted by the OTCBB, respectively:

	Price Range of
	Common Stock (1)
	High		Low
Year Ended December 31, 2009
Fourth Quarter	$	2.50	$	2.50
Third Quarter	$	2.50	$	2.25
Second Quarter	$	2.25	$	2.25
First Quarter	$	2.25	$	2.10

Year Ended December 31, 2008
Fourth Quarter	$	2.10	$	2.10
Third Quarter	$	2.20	$	2.10
Second Quarter	$	1.80	$	1.80
First Quarter	$	-	$	-

Reports to Shareholders

We plan to furnish our shareholders with an annual report for each fiscal year ending December 31 containing financial statements audited by our independent certified public accountants. Additionally, we may, in our sole discretion, issue unaudited quarterly or other interim reports to our shareholders when we deem appropriate. We intend to maintain compliance with the periodic reporting requirements of the Securities Exchange Act of 1934.

Holders

As of March 31, 2009, we had five shareholders of record and 22,680,000 common shares issued and outstanding. The number of holders does not include the shareholders for whom shares are held in a "nominee" or "street" name.

Dividend Policy

We have not declared or paid any dividends on our common stock to date. We anticipate that any future earnings will be retained as working capital and used for business purposes. Accordingly, it is unlikely that we will declare or pay any such dividends in the foreseeable future.

Securities Authorized for Issuance under Equity Compensation Plans

None

Recent Sales of Unregistered Securities

On March 18, 2008, the Company sold 800,000 shares of its common stock to one investor at $1.25 per share (an aggregate of $1,000,000). The shares were sold in transactions exempt from registration under Regulation S of the Securities Act of 1933, as amended. The shares are not registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The purchasers of the shares represented that they were acquiring the shares for their own account, for investment, and that the purchasers were not US Persons within the meaning of Regulation S. The Company has no obligation to register the resale of the shares under the Securities Act. The proceeds from the sale of the shares will be used for working capital purposes.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable

ITEM 7. MANAGEMENT’S DISCUSSION and ANALYSIS of FINANCIAL CONDITIONS and REULTS OF OPERATION.

Overview

We caution you that reliance on any forward-looking statement involves risks and uncertainties, and that although we believe the assumptions on which our forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions could be incorrect. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any plans and objectives or projected financial results referred to in any of the forward-looking statements. We do not undertake to release the results of any revisions of these forward-looking statements to reflect future events or circumstances. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the following:

•	our ability to raise additional capital and secure additional financing;
•	anticipated trends in our financial condition and results of operations;
•	our ability to hire and retain key employees;
•	Risks related to diverting management’s attention from ongoing business operations.

Background

Prior to September 2007, the Company’s business model provided telephonic conferencing services to businesses, organizations and individuals in North America. Due to capital constraints and because its executives could no longer serve the Company without compensation, the Company decided to change directions.

During 2009 the Company changed its emphasis from an International oil and gas company primarily to a US focused company because of current world economic conditions and lack of debt/capital financing. The Company disposed of its foreign oil and gas leases/permits in two separate transactions described below. The Company completed an extensive review of its Alaska and Oklahoma oil and gas leases, operations and recorded impairment charges of $639,813.

Plan of Operation

Our plan of operation for 2010 is to continue drilling test wells on our Oklahoma oil and gas leases. We anticipate the cost of these programs will be approximately $250,000, however, this figure could be reduced, possibly substantially, by third-party working interest participation, arising particularly as a result of spacing and pooling applications and hearings.

During 2010 we also anticipate spending $100,000 on administrative expenses, including fees payable in connection with our compliance reporting obligations as a public company, such as legal, accounting and audit fees.

Total expenditures in 2010 therefore could be at least $350,000. We have limited cash on hand to cover some of these expenses and will require additional funding. We anticipate this additional funding will be provided in the form of equity financing from the sale of our common stock, sale of our Tamm Oil and Gas Corp (“TAMO”) stock or loans from our majority stockholder. We cannot provide investors with any assurance that additional funds will be raised. Currently, we do not have any arrangements in place for future equity financings.

We are in the process of determining our personnel needs. We intend to hire consultants over the course of the next twelve months. To attract qualified personnel, we intend to offer percentages of the Company’s working interest in its oil and gas properties.

Results of Operations

For the year ended December 31, 2009, we had revenues of $70,961, oil and gas exploration costs of $210,641 and incurred a loss of $1,237,259, as compared to revenues of $24,151, oil and gas exploration costs of $28,297 and a loss of $346,414 in 2008. Salaries in 2009 and 2008 were $120,000. Professional fees in 2009 were $238,680 as compared to $156,368 in 2008. General and administrative expenses for 2009 were $26,918 as compared to $36,985 in 2008.

The Company disposed of its foreign oil and gas leases/permits in two separate transactions described below. The Company completed an extensive review of its Alaska and Oklahoma oil and gas leases, operations and recorded an impairment charge of $639,813.

In addition, we incurred interest expense of $72,895 in 2009 as compared to $30,633 in 2008.

Liquidity and Capital Resources

Soladino Investments SA, a Swiss corporation owned by our president, loaned the Company $182,094 on August 19, 2009 and $100,000 on October 13, 2009. The notes are secured, non-interest bearing and payable on demand.

On November 30, 2009, the Company sold oil and gas properties with a cost of $448,876 to Soladino Investments SA for $596,551. The purchase price was paid by cash of $96,551 and cancellation of $500,000 of its notes to Soladino. The oil and gas properties were in Quebec, Canada and its wholly owned subsidiary Mac Oil SpA. The Company recorded the $147,675 gain as a capital contribution.

At December 31, 2009, the Company has $1,099,975 in notes (four) payable to Soladino Investments SA. The notes are secured by the Company’s oil and gas leases, are non interest bearing and payable upon demand.

Our Company's principal cash requirements are for exploration expenses which we anticipate will rise as we proceed to determine the feasibility of developing our current or future property interests. As of December 31, 2009, we had cash of $38,510 and negative working capital of $820,289. Our net cash provided by financing activities from June 19, 2006 (inception) to December 31, 2009 was $2,273,017.

We anticipate that additional funding will be provided in the form of equity financing from the sale of our common stock, sale of our Tamm Oil and Gas Corp (“TAMO”) stock or loans from our majority stockholder. We cannot provide investors with any assurance that additional funds will be raised. Currently, we do not have any arrangements in place for future equity financings.

Seasonality and Inflation

We do not believe that our business will be seasonal to any material extent except that exploratory operations, particularly in Alaska, may be hampered by severe winter weather conditions. Since energy costs are a key component of inflation, we do not believe that our results will be materially impacted by inflation in the current fiscal year.

Critical Accounting Policies

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements. There are no material revenue generating activities that give rise to significant assumptions or estimates. Our most critical accounting policies relate to the accounting and disclosure of related party transactions. Our financial statements filed as part of this annual report include a summary of the significant accounting policies and methods used in the preparation of our financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

ITEM 7A. QUANTITATIVE and QUALITATIVE DISCLOSURES about MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS and SUPPLEMENTARY DATA.

Our financial statements for the years ended December 31, 2009 and 2008, and the reports thereon of Li & Company, respectively are included in this annual report.

ITEM 9. CHANGES in and DISAGREEMENTS with ACCOUNTANTS on ACCOUNTING and FINANCIAL DISCLOSURE.

None.

ITEM 9A(T). CONTROLS and PROCEDURES.

Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934 (the “Exchange Act”) require public companies to maintain “disclosure controls and procedures,” which are defined as controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2009. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2009, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following two material weaknesses which have caused management to conclude that, as of December 31, 2009, our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the year ending December 31, 2009. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:



Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;



Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the issuer; and



Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of the end of our most recent fiscal year, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, as of December 31, 2009, such internal control over financial reporting was not effective. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal control over financial reporting that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and (2) inadequate segregation of duties consistent with control objectives of having segregation of the initiation of transactions, the recording of transactions and the custody of assets. The aforementioned material weaknesses were identified by our Chief Financial Officer in connection with the review of our financial statements as of December 31, 2009.

Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management's report in this annual report.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

We will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. First, we will create a position to segregate duties consistent with control objectives of having separate individuals perform (i) the initiation of transactions, (ii) the recording of transactions and (iii) the custody of assets. Second, we will create a senior position to focus on financial reporting and standardizing and documenting our accounting procedures with the goal of increasing the effectiveness of the internal controls in preventing and detecting misstatements of accounting information. Third, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. We anticipate the costs of implementing these remediation initiatives will be approximately $50,000 to $100,000 a year in increased salaries, legal and accounting expenses.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2010.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the fourth quarter of 2009 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

PART 1II

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS and CORPORATE GOVERNANCE.

Our directors and officers as of March 31, 2010 are:

Name	Age	Position(s) with the Company
James Fitzsimons	49	Director, CEO and President (1)
Stephen M. Siedow	59	Director and CFO (1)
Frank J. Hariton	61	Secretary

(1)  Mr. Siedow was appointed CFO on March 16, 2009 effective March 1, 2009.

James Fitzsimons has been a director of our Company since September 20, 2007. Mr. Fitzsimons is an elected member of the Schweizerische Vereinigung von Petroleum-Geologen und Ingeneuren (Swiss Association of Petroleum Geologists and Engineers) and during the past five years has been employed by Reta Holding SA of Paradiso, Switzerland, also serving on the board of directors of Kapital Finanz und Treuhand Gesellshaft (Capital Finance and Trust Company) a licensed and regulated asset and fund management company and a full member of SECA (Swiss Private Equity & Corporate Finance Association). Mr. Fitzsimons has been active in the mineral extraction industry for over 15 years, and has been involved in the Oklahoma oil and gas industry for over five years. Mr. Fitzsimons received a Bachelor of Laws degree from University College London. His industry knowledge comes from direct experience of the oil and gas business both in Europe and the United States.

Stephen M. Siedow has been a director of our Company since December 2007. Mr. Siedow is a member of the American Institute of Certified Public Accountants and the Colorado Society of Certified Public Accountants. From 1974 to 1982 he was with the audit department of Ernst & Young, Certified Public Accountants in Denver, Colorado and in 1982, he formed Stephen M. Siedow, PC a professional accounting firm providing auditing, management consulting and tax services to corporations, partnerships and individuals. Mr. Siedow specializes in public and SEC accounting and has experience in industries including construction, mining, oil and gas, and mergers/acquisitions.

Frank J. Hariton has been secretary of our Company since September 2007 and is an attorney in private practice in New York State. Mr. Hariton received his BA (1971) and JD (1974) from Case Western Reserve University.

Family Relationships

There are no family relationships among our officers or directors.

Involvement in Certain Legal Proceedings

None of our directors, director nominees or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates that are required to be disclosed pursuant to the rules and regulations of the SEC other than as set forth in “Item 13. Certain Relationships and Related Transactions, and Director Independence” below. None of the directors, director designees or executive officers to our knowledge has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.

Term of Office

The term of office of the current directors shall continue until new directors are elected or appointed.

Committees of the Board and Financial Expert

We do not have a separately-designated audit or compensation committee of the Board or any other Board-designated committee. Audit and compensation committee functions are performed by our Board of Directors. We will form such committees in the future as the need for such committees may arise. In addition, at this time we have determined that we do not have an “audit committee financial expert” as defined by the SEC on our Board.

Code of Ethics

Due to its small size, the Company has not adopted a code of ethics. The Company will adopt a code of ethics for our senior officers, including our principal executive officer, principal financial officer, principal accounting officer or controller and any person who may perform similar functions. As required by SEC rules, we will report the nature of any change or waiver of our code of ethics.

ITEM 11. EXECUTIVE COMPENSATION.

Compensation of Executive Officers

The following table sets forth information concerning the compensation of our named executive officers for the fiscal years ended December 31, 2009 and 2008; provided, however, any payments to these officers were paid as consultants, not employees, of the Company, as the Company has not yet hired full or part-time employees. We may, once we are operational, implement employee benefits that will be generally available to all employees and subsidiary employees, including medical, dental and life insurance benefits and a 401(k) retirement savings plan. Except as listed below, there were no bonuses, other annual compensation, restricted stock awards or stock options/SARs or any other compensation paid to the named executive.

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Award ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)

James Fitzsimons, CEO, President, CFO and Director (1)	2009	$120,000							$120,000
	2008	$120,000							$120,000


Stephen M. Siedow, CFO and Director (2)	2009 2008	$-0- $-0-							$-0- $-0-

Frank J. Hariton, Secretary (3)	2009	$-0-							$-0-
Frank J. Hariton, Secretary (3)	2008	$-0-							$-0-

(1)		James Fitzsimons has been the Company’s CEO and President since December 17, 2007. Mr. Fitzsimons was CFO of our Company from December 17, 2007 through March 16, 2009. Mr. Fitzsimons was first elected a director of our Company on September 20, 2007.

(2)		Stephen M. Siedow has been a director since December 2007. Mr. Siedow was appointed CFO on March 16, 2009 effective March 1, 2009. The Company paid Mr. Siedow $68,300 for accounting/consulting fees in 2009 and $77,700 in 2008.

(3)		Frank J. Hariton has been the Company’s secretary since September 2007. Mr. Hariton was paid $30,000 for legal services in 2009 and $26,500 in 2008.

Compensation of Directors

The Company has no standard arrangements in place or currently contemplated to compensate the Company’s directors for their service as directors or as members of any committee of directors.

Employment Agreements

We do not have employment agreements with any of our executive officers or directors. We have verbal understandings with our executive officers regarding monthly retainers and reimbursement for actual out-of-pocket expenses.

Termination of Employment

There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in the Summary Compensation Table set forth above that would in any way result in payments to any such person because of his or her resignation, retirement or other termination of such person’s employment with us.

Employee Benefit Plans

None

Indemnification of Directors and Executive Officers and Limitation of Liability

Pursuant to the General Corporation Law of Delaware our Certificate of Incorporation provides that no director will have any personal liability to us or to any of our shareholders for monetary damages for breach of fiduciary duty as a director; provided, however, that this exclusion does not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to us or our shareholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under §174 of the General Corporation Law of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit.

ITEM 12. SECURITY OWNERSHIP of CERTAIN BENEFICIAL OWNERS and MANAGEMENT and RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of March 31, 2010, the stock ownership of (i) each of our named executive officers and directors, (ii)all executive officers and directors as a group, and (iii) each person known by us to be a beneficial owner of 5% or more of our common stock. No person listed below has any option, warrant or other right to acquire additional securities from us, except as may be otherwise noted. We believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them except as stated therein.

Name and Address	Amount & Nature
of Beneficial	of Beneficial	Percent
Owner (1)	Ownership (2)	of Class

James Fitzsimons (3)	17,800,000	78.5%
Selnaustrasse 3
8001 Zurich
Switzerland

Stephen M. Siedow	-0-	-0- %
13047 W. Iliff Drive
Lakewood, CO 80228

Frank J. Hariton	-0-	-0- %
1065 Dobbs Ferry Road
White Plains, NY 10607

Soladino Investments SA (3)	17,800,000	78.5%
Via Quadrellas 4
CH-7500 St.
Moritz, Switzerland

All officers and directors	17,800,000	78.5%
as a group (3 persons)

(1)		Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by him.

(2)		The beneficial ownership percent in the table is calculated with respect to the number of outstanding shares 22,680,000 of the Company’s common stock as of March 31, 2010, and each stockholder’s ownership is calculated as the number of shares of common stock owned plus the number of shares of common stock into which any preferred stock, warrants, options or other convertible securities owned by that stockholder can be converted within 60 days.

(3)		Soladino Investments SA is a Swiss corporation owned by James Fitzsimons.

The term “named executive officer” refers to our principal executive officer, our two most highly compensated executive officers other than the principal executive officer who were serving as executive officers at the end of 2009, and two additional individuals for whom disclosure would have been provided but for the fact that the individuals were not serving as executive officers of the Company at the end of 2009.

Changes in Control

We know of no contractual arrangements which may at a subsequent date result in a change of control in the Company.

Certain Relationships and Transactions with Related Persons

On August 12, 2008, the Company acquired from its president, James Fitzsimons, a 50% working interest (41.25% net revenue interest) in the Snake Creek prospect, a 3,200 gross (3,022 net) acre gas development project located in northern Okmulgee County, Oklahoma. The Company reimbursed Mr. Fitzsimons for his historic costs (acreage and drilling) by issuing a secured, non-interest bearing note, payable on demand for $210,917 and assumed responsibility for all further costs.

On December 1, 2008, James Fitzsimons transferred his 78.5% stock ownership in Petrocorp Inc. and three outstanding promissory notes (totaling $734,058) to Soladino Investments SA (“Soladino”), a Swiss corporation owned by Mr. Fitzsimons. The Company issued Soladino a $734,058 note, which is secured by the Company’s oil and gas leases, is non interest bearing and payable upon demand.

Soladino loaned the Company $182,094 on August 19, 2009 and $100,000 on October 13, 2009. The notes are secured, non-interest bearing and payable on demand.

At December 31, 2009, the Company has $1,099,975 in secured, non-interest bearing notes (four), payable on demand with its majority stockholder Soladino. During the years ended December 31, 2009 and 2008, the Company imputed interest expense related to these notes of $72,895 and $30,274, respectively. Interest was imputed at an implied rate of 6% per annum and the amounts were recorded as capital contributions by the Company.

The Company was provided management services by our president, Mr. Fitzsimons during 2009 and 2008 at no cost. The Company recorded the $120,000 estimated value of these services as compensation expense and as a capital contribution.

The Company was provided accounting services by Mr. Siedow, our chief financial officer. Mr. Siedow was paid $68,300 in 2009 and $77,700 in 2008 for these services.

The Company was provided legal and administrative services and office space by Mr. Hariton, our corporate secretary. Mr. Hariton was paid $30,000 in 2009 and $26,500 in 2008 for these services.

Director Independence

Our current directors are James Fitzsimons and Stephen Siedow. We are not currently subject to corporate governance standards defining the independence of our directors. We have not yet adopted an independence standard or policy, although we intend to do so in the near future. Accordingly, the Company’s Board currently determines the independence of each Director and nominee for election as a Director. The Board has determined that none of the Company’s directors currently qualifies as an independent director. We do not list the “independent” definition we use on our Internet website.

ITEM 14. PRINCIPAL ACCOUNTANT FEES and SERVICES.

Audit Fees

The aggregate fees billed by the Company’s auditors for professional services rendered in connection with the audit of the Company’s annual financial statements and reviews of the financial statements included in the Company’s Form 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for fiscal years 2009 and 2008 were $17,500 and $14,000, respectively.

Audit Related Fees

None

Tax Fees

None

All Other Fees

None

Pre-Approval Policies and Procedures

The board of directors has not adopted any pre-approval policies and approves all engagements with the Company’s auditors prior to performance of services by them.

PART 1V

ITEM 15. EXHIBITS and FINANCIAL STATEMENT SCHEDULES

The following exhibits are filed with this report, except those indicated as having previously been filed with the Securities and Exchange Commission and are incorporated by reference to another report, registration statement or form. As to any shareholder of record requesting a copy of this report, we will furnish any exhibit indicated in the list below as filed with this report upon payment to us of our expenses in furnishing the information.

Exhibit Number	Exhibit Description
3.1	Certificate of Incorporation (Incorporated by reference to like numbered exhibit to the Company’s Registration Statement on Form SB-2 File Number 333-141993).
3.2	Bylaws (Incorporated by reference to like numbered exhibit to the Company’s Registration Statement on Form SB-2 File Number 333-141993).
3.3	Certificate of Amendment to Certificate of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 5, 2007).
4.1	Specimen Stock Certificate (Incorporated by reference to like numbered exhibit to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007 filed on April 11, 2008).
10.1	Consulting Agreement, dated March 12, 2008, between the Company and Keith G. Summar (Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2007 filed April 11, 2008).
21	Description of Subsidiaries. **
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended. **
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended. **
32.1	Certificate (Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Chief Executive Officer. **
32.2	Certificate (Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) of Principal Financial Officer. **

• ** Filed herewith.

SIGNATURES

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

Date: April 21, 2010

PETROCORP INC.

By /s/ James Fitzsimons

James Fitzsimons

CEO and President

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/ James Fitzsimons James Fitzsimons		Director, CEO and President	April 21, 2010

/s/ Stephen M. Siedow Stephen M. Siedow		Director and CFO	April 21, 2010

PETROCORP INC.

(An Exploration Stage Company)

December 31, 2009 and 2008

Index to Consolidated Financial Statements

		Page

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets at December 31, 2009 and 2008		F-2

Consolidated Statements of Operations for the years ended December 31, 2009 and
2008 and for the period June 19, 2006 (inception) through December 31, 2009		F-3

Consolidated Statement of Stockholders' Equity for the period June 19, 2006
(inception) through December 31, 2009		F-4

Consolidated Statements of Cash Flows for the years ended December 31, 2009 and
2008 and for the period June 19, 2006 (inception) through December 31, 2009		F-5

Notes to the Consolidated Financial Statements		F-7-F-17

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Petrocorp Inc.

White Plains, New York

We have audited the accompanying consolidated balance sheets of Petrocorp Inc. and subsidiaries (an exploration stage company) (collectively, "Petrocorp' or the "Company") as of December 31, 2009 and 2008 and the related statements of operations, stockholders' equity and cash flows for the years then ended, and for the period June 19, 2006 (inception) through December 31, 2009. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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 audits 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2009 and 2008 and the results of its operations and its cash flows for the years then ended, and for the period June 19, 2006 (inception) through December 31, 2009, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company had a deficit accumulated during the exploration stage at December 31, 2009, a net loss from operations and net cash used in operations for the year then ended. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Li & Company, PC

Li & Company, PC

Skillman, New Jersey

April 21, 2010

F-1

PETROCORP INC.
(An Exploration Stage Company)
Consolidated Balance Sheets

ASSETS

	December 31,
	2009		2008

Current assets:
Cash	$	38,510	$	556,035
Revenue receivables		24,474		33,962
Marketable securities		250,000		-
Total current assets		312,984		589,997

Oil and gas properties (successful efforts method):
Unproven acreage		1,228,365		1,497,643
Less depletion, depreciation and amortization		(26,250)		(3,750)
		1,202,115		1,493,893

Total assets	$	1,515,099	$	2,083,890


LIABILITIES AND STOCKHOLDERS’ EQUITY


Current liabilities:
Accrued expenses	$	33,298	$	71,317
Notes payable to majority stockholder		1,099,975		734,058
Total current liabilities		1,133,273		805,375

Stockholders' equity:
Preferred stock; $.0001 par value; 1,000,000 shares
authorized; none issued or outstanding		-		-
Common stock; $.0001 par value; 100,000,000 shares
authorized; 22,680,000 shares issued and outstanding		2,268		2,268
Additional paid-in capital		2,051,752		1,711,182
Deficit accumulated during the exploration stage		(1,672,194)		(434,935)
		381,826		1,278,515

Total liabilities and stockholders’ equity	$	1,515,099	$	2,083,890



See accompanying notes to the consolidated financial statements.
F-2

PETROCORP INC.
(An Exploration Stage Company)
Consolidated Statements of Operations

					June 19, 2006
					(inception) to
	Year Ended December 31,				December 31,
	2009		2008		2009

Revenues earned during the exploration stage	$	70,961	$	24,151	$	95,112

Cost of revenues during the exploration stage:
Oil and gas operating costs		86,398		17,099		103,497
Exploration costs		96,634		5,709		102,343
Depletion, depreciation and amortization		22,500		3,750		26,250
Production taxes		5,109		1,739		6,848
Total cost of revenues during the exploration stage		210,640		28,297		238,938

Gross profit (loss)		(139,679)		(4,146)		(143,826)

Operating expenses:
Salary - president and majority stockholder		120,000		120,000		240,000
Professional fees - CFO and secretary		98,506		104,200		202,706
Professional fees		140,174		52,168		192,342
General and administrative expenses		26,918		36,985		127,819
Impairment charges		639,813		-		656,742
Total operating expenses		1,025,411		313,353		1,419,609

Loss from operations		(1,165,411)		(317,499)		(1,563,435)

Other (income) expenses:
Interest income		(727)		(1,718)		(2,445)
Interest expense		-		359		359
Interest expense - related parties		72,895		30,274		109,245
Total other (income) expense		72,168		28,915		107,159

Loss before income taxes		(1,237,259)		(346,414)		(1,670,594)

Provision for income taxes		-		-		1,600

Net loss	$	(1,237,259)	$	(346,414)	$	(1,672,194)

Net loss per common share -
basic and diluted	$	(0.08)	$	(0.02)

Weighted common shares outstanding -
basic and diluted		22,680,000		22,680,000


See accompanying notes to the consolidated financial statements. F-3

PETROCORP INC.
(An Exploration Stage Company)

Consolidated Statement of Stockholder's Equity
For the Period from June 19, 2006 (inception) through December 31, 2009

						Deficit
				Additional		Accumulated		Total
	Common Stock			Paid-in		during the		Stockholders'
	Shares	Amount		Capital		Exploration Stage		Equity

Balance, June 19, 2006 (inception)	-	$	-	$	-	$	-	$	-

Common stock issued for cash	20,000,000		2,000		(1,900)				100
Common stock issued for cash	600,000		60		29,940				30,000
Net loss							(27,397)		(27,397)

Balance, December 31, 2006	20,600,000		2,060		28,040		(27,397)		2,703

Common stock issued for cash	480,000		48		23,952				24,000
Capital contribution					3,000				3,000
Common stock issued for cash	800,000		80		499,920				500,000
Interest contribution					6,076				6,076
Net loss							(61,124)		(61,124)

Balance, December 31, 2007	21,880,000		2,188		560,988		(88,521)		474,655

Common stock issued for cash	800,000		80		999,920				1,000,000
Salary contribution					120,000				120,000
Interest contribution					30,274				30,274
Net loss							(346,414)		(346,414)

Balance, December 31, 2008	22,680,000		2,268		1,711,182		(434,935)		1,278,515

Sales price over cost of oil and gas
properties sold to majority stockholder					147,675				147,675
Salary contribution					120,000				120,000
Interest contribution					72,895				72,895
Net loss							(1,237,259)		(1,237,259)

Balance, December 31, 2009	22,680,000	$	2,268	$	2,051,752	$	(1,672,194)	$	381,826


See accompanying notes to the consolidated financial statements.
F-4

PETROCORP INC.
(An Exploration Stage Company)

Consolidated Statements of Cash Flows

					June 19, 2006
					(inception) to
	Year Ended December 31,				December 31,
	2009		2008		2009

Cash flows from operating activities:
Net loss	$	(1,237,259)	$	(346,414)	$	(1,672,194)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depletion, depreciation and amortization		22,500		3,750		27,321
Impairment charges		639,813				656,742
Salary contribution		120,000		120,000		240,000
Interest contribution		72,895		30,274		109,245
Changes in operating assets and liabilities:
Revenue receivables		9,488		(33,962)		(24,474)
Accrued expenses		(38,019)		52,431		33,298
State of Alaska payable				(279,500)		-
Net cash used in operating activities		(410,582)		(453,421)		(630,062)

Cash flows from investing activities:
Acquisition of oil and gas properties		(569,411)		(728,299)		(1,682,996)
Proceeds from sale of oil and gas properties		96,551				96,551
Purchase of equipment						(18,000)
Net cash used in investing activities		(472,860)		(728,299)		(1,604,445)

Cash flows from financing activities:
Proceeds from notes payable to majority stockholder		365,917				805,917
Repayment of notes payable to majority stockholder				(90,000)		(90,000)
Proceeds from sale of common stock				1,000,000		1,557,100
Net cash provided by financing activities		365,917		910,000		2,273,017

Net (decrease) increase in cash		(517,525)		(271,720)		38,510
Cash at beginning of year		556,035		827,755		-
Cash at end of year	$	38,510	$	556,035	$	38,510

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-	$	359	$	359
Cash paid for taxes	$	-	$	-	$	-

Supplemental disclosure of noncash investing and
financing activities:
Forgiveness of debt by a stockholder	$	-	$	-	$	3,000
Salary contribution	$	120,000	$	120,000	$	240,000
Interest contribution	$	72,895	$	30,274	$	109,245
Acquisition of undeveloped oil and gas properties
from majority stockholder for notes	$	583,823	$	384,058	$	967,881
Sale of $448,876 of oil and gas properties to Soladino
Investments SA, an entity owned by our president for
cancellation of $500,000 of notes and cash payment of $96,551	$	(500,000)	$	-	$	(500,000)

See accompanying notes to the consolidated financial statements.
F-5

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Note 1 - Organization and Operations

Petrocorp Inc., an exploration stage company, was incorporated on June 19, 2006 under the laws of the State of Delaware. Prior to September 2007, the Company’s business model provided telephonic conferencing services to businesses, organizations and individuals in North America. Due to capital constraints and because its executives could no longer serve the Company without compensation, the Company decided to change its business directions.

On August 13, 2008, the Company’s board of directors approved a stock dividend on its outstanding common stock. The ratio for the stock dividend was four shares to each share owned (4:1).

All share and per share amounts have been restated to reflect these common stock transactions.

Note 2 - Summary of Significant Accounting Policies

Basis of presentation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).

The consolidated financial statements include the accounts of Petrocorp Inc. and its wholly-owned subsidiaries: Petrocorp (Oklahoma) Inc., Union Energy (Alaska) LLC and Mac Oil SpA through November 30, 2009 (collectively, “Petrocorp” or the “Company”). All intercompany accounts and transactions have been eliminated.

Exploration stage company

The Company is an exploration stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification. Although the Company has recognized some nominal amount of revenue since inception, the Company is devoting substantially all of its efforts on establishing the business and its planned principal operations have not yet commenced. All losses since inception have been considered part of the Company’s exploration stage activities.

F-6

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Certain amounts in the prior period consolidated financial statements have been reclassified to conform with the current period presentation. These reclassifications had no effect on reported losses.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Marketable securities

Marketable securities available-for-sale, consisted of 1,000,000 common shares of Tamm Oil and Gas Corp. ("TAMO"), a publicly traded company listed on the Over the Counter Bulletin Board ("OTCBB"), and are stated at market value based on the most recently traded price of these marketable securities at December 31, 2009 taking into consideration their lack of liquidity. On June 12, 2009, the Company exchanged its membership interest in Union Energy (Alberta) LLC, a Colorado limited liability company, that owned eight contiguous sections (5,120 acres) of oil sands leases in the Peace River Oil Sands Area of northern Alberta, Canada for the 1,000,000 common shares, restricted for six (6) months from the date of signing, pursuant to the Agreement and Plan of Reorganization executed by and between Tamm Oil and Gas Corp and the Company. The Company acquired these oil sands leases in May 2008 for $250,000. Pursuant to Section 320-10-25 of the FASB Accounting Standards Codification unrealized gains and losses, if any, determined by the difference between the historical cost of $250,000 and the market value at each balance sheet date, are recorded as a component of accumulated other comprehensive income in stockholders' equity and realized gains and losses are determined by the difference between the historical cost of $250,000 and the gross proceeds received when these marketable securities are sold. TAMO's shares traded between $0.56 per share and $1.05 per share with an average daily volume of 274,000 shares for the period June 12, 2009 through December 31, 2009, with the closing price at $0.645 per share and a volume of 86,000 shares on December 31, 2009. The market value of the Company's 1,000,000 TAMO's shares at December 31, 2009 would have been $645,000 based on TAMO's December 31, 2009 closing price. The Management determined that the fair value of these marketable securities was $250,000, its historical cost when taking into consideration of the lack of average trading volume. At December 31, 2009, the Company did not record any unrealized gains or (losses), nor sold any of these marketable securities.

Oil and gas properties

The Company’s oil and gas exploration and production activities are accounted for using the successful efforts method. Under this method, all property acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending determination of whether the well has found proved reserves. If an exploratory well does not find proved reserves, the costs of drilling the well are charged to expense and included within cash flows from investing activities in the Consolidated Statements of Cash Flows pursuant to Topic 932 “Financial Accounting and Reporting by Oil and Gas Producing Companies” of the FASB Accounting Standards Codification (“Topic 932”). The costs of development wells are capitalized whether productive or nonproductive. Oil and gas lease acquisition costs are also capitalized. Interest cost is capitalized as a component of property cost for significant exploration and development projects that require greater than six months to be readied for their intended use.

Other exploration costs, including certain geological and geophysical expenses and delay rentals for oil and gas leases, are charged to expense as incurred. The sale of a partial interest in a proved property is accounted for as a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the unit-of-production amortization rate. A gain or loss is recognized for all other sales of proved properties and is classified in other operating revenues. Maintenance and repairs are charged to expense, and renewals and betterments are capitalized to the appropriate property and equipment accounts.

Unevaluated properties are assessed periodically on a property-by-property basis and any impairment in value is charged to expense. If the unevaluated properties are subsequently determined to be productive, the related costs are transferred to proved oil and gas properties. Proceeds from sales of partial interests in unproved leases are accounted for as a recovery of cost without recognizing any gain until all costs are recovered.

The provision for depreciation, depletion and amortization (“DD&A”) of oil and gas properties is calculated on a field-by-field basis using the unit-of-production method. Oil is converted to natural gas equivalents, Mcfe, at the rate of one barrel to six Mcf. Taken into consideration in the calculation of DD&A are estimated future dismantlement, restoration and abandonment costs, which are net of estimated salvage values.

F-7

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as
		of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which
		are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amounts of the Company’s financial assets and liabilities, such as cash, revenue receivable, and accrued expenses approximate their fair values because of the short maturity of these instruments. The Company’s marketable securities – restricted and notes payable to majority stockholder approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangement at December 31, 2009 and 2008.

The Company does not have any assets or liabilities measured at fair value on a recurring or a non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at December 31, 2009 or 2008, nor gains or losses are reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the interim period ended December 31, 2009 and 2008.

Revenue recognition

The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derives revenue primarily from the sale of produced natural gas and crude oil. The Company reports revenue as the gross amount received before taking into account production taxes and transportation costs, which are reported as separate expenses. Revenue is recorded in the month the Company’s production is delivered to the purchaser, but payment is generally received between thirty (30) and ninety (90) days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive.

Income taxes

The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statements of Income and Comprehensive Income in the period that includes the enactment date.

The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”). Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty (50) percent likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.

F-8

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Net loss per common share

Section 260-10-45 of the FASB Accounting Standards Codification requires dual presentation of basic and diluted earnings or loss per share (“EPS”) for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution; diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic loss per share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect is anti-dilutive. The Company had no potentially dilutive securities for the years ended December 31, 2009 or 2008.

Recently issued accounting pronouncements

On June 5, 2003, the United States Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-9072 on October 13, 2009. Under the provisions of Section 404 of the Sarbanes-Oxley Act, public companies and their independent auditors are each required to report to the public on the effectiveness of a company’s internal controls. The smallest public companies with a public float below $75 million have been given extra time to design, implement and document these internal controls before their auditors are required to attest to the effectiveness of these controls. This extension of time will expire beginning with the annual reports of companies with fiscal years ending on or after June 15, 2010. Commencing with its annual report for the fiscal year ending December 31, 2010, the Company will be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement

•	of management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;

•	of management’s assessment of the effectiveness of its internal control over financial reporting as of year end; and

•	of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting.

F-9

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Furthermore, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.

In June 2009, the FASB approved the “FASB Accounting Standards Codification” (the “Codification”) as the single source of authoritative nongovernmental US GAAP to be launched on July 1, 2009. The Codification does not change current US GAAP, but is intended to simplify user access to all authoritative US GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009.

In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-04 “Accounting for Redeemable Equity Instruments - Amendment to Section 480-10-S99” which represents an update to section 480-10-S99, distinguishing liabilities from equity, per EITF Topic D-98, Classification and Measurement of Redeemable Securities. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.

In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-05 “Fair Value Measurement and Disclosures Topic 820 – Measuring Liabilities at Fair Value”, which provides amendments to subtopic 820-10, Fair Value Measurements and Disclosures – Overall, for the fair value measurement of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1. A valuation technique that uses: a. The quoted price of the identical liability when traded as an asset b. Quoted prices for similar liabilities or similar liabilities when traded as assets. 2. Another valuation technique that is consistent with the principles of topic 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this update also clarify that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.

In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-08 “Earnings Per Share – Amendments to Section 260-10-S99”,which represents technical corrections to topic 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.

F-10

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-09 “Accounting for Investments - Equity Method and Joint Ventures and Accounting for Equity-Based Payments to Non-Employees”. This update represents a correction to Section 323-10-S99-4, Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee. Additionally, it adds observer comment Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees to the Codification. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.

In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-12 “Fair Value Measurements and Disclosures Topic 820 – Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent)”, which provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this update permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this update on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entity’s measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with Topic 820. The amendments in this update also require disclosures by major category of investment about the attributes of investments within the scope of the amendments in this update, such as the nature of any restrictions on the investor’s ability to redeem its investments a the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be make by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in US GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments in this update regardless of whether the fair value of the investment is measured using the practical expedient. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.

In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-01 “Equity Topic 505 – Accounting for Distributions to Shareholders with Components of Stock and Cash”, which clarify that the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in EPS prospectively and is not a stock dividend for purposes of applying Topics 505 and 260 (Equity and Earnings Per Share (“EPS”)). Those distributions should be accounted for and included in EPS calculations in accordance with paragraphs 480-10-25-14 and 260-10-45-45 through 45-47 of the FASB Accounting Standards codification. The amendments in this Update also provide a technical correction to the Accounting Standards Codification. The correction moves guidance that was previously included in the Overview and Background Section to the definition of a stock dividend in the Master Glossary. That guidance indicates that a stock dividend takes nothing from the property of the corporation and adds nothing to the interests of the stockholders. It also indicates that the proportional interest of each shareholder remains the same, and is a key factor to consider in determining whether a distribution is a stock dividend.

F-11

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

In January 2010, the FASB issued the FASB Accounting Standards Update No. 2010-02 “Consolidation Topic 810 – Accounting and Reporting for Decreases in Ownership of a Subsidiary – a Scope Clarification”, which provides amendments to Subtopic 810-10 and related guidance within U.S. GAAP to clarify that the scope of the decrease in ownership provisions of the Subtopic and related guidance applies to the following:

	1.	A subsidiary or group of assets that is a business or nonprofit activity

	2.	A subsidiary that is a business or nonprofit activity that is transferred to an equity method investee
		or joint venture

	3.	An exchange of a group of assets that constitutes a business or nonprofit activity for a
		noncontrolling interest in an entity (including an equity method investee or joint venture).

The amendments in this Update also clarify that the decrease in ownership guidance in Subtopic 810-10 does not apply to the following transactions even if they involve businesses:

	1.	Sales of in substance real estate. Entities should apply the sale of real estate guidance in Subtopics
		360-20 (Property, Plant, and Equipment) and 976-605 (Retail/Land) to such transactions.

	2.	Conveyances of oil and gas mineral rights. Entities should apply the mineral property conveyance
		and related transactions guidance in Subtopic 932-360 (Oil and Gas-Property, Plant, and Equipment)
		to such transactions.

If a decrease in ownership occurs in a subsidiary that is not a business or nonprofit activity, an entity first needs to consider whether the substance of the transaction causing the decrease in ownership is addressed in other US GAAP, such as transfers of financial assets, revenue recognition, exchanges of nonmonetary assets, sales of in substance real estate, or conveyances of oil and gas mineral rights, and apply that guidance as applicable. If no other guidance exists, an entity should apply the guidance in Subtopic 810-10.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

Note 3 – Going Concern

The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business. At December 31, 2009, the Company had a deficit accumulated during the exploration stage of $1,672,194, a net loss of $1,237,259 with revenues of $70,961 and cash used in operations of $410,582 for the year then ended. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

While the Company is attempting to generate measurable revenues, the Company’s cash position may not be sufficient to support its daily operations. Management intends to raise additional capital through sales of its securities, sale of its Tamm Oil and Gas Corp (“TAMO”) stock or loans from its majority stockholder. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan, generate sufficient revenues and raise additional capital.

F-12

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 4 - Marketable Securities

The available-for-sale marketable securities at December 31, 2009 and 2008 are set forth as follows:

	2009		2008

1,000,000 shares of TAMO common stock	$	250,000	$	-

Note 5 - Oil and Gas Properties

Leasehold Acreage

Petrocorp owns interests in oil and gas acreage in the locations set forth below as of December 31, 2009 and 2008. These ownership interests generally take the form of working interests in oil and gas leases or licenses that have varying terms.

	December 31, 2009				December 31, 2008
State or Country	Gross		Net		Gross			Net
Alaska		24,280		24,280		24,280			24,280
Oklahoma		7,204		4,929		6,379			2,809
Canada (1)		-		-		286,713			286,713
Italy (1)		-		-		-	(2)		-	(2)
Netherlands (1)		-		-		-	(3)		-	(3)
Total		31,484		29,209		317,372			313,802

(3) The Company had one license application pending covering a net surface area of 45,037 hectares (111,288 acres).

Leasehold Acreage Costs

Petrocorp has capitalized leasehold acreage costs, net of accumulated depletion, depreciation and amortization, in undeveloped oil and natural gas acreage in the locations set forth below as of December 31, 2009 and 2008:

	December 31,
	2009		2008
State or Country
Alaska	$	442,086	$	442,086
Oklahoma (1)		760,029		520,050
Canada (2), (3), (4)		-		277,130
Italy (3), (4)		-		228,867
Netherlands (3)		-		25,760
Total	$	1,202,115	$	1,493,893

(1) The Oklahoma oil and gas leasehold costs are net of acquisitions of $885,445, a 2009 impairment charge of $622,966 and accumulated depletion, depreciation and amortization of $26,200.

(3) On November 30, 2009, the Company sold $448,876 of its foreign oil and gas leases to Soladino Investments SA, an entity owned and controlled by the president and majority stockholder of the Company, for $596,551 by (i) the cancellation of $500,000 of notes and (ii) a cash payment of $96,551. The sales price over the cost basis of $147,675 was recorded as additional paid-in capital.

(4) At December 31, 2009, the Company wrote off $7,978 and $8,669 of remaining Canadian and Italian oil and gas leasehold costs as an impairment charge, respectively.

F-13

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

2009 Detailed Leasehold Acreage Costs

			2009 Activities
							Properties
	Balance at		Leasehold		Well		Exchanged		Impairment				Balance at
	12/31/2008		Costs		Costs		or Sold		Charge		Depletion		12/31/2009

State or Country
Alaska	$	442,086	$		$		$		$		$		$	442,086

Oklahoma (by prospect)
East Okemah		41,998								(41,998)				0
Snake Creek		307,803				29,106				(218,977)				117,932
Spanish Peak		173,999		65,990		206,526				(361,991)				84,524
Coal Creek		-		583,823										583,823
Accumulated depletion		(3,750)										(22,500)		(26,250)
Oklahoma, net		520,050		649,813		235,632		0		(622,966)		(22,500)		760,029

Canada		277,130		23,715				(292,866)		(7,978)				0

Italy		228,867		121,349				(341,348)		(8,869)				0

Netherlands		25,760		38,902				(64,662)						0
Total oil and gas properties	$	1,493,893	$	833,779	$	235,632	$	(698,876)	$	(639,813)	$	(22,500)	$	1,202,115

Oil and Gas Drilling Activity

The Company owns working interests in five (5) gross producing oil wells and seven (7) gross producing gas wells at December 31, 2009. Of the five (5) gross producing oil wells two (2) were dual completions (oil and gas). At December 31, 2009, the Company had no wells in progress.

F-14

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Note 6 - Notes Payable to Majority Stockholder

On December 1, 2008, Mr. Fitzsimons transferred his 78.5% stock ownership in Petrocorp Inc. and three outstanding promissory notes (totaling $734,058) to Soladino Investments SA (“Soladino”), a Swiss corporation owned by Mr. Fitzsimons. The Soladino note is secured, non-interest bearing and payable on demand.

On March 31, 2009, the Company purchased 171 oil and gas leases totaling 3,827 gross (2,666 net) acres in Okfuskee and Okmulgee Counties, Oklahoma from CH4 Energy, Inc., a company controlled by Soladino Investments SA at a cost of $583,823. The Company reimbursed Soladino for its historic costs (acreage) by issuing a secured, non-interest bearing note, payable on demand for $583,823 and assumed responsibility for all further costs.

Soladino loaned the Company $182,094 on August 19, 2009 and $100,000 on October 13, 2009. The notes are secured, non-interest bearing and payable on demand.

On November 30, 2009, Soladino cancelled $500,000 of the Company’s notes in Soladino’s acquisition of Mac Oil SpA and its foreign oil and gas leases in Quebec, Canada. At December 31, 2009, the Company has $1,099,975 in secured, non-interest bearing notes (four), payable on demand with its majority stockholder Soladino.

During the years ended December 31, 2009 and 2008, the Company imputed interest expense related to these notes of $72,895 and $30,274, respectively. Interest was imputed at an implied rate of 6% per annum and the amounts were recorded as capital contributions by the Company.

Note 7 - Stockholders’ Equity

Common stock

On September 30, 2006, the Company issued 20,000,000 shares of common stock to its founders at par value ($.0001 per share). During the period July 1 through December 31, 2006, the Company sold 600,000 shares of its common stock in a private placement at $0.05 per share (an aggregate of $30,000) to 16 individuals. During the period from January 1 through September 30, 2007, the Company sold 480,000 shares of its common stock at $0.05 per share (an aggregate of $24,000) to 24 individuals.

On December 27, 2007, the Company sold 800,000 shares of its common stock to one investor at $.625 per share (an aggregate of $500,000). On March 18, 2008, the Company sold 800,000 shares of its common stock to one investor at $1.25 per share (an aggregate of $1,000,000). These shares were sold in transactions exempt from registration under Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). These shares are not registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The purchasers of these shares represented that they were acquiring the shares for their own account, for investment, and that the purchasers were not US Persons within the meaning of Regulation S. The Company has no obligation to register the resale of these shares under the Securities Act. The proceeds from the sale of these shares will be used for working capital purposes.

F-15

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

Note 8 - Income Taxes

Deferred tax assets

At December 31, 2009, the Company had net operating loss ("NOL") carry-forwards for Federal income tax purposes of $1,049,227 exclusive of $639,813 in impairment charges, that may be offset against future taxable income through 2029. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company's net deferred tax assets of approximately $356,700 was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are fully offset by a valuation allowance of $356,700.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance increased approximately $260,900 and $78,100 for the year ended December 31, 2009 and 2008, respectively.

The components of deferred tax assets at December 31, 2009 and 2008 are:

	2009		2008
Net deferred tax assets - noncurrent:
Expected income tax benefit from NOL carry-forwards	$	356,700	$	95,800
Less valuation allowance		(356,700)		(95,800)
Deferred tax assets, net of valuation allowance	$	-	$	-

Income taxes in the consolidated statements of operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes follows:


	For the Year Ended December 31,
	2009		2008
Federal statutory income tax rate		34.0%		34.0%
Change in valuation allowance on net operating loss carry-
forwards		(34.0)%		(34.0)%
Effective income tax rate		-0-%		-0-%

Note 9 - Related Party Transactions

F-16

PETROCORP INC.
(An Exploration Stage Company)

December 31, 2009 and 2008
Notes to the Consolidated Financial Statements

On March 31, 2009, the Company purchased 171 oil and gas lease leases totaling 3,827 gross (2,666 net) acres in Okfuskee and Okmulgee Counties, Oklahoma from CH4 Energy, Inc., a company controlled by Soladino Investments SA at a cost of $583,823. The Company reimbursed Soladino for its historic costs (acreage) by issuing a secured, non-interest bearing note, payable on demand for $583,823 and assumed responsibility for all further costs.

Soladino loaned the Company $182,094 on August 19, 2009 and $100,000 on October 13, 2009. The notes are secured, non-interest bearing and payable on demand.

On November 30, 2009, the Company sold $448,876 of its oil and gas properties to Soladino Investments SA for $596,551. The purchase price was paid by (i) cancellation of $500,000 of its notes to Soladino and (ii) a cash payment of $96,551. The oil and gas properties were in Quebec, Canada and its wholly owned subsidiary Mac Oil SpA. The Company recorded the $147,675 gain as a capital contribution.

The Company was provided management services by its president, Mr. Fitzsimons during 2009 and 2008 at no cost. The Company recorded the $120,000 estimated annual value of these services as compensation expense and as a capital contribution.

Note 10 - Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through December 31, 2009, through April 21, 2010 the date when the financial statements were issued to determine if they must be reported. Management of the Company has determined that there are no reportable subsequent events to be disclosed.

F-17

PART II

ITEM 5. MARKET for REGISTRANT’S COMMON EQUITY and ISSURER PURCHASES of EQUITY SECURITIES.

ITEM 6. SELECTED FINANCIAL DATA.

ITEM 7. MANAGEMENT’S DISCUSSION and ANALYSIS of FINANCIAL CONDITIONS and REULTS OF OPERATION.

ITEM 8. FINANCIAL STATEMENTS and SUPPLEMENTARY DATA.

ITEM 9. CHANGES in and DISAGREEMENTS with ACCOUNTANTS on ACCOUNTING and FINANCIAL DISCLOSURE.

ITEM 9A(T). CONTROLS and PROCEDURES.

ITEM 9B. OTHER INFORMATION.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS and CORPORATE GOVERNANCE.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP of CERTAIN BENEFICIAL OWNERS and MANAGEMENT and RELATED STOCKHOLDER MATTERS.

ITEM 13. CERTAIN RELATIONSHIPS and RELATED TRANSACTIONS, and DIRECTOR INDEPENDENCE.

ITEM 14. PRINCIPAL ACCOUNTANT FEES and SERVICES.

PART 1V

ITEM 15. EXHIBITS and FINANCIAL STATEMENT SCHEDULES

Petrocorp Inc 10-K