UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2014~~2015

Commission File Number: 53915

~~ENERGY~~SABLE ~~HOLDINGS, INC.~~NATURAL RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)



Delaware		84-1080045
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



12222 Merit Drive, Suite 1850 Dallas, Texas		75251
(Address of principal executive offices)		(Zip Code)

972-770-4700

(Registrant’s telephone number, including area code)

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 ¨

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See 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 ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

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

As of ~~October~~April 3130, ~~2014,~~2015 the registrant had 3435,~~879~~157,~~168~~501 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS

		Page
PART I
FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements:
	Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	4
	Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014	4
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2014 and 2013	5
	Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014	5
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2014 and 2013	6
	Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2015 and 2014	6
	Consolidated Statement of Stockholders’ Equity (Deficit) for the Nine Months Ended September 30, 2014	7
	Consolidated Statement of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2015	7
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2014 and 2013	8
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1816
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2319
Item 4.	Controls and Procedures	2319
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	2520
Item 1A.	Risk Factors	2520
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2520
Item 3.	Defaults Upon Senior Securities	2520
Item 4.	Mine Safety Disclosures	2520
Item 5.	Other Information	2520
Item 6.	Exhibits	2520
Signatures		2621

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FORWARD-LOOKING STATEMENTS

The statements contained in all parts of this document relate to future events, including, but not limited to, any and all statements regarding future operations, financial results, business plans and cash needs and other statements that are not historical facts are forward looking statements. When used in this document, the words “anticipate,” “budgeted,” “planned,” “targeted,” “potential,” “estimate,” “expect,” “may,” “project,” “believe” and similar expressions are intended to be among the statements that identify forward looking statements. Such statements involve known and unknown risks and uncertainties, including, but not limited to, those relating to the current economic and credit environment, the volatility of natural gas and oil prices, our dependence on our key personnel, factors that affect our ability to manage our growth and achieve our business strategy, technological changes, our significant capital requirements, our ability to continue as a going concern, the potential impact of government regulations and the taxation of the oil and gas industry, adverse regulatory determinations, litigation, competition, availability of drilling, completion and production equipment and materials, business and equipment acquisition risks, weather, availability of financing and the terms of any such financing, financial condition of our industry partners, ability to obtain permits, drilling and completion of wells, infrastructure for salt water disposal, costs of exploiting and developing our properties and conducting other operations, the ability to obtain financing for drilling activities, competition in the oil and natural gas industry, developments in oil producing and natural gas producing countries, and other factors detailed herein. Some of the factors that could cause actual results to differ from those expressed or implied in forward-looking statements are described under “Risk Factors” and in our Form 10-K for the year ended December 31, ~~2013~~2014 filed with the U.S. Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement and we undertake no obligation to update or revise any forward-looking statement.

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PART I

Item 1. Financial Statements

SABLE ~~NYTEX~~NATURAL ~~ENERGY~~RESOURCES ~~HOLDINGS, INC.~~CORPORATION

Consolidated Balance Sheets

	September 30, 2014 (Unaudited)			December 31, 2013
	March 31, 2015 (Unaudited)			December 31, 2014
Assets
Current assets:
Cash and cash equivalents	$	~~125~~426,~~730~~427		$	93205,~~728~~999
Accounts receivable, net	~~265~~82,~~694~~830			76117,~~696~~833
Prepaid expenses and other	19,849			82,027
Inventory	22,804			59,385
Total current assets	411,273			252,451
Prepaid expenses and other	92,295			91,480
Restricted cash	3,120,183			3,119,949
Total current assets	624,356			474,697
Oil & gas properties and equipment, net	1,217,413			934,486
Restricted cash	2,986,204			2,986,154
Deposits and other	1,024,797			56,134
Oil & gas properties and equipment, net	11,800,290			11,665,160
Total assets	$	5,773,666		$	4,363,020
Deferred financing costs	2,925,728			3,209,168
Deposits and other	265,739			262,697
Total assets	$	18,602,317		$	18,597,876
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable and accrued expenses	$	~~580~~1,~~723~~905,590		$	~~597~~1,~~830~~674,295
Accounts payable - related party	~~500~~480,000			—480,000
Revenues payable	76			7,837
Accrued liabilities	697,371			414,567
Debt - current portion	292,232			289,891
Revenues payable	71,107			69,548
Total current liabilities	1,373,031			895,558
Debt - current portion	536,709			282,791
Total current liabilities	3,690,777			2,921,201
Other liabilities:
Debt	112,~~361~~164,~~836~~309			~~128~~10,~~807~~681,124
Derivative liabilities	2,510			2,510
Accrued working interest	2,911,872			3,053,272
Asset retirement obligation	7,199			7,199
Derivative liabilities	514,950			617,125
Total liabilities	2,744,576			1,034,074
Asset retirement obligation	1,295,686			1,284,771
Total liabilities	20,577,594			18,557,493
Commitments and contingencies
Mezzanine equity:
Preferred stock, Series A convertible, $0.001 par value; and redemption value of 3,724,004 at September 30, 2014 and December 31, 2013	3,724,004			3,724,004
Stockholders’ equity (deficit):
Common stock, $0.001 par value; 200,000,000 shares authorized; 35,880,209 shares issued and 34,879,168 outstanding at September 30, 2014 and 27,729,736 shares issued and 26,728,695 outstanding at December 31, 2013	35,879			27,730
Common stock, $0.001 par value; 200,000,000 shares authorized; 36,158,542 shares issued and 35,157,501 outstanding at March 31, 2015 and 36,158,542 shares issued and 35,157,501 outstanding at December 31, 2014	36,158			36,158
Additional paid-in capital	21,~~668~~999,~~751~~647			2021,~~615~~947,~~409~~952
Treasury stock, at cost: 1,001,041 shares at September 30, 2014 and December 31, 2013	(1,860,233		)	(1,860,233		)
Accumulated deficit	(2025,~~534~~874,~~117~~853		)	(1923,~~172~~807,~~770~~498		)
Accumulated other comprehensive loss	~~(5,194~~—		)	~~(5,194~~—		)
Total stockholders’ equity (deficit)	(~~694~~5,~~914~~699,281		)	(~~395~~3,~~058~~683,621		)
Total liabilities and stockholders’ equity (deficit)	$	518,~~773~~602,~~666~~317		$	418,~~363~~597,~~020~~876

See accompanying Notes to Consolidated Financial Statements

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
	2014			2013			2014			2013
	2015			2014
Revenues:
Land services and other	$	~~612~~1,329		$	131,~~420~~074		$	~~187,303~~		$	~~343,802~~
Oil and gas sales	~~124~~259,~~833~~821			7848,~~587~~133			~~332,661~~			~~253,055~~
Sale of oil and gas interests	~~15,710~~—			~~128~~27,~~188~~260			~~62,262~~			~~244,190~~
Total revenues	~~141~~261,~~155~~150			~~220~~76,~~195~~467			~~582,226~~			~~841,047~~
Operating expenses:
Oil & gas lease operating expenses	31530,~~889~~532			4337,113			~~98,890~~			~~181,986~~
Exploration	2139,~~693~~274			—30,950			~~52,643~~			—
Depreciation, depletion, and amortization	17454,~~639~~504			199,~~312~~936			~~45,213~~			~~40,300~~
Selling, general, and administrative expenses	~~772~~738,~~069~~370			~~618~~362,~~017~~390			~~1,574,109~~			~~2,246,491~~
Total operating expenses	~~843~~1,~~290~~762,680			~~680~~440,~~442~~389			~~1,770,855~~			~~2,468,777~~
Loss from operations	(~~702~~1,~~135~~501,530		)	(~~460~~363,~~247~~922		)	~~(1,188,629~~		)	~~(1,627,730~~		)
Other income (expense):
Interest and dividend income	7950			~~1,826~~77			~~234~~			~~10,245~~
Loss on disposal of assets	—			(154,178		)	—			(158,065		)
Deferred financing cost amortization	(283,440		)	—
Loss on sale of securities	—			(20,042		)	—			(17,367		)
Change in value of accrued working interest	141,401			—
Interest expense	(54,082		)	(18,091		)	(172,952		)	(53,895		)
Change in fair value of derivative liabilities	102,175			—
Total other expense	(54,003		)	(190,485		)	(172,718		)	(219,082		)
Interest expense	(526,011		)	(77,382		)
Loss before income taxes	(756,138		)	(650,732		)	(1,361,347		)	(1,846,812		)
Total other expense	(565,825		)	(77,305		)
Income tax benefit (provision)	—			155,681			—			105,408
Loss before income taxes	(2,067,355		)	(441,227		)
Net loss	$	(756,138	)	$	(495,051	)	(1,361,347		)	(1,741,404		)
Income tax benefit (provision)	—			—
Basic and diluted earnings per share:
Net loss	$	(2,067,355	)	$	(441,227	)
Net loss	$	(0.02	)	$	(0.02	)	$	(0.05	)	$	(0.07	)
Basic and diluted earnings per share:
Weighted average shares outstanding
Net loss	$	(0.06	)	$	(0.02	)
Basic and diluted	34,879,168			26,725,999			29,824,534			26,696,792
Weighted average shares outstanding
Basic and diluted	35,157,501			26,755,408

See accompanying Notes to Consolidated Financial Statements

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
	2014			2013			2014			2013
	2015			2014
Net loss to common stockholders	$	(~~756~~2,~~138~~067,355	)	$	(~~495~~441,~~051~~227	)	$	~~(1,361,347~~	)	$	~~(1,741,404~~	)
Other comprehensive income
Other comprehensive loss	—			—
Unrealized holding gain (loss) on securities available for sale	—			14,119			—			(10,388		)
Comprehensive loss to common stockholders	$	(2,067,355	)	$	(441,227	)
Other comprehensive loss	—			14,119			—			(10,388		)
Comprehensive loss to common stockholders	$	(756,138	)	$	(480,932	)	$	(1,361,347	)	$	(1,751,792	)

See accompanying Notes to Consolidated Financial Statements

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Consolidated Statement of Stockholders’ Equity (Deficit)

(Unaudited)

	Common Stock			AdditionalPaid-InCapital		Treasury Stock				AccumulatedDeficit			AccumulatedOtherComprehensiveIncome (Loss)
	Shares	Amounts				Shares	Amounts									Total
Balance at December 31, 2013	27,729,736	$	27,730	$	20,615,409	1,001,041	$	(1,860,233	)	$	(19,172,770	)	$	(5,194	)	$	(395,058	)
Balance at December 31, 2014	36,158,542	$	36,158	$	21,947,952	1,001,041	$	(1,860,233	)	$	(23,807,498	)	$	—		$	(3,683,621	)
Shares issued with promissory notes	112,500	112		11,137												11,249
Share based compensation	—	—		51,695												51,695
Share based compensation	24,071	23		8,047												8,070
Warrants issued with debentures				40,434												40,434
Issuance of common stock	8,013,902	8,014		993,724												1,001,738
Comprehensive loss:
Net loss										(12,~~361~~067,~~347~~355		)				(12,~~361~~067,~~347~~355		)
Comprehensive loss to common stockholders																(12,~~361~~067,~~347~~355		)
Balance at September 30, 2014	35,880,209	$	35,879	$	21,668,751	1,001,041	$	(1,860,233	)	$	(20,534,117	)	$	(5,194	)	$	(694,914	)
Balance at March 31, 2015	36,158,542	$	36,158	$	21,999,647	1,001,041	$	(1,860,233	)	$	(25,874,853	)	$	—		$	(5,699,281	)

See accompanying Notes to Consolidated Financial Statements

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Consolidated Statements of Cash Flows

(Unaudited)

	For the Nine Months Ended September 30,
	For the Three Months Ended March 31,
	2014			2013
	2015			2014
Cash flows from operating activities:
Net loss	$	(12,~~361~~067,~~347~~355	)	$	(1441,~~741,404~~227	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion, and amortization	45454,~~213~~504			399,~~898~~936
Share-based compensation	851,~~070~~695			585,~~087~~505
Share-based debt issuance costs	~~11,249~~—			—11,249
Accretion of discount on asset retirement obligations	—10,915			~~402~~—
Amortization of debt discount	51123,~~202~~819			4916,~~347~~482
Gain on sale of oil and gas interest	(32,970		)	(244,190		)
Amortization of deferred financing fees	283,440			—
Loss on disposal of assets	—			158,065
Change in accrued working interest liability	(141,400		)	—
Loss on sale of securities	—			17,367
Change in fair value of derivative liabilities	(102,175		)	—
Gain on sale of oil and gas interest	—			(27,260		)
Change in working capital:
Accounts receivable	~~(188~~35,~~998~~003		)	1(12,~~013,972~~931		)
Prepaid expenses and other	62,178			(5,369		)
Inventories	36,581			—
Accounts payable and accrued expenses	482,893			490,467
Prepaid expenses and other	(815		)	23,472
Deposits held in trust	—			170,045
Accounts payable and accrued expenses	514,099			(27,482		)
Revenues payable	(7,761		)	340,792
Deposits held in trust	(3,042		)	—
Net cash provided by (used in) operating activities	(930,271		)	347,479
Revenues payable	1,559			(6,805		)
Net cash provided by (used in) operating activities	(803,172		)	(449,061		)
Cash flows from investing activities:
Earnest money paid on property acquisition	(968,663		)	—
Proceeds from sale of oil and gas properties	—			67,238
Proceeds from sale of oil and gas properties	89,028			988,938
Investments in oil and gas properties	(589,634		)	(17,372		)
Investments in oil and gas properties	(384,198		)	(1,593,416		)
Restricted cash	(50		)	(77		)
Restricted cash	(234		)	153,798
Net cash used in investing activities	(589,684		)	49,789
Purchase of marketable securities	—			(8,125		)
Net cash used in investing activities	(1,264,067		)	(458,805		)
Cash flows from financing activities:
Proceeds from issuance of common stock	1,001,738			—
Issuance of 13% secured notes	1,675,000			—
Issuance of 12% convertible debentures	~~1,375,000~~—			—250,000
Redemption of Series A convertible preferred stock	—			(999,958		)
Borrowings under notes payable	—			200,000
Purchase of treasury shares	—			(343		)
Payments on notes payable	(61,716		)	(41,443		)
Borrowings under notes payable	200,000			216,645
Net cash provided by (used in) financing activities	1,613,284			408,557
Payments on notes payable	(350,398		)	(238,630		)
Net increase (decrease) in cash and cash equivalents	220,428			9,285
Net cash provided by (used in) financing activities	2,226,340			(1,022,286		)
Cash and cash equivalents at beginning of period	205,999			93,728
Net increase (decrease) in cash and cash equivalents	32,002			(1,133,612		)
Cash and cash equivalents at end of period	$	426,427		$	103,013
Cash and cash equivalents at beginning of period	93,728			1,484,386
Cash and cash equivalents at end of period	$	125,730		$	350,774

See accompanying Notes to Consolidated Financial Statements

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)


NOTE 1.	Summary of Significant Accounting Policies

General

~~NYTEX Energy Holdings, Inc. d/b/a~~ Sable Natural Resources Corporation (“Sable”) is an ~~energy~~independent ~~holding~~oil ~~company~~and ~~with~~gas ~~principal~~company ~~operations~~focused ~~centralized~~on inthe ~~its~~acquisition ~~wholly-owned~~and ~~subsidiary,~~exploitation ~~NYTEX~~of ~~Petroleum,~~unconventional ~~Inc.~~liquids ~~which~~rich ~~changed~~gas ~~its~~and ~~name~~oil toreserves ~~Sable~~in ~~Operating~~the ~~Company,~~Fort ~~Inc~~Worth Basin. ~~(“Sable~~The ~~Operating”)~~company's onstrategy ~~July 16, 2014. Sable Operating~~ is anto ~~early-stage~~increase ~~exploration~~production and ~~production~~expand ~~company~~oil ~~engaged~~and ingas ~~the~~reserves ~~acquisition,~~through ~~development,~~unconventional recompletions and ~~production~~restimulations of ~~oil~~existing ~~and~~conventional ~~natural~~wells ~~gas~~and ~~reserves~~the ~~from~~drilling of low- risk, high rate-of-return ~~wells~~gas inand ~~carbonate~~oil ~~reservoirs~~wells.

Sable and subsidiaries are collectively referred to herein as the "Company,” “we,” “us,” and “our.”

Basis of Presentation

The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. These financial statements include the accounts of Sable and entities in which it holds a controlling interest. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior-period amounts have been reclassified to conform to the current year classification.

The interim financial data as of ~~September~~March 3031, ~~2014~~2015 and for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 is unaudited; in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to a fair statement of the results for the interim periods. The consolidated results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 are not necessarily indicative of the results to be expected for the full year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto as filed in our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014. Due to time and financial constraints, this report has not been reviewed by our independent auditors.

Liquidity

We cannot be certain that our existing sources of cash will be adequate to meet our liquidity requirements, including cash requirements that may be due under existing debt obligations as well as amounts due to our vendors in the normal course of business. For the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, we incurred a net loss of $12,~~361~~067,~~347~~355, and have an accumulated deficit totaling $2025,~~534~~874,~~117~~853, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing from shareholders or other sources to meet its obligations and repay its liabilities arising from normal business operations when they come due.

We intend to seek substantial sources of liquidity. In addition, management has implemented plans to improve liquidity through cash flows generated from development of new business initiatives within the oil & gas industry and improvements to results from existing operations. There can be no assurance that we will be successful with our plans or that our results of operations will materially improve in either the short-term or long-term and accordingly, we may be unable to meet our obligations as they become due.

A fundamental principle of the preparation of financial statements in accordance with generally accepted accounting principles is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent. In accordance with this requirement, our policy is to prepare our consolidated financial statements on a going concern basis unless we intend to liquidate or have no other alternative but to liquidate. Our consolidated financial statements have been prepared on a going concern basis and do not reflect any adjustments that might specifically result from the outcome of this uncertainty.

Restricted cash

On May 4, 2012, (the “Closing Date”), we entered into an agreement with a third party, FDF Resources Holdings LLC

(the” Purchaser”), which resulted in the sale of 100% of the outstanding interests of FDF. The total consideration for the sale was $62.5 million. In accordance with the Merger Agreement, $6,250,000 of the total consideration was set aside to be held in escrow and is reported as restricted cash on the accompanying consolidated balance sheets. The funds held in escrow are subject to distribution in accordance with terms set forth in the Merger Agreement including final closing date net working capital. As of

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

~~September~~and is reported as restricted cash on the accompanying consolidated balance sheets. The funds held in escrow are subject to distribution in accordance with terms set forth in the Merger Agreement. As of March 3031, ~~2014~~2015 the balance of $32,~~120~~986,~~183~~204 remains for redemption of the Series A convertible preferred stock ~~within~~after May 4, 2015, less any future claims asserted by the ~~next~~buyer ~~year~~pursuant to the terms of the escrow agreement and vetted by Sable, along with direct costs and third party legal fees associated with preserving the escrow fund incurred by Sable.

Deposits and other

Deposits and other at September 30, 2014 includes $968,663 in earnest money paid for the acquisition of property.

Due to related party

On August 27, 2014 the Company received a loan from Cory R. Hall, President in the amount of $500,000 to secure an extension on the closing date for the acquisition of property until October 15, 2014. The loan will be due when the Company closes the financing of the acquisition and is at zero interest.

Loss on disposal of assets

On April 30, 2013, the Company elected to cease the operations of its staffing services business, Petro Staffing Group, LLC. We recognized an net after-tax loss of approximately $114,000 from the disposition transaction, which represents the excess of the book value of the assets disposed over our investment in Petro Staffing Group, LLC.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make informed judgments and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses. Management evaluates its estimates and related assumptions regularly, including those related to proved reserves; the value of properties and equipment; goodwill; intangible assets; asset retirement obligations; litigation liabilities; environmental liabilities; pension assets, liabilities, and costs; income taxes; and fair values. Changes in facts and circumstances or additional information may result in revised estimates, and actual results may differ from these estimates.

Earnings Per Common Share

Basic earnings per share amounts have been computed based on the average number of shares of common stock outstanding for the period. Diluted earnings per share is calculated using the treasury stock method to reflect the potential dilution that could occur if dilutive share-based instruments were exercised. There is no dilution effect on earnings due to the net loss for the period, however the Company has the following potentially dilutive securities outstanding:

	September 30, 2014
	March 31, 2015
Warrants	511,~~376~~892,~~190~~440
Stock Options	40745,000
Restricted Stock	35763,~~000~~333
Series A Convertible Preferred Stock	3,724,004
	9,175,194
	17,124,777

~~Recently~~NOTE ~~Issued~~2. ~~Accounting~~PROPERTY ~~Standards~~AND EQUIPMENT

~~The~~Property ~~Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-08, Reporting Discontinued Operations~~ and ~~Disclosures of Disposals of Components of an Entity. The ASU changes the criteria for reporting discontinued operations and requires additional disclosures~~equipment, ~~both~~which ~~for~~includes ~~discontinued~~our ~~operations~~oil and ~~for~~gas ~~individually~~properties ~~significant~~at ~~dispositions~~March 31, ~~and~~2015 ~~assets classified as held for sale not qualifying as discontinued operations. The ASU is effective for annual~~ and interim periods beginning in 2015. Early adoption is permitted for disposals or for assets classified as held for sale that have not been reported in previously issued financial statements. Sable elected to early adopt the ASU on a prospective basis for the quarter ended March December 31, 2014. ~~The~~consist ~~adoption~~of ~~did not have a material impact on~~ the ~~Company’s consolidated financial statements.~~following:



	March 31, 2015			December 31, 2014
Oil and gas properties	$	12,481,764		$	11,903,045
Furniture, fixtures, and equipment	359,931			359,931
Total property and equipment	12,841,695			12,262,976
Accumulated DD&A	(1,041,405		)	(597,816		)
Property and equipment, net	$	11,800,290		$	11,665,160

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

~~The~~NOTE ~~FASB issued ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists~~3. ~~The~~DERIVATIVE ASU requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset, except in certain circumstances as described in the ASU. The ASU is effective for annual and interim periods beginning in 2014. See Note 9 —Income Taxes. The adoption did not have a material impact on the Company's consolidated financial statements.LIABILITIES

At March 31, 2015, we had two derivative liabilities on our consolidated balance sheet related to the warrants issued to the holders of the Company’s Series A Convertible Preferred Stock and the 13% Secured Notes. The agreements setting forth the terms of the warrants includes an anti-dilution provision that requires a reduction in the instrument’s exercise price should subsequent at-market issuances of the Company’s common stock be issued below the instrument’s original exercise price per share. Accordingly, we consider the warrants to be a derivative. The activity for the three months ended March 31, 2015 for these derivatives is as follows:



	Series A Preferred Stock - warrants derivative			13% Secured Note - warrants derivative			Total Derivative liability
December 31, 2014	$	33,300		$	583,825		$	617,125

Change in fair value of derivative liabilities	(16,650		)	(85,525		)	(102,175		)

March 31, 2015	$	16,650		$	498,300		$	514,950

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

NOTE 2. PROPERTY AND EQUIPMENT

Property and equipment, which includes our oil and gas properties at September 30, 2014 and December 31, 2013 consist of the following:

	September 30, 2014			December 31, 2013
Oil and gas properties - unproved	$	540,682		$	388,937
Oil and gas properties - proved	856,585			684,560
Total oil and gas properties	1,397,267			1,073,497
Furniture, fixtures, and equipment	142,734			138,378
Total property and equipment	1,540,001			1,211,875
Accumulated DD&A	(322,588		)	(277,389		)
Property and equipment, net	$	1,217,413		$	934,486

Depreciation, depletion & amortization related to our property and equipment was $45,213 and $40,300 for the nine months ended September 30, 2014 and 2013, respectively.

NOTE 3. DERIVATIVE LIABILITIES

At September 30, 2014, we had one derivative liability on our consolidated balance sheet which was related to the warrants issued to the holders of the Company’s Series A Convertible Preferred Stock. The agreement setting forth the terms of the warrants issued to the holders of the Company’s Series A Convertible Preferred Stock includes an anti-dilution provision that requires a reduction in the instrument’s exercise price should subsequent at-market issuances of the Company’s common stock be issued below the instrument’s original exercise price of $2.00 per share. Accordingly, we consider the warrants to be a derivative. As a result, the fair value of this derivative is included as a derivative liability on the accompanying consolidated balance sheets. At both September 30, 2014 and December 31, 2013, the fair value of the warrants issued to the holders of the Series A Convertible Preferred Stock was $2,510.

Changes in fair value of the derivative liabilities are included as a separate line item within other income (expense) in the accompanying consolidated statement of operations for the three and nine months ended September 30, 2014 and 2013, and are not taxable or deductible for income tax purposes.


NOTE 4.	DEBT

A summary of our outstanding debt obligations as of ~~September~~March 3031, ~~2014~~2015 and December 31, ~~2013~~2014 is presented as follows:

	September 30, 2014			December 31,2013
	March 31, 2015			December 31,2014
12.0% Convertible Debentures	$	1,336,421		$	—
13.0% Secured Notes	$	11,325,000		$	9,650,000
Promissory Note (non-interest bearing, net of discount) due October 2015	192,887			200,051
12.0% Convertible Debentures	1,950,000			1,950,000
Promissory Note (non-interest bearing, net of discount) due December 2015	116,389			160,969
Francis Promissory Note (non-interest bearing)	200,000			225,000
5.74% Insurance Financing due August 2014	—			45,211
Strasburger Promissory Note (non-interest bearing)	84,042			105,642
7.5% Secured Equipment Loan due March 2016	8,371			12,467
5.5% Insurance Financing	60,763			68,203
Total debt	1,654,068			418,698
7.5% Secured Equipment Loans	130,178			137,855
Less: current maturities	(292,232		)	(289,891		)
Total debt	$	13,749,983		$	12,136,700
Total long-term debt	$	1,361,836		$	128,807
Less: current maturities	(536,709		)	(282,791		)
Total long-term debt	$	12,164,309		$	10,681,124
Discount - 13% Secured Notes - warrants	(924,989		)	(1,023,508		)
Discount - 12% Convertible Debentures - warrants	(88,908		)	(97,760		)
Discount - Francis Note - interest	(28,557		)	(42,835		)
Discount - Strasburger Note - interest	(6,511		)	(8,682		)
Total debt net of discount	$	12,701,018		$	10,963,915
Less: current maturities	(536,709		)	(282,791		)
Total long-term debt	$	12,164,309		$	10,681,124
Debt maturities are as follows:
2015	$	569,073		$	729,345
2016	4,655,755			3,887,200
2017	8,472,001			7,467,001
2018	28,312			28,312
2019	24,842			24,842
	$	13,749,983		$	12,136,700

~~Carrying~~NOTE ~~values~~5. inCOMMITMENTS ~~the~~AND table above include net unamortized debt discount of $106,545 and $117,313 as of September 30, 2014 and December 31, 2013, respectively, which is amortized to interest expense over the terms of the related debt. CONTINGENCIES

~~12% Convertible Debentures~~Leases

InThe ~~February~~Company ~~2014,~~leases weoffice ~~initiated~~space aand ~~$1,000,000~~office ~~offering~~equipment ofunder ~~convertible~~non-cancelable ~~debt~~operating ~~("12%~~leases ~~Convertible~~which ~~Debentures")~~provide tofor ~~fund~~minimum ~~our~~annual ~~ongoing~~rentals. At ~~working~~March 31, ~~capital~~2015, ~~needs.~~future ~~Terms~~minimum ofobligations ~~the~~under ~~12%~~these ~~Convertible~~lease ~~Debentures~~agreements ~~were~~are as follows: ~~(i) $100,000 per unit with interest at~~

a rate of 12% per annum payable monthly with a maturity of three years from the date of issuance; (ii) convertible at any time prior to maturity at $0.75 per share of the Company's common stock; (iii) each unit included a three-year warrant to purchase up to 30,000 shares of the Company's common stock at an exercise price of $0.75 per share for a period of three years from the effective date of the warrant; and, (iv) an anti-dilution provision that requires a reduction in the conversion price should at-market issuances of the Company’s common stock be issued below the stated conversion price prior to August 31, 2014. The offering was subsequently extended to $2,000,000 with the terms modified as follows: (i) convertible at any time prior to maturity at $0.50 per share of the Company's common stock; (ii) each unit included a three-year warrant to purchase up to 50,000 shares of the Company's common stock at an exercise price of $0.50 per share for a period of three years from the effective date of the warrant. One unit was issued with a maturity of one year from the date of issuance. As of September 30, 2014, we had raised $1,375,000 under the 12% Convertible Debenture offering including warrants to purchase up to 627,500 shares of the Company's common stock.



2015	74,052
2016	58,283
2017	—
2018	—
Thereafter	—
	$	132,335

The sale of common stock on June 20, 2014 was a "Subsequent Equity Sale" as defined in the 12% Convertible Debentures wherein the stated conversion price of the debenture to common stock is adjusted. As a result the debentures issued prior to March 31, 2014 with a stated conversion price of $0.75 were adjusted to a $0.64 conversion price. Debentures issued after March 31, 2014 and before June 20, 2014 with a stated conversion price of $0.50 were adjusted to a $0.43 conversion price.

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

~~Promissory~~Total ~~Notes~~lease rental expense for the three months ended March 31, 2015 and 2014 was $42,319 and $10,572 respectively.

In January 2014, we entered into a $100,000 secured promissory note agreement with an unrelated third party to provide working capital to the Company. The secured promissory note was due four months from the date of issuance. Under the terms of the secured promissory note, the loan paid interest at a rate of 18%, plus an accommodation fee, which, including the interest payable under the loan, was an amount ranging from $5,000 to $20,000, (depending upon the number of months the secured promissory note remained outstanding), plus 12,500 shares of the Company's common stock. In February 2014, the holder of the secured promissory note transferred its principal due under the agreement to the Company's 12% Convertible Debentures and the secured promissory note was deemed paid in full.

In February 2014, we entered into two $100,000 secured bridge loans ("Secured Bridge Loans") with two unrelated third parties to provide working capital to the Company. Under the terms of the Secured Bridge Loans, principal was due in forty days with interest payable at 18%, plus an accommodation fee, such that combined with the interest due and payable, a sum equal to $20,000 plus 25,000 shares of the Company's common stock was paid. In March 2014, in consideration of the issuance of an additional 25,000 shares of the Company's common stock, the maturity date of both Secured Bridge Loans was extended. In April 2014, the Company made a partial payment totaling $140,000 on the Secured Bridge Loans. In May 2014, one of the Secured Bridge Loans was paid in full, and in September 2014 the second Secured Bridge loan was paid in full.

In connection with the acquisition of Francis Drilling Fluids, Inc. ("FDF"), on November 23, 2010, we issued a promissory note payable to a former interest holder of FDF in the face amount of $750,000. The note is an unsecured, non-interest bearing loan that requires quarterly payments of $37,500 and matures October 1, 2015. At September 30, 2014 and December 31, 2013, we have recorded the note as a discounted debt of $192,887 and $200,051 respectively, using an imputed interest rate of 9%.

In November 2013, we entered into a promissory note with a third party to finance premiums related to certain insurance policies. The promissory note bears an annual interest rate of 5.7% with principal and interest payments of $8,109 due monthly through maturity in August 2014, when the note was paid in full.

In December 2012, we entered into an unsecured, non-interest bearing promissory note with a former vendor in the amount of $342,500 as a settlement for outstanding payables due to the former vendor. The promissory note required an initial payment of $75,000 with monthly payments of $7,431 due through maturity, on December 31, 2015. At September 30, 2014 and December 31, 2013, we have recorded the promissory note as a discounted debt of $116,389 and $160,969, respectively, using an imputed interest rate of 7.5%.

We also have a secured equipment loan outstanding that requires a monthly principal and interest payment based on a fixed interest rate of 7.5% and matures in March of 2016.

NOTE 5. COMMITMENTS AND CONTINGENCIES

Leases

The Company leases office space and office equipment under non-cancelable operating leases which provide for minimum annual rentals. At September 30, 2014, future minimum obligations under these lease agreements are as follows:

July 1, 2014 to December 31, 2014	$	39,234
2015	146,193
2016	134,534
2017	58,230
2018	—
Thereafter	—
	$	378,191

Total lease rental expense for the nine months ended September 30, 2014 and 2013 was $69,845 and $64,932 respectively.

Litigation

We may become involved from time to time in litigation on various matters, which are routine to the conduct of our business. We believe that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial position or operations, although any adverse decision in these cases, or the costs of defending or settling such claims, could have a material adverse effect on our financial position, operations, and cash flows.

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NYTEX ENERGY HOLDINGS, INC.

Notes to Consolidated Financial Statements

(Unaudited)


NOTE 6.	STOCKHOLDERS’ EQUITY

The authorized capital of Sable consists of 200 million shares of common stock, par value $0.001 per share, and 10 million shares of Series A Convertible Preferred Stock, par value $0.001 per share. The holders of Series A Convertible Preferred Stock have the same voting rights and powers as the holders of common stock. Each holder of Series A Convertible Preferred Stock may, at any time, convert their shares of Series A Convertible Preferred Stock into shares of common stock at an initial conversion ratio of one-to-one. For the three and nine months ended September 30, 2014, we did not issue any shares of common stock related to conversions of the Company’s Series A Convertible Preferred Stock.

On June 20, 2014, the Board of Directors of the Company approved the sale and issuance of 8,013,902 shares of Common Stock of the Company to Cory R. Hall in exchange for $1,001,738 in accordance with that certain Securities Purchase Agreement executed on June 20, 2014 between the Company and Mr. Hall (the “Offering”). The Offering was made in reliance on the exemption provided by Rule 506(b) promulgated under the Securities Act of 1933, as amended, and certain provisions of Regulation D thereunder based on Mr. Hall’s status as an accredited investor.

Treasury Stock

In April 2013, our Board of Directors approved the repurchase of up to an aggregate of 2.7 million shares of our common stock, or approximately 10% of our then outstanding common shares. The repurchases were made from time-to-time on the open market at prevailing market prices. The repurchase program continued for twelve months and has now been suspended. The 12% Convertible Debentures restrict the Company to de minimus repurchases as long as the debentures are outstanding. There were no repurchases during the three and nine months ended September 30, 2014.

Warrants

The fair value of our warrants is determined using the Black-Scholes option pricing model and the Monte Carlo simulation. The expected term of each warrant is estimated based on the contractual term or an expected time-to-liquidity event. The volatility assumption is estimated based on expectations of volatility over the term of the warrant as indicated by implied volatility. The risk-free interest rate is based on the U.S. Treasury rate for a term commensurate with the expected term of the warrant.

A summary of warrant activity for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 is as follows:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2014			2013
	2015			2014
	Warrants	WeightedAverageExercisePrice		Warrants	WeightedAverageExercisePrice
Outstanding at beginning of period	410,~~748~~971,~~690~~190	$	10.1884	4,748,690	$	1.18
Issued	~~627~~921,~~500~~250	0.5450		—75,000	—0.75
Exercised	—	—		—	—
Forfeited or expired	—	—		—	—
Outstanding at end of period	511,~~376~~892,~~190~~440	$	10.1177	4,~~748~~823,690	$	1.1817

The following table shows the weighted average assumptions used in the ~~Black-Scholes~~Monte ~~calculation~~Carlo simulation of the fair value of the warrants issued in the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015:

Volatility	~~114~~176.1263% ~~- 129.19%~~
Risk-free interest rate	~~.69% -~~ 1.0407%
Expected life	21.8559 Years
Fair value on grant date	$0.~~0186 - $0.1234~~08


NOTE 7.	STOCK BASED COMPENSATION

In November 2012, the Board of Directors adopted the 2013 Equity Incentive Plan for the purpose of attracting and retaining the services of key employees, consultants, and non-employee members of the Board of Directors and to provide such persons with a proprietary interest in the Company through the granting of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and/or other awards.

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NYTEX ENERGY HOLDINGS, INC.

Notes to Consolidated Financial Statements

(Unaudited)

In March 2013, the Company granted to its executive officers, Board of Directors, and certain key employees nonqualified stock options and restricted stock under the 2013 Equity Incentive Plan. Nonqualified stock options to purchase an aggregate 227,000 shares of the Company’s common stock at $0.42 per share were awarded; these options vest ratably over a service period of three years. A total of 136,200 shares of restricted stock were granted and such awards vest over a three years period. The total grant date fair value of all of these awards was approximately $101,000. In August 2014 an additional 200,000 shares of restricted stock were granted with a grant date fair value of $20,000 that vest over a two year period. At September 30, 2014, the unrecognized stock-based compensation expense related to all awards which is expected to be recognized over a weighted average period of 1.6 years is approximately $26,823.

Stock Options

We utilize the Black-Scholes option pricing model to measure the fair value of stock options granted to employees and directors. Forfeitures are recognized as a reversal of expense of any unvested amounts in the period incurred.

~~The following table summarizes our stock option activity for the nine months ended September 30, 2014:~~13

	NumberofShares		WeightedAverageExercisePrice PerShare		WeightedAverageGrant DateFair ValuePer Share		WeightedAverageRemainingContractualTerm - Years
Outstanding, December 31, 2013	209,000		$	0.42	$	0.19
Granted	—		$	—	$	—
Exercised	—		$	—	$	—
Canceled / Forfeited	(89,000	)	$	0.42	$	0.19
Outstanding, September 30, 2014	120,000		$	0.42	$	0.19	8.5
Options exercisable at September 30, 2014	40,000		$	0.42	$	0.19	8.5

Restricted stock

Restricted stock awards are awards of common stock that are subject the restrictions on transfer and to a risk of forfeiture if the awardee terminates employment with the Company prior to the lapse of the restrictions. The fair value of such stock was determined using the closing price on the grant date and compensation expense is recorded over the applicable vesting periods. Forfeitures are recognized as a reversal of expense of any unvested amounts in the period incurred.

The following table summarizes our restricted stock activity for the nine months ended September 30, 2014

	Shares		Wtd AvgGrant-DateFair Value
Nonvested, December 31, 2013	95,800		$	0.44
Granted	200,000		$	0.10
Vested	(35,000	)	$	0.42
Canceled / Forfeited	(50,800	)	$	0.46
Nonvested, September 30, 2014	210,000		$	0.12

The following table summarizes our Stock based compensation expense:

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014			2013
Stock options	$	1,944	$	4,178	$	7,179		$	12,478
Restricted stock	7,717		7,422		15,406			53,422
Forfeitures	—		—		(14,515		)	(7,813		)
Total stock based compensation	$	9,661	$	11,600	$	8,070		$	58,087

The following table summarizes our stock option activity for the three months ended March 31, 2015:



	Number of Shares	Weighted Average Exercise Price Per Share		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term - Years
Outstanding, December 31, 2014	745,000	$	0.15	$	0.31	9.5
Granted	—	$	—	$	—
Exercised	—	$	—	$	—
Canceled / Forfeited	—	$	—	$	—
Outstanding, March 31, 2015	745,000	$	0.15	$	0.31	9.25
Options exercisable at March 31, 2015	248,333	$	0.15	$	0.31	9.25

Restricted stock

The following table summarizes our restricted stock activity for the three months ended March 31, 2015



	Shares		Wtd Avg Grant-Date Fair Value
Nonvested, December 31, 2014	946,667		$	0.28
Granted	—		$	—
Vested	(183,334	)	$	0.25
Canceled / Forfeited	—		$	—
Nonvested, March 31, 2015	763,333		$	0.29


NOTE 8.	FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Our financial instruments include cash and cash equivalents, accounts receivable, marketable securities, accounts payable, derivative liabilities, and long-term debt. Because of their short maturity, the carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value. The carrying value of certain long-term debt instruments approximates fair value since these instruments bear market rates of interest. Additional non-interest bearing long-term instruments have been reduced by a market interest rate. They approximate fair value as a result of this imputed interest.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We utilize a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable.


•	Level 1 — Quoted prices in active markets for identical assets or liabilities. These are typically obtained from real-time quotes for transactions in active exchange markets involving identical assets.


•	Level 2 — Quoted prices for similar assets and liabilities in active markets; quoted prices included for identical or similar assets and liabilities that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. These are typically obtained from readily-available pricing sources for comparable instruments.


•	Level 3 — Unobservable inputs, where there is little or no market activity for the asset or liability. These inputs reflect the reporting entity’s own beliefs about the assumptions that market participants would use in pricing the asset or liability, based on the best information available in the circumstances.

As discussed in Note 3, we consider the warrants issued to the holders of the Company’s Series A Convertible Preferred Stock to be derivatives, and, as a result, the fair value of the derivative liabilities are reported on the accompanying consolidated balance sheets. We value the derivative liabilities using a Monte Carlo simulation, which contains significant unobservable, or Level 3, inputs. The use of valuation techniques requires us to make various key assumptions for inputs into the model, including assumptions about the expected behavior of the instruments’ holders and expected future volatility of the price of our common stock. At certain common stock price points within the Monte Carlo simulation, we assume holders of the instruments will convert into shares of our common stock. In estimating the fair value, we estimated future volatility by considering the historic volatility of the stock of a selected peer group over a five year period.14

We classify our marketable securities as available-for-sale, which are reported at fair value. Unrealized holding gains and losses, net of the related income tax effect, if any, on available-for-sale securities are excluded from income and are reported as accumulated other comprehensive income in stockholders’ equity. Realized gains and losses from securities classified as available-for-sale are included in income. We measure the fair value of our marketable securities based on quoted prices for identical securities in active markets, or Level 1 inputs. As of September 30, 2014 we did not hold any available-for-sale securities. As of September 30, 2013, available-for-sale securities consisted of the following:

	CostBasis		Gross Unrealized				FairValue
Available For Sale			Gains		Losses
Money-market funds	$	494,614	$	—	$	—	$	494,614
	$	494,614	$	—	$	—	$	494,614

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~~NYTEX~~SABLE ~~ENERGY~~NATURAL ~~HOLDINGS, INC.~~RESOURCES CORPORATION

Notes to Consolidated Financial Statements

(Unaudited)

As discussed in Note 3, we consider the warrants issued to the holders of the Company’s 13% Secured Notes and the Series A Convertible Preferred Stock to be derivatives, and, as a result, the fair value of the derivative liabilities are reported on the accompanying consolidated balance sheets. We value the derivative liabilities using a Monte Carlo simulation, which contains significant unobservable, or Level 3, inputs. The use of valuation techniques requires us to make various key assumptions for inputs into the model, including assumptions about the expected behavior of the instruments’ holders and expected future volatility of the price of our common stock. At certain common stock price points within the Monte Carlo simulation, we assume holders of the instruments will convert into shares of our common stock.

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

September 30, 2014	CarryingAmount		Level 1		Level 2		Level 3
March 31, 2015	CarryingAmount		Level 1		Level 2		Level 3
Marketable securities	$	—	$	—	$	—	$	—
Derivative liabilities	$	514,950	$	—	$	—	$	514,950
Derivative liabilities	$	2,510	$	—	$	—	$	2,510

September 30, 2013	CarryingAmount		Level 1		Level 2		Level 3
March 31, 2014	CarryingAmount		Level 1		Level 2		Level 3
Marketable securities	$	494,614	$	494,614	$	—	$	—
Derivative liabilities	$	2,510	$	—	$	—	$	2,510

Included below is a summary of the changes in our Level 3 fair value measurements:

Balance, December 31, 2014	$	617,125
Change in derivative liabilities	(108,175		)
Issuance of warrant derivative	6,000
Balance, March 31, 2015	$	514,950
Balance, December 31, 2013	$	2,510
Change in derivative liabilities	—
Issuance of warrant derivative	—
Balance, September 30, 2014	$	2,510
Balance, March 31, 2014	$	2,510
Balance, December 31, 2012	$	2,510
Change in derivative liabilities	—
Issuance of warrant derivative	—
Balance, September 30, 2013	$	2,510


NOTE 9.	INCOME TAXES

Income tax provision for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 was $0 and $~~105~~0,~~408,~~ respectively. At ~~September~~March 3031, ~~2014;~~2015 ~~we had deferred income tax assets of $10,148,637~~ and ~~a valuation allowance of $9~~December 31,~~950,899~~ ~~resulting~~2014 inwe anhave ~~estimated~~no ~~recoverable amount of~~ deferred ~~income~~ tax assets ofor ~~$197,739. This~~liabilities ~~reflects~~included ain ~~net increase of~~ the ~~valuation~~consolidated ~~allowance of $473,657 from the December 31, 2013~~ balance ~~of $9,477,242~~sheets. ~~At September 30, 2014, we had deferred income tax liabilities of $197,739.~~

The balance of the valuation allowance as of ~~September 30, 2014 and~~ December 31, ~~2013~~2014 was $911,~~950~~199,~~899 and $9,477,242, respectively~~275. The anticipated effective income tax rate is expected to continue to differ from the Federal statutory rate primarily due to the effect of state income taxes, permanent differences between book and taxable income, changes to the valuation allowance, and certain discrete items.


NOTE 10.	SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Additional cash flow information was as follows for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014:

	2014		2013
	2015		2014
Supplemental disclosures of cash flow information:
Total cash paid for interest	$	~~110~~362,~~500~~879	$	414,~~550~~500
Total cash paid for taxes	$	—	~~146,000~~—

	2014		2013
	2015		2014
Supplemental disclosure of non-cash information:
Warrants issued	$	4073,~~434~~700	$	—

~~NOTE 11. SUBSEQUENT EVENTS~~15

On October 15, 2014, the Company completed the acquisition of 19,881 acres held by production in the Fort Worth Basin at a purchase price of $9,250,000 from Upham Oil & Gas Co., L.P. of Mineral Wells, Texas. The acquisition was financed primarily

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byNOTE ~~issuance of Secured Notes up to a maximum of $15,000,000; bearing interest at the rate of 13% per annum with a maturity in three years~~11. In SUBSEQUENT addition, each Secured Lender will receive (i) a 3.0% overriding royalty interest effective at closing, (ii) on the date that the principal and interest on the Secured Notes is paid in full a record assignment of such Secured Lender's pro rata share of a 33.33% working interest.EVENTS

~~RKJ~~On ~~Holdings~~May 4, ~~LLC~~2015 ~~is one of~~ the ~~Lenders~~escrow ~~under~~related to the ~~Loan~~restricted ~~Agreement~~cash aswas ~~of October 14, 2014~~released. ~~RKJ~~The ~~Holdings,~~Company ~~LLC~~notified isthe ~~owned~~holders ~~and~~of ~~managed~~the bySeries ~~Mr.~~A ~~Cory~~Convertible R.Preferred ~~Hall,~~Stock ~~the~~that ~~President~~3,724,004 ~~and~~shares ~~Chief~~would ~~Operating~~be ~~Officer~~redeemed ofin ~~Sable~~exchange ~~and~~for a$2,752,725 ~~member~~in ofcash ~~the~~and ~~Sable~~971,279 ~~Board~~shares ofto ~~Directors~~be re-issued. AsThe afinal ~~Lender,~~redemption ~~RKJ~~of ~~Holdings~~the ~~loaned~~escrow ~~Sable~~balance ~~$2,850,000~~is atas ~~closing.~~follows:

In connection with the transactions described above, effective October 14, 2014, Sable issued warrants (the “Warrants”) exercisable for approximately 4,895,000 shares of common stock of Sable to the Lenders on such date, at an exercise price of $0.50 per share, in consideration of the distribution of the Loan proceeds to Sable, pursuant to warrant agreements with each of the Lenders. As a Lender, Mr. Hall’s entity, RKJ Holdings, LLC was issued warrants to purchase 1,567,500 shares of NYTEX common stock as part of the transactions contemplated by the Loan Agreement.



Final escrow balance		2,986,204

Final indemnity claim vetted and settled by Sable	60,000
Legal fees incurred by Sable in defending the escrow balance	143,856
Time and travel costs incurred by Sable in defending the escrow balance	27,123
Administrative costs of effecting the final redemption	2,500
Total costs and final claim		233,479
Final cash redemption		2,752,725

Each of the Warrants issued on October 14, 2014 in connection with the transactions contemplated by the Loan Agreement are exercisable for a two year period beginning on October 14, 2014 and ending on October 14, 2016.

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

The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and the notes thereto.

Overview

~~NYTEX Energy Holdings, Inc. d/b/a~~ Sable Natural Resources Corporation (“Sable”) is an ~~energy~~independent ~~holding~~oil company with principal operations centralized in its wholly-owned subsidiary, NYTEX Petroleum, Inc. which changed its' name to Sable Operating Company, Inc. ("Sable Operating") on July 16, 2014. Sable Operating is an early-stage exploration and ~~production~~gas ~~("E&P")~~ company ~~engaged~~focused inon the acquisition, ~~development,~~ and ~~production~~exploitation of ~~oil~~unconventional ~~and~~liquids ~~natural~~rich gas ~~reserves~~and ~~from~~oil ~~low-risk,~~reserves ~~high~~in ~~rate-of-return~~the ~~wells~~Fort inWorth ~~carbonate reservoirs~~Basin. ~~Sable~~ ~~Operating~~The ~~also~~company's ~~provides~~strategy ~~land~~is ~~services~~ to ~~its~~increase ~~customers~~production byand ~~identifying~~expand ~~landowners~~oil and ~~performing~~gas ~~such~~reserves ~~services~~through asunconventional ~~analyzing~~recompletions ~~land~~ and ~~mineral~~restimulations ~~title~~of ~~reports,~~existing ~~leasehold~~conventional ~~title~~wells ~~analysis~~ and ~~reports,~~the ~~land~~drilling ~~title~~of ~~runsheets,~~low ~~sourcing~~risk, ~~negotiating~~high ~~and~~rate-of-return ~~acquiring~~gas ~~leases, document preparation,~~ and ~~performing~~oil ~~title curative functions~~wells.

Sable and subsidiaries are collectively referred to herein as the "Company,” “we,” “us,” and “our.”

General Industry Overview

The U.S. economy experienced a modest recovery during 2013 that has continued into 2014 with much of that recovery driven by the U.S. energy industry. However, uncertainty persists as federal deficit issues continue to leave ambiguities with U.S. businesses and consumers including what policies and practices may be implemented to resolve these matters. It remains challenging to predict the economic consequences on the U.S. energy industry, specifically the supply and demand for oil and gas, as governments struggle to resolve these issues.

Oil and Natural Gas

Sable Operating is an exploration and production company engaged in the acquisition, development and production of oil & natural gas reserves from low-risk, high rate-of-return wells in carbonate reservoirs. By focusing on early, low and no-cost entry into “tight oil” resource plays in North Texas, using multiple entry methods, Sable Operating has swiftly amassed interests in more than 87,000 leasehold acres. We believe these plays can be developed uniformly over expansive geographical areas with a high rate of success due to the recent advancements in horizontal drilling and multi-stage hydraulic fracturing technologies.

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Results of Operations

Selected Data

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2014			2013			2014			2013
	2015			2014
Financial Results
Revenues - Land Lease	$	~~612~~1,329		$	131,~~420~~074		$	~~187,303~~		$	~~343,802~~
Revenues - Oil and Gas sales	~~124~~259,~~833~~821			7848,~~587~~133			~~332,661~~			~~253,055~~
Revenues - Sale of oil and gas interests	~~15,710~~—			~~128~~27,~~188~~260			~~62,262~~			~~244,190~~
Total revenues	~~141~~261,~~155~~150			~~220~~76,~~195~~467			~~582,226~~			~~841,047~~
Total operating expenses	~~843~~1,~~290~~762,680			~~680~~409,~~442~~439			~~1,770,855~~			~~2,468,777~~
Total other expense	(54565,~~003~~825		)	(~~190~~77,~~485~~305		)	~~(172,718~~		)	~~(219,082~~		)
Loss before income taxes	(~~756~~2,~~138~~067,355		)	(~~650~~410,~~732~~277		)	~~(1,361,347~~		)	~~(1,846,812~~		)
Income tax benefit (provision)	—			~~155,681~~—			—			~~105,408~~
Net loss	$	(~~756~~2,~~138~~067,355	)	$	(~~495~~410,~~051~~277	)	$	~~(1,361,347~~	)	$	~~(1,741,404~~	)
Operating Results
Consolidated Adjusted EBITDA(1)	$	(684,417	)	$	(439,109	)	$	(1,143,182	)	$	(1,577,185	)
Consolidated Adjusted EBITDAX(1)	$	(1,007,702	)	$	(292,009	)

________________________________________________________

(1)See Results of Operations—Adjusted EBITDA for a description of Adjusted EBITDA, which is not a U.S. Generally Accepted Accounting Principles (“GAAP”) measure, and a reconciliation of Adjusted EBITDA to net loss, which is presented in accordance with GAAP.16

Three months ended September 30, 2014 compared to the three months ended September 30, 2013

Revenues. Revenues decreased $79,040 for the three months ended September 30, 2014, compared to the prior year period. This was primarily due to a decrease in the sale of oil and gas interests of $112,478 and a decrease in land services revenue of $12,808. The decrease in land services revenue and in the sale of oil and gas interests is directly related to the timing of our ability to identify oil and gas leasehold properties to be acquired by our customers, and the timing and availability of our customer’s capital budget expenditures. The decrease in land services revenue and oil & gas sales was partially offset by an increase in revenues from oil & gas sales of $46,246 as our production volumes increased as problems experienced during the winter were resolved. We anticipate revenues from land services and sale of oil and gas interests will decrease over time as we continue to focus on opportunities to retain, explore and operate properties in resource plays primarily in West Texas.

Oil & gas lease operating expenses. Lease operating expenses decreased slightly by $11,224 for the three months ended September 30, 2014 compared to three months ended September 30, 2013. Although revenues increased during the period due in part to the above mentioned resolution of production problems, lease operating expense was virtually unchanged.

Exploration. Exploration costs for the three months ended September 30, 2014 has increased by $21,693 over the prior period due to the shift in focus towards retaining and developing properties.

Depreciation, depletion, and amortization. Depreciation, depletion, and amortization (“DD&A”) for the three months ended September 30, 2014, decreased slightly by $1,673 over the prior period due to impairment of wells that are no longer subject to depletion.

Selling, general, and administrative expenses. Selling, general, and administrative (“SG&A”) expenses increased $154,052 for the three months ended September 30, 2014 compared to the three months ended September 30, 2013. This increase was due to an overall increase in professional fees and expenses including accounting and legal costs, and increases in payroll related costs due in part to an increase in personnel. SG&A consists primarily of salary and wages, contract labor, professional fees, lease rental costs, and insurance costs.

Interest expense. Interest expense increased $35,991 for the three months ended September 30, 2014 compared to the prior year period primarily due to the addition of the 12% convertible debentures. Interest expense was $54,082 for the three months ended September 30, 2014 compared to $18,091 for the same period in the prior year.

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~~Income tax benefit~~ (~~provision~~1)~~. The~~See ~~income~~Results ~~tax~~of ~~benefit~~Operations—Adjusted ~~(provision)~~EBITDAX for ~~the~~a ~~three~~description ~~months ended September 30, 2014 and 2013~~ of $0Adjusted ~~and $155~~EBITDAX,~~681,~~ ~~respectively,~~which is ~~the~~not ~~result~~a ~~of utilizing existing and current net operating losses to offset taxable income generated by our oil and gas segment~~U. ~~For~~S. ~~the~~Generally ~~three~~Accepted ~~months~~Accounting ~~ended~~Principles ~~September~~(“GAAP”) 30measure, ~~2013~~and a ~~benefit~~reconciliation of ~~$175,758~~Adjusted ~~resulting~~EBITDAX ~~from~~to ~~the~~net ~~disposal of Petro Staffing Group LLC was offset by a provision of $20~~loss,~~077~~ ~~from~~which ~~operations. The provision~~ is ~~due~~presented toin ~~limitations~~accordance ~~placed~~with ~~on our ability to fully offset taxable income by available net operating loss carryforwards~~GAAP.

~~Nine~~Three months ended ~~September~~March 3031, ~~2014~~2015 compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014

Revenues. Revenues ~~decreased~~increased $~~258~~184,~~821~~683 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, compared to the prior year period. This was primarily due to aan ~~decrease~~increase ~~from land services revenue of $156,499 for the nine months ended September 30, 2014, compared to the prior year period. The decrease~~ in ~~land~~revenues ~~services~~from ~~revenue is directly related to the timing of our ability to identify~~ oil ~~and~~& gas ~~leasehold~~sales ~~properties~~of to$211,688 beas ~~acquired by~~ our ~~customers,~~production ~~and~~volumes ~~the~~increased ~~timing~~following ~~and availability of~~ our ~~customer’s~~acquisition ~~capital budget expenditures. Revenues from Sale~~ of ~~oil~~the &Panther ~~gas~~Creek ~~interests~~properties ~~also~~on ~~decreased~~October ~~by $181~~15,~~928~~ ~~for the same reasons~~2014. ~~The~~This ~~decrease~~increase ~~in land services revenue and Sale of oil & gas interests~~ was partially offset by ana ~~increase~~decrease in ~~oil~~the &sale ~~gas sales~~ of ~~$79,606~~ asoil ~~our~~and ~~production~~gas ~~volumes~~interests ~~increased~~of ~~in the spring as problems experienced during the winter were resolved~~$27,260. We anticipate revenues from land services and sale of oil and gas interests will decrease over time as we continue to focus on ~~opportunities~~operating toPanther ~~retain, explore and operate properties in resource plays primarily in West Texas~~Creek.

Oil & gas lease operating expenses. Lease operating expenses ~~decreased~~increased significantly by $83493,~~096~~419 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 compared to ~~the~~three ~~nine~~ months ended ~~September~~March 3031, ~~2013~~2014. ~~The~~This ~~decrease~~was is due to ~~several~~increased ~~under~~field ~~performing~~operations ~~wells~~following ~~that were impaired in~~ the ~~prior~~acquisition ~~year~~of ~~and~~Panther ~~are~~Creek ~~no longer producing~~properties.

Exploration. Exploration costs for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 has increased by $5239,~~643~~274 over the prior period due to the shift in focus towards retaining and developing properties.

Depreciation, depletion, and amortization. Depreciation, depletion, and amortization (“DD&A”) for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015, increased by $4444,~~913~~568 over the prior period due to the addition of the ~~Newman~~Panther ~~and~~Creek ~~Coley wells~~property.

Selling, general, and administrative expenses. Selling, general, and administrative (“SG&A”) expenses ~~decreased~~increased $~~672~~375,~~382~~980 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 compared to the ~~prior~~three ~~year nine~~ months ended ~~September~~March 3031, ~~2013~~2014. This ~~decrease~~increase was due to an overall ~~decrease~~increase in professional fees and expenses including accounting and legal costs, and ~~decreases~~increases in payroll related costs due in part to aan ~~decrease~~increase in personnel. SG&A consists primarily of salary and wages, contract labor, professional fees, lease rental costs, and insurance costs.

Interest expense. Interest expense increased $~~119~~448,~~057~~629 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 compared to the prior year period primarily due to the addition of the 1213% ~~convertible~~Secured ~~debentures~~Notes and the ~~Secured~~12% ~~Bridge~~convertible ~~Loans~~debentures. Interest expense was $~~172~~526,~~952~~011 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 compared to $5377,~~895~~382 for the same period in the prior year.

Income tax benefit (provision). The income tax benefit (provision) for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 and ~~2013~~2014 of $0 and $~~105~~0,~~408,~~ respectively, is the result of utilizing existing and current net operating losses to offset taxable income generated by our oil and gas segment. For the nine months ended September 30, 2013 a benefit of $135,758 resulting from the disposal of Petro Staffing Group LLC was offset by a provision of $30,350 from operations. The provision is due to limitations placed on our ability to fully offset taxable income by available net operating loss carryforwards.

Adjusted ~~EBITDA~~EBITDAX

To assess the continuing operating results of our business, our chief operating decision maker analyzes net income (loss) before income taxes, interest expense, DD&A, exploration, impairments, gains or losses resulting from the sale of assets or resolution of commercial disputes, changes in fair value attributable to derivative liabilities, and discontinued operations (“Adjusted ~~EBITDA~~EBITDAX”). Our definition of Adjusted ~~EBITDA~~EBITDAX, which is not a GAAP measure, excludes interest expense to allow for assessment of segment operating results without regard to our financing methods or capital structure. Similarly, DD&A, exploration and impairments are excluded from Adjusted ~~EBITDA~~EBITDAX as a measure of our operating performance because capital expenditures are evaluated at the time capital costs are incurred. In addition, changes in fair value attributable to derivative liabilities and the accretion of preferred stock liability are excluded from Adjusted ~~EBITDA~~EBITDAX since these unrealized (gains) losses are not considered to be a measure of asset-operating performance. Management believes that the presentation of Adjusted ~~EBITDA~~EBITDAX provides information useful in assessing the Company’s financial condition and results of operations and that Adjusted ~~EBITDA~~EBITDAX is a widely accepted financial indicator of a company’s ability to incur and service debt, fund capital expenditures and make distributions to stockholders.

Adjusted ~~EBITDA~~EBITDAX, as we define it, may not be comparable to similarly titled measures used by other companies. Therefore, our consolidated Adjusted ~~EBITDA~~EBITDAX should be considered in conjunction with net income (loss) and other performance measures prepared in accordance with GAAP, such as operating income or cash flow from operating activities. Adjusted EBITDAX has important limitations as an analytical tool because it excludes certain items that affect net income (loss) and net cash provided by operating activities. Adjusted EBITDAX should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Below is a reconciliation of consolidated Adjusted EBITDAX to consolidated net income (loss) to common stockholders as reported on our consolidated statements of operations.

2017

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prepared in accordance with GAAP, such as operating income or cash flow from operating activities. Adjusted EBITDA has important limitations as an analytical tool because it excludes certain items that affect net income (loss) and net cash provided by operating activities. Adjusted EBITDA should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Below is a reconciliation of consolidated Adjusted EBITDA to consolidated net income (loss) to common stockholders as reported on our consolidated statements of operations.



	Three Months Ended March 31,
	2015			2014
Reconciliation of Adjusted EBITDAX to GAAP Net Loss:
Net loss	$	(2,067,355	)	$	(410,277	)

Interest expense	526,011			77,382
DD&A	454,504			9,936
Exploration	39,274			30,950
Deferred financing cost amortization	283,440			—
Change in value of accrued working interest	(141,401		)	—
Change in fair value of derivative liabilities	(102,175		)	—

Consolidated Adjusted EBITDAX	$	(1,007,702	)	$	(292,009	)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2013			2012
Reconciliation of Adjusted EBITDA to GAAP Net Loss:
Net loss	$	(756,138	)	$	(495,051	)	$	(1,361,347	)	$	(1,741,404	)
Income tax expense (benefit)	—			(155,681		)	—			(105,408		)
Interest expense	54,082			18,091			172,952			53,895
DD&A	17,639			19,312			45,213			40,300
Loss on disposal of assets	—			154,178			—			158,065
Loss on sale of securities	—			20,042			—			17,367
Consolidated Adjusted EBITDA	$	(684,417	)	$	(439,109	)	$	(1,143,182	)	$	(1,577,185	)

Liquidity and Capital Resources

Our working capital needs have historically been satisfied through operations, equity and debt investments from private investors, loans with financial institutions, and through the sale of assets. Historically, our primary use of cash has been to pay for acquisitions and investments, service our debt, and for general working capital requirements. As of ~~September~~March 3031, ~~2014~~2015, we have cash and ~~marketable securities, less the~~ cash ~~portion~~equivalents ~~of deposits held in trust,~~ totaling $~~125~~426,~~730. In addition~~427, ~~the balance of deposits~~ and ~~other~~negative atworking ~~September 30,~~capital ~~2014~~of ~~includes~~ $~~968~~(3,~~663 in earnest money paid for the acquisition of property~~066,421).

IfWe ~~however, we~~ do not currently generate sufficient cash flow from operations, and so we ~~will~~are ~~need~~continuing to raise additional capital through equity and/or debt financings to support and expand our drilling activities until such time as we can fully implement our plan of future operations and generate sufficient cash flow.

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Cash Flows

The following table summarizes our cash flows and has been derived from our unaudited financial statements for the three months ended ~~September~~March 3031, ~~2014~~2015 and 2013.

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2014			2013
	2015			2014
Cash flow provided by (used in) operating activities	(~~930~~803,~~271~~172		)	~~347~~(449,~~479~~061		)
Cash flow provided by (used in) investing activities	(1589,~~264,067~~684		)	~~(458~~49,~~805~~789		)
Cash flow provided by (used in) financing activities	21,~~226~~613,~~340~~284			(1408,~~022,286~~557		)
Net increase (decrease) in cash and cash equivalents	32220,~~002~~428			(19,~~133,612~~285		)
Beginning cash and cash equivalents	93,728			1,484,386
Ending cash and cash equivalents	$	~~125~~314,~~730~~156		$	~~350~~1,~~774~~493,671

Cash flows ~~from~~used in operating activities ~~decreased~~increased for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 by $1354,~~277,750~~111 compared to cash flows from operating activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014. This ~~decrease~~increase was mainly due to aincreased ~~significant~~LOE ~~reduction~~costs inassociated ~~working~~with ~~capital~~the ~~from~~Panther ~~accounts~~Creek ~~receivable~~properties.

Cash flows used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 increased by $~~805~~639,~~262~~473 compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014. The change is primarily due to an $~~899~~572,~~910~~262 ~~decrease~~increase in cash ~~inflows~~outflows ~~provided~~used byin the ~~sale~~investment ofin oil & gas properties.

Cash flows provided by financing activities increased by $31,~~248~~204,~~626~~727 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015 compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2013~~2014. The increase was due primarily to the $1,~~375~~675,000 provided by the issuance of 1213% ~~Convertible~~Secured debentures and the $1,001,738 sale of Common stock in the nine months ended September 30, 2014 as opposed to the $999,958 used in the redemption of Preferred stock in the nine months ended September 30, 2013Notes.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

Preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. We believe the most complex and sensitive judgments, because of their significance to the Consolidated Financial Statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014, describe the significant accounting estimates and policies used in preparation of the Consolidated Financial Statements. Actual results in these areas could differ from management’s estimates. Other than the clarification to our revenue recognition policy described below, there have been no significant changes in our critical accounting estimates and policies during the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015.

Revenue Recognition

Revenues from the sales of natural gas and crude oil are recorded when product delivery occurs and title and risk of loss pass to the customer, the price is fixed or determinable, and collection is reasonably assured. The Company uses the sales method of accounting for oil and gas revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes the Company may be entitled to, based on the Company's individual interest in the property. Periodically, imbalances between production and nomination volumes can occur for various reasons. In cases where imbalances have occurred, a production imbalance receivable or liability will be recorded when determined. If an imbalance exists at the time the wells’ reserves are depleted, settlements are made among the joint interest owners under a variety of arrangements.

Revenues from land services are recorded when title work is completed and the customer has been invoiced for services provided. Revenues from the sale of interests in oil and gas properties are recorded once a formal agreement has been reached and the agreement has been consummated through the exchange of consideration.

22• Land services revenue - Land services revenues consist of fees generated from analyzing land and mineral title reports, leasehold title analysis and reports, land title runsheets, sourcing, negotiating and acquiring leases, document

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• Land services revenue - Land services revenues consist of fees generated from analyzing land and mineral title reports, leasehold title analysis and reports, land title runsheets, sourcing, negotiating and acquiring leases, document preparation and performing title curative functions. Such revenues had previously been reported as Other revenues on the consolidated statements of operations. Sable provides land services to its customers by identifying the landowners and performing various land services identified above. The buyer (Sable’s customer) pays the landowner directly for the undeveloped lease acreage. Sable does not take title to the leasehold acreage and the buyer’s purchase from the landowner is non-recourse. For its services, Sable receives fees directly from its customer for services provided for clearing title, etc., generally based on a per acre amount. There is no substantial performance obligation or a retained interest by Sable as we do not obtain an interest in the leasehold acreage (not a conveyance of interests).

•

Sale of oil and gas interests - As there is a very competitive market to purchase oil and gas lease interests, especially in newer oil and gas plays with increasing acreage costs, Sable may purchase undeveloped leasehold acreage from landowners and take title to the leasehold. However, holding the leasehold acreage is generally short term in nature (less than 90 days) as we only acquire the undeveloped property when an identified customer has already agreed to the 100% re-purchase of the leasehold acreage from Sable. Accordingly, we do not acquire the leasehold acreage on a speculative basis nor for our own development. There is no substantial performance obligation or retained interest by Sable as all land services have been performed and Sable sells 100% of the leasehold interest. The difference between the sale price and the amount (cost) paid for the lease by Sable is recognized as a gain on sale in accordance with ASC 932-360-55-8. Such gains are not deemed to be incidental or peripheral transactions as providing land services and facilitating the purchase of oil and gas leasehold interest for its customers are transactions that are part of Sable’s principal ongoing operations, thus reported within the Company’s revenues.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The information is not required under Regulation S-K for “smaller reporting companies.”

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management performed an evaluation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and to ensure that the information required to be disclosed by us in reports that we file under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, management has concluded that the Company’s disclosure controls and procedures are not effective as of ~~September~~March 3031, ~~2014~~2015.

Changes in Internal Control Over Financial Reporting

~~There~~No ~~were significant~~ changes in our internal control over financial reporting ~~that~~were ~~occurred~~made during ~~our~~the ~~most~~three ~~recent~~months ~~fiscal quarter~~ ended ~~September 30,~~March ~~2014~~31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have hired a permanent accounting professional to serve as the Company's Principal Accounting Officer, and have hired sufficient accounting staff and implement appropriate procedures for monitoring and review of work performed.

~~Management's Report on Internal Control over Financial Reporting~~19

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness in 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.

Effective internal controls are necessary for us to provide reliable financial reports. If we cannot provide reliable financial reports, our operating results could be harmed. 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. Based on our evaluation, our management concluded that, as of September 30, 2014, our internal control over financial reporting was effective based on the criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO’).

Limitations on the Effectiveness of Controls

Our management, including our chief executive officer, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system cannot provide absolute assurance due to its inherent limitations; it is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. A control system also can be circumvented by collusion or improper management override. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of such limitations, disclosure controls and internal control over financial reporting cannot prevent or detect all misstatements, whether unintentional errors or fraud. 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.

Table of Contents

PART II

Item 1. Legal Proceedings

At ~~September~~March 3031, ~~2014~~2015, the Company was a party to lawsuits that were incurred in the normal course of business, none of which individually or in the aggregate is considered material by management in relation to the Company’s financial position or results of operations. In management’s opinion, the Company’s consolidated financial statements would not be materially affected by the outcome of these legal proceedings, commitments, or asserted claims.

Item 1A. Risk Factors

There have been no material changes in the Company’s risk factors from those disclosed in Part I, Item 1A, Risk Factors, in the Company’s Form 10-K for the year ended December 31, ~~2013~~2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~In February 2014, we initiated a $1,000,000 offering of convertible debt ("12~~13% ~~Convertible~~Secured ~~Debentures") to fund our~~Notes

~~ongoing~~On ~~working~~October ~~capital~~15, ~~needs.~~2014, ~~Terms~~the Company completed the acquisition of 19,881 acres held by production in the ~~12%~~Fort ~~Convertible~~Worth ~~Debentures~~Basin ~~were~~at asa ~~follows:~~purchase ~~(i)~~price of $~~100~~9,500,000 from Upham Oil & Gas Co., L.P. of Mineral Wells, Texas. The acquisition was financed primarily by issuance of Secured Notes of $8,900,000; bearing interest at the rate of 13% per ~~unit~~annum with a maturity in three years. In addition, each Secured Lender will receive (i) a pro rata share of a 3.0% overriding royalty interest effective at closing, (ii) on the date that the principal and interest on the Secured Notes is paid in full a record assignment of such Secured Lender's pro rata share of a 33.33% working interest.

aPayment ~~rate~~terms ofon 12the 13% ~~per~~Secured ~~annum~~Notes are as follows: Interest only on each Note shall be due and payable ~~monthly~~quarterly ~~with~~in aarrears ~~maturity~~commencing on January 15, 2015, and continuing on the fifteenth (15) day of ~~three~~each ~~years~~April, ~~from~~July, October, and January thereafter through April 15, 2016. Commencing on July 15, 2016, and continuing on the ~~date~~fifteenth (15) day of ~~issuance;~~each October, January, April and July thereafter, principal and interest shall be due and payable quarterly based upon a fifteen (ii15) ~~convertible~~year atamortization ~~any~~schedule. ~~time~~The unpaid principal balance, and all accrued and unpaid interest, shall be due and payable on the Maturity Date, October 15, 2017.

~~prior~~RKJ toHoldings, ~~maturity~~LLC atis ~~$0.75~~one ~~per share~~ of the ~~Company's~~Lenders ~~common~~under ~~stock;~~the ~~(iii)~~Loan ~~each~~Agreement ~~unit~~as ~~included~~of aOctober ~~three-year~~14, ~~warrant~~2014. RKJ ~~to purchase up to 30~~Holdings,~~000~~ ~~shares~~LLC ofis ~~the~~owned ~~Company's~~and ~~common~~managed ~~stock~~by atMr. anCory ~~exercise price of $0~~R.75 ~~per~~Hall, ~~share~~the ~~for~~President aand ~~period~~Chief ofOperating ~~three~~Officer ~~years from the effective date~~ of ~~the~~Sable ~~warrant;~~ and, ~~(iv) an anti-dilution provision that requires~~ a ~~reduction~~member inof the ~~conversion~~Sable ~~price~~Board ~~should subsequent at-market issuances~~ of ~~the Company’s common stock be issued below the stated conversion price~~Directors. As ofa ~~September 30~~Lender, ~~2014,~~RKJ weHoldings ~~had~~loaned ~~raised~~Sable $12,~~375~~850,000 ~~under~~at ~~the~~closing ~~12%~~and ~~Convertible~~an ~~Debenture~~additional ~~offering including warrants to purchase up to 627~~$150,~~500~~000 ~~shares~~during of the ~~Company's~~three ~~common~~months ~~stock. The~~ended ~~proceeds~~March ~~were~~31, ~~used to fund drilling and exploration costs along with general corporate overhead~~2015.

As of March 31, 2015 we had raised $11,325,000 under the 13% Secured Notes offering including warrants to purchase up to 6,228,750 shares of the Company's common stock.

The proceeds were used to acquire the Panther Creek property, begin remedial and recompletion operations along with general corporate overhead.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information

None

Item 6. Exhibits

The exhibits set forth on the accompanying Exhibit Index have been filed as part of this Form 10-Q.

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SIGNATURES

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

	NYTEX Energy Holdings, Inc.
	Sable Natural Resources Corporation
	By:	/s/ Michael K. Galvis
		Michael K. Galvis
		Chief Executive Officer
November 13, 2014
May 22, 2015

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EXHIBIT INDEX

Exhibit		Document
2.1		Agreement and Plan of Merger, dated as of May 4, 2012, by and among FDF Resources Holdings LLC, New Francis Oaks, LLC and NYTEX FDF Acquisition, Inc. (filed as Exhibit 2.1 to the Registrant’s Form 8-K filed May 10, 2012 and incorporated herein by reference)
3.1		Certificate of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Form 10-12G/A filed August 12, 2010 and incorporated herein by reference)
3.2		Bylaws of Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Form 10-12G/A filed August 12, 2010 and incorporated herein by reference)
4.1		Amended and Restated Certificate of Designation in respect of Senior Series A Redeemable Preferred Stock (filed as Exhibit 10.9 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
4.2		Amended and Restated Certificate of Designation in respect of Senior Series B Redeemable Preferred Stock (filed as Exhibit 10.10 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
4.3		Amended and Restated Certificate of Designation in respect of Series A convertible Preferred Stock (filed as Exhibit 4.3 to the Registrant’s Form 10-Q filed November 6, 2012 and incorporated herein by reference)
4.4		Amended and Restated Certificate of Designation in respect of Senior Series A Redeemable Preferred Stock (filed as Exhibit 10.9 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
4.5		Amended and Restated Certificate of Designation in respect of Senior Series B Redeemable Preferred Stock (filed as Exhibit 10.10 to the Registrant’s Form 8-K filed November 30, 2010 and incorporated herein by reference)
4.6		NYTEX Energy Holdings, Inc. 2013 Equity Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on January 28, 2013 and incorporated herein by reference)
4.7		NYTEX Energy Holdings, Inc. Amendment No. 1 to 2013 Equity Incentive Plan (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with on February 7, 2013 and incorporated herein by reference)
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.1		Employment Agreement - Galvis (filed as Exhibit 10.1 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
31.2*		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
10.2		Employment Agreement - Hall (filed as Exhibit 10.2 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
32.1*		Certifications of Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002***
10.3		NYTEX Energy Holdings, Inc. 2014 12% Convertible Debenture (filed as Exhibit 10.3 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
101.INS**		XBRL Instance Document.
10.4		NYTEX Energy Holdings, Inc. 2014 Debenture Warrant (filed as Exhibit 10.4 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
101.SCH**		XBRL Taxonomy Extension Schema.

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10.5		Securities Purchase Agreement - Hall (filed as Exhibit 10.5 to the Registrant's Form 10-K filed August 14, 2014 and incorporated herein by reference.
10.6		Form of Loan Agreement - 13% Secured Note (filed as Exhibit 10.1 to the Registrant's Form 8-K filed October 20, 2014 and incorporated herein by reference)
21		List of Subsidiaries of Registrant (filed as Exhibit 21 to the Registrant's Form 10-K filed March 31, 2015 and incorporated herein by reference)
23.1		Consent of Whitley Penn LLP (filed as Exhibit 23.1 to the Registrant's Form 10-K filed March 31, 2015 and incorporated herein by reference)
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certifications of Chief Executive Officer and Chief Accounting Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002***
101.INS**		XBRL Instance Document.
101.SCH**		XBRL Taxonomy Extension Schema.
101.CAL**		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**		XBRL Taxonomy Extension Definition Linkbase.
101.LAB**		XBRL Taxonomy Extension Label Linkbase.
101.PRE**		XBRL Taxonomy Extension Presentation Linkbase.

________________________________________________________

* Filed herewith

** Furnished herewith

*** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.23

Exhibit 31.1

CERTIFICATIONS

I, Michael K. Galvis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NYTEX Energy Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 13th day of November, 2014

/s/ Michael K. Galvis

Michael K. Galvis

Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, James D. Parker, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NYTEX Energy Holdings, Inc.;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated this 13th day of November, 2014

/s/ James D. Parker

James D. Parker

Vice President and Controller

Exhibit 32.1

SECTION 1350 CERTIFICATIONS

This Certificate is being delivered pursuant to the requirements of Section 1350 of Chapter 63 (Mail Fraud) of Title 18 (Crimes and Criminal Procedures) of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed for purposes of Section 18 of the Securities Act of 1934, as amended.

The undersigned, who are the Chief Executive Officer and Controller of NYTEX Energy Holdings, Inc. (the “Company”), each hereby certify as follows:

The Quarterly Report on Form 10-Q of the Company (the “Report”), which accompanies this Certificate, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and all information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated this 13th day of November, 2014

/s/ Michael K. Galvis

Michael K. Galvis

Chief Executive Officer

/s/ James D. Parker

James D. Parker

Vice President and Controller

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