UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended ~~January~~July 31, 2014

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

For the Transition Period from _________ to _________

Commission file number: 000-51427

BLACKSANDS PETROLEUM, INC. (Exact name of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Nevada		20-1740044
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

800 Bering, Suite 250

Houston, Texas 77057

(Address of principal executive offices) (zip code)

(713) 554-4490

(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 o¨

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 ox

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

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

As of ~~March~~September 1112, 2014, there were 1718,~~722~~756,~~484~~199 shares of registrant’s common stock outstanding.

BLACKSANDS PETROLEUM, INC.

FORM 10-Q

For the Quarter Ended ~~January~~July 31, 2014

Table of Contents

			Page
PART I FINANCIAL INFORMATION		Page
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements
Item 1.	Financial Statements
	Consolidated Balance Sheets as of July 31, 2014 and October 31, 2013 (unaudited)		3
	Consolidated Balance Sheets as of January 31, 2014 and October 31, 2013 (unaudited)			3
	Consolidated Statements of Operations for the nine and three months ended July 31, 2014 and 2013 (unaudited)		4
	Consolidated Statements of Operations for the three months ended January 31, 2014 and 2013 (unaudited)			4
	Consolidated Statements of Cash Flows for the nine months ended July 31, 2014 and 2013 (unaudited)		5
	Consolidated Statements of Cash Flows for the three months ended January 31, 2014 and 2013 (unaudited)			5
	Condensed Notes to Consolidated Financial Statements (unaudited)		6
	Condensed Notes to Consolidated Financial Statements (unaudited)			6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			9
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk			13
Item 4.	Controls and Procedures		16
Item 4.	Controls and Procedures			14
PART II OTHER INFORMATION
PART II OTHER INFORMATION
Item 1.	Legal Proceedings		18
Item 1.	Legal Proceedings			16
Item 1A.	Risk Factors		18
Item 1A.	Risk Factors			16
Item 2.	Unregistered Sales of Securities and Use of Proceeds		18
Item 2.	Unregistered Sales of Securities and Use of Proceeds			16
Item 3.	Defaults Upon Senior Securities		18
Item 3.	Defaults Upon Senior Securities			16
Item 4.	Mine Safety Disclosures		18
Item 4.	Mine Safety Disclosures			16
Item 5.	Other Information		18
Item 5.	Other Information			16
Item 6.	Exhibits		19
Item 6.	Exhibits			17
SIGNATURES			20
SIGNATURES				18

Blacksands Petroleum, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

		January 31, 2014				October 31, 2013
	July 31,2014				October 31,2013
ASSETS
Current Assets:
Cash and cash equivalents	$	$719,586	~~702,712~~		$	$1,335,237	~~1,335,237~~
Accounts receivable		197,610	~~315,971~~			417,597	~~417,597~~
Prepaid expenses		12,660	~~27,539~~			--	--
Total Current Assets		929,856	~~1,046,222~~			1,752,834	~~1,752,834~~
Oil and gas property costs (successful efforts method of accounting)
Proved			2,032,019				2,077,872
Proved, net of accumulated depletion of 7,368,699 and 6,309,607		4,015,072				2,077,872
Other assets		50,000	~~50,054~~			50,312	~~50,312~~
TOTAL ASSETS	$	$4,994,928	~~3,128,295~~		$	$3,881,018	~~3,881,018~~
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities:
Note payable	$	$60,000	~~3,280,000~~		$	$280,000	~~280,000~~
Accounts payable		478,650	~~2,396,725~~			523,365	~~523,365~~
Accrued expenses		4,011,483	~~3,245,671~~			3,121,900	~~3,121,900~~
Total Current Liabilities		4,550,133	~~8,922,396~~			3,925,265	~~3,925,265~~
Notes Payable, net of discount of $1,004,404 and $1,329,581			1,595,596				4,270,419
Notes Payable, net of discount of $-- and $1,329,581		5,820,000				4,270,419
Asset Retirement obligation			64,141				649,233
Convertible debenture net of discount of $1,337,497 and $--		162,503				--
Total Liabilities			10,582,133				8,844,917
Asset Retirement obligation		48,081				649,233
Stockholders’ Deficiency:
Total Liabilities		10,580,717				8,844,917
Preferred stock - $0.01 par value; 10,000,000 shares authorized:
Stockholders’ Deficit:
Series A - $.001 par value, 310,000 shares authorized, nil shares issued and outstanding			--				--
Preferred stock - $0.001 par value; 10,000,000 shares authorized:
Common stock - $0.001 par value; 100,000,000 shares authorized; 17,722,485 and 17,719,360 shares issued and outstanding at January 31, 2014 and October 31, 2013, respectively			17,723				17,720
Series A - $.001 par value, 310,000 shares authorized, nil shares issued and outstanding		--				--
Additional paid-in capital			23,741,212				23,726,191
Series B - $.001 par value, 2,217,281 shares authorized, 500,000 shares issued and outstanding		500				--
Accumulated deficit			(31,212,773	)			(28,707,810	)
Common stock - $0.001 par value; 100,000,000 shares authorized;
Total Stockholders’ Deficiency			(7,453,838	)			(4,963,899	)
17,725,610 and 17,719,360 shares issued and outstanding at July 31, 2014 and October 31, 2013, respectively		17,726				17,720
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY		$	3,128,295			$	3,881,018
Additional paid-in capital		25,559,704				23,726,191
Accumulated deficit		(31,163,719	)			(28,707,810	)
Total Stockholders’ Deficit		(5,585,789	)			(4,963,899	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	4,994,928			$	3,881,018

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

Blacksands Petroleum, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

		Three months ended January 31,
			Nine Months Ended July 31,							Three Months Ended July 31,
		~~2014~~	2014			~~2013~~	2013			2014			2013
Revenue:
Oil and gas revenue		$	~~328,297~~$	1,062,491		$	~~361,986~~$	1,303,045		$	465,791		$	467,879
Expenses:
~~Selling, general and administrative~~	Selling, general and administrative		~~341,635~~	960,706			~~347,267~~	1,107,685			244,723			336,255
~~Depreciation and depletion~~	Depreciation and depletion		~~197,801~~	366,501			~~158,549~~	375,257			69,924			138,211
Accretion			8,444				14,674
	Accretion expense			15,648				31,287			1,707			8,525
~~Lease operating expenses~~	Lease operating expenses		~~178,780~~	430,473			~~165,826~~	507,585			129,902			152,460
Impairment of oil and gas property interest			2,219,813				--
	Gain on sale of interest in Cabeza Creek Field			(645,323	)			--			--			--
Total expenses			2,946,473				686,316
	Gain on transfer of interest to PIE Holdings			(1,760,390	)			--			--			--
Loss from Operations			(2,618,176	)			(324,330	)
	Oil and gas exploration costs			--				220,000			--			220,000
Other income and expense:
	Impairment of oil and gas property interest			2,219,813				--			--			--
Interest expense			(508,457	)			(282,081	)
	Total expenses			1,587,428				2,241,814			446,256			855,451
Gain on sale of oil and gas properties			621,670				--
Gain (loss) from operations				(524,937	)			(938,769	)		19,535			(387,572	)
Other income			--				27,763
	Other income and (expense):
Total Other Income (Expense)			113,213				(254,318	)
Interest expense				(1,941,519	)			(955,918	)		(769,317	)		(360,411	)
Loss before provision for income taxes			(2,504,963	)			(578,648	)
Other income				10,547				27,763			10,547			--
Provision for income taxes			--				--
	Total other income (expense)			(1,930,972	)			(928,155	)		(758,770	)		(360,411	)
Net Loss			(2,504,963	)			(578,648	)
Loss before provision for income taxes				(2,455,909	)			(1,866,924	)		(739,235	)		(747,983	)
Preferred stock dividends			--				50,000
Provision for income taxes				--				--			--			--
Net loss attributable to common shareholders		$	(2,504,963	)		$	(628,648	)
Net loss				(2,455,909	)			(1,866,924	)		(739,235	)		(747,983	)
Loss Per Share attributable to common shareholders
Preferred stock dividends				2,500				150,000			2,500			50,000
Basic and diluted		$	(0.14	)		$	(0.04	)
Deemed dividend				450,000				--			450,000			--
Weighted Average Shares Outstanding
Net loss attributable to common shareholders			$	(2,908,409	)		$	(2,016,924	)	$	(1,191,735	)	$	(797,983	)
Basic and diluted			17,719,530				16,386,613
Loss per share attributable to common shareholders
Basic			$	(0.16	)		$	(0.12	)	$	(0.07	)	$	(0.04	)
Diluted			$	(0.16	)		$	(0.12	)	$	(0.07	)	$	(0.04	)
Weighted Average Shares Outstanding
Basic				17,721,546				16,388,648			17,722,655			16,389,738
Diluted				17,721,546				16,388,648			17,722,655			16,389,738

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

BLACKSANDS PETROLEUM, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the ~~Three~~Nine Months Ended ~~January~~July 31, 2014 and 2013

(Unaudited)

	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Netloss	$	(2,504,963	)	$	(578,648	)
Net loss	$	(2,455,909	)	$	(1,866,924	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Impairment of oil and gas property costs		2,219,813			--
Equity compensation expense		(15,~~024~~980	)		90236,~~980~~526
Amortization of debt discount		~~325~~1,~~177~~342,084			~~105~~433,~~284~~032
Depreciation, depletion and accretion		206,245			173,223
Gain on transfer of interest to PIE Holdings		(1,760,392	)		--
Gain on sale of oil and gas properties		(621,670	)		--
Depreciation, depletion and accretion		382,148			406,544
Gain on sale of oil and gas properties		(645,323	)		--
Changes in operating assets and liabilities:
Accounts receivable		~~151~~219,~~626~~987			19161,~~360~~185
Prepaid expense and other current assets		(2712,~~539~~660	)		6169,~~538~~611
Accounts payable		~~316~~(12,~~234~~753	)		~~217~~315,~~956~~562
Net cash flows from operating activities		79(738,~~947~~985	)		34(144,~~693~~464	)
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM INVESTING ACTIVITIES
Oil and gas property costs		(~~712~~1,~~472~~926,666	)		(22390,~~726~~401	)
Net cash flows from investing activities		(712,472	)		(22,726	)
Proceeds from the sale of Cabeza Creek		50,000			--
Net cash flows from investing activities		(1,876,666	)		(390,401	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable		--			--
Borrowings on debt		1,500,000			--
Net cash flows from financing activities		--			--
Proceeds from preferred stock subscription		500,000			--
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(632,525	)		11,967
Net cash flows from financing activities		2,000,000			--
NET DECREASE IN CASH AND CASH EQUIVALENTS		(615,651	)		(534,865	)
CASH AND CASH EQUIVALENTS - Beginning of period		1,335,237			1,160,320
CASH AND CASH EQUIVALENTS - End of period	$	~~702~~719,~~712~~586		$	1625,~~172,287~~455
Supplemental Disclosures
Cash paid for interest	$	85252,~~004~~252		$	--167,240
Cash paid for income taxes	$	--		$	--
Supplemental non-cash activities:
Oil and gas property costs in accounts payable	$	1,680,897		$	--
Oil and gas costs in accounts payable	$	858,009		$	--
Discount on debt	$	1,350,000		$	--

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

BLACKSANDS PETROLEUM, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

1. The Company and Summary of Significant Accounting Policies

Blacksands Petroleum, Inc. (hereinafter referred to as the “Company”) was incorporated in the State of Nevada on October 12, 2004. Since August 2007, the Company has been engaged in the exploration, development, exploitation and production of oil and natural gas. The Company sells its oil and gas products primarily to domestic pipelines and refineries. Its operations are presently focused in the States of Texas and New Mexico.

The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in annual report on Form 10-K for the year ended October 31, 2013 filed with the SEC on February 14, ~~2013~~2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements as reported in the 2013 annual report on Form 10-K have been omitted.

Oil and Gas Properties

The Company follows the successful efforts method of accounting for its oil and natural gas properties. Oil and gas properties are periodically assessed to determine whether they have been impaired. Any impairment in value of unproved properties is charged to exploration expense. The costs of unproved properties, which are determined to be productive, are transferred to prove oil and gas properties and amortized on an equivalent unit-of-production basis. Exploratory expenses, including geological and geophysical expenses and delay rentals for unevaluated oil and gas properties, are charged to expense as incurred. Exploratory drilling costs are initially capitalized as unproved property but charged to expense if and when the well is determined not to have found proved oil and gas reserves. In accordance with ASC No. 935, exploratory drilling costs are evaluated within a one-year period after the completion of drilling. For proved properties, we compare expected undiscounted future cash flows at a producing field level to the unamortized capitalized cost of the asset. If the future undiscounted cash flows, based on our estimate of future natural gas and crude oil prices, operating costs, anticipated production from proved reserves and other relevant date, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is calculated by discounting the future cash flows at an appropriate risk-adjusted discount rate.

During the three months ended January 31, 2014, the Company impaired its oil and gas properties by $2,219,813, which is reflected in the consolidated statement of operations. This impairment was the result of the additional costs incurred in the AP Clark Field related to the three wells on which the drilling was commenced in November 2013.

Subsequently, during the three months ended April 30, 2014, the Company recorded income of $1,760,392 in connection with the transfer of some of the Company’s interest in three wells to PIE Holdings, LP on which drilling commenced in November 2013. This income is included in the income statement as an operating expense.

Going Concern

As shown in the accompanying consolidated financial statements, the Company has incurred an accumulated deficit of $31,~~212~~163,~~773~~719 through ~~January~~July 31, 2014. In addition, at July 31, 2014, the Company had a working capital deficit of $73,~~876~~620,~~174~~277, ~~and~~a ~~cash~~stockholders’ ~~and~~deficit ~~cash equivalents~~ of $~~702~~5,~~712 at January 31~~585,789 ~~2014.~~and ~~The~~cash ~~Company drilled three new wells in November 2013. In order to complete the wells, the Company must raise additional capital~~ and~~/or~~ ~~sell~~cash ~~down~~equivalents ~~its~~of ~~interest in these wells. However~~$719, ~~the Company cannot assure that it will accomplish this task~~586.

The current rate of cash usage raises substantial doubt about the Company’s ability to continue as a going concern, absent the raising of additional capital, ~~and/~~restructuring or ~~additional~~extending ~~significant revenues from new oil production. In an effort to mitigate this near-term concern~~ the ~~Company~~terms ison ~~seeking~~its tocurrent ~~obtain~~debt ~~sufficient~~and/or ~~funds~~additional tosignificant ~~complete~~revenue ~~the~~from ~~three~~ new ~~wells~~oil ~~drilled in November 2013 and to fund working capital~~production. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue in existence.

2. Asset Retirement Obligation

The following table summarizes the change in the asset retirement obligation (“ARO”) for the periods ended ~~January~~July 31, 2014:

Beginning balance at November 1	$	649,233
Beginning balance at November 1, 2013	$	649,233
Liabilities settled		--
Liabilities incurred through acquisition of assets		--
Liabilities settled through sale of assets		(~~593~~616,~~536~~800	)
Accretion expense		815,~~444~~648
Ending balance at January 31	$	64,141
Ending balance at July 31, 2014	$	48,081

The ARO reflects the estimated present value of the amount of dismantlement, removal, site reclamation and similar activities associated with the Company’s oil and gas properties. Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the oil and gas property balance.

3. Contingencies

The Company, as an owner or lessee and operator of oil and gas properties, is subject to various federal, state and local laws and regulations relating to discharge of materials into, and protection of, the environment. These laws and regulations may, among other things, impose liability on the lessee under an oil and gas lease for the cost of pollution clean-up resulting from operations and subject the lessee to liability for pollution damages. In some instances, the Company may be directed to suspend or cease operations in the affected area. The Company maintains insurance coverage, which it believes is customary in the industry, although the Company is not fully insured against all environmental risks. The Company is not aware of any environmental claims existing as of ~~January~~July 31, 2014, which have not been provided for, covered by insurance or otherwise have a material impact on its financial position or results of operations. There can be no assurance, however, that current regulatory requirements will not change, or past noncompliance with environmental laws will not be discovered on the Company’s properties.

In June 2014, the Company received notice that it owed to PIE Holdings LP approximately $485,000 for the completion costs related to the three new wells in the AP Clark Field. According to the Joint Operating Agreement the Company has with PIE Holdings, LP, these amounts are required to be paid within seven days of the notification that fracking activities commenced. These amounts have not been paid to date. According to the Joint Operating Agreement, the Company could be forced to give up all or a portion of its interest in these wells for non-payment. The Company has not been notified to date of any actions to be taken for the non-payment of these completion costs.

4. Stockholders’ Equity

Series B Convertible Preferred Stock

In June 2014, the Company designated 2,217,281 shares of preferred stock as non-voting Redeemable Convertible Series B Preferred Stock (“Series B Preferred”) (See Note 6). Each share of Series B Preferred is entitled to a dividend of 3% payable annually through the issuance of additional Series B Preferred. Each share of Series B Preferred may be converted at the option of the holder any time on or prior to May 30, 2017 into shares of the Company’s common stock at a conversion price of $1.00 per share, which is subject to adjustment. The Company has the right to redeem the shares, in whole or in part, any time after May 30, 2017 at $1.00 per share.

Under the terms set forth in the Certificate of Designation, the holders of Series B Preferred stock have the exclusive right, voting separately as a class, to elect one director of the Board (“Series B Director”), who must be reasonably acceptable to the Company. The Series B Director must be appointed by the holders of a majority of the issued and outstanding shares of Series B Preferred Stock. The Series B Director was appointed to the Board in June 2014.

Stock Options

A summary of the Company’s stock option activity and related information is as follows:

	Number of Shares	~~Number of Shares~~		Weighted Average Exercise Price		~~Weighted Average Exercise Price~~
Outstanding at November 1, 2013		1,046,333	~~1,046,333~~	$	3.13	$	~~3.12~~
Granted		-	-		-		-
Exercised		-	-		-		-
Cancelled		27,500	-	$	4.50		-
Outstanding at January 31, 2014			1,046,333			$	3.12
Outstanding at July 31, 2014		1,018,833		$	3.09
Exercisable at January 31, 2014			1,002,333			$	3.07
Exercisable at July 31, 2014		1,018,833		$	3.09

During the ~~three~~nine months ended ~~January~~July 31, 2014 and 2013, the Company recorded stock-based compensation of $(15,~~024~~980) and $90236,~~980~~526, respectively, as general and administrative expenses. At ~~January~~July 31, 2014, the weighted average remaining life of the stock options is 6.1002 years. ~~The unamortized amount of stock-based compensation at January 31, 2014 was $52,034. This cost is expected to be recognized over a weighted average period of 0.67 years.~~

7Warrants

A summary of the Company’s warrant activity and related information is as follows:

	Number of Shares		Weighted Average Exercise Price
Outstanding at November 1, 2013	2,057,268		$	4.50
Granted		-		-
Exercised		-		-
Expired		2,057,268	$	4.50
Outstanding at July 31, 2014		--		--
Exercisable at July 31, 2014		--		--

5. Sale of Cabeza Creek Field

In January 2014, the Company sold its interest in all of the wells in the Cabeza Creek Field for all depths from the surface to 8,500 feet below the surface in exchange for $50,000 and the assumption of all future liabilities associated with the plugging and abandoning of all wells in the Cabeza Creek Field ($~~593~~616,~~536~~800).

The following is a summary of the ~~proforma~~pro forma information for the ~~three~~nine months ended ~~January~~July 31, 2014 and 2013 assuming the sale of the Cabeza Creek field had occurred as of the beginning of each fiscal year presented:

	2014			2013
Oil and gas revenues	$	328,297		$	308,045
Oil and gas revenue	$	1,062,491		$	1,149,001
Expenses
Selling, general and administrative		~~341~~1,~~635~~018,271			~~347~~1,~~267~~107,685
Depreciation and depletion		~~197~~366,~~801~~501			~~123~~301,~~979~~620
Accretion		815,~~444~~648			41,~~515~~143
Lease operating expense		~~140~~430,~~759~~473			~~138~~447,~~620~~579
Impairment of oil and gas property interest		2,219,813			--
Total expenses		2,908,452			614,381
Oil and gas exploration costs		--			220,000
Loss from operations		(2,580,155	)		(306,336	)
Total expenses		4,050,706			2,078,027
Other income (expense)		(508,457	)		(254,318	)
Loss from operations		(2,988,215	)		(929,026	)
Net income	$	(3,088,612	)	$	(560,654	)
Other income (expense)		(230,952	)		(928,155	)
Net loss	$	(3,219,167	)	$	(1,857,181	)

~~Item 2~~6. ~~Management’s~~ ~~Discussion~~Subscription ~~and Analysis of Financial Condition and Results of Operations.~~Agreement

~~CAUTIONARY~~On ~~NOTICE~~June ~~REGARDING~~6, ~~FORWARD-LOOKING~~2014, ~~STATEMENTS~~the Company entered into a subscription agreement with Pacific LNG Operations Ltd., a company incorporated in the British Virgin Islands (“Pacific LNG”), whereby the Company issued to Pacific LNG, in exchange for $2,000,000, a (i) $1,500,000 principal face amount 5% Convertible Debenture (“Debenture”) convertible into shares of Series B Preferred (Note 5) at a conversion price of $1.00 per share, and (ii) $500,000 in exchange for 500,000 shares of Series B Preferred.

~~This~~The ~~Management's~~Debenture ~~Discussion~~accrues ~~and~~interest ~~Analysis~~at ofthe ~~Financial~~rate ~~Condition and Results~~ of ~~Operations~~5% ~~includes~~per aannum, ~~number~~payable ~~of forward~~semi-~~looking~~annually ~~statements~~in ~~that~~arrears, ~~reflect Management's current views with respect to future events~~ and ~~financial~~matures ~~performance.~~on ~~You~~June ~~can identify these statements by forward-looking words such as “may” “will~~6,” ~~“expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words~~2017. ~~Those~~Pacific ~~statements~~LNG ~~include~~has ~~statements regarding~~ the ~~intent~~right, ~~belief~~at orany ~~current~~time ~~expectations~~prior ofto usJune ~~and~~6, ~~members~~2015, ofto ~~its~~convert ~~management team as well as~~ the ~~assumptions~~outstanding onprincipal ~~which~~and ~~such~~interest, ~~statements~~if ~~are based. Prospective investors are cautioned that~~ any, ~~such~~of ~~forward-looking~~the ~~statements~~Debenture ~~are~~into ~~not~~shares ~~guarantees~~ of ~~future~~Series ~~performance~~B ~~and~~Preferred ~~involve~~at ~~risk~~a ~~and~~price ~~uncertainties,~~of ~~and~~$1.00 ~~that~~per ~~actual~~share ~~results~~of ~~may~~Series ~~differ~~B ~~materially from those contemplated by such forward-looking statements~~Preferred.

~~Readers~~Each ~~are~~share ~~urged~~of toSeries ~~carefully~~B ~~review~~Preferred ~~and~~has ~~consider~~a ~~the~~stated ~~various~~value ~~disclosures~~of ~~made~~$1.00 by(“Stated usValue”) ~~in this report~~ and inaccrues ~~our~~a ~~other~~dividend ~~reports~~of ~~filed~~3% ~~with~~of the ~~Securities~~Stated ~~and~~Value ~~Exchange~~per ~~Commission.~~annum, ~~Important~~which ~~factors~~is ~~currently~~payable ~~known~~in toadditional usshares ~~could~~of ~~cause~~Series ~~actual~~B ~~results~~Preferred toannually ~~differ~~on ~~materially~~December ~~from~~31 ~~those~~ in ~~forward-looking statements~~arrears. WeEach ~~undertake~~share noof ~~obligation~~Series toB ~~update~~Preferred ormay ~~revise~~be ~~forward-looking~~converted ~~statements~~at toany ~~reflect~~time ~~changed~~on ~~assumptions,~~or ~~the~~prior ~~occurrence~~to ofMay ~~unanticipated~~30, ~~events~~2017 orinto ~~changes~~such innumber ~~the~~of ~~future~~shares ~~operating~~of ~~results~~the ~~over~~Company’s ~~time.~~common Westock ~~believe~~equal ~~that~~to ~~its~~the ~~assumptions~~Stated ~~are~~Value ~~based~~divided ~~upon~~by ~~reasonable~~$1.00 ~~data~~per ~~derived~~share. ~~from~~The ~~and~~Company ~~known~~has ~~about~~the ~~our~~right, ~~business~~at ~~and~~any ~~operations~~time ~~and~~after ~~the~~May ~~business~~30, ~~and~~2017, ~~operations~~to ofredeem the ~~Company.~~Series NoB ~~assurances~~Preferred ~~are~~at ~~made~~a ~~that~~price ~~actual results~~ of ~~operations~~$1.00 orper ~~the~~share. ~~results~~Management ofhas ~~our~~evaluated ~~future~~the ~~activities~~Series ~~will~~B ~~not~~Preferred ~~differ~~and ~~materially from~~ its ~~assumptions.~~related ~~Factors~~terms ~~that~~and ~~could~~determined ~~cause~~there ~~differences include, but~~ are ~~not~~no ~~limited~~embedded ~~to, expected market demand for the Company’s services, fluctuations in pricing for materials, and competition~~derivatives.

~~Overview~~In connection with the issuance of the Debenture, the Company has reported a beneficial conversion feature for the difference between the conversion price pursuant to the Debenture and the quoted price of the Company’s common stock on the date of the agreement. On the date of the agreement, a discount totaling $1,350,000 was recorded. The unamortized discount which at July 31, 2014 was $1,337,497, will be amortized over the remaining term of the Debenture using the effective interest method. In addition, a deemed dividend totaling $450,000 was recorded in connection with the beneficial conversion feature associated with the conversion features in the Series B Preferred.

~~We currently focus our oil and natural gas exploration, exploitation and development operations on projects located in Colorado, New Mexico and Texas~~7. Subsequent The higher potential impact projects (“Core Focus Areas”) are concentrated on (i) Spraberry, Wolfberry, Cline, Strawn and Mississippian formations in the Permian Basin (Midland Basin) in W. Texas, (ii) conventional reef structures in the Pedregosa Basin in S.W. New Mexico and (iii) conventional structure and stratigraphic formations and unconventional resource formations in Southern Colorado. We also have an interest in the Beech Creek Field in Hardin County Texas, which we anticipate will provide us with immediate cash flow and additional upside through recompletion potential and new drilling opportunities (“Non-core Properties”).Events

AsAmendment ofto ~~January~~Silver ~~31,~~Bullet ~~2014,~~Notes we owned interests in (i) approximately 8,700 gross (5,050 net) acres in the Midland Basin, (ii) approximately 108,715 gross (54,357 net) acres in the Pedregosa Basin, and (iii) approximately 3,300 gross (1,650 net) acres in Colorado.Payable

WeIn ~~have~~August ~~approximately 112~~2014,~~793~~ ~~gross~~the ~~acres~~Company ~~(56,100~~and ~~net~~Silver ~~acres~~Bullet Property Holdings SDN BHD (“Silver Bullet”) ~~held~~entered byinto ~~production~~an Amendment and ~~continuous~~Exchange ~~drilling~~Agreement ~~operations~~(the “August 2014 Amendment”). ~~This~~Pursuant ~~includes~~to ~~approximately~~the 4August 2014 Amendment,~~000~~ ~~gross~~all ~~acres~~accrued (1and unpaid interest through June 30,~~843~~ ~~net~~2014 ~~acres)~~on inthe ~~Midland~~outstanding ~~Basin~~notes issued to Silver Bullet, ~~108~~totaling $1,~~715~~052,407, ~~gross~~was ~~acres~~exchanged ~~(54~~for 1,~~357~~052,407 ~~net~~shares ~~acres)~~of the Company’s common stock. In addition, interest accrued on the notes is to be paid quarterly in arrears in shares of the ~~Pedregosa~~Company’s ~~Basin~~common stock based upon the average common stock price for the last five trading days of the quarter. WeThe ~~have~~due nodates ~~production~~on ineach ~~Colorado~~of the notes payable to Silver Bullet were extended to December 31, 2015.

WeDevelopment ~~began~~Agreement ~~oil and gas operations in the United States on November 1, 2009,~~ with ~~the~~Adwar ~~purchase~~Drilling ofFund a producing conventional oil and gas field, located in the Gulf Coast region of Texas, from Pioneer Natural Resources. Additionally, we acquired interests in two properties located in the Gulf Coast region of Texas and one property in our Core Focus Area located in West Texas.III

~~The~~In ~~Core~~August ~~Focus~~2014, ~~Areas~~ApClark, ~~provide~~LLC, usa ~~with~~wholly-owned ~~the~~subsidiary ~~opportunity~~of tothe ~~grow~~Company, ~~reserves~~entered ~~and~~into ~~cash~~a ~~flow~~Participation ~~by drilling~~ and ~~developing~~Development ~~the~~Agreement ~~properties.~~with ~~The~~Adwar ~~Core~~Drilling ~~Focus~~Fund ~~Areas~~III, weLP. ~~currently~~(“Adwar ~~plan~~III”). Pursuant to ~~concentrate~~the onagreement, ~~developing~~Adwar ~~are~~III has in the APright ~~Clark~~to ~~Field. We~~invest ~~will~~up ~~need~~ to ~~raise~~$7.5 ~~additional~~million ~~capital~~ in ~~order~~contributions to ~~complete~~acquire ~~the~~working ~~three~~interests ~~wells~~of up ~~drilled~~to in50% ~~the AP Clark Field~~ in ~~November~~certain ~~2013, as well as any potential~~ future ~~wells~~development ~~to be drilled~~wells.

We continue to pursue avenues to reduce or eliminate our financial exposure on a case by case basis for each project. Joint venture arrangements may be considered for others to participate for a disproportionate share of the initial leasing and/or drilling costs, further reducing our exposure.

WeItem ~~have not entered into any commodity derivative arrangements or hedging transactions~~2. ~~Although~~Management’s weDiscussion ~~have no current plans to do so, we may enter into commodity swap~~ and~~/or~~ ~~hedging~~Analysis ~~transactions~~of inFinancial ~~the~~Condition ~~future in conjunction with oil~~ and ~~gas~~Results ~~production.~~of ~~We have no off-balance sheet arrangements~~Operations.

InCAUTIONARY ~~order~~NOTICE toREGARDING ~~maintain~~FORWARD-LOOKING ~~our financial position, we have sold equity and used joint venture agreements with other industry companies to limit or eliminate our financial exposure in early drilling.~~STATEMENTS

~~Consolidated~~This Management's Discussion and Analysis of Financial Condition and Results of Operations ~~for~~includes ~~the~~a ~~Three~~number ~~Months~~of ~~Ended~~forward-looking ~~January~~statements ~~31,~~that ~~2014~~reflect ~~Compared~~Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the ~~Three~~intent, ~~Months~~belief ~~Ended~~or ~~January~~current 31expectations of us and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, ~~2013~~and that actual results may differ materially from those contemplated by such forward-looking statements.

~~Revenues~~Readers ~~for~~are urged to carefully review and consider the ~~three~~various ~~months~~disclosures ~~ended~~made ~~January~~by ~~31,~~us ~~2014~~in ~~totaled~~this ~~$328,297~~report asand ~~compared~~in toour ~~$361,986~~other ~~for~~reports filed with the ~~three~~Securities ~~months~~and ~~ended~~Exchange ~~January~~Commission. ~~31,~~Important ~~2013~~factors currently known to us could cause actual results to differ materially from those in forward-looking statements. ~~The~~We ~~decrease~~undertake ~~totaling~~no ~~$33~~obligation to update or revise forward-looking statements to reflect changed assumptions,~~689~~ ~~resulted~~the occurrence of unanticipated events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from and known about our business and operations and the ~~lack~~business and operations of ~~production~~the inCompany. No assurances are made that actual results of operations or the ~~Cabeza~~results ~~Creek~~of ~~Field~~our ~~prior~~future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, ~~being~~expected ~~sold~~market demand for the Company’s services, fluctuations in ~~late~~pricing ~~January~~for ~~2014~~materials, and competition.

Selling, general and administrative expenses decreased $5,632 from $347,267 in the three months ended January 31, 2013 to $341,635 in the three months ended January 31, 2014. This decrease is primarily the result of a decrease of $75,956 in the stock based compensation recorded in the quarter ended January 31, 2014 as the result of the vesting of previously granted stock options, and partially offset by additional consulting fees of $32,349 and professional services of $27,391. There were no additional options granted during the quarter ended January 31, 2014.Overview

~~Depreciation,~~We ~~depletion~~currently focus our oil and ~~accretion~~natural ~~increased~~gas ~~$33~~exploration,~~022~~ ~~from~~exploitation ~~$173,223~~and development operations on projects located in ~~the~~Texas. ~~three~~The ~~months~~higher ~~ended~~potential ~~January~~impact ~~31,~~projects ~~2013~~(“Core asFocus ~~compared~~Area”) toare ~~$206~~concentrated in the Spraberry,~~245~~ ~~for~~Wolfberry, Cline, Strawn and Mississippian formations in the ~~period~~Permian ~~ended~~Basin ~~January~~(Midland ~~31,~~Basin) ~~2014~~in W. ~~The~~Texas. ~~increase~~We isalso ~~primarily~~have ainterests ~~result~~in of(i) ~~the~~conventional ~~depletion~~reef ~~expense~~structures ~~for~~in the ~~costs~~Pedregosa ~~related~~Basin toin ~~the~~S.W. APNew ~~Clark~~Mexico, (ii) conventional structure and stratigraphic formations and unconventional resource formations in Southern Colorado and (iii) Beech Creek Field in Hardin County, Texas (“Non-core Properties”).

~~Lease~~As ~~operating~~of ~~expenses~~July ~~increased by $12~~31,~~954~~ ~~from $165~~2014,~~826~~ inwe ~~the~~owned ~~three~~interests ~~months~~in ~~ended~~(i) ~~January~~approximately 317,700 ~~2013~~gross ~~to $178~~(3,~~780~~900 net) acres in the ~~three~~Midland ~~months~~Basin, ~~ended~~(ii) ~~January~~approximately 31108,715 ~~2014.~~gross ~~The~~(54,357 ~~increase~~net) ~~was~~acres in the ~~result~~Pedregosa ofBasin, ~~repairs~~and ~~done~~(iii) toapproximately ~~one~~3,300 ofgross ~~the~~(1,650 ~~wells~~net) acres in ~~the AP Clark Field~~Colorado.

~~During~~We ~~the~~have ~~three~~approximately ~~months~~112,793 ~~ended~~gross ~~January~~acres 31(56,100 ~~2014,~~net weacres) ~~tested~~held by production and ~~reported~~continuous andrilling ~~impairment~~operations. ofThis ~~our~~includes ~~oil~~approximately ~~and~~3,100 ~~gas~~gross ~~properties~~acres ~~costs~~(1,145 net acres) in ~~our~~Midland APBasin ~~Clark~~and ~~Field~~108,715 ~~totaling~~gross $2acres (54,~~219,813~~357 net acres) in the Pedregosa Basin. ~~There~~In ~~was~~addition, nowe ~~impairment~~own ~~charge~~between ~~recorded~~a 24% and 30%working interest in ~~the~~two ~~three~~wells ~~months~~in ~~ended~~the ~~January~~Beech 31Creek Field, ~~2013~~which are operated by Gaither Petroleum Corp. We have no production in Colorado.

~~Interest~~We ~~expense~~began ~~increased~~oil byand ~~$226,376~~gas ~~from~~operations ~~$282,081~~ in the ~~three~~United ~~months~~States ~~ended~~on ~~January~~November 311, ~~2013 to $508~~2009,~~457~~ inwith the ~~three~~purchase ~~months~~of ~~ended~~a ~~January~~producing ~~31,~~conventional ~~2014.~~oil ~~This~~and ~~increase~~gas ~~is primarily related to a $219~~field,~~893~~ ~~increase~~located in the ~~amortization~~Gulf ofCoast ~~the~~region ~~discount~~of onTexas, ~~the~~from ~~amounts~~Pioneer ~~due~~Natural toResources. KPAdditionally, ~~Rahr~~we ~~and~~acquired ~~additional~~interests ~~interest~~in oftwo ~~$6,654~~properties onlocated in the ~~additional~~Gulf ~~loan~~Coast ~~made~~region byof ~~Silver~~Texas ~~Bullet~~and one property in ~~the~~our ~~last~~Core ~~half~~Focus ofArea ~~2013~~located in West Texas.

The ~~gain~~Core onFocus Area provides us with the ~~sale~~opportunity ofto ~~oil~~grow reserves and ~~gas~~cash ~~properties~~flow ofby ~~$621,670~~drilling inand developing the ~~three~~properties. ~~months~~The ~~ended~~Core ~~January~~Focus ~~31,~~Area ~~2014,~~we ~~was~~currently ~~the~~plan ~~result~~to ofconcentrate ~~selling~~on ~~our~~developing ~~rights~~is in the ~~Cabeza~~AP ~~Creek~~Clark Field. InThe ~~January~~three ~~2014,~~wells that we ~~sold~~commenced ~~our~~drilling ~~interest~~on in ~~all~~the ofAP ~~the~~Clark ~~wells~~Field in ~~the~~November ~~Cabeza~~2013 ~~Creek~~were ~~Field~~completed ~~for~~and ~~all~~have ~~depths~~been ~~from~~producing. During the ~~surface~~three tomonths 8ended July 31,~~500~~ ~~feet~~2014, ~~below~~our portion of the ~~surface~~production inamounted ~~exchange~~to ~~for~~approximately ~~$50~~1,000 ~~and~~barrels of oil. These wells came online in the ~~assumption~~month of ~~$593~~May 2014 with our portion of the production averaging approximately 18 barrels of oil per day,~~536~~ which had decreased to approximately 4 barrels of oil per day at July 31, 2014. During August 2014, the wells were shut in ~~current~~for ~~liabilities~~completion and ~~all~~fracking. ~~future~~We ~~liabilities~~are ~~associated~~still ~~with~~testing zones on the ~~plugging~~wells and ~~abandoning~~are ofwaiting ~~all~~for ~~wells~~the formations to come back in. ~~the~~We ~~Cabeza~~will ~~Creek~~need ~~Field~~to raise additional capital in order to drill any potential future wells.

~~We incurred a net loss for the period ended January 31, 2014 of $2,504,963, compared to a net loss of $578,648 for the period ended January 31, 2013.~~10

~~Liquidity~~We continue to pursue avenues to reduce or eliminate our financial exposure on a case by case basis for each project. Joint venture arrangements may be considered for others to participate for a disproportionate share of the initial leasing and/or ~~Capital~~drilling ~~Resources~~costs, further reducing our exposure. In order to maintain our financial position, we have sold equity and used joint venture agreements with other industry companies to limit or eliminate our financial exposure in early drilling.

~~The~~We ~~Company~~have ~~had~~not ~~cash~~entered ~~and~~into ~~cash~~any ~~equivalents~~commodity ofderivative ~~$702,712~~arrangements asor ofhedging ~~January 31, 2014~~transactions. ~~The~~Although ~~Company~~we ~~owes~~have ~~approximately~~no ~~$2.4~~current ~~million~~plans into ~~currently~~do ~~due accounts payable~~so, awe ~~substantial~~may ~~portion~~enter ofinto ~~which~~commodity ~~were~~swap ~~incurred~~and/or inhedging ~~the~~transactions ~~drilling of three new, uncompleted wells~~ in the APfuture ~~Clark Field. As such, we currently do not have sufficient cash to complete the new wells or engage~~ in ~~any~~conjunction ~~further~~with ~~drilling~~oil orand ~~exploration~~gas ~~activities~~production. In ~~addition,~~We ~~our~~have ~~cash~~no ~~balances~~off-balance ~~are~~sheet not sufficient to satisfy our anticipated cash requirements for normal operations, or to meet our immediate accounts payable and other obligations regarding our indebtedness or capital expenditures for the foreseeable futurearrangements.

10Consolidated Results of Operations for the Nine and Three Months Ended July 31, 2014 Compared to the Nine and Three Months Ended July 31, 2013

~~The~~Revenue ~~accompanying~~for ~~consolidated~~the ~~financial~~nine ~~statements~~months ~~have~~ended ~~been~~July ~~prepared~~31, on2014 atotaled ~~going~~$1,062,491 ~~concern~~as ~~basis~~compared to $1,303,045 ~~which~~for ~~contemplates~~the nine months ended July 31, 2013. Revenue for the ~~realization~~three ofmonths ~~assets~~ended ~~and~~July 31, 2014 totaled $465,791 as compared to $467,879 for the ~~settlement~~three months ended July 31, 2013. $154,044 of ~~liabilities~~the ~~and~~$240,554 ~~commitments~~reduction in the ~~normal~~revenue ~~course~~during the nine months ended July 31, 2014 resulted from the sale of ~~business.~~the AsCabeza ~~reflected~~Creek Field in January 2014 and the ~~accompanying~~lack ~~consolidated~~of ~~financial~~production ~~statements,~~in asthat field for several months prior to being sold. The balance of ~~January~~the decrease in revenue comes from lower production from the Beech Creek and older AP Clark wells. Revenue for the three months ended July 31, 2014, weremained ~~had~~flat ~~$702,712~~as incompared ~~cash~~to ~~and~~the ~~cash~~three ~~equivalents~~months onended ~~hand~~July 31, 2013. We were able to replace the revenue lost as a ~~working~~result ~~capital~~of ~~deficiency~~the sale of ~~approximately~~the ~~$7.9~~Cabeza ~~million~~Creek Field and anlower ~~accumulated~~production ~~deficit~~from the existing wells in the AP Clark Field with the production from the three completed wells in the AP Clark Field drilled in the first quarter of ~~approximately~~fiscal ~~$31~~2014.~~2 million.~~

WeSelling, ~~have~~general ~~incurred~~and ~~substantial~~administrative ~~losses~~expenses ~~since~~decreased ~~inception~~$146,979 ~~and~~from we$1,107,685 ~~are~~in ~~not~~the ~~operating~~nine atmonths ~~cash~~ended ~~flow~~July ~~breakeven.~~31, ~~Our~~2013 ~~cash~~to ~~balance~~$960,706 atin ~~January~~the nine months ended July 31, 2014. This decrease is ~~not~~primarily ~~sufficient~~the toresult ~~fully~~of ~~fund~~a ~~our~~decrease ~~business~~of ~~plan~~$252,507 orin tothe ~~satisfy~~stock ~~our~~based ~~cash~~compensation ~~requirements~~recorded ~~for~~in ~~normal~~the ~~operations~~nine months ended July 31, to2014 ~~meet~~from ~~our~~reduced ~~immediate~~vesting ~~accounts~~of ~~payable~~previously orgranted ~~other~~stock ~~obligations~~options, ~~regarding~~which ~~our~~was ~~indebtedness~~partially oroffset ~~our~~by ~~anticipated~~additional ~~development~~consulting ~~activities~~fees ~~over~~of ~~the~~$63,114 ~~next~~and ~~twelve~~professional ~~months~~services of $37,423. InThere ~~view~~were ofno ~~our~~options ~~capital~~granted ~~requirements,~~during ~~current~~the ~~cash~~nine ~~resources~~months ended July 31, ~~nondiscretionary~~2014. ~~expenses~~Selling, ~~debt~~general and ~~near~~administrative ~~term~~expenses ~~accounts~~decreased ~~payable~~$91,532 ~~and~~from ~~accrued~~$336,255 ~~expenses~~in ~~obligations,~~the wethree ~~may~~months ~~explore~~ended ~~all~~July ~~strategic~~31, ~~alternatives~~2013 to ~~maintain~~$244,723 ~~our~~in ~~business~~the asthree amonths ~~going~~ended ~~concern~~July ~~including~~31, ~~but~~2014. This ~~not~~decrease ~~limited~~is ~~to,~~primarily athe ~~sale~~result of ~~assets~~a decrease of ~~our company~~$102,488 orin ~~one~~the orstock ~~more~~based ~~other~~compensation ~~transactions~~recorded ~~that~~in ~~may~~the ~~include~~three amonths ~~comprehensive~~ended ~~financial~~July ~~reorganization~~31, 2014 from reduced vesting of ~~our~~previously ~~company~~granted stock options, which was partially offset by additional consulting fees of $15,000.

InDepreciation, ~~order~~depletion ~~to continue operations~~ and ~~engage~~accretion indecreased ~~development~~$24,395 offrom ~~our properties~~$406,544 wein ~~will~~the benine ~~dependent~~months onended ~~raising~~July ~~capital~~31, ~~debt~~2013 orto ~~equity~~$382,149 ~~from outside sources to pay~~ for ~~further~~the ~~expansion,~~nine ~~exploration~~months ~~and~~ended ~~development~~July ~~of our business~~31, ~~and to meet current obligations~~2014. ~~Such~~Depreciation, ~~capital~~depletion ~~may~~and ~~not~~accretion bedecreased ~~available~~$75,105 tofrom ~~us when we need it on terms acceptable to us if at all~~$146,736 ~~particularly~~ in the ~~current~~three ~~global~~months ~~economic~~ended ~~conditions.~~July ~~The~~31, ~~issuance~~2013 ~~of additional equity securities by us will result in a dilution~~ to ~~our~~$71,631 ~~current~~for ~~stockholders which could depress~~ the ~~trading~~three ~~price~~months ofended ~~our~~July ~~common~~31, ~~stock~~2014. ~~Obtaining~~The ~~debt~~decreases ~~financing will increase our liabilities and future cash commitments. If we~~ are ~~unable~~primarily toa ~~obtain~~result ~~financing~~of in the ~~amounts~~depletion ~~and~~expense onfor ~~terms~~the ~~deemed~~costs ~~acceptable~~related to ~~us,~~the wedecrease ~~may~~in beproduction ~~unable to continue our business and may be required to scale back, sell a portion~~ of orthe ~~cease~~older ~~our~~AP ~~operations.~~Clark ~~The~~Field ~~terms~~wells ~~of securities we issue in future capital transactions may be more favorable to our new investors,~~ and ~~may include preferences, superior voting rights and~~ the ~~issuance~~loss of ~~warrants~~production orfrom ~~other~~the ~~derivative~~sale ~~securities, and issuances~~ of ~~incentive~~the ~~awards~~Cabeza ~~under~~Creek ~~equity employee incentive plans, which may have a further dilutive effect~~Field.

WeLease ~~may~~operating ~~incur~~expenses ~~substantial~~decreased ~~costs~~by in$77,112 ~~pursuing~~from ~~future capital financing~~$507,585 ~~including~~in ~~investment~~the ~~banking~~nine ~~fees,~~months ~~legal~~ended ~~fees,~~July ~~accounting fees~~31, ~~securities~~2013 ~~law~~to ~~compliance fees~~$430,473 ~~and~~in ~~other~~the ~~costs.~~nine Wemonths ~~may~~ended ~~also~~July be31, ~~required~~2014. toLease ~~recognize~~operating ~~non-cash~~ expenses indecreased ~~connection~~by ~~with certain securities we may issue~~$22,558 ~~such~~from ~~as convertible notes and warrants~~$152,460 ~~which~~in ~~may~~the ~~adversely~~three ~~impact~~months ~~our~~ended ~~financial~~July ~~condition. However~~31, ~~there~~2013 isto no$129,902 ~~assurance~~in ~~that~~the wethree ~~will~~months beended ~~able~~July to31, ~~obtain~~2014. ~~sufficient~~The ~~funds~~decreases onwere ~~terms~~primarily ~~acceptable~~the toresult usof orthe atcosts ~~all.~~eliminated Ifas ~~adequate~~a ~~additional~~result ~~funding~~of isthe ~~not~~sale ~~available,~~of wethe ~~may~~Cabeza beproperty ~~forced~~in toJanuary ~~limit our activities~~2014.

IfDuring the nine months ended July 31, 2014, we ~~are~~reported ~~not~~an ~~able~~impairment toof ~~obtain~~our ~~sufficient~~oil ~~capital~~and ~~either~~gas properties totaling $2,219,813. These impairment charges resulted from the ~~sale~~carrying costs of ~~assets~~the orAP ~~external~~Clark ~~sources~~Field, ofincluding ~~capital~~the tocosts ~~fund~~of ~~our~~the ~~immediate~~three ~~operating~~new ~~requirements,~~wells weexceeding ~~may~~the ~~determine~~estimated ~~that~~fair itvalue isof in the ~~Company’s~~field ~~best~~based ~~interests~~on toestimated ~~seek~~future ~~relief~~cash ~~through~~flows. aThere ~~pre-packaged,~~were ~~pre-negotiated~~no orimpairments ~~other~~during ~~type~~the ofthree ~~filing~~months ~~under~~ended ~~Chapter~~July 1131, of2014 or the ~~U.S.~~three ~~Bankruptcy~~and ~~Code~~nine months ended July 31, 2013.

InThe ~~the~~gain ~~event~~on wethe ~~seek~~sale ~~protection~~of ~~under~~oil ~~Chapter~~and 11gas properties of ~~the~~$645,323 ~~U.S.~~in ~~Bankruptcy~~the ~~Code,~~nine itmonths ~~may~~ended beJuly ~~necessary~~31, in2014 ~~order~~was ~~to obtain~~ the ~~approval~~result of selling our ~~creditors~~rights ~~and~~in the ~~Bankruptcy~~Cabeza ~~Court~~Creek toField. In aJanuary ~~plan of reorganization for the Company~~2014, towe ~~eliminate~~sold ~~and~~our ~~cancel~~interest in all ~~existing equity~~ of the ~~Company,~~wells ~~including~~in ~~common~~the ~~stock,~~Cabeza ~~options,~~Creek ~~warrants~~Field ~~and~~for ~~other~~all ~~securities~~depths ~~that~~from ~~are~~the ~~linked~~surface to ~~our equity~~8,500 ~~which~~feet ~~will~~below ~~result~~the surface in aexchange ~~loss~~for of$50,000 and the ~~entire~~assumption ~~investment~~by of the ~~holders~~purchaser of ~~such securities~~$617,189 ~~including our stockholders. Further, if we were unable to implement a plan of reorganization or if sufficient debtor-~~in~~-possession~~ ~~financing~~current ~~were~~liabilities ~~not~~and ~~available,~~all wefuture ~~could~~liabilities beassociated ~~forced~~with tothe ~~liquidate~~plugging ~~under~~and ~~Chapter~~abandoning 7 of ~~the~~all ~~U.S.~~wells ~~Bankruptcy Code, which would result~~ in athe ~~loss~~Cabeza ofCreek ~~your entire investment~~Field.

~~Net Cash Used In Operating Activities~~11

~~Cash provided~~The bygain ~~operating~~on ~~activities~~sale inof ~~the~~interest ~~period~~to ~~ended~~PIE ~~January~~Holdings ~~31,~~of ~~2014 was~~ $791,~~947~~760,392 ~~compared~~for ~~to $34,693 in~~ the ~~period~~nine months ended ~~January~~July 31, ~~2013.~~2014 ~~The~~is ~~increase~~the inresult ~~cash~~of ~~provided~~the bypartial ~~operating~~transfer ~~activities~~of ~~was~~our ~~primarily~~interest ain ~~result~~three ofwells ~~a $2,219,813 increase~~ in the ~~impairment~~AP ~~costs~~Clark ~~for~~Field, ~~oil~~ranging ~~and~~from ~~gas~~between ~~properties,~~38.6% aand ~~$219~~50.0%,~~893~~ ~~increase~~to inPIE ~~the~~Holdings, ~~amortization~~LP. ofIn ~~debt~~connection ~~discounts~~with ~~and~~these ~~a $132~~transfers,~~266~~ ~~increase~~PIE inHoldings ~~accounts~~paid ~~receivable~~a ~~which~~purchase ~~was offset~~price byof a $~~1,926,315~~20.00 ~~increase~~and inassumed ~~the~~aggregate ~~net~~obligations ~~loss, a gain~~ of approximately $~~621~~1.3 million,~~670~~ onwhich ~~the~~related ~~sale~~to ofexpense ~~the~~obligations ~~Cabeza~~incurred ~~Creek~~in ~~Field~~relation ~~and~~to athe ~~$75,956~~wells ~~decrease~~and inrelated ~~equity compensation expense~~interests.

11Interest expense increased by $985,601 from $955,918 in the nine months ended July 31, 2013 to $1,941,519 in the nine months ended July 31, 2014. These increases are primarily related to an $896,549 increase in the amortization of the discount on the amounts due to KP-RAHR Ventures III, LLC, which represents the balance of the discount on the amounts due KP-RAHR Ventures III, LLC using the effective interest method of amortization, amortization totaling $12,503 on the discount of Pacific LNG convertible note, interest of $19,746 on the additional loan made by Silver Bullet in the last half of 2013 and $26,507 from the Pacific LNG convertible debenture.

~~Cash~~Interest ~~Flows~~expense ~~Used~~increased Inby ~~Investing~~$408,976 ~~Activities~~from $360,411 in the three months ended July 31, 2013 to $769,387 in the three months ended July 31, 2014. These increases are primarily related to a $385,503 increase in the amortization of the discount on the amounts due to KP-RAHR Ventures III, LLC, which represents the balance of the discount on the amounts due KP-RAHR Ventures III, LLC using the effective interest method of amortization, amortization totaling $12,503 on the discount of Pacific LNG convertible note, interest of $6,654 on the additional loan made by Silver Bullet in the fourth quarter of fiscal 2013 and $2,178 from the Pacific LNG convertible debenture issued during the quarter ended July 31, 2014.

~~Net~~We ~~cash~~incurred ~~used~~a innet ~~investing~~loss ~~activities~~ for the ~~three~~nine months ended ~~January~~July 31, 2014 ~~was~~of $~~712~~2,~~472~~ 455,909, compared to a net loss of $221,~~726~~866,924 infor the ~~period~~nine months ended ~~January~~July 31, 2013. ~~The~~We ~~costs~~incurred ~~for~~a ~~both~~net ~~periods~~loss ~~presented~~for ~~relate to our oil and gas acquisitions and development activity. The costs in~~ the three months ended ~~January~~July 31, 2014 ~~represent~~of ~~the~~$739,235, ~~costs~~compared ~~paid~~ to ~~drill~~a ~~the~~net ~~three~~loss ~~new~~of $747,983 ~~uncompleted~~for ~~wells in~~ the APthree ~~Clark~~months ~~Field.~~ended ~~There~~July ~~were~~31, ~~no acquisitions of additional leaseholds incurred in either quarter~~2013.

~~Cash~~Liquidity ~~Flows~~and ~~From~~Capital ~~Financing Activities~~Resources

~~There~~We ~~was~~had nocash and cash ~~provided~~equivalents byof ~~financing~~$719,586 ~~activities~~as ~~for~~of July 31, 2014. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the ~~quarters~~realization ~~ended~~of ~~January~~assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, as of July 31, 2014, we had $719,586 in cash and ~~2013~~cash equivalents on hand, a working capital deficiency of approximately $3.6 million, a stockholders’ deficit of approximately $5.6 million and an accumulated deficit of approximately $31 million. As such, we currently do not have sufficient cash to engage in any further drilling or exploration activities. In addition, our cash balances are not sufficient to satisfy our anticipated cash requirements for normal operations, or to meet our accounts payable, accrued expenses and obligations regarding our indebtedness or capital expenditures for the foreseeable future.

~~Critical~~We ~~Accounting~~have ~~Policies~~incurred substantial losses since inception and we are not operating at cash flow breakeven. Our cash balance at July 31, 2014 is not sufficient to fully fund our business plan or to satisfy our cash requirements for normal operations, to meet our immediate accounts payable or other obligations regarding our indebtedness or our anticipated development activities over the next twelve months. In view of our capital requirements, current cash resources, nondiscretionary expenses, debt and near term accounts payable and accrued expenses obligations, we may explore all strategic alternatives to maintain our business as a going concern including, but not limited to, a sale of assets of our company, or one or more other transactions that may include a comprehensive financial reorganization of our company.

~~Oil~~In order to continue operations and ~~Gas~~engage ~~Accounting~~in development of our properties, we will be dependent on raising capital, debt or equity, from outside sources to pay for further expansion, exploration and development of our business, and to meet current obligations. Such capital may not be available to us when we need it on terms acceptable to us if at all, particularly in the current global economic conditions. The issuance of additional equity securities by us will result in a dilution to our current stockholders, which could depress the trading price of our common stock. Obtaining debt financing will increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business and may be required to scale back, sell a portion of or cease our operations. The terms of securities we issue in future capital transactions may be more favorable to our new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, and issuances of incentive awards under equity employee incentive plans, which may have a further dilutive effect.

Accounting for oil and gas exploratory activity is subject to special accounting rules unique to the oil and gas industry. The acquisition of geological and geophysical seismic information, prior to the discovery of proved reserves, is expensed as incurred, similar to accounting for research and development costs. However, leasehold acquisition costs and exploratory well costs are capitalized on the balance sheet pending determination of whether proved oil and gas reserves have been discovered on the prospect.12

~~Property~~We ~~Acquisition~~may ~~Costs~~incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which may adversely impact our financial condition. However, there is no assurance that we will be able to obtain sufficient funds on terms acceptable to us or at all. If adequate additional funding is not available, we may be forced to limit our activities.

~~For~~If ~~individually~~we ~~significant~~are ~~leaseholds,~~not ~~management~~able ~~periodically assesses for impairment based on exploration and drilling efforts~~ to ~~date.~~obtain ~~For~~sufficient ~~leasehold~~capital ~~acquisition~~either ~~costs~~from ~~that~~the ~~individually~~sale ~~are~~of ~~relatively~~assets ~~small,~~or ~~management~~external ~~exercises~~sources ~~judgment~~of ~~and~~capital ~~determines a percentage probability that the prospect ultimately will fail~~ to ~~find~~fund ~~proved~~our ~~oil~~immediate ~~and~~operating ~~gas~~requirements, ~~reserves~~we ~~and~~may ~~pools~~determine that ~~leasehold~~it ~~information~~is ~~with others~~ in the ~~geographic~~Company’s ~~area.~~best ~~For~~interests ~~prospects~~to inseek ~~areas~~relief ~~that~~through ~~have~~a ~~had limited~~pre-packaged, pre-negotiated or ~~no,~~other ~~previous~~type ~~exploratory drilling, the percentage probability~~ of ~~ultimate~~filing ~~failure~~under isChapter ~~normally~~11 ~~judged to be quite high. This judgmental percentage is multiplied by the leasehold acquisition cost, and that product is divided by the contractual period~~ of the ~~leasehold~~U.S. toBankruptcy ~~determine a periodic leasehold impairment charge that is reported in exploration expense~~Code.

~~This~~In ~~judgmental~~the ~~probability~~event ~~percentage~~we isseek ~~reassessed~~protection ~~and~~under ~~adjusted~~Chapter ~~throughout~~11 of the ~~contractual~~U.S. ~~period~~Bankruptcy Code, it may be necessary, in order to obtain the approval of our creditors and the ~~leasehold~~Bankruptcy ~~based~~Court onto ~~favorable~~a orplan ~~unfavorable~~of ~~exploratory~~reorganization ~~activity~~for onthe Company, to eliminate and cancel all existing equity of the ~~leasehold~~Company, orincluding oncommon ~~adjacent~~stock, ~~leaseholds~~options, warrants and ~~leasehold~~other ~~impairment~~securities ~~amortization~~that ~~expense~~are islinked ~~adjusted~~to ~~prospectively.~~our ~~Management~~equity, ~~periodically~~which ~~assesses~~will ~~individually~~result ~~significant~~in ~~leaseholds~~a ~~for~~loss ~~impairment~~of ~~based~~the onentire investment of the ~~results~~holders of ~~exploration~~such ~~and~~securities, ~~drilling~~including ~~efforts~~our ~~and~~stockholders. Further, if we were unable to implement a plan of reorganization or if sufficient debtor-in-possession financing were not available, we could be forced to liquidate under Chapter 7 of the ~~outlook~~U.S. ~~for~~Bankruptcy ~~project~~Code, ~~commercialization~~which would result in a loss of your entire investment.

~~Exploratory~~June ~~Costs~~2014 Financing

~~For~~On ~~exploratory~~June ~~wells~~6, ~~drilling costs are temporarily capitalized~~2014, ~~or “suspended,” on~~ the ~~balance~~Company ~~sheet,~~entered ~~pending~~into a ~~determination~~subscription ofagreement ~~whether~~with ~~potentially~~Pacific ~~economic~~LNG ~~oil~~Operations ~~and gas reserves have been discovered by the drilling effort to justify completion of the find as a producing well~~Ltd. ~~If exploratory wells encounter potentially economic quantities of oil and gas~~, ~~the~~a ~~well~~company ~~costs~~incorporated ~~remain~~in ~~capitalized on~~ the ~~balance~~British ~~sheet~~Virgin asIslands ~~long as sufficient progress assessing the reserves and the economic and operating viability of the project is being made. The accounting notion of~~ (“~~sufficient~~Pacific ~~progress~~LNG” ~~is a judgmental area~~), ~~but~~whereby the ~~accounting~~Company ~~rules~~issued doto ~~prohibit~~Pacific ~~continued~~LNG ~~capitalization~~a of(i) ~~suspended~~$1,500,000 ~~well~~principal ~~costs~~face onamount ~~the~~5% ~~mere~~Convertible ~~chance~~Debenture ~~that~~(“Debenture”) ~~future~~convertible ~~market conditions will improve or new technologies will be found that would make the project’s development economically profitable. Often, the ability to move the project~~ into ~~the~~shares ~~development phase and record proved reserves is dependent on obtaining permits and government or co-venturer approvals, the timing~~ of ~~which~~Series isB ~~ultimately~~Preferred ~~beyond~~Stock ~~our control. Exploratory well costs remain suspended~~ (as ~~long~~hereinafter asdefined) weat ~~are~~a ~~actively~~conversion ~~pursuing~~price ~~such~~of ~~approvals and permits, and believe they will be obtained~~$1.00 ~~Once~~per ~~all~~share ~~required approvals~~ and ~~permits~~(ii) ~~have been obtained~~500,000 ~~the~~shares ~~projects~~of ~~are~~Series ~~moved~~B ~~into~~Convertible ~~the~~Preferred ~~development~~Stock ~~phase,~~(“Series ~~and~~B ~~the~~Preferred ~~oil~~Stock”) ~~and~~at ~~gas~~a ~~reserves~~price ~~are~~of ~~designated as proved reserves~~$1.00 ~~Once~~per ~~a determination is made the well did not encounter potentially economic oil and gas quantities, the well costs are expensed as a dry hole and reported in exploration expense~~share.

~~Management~~The ~~reviews~~Debenture ~~suspended~~accrues ~~well~~interest ~~balances~~at ~~quarterly, continuously monitors~~ the ~~results~~rate of ~~the~~5% ~~additional~~per ~~appraisal~~annum, ~~drilling~~payable ~~and~~semi-annually ~~seismic~~in ~~work~~arrears, and ~~expenses~~matures ~~the~~on ~~suspended~~June ~~well~~6, ~~costs~~2017. asPacific aLNG ~~dry~~has ~~hole when it determines~~ the ~~potential~~right, ~~field~~at ~~does~~any ~~not~~time ~~warrant~~prior ~~further~~to ~~investment~~June in6, ~~the~~2015, ~~near~~to ~~term.~~convert ~~Criteria utilized in making this determination include evaluation of~~ the ~~reservoir~~outstanding ~~characteristics~~principal and ~~hydrocarbon properties~~interest, ~~expected~~if ~~development costs~~any, ~~ability~~of tothe ~~apply~~Debenture ~~existing~~into ~~technology~~shares toof ~~produce~~Series ~~the~~B ~~reserves,~~Preferred ~~fiscal~~Stock ~~terms,~~at ~~regulations~~a orprice ~~contract~~of ~~negotiations,~~$1.00 ~~and~~per ~~our~~share ~~required~~of ~~return~~Series onB ~~investment~~Preferred Stock.

12Each share of Series B Preferred Stock has a stated value of $1.00 (“Stated Value”) and accrues a dividend of 3% of the Stated Value per annum, which is payable in additional shares of Series B Preferred Stock annually on December 31 in arrears. Each share of Series B Preferred Stock may be converted at any time on or prior to May 30, 2017 into such number of shares of the Company’s Common Stock equal to the Stated Value divided by $1.00 per share. The Company has the right, at any time after May 30, 2017, to redeem the Series B Preferred Stock at a price of $1.00 per share.

~~Proved~~Amendment ~~Reserves~~to Silver Bullet Notes Payable

~~Engineering~~In ~~estimates~~August of2014, the ~~quantities~~Company ofand ~~proved~~Silver ~~reserves~~Bullet ~~are~~Property ~~inherently~~Holdings ~~imprecise~~SDN BHD (“Silver Bullet”) entered into an Amendment and ~~represent~~Exchange ~~only~~Agreement ~~approximate~~(the ~~amounts~~“August ~~because~~2014 ofAmendment”). Pursuant to the ~~judgments~~August ~~involved~~2014 inAmendment, ~~developing~~all ~~such~~accrued ~~information.~~and ~~Reserve~~unpaid ~~estimates~~interest ~~are~~through ~~based~~June 30, 2014 on ~~geological~~the ~~and~~outstanding ~~engineering~~notes ~~assessments~~issued ofto ~~in-place~~Silver ~~hydrocarbon~~Bullet, ~~volumes~~totaling $1,052,407, ~~the~~was ~~production~~exchanged ~~plan~~for 1,052,407 ~~historical~~shares ~~extraction~~of ~~recovery~~the ~~and~~Company’s ~~processing~~common ~~yield~~stock. ~~factors~~In addition, ~~installed~~interest ~~plant~~accrued ~~operating~~on ~~capacity~~the ~~and~~notes ~~operating~~is ~~approval~~to ~~limits.~~be ~~The~~paid ~~reliability~~quarterly in arrears in shares of ~~these~~the ~~estimates~~Company’s atcommon ~~any~~stock ~~point~~based inupon ~~time~~the ~~depends~~average oncommon ~~both~~stock price for the ~~quality~~last ~~and~~five ~~quantity~~trading days of the ~~technical~~quarter. ~~and~~The ~~economic~~due ~~data~~dates ~~and~~on each of the ~~efficiency~~notes ofpayable ~~extracting~~to ~~and~~Silver ~~processing~~Bullet ~~the~~were ~~hydrocarbons~~extended to December 31, 2015.

Despite the inherent imprecision in these engineering estimates, accounting rules require disclosure of “proved” reserve estimates due to the importance of these estimates to better understand the perceived value and future cash flows of a company’s exploration and production operations. There are several authoritative guidelines regarding the engineering criteria that must be met before estimated reserves can be designated as “proved.” Our reservoir engineers have policies and procedures in place consistent with these authoritative guidelines.13

~~Proved~~Development ~~reserve~~Agreement ~~estimates~~with ~~are~~Adwar ~~adjusted~~Drilling ~~annually~~Fund and during the year if significant changes occur, and take into account recent production and subsurface information about each field. Also, as required by current authoritative guidelines, the estimated future date when a field will be permanently shut down for economic reasons is based on 12-month average prices and year-end costs. This estimated date when production will end affects the amount of estimated reserves. Therefore, as prices and cost levels change from year to year, the estimate of proved reserves also changes.III

~~Our~~In ~~proved~~August ~~reserves~~2014, ~~include~~ApClark, ~~estimated quantities related to production sharing contracts~~LLC, ~~which~~a ~~are~~wholly-owned ~~reported~~subsidiary ~~under~~of the ~~“economic~~Company, ~~interest”~~entered ~~method~~into ~~and~~a ~~are~~Participation ~~subject to fluctuations in prices of crude oil, natural gas~~ and ~~natural~~Development ~~gas~~Agreement ~~liquids;~~with ~~recoverable~~Adwar ~~operating expenses; and capital costs~~III. ~~The~~Pursuant ~~estimation of proved developed reserves also is important~~ to the ~~statement~~agreement, ofAdwar ~~operations~~has ~~because~~ the ~~proved~~right ~~developed~~to ~~reserve~~invest ~~estimate~~up ~~for~~to a$7.5 ~~field~~million ~~serves as the denominator~~ in ~~the~~contributions ~~unit-of-production~~to ~~calculation~~acquire ofworking ~~depreciation,~~interests ~~depletion~~up ~~and~~to ~~amortization~~50% ofin ~~the~~certain ~~capitalized~~future ~~costs~~development ~~for that asset~~wells.

~~Asset~~Net ~~Retirement~~Cash ~~Obligations~~Used In Operating Activities

~~Under~~Cash used ~~various~~in ~~contracts,~~operating ~~permits~~activities ~~and~~for ~~regulations,~~the wenine ~~have~~months ~~material~~ended ~~legal~~July ~~obligations~~31, to2014 ~~remove~~was ~~tangible~~$738,985, ~~equipment~~compared ~~and~~to ~~plug~~$144,464 ~~wells~~for at the ~~end~~nine ofmonths ~~operations~~ended atJuly ~~operational~~31, ~~sites~~2013. The ~~fair~~increase ~~values~~in ofcash ~~obligations~~used ~~for~~in ~~dismantling~~operating ~~and~~activities ~~removing~~was ~~these~~primarily ~~facilities~~a ~~are~~result ~~accrued at the installation~~ of ~~the~~a ~~asset~~noncash ~~based~~gain on ~~estimated discounted costs. Estimating~~ the ~~future~~transfer ~~asset~~of ~~removal~~interest ~~costs~~in ~~necessary~~oil ~~for~~and ~~this~~gas ~~accounting~~properties ~~calculation~~to isPIE ~~difficult.~~Holdings ~~Most~~ of ~~these~~$1,760,392, ~~removal~~a ~~obligations~~non-cash ~~are~~gain ~~many~~of ~~years~~$645,323 oron ~~decades, in~~ the ~~future~~sale ~~and~~of the ~~contracts~~Cabeza ~~and~~Creek ~~regulations~~Field, ~~often~~a ~~have~~$588,985 ~~vague~~increase ~~descriptions~~in ofthe ~~what~~net ~~removal~~loss, ~~practices~~a ~~and~~$328,315 ~~criteria~~decrease ~~must~~in beaccounts ~~met~~payable ~~when~~and ~~the~~a ~~removal~~$252,506 ~~event~~decrease ~~actually~~in ~~occurs.~~equity ~~Asset~~compensation ~~removal technologies and costs~~expense, ~~regulatory~~which ~~and~~was ~~other~~partially ~~compliance~~offset ~~considerations,~~by ~~expenditure~~a ~~timing~~$2,219,813 ~~and~~increase ~~other~~in ~~inputs~~the ~~into~~impairment ~~valuation~~costs offor ~~the~~oil ~~obligation,~~and ~~including~~gas ~~discount~~properties and ~~inflation~~a ~~rates~~$909,052 ~~are~~increase ~~also~~in ~~subject~~the toamortization ~~change~~of debt discounts.

~~Item~~Cash 3.Flows ~~Quantitative~~Used ~~and~~In ~~Qualitative~~Investing ~~Disclosures About Market Risk.~~Activities

~~Not~~Net ~~required~~cash ~~under~~used ~~Regulation~~in ~~S-K~~investing activities for ~~“smaller~~the ~~reporting~~nine ~~companies~~months ended July 31, 2014 was $1,876,666 compared to $390,401 for the nine months ended July 31, 2013.” Investing activities for both periods relate to our oil and gas acquisitions and development activity. The costs for the nine months ended July 31, 2014 represented $1,926,666 paid to drill the three new wells in the AP Clark Field, offset in part by $50,000 of cash received from the sale of Cabeza Creek. There were no acquisitions of additional leaseholds incurred in either period.

13Cash Flows From Financing Activities

~~Item~~During 4the nine months ended July 31, 2014, we obtained additional financing totaling $2 million. ~~Controls~~On June 6, 2014, we entered into a subscription agreement with Pacific LNG, whereby, in exchange for the $2 million previously received, we issued to Pacific LNG the (i) $1,500,000 Debenture and ~~Procedures~~(ii) 500,000 shares of Series B Preferred Stock. There was no cash provided by financing activities during the nine months ended July 31, 2013.

~~(a)~~Critical ~~Evaluation~~Accounting ~~of disclosure controls and procedures.~~Policies

~~Our~~Oil ~~management, with the participation of our interim president~~ and ~~chief~~Gas financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of January 31, 2014. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.Accounting

~~Based~~Accounting ~~on management’s~~for ~~evaluation,~~oil ~~our interim president~~ and ~~chief~~gas ~~financial~~exploratory ~~officer~~activity ~~concluded~~is ~~that,~~subject asto ofspecial ~~January~~accounting ~~31,~~rules ~~2014~~unique ~~our~~to ~~disclosure~~the ~~controls~~oil and ~~procedures~~gas ~~are~~industry. ~~not~~The ~~designed~~acquisition atof ageological ~~reasonable assurance level~~ and ~~are~~geophysical ~~ineffective~~seismic ~~to provide reasonable assurance that~~ information, weprior ~~are required~~ to ~~disclose in reports that we file or submit under~~ the ~~Exchange~~discovery ~~Act~~of isproved ~~recorded~~reserves, ~~processed,~~is ~~summarized,~~expensed ~~and~~as ~~reported within the time periods specified in SEC rules and forms~~incurred, ~~and~~similar ~~that~~to ~~such~~accounting ~~information~~for isresearch ~~accumulated~~ and ~~communicated~~development tocosts. ~~our management~~However, ~~including~~leasehold ~~our~~acquisition ~~chief~~costs ~~executive officer~~ and ~~chief~~exploratory ~~financial~~well ~~officer,~~costs asare ~~appropriate,~~capitalized toon ~~allow~~the ~~timely~~balance ~~decisions~~sheet ~~regarding~~pending ~~required~~determination ~~disclosure.~~of ~~The~~whether ~~material~~proved ~~weaknesses,~~oil ~~which~~and ~~relate~~gas toreserves ~~internal~~have ~~control~~been ~~over~~discovered ~~financial~~on ~~reporting,~~the ~~that were identified are:~~ prospect.

a)Property ~~Due~~Acquisition to our small size, we did not have sufficient personnel in our accounting and financial reporting functions nor do we have a proper segregation of duties. During the period ended January 31, 2014, we had limited staff that performed nearly all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements. This creates certain incompatible duties and a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission. In addition, we have had an overreliance on consultants involved in our financial statement closing process. As a result we were not able to achieve adequate segregation of duties and were not able to provide for adequate reviewing of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis; andCosts

b)For ~~Our~~individually ~~executive~~significant ~~officers~~leaseholds, ~~only~~management ~~work~~periodically assesses for ~~the~~impairment ~~Company~~based on aexploration ~~part-time~~and ~~basis~~drilling efforts to date. For leasehold acquisition costs that individually are relatively small, ~~have~~management ~~outside~~exercises ~~interests~~judgment and ~~are~~determines ~~unable~~a percentage probability that the prospect ultimately will fail to ~~devote~~find ~~all~~proved ofoil ~~their~~and ~~business~~gas ~~time~~reserves and ~~effort~~pools tothat leasehold information with others in the ~~Company~~geographic area. AsFor aprospects ~~result~~in areas that have had limited, ~~they~~or ~~may~~no, beprevious ~~unable~~exploratory drilling, the percentage probability of ultimate failure is normally judged to ~~provide~~be quite high. This judgmental percentage is multiplied by the ~~level~~leasehold acquisition cost, and that product is divided by the contractual period of ~~oversight~~the ~~required~~leasehold to determine a periodic leasehold impairment charge that is reported in exploration expense.

This judgmental probability percentage is reassessed and adjusted throughout the contractual period of the leasehold based on favorable or unfavorable exploratory activity on the leasehold or on adjacent leaseholds, and leasehold impairment amortization expense is adjusted prospectively. Management’s ~~Remediation~~periodically ~~Plans~~assesses individually significant leaseholds for impairment based on the results of exploration and drilling efforts and the outlook for project commercialization.

We are committed to improving our financial organization. When funds are available, we will look to increase our personnel resources and technical accounting expertise within the accounting function to resolve non-routine or complex accounting matters. As our operations are relatively small and we continue to have net cash losses each quarter, we do not anticipate being able to hire additional internal personnel until such time as our operations are profitable on a cash basis or until our operations are large enough to justify the hiring of additional accounting personnel. As necessary, we will engage consultants in the future in order to ensure proper accounting for our consolidated financial statements.14

14Exploratory Costs

~~Management~~For ~~believes~~exploratory ~~that~~wells, ~~hiring~~drilling ~~additional~~costs ~~knowledgeable~~are ~~personnel~~temporarily ~~with~~capitalized, ~~technical~~or ~~accounting~~“suspended,” ~~expertise~~on ~~will~~the ~~remedy~~balance sheet, pending a determination of whether potentially economic oil and gas reserves have been discovered by the ~~following~~drilling ~~material~~effort ~~weakness:~~to ~~insufficient~~justify ~~personnel~~completion ~~with~~of anthe ~~appropriate~~find ~~level~~as a producing well. If exploratory wells encounter potentially economic quantities of ~~technical~~oil and gas, the well costs remain capitalized on the balance sheet as long as sufficient progress assessing the reserves and the economic and operating viability of the project is being made. The accounting ~~knowledge~~notion of “sufficient progress” is a judgmental area, ~~experience~~but the accounting rules do prohibit continued capitalization of suspended well costs on the mere chance that future market conditions will improve or new technologies will be found that would make the project’s development economically profitable. Often, the ability to move the project into the development phase and ~~training~~record inproved reserves is dependent on obtaining permits and government or co-venture approvals, the ~~application~~timing of ~~GAAP~~which ~~commensurate~~is ~~with~~ultimately beyond our ~~complexity~~control. Exploratory well costs remain suspended as long as we are actively pursuing such approvals and ~~our~~permits, ~~financial~~and ~~accounting~~believe they will be obtained. Once all required approvals and ~~reporting~~permits ~~requirements~~have been obtained, the projects are moved into the development phase, and the oil and gas reserves are designated as proved reserves. Once a determination is made the well did not encounter potentially economic oil and gas quantities, the well costs are expensed as a dry hole and reported in exploration expense.

Management ~~believes~~reviews ~~that~~suspended ~~the~~well ~~hiring~~balances ofquarterly, ~~additional~~continuously ~~personnel~~monitors ~~who have~~ the ~~technical~~results ~~expertise~~of ~~and knowledge with~~ the ~~non-routine~~additional orappraisal ~~technical~~drilling ~~issues~~and weseismic ~~have~~work, ~~encountered~~and inexpenses the ~~past~~suspended ~~will~~well ~~result~~costs inas ~~both proper recording of these transactions and~~ a ~~much~~dry ~~more~~hole ~~knowledgeable~~when ~~finance~~it ~~department~~determines ~~as a whole. Due to~~ the ~~fact~~potential ~~that~~field ~~our~~does ~~internal~~not ~~accounting~~warrant ~~staff~~further ~~consists~~investment ofin athe ~~Chief~~near ~~Financial~~term. ~~Officer~~Criteria ~~and~~utilized ain ~~bookkeeper,~~making ~~additional~~this ~~personnel~~determination ~~will~~include ~~also~~evaluation ~~ensure~~of the ~~proper~~reservoir ~~segregation~~characteristics ~~of duties~~ and ~~provide~~hydrocarbon ~~more~~properties, ~~checks~~expected ~~and~~development ~~balances~~costs, ~~within~~ability ~~the~~to ~~department.~~apply ~~Additional~~existing ~~personnel~~technology ~~will also provide the cross training needed~~ to ~~support~~produce ~~us if personnel turn over issues within~~ the ~~department~~reserves, ~~occur.~~fiscal Weterms, ~~believe~~regulations ~~this~~or ~~will~~contract ~~greatly~~negotiations, ~~increase~~and our ~~internal~~required ~~control~~return ~~procedures~~on ~~in the future~~investment.

InProved ~~addition to the accounting personnel to be hired in the future, we are actively searching for a full time Chief Executive Officer to oversee our operations.~~Reserves

~~(b)~~Engineering ~~Changes~~estimates of the quantities of proved reserves are inherently imprecise and represent only approximate amounts because of the judgments involved in ~~internal~~developing ~~control~~such ~~over~~information. ~~financial~~Reserve ~~reporting~~estimates are based on geological and engineering assessments of in-place hydrocarbon volumes, the production plan, historical extraction recovery and processing yield factors, installed plant operating capacity and operating approval limits. The reliability of these estimates at any point in time depends on both the quality and quantity of the technical and economic data and the efficiency of extracting and processing the hydrocarbons.

~~Other~~Despite ~~than~~ the ~~resignation~~inherent ofimprecision ~~Bruno~~in ~~Mosimann~~these asengineering ~~our~~estimates, ~~interim~~accounting ~~Chief~~rules ~~Executive~~require ~~Officer~~disclosure ~~and~~of ~~President,~~“proved” ~~effective~~reserve ~~December~~estimates ~~24,~~due ~~2013~~to ~~and~~ the ~~appointment~~importance of ~~Rhonda~~these ~~Rosen~~estimates asto ~~interim~~better ~~President,~~understand ~~effective~~the ~~December~~perceived ~~30,~~value ~~2013,~~and ~~there~~future ~~were~~cash noflows ~~changes~~of ina ~~our~~company’s ~~internal~~exploration ~~control~~and ~~over~~production ~~financial~~operations. ~~reporting~~There ~~that~~are ~~occurred~~several ~~during~~authoritative guidelines regarding the ~~quarter~~engineering ~~ended~~criteria ~~January~~that ~~31,~~must ~~2014~~be ~~that~~met ~~have~~before ~~materially~~estimated ~~affected,~~reserves orcan ~~are~~be ~~reasonably~~designated ~~likely~~as to“proved.” ~~materially~~Our ~~affect,~~reservoir ~~our~~engineers ~~internal~~have ~~control~~policies ~~over~~and ~~financial~~procedures ~~reporting~~in place consistent with these authoritative guidelines.

15Proved reserve estimates are adjusted annually and during the year if significant changes occur, and take into account recent production and subsurface information about each field. Also, as required by current authoritative guidelines, the estimated future date when a field will be permanently shut down for economic reasons is based on 12-month average prices and year-end costs. This estimated date when production will end affects the amount of estimated reserves. Therefore, as prices and cost levels change from year to year, the estimate of proved reserves also changes.

~~PART~~Our IIproved reserves include estimated quantities related to production sharing contracts, which are reported under the “economic interest” method and are subject to fluctuations in prices of crude oil, natural gas and natural gas liquids; recoverable operating expenses; and capital costs. The estimation of proved developed reserves also is important to the statement of operations because the proved developed reserve estimate for a field serves as the denominator in the unit-of-production ~~OTHER~~calculation ~~INFORMATION~~of depreciation, depletion and amortization of the capitalized costs for that asset.

~~Item 1. Legal Proceedings.~~15

WeImpairment ~~are~~of ~~currently~~Oil ~~not~~and aGas ~~party to any material legal proceedings or claims.~~Properties

~~Item~~For 1Aproved properties, we compare expected undiscounted future cash flows at a producing field level to the unamortized capitalized cost of the asset. ~~Risk~~If ~~Factors~~the future undiscounted cash flows, based on our estimate of future natural gas and crude oil prices, operating costs, anticipated production from proved reserves and other relevant date, are lower than the unamortized capitalized cost, the capitalized cost is reduced to fair value. Fair value is calculated by discounting the future cash flows at an appropriate risk-adjusted discount rate.

~~Not~~Asset ~~required~~Retirement ~~under Regulation S-K for “smaller reporting companies.”~~Obligations

~~Item~~Under 2various contracts, permits and regulations, we have material legal obligations to remove tangible equipment and plug wells at the end of operations at operational sites. ~~Unregistered~~The ~~Sales~~fair values of ~~Equity~~obligations ~~Securities~~for dismantling and ~~Use~~removing these facilities are accrued at the installation of ~~Proceeds~~the asset based on estimated discounted costs. Estimating the future asset removal costs necessary for this accounting calculation is difficult. Most of these removal obligations are many years, or decades, in the future and the contracts and regulations often have vague descriptions of what removal practices and criteria must be met when the removal event actually occurs. Asset removal technologies and costs, regulatory and other compliance considerations, expenditure timing, and other inputs into valuation of the obligation, including discount and inflation rates, are also subject to change.

~~During~~Item ~~the quarter ended January 31, 2014,~~ 3~~,125~~. ~~shares~~Quantitative ofand aQualitative ~~restricted~~Disclosures ~~stock~~About ~~award~~Market ~~granted to Richard Hunter vested and were deemed issued~~Risk.

~~Item~~Not 3.required ~~Defaults~~under ~~Upon~~Regulation ~~Senior~~S-K ~~Securities~~for “smaller reporting companies.”

~~None~~Item 4. Controls and Procedures.

~~Item~~(a) 4.Evaluation ~~Mine~~of ~~Safety~~disclosure ~~Disclosures~~controls and procedures.

~~Not~~Our ~~applicable~~management, with the participation of our interim president and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 as of July 31, 2014. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

~~Item~~Based 5.on management’s ~~Other~~evaluation, ~~Information~~our interim president and chief financial officer concluded that, as of July 31, 2014 our disclosure controls and procedures are not designed at a reasonable assurance level and are ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. The material weaknesses, which relate to internal control over financial reporting, that were identified are:

~~None~~a) Due to our small size, we did not have sufficient personnel in our accounting and financial reporting functions nor do we have a proper segregation of duties. During the period ended July 31, 2014, we had limited staff that performed nearly all aspects of our financial reporting process, including, but not limited to, access to the underlying accounting records and systems, the ability to post and record journal entries and responsibility for the preparation of the financial statements. This creates certain incompatible duties and a lack of review over the financial reporting process that would likely result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the Securities and Exchange Commission. In addition, we have had an overreliance on consultants involved in our financial statement closing process. As a result we were not able to achieve adequate segregation of duties and were not able to provide for adequate reviewing of the financial statements. This control deficiency, which is pervasive in nature, results in a reasonable possibility that material misstatements of the financial statements will not be prevented or detected on a timely basis; and

~~Item~~b) 6Our executive officers only work for the Company on a part-time basis, have outside interests and are unable to devote all of their business time and effort to the Company. ~~Exhibits~~As a result, they may be unable to provide the level of oversight required.

31.01		Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.02		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.01		Certifications of Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Calculation Linkbase Document
101.LAB		XBRL Taxonomy Label Linkbase Document
101.PRE		XBRL Taxonomy Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

Management’s Remediation Plans

17We are committed to improving our financial organization. When funds are available, we will look to increase our personnel resources and technical accounting expertise within the accounting function to resolve non-routine or complex accounting matters. As our operations are relatively small and we continue to have net cash losses each quarter, we do not anticipate being able to hire additional internal personnel until such time as our operations are profitable on a cash basis or until our operations are large enough to justify the hiring of additional accounting personnel. As necessary, we will engage consultants in the future in order to ensure proper accounting for our consolidated financial statements.

~~SIGNATURES~~Management believes that hiring additional knowledgeable personnel with technical accounting expertise will remedy the following material weakness: insufficient personnel with an appropriate level of technical accounting knowledge, experience, and training in the application of GAAP commensurate with our complexity and our financial accounting and reporting requirements.

~~Pursuant~~Management tobelieves that the ~~requirements~~hiring of additional personnel who have the ~~Securities~~technical ~~Exchange~~expertise ~~Act~~and knowledge with the non-routine or technical issues we have encountered in the past will result in both proper recording of ~~1934~~these transactions and a much more knowledgeable finance department as a whole. Due to the fact that our internal accounting staff consists of a Chief Financial Officer and a bookkeeper, additional personnel will also ensure the ~~registrant~~proper ~~has~~segregation ~~duly~~of ~~caused~~duties ~~this~~and ~~report~~provide more checks and balances within the department. Additional personnel will also provide the cross training needed to besupport ~~signed~~us onif ~~its~~personnel ~~behalf~~turn byover issues within the ~~undersigned~~department ~~thereunto~~occur. ~~duly~~We ~~authorized~~believe this will greatly increase our internal control procedures in the future.

	BLACKSANDS PETROLEUM, INC.
Date: March 12, 2014	By:	/s/ RHONDA ROSEN
		Name: Rhonda Rosen
		Title: Interim President (Principal Executive Officer)
Date: March 12, 2014	By:	/s/ DONALD GIANNATTASIO
		Name: Donald Giannattasio
		Title: Chief Financial Officer

In addition to the accounting personnel to be hired in the future, we are actively searching for a full time Chief Executive Officer to oversee our operations.

(b) Changes in internal control over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the quarter ended July 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are currently not a party to any material legal proceedings or claims.

Item 1A. Risk Factors.

Not required under Regulation S-K for “smaller reporting companies.”

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

During the quarter ended July 31, 2014, 3,125 shares of a restricted stock award granted to Richard Hunter vested and were deemed issued.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

On July 9, 2014 but effective as of March 31, 2014, ApClark, LLC (“APC”), Blacksands Petroleum Texas, LLC (“Blacksands Texas”), NRG Assets Management, LLC (“NRG”) and Adwar Drilling Fund II, LP (“Adwar”) (collectively, the “Parties”) amended (“Amendment II”) the Development Agreement, dated September 3, 2013 and amended on January 1, 2014 (the “Development Agreement”). Pursuant to Amendment II, all references to Blacksands Texas in the Development Agreement were deemed to refer to APC. In addition, Adwar’s acquisition was amended to an undivided working interest in and to three (3) development wells: the Livestock Well No. 7-2, the Livestock Well No. 18-2 and the BVR Well No. 5-1 (the “Development Wells”). Also pursuant to Amendment II, the Parties (i) acknowledged the receipt by APC from Adwar of $630,000 under the Development Agreement and (ii) agreed that of such funds, $10,000 shall be designated as “Upfront Monies” paid with respect to the Livestock Well No. 7-2, $10,000 shall be designated as “Upfront Monies” paid with respect to Livestock Well No. 18-2 and $10,000 shall be designated as “Upfront Monies” paid with respect to the BVR Well No. 5-1. The remaining $600,000 of funds shall be credited to Adwar’s earned working interest in the Development Wells as follows: (i) $200,000 shall be credited to Adwar’s earned working interest in the Livestock Well No. 7-2, (ii) $200,000 shall be credited to Adwar’s earned working interest in the Livestock Well No. 18-2 and (iii) $200,000 shall be credited to Adwar’s earned working interest in the BVR Well No. 5-1. The Parties also acknowledged under Amendment II that PIE Operating, LLC, has obtained the exclusive appointment as operator for the Livestock Well No. 7-2, Livestock Well No. 18-2 and BVR Well No. 5-1, effective March 17, 2014.

Item 6. Exhibits.

10.01		Amendment 2 to Development Agreement, dated July 9, 2014, by and among ApClark, LLC, Blacksands Petroleum Texas, LLC, NRG Assets Management, LLCand Adwar Drilling Fund II, LP

10.02		Participation and Development Agreement, dated August 9, 2014, by and between ApClark, LLC and Adwar Drilling Fund III, L.P.

31.01		Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02		Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01		Certifications of Principal Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

___________

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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.

	BLACKSANDS PETROLEUM, INC.

Date: September 15, 2014	By:	/s/ RHONDA ROSEN
	Name:	Rhonda Rosen
	Title:	Interim President (Principal Executive Officer)

Date: September 15, 2014	By:	/s/ DONALD GIANNATTASIO
	Name:	Donald Giannattasio
	Title:	Chief Financial Officer

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