COMMITMENTS AND CONTINGENCIES	3 Months Ended
Oct. 31, 2011
Notes to Financial Statements
COMMITMENTS AND CONTINGENCIES	Note 5: COMMITMENTS AND CONTINGENCIES On October 28, 2011, the Company and a private seller ("Seller") entered into an asset purchase agreement (the "Asset Purchase Agreement") for the acquisition by the Company of certain onshore and offshore oil and gas fields of Seller (the "Assets") for $175 Million in cash, subject to certain purchase price adjustments at closing. The Assets include about 110 producing wells in 34 fields with average net production of 12 million cubic feet per day (MMcf/d) of natural gas and 900 barrels per day of oil (BBl/d), or a total of 2,900 BOE/d. The Assets have Proven Reserves of approximately 15.5 Million BOE with additional Probable and Possible potential of over 10 Million BOE. The closing of the purchase and sale of the Assets is expected to occur upon the satisfaction or waiver of the conditions set forth in the Asset Purchase Agreement, but no later than December 31, 2011, and will have an effective date of June 1, 2011, unless Seller and the Company mutually agree in writing to extend the closing date. Completion of the purchase is subject to preferential rights-to-purchase held by other working interest owners in a number of the Assets, as well as, several industry-standard closing conditions, including, without limitation, the completion by the Company of satisfactory due diligence and the receipt of all necessary regulatory approvals. Additionally, the Company's ability to close the purchase is contingent on its ability to raise sufficient capital, and the failure to do so could result in termination of the purchase and sale agreement between the Company and the Seller. The Company intends to utilize a combination of debt and equity to fund the purchase. Interim financing for due diligence expenses and operations is being funded pursuant to a $500,000 multiple advance bridge loan provided to the Company by Clinton W. Coldren. In evidence of the loan, on November 3, 2011, the Company issued to Clinton W. Coldren that certain 8% Convertible Note in the principal amount of $500,000. The Convertible Note has a term of one year and is convertible into shares of common stock of the Company, in whole or in part at any time, at an initial conversion price equal to 130% of the volume-weighted average price of the common stock for the 50 trading days following October 31, 2011, subject to adjustment for distributions to shareholders, stock splits, reclassification of shares and tender or exchange offers. Notwithstanding the above, should prior to December 31, 2011, the Company complete the previously announced Gulf Coast acquisition and in connection therewith files a registration statement covering the shares of Common Stock underlying the Note, then the Note shall convert on the 23rd trading day following effectiveness of the registration statement into shares of Common Stock at a price equal to 90% of the Volume Weighted Average Price of the Common Shares for the 20 trading days following effectiveness of such registration statement. The Company does not have the right to prepay all or any portion of the Note prior to the Maturity Date.

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Oct. 31, 2011

Note 5: COMMITMENTS AND CONTINGENCIES

On October 28, 2011, the Company and a private seller ("Seller") entered into an asset purchase agreement (the "Asset Purchase Agreement") for the acquisition by the Company of certain onshore and offshore oil and gas fields of Seller (the "Assets") for $175 Million in cash, subject to certain purchase price adjustments at closing. The Assets include about 110 producing wells in 34 fields with average net production of 12 million cubic feet per day (MMcf/d) of natural gas and 900 barrels per day of oil (BBl/d), or a total of 2,900 BOE/d. The Assets have Proven Reserves of approximately 15.5 Million BOE with additional Probable and Possible potential of over 10 Million BOE. The closing of the purchase and sale of the Assets is expected to occur upon the satisfaction or waiver of the conditions set forth in the Asset Purchase Agreement, but no later than December 31, 2011, and will have an effective date of June 1, 2011, unless Seller and the Company mutually agree in writing to extend the closing date. Completion of the purchase is subject to preferential rights-to-purchase held by other working interest owners in a number of the Assets, as well as, several industry-standard closing conditions, including, without limitation, the completion by the Company of satisfactory due diligence and the receipt of all necessary regulatory approvals. Additionally, the Company's ability to close the purchase is contingent on its ability to raise sufficient capital, and the failure to do so could result in termination of the purchase and sale agreement between the Company and the Seller. The Company intends to utilize a combination of debt and equity to fund the purchase.

Interim financing for due diligence expenses and operations is being funded pursuant to a $500,000 multiple advance bridge loan provided to the Company by Clinton W. Coldren. In evidence of the loan, on November 3, 2011, the Company issued to Clinton W. Coldren that certain 8% Convertible Note in the principal amount of $500,000. The Convertible Note has a term of one year and is convertible into shares of common stock of the Company, in whole or in part at any time, at an initial conversion price equal to 130% of the volume-weighted average price of the common stock for the 50 trading days following October 31, 2011, subject to adjustment for distributions to shareholders, stock splits, reclassification of shares and tender or exchange offers. Notwithstanding the above, should prior to December 31, 2011, the Company complete the previously announced Gulf Coast acquisition and in connection therewith files a registration statement covering the shares of Common Stock underlying the Note, then the Note shall convert on the 23rd trading day following effectiveness of the registration statement into shares of Common Stock at a price equal to 90% of the Volume Weighted Average Price of the Common Shares for the 20 trading days following effectiveness of such registration statement. The Company does not have the right to prepay all or any portion of the Note prior to the Maturity Date.