PETROCORP INC.

REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2009

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

PETROCORP INC.

(An Exploration Stage Company)

Consolidated Balance Sheets

See notes to the consolidated financial statements.

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PETROCORP INC.

(An Exploration Stage Company)

Consolidated Statements of Operations

(Unaudited)

** less than $.01 per share

See notes to the consolidated financial statements.

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PETROCORP INC.

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

See notes to the consolidated financial statements.

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PETROCORP INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.  In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included.  Operating results for the three and nine months ended September 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.  These financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2008 and notes thereto contained in the Annual Report on Form 10-K of the Company as filed with the United States Securities and Exchange Commission (the “SEC”) on April 9, 2009.

2.  Exploration Stage Company

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

3.  Marketable Securities - Restricted

On June 12, 2009, the Company executed and held a closing under an Agreement and Plan of Reorganization by and between Tamm Oil and Gas Corp (“TAMO”) and the Company wherein the Company exchanged the membership interest in its subsidiary Union Energy (Alberta) LLC, a Colorado limited liability company, which owns eight contiguous sections (totaling 5,120 acres) of oil sands leases in the Peace River Oil Sands Area of northern Alberta, Canada which were acquired for $250,000 in May 2008 for 1,000,000 restricted shares of TAMO’s common stock.  TAMO’s shares are traded on the OTCBB and the closing price on June 12, 2009 was $0.80 per share.  The shares are restricted under the Securities Act and the Company does not have any registration rights.

4.  Related Party Transactions

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

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PETROCORP INC.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

(Unaudited)

On August 19, 2009, Soladino loaned the Company $182,094.  The note is secured, payable on demand and non-interest bearing.  At September 30, 2009, the Company has $1,499,975 in secured, non-interest bearing notes (three), payable on demand with its majority stockholder, Soladino.

During the three and nine month period ended September 30, 2009 the Company recorded interest expense of $21,025 and $51,895, respectively.  Interest is computed at an implied rate of 6% and this amount was recorded as a capital contribution by the Company.

The Company was provided management services by its president, Mr. Fitzsimons, during the quarter at no cost.  The Company recorded the $30,000 estimated value of these services as compensation expense and as a capital contribution.  At March 31, 2009, Mr. Fitzsimons had advanced the Company $26,552 which was repaid in April, 2009.

5.  Subsequent Events

The Company has evaluated all events that occurred after the balance sheet date through November 16, 2009, the date when the financial statements were issued to determine if they must be reported. Management of the Company has determined that there are certain reportable subsequent events to be disclosed as follows:

On October 13, 2009, Soladino loaned the Company $100,000.  The note is secured, non-interest bearing and payable on demand.

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Item 2 – Management’s Discussion and Analysis or Plan of Operation

References to “Company”, “we” or “us” refer to Petrocorp Inc., unless the context requires otherwise.

Forward Looking Statements

The following is provided to supplement, and should be read in conjunction with, our financial statements and the accompanying notes included in our Form 10-K as of December 31, 2008.  This report contains forward-looking statements and information relating to us that is based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. When used in this report, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan” and similar expressions, as they relate to us or our management, are intended to identify forward-looking statements. These statements reflect management’s current view of us concerning future events and are subject to certain risks, uncertainties and assumptions, including among many others:

Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual outcomes and results could differ materially from those indicated in the forward-looking statements.

Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

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Business Overview

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

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

Our office is located at 1065 Dobbs Ferry Road, White Plains, NY 10607 and our telephone number is (914) 674-4373.  Our web-site address is http://petrocorp.us.

Plan of Operation

Our plan of operation is to conduct exploration work on each of our current and future properties in order to ascertain whether any of them possess commercially exploitable quantities of oil and gas reserves. There is no assurance that a commercially viable oil and gas reserve exists on any of our current and future properties, and a great deal of further exploration will be required before a final evaluation as to the economic feasibility for our future exploration is determined. To date, we do not know if any economically viable oil and gas reserves exist on any of our current or future properties and there is no assurance that we will discover any.

            Alaska

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

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

The Alaska leases are in areas which the Company believes are promising for gas production although the Company does not make any representations as to their future production, if any.  Furthermore, any gas recovered from our Alaska leases will not be salable unless or until a proposed North Slope gas pipeline is completed.  We have retained Frontier Land Inc. (an established land firm and a member of the American Association of Professional Landmen) to conduct negotiations with other leaseholders regarding their acreage and to acquire other land interests within the vicinity of our tracts.

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            Oklahoma

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

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

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

The Company’s Okfuskee and Okmulgee County oil and gas leases are near oil and gas fields with proved developed production and within the general area of the “Woodford shale play”.  We have retained Keith Summar (a member of the American Association of Petroleum Geologists) as a consultant to assist us in our Oklahoma operations.

            Quebec, Canada

On February 4, 2009, the Government of Quebec awarded the Company seven oil and gas exploration licenses – 2009P462 to 2009PG468 – all located in the St. Lawrence Lowlands area.  The seven Quebec licenses cover a total net surface area of 114,045 hectares (281,593 acres) and have an initial term of five years.  The Company has committed to a five-year work program with minimum expenditures of (expressed in Canadian dollars): $0.50 per hectare in the first year; $1.00 per hectare in the second year; $1.50 per hectare in the third year; $2.00 per hectare in the fourth year; and $2.50 per hectare in the fifth year.

            Italy

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

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

            Netherlands

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

Internationally, we have retained Daniele Albisetti and Christian Ceppi (members of the Swiss Geological Society, the Società Geologica Italiana (Italian Geological Society) and the Geological Association of Canada) as consultants to assist us in our operations.

Results of Operations

Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008

For the quarter ended September 30, 2009, we had revenues of $18,528, oil and gas exploration costs of $60,584 and incurred a loss of $223,155, as compared to revenues of $7,241 oil and gas exploration costs of $6,169 and a loss of $73,594 in 2008.  During the 2009 quarter, the Company paid compensation to its President of $30,000 which was recorded as a capital contribution by the Company and professional fees of $131,176, which related primarily to the development of the Company’s business plan and costs associated with being a public company, as compared to $26,300 for the 2008 quarter.  Also during the 2009 quarter, the Company paid general and administrative expenses of $5,701, which included rent, telephone and other office costs, as compared to $10,970 for the 2008 quarter.  Interest expense of $21,025 was computed on the majority stockholder loans at an implied rate of 6% and this amount was recorded as a capital contribution by the Company during the quarter.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

During the nine months ended September 30, 2009, we incurred a net loss of $551,157 compared to a net loss of $221,008 for the 2008 period.  During the nine months ended September 30, 2009, the Company paid compensation and professional fees of $284,339, which related primarily to the development of the Company’s business plan and costs associated with being a public company, as compared to $172,200 for the 2008 period.  Also during the nine months ended September 30, 2009, the Company paid general and administrative expenses of $21,853, which included rent, telephone and other office costs, as compared to $23,498 for the 2008 period.  During the nine months ended September 30, 2009 interest expense of $51,895 was computed on the majority stockholder loans at an implied rate of 6% and this amount was recorded as a capital contribution by the Company during the period.

Liquidity and Capital Resources

Our Company's principal cash requirements are for exploration expenses which we anticipate will rise as we proceed to determine the feasibility of developing our current or future property interests.  As of September 30, 2009, we had cash of $144,164 and deficit working capital of $41,486.  Our net cash provided by financing activities during the period from our inception to September 30, 2009 was $3,054,075.

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

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On August 19, 2009, Soladino loaned the Company $182,094.  The note is secured, payable on demand and none interest bearing.  At September 30, 2009, the Company has $1,499,975 in secured, non-interest bearing notes (three), payable on demand with its majority stockholder Soladino.  The notes are secured by the Company’s oil and gas leases and its other assets.

On October 13, 2009, Soladino loaned the Company $100,000.  The note is secured, payable on demand and none interest bearing.  We anticipate that additional funding will be provided in the form of equity financing from the sale of our common stock or loans from directors or majority shareholder. We cannot provide investors with any assurance that additional funds will be raised.  Currently, we do not have any arrangements in place for future equity financings.

Critical Accounting Policies

Financial Reporting Release No. 60 of the SEC encourages all companies to include a discussion of critical accounting policies or methods used in the preparation of the financial statements.  There are no current revenue generating activities that give rise to significant assumptions or estimates.  Our most critical accounting policies relate to the accounting and disclosure of related party transactions.  Our financial statements filed as part of our December 31, 2008 Annual Report on Form 10-K include a summary of the significant accounting policies and methods used in the preparation of our financial statements.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The information called for by this item is not required as we are a smaller reporting company.

Item 4T.  Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2009, our disclosure controls and procedures were ineffective at the reasonable assurance level due to the two (2) material weaknesses described below:

(i) We do not have written documentation of our internal control policies and procedures.  Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the year ending December 31, 2008.  Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

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

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met.  In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the third quarter of 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting as such term is defined in Rule 13a-15 and 15d-15 of the Exchange Act.

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

The Company is not currently a party to any legal proceedings.

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

None.

Item 3 – Defaults Upon Senior Securities

None.

Item 4 – Submission of Matters to a Vote of Security Holders

None.

Item 5 – Other Information

None.

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Item 6 – Exhibits

The following documents are filed as part of this Report.

** Filed herewith

SIGNATURE

In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

                                                                                            PETROCORP INC.

Date: November 16, 2009

                                                                                            By:   /s/  James Fitzsimons

        James Fitzsimons, President

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