SurgePays, Inc. - FORM 10-K

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EX-32.2 - EXHIBIT - SurgePays, Inc.	ex_32-2.htm
EX-31.1 - EXHIBIT - SurgePays, Inc.	ex_31-1.htm
EX-32.1 - EXHIBIT - SurgePays, Inc.	ex_32-1.htm
EX-31.2 - EXHIBIT - SurgePays, Inc.	ex_31-2.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2011

Commission File Number 000-52522

NORTH AMERICAN ENERGY RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Nevada		98-0550352
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)

228 Saint Charles Ave., Suite 724
New Orleans, LA		70130
(Address of Principal Executive Office)		(Zip Code)

Issuer’s telephone number (504) 561-1151

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

COMMON STOCK, $0.001 PAR VALUE

(Title of each class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. (Check one)

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company x

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

The aggregate market value of the shares of our common stock, par value $0.001, held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $278,202.

As of May 30, 2011, the registrant had outstanding 21,554,945 shares of its common stock, par value of $0.001.

DOCUMENTS INCORPORATED BY REFERENCE

No documents are incorporated by reference into this Report except those Exhibits so incorporated as set forth in the Exhibit index.

NORTH AMERICAN ENERGY RESOURCES, INC.

TABLE OF CONTENTS

FORM 10-K

Part I

		Page
PART I
Item 1	Business	3
Item 1A	Risk Factors	10
Item 1B	Unresolved Staff Comments	10
Item 2	Properties	10
Item 3	Legal Proceedings	16

PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
Item 6	Selected Financial Data	19
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operation	19
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	24
Item 8	Financial Statements and Supplementary Data	25
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	49
Item 9AT	Controls and Procedures	49
Item 9B	Other Information	50

PART III
Item 10	Directors, Executive Officers and Corporate Governance	51
Item 11	Executive Compensation	53
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	56
Item 13	Certain Relationships and Related Transactions, and Director Independence	58
Item 14	Principal Accountant Fees and Services	58

PART IV
Item 15	Exhibits and Financial Statement Schedules	59

From time to time, we may publish forward-looking statements relative to such matters as anticipated financial results, business prospects, technological developments and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. The following discussion and analysis should be read in conjunction with the report on the Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements appearing later in this report. All statements other than statements of historical fact included in this Annual Report on Form 10-K are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, the following: our current liquidity needs, as described in our periodic reports; changes in the economy; our inability to raise additional capital; our involvement in potential litigation; volatility of our stock price; the variability and timing of business opportunities; changes in accounting policies and practices; the effect of internal organizational changes; adverse state and federal regulation and legislation; and the occurrence of extraordinary or catastrophic events and terrorist acts. These factors and others involve certain risks and uncertainties that could cause actual results or events to differ materially from management’s views and expectations. Inclusion of any information or statement in this report does not necessarily imply that such information or statement is material. We do not undertake any obligation to release publicly revised or updated forward-looking information, and such information included in this report is based on information currently available and may not be reliable after this date.

PART I

ITEM 1: BUSINESS

ORGANIZATION

North American Energy Resources, Inc. ("NAEY" or the "Company") was originally organized in Nevada on August 22, 2006 with the name Mar Ked Mineral Exploration, Inc. ("Mar Ked"). The Company changed its name from Mar Ked to North American Energy Resources, Inc. on August 11, 2008.

NAE is an independent oil and natural gas company engaged in the acquisition, exploration and development of oil and natural gas properties and the production of oil and natural gas. The Company operates in the upstream segment of the oil and gas industry which includes the drilling, completion and operation of oil and gas wells. The Company has an interest in a pipeline in Washington County, Oklahoma which is currently shut-in, but has been used to gather natural gas production. The Company's gas production in Washington County, Oklahoma was shut-in due to low prices in February 2009 and was sold effective October 1, 2010 along with the Company's oil production in the area. The Company has acquired an interest in a non-operated gas well in Texas County, Oklahoma and is continuing to seek additional acquisition possibilities. The Company's focus is on acquiring producing oil and gas properties or companies with development potential.

At a special meeting of shareholders held on April 23, 2009, 63% of our shareholders, either in person or by proxy, voted to approve a 1:50 reverse split of the Company's common stock. This amendment to the Company's Articles of Incorporation was filed with the Nevada Secretary of State and became effective on April 27, 2009. Accordingly, all references to shares of our common stock included herein have been retroactively restated to give effect to the reverse split.

On July 28, 2008, the Company acquired 100% of the outstanding stock of North American Exploration, Inc. ("NAE") (formerly Signature Energy, Inc.) for 420,000 shares of our common stock pursuant to a Stock Purchase Agreement ("SPA"). Completion of the SPA resulted in the shareholders of NAE having control of NAEY. Accordingly, the transaction was recorded for accounting purposes as the acquisition of NAE by NAEY with NAE as the acquirer (reverse acquisition). The financial statements of the Company prior to July 28, 2008 are those of NAE. Formerly NAEY used a November 30 year-end. As a result of the reverse acquisition, the Company will utilize the April 30 year-end of NAE after April 30, 2008.

NAE was organized in Nevada on August 18, 2006 as Signature Energy, Inc. and changed its name to North American Exploration, Inc. on June 2, 2008.

The SPA provided that NAEY was to have $1,500,000 in cash and no liabilities at closing. At July 31, 2008, NAEY had $150,000 of the required cash and on August 28, 2008, the parties to the SPA entered into a Modification Agreement ("MA") which provided an extension until January 27, 2009 for the additional cash to be contributed to the Company. At January 27, 2009, the Company had received an additional $50,000 and was still short $1,300,000 of the amount agreed. The MA provided that the Buyer would make contingent issuances of shares to the Seller equal to 95% of all the outstanding stock after issuance. Accordingly, effective April 30, 2009, an additional 13,250,381 shares were issued to the Sellers. The total purchase price for NAE was 13,690,381 shares.

Mar Ked was originally formed to acquire and explore mineral claims, principally in the Yukon Territory, Canada. All activity relating to mining activity was abandoned when NAE was acquired.

Glossary of Oil and Natural Gas Terms

The definitions set forth below apply to the indicated terms as used in this report. All volumes of natural gas referred to herein are stated at the legal pressure base of the state or area where the reserves exist and at 60 degrees Fahrenheit and in most instances are rounded to the nearest major multiple.

Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.

Bcf. One billion cubic feet of natural gas.

Boe. Barrels of oil equivalent in which six Mcf of natural gas equals one Bbl of oil.

Btu. British thermal unit, which is the heat required to raise the temperature of a one-pound mass of water from 58.5 to 59.5 degrees Fahrenheit.

Completion. The installation of permanent equipment for the production of oil or natural gas or, in the case of a dry hole, the reporting of abandonment to the appropriate agency.

Development well. A well drilled within the proved areas of an oil or natural gas reservoir to the depth of a stratigraphic horizon known to be productive.

Dry hole or well. A well found to be incapable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.

Exploratory well. A well drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil or natural gas in another reservoir.

Field. An area consisting of a single reservoir or multiple reservoirs all grouped on or related to the same individual geological structural feature and/or stratigraphic condition.

Gross acres or gross wells. The total acres or wells, as the case may be, in which a working interest is owned.

MBbls. One thousand barrels of crude oil or other liquid hydrocarbons.

MBoe. One thousand Boe.

MMBoe. One million Boe.

Mcf. One thousand cubic feet of natural gas.

MMBbls. One million barrels of crude oil or other liquid hydrocarbons.

MMBtu. One million Btus.

MMcf. One million cubic feet of natural gas.

Net acres or net wells. The sum of the fractional working interests owned in gross acres or gross wells, as the case may be.

Operator. The individual or company responsible for the exploration, exploitation and production of an oil or natural gas well or lease.

PV-10 Value. When used with respect to oil and natural gas reserves, the estimated future gross revenues to be generated from the production of proved reserves, net of estimated production and future development costs, using the guidelines provided by the SEC with prices provided in this report and costs applicable as of the date indicated, without giving effect to non-property related expenses such as general and administrative expenses, debt service and future income tax expenses or to depreciation, depletion and amortization, discounted using an annual discount rate of 10%.

Productive well. A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of such production exceed production expenses and taxes.

Proved developed producing reserves. ("PDP") Proved developed reserves that are expected to be recovered from completion intervals currently open in existing wells and capable of production.

Proved developed non producing reserves. ("PDNP") Proved reserves that are expected to be recovered from existing wellbores, whether or not currently producing, without drilling additional wells. Production of such reserves may require a recompletion.

Proved reserves. Those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations —prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for estimation.

Proved undeveloped location. A site on which a development well can be drilled consistent with spacing rules for purposes of recovering proved undeveloped reserves.

Proved undeveloped reserves. ("PUD") Proved reserves that are expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required.

Recompletion. The completion for production of an existing wellbore in another formation from that in which the well has been previously completed.

Reserve life. A ratio determined by dividing our estimated existing reserves determined as of the stated measurement date by production from such reserves for the prior twelve month period.

Reservoir. A porous and permeable underground formation containing a natural accumulation of producible oil and/or natural gas that is confined by impermeable rock or water barriers and is individual and separate from other reservoirs.

3-D seismic. The method by which a three dimensional image of the earth’s subsurface is created through the interpretation of reflection seismic data collected over a surface grid. 3-D seismic surveys allow for a more detailed understanding of the subsurface than do conventional surveys and contribute significantly to field appraisal, exploitation and production.

Undeveloped acreage. Lease acreage on which wells have not been drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

Working interest. The operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.

Workover. Operations on a producing well to restore or increase production.

OIL AND GAS DRILLING PROSPECTS

DEVELOPMENT STAGE COMPANY

We are considered a development stage company because we have had limited resources and do not currently have sufficient capital to complete our business plan, which includes acquiring and operating producing properties with development potential. Accordingly, the operations of the Companies are presented as those of a development stage enterprise, from inception (August 18, 2006).

OTHER

Our principal executive office is located at 228 Saint Charles Ave., Suite 724, New Orleans, Louisiana 70130 and our telephone number is (504) 561-1151.

FINANCIAL POSITION AND FUTURE FINANCING NEEDS

We are a development stage company. We have a limited history in the oil and gas development and production business.

We have not established sources of revenues sufficient to fund the development of business, projected operating expenses and commitments for our fiscal year ending April 30, 2012. We have been in the development stage since our inception, August 18, 2006, have accumulated a net loss of $2,973,018 through April 30, 2011, and incurred a loss of $462,392 for the year then ended.

The Company's strategy to raise additional funds include: sales of its common stock or preferred stock in private transactions, sales of its common or preferred stock in public transactions or to borrow the funds. Any such potential transactions would be as needed to raise sufficient capital to fund acquisitions and the development of business, projected operating expenses and commitments. However, there can be no assurance that we will be able to obtain sufficient funding to develop our current business plan.

COMPETITION

The Company expects to concentrate the majority of its resources on oil and gas development and production. The Company is much smaller than most participants in this industry and has now retained individuals with expertise in operating an energy business and performing the steps necessary to complete its business plan.

GOVERNMENTAL REGULATIONS, APPROVAL, COMPLIANCE

When we elect to participate directly in development of oil and gas properties, our operations are subject to various types of regulation at the federal, state and local levels. Such regulations includes requiring permits for the drilling of wells; maintaining bonding requirements in order to drill or operate wells; implementing spill prevention plans; submitting notification and receiving permits relating to the presence, use and release of certain materials incidental to oil and gas operations; and regulating the location of wells, the method of drilling and casing wells, the use, transportation, storage and disposal of fluids and materials used in connection with drilling and production activities, surface usage and the restoration of properties upon which wells have been drilled, the plugging and abandoning of wells and the transporting of production. Our operations will also be subject to various conservation matters, including the regulation of the size of drilling and spacing units or pro-ration units, the number of wells which may be drilled in a unit, and the unitization or pooling of oil and gas properties. In this regard, some states allow the forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases, which may make it more difficult to develop oil and gas properties. In addition, state conservation laws establish maximum rates of production from oil and gas wells, generally limit the venting or flaring of gas, and impose certain requirements regarding the ratable purchase of production. The effect of these regulations is to limit the amounts of oil and gas we may be able to produce from our wells and to limit the number of wells or the locations at which we may be able to drill.

Our business is affected by numerous laws and regulations, including energy, environmental, conservation, tax and other laws and regulations relating to the oil and gas industry. We plan to develop internal procedures and policies to ensure that our operations are conducted in full and substantial environmental regulatory compliance.

Failure to comply with any laws and regulations may result in the assessment of administrative, civil and criminal penalties, the imposition of injunctive relief or both. Moreover, changes in any of these laws and regulations could have a material adverse effect on business. In view of the many uncertainties with respect to current and future laws and regulations, including their applicability to us, we cannot predict the overall effect of such laws and regulations on our future operations.

We believe that our operations comply in all material respects with applicable laws and regulations and that the existence and enforcement of such laws and regulations have no more restrictive an effect on our operations than on other similar companies in the energy industry. We do not anticipate any material capital expenditures to comply with federal and state environmental requirements.

ENVIRONMENTAL

Operations on properties in which we have an interest are subject to extensive federal, state and local environmental laws that regulate the discharge or disposal of materials or substances into the environment and otherwise are intended to protect the environment. Numerous governmental agencies issue rules and regulations to implement and enforce such laws, which are often difficult and costly to comply with and which carry substantial administrative, civil and criminal penalties and in some cases injunctive relief for failure to comply.

Some laws, rules and regulations relating to the protection of the environment may, in certain circumstances, impose “strict liability” for environmental contamination. These laws render a person or company liable for environmental and natural resource damages, cleanup costs and, in the case of oil spills in certain states, consequential damages without regard to negligence or fault. Other laws, rules and regulations may require the rate of oil and gas production to be below the economically optimal rate or may even prohibit exploration or production activities in environmentally sensitive areas. In addition, state laws often require some form of remedial action, such as closure of inactive pits and plugging of abandoned wells, to prevent pollution from former or suspended operations.

Legislation has been proposed in the past and continues to be evaluated in Congress from time to time that would reclassify certain oil and gas exploration and production wastes as “hazardous wastes.” This reclassification would make these wastes subject to much more stringent storage, treatment, disposal and clean-up requirements, which could have a significant adverse impact on operating costs. Initiatives to further regulate the disposal of oil and gas wastes are also proposed in certain states from time to time and may include initiatives at the county, municipal and local government levels. These various initiatives could have a similar adverse impact on operating costs.

The regulatory burden of environmental laws and regulations increases our cost and risk of doing business and consequently affects our profitability. The federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, also known as the “Superfund” law, imposes liability, without regard to fault, on certain classes of persons with respect to the release of a “hazardous substance” into the environment. These persons include the current or prior owner or operator of the disposal site or sites where the release occurred and companies that transported, disposed or arranged for the transport or disposal of the hazardous substances found at the site. Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment and for damages to natural resources, and it is not uncommon for the federal or state government to pursue such claims.

It is also not uncommon for neighboring landowners and other third parties to file claims for personal injury or property or natural resource damages allegedly caused by the hazardous substances released into the environment. Under CERCLA, certain oil and gas materials and products are, by definition, excluded from the term “hazardous substances.” At least two federal courts have held that certain wastes associated with the production of crude oil may be classified as hazardous substances under CERCLA. Similarly, under the federal Resource, Conservation and Recovery Act, or RCRA, which governs the generation, treatment, storage and disposal of “solid wastes” and “hazardous wastes,” certain oil and gas materials and wastes are exempt from the definition of “hazardous wastes.” This exemption continues to be subject to judicial interpretation and increasingly stringent state interpretation. During the normal course of operations on properties in which we have an interest, exempt and non-exempt wastes, including hazardous wastes, that are subject to RCRA and comparable state statutes and implementing regulations are generated or have been generated in the past. The federal Environmental Protection Agency and various state agencies continue to promulgate regulations that limit the disposal and permitting options for certain hazardous and non-hazardous wastes.

We plan to establish guidelines and management systems to ensure compliance with environmental laws, rules and regulations if we participate directly in the development of oil and gas resources. The existence of these controls cannot, however, guarantee total compliance with environmental laws, rules and regulations. We will rely on the operator of the properties in which we have an interest to be in substantial compliance with applicable laws, rules and regulations relating to the control of air emissions at all facilities on those properties. Although we plan to maintain insurance against some, but not all, of the risks described above, including insuring the costs of clean-up operations, public liability and physical damage, there is no assurance that our insurance will be adequate to cover all such costs, that the insurance will continue to be available in the future or that the insurance will be available at premium levels that justify our purchase. The occurrence of a significant event not fully insured or indemnified against could have a material adverse effect on our financial condition and operations. Compliance with environmental requirements, including financial assurance requirements and the costs associated with the cleanup of any spill, could have a material adverse effect on our capital expenditures, earnings or competitive position. We do believe, however, that our operators are in substantial compliance with current applicable environmental laws and regulations. Nevertheless, changes in environmental laws have the potential to adversely affect operations. At this time, we have no plans to make any material capital expenditures for environmental control facilities.

EMPLOYEES

Unless an acquisition is completed, it is anticipated that the only active employees of this business in the near future will be its Chief Executive Officer and its President and Chief Financial Officer. All other operative functions, such as acquiring leaseholds, creating joint ventures and development and production of oil and gas will be handled by the Chief Executive Officer and its President and Chief Financial Officer or independent contractors and consultants.

ITEM 1A: RISK FACTORS

Not applicable.

ITEM 2: PROPERTIES

The Company’s oil and gas business is primarily involved in the development and production of oil and gas. As of April 30, 2011, we have 160 acres under lease in Texas County, Oklahoma which includes 1 producing gas well. The Company's current focus is to identify, evaluate, and obtain financing to potentially acquire producing oil and gas properties with development potential.

Proved Reserves and Estimated Future Net Revenue

The following table sets forth our estimated proved reserves and the related estimated pre-tax future net revenues, pre-tax 10% present value and after-tax standardized measure of discounted future net cash flows as of April 30, 2011. These estimates correspond with the method used in presenting the “Supplemental Information on Oil and Gas Operations” in Note 10 to our consolidated financial statements included herein. At April 30, 2011, 100% of the proved reserves have been classified as proved developed producing ("PDP"). There are no proved developed non-producing ("PDNP") reserves.

	Total		Proved		Proved
	Proved		Developed		Undeveloped
	Reserves		Reserves		Reserves
Total Reserves
Oil (BBLs)		-		-		-
Gas (MCF)		13,320		13,320		-
BOE (1)		2,220		2,220		-
Pre-tax future net revenue (2)	$	10,740	$	10,740	$	-
Pre-tax 10% present value (2)		5,690		5,690		-
Standardized measure of discounted
future net cash flows (2)(3)	$	5,690	$	5,690	$	-

(1)	Gas reserves are converted to barrels of oil equivalent (“BOE”) at the rate of six MCF per BBL of oil, based upon the approximate relative energy content of natural gas and oil, which rate is not necessarily indicative of the relationship of gas and oil prices.

(2)

Estimated pre-tax future net revenue represents estimated future revenue to be generated from the production of proved reserves, net of estimated production and development costs and site restoration and abandonment charges. The amounts shown do not give effect to depreciation, depletion and amortization, or to non-property related expenses such as debt service and income tax expense.

(3)	See Note 10 to the consolidated financial statements included in Item 8.

No estimates of our proved reserves have previously been filed with or included in reports to any federal governmental authority or agency except for our Form 10-K for the years ended April 30, 2010 and 2009.

The prices used in calculating the estimated future net revenues attributable to proved reserves do not necessarily reflect market prices for oil and gas production subsequent to April 30, 2011. There can be no assurance that all of the proved reserves will be produced and sold within the periods indicated, that the assumed prices will be realized or that existing contracts will be honored or judicially enforced.

Proved Reserves Disclosures

Recent SEC Rule-Making Activity. In December 2008, the SEC announced that it had approved revisions to modernize the oil and gas reserve reporting disclosures. The new disclosure requirements include provisions that:

●

Introduce a new definition of oil and gas producing activities. This new definition allows companies to include in their reserve base volumes from unconventional resources. Such unconventional reserves include bitumen extracted from oil sands and oil and gas extracted from coal beds and shale formations.

●	Report oil and gas reserves using an un-weighted average price using the prior 12-month period, based on the closing prices on the first day of each month, rather than year-end prices.

●	Permit companies to disclose their probable and possible reserves on a voluntary basis. In the past, proved reserves were the only reserves allowed in the disclosures. (We have chosen not to make disclosure under these categories.)

●	Requires companies to provide additional disclosure regarding the aging of proved undeveloped reserves.

●	Permit the use of reliable technologies to determine proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserve volumes.

●	Replace the existing "certainty" test for areas beyond one offsetting drilling unit from a productive well with a "reasonable certainty" test.

●

Require additional disclosures regarding the qualifications of the chief technical person who oversees the company's overall reserve estimation process. Additionally, disclosures regarding internal controls over reserve estimation, as well as a report addressing the independence and qualifications of its reserves preparer or auditor will be mandatory.

We adopted the rules effective April 30, 2010.

Internal Controls Over Reserve Estimates. Our reserve estimates are prepared by an independent petroleum consulting firm who was engaged to audit our reserves. We updated our reserves using the new pricing guidelines required by the SEC.

Production

All of our production was from our leases in Washington, County Oklahoma, until the properties were sold effective October 1, 2010. We acquired an interest in a non-operated gas well in Texas County, Oklahoma on November 1, 2010 and it represents our current production.

Project Summary

The Company sold its position in Washington County, Oklahoma, effective October 1, 2010, acquired an interest in a non-operated gas well and continues to evaluate other investment opportunities.

Acreage

The following table summarizes gross and net developed acreage at April 30, 2011.

	Developed Acreage
	Gross		Net
Texas County, Oklahoma		160		12

Production History

The following table presents the historical information about our natural gas and oil production volumes.

	Year ended April 30,
	2011		2010
Oil production (BBLs)		64		220
Gas production (MCF)		291		-
Total production (BOE)		112		220
Daily production (BOE/d)		0.31		0.60
Average sales price:
Oil (per BBL)	$	63.52	$	65.33
Gas (per MCF)	$	2.87	$	-
Total (per BOE)	$	43.56	$	65.33
Average production cost (per BOE)	$	78.62	$	102.64
Average production taxes (per BOE)	$	3.12	$	4.69

The average oil sales price amounts above are calculated by dividing revenue from oil sales by the volume of oil sold in BBLs. The average gas price amounts above are calculated by dividing revenue from gas sales by the volume of gas sold in MCF. The total average sales price amounts above are calculated by dividing total revenues by total volume sold in BOE. The average production costs and average production taxes above are calculated by dividing production costs by total production in BOE.

Productive wells

The following table presents our ownership at April 30, 2011 and 2010, in oil and natural gas wells (a net well is our percentage ownership of a gross well).

		Oil wells				Gas wells				Total wells
Year		Gross		Net		Gross		Net		Gross		Net

2011	Oklahoma		-		-		1.0		0.1		1.0		0.1
2010	Oklahoma		2.0		1.0		-		-		2.0		1.0

Drilling Activities

We did not participate in any drilling activities during 2011.

Cost information

We conduct our oil and natural gas activities entirely in the United States and to date only in Oklahoma. Costs incurred for property acquisition, exploration and development activities during the years ended April 30, 2011 and 2010 are shown below.

	For the years ended April 30,
	2011		2010
Acquisition of proved properties	$	2,000	$	207,645
Acquisition on non-producing properties		-		126,607
Development costs		2,893		95
Total costs incurred	$	4,893	$	334,347

The acquisition of proved properties and the acquisition of non-producing properties were made primarily through issue of our common stock in 2010.

Reserve Quantity Information

Our estimates of proved reserves and valuation were prepared by an independent petroleum consultant, Christopher Energy. The estimates of proved reserves are inherently imprecise and continually subject to revision based on production history, results of additional exploration and development, price changes and other factors. Our oil and natural gas reserves are attributed solely to properties within the United States. A summary of the changes in quantities of proved developed oil and natural gas reserves is shown below.

				Natural Gas
	Oil (BBLs)			(MCF)
Balance, April 30, 2009		7,288			-
Acquisition of minerals in place		7,222			-
Production		(220	)		-
Revisions of estimates		(12,040	)		-
Balance, April 30, 2010		2,250			-
Acquisition of minerals in place		-			13,611
Sales of properties		(2,186	)		-
Production		(64	)		(291	)
Revisions of estimates		-			-
Balance, April 30, 2011		-			13,320

Standardized Measure of Discounted Future Net Cash Flows

Our standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves and changes in the standardized measure as described below were prepared in accordance with generally accepted accounting principles.

Future income tax expenses are calculated by applying appropriate year-end tax rates to future pre-tax net cash flows relating to proved oil and natural gas reserves, less the tax basis of properties involved. Future income tax expenses give effect to permanent differences, tax credits and loss carryforwards relating to the proved oil and natural gas reserves. Future net cash flows are discounted at a rate of 10% annually to derive the standardized measure of discounted future net cash flows. This calculation procedure does not necessarily result in an estimate of the fair market value or the present value of our oil and natural gas properties. Future income tax expenses were not included due to the Company's net operating loss carryforwards.

The standardized measure of discounted future net cash flows relating to the proved oil and natural gas reserves are shown below.

	For the years ended April 30,
	2011			2010
Future cash flows	$	39,580		$	154,220
Future production costs		(28,840	)		(87,530	)
Future income taxes		-			-
Future net cash flows		10,740			66,690
10% annual discount for estimated timing of cash flows		(5,050	)		(14,440	)
Standardized Measure of Discounted Cash Flows	$	5,690		$	52,250

The changes in the standardized measure of discounted future net cash flows relating to the proved oil and natural gas reserves are shown below.

	For the years ended April 30,
	2011			2010
Beginning of year	$	52,250		$	38,379
Purchase of minerals in place		2,000			207,645
Sale of properties		(15,000	)		-
Development costs incurred during the year		2,893			95
Sales of oil and gas produced, net of production costs		4,284			9,270
Unevaluated costs transferred to full cost pool		-			126,607
Impairments		(46,984	)		(313,317	)
Net changes in price and production costs		6,247			48,325
Revision of previous quantity estimates		-			(64,754	)
End of year	$	5,690		$	52,250

Management's Business Strategy Related to Properties

Our goal is to focus on acquiring oil properties with existing production and upside drilling and re-development potential, initially primarily in the Gulf Coast area.

Title to Properties

Title to properties is subject to contractual arrangements customary in the oil and gas industry, liens for current taxes not yet due and, in some instances, other encumbrances. We believe that such burdens do not materially detract from the value of such properties or from the respective interests therein or materially interfere with their use in the operation of the business.

As is customary in the industry, other than a preliminary review of local records, little investigation of record title is made at the time of acquisitions of undeveloped properties. Investigations, which generally include a title opinion of outside counsel, are made prior to the consummation of an acquisition of producing properties and before commencement of drilling operations on undeveloped properties.

IMPAIRMENTS

In 2011, the Company recorded an impairment of $46,984 on its properties in Washington County, Oklahoma to adjust the carrying value to the proceeds received on sale of the properties. In 2010, the Company recorded an impairment of an interest in two oil wells that it had acquired for its common stock in the amount of $108,000. It was determined during 2010, as the result of two failed workover attempts that the unevaluated property costs should be fully impaired and $126,607 was transferred from unevaluated property costs to the full cost pool. The Company recorded an additional impairment of $205,317 at the end of 2010. As a result of the gas reserves continuing to be impaired, the Company wrote off its investment in a pipeline of $132,663 that was principally used to gather the gas production.

OTHER

The Company's corporate office is maintained at 228 Saint Charles Ave., Suite 724, New Orleans, LA 70130 on a month-to-month basis at a cost of $5,781 per month.

ITEM 3: LEGAL PROCEEDINGS

There are no pending or threatened lawsuits against us.

PART II

ITEM 5:

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a) MARKET INFORMATION

Our $0.001 par value per share common stock is traded in the over-the-counter market and is quoted on the OTCQB under the symbol “NAEY.” Until we began trading on July 24, 2007, there was no public market for our common stock. Previously we traded under the symbol NAEN.

The following table sets forth the quarterly high and low daily close for our common stock as reported by the OTCQB for the two years ended April 30, 2011 and 2010. The bids reflect inter dealer prices without adjustments for retail mark-ups, mark-downs or commissions and may not represent actual transactions.

Period (Quarter ended)	High		Low

2011
April 30, 2011	$	0.12	$	0.05
January 31, 2011	$	0.12	$	0.01
October 31, 2010	$	0.04	$	0.01
July 31, 2010	$	0.04	$	0.02

2010
April 30, 2010	$	0.09	$	0.04
January 31, 2010	$	0.20	$	0.06
October 31, 2009	$	0.79	$	0.20
July 31, 2009	$	2.00	$	0.13

The OTCQB is the middle tier of the OTC market. OTCQB companies report to the SEC, making it easy for investors to identify companies that are current in their reporting obligations. There are no financial or qualitative standards to be in this tier. OTCQB securities may also be quoted on the FINRA.BB. The OTCQB allows investors to easily identify reporting companies traded in the OTC market regardless of where they are quoted.

PENNY STOCK CONSIDERATIONS

Our shares will be “penny stocks” as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares thus will be subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.

(1) In general. No broker or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any penny stock by any customer except in accordance with the requirements below.

(2) Risk disclosure with respect to penny stocks. Prior to effecting any transaction in any penny stock, a broker or dealer shall give the customer a risk disclosure document that -

a)	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;

b)	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to violations of such duties or other requirements of Federal securities laws;

c)	contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" prices for penny stocks and the significance of the spread between the bid and ask prices;

d)	contains the established toll free telephone number for inquiries on disciplinary actions;

e)	defines significant terms used in the disclosure document or in the conduct of trading in penny stocks; and

f)	contains such other information, and is in such form (including language, type size, and format), as the Commission shall require by rule or regulation.

(3) Commission rules relating to disclosure. The Commission shall adopt rules setting forth additional standards for the disclosure by brokers and dealers to customers of information concerning transactions in penny stocks. Such rules -

shall require brokers and dealers to disclose to each customer, prior to effecting any transaction in, and at the time of confirming any transaction with respect to any penny stock, in accordance with such procedures and methods as the Commission may require consistent with the public interest and the protection of investors -

i.	the bid and ask prices for penny stock, or such other information as the Commission may, by rule, require to provide customers with more useful and reliable information relating to the price of such stock;

ii.	the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and

iii.	the amount and a description of any compensation that the broker or dealer and the associated person thereof will receive or has received in connection with such transaction;

shall require brokers and dealers to provide, to each customer whose account with the broker or dealer contains penny stocks, a monthly statement indicating the market value of the penny stocks in that account or indicating that the market value of such stock cannot be determined because of the unavailability of firm quotes; and

may, as the Commission finds necessary or appropriate in the public interest or for the protection of investors, require brokers and dealers to disclose to customers additional information concerning transactions in penny stocks.

(4)

Exemptions. The Commission, as it determines consistent with the public interest and the protection of investors, may by rule, regulation, or order exempt in whole or in part, conditionally or unconditionally, any person or class of persons, or any transaction or class of transactions, from the requirements of this subsection. Such exemptions shall include an exemption for brokers and dealers based on the minimal percentage of the broker's or dealer's commissions, commission-equivalents, and markups received from transactions in penny stocks.

(5)

Regulations. It shall be unlawful for any person to violate such rules and regulations as the Commission shall prescribe in the public interest or for the protection of investors or to maintain fair and orderly markets -

as necessary or appropriate to carry out these requirements; or

as reasonably designed to prevent fraudulent, deceptive, or manipulative acts and practices with respect to penny stocks.

RECENT SALES OF UNREGISTERED SECURITIES

There were no sales of our common stock during the quarter ended April 30, 2011.

(b) HOLDERS

There are 48 shareholders of record of the Company’s common stock at April 30, 2011.

The Company has not paid dividends to date and has no plans to do so in the foreseeable future.

(d) SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table summarizes certain information as of April 30, 2011, with respect to compensation plans (including individual compensation arrangements) under which our common stock is authorized for issuance:

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance
Equity compensation plans approved by security holders:
2008 Plan		-			1,242,333
		-			1,242,333

The North American Energy Resources, Inc. 2008 Stock Option Plan (“Plan”) was filed on September 11, 2008 and reserves 2,500,000 shares for Awards under the Plan. The Company’s Board of Directors is designated to administer the Plan and may designate a Compensation Committee for this purpose. There are no options outstanding at April 30, 2011 and 2010.

WARRANTS

As a part of their initial compensation, on December 15, 2010, the new Executive Team was granted Warrants with the following primary terms and conditions. The strike price exceeded the market price when the Warrants were granted.

a) Each Warrant shall entitle the owner to purchase one share of common stock of the Company. The warrants will contain price protection should shares be used for an acquisition at a price lower than the conversion price in force. The anti dilution provision will not apply to financings done below the strike price.

b) The Executive Team is granted three Warrant Certificates as follows:

1.	Certificate #1 for 10,000,000 warrants with a strike price of $0.025 per share must be exercised within one year of the date Executive Team begins collecting salaries from the Company,

2.	Certificate #2 for 10,000,000 warrants with a strike price of $0.04 per share and a Term of 5 years from the vesting date, and

3.	Certificate #3 for 10,000,000 warrants with a strike price of $0.055 per share and a Term of 5 years from the vesting date.

c) Other warrant terms are as follows:

1.	Certificate #1 vests immediately, Certificate #2 shall vest upon execution of Certificate #1 and Certificate #3 shall vest upon execution of Certificate #1.

2.	All Warrants may vest early if the Company has revenue of $12,500,000 total for two consecutive quarters and records a pre-tax net profit for the two quarters and other conditions including change in control, termination, etc.

3.	The Warrant Certificates may be allocated among the Executive Team as they so determine.

4.	The Warrants shall be registered in the first registration statement the Company files, subject to legal counsel approval.

ITEM 6: SELECTED FINANCIAL DATA

Not applicable.

ITEM 7:

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This statement contains forward-looking statements within the meaning of the Securities Act. Discussions containing such forward-looking statements may be found throughout this statement. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, the matters set forth in this statement.

Revenues for the years ended April 30, 2011 and 2010 consisted of the following.

	2011		2010

Oil sales	$	4,044	$	14,343
Gas sales		835		-
	$	4,879	$	14,343

In 2010, the Company had oil sales of 220 BBL at an average price of $65.20. In 2011, the Company had oil sales of 64 BBL at an average price of $63.51 and gas sales of 291 MCF at an average price of $2.87. The Company sold its oil production on October 1, 2010 due primarily to its high operating cost.

Costs and expenses consisted of the following for the years ended April 30, 2011 and 2010.

	2011		2010

Oil and natural gas production taxes	$	349	$	1,033
Oil and natural gas production expenses		8,814		22,580
Depreciation and amortization		1,530		6,943
Non-cash compensation		266,754		759,279
Asset impairment		46,894		445,980
General and administrative expenses, net of operator's overhead fees		105,873		112,784
	$	430,214	$	1,348,599

Production taxes are a percentage of revenue and vary directly with revenue. Production expenses have decreased due to the sale of the oil properties on October 1, 2010. For 2011, $8,415 of production expenses were for oil properties which were sold and $399 was for the gas well acquired on November 1, 2010. Non-cash compensation primarily includes the cost of stock grants for consultants in 2011 and 2010. The decrease in 2011 is related to hiring a new CEO and CFO in December 2010 who are currently working without pay while they attempt to acquire additional producing properties.

Asset impairment amounted to $46,894 and $445,980 in 2011 and 2010, respectively. The amount in 2011 of $46,894 represents the impairment on its properties in Washington County, Oklahoma to adjust the carrying value to the proceeds received on sale of the properties. The amount in 2010 includes the transfer to the full cost pool of property costs not previously evaluated of $126,607 due to unsuccessful workover attempts, a total of $313,317 due to ceiling test limitations and $132,663 for the Company's interest in a pipeline which has limited future viability with gas production shut-in.

General and administrative expenses, net of operator's overhead fees is summarized as follows for the two years ended April 30, 2011 and 2010.

	2011			2010

Accounting and auditing	$	36,630		$	46,790
Legal and professional		13,646			34,161
Rent		24,305			-
Consulting services		-			1,650
Bad debt expense		12,828			15,415
Office and other expenses		16,579			11,623
Shareholder communications		4,885			10,345
Operator overhead fees		(3,000	)		(7,200	)
	$	105,873		$	112,784

Accounting and auditing expense declined in 2011 primarily due to a reduction in activity with the sale of the properties in Washington County, Oklahoma which the Company had operated. Legal and professional fees declined in 2011 from the amount in 2010. During 2010, the legal fees included other administrative services that were being provided by the attorney. In 2011 the fees relate to the development of the warrants and employment of the new CEO and CFO. Rent was added in 2011 when the Company opened its new office in New Orleans (approximately 4 1/2 months).

Other income (expense) consisted of the following for the years ended April 30, 2011 and 2010.

	2011			2010

Interest income - stockholder	$	-		$	900
Interest expense - stockholders		(37,057	)		(49,618	)
	$	(37,057	)	$	(48,718	)

The Company incurred interest expense in 2011 and 2010 with shareholders. In December the full balance of convertible notes was converted into common stock. A new note in the amount of $38,678 was added in January 2011. The reduction in interest expense is due to the reduction in notes payable from $510,476 at April 30, 2010 to $38,678 at April 30, 2011.

GOING CONCERN FACTORS—LIQUIDITY

The accompanying financial statements are prepared assuming the company will continue as a going concern. As of April 30, 2011, the Company’s current liabilities exceed its current assets by $115,572 and its total liabilities exceed its total assets by $113,266. The company has also incurred net losses since its inception. These factors, among others, raise substantial doubt as to the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company expects to attempt to raise capital with private placements of common or preferred stock and borrow funds as necessary to implement its business plan.

NEW ACCOUNTING STANDARDS

There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s financial position or operating results. See Note 1 to the financial statements.

CRITICAL ACCOUNTING POLICIES

Our discussion of financial condition and results of operations is based upon the information reported in our financial statements. The preparation of these statements requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses as well as the disclosure of contingent assets and liabilities at the date of our financial statements. We base our assumptions and estimates on historical experience and other sources that we believe to be reasonable at the time. Actual results may vary from our estimates due to changes in circumstances, weather, politics, global economics, mechanical problems, general business conditions and other factors. Our significant accounting policies are detailed in Note 1 to our financial statements included in this Annual Report. We have outlined below certain of these policies as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by our management.

REVENUE RECOGNITION – We have derived our revenue primarily from the sale of produced crude oil and natural gas. Revenue is recorded in the month the product is delivered to the purchaser. We receive payment from one to three months after delivery. At the end of each month, we estimate the amount of production delivered to purchasers and the price we will receive. Variances between our estimated revenue and actual payment are recorded in the month the payment is received; however, the differences should be insignificant.

FULL COST METHOD OF ACCOUNTING – We account for our oil and natural gas operations using the full cost method of accounting. Under this method, all costs associated with property acquisition, exploration and development of oil and gas reserves are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and cost of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs. All of our properties are currently located within the continental United States.

OIL AND NATURAL GAS RESERVE QUANTITIES – Reserve quantities and the related estimates of future net cash flows affect our periodic calculations of depletion and impairment of our oil and natural gas properties. Proved oil and natural gas reserves are the estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions. Reserve quantities and future cash flows included in this Annual Report are prepared in accordance with guidelines established by the SEC and FASB. The accuracy of our reserve estimates is a function of:

● The quality and quantity of available data;

● The interpretation of that data;

● The accuracy of various mandated economic assumptions; and

● The judgments of the person preparing the estimates.

Our proved reserve information included in this Annual Report is based on estimates prepared by an independent petroleum consultant, Christopher Energy. Because these estimates depend on many assumptions, all of which may differ substantially from actual results, reserve estimates may be different from the quantities of oil and natural gas that are ultimately recovered. We will make changes to depletion rates and impairment calculations in the same period that changes in reserve estimates are made.

All capitalized costs of oil and gas properties, including estimated future costs to develop proved reserves and estimated future costs of site restoration, are amortized on the unit-of-production method using our estimate of proved reserves. Investments in unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined.

IMPAIRMENT OF OIL AND NATURAL GAS PROPERTIES – We review the value of our oil and natural gas properties whenever management judges that events and circumstances indicate that the recorded carrying value of properties may not be recoverable. We provide for impairments on undeveloped property when we determine that the property will not be developed or a permanent impairment in value has occurred. Under the full cost method the net book value of oil and natural gas properties, less related deferred income taxes, may not exceed the estimated after-tax future net revenues from proved oil and natural gas properties, discounted at 10% (the “Ceiling Limitation”). In arriving at estimated future net revenues, estimated lease operating expenses, development costs, and certain production-related taxes are deducted. In calculating future net revenues, prices and costs in effect at the time of the calculation are held constant indefinitely, except for changes that are fixed and determinable by existing contracts. The net book value is compared to the ceiling limitation on a quarterly and yearly basis. The excess, if any, of the net book value above the ceiling limitation is charged to expense in the period in which it occurs and is not subsequently reinstated.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any material off-balance sheet arrangements.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

None.

ITEM 7A:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of North American Energy Resources, Inc. and Subsidiary together with the report thereon of Paritz & Company, P.A. for the years ended April 30, 2011 and 2010 and the period from inception (August 18, 2006) through April 30, 2011, is set forth as follows:

INDEX TO FINANCIAL STATEMENTS

	Page

Report of Independent Registered Public Accounting Firm:
Paritz & Company, P. A.	25
Consolidated Balance Sheet	26
Consolidated Statements of Operations	27
Consolidated Statements of Stockholders’ Deficit	28
Consolidated Statements of Cash Flows	32
Notes to Consolidated Financial Statements	34

Paritz & Company, P.A.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

North American Energy Resources, Inc. and Subsidiary

(A Development Stage Company)

We have audited the accompanying consolidated balance sheets of North American Energy Resources, Inc. and Subsidiary (A Development Stage Company) as of April 30, 2011 and 2010, and the related consolidated statements of operations, stockholders’ deficit and cash flows for the years ended April 30, 2011 and 2010 and from inception (August 18, 2006) through April 30, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conduct our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of North American Energy Resources, Inc., and subsidiary (A Development Stage Company) as of April 30, 2011 and 2010, and the consolidated results of its operations and its cash flows for the years then ended and for the period from inception (August 18, 2006 to April 30, 2011, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements are prepared assuming the company will continue as a going concern. As discussed in note 8, as of April 30, 2011, the Company’s current liabilities exceed its current assets by $115,572 and its total liabilities exceed its total assets by $113,266. The company has also incurred net losses since its inception. These factors, among others, raise substantial doubt as to the Company’s ability to continue as a going concern. Managements’ plans concerning these matters are also described in note 8. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Paritz & Company, P.A.

Paritz & Company, P.A.

Hackensack, New Jersey

June 13, 2011

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Balance Sheets

April 30, 2011 and 2010

	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	716		$	3,026
Accounts receivable		-			13,150
Prepaid expenses		8,664			250,733
Total current assets		9,380			266,909
Properties and equipment, at cost:
Proved oil and natural gas properties and equipment using full cost accounting		2,358			68,424
		2,358			68,424
Accumulated depreciation and amortization		(52	)		(16,174	)
Total properties and equipment		2,306			52,250
Other assets		-			5,000
Deposits		-			864
Total assets	$	11,686		$	325,023
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable
Trade	$	30,860		$	13,554
Related parties		54,187			-
Oil and gas proceeds due others		368			4,990
Advances received from joint interest participants		-			33,056
Accrued expenses		859			49,618
Convertible notes payable		38,678			510,476
Total current liabilities		124,952			611,694
Commitments and contingencies
Stockholders' deficit:
Preferred stock: $0.001 par value; 100,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock: $0.001 par value; 100,000,000 shares authorized; 21,554,945 and 17,375,539 shares issued and outstanding at April 30, 2010 and 2009, respectively		21,555			17,376
Additional paid in capital		2,838,197			2,219,708
Prepaid officer compensation		-			(12,129	)
Other comprehensive loss		-			(1,000	)
Deficit accumulated during the exploration stage		(2,973,018	)		(2,510,626	)
Total stockholders' deficit		(113,266	)		(286,671	)
Total liabilities and stockholders' deficit	$	11,686		$	325,023
See accompanying notes to consolidated financial statements

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Operations

For the years ended April 30, 2011 and April 30, 2010 and the period from inception (August 18, 2006) through April 30, 2011

							Inception
							(August 18, 2006)
							through
							April 30,
	2011			2010			2011
Oil and natural gas sales	$	4,879		$	14,343		$	43,894
Pipeline fees		-			-			2,450
Total revenues		4,879			14,343			46,344
Costs and expenses
Oil and natural gas production taxes		349			1,033			3,159
Oil and natural gas production expenses		8,814			22,580			107,117
Depreciation and amortization		1,530			6,943			16,116
Non-cash compensation		266,754			759,279			1,414,291
Asset impairment		46,894			445,980			910,714
General and administrative expense, net of operator's overhead fees		105,873			112,784			480,700
		430,214			1,348,599			2,932,097
Loss from operations		(425,335	)		(1,334,256	)		(2,885,753	)
Other income (expense):
Other income		-			-			320
Interest income - stockholder		-			900			900
Interest expense - stockholder		(37,057	)		(49,618	)		(88,485	)
Total other income (expense)		(37,057	)		(48,718	)		(87,265	)
Net loss		(462,392	)		(1,382,974	)		(2,973,018	)
Other comprehensive loss
Unrealized loss on available-for-sale securities		1,000			(1,000	)		-
Net comprehensive loss	$	(461,392	)	$	(1,383,974	)	$	(2,973,018	)

Net loss per common share, basic and diluted	$	(0.02	)	$	(0.09	)

Weighted average common shares outstanding		19,063,503			15,850,041

See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Stockholders' Deficit

For the period from inception (August 18, 2006) through April 30, 2011

									Intrinsic
						Additional			Value of
		Common stock				Paid in			Common
	Date	Shares		Amount		Capital			Stock Options

BALANCE August 18, 2006			-	$	-	$	-		$	-
Common stock issued for net assets	09/01/06		11,264,485		11,265		88,735			-
Common stock issued for cash	09/07/06		1,126,448		1,126		8,874			-
Common stock issued for cash	09/11/06		1,126,448		1,126		8,874			-
Net loss			-		-					-
BALANCE April 30, 2007			13,517,381		13,517		106,483			-
Net loss			-		-					-
BALANCE April 30, 2008			13,517,381		13,517		106,483			-
Acquisition of North American Energy
Resources, Inc.	07/28/08		177,000		177		119,653			-
Conversion of note payable and accrued
interest for common stock	07/31/08		153,000		153		35,377			-
Common stock options granted for:
350,000 shares at $1.00 per share	08/01/08		-		-		178,000			(178,000	)
50,000 shares at $1.25 per share	08/01/08		-		-		27,096			(27,096	)
Exercise common stock options:
for $1.25 per share	09/22/08		100		-		6,250			-
for $1.00 per share	09/22/08		1,000		1		49,999			-
for $1.25 per share	10/13/08		100		-		6,250			-
for $1.00 per share	10/13/08		70		-		3,500			-
Accounts payable paid with common stock	10/14/08		90		-		9,016			-
Amortize intrinsic value of options	10/31/08		-		-		-			17,091
Cancel common stock options	11/05/08		-		-		(188,005	)		188,005
Common stock issued for compensation	11/07/08		100		-		6,250			-
Common stock issued for accounts payable	11/07/08		60		-		3,000			-
Common stock issued for consulting servic	11/12/08		3,000		3		310,497			-
Common stock issued for accounts payable	11/17/08		400		1		24,999			-
Capital contribution by shareholder in cash	11/30/08		-		-		50,000			-
Common stock issued for:
Compensation	12/09/08		338		-		5,000			-
Accounts payable	12/09/08		300		-		1,200			-
Accounts payable	12/09/08		400		-		6,000			-
Compensation	01/05/09		500		1		4,999			-
Accounts payable	01/05/09		800		1		3,199			-
Accounts payable	01/05/09		400		1		3,999			-
Accounts payable	01/19/09		4,000		4		14,996			-
Compensation	01/26/09		1,500		2		4,998			-
Accounts payable	02/24/09		6,000		6		9,761			-
Compensation	02/24/09		1,000		1		1,999			-
Compensation	03/04/09		4,000		4		4,996			-
Compensation	04/06/09		4,000		4		5,996			-
Officer compensation	04/21/09		160,000		160		145,440			-
Net loss			-		-					-
BALANCE April 30, 2009			14,035,539	$	14,036		960,948			-
										(Continued)

See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Stockholders' Deficit, continued

For the period from inception (August 18, 2006) through April 30, 2011

						Deficit
				Accumulated		Accumulated
	Prepaid			Other		During the
	Officer			Comprehensive		Development
	Compensation			Loss		Stage			Total

BALANCE August 18, 2006	$	-		$	-	$	-		$	-
Common stock issued for net assets		-			-		-			100,000
Common stock issued for cash		-			-		-			10,000
Common stock issued for cash		-			-		-			10,000
Net loss		-			-		(5,379	)		(5,379	)
BALANCE April 30, 2007		-			-		(5,379	)		114,621
Net loss		-			-		(24,805	)		(24,805	)
BALANCE April 30, 2008		-			-		(30,184	)		89,816
Acquisition of North American Energy
Resources, Inc.		-			-		-			119,830
Conversion of note payable and accrued interest for common stock		-			-		-			35,530
Common stock options granted for:
350,000 shares at $1.00 per share		-			-		-			-
50,000 shares at $1.25 per share		-			-		-			-
Exercise common stock options:
for $1.25 per share		-			-		-			6,250
for $1.00 per share		-			-		-			50,000
for $1.25 per share		-			-		-			6,250
for $1.00 per share		-			-		-			3,500
Accounts payable paid with common stock		-			-		-			9,016
Amortize intrinsic value of options		-			-		-			17,091
Cancel common stock options		-			-		-			-
Common stock issued for compensation		-			-		-			6,250
Common stock issued for accounts payable		-			-		-			3,000
Common stock issued for consulting servic		-			-		-			310,500
Common stock issued for accounts payable		-			-		-			25,000
Capital contribution by shareholder in cash		-			-		-			50,000
Common stock issued for:
Compensation		-			-		-			5,000
Accounts payable		-			-		-			1,200
Accounts payable		-			-		-			6,000
Compensation		-			-		-			5,000
Accounts payable		-			-		-			3,200
Accounts payable		-			-		-			4,000
Accounts payable		-			-		-			15,000
Compensation		-			-		-			5,000
Accounts payable		-			-		-			9,767
Compensation		-			-		-			2,000
Compensation		-			-		-			5,000
Compensation		-			-		-			6,000
Officer compensation		(84,933	)		-		-			60,667
Net loss		-			-		(1,097,468	)		(1,097,468	)
BALANCE April 30, 2009		(84,933	)		-		(1,127,652	)	$	(237,601	)
										(Continued)

See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Stockholders' Deficit, continued

For the period from inception (August 18, 2006) through April 30, 2011

								Intrinsic
						Additional		Value of
		Common stock				Paid in		Common
	Date	Shares		Amount		Capital		Stock Options

BALANCE April 30, 2009			14,035,539	$	14,036	$	960,948	$	-
Common stock issued for:
consulting agreement	05/01/09		400,000		400		419,600		-
consulting agreement	05/01/09		200,000		200		209,800		-
oil and gas non-producing property	06/09/09		700,000		700		125,300		-
accounts payable	07/27/09		10,000		10		4,990		-
consulting agreement	07/27/09		30,000		30		14,970		-
consulting agreement	07/27/09		30,000		30		14,970		-
oil and gas producing property	09/25/09		350,000		350		192,150		-
consulting contract	09/25/09		300,000		300		182,700		-
cash	02/23/10		200,000		200		5,800		-
consulting agreement	02/24/10		400,000		400		31,600		-
consulting agreement - director fees	02/24/10		450,000		450		35,550		-
consulting agreement - director fees	02/24/10		150,000		150		11,850		-
officer compensation - director fees	02/24/10		120,000		120		9,480		-
Other comprehensive loss on available-for-sale securities			-		-		-		-
Amortize officer compensation			-		-		-		-
Net loss			-		-		-		-
BALANCE April 30, 2010			17,375,539		17,376		2,219,708		-
Recission of available-for-sale securities transaction			-		-		-		-
Amortize officer compensation			-		-		-		-
Convertible note payable forgiven by related party	12/03/10		-		-		57,920		-
Common stock issued for:
Consulting agreement	12/02/10		850,000		850		7,650		-
Conversion of convertible notes payable	12/05/10		3,329,406		3,329		552,919		-
Net loss			-		-		-		-
BALANCE April 30, 2011			21,554,945	$	21,555	$	2,838,197	$	-
									(Continued)

See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Stockholders' Deficit, continued

For the period from inception (August 18, 2006) through April 30, 2011

							Deficit
				Accumulated			Accumulated
	Prepaid			Other			During the
	Officer			Comprehensive			Development
	Compensation			Loss			Stage			Total

BALANCE April 30, 2009	$	(84,933	)	$	-		$	(1,127,652	)	$	(237,601	)
Common stock issued for:
consulting agreement		-			-			-			420,000
consulting agreement		-			-			-			210,000
oil and gas non-producing property		-			-			-			126,000
accounts payable		-			-			-			5,000
consulting agreement		-			-			-			15,000
consulting agreement		-			-			-			15,000
oil and gas producing property		-			-			-			192,500
consulting contract		-			-			-			183,000
cash		-			-			-			6,000
consulting agreement		-			-			-			32,000
consulting agreement - director fees		-			-			-			36,000
consulting agreement - director fees		-			-			-			12,000
officer compensation - director fees		-			-			-			9,600
Other comprehensive loss on available-for-sale securities		-			(1,000	)		-			(1,000	)
Amortize officer compensation		72,804			-			-			72,804
Net loss		-			-			(1,382,974	)		(1,382,974	)
BALANCE April 30, 2010		(12,129	)		(1,000	)		(2,510,626	)		(286,671	)
Recission of available-for-sale securities transaction		-			1,000			-			1,000
Amortize officer compensation		12,129			-			-			12,129
Convertible note payable forgiven by related party		-			-			-			57,920
Common stock issued for:
Consulting agreement		-			-			-			8,500
Conversion of convertible notes payable		-			-			-			556,248
Net loss		-			-			(462,392	)		(462,392	)
BALANCE April 30, 2011	$	-		$	-		$	(2,973,018	)	$	(113,266	)

See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Cash Flows

For the years ended April 30, 2011 and April 30, 2010 and the period from inception (August 18, 2006) through April 30, 2011

							Inception
							(August 18, 2006)
							through
							April 30,
	2011			2010			2011
Operating activities
Net loss	$	(462,392	)	$	(1,382,974	)	$	(2,973,018	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		1,530			6,943			16,116
Non-cash compensation		266,754			759,279			1,414,291
Asset impairment		46,894			445,980			910,714
Bad debt expense		12,828			15,415			104,243
Accounts receivable		321			(38,236	)		(96,057	)
Accrued interest income - stockholder		-			(900	)		(900	)
Prepaid expenses and other assets		9,040			(5,472	)		3,568
Accounts payable		24,693			125,115			298,747
Accrued expenses		37,076			49,618			86,974
Related party advances for working capital		54,187			-			36,194
Oil and gas proceeds due others		(4,622	)		4,034			368
Advances from joint interest owners		(1,226	)		(29,747	)		(9,643	)
Net cash used in operating activities		(14,917	)		(50,945	)		(208,403	)
Investing activities
Payments for oil and natural gas properties and equipment		(4,893	)		(95	)		(166,311	)
Cash received in excess of cash paid to acquire
North American Energy Resources, Inc.		-			-			119,830
Proceeds from sale of oil and natural gas properties		-			-			7,500
Payments for pipeline		-			-			(7,500	)
Net cash used in investing activities		(4,893	)		(95	)		(46,481	)
Financing activities
Loan proceeds		-			-			48,750
Loans from shareholders		17,500			20,100			130,850
Cash contributions from shareholders		-			-			50,000
Sale of common stock		-			6,000			26,000
Net cash provided by financing activities		17,500			26,100			255,600
Net increase (decrease) in cash and cash equivalents		(2,310	)		(24,940	)		716
Cash and cash equivalents, beginning of period		3,026			27,966			-
Cash and cash equivalents, end of period	$	716		$	3,026		$	716
								(Continued)


See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(Development Stage Companies)

Consolidated Statements of Cash Flows, Continued

For the years ended April 30, 2011 and April 30, 2010 and the period from inception (August 18, 2006) through April 30, 2011

					Inception
					(August 18, 2006)
					through
					April 30,
	2011		2010		2011

Supplemental cash flow information
Cash paid for interest and income taxes:
Interest	$	-	$	-	$	437
Income taxes		-		-		-
Non-cash investing and financing activities:
Common stock issued for:
Notes receivable	$	-	$	-	$	76,000
Oil and gas properties		-		-		303,670
Interest in pipeline		-		-		100,000
Loans to shareholders assumed		-		-		(371,000	)
Advance from joint interest participant assumed		-		-		(8,670	)
					$	100,000
Common stock issued for convertible note payable and accrued interest		556,248		-		591,778
Exchange of joint interest receivable for oil and natural gas properties		-		15,752		53,068
Common stock options granted		-		-		205,096
Common stock options cancelled		-		-		188,005
Common stock issued for consulting agreements		8,500		902,600		911,100
Unevaluated oil and gas properties		-		126,000		126,000
Proven oil and natural gas properties		-		192,500		192,500
Accounts payable		-		5,000		106,183
Chief executive officer compensation		-		9,600		155,200
Credit balance transferred from accounts receivable to accounts payable		-		1,068		1,068
Accounts receivable applied as payment on note payable to related party		-		4,572		4,572
Option exercises paid by reducing note payable to related party		-		-		75,250
Advance from shareholder converted to note		-		2,000		2,000
Accounts payable converted to convertible note payalbe		38,678		-		38,678

See accompanying notes to consolidated financial statements.

NORTH AMERICAN ENERGY RESOURCES, INC. AND SUBSIDIARY

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

NOTE 1:

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

The consolidated financial statements include the accounts of North American Energy Resources ("NAEY") and its wholly owned subsidiary North American Exploration, Inc. (“NAE”) (collectively the "Company").

NAEY was originally organized in Nevada on August 22, 2006 with the name Mar Ked Mineral Exploration, Inc. ("Mar Ked"). The Company changed its name from Mar Ked to North American Energy Resources, Inc. on August 11, 2008.

On July 28, 2008, the Company acquired 100% of the outstanding stock of NAE for 420,000 shares of our common stock pursuant to a Stock Purchase Agreement ("SPA"). Completion of the SPA resulted in the shareholders of NAE having control of NAEY. Accordingly, the transaction was recorded for accounting purposes as the acquisition of NAE by NAEY with NAE as the acquirer (reverse acquisition). The financial statements of the Company prior to July 28, 2008 are those of NAE. Formerly NAEY used a November 30 year-end. As a result of the reverse acquisition, the Company will utilize the April 30 year-end of NAE after April 30, 2008.

The SPA provided that NAEY was to have $1,500,000 in cash and no liabilities at closing. At closing, NAEY had $150,000 of the required cash and on August 28, 2008, the parties to the SPA entered into a Modification Agreement ("MA") which provided an extension until January 27, 2009 for the additional cash to be contributed to the Company. At January 27, 2009, the Company had received an additional $50,000 and was still short $1,300,000 of the amount agreed. The MA provided that the Buyer would make contingent issuances of shares to the Seller equal to 95% of all the outstanding stock after issuance. Accordingly, effective April 30, 2009, an additional 13,250,381 shares were issued to the Sellers. The total purchase price for NAE was 13,690,381 shares of common stock.

NAE was organized in Nevada on August 18, 2006 as Signature Energy, Inc. and changed its name to North American Exploration, Inc. on June 2, 2008.

Business

Development stage

Cash and cash equivalents

The Company considers all cash on hand; cash in banks and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents. At times cash and cash equivalent balances at a limited number of banks and financial institutions may exceed insurable amounts. The Company believes it mitigates its risks by depositing cash or investing in cash equivalents in major financial institutions.

Revenue recognition

We derive our revenue primarily from the sale of produced crude oil and natural gas. Revenue is recorded in the month the product is delivered to the purchaser. We receive payment from one to three months after delivery. At the end of each month, we estimate the amount of production delivered to purchasers and the price we will receive. Variances between our estimated revenue and actual payment are recorded in the month the payment is received; however, the differences should be insignificant.

Property and equipment

The Company follows the full cost method of accounting for oil and natural gas operations. Under this method all productive and nonproductive costs incurred in connection with the acquisition, exploration and development of oil and natural gas reserves are capitalized. No gains or losses are recognized upon the sale or other disposition of oil and natural gas properties except in transactions that would significantly alter the relationship between capitalized costs and proved reserves. The costs of unevaluated oil and natural gas properties are excluded from the amortizable base until the time that either proven reserves are found or it has determined that such properties are impaired. The Company had no capitalized costs related to unevaluated properties at April 30, 2011 and 2010. As properties are evaluated, the related costs would be transferred to proven oil and natural gas properties using full cost accounting. All capitalized costs were included in the amortization base as of April 30, 2011 and 2010.

Under the full cost method the net book value of oil and natural gas properties, less related deferred income taxes, may not exceed the estimated after-tax future net revenues from proved oil and natural gas properties, discounted at 10% (the “Ceiling Limitation”). In arriving at estimated future net revenues, estimated lease operating expenses, development costs, and certain production-related taxes are deducted. In calculating future net revenues, revenues are based on the arithmetic average of beginning of month prices for both years. Costs in effect at the time of the calculation for both years are held constant indefinitely, except for changes that are fixed and determinable by existing contracts. The net book value is compared to the ceiling limitation on a quarterly and yearly basis. The excess, if any, of the net book value above the ceiling limitation is charged to expense in the period in which it occurs and is not subsequently reinstated. Reserve estimates used in determining estimated future net revenues have been prepared by an independent engineer. The Company recorded an impairment of $46,894 and $313,317 in 2011 and 2010, respectively.

Other property and equipment consists principally of the Company’s interest in a pipeline. Other property and equipment and related accumulated amortization and depreciation are relieved upon retirement or sale and the gain or loss is included in operations. Renewals and replacements that extend the useful life of property and equipment are treated as capital additions. The pipeline was written off at the end of 2010 and an asset impairment charge of $132,663 was recorded.

The Company assesses the recoverability of the carrying value of its non-oil and gas long-lived assets when events occur that indicate an impairment in value may exist. An impairment loss is indicated if the sum of the expected undiscounted future net cash flows is less than the carrying amount of the assets. If this occurs, an impairment loss is recognized for the amount by which the carrying amount of the assets exceeds the estimated fair value of the asset.

Depreciation and amortization

All capitalized costs of oil and natural gas properties and equipment, including the estimated future costs to develop proved reserves, are amortized using the unit-of-production method based on total proved reserves. Depreciation of other equipment is computed on the straight-line method over the estimated useful lives of the assets, which range from three to twenty-five years.

Natural gas sales and gas imbalances

The Company follows the entitlement method of accounting for natural gas sales, recognizing as revenues only its net interest share of all production sold. Any amount attributable to the sale of production in excess of or less than the Company’s net interest is recorded as a gas balancing asset or liability. At April 30, 2011 and 2010, there were no natural gas imbalances.

Credit and market risk

The Company sells oil and natural gas to one customer and participates with other parties in the drilling, completion and operation of oil and natural gas wells. Joint interest and oil and natural gas sales receivables related to these operations are generally unsecured. The Company provides an allowance for doubtful accounts for certain joint interest owners’ receivable balances when the Company believes the recoverable balance may not be collected. The Company has the right of offset of the joint interest owners’ share of oil and natural gas production against amounts owed by the joint interest owners. Accounts receivable are presented net of the related allowance for doubtful accounts.

In 2011 and 2010, the Company had cash deposits in certain banks that at times may have exceeded the maximum insured by the Federal Deposit Insurance Corporation. The Company monitors the financial condition of the banks and has experienced no losses on these accounts.

General and administrative expense

The Company receives fees for the operation of jointly owned oil and natural gas properties and records such reimbursements as reductions of general and administrative expense. Such fees totaled approximately $3,000 and $7,200 in 2011 and 2010, respectively.

Oil and natural gas reserve estimates

The Company engaged an independent consultant to prepare its oil and natural gas reserves. Proved reserves, estimated future net revenues and the present value of our reserves are estimated based upon a combination of historical data and estimates of future activity. Consistent with SEC requirements, we have based our revenue projections on the arithmetic average of beginning of the month historical prices in 2011 and 2010. The reserve estimates are used in calculating depletion, depreciation and amortization and in the assessment of the Company’s Ceiling Limitation. Significant assumptions are required in the valuation of proved oil and natural gas reserves which, as described herein, may affect the amount at which oil and natural gas properties are recorded. Actual results could differ materially from these estimates.

Income taxes

Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes. Deferred taxes are provided on differences between the tax bases of assets and liabilities and their reported amounts in the financial statements, and tax carry forwards. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

At April 30, 2011 and 2010, the Company had no accrued interest or penalties relating to any tax obligations. The Company currently has no federal or state examination in progress, nor has it had any federal or state examinations since its inception. The last three years of the Company's tax years are subject to federal and state tax examination.

Earnings (loss) per common share

The Company is required to report both basic earnings per share, which is based on the weighted-average number of common shares outstanding, and diluted earnings per share, which is based on the weighted-average number of common shares outstanding plus all potential dilutive shares outstanding. At April 30, 2011 and 2010, there were no potentially dilutive common stock equivalents. Accordingly, basic and diluted earnings (loss) per share are the same for each of the periods presented.

Estimates

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

Fair value of financial instruments

Financial instruments consist of accounts payable, accrued expenses and short-term borrowings. The carrying amount of these financial instruments approximates fair value due to their short-term nature or the current rates at which the Company could borrow funds with similar remaining maturities.

Stock option plans

The compensation cost relating to share-based payment transactions (including the cost of all employee stock options) is required to be recognized in the financial statements. That cost will be measured based on the estimated fair value of the equity or liability instruments issued. The accounting literature covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company's options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models may not necessarily provide a reliable single measure of the fair value of its options. However, the Black-Scholes option valuation model provides the best available estimate for this purpose.

Contingencies

Certain conditions may exist as of the date financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. Company management and its legal counsel assess such contingencies related to legal proceeding that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or if probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.

Asset retirement obligations

The fair value of a liability for an asset retirement obligation is required to be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made, and that the associated retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Company determines its asset retirement obligation by calculating the present value of the estimated cash flows related to the liability. Periodic accretion of the discount of the estimated liability would be recorded in the statement of operations. At April 30, 2011 the Company has estimated that its share of the cost of plugging and abandoning its producing properties was $367.

Recent accounting pronouncements

There are several new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of May 31, 2011, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

NOTE 2:

ACCOUNTS AND NOTE RECEIVABLE

Accounts receivable at April 30, 2011 and 2010 include the following:

	2011			2010

Natural gas sales, net	$	-		$	4,279
Joint interest operations, net		-			18,871
Note receivable		5,000			-
Allowance for doubtful accounts		(5,000	)		(10,000	)
	$	-		$	13,150

The Company received a note for $5,000 when it sold its oil properties and gas leases in Washington County, Oklahoma in the fall of 2010. The Company has determined uncertainty about the collectability of the note exists and has fully reserved the note balance at April 30, 2011.

During the year ended April 30, 2010, the Company acquired interests in oil and gas properties in exchange for $15,752 of joint interest receivables.

During 2010, the Company established an allowance for doubtful accounts in the amount of $10,000 and wrote off the balance of a note receivable from a related party in the amount of $5,415.

NOTE 3: PREPAID EXPENSES

The Company has recorded prepaid expenses from the issue of its common stock for consulting services. The cost, based on the trading price of the stock at the time of the transaction, is amortized to expense over the term of the contracts. The other prepaid expense at April 30, 2011 represents the unamortized balance of D&O insurance. The unamortized balances at April 30, 2011 and 2010 are as follows.

	2011		2010
Current asset
Stockholder relations firm	$	-	$	168,000
Consulting firm assisting with listing common stock on the Frankfort Exchange		-		68,625
Administrative management		-		9,500
Other prepaid expense		8,664		4,608
	$	8,664	$	250,733
Component of stockholders' deficit
Chief executive officer compensation	$	-	$	12,129

NOTE 4: RELATED PARTY TRANSACTIONS

At April 30, 2011, the Company owes its CEO and CFO the following amounts for expense reimbursements and cash advances.

	2011		2010

Chief executive officer	$	50,769	$	-
Chief financial officer		3,418
	$	54,187	$	-

At April 30, 2009, the Company had advanced $19,993 to one shareholder consultant. During 2010, the Company accrued interest of $900, received a payment of $15,478 and recorded bad debt expense for the balance of $5,415.

In April 2009, the Company issued 160,000 shares of its common stock valued at $145,600 to its Chief Executive Officer for compensation for the period from August 1, 2008 through July 31, 2010. See Note 3. In February 2010, the Company issued an additional 120,000 shares of its common stock valued at $9,600 for director fees to its CEO, issued 450,000 shares of its common stock valued at $36,000 to a Director for director fees and consulting services and issued 150,000 shares of its common stock valued at $12,000 to a company controlled by a Director for director fees and management services.

The Company had notes payable to shareholders in the amount of $406,528 at April 30, 2010, as described in Note 5. These notes were converted to common stock in December 2010.

NOTE 5: CONVERTIBLE NOTES PAYABLE AND LONG-TERM DEBT

Convertible notes payable and long-term debt consists of the following at April 30, 2011 and 2010.

	2011		2010

Convertible note payable due January 6, 2012 with interest at 4 % per annum; convertible into the Company's comon stock at the rate of $0.10 per share	$	38,678	$	-
Convertible note payable due April 27, 2011 with interest at 12% per annum; convertible into the Company's common stock at the rate of $1.00 per share		-		13,500
Convertible note payable due March 1, 2011 with interest at 12% per annum; convertible into the Company's common stock at the rate of $0.10 per share		-		53,618
Convertible note payable due March 1, 2011 with interest at 12% per annum; convertible into the Company's common stock at the rate of $0.03 per share		-		36,830
Convertible notes payable to shareholders due April 30, 2011 with interest at 12% per annum; convertible into the Company's common stock at the rate of $0.04 per share		-		22,100
Convertible note payable to a shareholder due May 1, 2010 with interest at 12% per annum; convertible into the Company's common stock at the rate of $1.50 per share		-		384,428
Total		38,678		510,476
Long term debt, less current maturities		-		-
Current maturities of long-term debt	$	38,678	$	510,476

The note with a principal balance of $53,618 together with accrued interest was forgiven and the total amount of $57,920 was contributed to capital. All other notes at April 30, 2010 in the amount of $456,858 plus a new note in the amount of $17,500 were converted into common stock in December 2010. The note at April 30, 2011 consists of accounts payable to a consultant that was converted into the convertible note described above.

NOTE 6: STOCKHOLDER’S EQUITY

PREFERRED STOCK

The Company has 100,000,000 shares of $0.001 par value preferred stock authorized and no shares issued or outstanding at April 30, 2011 and 2010.

COMMON STOCK

The Company has 100,000,000 shares of its $0.001 par value common stock authorized. At April 30, 2011 and 2010 the Company had 21,554,945 and 17,375,539 shares issued and outstanding, respectively.

WARRANTS

b) The Executive Team is granted three Warrant Certificates as follows:

Certificate #1 for 10,000,000 warrants with a strike price of $0.025 per share must be exercised within one year of the date Executive Team begins collecting salaries from the Company,

Certificate #2 for 10,000,000 warrants with a strike price of $0.04 per share and a Term of 5 years from the vesting date, and

Certificate #3 for 10,000,000 warrants with a strike price of $0.055 per share and a Term of 5 years from the vesting date.

c) Other warrant terms are as follows:

Certificate #1 vests immediately, Certificate #2 shall vest upon execution of Certificate #1 and Certificate #3 shall vest upon execution of Certificate #1,

All Warrants may vest early if the Company has revenue of $12,500,000 total for two consecutive quarters and records a pre-tax net profit for the two quarters and other conditions including change in control, termination, etc.,

The Warrant Certificates may be allocated among the Executive Team as they so determine, and

The Warrants shall be registered in the first registration statement the Company files, subject to legal counsel approval.

REVERSE SPLIT

CONTINGENT SHARES

The SPA provided that NAEY was to have $1,500,000 in cash and no liabilities at closing. At July 28, 2008, the closing date, NAEY had $150,000 of the required cash and on August 28, 2008, the parties to the SPA entered into a Modification Agreement ("MA") which provided an extension until January 27, 2009 for the additional cash to be contributed to the Company. At January 27, 2009, the Company had received an additional $50,000 and was still short $1,300,000 of the agreed amount. The MA provided that the Buyer would make contingent issuances of shares to the Seller equal to 95% of all the outstanding stock after issuance. Accordingly, effective April 30, 2009, an additional 13,250,381 shares were issued to the Sellers. The total purchase price of NAE was 13,670,381 shares.

COMMON STOCK OPTIONS

The North American Energy Resources, Inc. 2008 Stock Option Plan ("Plan") was filed on September 11, 2008 and reserved 2,500,000 shares for awards under the Plan. The Company's Board of Directors is designated to administer the Plan and may form a Compensation Committee for this purpose. The Plan terminates on July 23, 2013.

Options granted under the Plan may be either "incentive stock options" intended to qualify as such under the Internal Revenue Code, or "non-qualified stock options." Options outstanding under the Plan have a maximum term of up to ten years, as designated in the option agreements.

At April 30, 2011, there are 1,242,333 shares available for grant. There was no activity in options during 2010 or 2011.

NOTE 7: INCOME TAXES

The Company has not provided a deferred tax benefit or expense for the years ended April 30, 2011 and 2010, as all net deferred tax assets have a full valuation allowance.

Actual income tax benefit applicable to net loss before income taxes is reconciled with the “normally expected” federal income tax as follows:

	2011			2010

"Normally expected" income tax benefit	$	(157,200	)	$	(470,200	)
State income taxes net of federal income tax benefit		(18,500	)		(55,300	)
Other		100			-
Valuation allowance		175,600			525,500
Total	$	-		$	-

The Company’s income tax provision was computed based on the federal statutory rate and the average state rate, net of the related federal benefit. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	2011			2010

Net operating loss carryforward	$	920,000		$	623,400
Depreciable/depletable property, plant and equipment		50,400			169,500
Bad debts		1,900			3,800
Valuation allowance		(972,300	)		(796,700	)
Total	$	-		$	-

At April 30, 2011, the Company has a net operating loss carryforward in the amount of approximately $2,421,000, which expires between 2027 and 2031.

NOTE 8: GOING CONCERN

The Company expects to raise capital with private placements of common stock and borrow funds as necessary to implement its business plan.

NOTE 9:

ASSET IMPAIRMENTS

The Company recorded the following asset impairments during the years ended April 30, 2011 and 2010.

	2011		2010

Ceiling test limitation of oil and gas reserves	$	46,894	$	313,317
Impairment of interest in pipeline		-		132,663
	$	46,894	$	445,980

In 2011, the Company impaired the value of its producing oil properties by $46,894 when the properties were sold below book value. In 2010, the Company recorded an impairment of an interest in two oil wells that it had acquired for its common stock in the amount of $108,000. It was determined during 2010, as the result of two failed workover attempts that the unevaluated property costs should be fully impaired and $126,607 was transferred from unevaluated property costs to the full cost pool. The Company recorded an impairment of $205,317 at April 30, 2010 based on its estimate of reserves. In addition, as a result of the gas reserves continuing to be impaired, the Company wrote off its investment in a pipeline of $132,663 that was principally used to gather the gas production.

NOTE 10:

SUPPLEMENTARY OIL AND GAS RESERVE INFORMATION (UNAUDITED)

The Company has interest in a gas well in Texas County, Oklahoma at April 30, 2011 and an interest in oil and natural gas properties in Washington County, Oklahoma at April 30, 2010. The Washington County properties were all sold on October 1, 2010.

The Company engaged an independent consultant to prepare its own year-end estimates of future net recoverable oil and natural gas reserves. Estimated proved net recoverable reserves as shown below include only those quantities that can be expected to be commercially recoverable using the beginning of month average prices and costs in effect at the balance sheet dates existing under existing regulatory practices and with conventional equipment and operating methods.

Proved developed reserves represent only those reserves expected to be recovered through existing wells. Proved undeveloped reserves would include those reserves expected to be recovered from new wells on un-drilled acreage or from existing wells on which a relatively major expenditure is required for re-completion.

Capitalized costs relating to oil and natural gas producing activities and related accumulated depreciation and amortization at April 30, 2011 and 2010 are summarized as follows:

	2011		2010

Ceiling test limitation of oil and gas reserves	$	46,894	$	313,317
Impairment of interest in pipeline		-		132,663
	$	46,894	$	445,980

Costs incurred in oil and natural gas producing activities for the year ended April 30, 2011 and 2010 are summarized as follows:

	2011		2010

Acquisition of proved properties	$	2,000	$	207,645
Acquisition of non-producing properties		-		126,607
Development costs		2,893		95
	$	4,893	$	334,347

Amortization rate per equivalent BOE	$	1.04	$	23.22

Net quantities of proved and proved developed reserves of oil and natural gas are summarized as follows:

	Oil (BBLs)			Gas (MCF)

Balance, April 30, 2009		7,288			-
Extensions and discoveries		-			-
Acquisition of producing reserves		7,222			-
Revisions of estimates		(12,040	)		-
Production		(220	)		-
Balance, April 30, 2010		2,250			-
Extensions and discoveries		-			-
Acquisition of producing reserves		-			13,611
Sale of producing reserves		(2,186	)		-
Revisions of estimates		-			-
Production		(64	)		(291	)
Balance, April 30, 2011		-			13,320

The following is a summary of a standardized measure of discounted net cash flows related to the Company’s proved oil and natural gas reserves. For these calculations, estimated future cash flows from estimated future production of proved reserves were computed using the arithmetic average of beginning of month prices. Future development and production costs attributable to the proved reserves were estimated assuming that existing conditions would continue over the economic lives of the individual leases and costs were not escalated for the future. Estimated future income tax expenses were calculated by applying future statutory tax rates (based on the current tax law adjusted for permanent differences and tax credits) to the estimated future pretax net cash flows related to proved oil and natural gas reserves, less the tax basis of the properties involved.

The Company cautions against using this data to determine the fair value of its oil and natural gas properties. To obtain the best estimate of the fair value of the oil and natural gas properties, forecasts of future economic conditions, varying discount rates, and consideration of other than proved reserves would have to be incorporated into the calculation. In addition, there are significant uncertainties inherent in estimating quantities of proved reserves and in projection rates of production that impair the usefulness of the data.

The standardized measure of discounted future net cash flows relating to proved oil and natural gas reserves at April 30, 2011 and 2010 are summarized as follows:

	2011			2010

Future cash inflows	$	39,580		$	154,220
Future production costs		(28,840	)		(87,530	)
Future income tax expenses		-			-
Future net cash flows		10,740			66,690
10% annual discount for estimated timing of cash flows		(5,050	)		(14,440	)
Standardized measure of discounted future net cash flows	$	5,690		$	52,250

The following are the principal sources of changes in the standardized measure of discounted future net cash flows of the Company for the years ended April 30, 2011 and 2010:

	2011			2010
Standardized measure of discounted future net cash flows
at beginning of period	$	52,250		$	38,379
Changes during the period:
Sales of natural gas produced, net of production costs		4,284			9,270
Net changes in prices and production costs		6,247			48,325
Impairments		(46,984	)		(313,317	)
Unevaluated costs transferred to full cost pool		-			126,607
Development costs incurred and revisions		2,893			95
Purchase of reserves in place		2,000			207,645
Sale of properties		(15,000	)		-
Revision of previous quantity estimates		-			(64,754	)
Net change		(46,560	)		13,871
Standardized measure of discounted future net cash flows at end of period	$	5,690		$	52,250

Prices used in computing these calculations of future production of proved reserves were $2.97 per thousand cubic feet (MCF) of natural gas at April 30, 2011 and $68.47 per BBL of oil at April 30, 2010. The oil production was all sold on October 1, 2010.

ITEM 9:

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9AT: CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that are filed under the Exchange Act is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Under the supervision of and with the participation of management, including the principal executive officer and principal financial officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of April 30, 2011, and, based on its evaluation, our principal executive officer and principal financial officer have concluded that these controls and procedures are effective.

(b) Changes in Disclosure Controls and Internal Controls

There were no changes in our disclosure controls and internal control over financial reporting during the quarter ended April 30, 2011 that materially affected, or are reasonably likely to materially affect, our disclosure controls and our internal control over financial reporting.

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the SEC, internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting is supported by written policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Company’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations which may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2011. In making this assessment, management used the framework set forth in the report entitled “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of April 30, 2011.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permits us to provide only management’s report in this annual report.

ITEM 9B: OTHER INFORMATION

Pursuant to General Instruction B of Form 8-K, any reports previously or in the future submitted under Item 2.02 (Results of Operations and Financial Condition) are not deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 and the Company is not subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Securities Act or Exchange Act. If a report on Form 8-K contains disclosures under Item 2.02, whether or not the report contains disclosures regarding other items, all exhibits to such report relating to Item 2.02 will be deemed furnished, and not filed, unless the registrant specifies, under Item 9.01 (Financial Statements and Exhibits), which exhibits, or portions of exhibits, are intended to be deemed filed rather than furnished pursuant to this instruction. The Company is not incorporating, and will not incorporate, by reference these reports into a filing under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.

PART III

ITEM 10:

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officers and Directors

The following section sets forth the names, ages and current positions with the Company held by the Directors, Executive Officers and Significant Employees; together with the year such positions were assumed. We are not aware of any arrangement or understanding between any Director or Executive Officer and any other person pursuant to which he was elected to his current position. Each Executive Officer will serve until he or she resigns or is removed or otherwise disqualified to serve, or until his or her successor is elected and qualified.

Each Director will serve until he or she resigns or is removed or otherwise disqualified to serve or until his or her successor is elected. The Company currently has three Directors.

			DATE FIRST
NAME	AGE	POSITION	ELECTED/APPOINTED

Clinton W. Coldren	55	Chairman,	December 15, 2010
		Chief Executive Officer

Alan G. Massara	57	President,	December 15, 2010
		Chief Financial Officer

Michael D. Pruitt	50	Executive Vice President	December 29, 2009
		and Director

Clinton W. Coldren - Chairman and Chief Executive Officer - Mr. Coldren, brings 33+ years of oil and gas management, financial and operational experience to the Company. For most of these years he focused on domestic operating basins, specifically the Louisiana and Texas Gulf coast. He has held management positions with Gulf Oil/Chevron and CNG Producing. Mr. Coldren has had great success as a company builder - he founded Cenergy Corporation, an oil and gas consulting company, and was a founding member of Energy Partners, Ltd., which became a publicly traded company focused on the shallow-water region of the Gulf of Mexico. At Energy Partners, he held several senior positions, including Executive Vice President and Chief Operating Officer. Mr. Coldren then founded Coldren Oil & Gas Company LP, where he was Director, President and CEO for this Gulf of Mexico oil and gas company. Most recently he did a start-up, Bayou Bend Petroleum, a publicly traded exploration company where he was Director, President and CEO. These were all successful companies completing major acquisitions and transactions up to $500 Million in the Gulf region. In 1977 Mr. Coldren graduated from Lehigh University with a degree in Mechanical Engineering. He later received his MBA from the University of Pittsburgh in 1992.

Alan G. Massara - President, Chief Financial Officer and Director - Mr. Massara, has over 35 years of experience primarily in energy and investment banking. Alan has raised over $2.5 Billion in privately placed debt and equity and he has provided M&A, lending and advisory services to over 2 dozen companies ranging in size from $1 Million to over $1 Billion. Mr. Massara’s energy career began as a petroleum engineer in the Gulf of Mexico with Gulf Oil Corp. This initial exposure included reservoir engineering, drilling, workovers, platform and equipment design and strategic planning. Moving to the corporate headquarters of Texaco Inc. he managed many overseas exploration and production ventures. This included negotiating one of the first concessions with the Peoples Republic of China, and managing operations in Spain, the Netherlands, Egypt and Indonesia. During his oversight of Texaco’s Australian subsidiary its earnings grew from a loss to over $100 Million profit. Moving to Wall Street he became a VP in Citicorp’s Global Mergers and Acquisitions Group providing advisory services throughout the upstream energy and utility industries. Subsequently as an SVP for ING Barings, he expanded the energy group from mezzanine lending to merchant banking. Most recently he was CEO of Four Springs Energy LLC., and President of Natural Resources Advisors, Inc. In 1975 Mr. Massara graduated from Lehigh University with a degree in Civil Engineering. He later received his MBA in Finance and Strategic Planning from the Wharton Business School in 1979.

Michael D. Pruitt - Director - is a long-time entrepreneur with a proven track record, possesses the expertise to evaluate potential investments, form key relationships and recognize a strong management team. Mr. Pruitt founded Avenel Financial Group, a boutique financial services firm concentrating on emerging technology company investments. The business succeeded immediately, and in order to grow Avenel Financial Group to its full potential and better represent the company's ongoing business model, he formed Avenel Ventures, an innovative technology investment and business development company. In the late 1980s, Mr. Pruitt owned Southern Cartridge, Inc., which he eventually sold to MicroMagnetic, Inc., where he continued working as Executive Vice President and a Board member until Southern Cartridge was sold to Carolina Ribbon in 1992. From 1992 to 1996, Mr. Pruitt worked in a trucking firm where he was instrumental in increasing revenues from $6 million to $30 million. The firm was sold in 1996 to Priority Freight Systems. Between 1997 and 2000, Mr. Pruitt assisted several public and private companies in raising capital, recruiting management and preparing companies to go public or be sold. He was the CEO, President and Chairman of the Board of Onetravel Holdings, Inc. (formerly RCG Companies), a publicly traded holding company formerly listed on the AMEX. Mr. Pruitt received a Bachelor of Arts degree from Coastal Carolina University in Conway, South Carolina, where he sits on the Board of Visitors of the Wall School of Business. Mr. Pruitt is currently a director and Chief Executive Officer of Chanticleer Holdings, Inc. and Efftec International, Inc.

Audit Committee

The Board of Directors of the Company serves as the audit committee.

Compliance with Section 16(a) Of the Exchange Act

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s executive officers, directors and persons who own more than ten percent of the Company’s common stock to file initial reports of ownership and changes in ownership with the SEC. Additionally, SEC regulations require that the Company identify any individuals for whom one of the referenced reports was not filed on a timely basis during the most recent fiscal year or prior fiscal years. The Company is unaware of any late filings.

Code of Ethics

The Company has not yet adopted a code of ethics to apply to its principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions.

NOMINATING COMMITTEE

We do not currently have a standing nominating committee, or a committee performing similar functions. The full Board of Directors currently serves this function.

ITEM 11: EXECUTIVE COMPENSATION

The Compensation Committee of the Board of Directors deliberates executive compensation matters to the extent they are not delegated to the Chief Executive Officer.

a.	Summary Compensation Table

The following table shows the compensation of the Company’s Chief Executive Officer and each executive officer whose total cash compensation exceeded $100,000 for the three years ended April 30, 2011.

ANNUAL COMPENSATION


Name and Principal Position	Year		Salary		Awards		Total

Clinton W. Coldren (CEO since	2011	$	—	$	—	$	—
December 15, 2010)	2010		N/A		N/A		N/A
	2009		N/A		N/A		N/A

Ross E. Silvey (CEO from	2011	$	—	$	12,129	$	12,129
June 2008 until December	2010		—		82,404		82,404
2010)	2009		—		60,667		60,667

Alan G. Massara (CFO since	2011	$	—	$	—	$	—
December 15, 2010)	2010		N/A		N/A		N/A
	2009		N/A		N/A		N/A

Vladimir Fedyunin (CEO from	2011		N/A		N/A		N/A
April 2008 until June 2008)	2010		N/A		N/A		N/A
	2009		—		—		—

Narrative disclosure to summary compensation table

Required columns for bonus, option awards, non-entity incentive plan compensation, change in pension value and nonqualified deferred compensation earnings and all other compensation are omitted from the table above as the amounts are all zero. Compensation levels and amounts are determined by the Board of Directors based on amounts paid to executives in similar sized companies with similar responsibilities.

b) The Executive Team is granted three Warrant Certificates as follows:

Certificate #1 for 10,000,000 warrants with a strike price of $0.025 per share must be exercised within one year of the date Executive Team begins collecting salaries from the Company,

Certificate #2 for 10,000,000 warrants with a strike price of $0.04 per share and a Term of 5 years from the vesting date, and

Certificate #3 for 10,000,000 warrants with a strike price of $0.055 per share and a Term of 5 years from the vesting date.

c) Other warrant terms are as follows:

Certificate #1 vests immediately, Certificate #2 shall vest upon execution of Certificate #1 and Certificate #3 shall vest upon execution of Certificate #1,

The Warrant Certificates may be allocated among the Executive Team as they so determine, and

The Warrants shall be registered in the first registration statement the Company files, subject to legal counsel approval.

Mr. Silvey was granted 160,000 shares of our restricted common stock valued at $145,600 in exchange for his services for the period July 1, 2008 through June 30, 2010. The value of the amount earned in 2009 of $60,667 is included in the 2009 period above and the remaining $84,933 is included in prepaid expenses in the consolidated balance sheet at April 30, 2009. In 2010, Mr. Silvey's compensation included $72,804 from amortization of the stock issued in 2009 and $9,600 from the value of 120,000 shares issued in 2010 for director fees. In 2011, the balance of Mr. Silvey's compensation of $12,129 from amortization for the stock issued in 2009 was recorded.

EMPLOYMENT AGREEMENTS

The new Executive Team agreed to defer any salary during the initial six months of their employment. Appropriate employment agreements will be developed at that time. The Company intends to pay its Executives and Directors salaries, wages, or fees commensurate with experience and industry standards in relationship to the success of the company.

b.	Grants of plan-based awards table

There were no grants of plan-based awards during the year for the named individual.

c.	Outstanding equity awards at fiscal year-end table

There were no outstanding equity awards at fiscal year-end for the named individual.

d.	Option exercises and stock vested table

There were no option exercises during the year and no stock vested at fiscal year-end for the named individual.

e.	Pension benefits

There are no pension plans.

f.	Nonqualified defined contribution and other nonqualified deferred compensation plans

There are no nonqualified defined contribution or other nonqualified deferred compensation plans.

g.	Potential payments upon termination or changes-in-control

There are no potential payments upon termination or changes-in-control for the named individual.

h.	Compensation of directors

Dr. Silvey received $9,600 from the value of 120,000 shares issued in 2010 for director fees. Mr. Young received $36,000 from the value of 450,000 shares issued in 2010 for director fees and consulting fees and Mr. Pruitt's company received $12,000 from the value of 150,000 shares issued in 2010 for director fees and management services.

i.	Compensation committee interlocks and insider participation

The Board of Directors currently serves as the compensation committee.

j.	Compensation committee report

Based on the Compensation Discussion and Analysis required by Item 402(b) between the compensation committee and management, the compensation committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the 10-K.

ITEM 12:

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

(a)	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below lists the beneficial ownership of the Company’s voting securities by each person known to be the beneficial owner of more than 5% of such securities. As of April 30, 2011 and May 31, 2011, there were 21,554,945 shares of the Company’s common stock issued and outstanding. To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted. There are not any pending or anticipated arrangements that may cause a change in control.

The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. We believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.

The following information lists, as to each class, equity securities beneficially owned by all officers and directors, and of the directors and officers of the issuer, as a group as of April 30, 2011.

	Name and	Amount and
	address	nature of
	of beneficial	beneficial		Percent
Title of class	owner	owner		of class

Common	Clinton W. Coldren (1)		15,000,000		41.0	%
	228 Saint Charles Ave, Ste 724
	New Orleans, LA		70130
Common	Alan G. Massara (1)		15,000,000		41.0	%
	228 Saint Charles Ave, Ste 724
	New Orleans, LA 70130

Common	Michael D. Pruitt (2)		2,992,577		13.9	%
	11220 Elm Lane, Ste 203
	Charlotte, NC 28277

Common	All officers and directors		32,992,577		64.0	%
	as a group (3 persons)

(1) Mr. Coldren and Mr. Massara are parties to a warrant agreement described in Item 10 above. The total warrants in the plan of 30,000,000 are split equally between the two in the table above.

(2) The shares beneficially owned by Mr. Pruitt include 2,142,577 shares owned by Avenel Financial Group, Inc. which is wholly owned by Mr. Pruitt; 700,000 shares owned by Chanticleer Holdings, Inc. of which Mr. Pruitt is Chief Executive Officer, a director and 15% owner; and 150,000 shares owned by Avenel Ventures, LLC, which is wholly owned by Chanticleer Holdings, Inc.

Equity Compensation Plan Information

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column

Equity compensation plans approved by security holders		-			1,242,333

Equity compensation plans not approve by security holde		-			-

Total		-			1,242,333

The North American Energy Resources, Inc. 2008 Stock Option Plan (“Plan”) was filed on September 11, 2008 and reserved 2,500,000 shares for Awards under the Plan. The Company’s Compensation Committee is designated to administer the Plan at the direction of the Board of Directors. No options were granted during the two years ended April 30, 2011 and 2010.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

At April 30, 2011, the Company owes its CEO and CFO the following amounts for expense reimbursements and cash advances.

	2011		2010

Chief executive officer	$	50,769	$	-
Chief financial officer		3,418
	$	54,187	$	-

In April 2009, the Company issued 160,000 shares of its common stock valued at $145,600 to its Chief Executive Officer for compensation for the period from August 1, 2008 through July 31, 2010. See Note 3 of the consolidated financial statements. In February 2010, the Company issued an additional 120,000 shares of its common stock valued at $9,600 for director fees to its CEO, issued 450,000 shares of its common stock valued at $36,000 to a Director for director fees and consulting services and issued 150,000 shares of its common stock valued at $12,000 to a company controlled by a Director for director fees and management services.

The Company has notes payable to shareholders in the amount of $406,528 at April 30, 2010, as described in Note 5 of the consolidated financial statements. These notes were converted to common stock in December 2010.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees – The aggregate fees billed as of May 31, 2011 for professional services rendered by the Company’s accountant was approximately $13,930 and $9,250 for the audit of the Company’s annual financial statements and the quarterly reviews for the fiscal years ended April 30, 2011 and 2010. The costs for the audit of 2009 is included in the 2010 amount and the cost of the 2010 audit is included in the 2011 amount.

Audit-Related Fees – None.

Tax Fees – None.

All Other Fees – Other than the services described above, no other fees were billed for services rendered by the principal accountant.

Audit Committee Policies and Procedures – Not applicable.

If greater than 50 percent, disclose the percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees – Not applicable.

PART IV

ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)	The following documents are filed as part of this report:

1.	Financial Statements – The following consolidated financial statements of North American Energy Resources, Inc. are contained in Item 8 of this Form 10-K:

●	Report of Independent Registered Public Accountant

●	Consolidated Balance Sheets at April 30, 2011 and 2010

●	Consolidated Statements of Operations – For the years ended April 30, 2011 and 2010 and from inception (August 18, 2006) through April 30, 2011

●	Consolidated Statements of Stockholders’ Deficit - From inception (August 18, 2006) through April 30, 2011

●	Consolidated Statements of Cash Flows – For the years ended April 30, 2011 and 2010 and from inception (August 18, 2006) through April 30, 2011

●	Notes to the Consolidated Financial Statements

2.	Financial Statement Schedules were omitted, as they are not required or are not applicable, or the required information is included in the Financial Statements.

3.	Exhibits – The following exhibits are filed with this report or are incorporated herein by reference to a prior filing, in accordance with Rule 12b-32 under the Securities Exchange Act of 1934.

Exhibit		Description

31.1		Certification of the Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934
31.2		Certification of the Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934
32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

SIGNATURES

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

	NORTH AMERICAN ENERGY RESOURCES, INC.

June 30, 2011	/s/ Clinton W. Coldren
	Clinton W. Coldren, Chairman and CEO

June 30, 2011	/s/ Alan G. Massara
	Alan G. Massara, President and CFO

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

June 30, 2011	/s/ Clinton W. Coldren
	Clinton W. Coldren, Chairman and CEO

June 30, 2011	/s/ Alan G. Massara
	Alan G. Massara, President and CFO

June 30, 2011	/s/ Michael D. Pruitt
	Michael D. Pruitt, Director

SurgePays, Inc. - FORM 10-K - July 1, 2011

Attached files

SurgePays, Inc. Reports