10-K 1 f10k2009_exploretex.htm ANNUAL REPORT f10k2009_exploretex.htm

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-K
 
 
x  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended: April 30, 2009
 
 o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from                to   
 
Commission File Number: 000-52152
 
EXPLORTEX ENERGY INC.
(Name of small business issuer in its charter)
 
Nevada
  
98-0489027
(State or other jurisdiction of incorporation or
  
(I.R.S. Employer Identification No.)
organization)
    
     
1694 Falmouth Road
    
#143
    
Centerville MA
  
02632
(Address of principal executive offices)
  
(Zip Code)
 
Issuer’s telephone number: (774) 994-2709
 
Securities registered under Section 12(b) of the Exchange Act:
 
Title of each class
  
Name of each exchange on which registered
Not Applicable
  
Not Applicable
 
Securities registered under Section 12(g) of the Exchange Act:
 
Common Stock, $0.001 par value
(Title of class)
 
 
 
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 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 Section 15(d) of the Act.
Yes o   No x 
 
Check whether the Issuer (1) 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, 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. x
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.   (Check one):
 
Large Accelerated Filer   o
Accelerated Filer                   o
   
Non-Accelerated Filer     o
(Do not check if a smaller reporting company)
Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o   No x 
 
State issuer’s revenues for its most recent fiscal year: $277
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equitywas sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) $336,000 as of July 27, 2009
 
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 4,800,000 shares of common stock as of July 27, 2009.
 
 
Transitional Small Business Disclosure Format (check one): Yes o   No x
 
 
 
 
 
 
 
EXPLORTEX ENERGY INC.
 
Annual report On Form 10-K
For The Year Ended
April 30, 2009
 
INDEX
 
 
PART I
  
1
 
Item 1.
1
 
Item1A.
4
 
Item 2.
7
 
Item 3.
7
 
Item 4.
7
PART II – FINANCIAL INFORMATION
7
 
Item 5.
7
 
Item 6
8
 
Item 7.
9
 
Item 7A
13
 
Item 8.
F
 
Item 9.
14
 
Item 9A.
14
 
Item 9B.
15
PART III
16
 
Item 10.
16
 
Item 11.
17
 
Item 12.
18
 
Item 13.
19
 
Item 14.
19
 
Item 15.
20
       
 
 
 
 
FORWARD-LOOKING STATEMENTS
 
This annual report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this annual report on Form 10-K constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of natural gas, availability of funds, government regulations, common share prices, operating costs, capital costs and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration, availability of funds and operating costs. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our registration statement on Form SB-2, filed originally with the Securities and Exchange Commission (the “SEC”) on July 10, 2006, this annual report on Form 10-K, and, from time to time, in other reports we file with the SEC. These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
 
 

 
 
 
 
 
PART I
 
 
Item 1.                 Business
 
We are a natural resource exploration stage company engaged in the participation in the drilling of oil and gas properties in the United States. We have acquired a 1% working interest, in an exploration well drilled by Star of Texas Energy Services. We acquired this working interest through our PB Energy Participation Agreement with PB Energy USA Ltd. We do not conduct any independent oil and gas exploration, other than through our participation in wells drilled by Star of Texas Energy Services, as operator, under the PB Energy Participation Agreement.
 
We are considered an exploration or exploratory stage company as we are involved in the participation in the drilling of exploration wells that we believe may contain commercial quantities of oil and gas for the purpose of production and sale. We do not own any direct interest in any oil and gas property and there are no assurances that the exploration wells in which we participate will result in the establishment of proved oil or gas reserves or commercial production.
 
Our Corporate Organization
 
Incorporation
 
We were incorporated under the laws of Nevada under the name Anacot Technologies. Our name was changed to Explortex Energy Inc. effective November 9, 2005.
 
Principal Executive Offices
 
Our principal offices are located at 1694 Falmouth Road, #143, Centerville, MA 02632.  Our telephone number is (774) 994-2709.
 
Our Business
 
We are a natural resource company engaged in participating in the drilling of oil and gas wells in the United States. The company’s plan of operation over the next twelve months is to begin actively seeking oil or gas producing prospects, or exploratory prospects, with exceptional risk/reward characteristics in the current environment. We will pay particular attention to prospects with proven production potential, where the working interest owner or operator is capital constrained; especially those owned by small public or private entities. The company anticipates it will raise additional funds when those prospects are identified.
 
In December of 2005, the company entered into a non-exclusive participation agreement, the PB Energy Participation Agreement, which gave the company the right to participate, up to a maximum 25% working interest, in up to 24 wells to be drilled by Star of Texas Energy Services in the Barnett Shale formation in North Texas. The Malcolm-Star #1H well was to be the first well drilled as part of this agreement.
 
The Malcolm Star Well
 
In May 2006, we elected to participate in our first exploration well with Star of Texas pursuant to the PB Energy Participation Agreement. To date, we have made cash call payments of $48,899 for a 1% working interest in the Malcolm-Star #1H natural gas horizontal well (“Malcolm-Star”). Based on our 1% working interest, we were obliged to pay for 1.333% of the costs for drilling and completion of the well, but were only entitled to receive a 1% revenue interest in the well.
 
 
-1-
 
 
The Malcolm-Star prospect consists of 211.8 acres in Wise County, Texas, a core gas area of the Barnett Shale play of North Texas. Star of Texas has access to seismic geological data which shows the area to be favorable for the drilling of a horizontal well. Star of Texas commenced drilling the Malcolm-Star well on May 22, 2006. The well was drilled to a depth of 10,500 feet to test the Barnett Shale formation, which was approximately 2,000 feet farther than expected. The estimated cost of our proportionate share of the drilling and completion of this well was $35,532. During the two years ended April 30, 2008, we advanced Star of Texas $48,899 for our share of the costs of the well. Star of Texas notified us that the well began production on June 8, 2007 and is currently flowing at an average rate of 140 MCF (thousand cubic feet) of natural gas per day. Our working interest in the well is 1%, which, after expenses, translates to net income to Explortex of less than $40 per month. The company currently has no plans to participate in any more wells on this prospect. We do not deem this project material to the company, at this juncture, as in the future, the company will concentrate on prospects with higher payout and lower risk characteristics.
 
Competitors
 
In the Barnett Shale area located in the Greater Fort Worth Basin of Texas, we compete with a number of larger well-known oil and gas exploration companies such as Burlington Resources, Devon Energy, EOG Resources, Encana, Murphy Oil and Quicksilver Resources. Each of these companies has significant financial resources as well as specialized engineering expertise in the area which makes them formidable competitors. Due to the area’s significant potential upside, the Barnett Shale has recently attracted a great deal of interest from numerous other companies and it is expected that the competition for land, personnel and equipment will become more intense over the months and years ahead.  We do not feel this competition will directly impact the company, as the company plans on looking for prospects outside this geographic area, where there is less competition.
 
Government Regulations
 
Drilling of oil and gas wells in the United States is subject to various types of regulation at the federal, state and local levels. Such regulation 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. Operations are or will be also subject to various conservation matters, including the regulation of the size of drilling and spacing units or proration 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 that may be produced from wells in which we participate and to limit the number of wells or the locations that may drilled and in which we may participate.
 
As a participant in the drilling of exploration wells, 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. Failure of the operator of wells in which we participate 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 increase the costs of exploration for and production of oil and gas. These increased costs are passed on to us by the operator of the wells in accordance with our obligations to bear a proportionate share of these costs under our participation agreements. Increased costs could reduce our ability to participate in the drilling and completion of additional wells and could reduce the overall profitability of wells in which we participate where the production stage is achieved and sales revenues are earned.
 
 
-2-
 
 
Environmental Regulations
 
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.
 
We will rely on the operator of wells in which we participate to comply with all environmental laws in carrying out the drilling and completion of exploration wells and bringing any wells into production. To the extent that increased expenses are incurred to comply with environmental regulation, these costs will be passed on to us by the operators of the wells in accordance with our obligations under our participation agreements for the wells. Increased costs could reduce our ability to participate in the drilling and completion of additional wells and could reduce the overall profitability of wells in which we participate where the production stage is achieved and sales revenues are earned.
 
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 cleanup 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.
 
Employees
 
As of the date of this annual report, we do not have any employees other than Mr. John J. Lennon, our sole executive officer. On June 29, 2009, Mr. Lennon resigned to pursue other interests, and Mr. Steven Kurlander became the President and sole executive officer of the Company.
 
Research and Development Expenditures
 
We have not incurred any research or development expenditures since our incorporation.
 
Subsidiaries
 
We do not have any subsidiaries.
 
Patents and Trademarks
 
We do not own, either legally or beneficially, any patent or trademarks.
 
 
-3-
 
 
 
Item 1A.    Risk Factors
 
Risks Related to our Business
 
If we do not obtain additional financing, our business plan will fail.
 
Our current operating funds are estimated to be sufficient to complete our participation obligations for our interest in the Malcolm-Star well, however, we will need to obtain additional financing in order to continue our business operations. As of April 30, 2009, we had cash on hand of $944. Our business plan calls for significant capital expenses if we continue to participate in exploration wells with Star of Texas Energy Services, or acquire or participate in the drilling of any other wells. We will require additional financing in order to participate in further exploration wells. We currently do not have any arrangements for financing and we may not be able to obtain financing when required. Obtaining additional financing would be subject to a number of factors, including the market price of natural gas. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us.
 
Because we have only recently commenced business operations, we face a high risk of business failure and this could result in a total loss of your investment.
 
We have only begun our business of participating in the drilling of oil and gas wells, and thus have no way to evaluate the likelihood whether we will be able to operate our business successfully. We were incorporated on March 25, 2004, and to date have been involved primarily in organizational activities and evaluating resource projects. We have earned minimal revenues and have not achieved profitability as of the date of this prospectus. Potential investors should be aware of the difficulties normally encountered by new resource exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of oil and gas properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. We have no history upon which to base any assumption as to the likelihood that our business will prove successful, and we can provide no assurance to investors that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will likely fail and you will lose your entire investment in this offering.
 
Because we have earned minimal revenues, we expect to incur operating losses for the foreseeable future.
 
We have earned minimal revenues and we have never been profitable. We therefore expect to incur significant losses into the foreseeable future. If we are unable to generate financing to continue our exploration efforts, we will fail and you will lose your entire investment in this offering.
 
We have yet to attain profitable operations and because we will need additional financing to fund our exploration activities, our accountants believe there is substantial doubt about our ability to continue as a going concern
 
We have incurred a net loss of $221,563 for the period from March 25, 2004 (inception) to April 30, 2009, and have had minimal revenues to date. Our future is dependent upon our ability to obtain financing and upon future profitable operations from the participation in the drilling of oil and gas properties. These factors raise substantial doubt that we will be able to continue as a going concern.
 
Our financial statements included with this filing have been prepared assuming that we will continue as a going concern. Our auditors have made reference to the substantial doubt as to our ability to continue as a going concern in their audit report on our audited financial statements for the year ended April 30, 2009. If we are not able to achieve revenues, then we may not be able to continue as a going concern and our financial condition and business prospects will be adversely affected.
 
 
-4-
 
 
If our costs of participation in the Malcolm-Star well are greater than anticipated, then we will not be able to complete the exploration program for our Malcolm-Star well without additional financing, of which there is no assurance that we would be able to obtain.
 
We are participating in the drilling of the Malcolm-Star well. We have a 1% working interest in this well. The operator of the well, Star of Texas Energy Services, outlined a budget for leasing, drilling, completing and pipelining of the well. However, there is no assurance that our actual costs will not exceed the budgeted costs. Factors that could cause actual costs to exceed budgeted costs include increased prices due to competition for personnel and supplies during the drilling and completion of the well, unanticipated problems in completing the drilling program and delays experienced in completing the drilling program. Increases in exploration costs could result in us not being able to continue our participation in the drilling of the Malcolm-Star well without additional financing. There is no assurance that we would be able to obtain additional financing in this event.
 
Because of the speculative nature of exploration drilling and because we only have sufficient financial resources to participate in the drilling of one exploration well, there is substantial risk that we will not achieve revenues and our business will fail.
 
We are in the initial stages of participating in the drilling of an exploration oil and gas well. We cannot provide you with any assurance that the drilling of the exploration well will be successful and will eventually produce gas in sufficient quantities in order that we can earn revenues from our participation in the well. Further, our participation in the Malcolm-Star well is the only well in which we are currently participating in and is the only well in which we have the financial resources to participate. The search for oil and gas as a business is extremely risky and involves substantial risk. The expenditures to be made by us on our exploration program may not result in the discovery of commercial quantities of gas. If we do not earn increased revenues from our participation in the Malcolm-Star well, then we will not be able participate in the drilling of any other exploration wells unless we achieve additional financing. If we are unable to achieve this additional financing, then our business will fail.
 
The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.
 
The marketability of natural resources which may be acquired or discovered as a result of the drilling of the exploration wells in which we participate will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable. If gas prices decline, then any sales of gas from the Malcolm-Star well will decline, possibly to the point where our proportionate share of sales does not exceed our proportionate share of costs, such that we will not be entitled to any revenues from our working interest in the Malcolm-Star well.
 
Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays, resulting in increased participation and operating costs for those exploration wells in which we participate.
 
Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Increased expenses or capital outlays resulting from government regulation required to complete drilling of any wells in which we participate will increase our cost of participation in wells, thereby increasing the amount of additional financing we will require and decreasing the amount of revenues, if any, that we are able to achieve from production of gas from exploration wells in which we participate.
 
 
-5-
 
Exploration activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of drilling operations or increase the costs of drilling operations, with the result that our cost of participating in exploration wells may increase and the amount of revenues that we achieve from production, if any, may decrease.
 
In general, our exploration activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, the drilling activities on the wells in which we participate are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Increased expenses resulting from compliance with environmental regulations will increase the amount of additional financing we will require and decrease the amount of revenues, if any, that we are able to achieve from production of gas from exploration wells in which we participate.
 
Exploratory drilling involves many risks which may increase our participation expenses or result in us losing amounts that we have advanced in order to participate in any oil or gas well.
 
Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labor, and other risks are involved. The occurrence of any of these risks could result in unanticipated costs being incurred by the operator of the well, with the result that we may have to pay additional unanticipated amounts under our participation obligation for exploration wells in which we participate. Further, the occurrence of these risks could result in the abandonment of any well in which we participate, with the result that we will not be able to recover any amounts that we have advanced in order to participate in any well.
 
Because our executive officer has no formal training specific to the technicalities of oil and gas exploration, there is a higher risk that our business will fail.
 
Our executive officer has no formal training as a geologist, petroleum engineer or in the technical aspects of management of an oil and gas exploration company. As a result of this inexperience, there is a higher risk of our being unable to successfully complete our business plan to participate in the drilling of oil and gas exploration wells. With no direct training in this area, our management may not be fully aware of many of the specific requirements related to working within this industry. Our decisions and choices may not take into account standard engineering or managerial approaches oil and gas exploration companies. Consequently, the lack of training of our management in this industry could result in management making decisions that could result in a reduced likelihood of our being able to participate in the drilling of successful oil and gas exploration wells with the result that we would not be able to achieve revenues or raise further financing to continue exploration activities. In addition, we will have to rely on the technical services of others with expertise in oil and gas exploration in order for us to carry our planned exploration program. If we are unable to contract for the services of such individuals, it will make it difficult and maybe impossible to pursue our business plan. There is thus a higher risk that our operations, earnings and ultimate financial success could suffer irreparable harm and our business will likely fail and you will lose your entire investment in this offering.
 
 
-6-
 
 
Because our executive officer has other business interests, he may not be able or willing to devote a sufficient amount of time to our business operation, causing our business to fail.
 
Our executive officer is spending approximately twenty hours per week of his business time on providing management services to us. While our executive officer presently possesses adequate time to attend to our interests, it is possible that the demands on him from his other obligations could increase, with the result that he would no longer be able to devote sufficient time to the management of our business. This could negatively impact our business development.
 
Item 2.                   Properties
 
Our executive offices are located at 1694 Falmouth Road, #143, Centerville, MA 02632.   Mr. John J. Lennon, our President, currently provides space to us for $500 per month, including all utilities and supplies. There is no guarantee this arrangement will continue in the future.
 
We also have a 1% working interest in the Malcolm-Star well located in Wise County, Texas, as described above under “Description of Business Overview”.
 
Item 3.                   Legal Proceedings
 
The company was informed in April, 2008, that as a working interest owner in the Malcolm-Star Prospect, that it had been named as a 3rd party defendant in litigation between the operator of the well, Star of Texas Energy Services, and the driller, Kal Drilling. All legal costs to date have been covered by Star of Texas, and Explortex has been informed that its worst case potential liability would be in being forced to relinquish its 1% working interest in the well, currently carried at a value of $48,899. Star of Texas turned over the operation of the well to Strata Operating, Inc, in March of 2009, in order to insure the efficient operation of the well under any contingencies. We do not feel that this litigation is material to the long-term prospects of the company, in that this well produced  revenues in 2009 of less than $300, and potential prospects currently being considered are all larger, and outside of this area. Although the Company has received no recent correspondence regarding this matter, the Company believes it will evaluate its options concurrent with an acquisition of a new property, at which time it will have the resources available to review the value of its 1% interest, in relation to the future direction of the Company.
 
Item 4.                   Submission of Matters to a Vote of Securities Holders
 
No matters were submitted to our security holders for a vote during the year ended April 30, 2009.
 
 
PART II – FINANCIAL INFORMATION
 
Item 5.                    Market for Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities
 
Shares of our common stock are quoted on the OTC Bulletin Board under the symbol EXPX. Our common stock became eligible for trading on the OTC Bulletin Board on October 23, 2006. The following table indicates the high and low bid prices of our common stock during the periods indicated: 
 
Quarter Ended
  
High Bid
    
Low Bid
  
April 30, 2009
   $ 0.04     $ 0.04  
January 31, 2009
   $ 0.04     $
0.0
  
October 31, 2008
   $ 0.10     $ 0.10  
July 31, 2008
   $ 0.10     $ 0.10  
                 
 
 
 
-7-
 
 
The source of the high and low bid information is the NASD OTC Bulletin Board. The market quotations provided reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
 
Holders of Our Common Stock
 
As at April 30, 2009, we had 16 registered holders of our common stock.
 
Dividends
 
There are no restrictions in our articles of incorporation or by-laws that prevent us from declaring dividends. The declaration of dividends is at the discretion of our board. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
 
▪
We would not be able to pay our debts as they become due in the usual course of business; or
 
▪
Our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution.
 
We have not declared any dividends and we do not plan to declare any dividends in the foreseeable future.
 
Recent Sales of Unregistered Securities
 
We completed two sales of securities under the Securities Act of 1933 during our fiscal year ended April 30, 2009.
 
▪
We completed an offering of 500,000 shares of our common stock at a price of $0.05 per share to a total of three purchasers on July 25, 2008. The total proceeds from this offering were $25,000.  A second offering of 700,000 shares of our common stock at a price of $0.05 per share was completed on March 17, 2009, with total proceeds of this offering amounting to $35,000.  Due to delays in getting paperwork, these 700,000 shares are accounted for as, “To Be Issued,” on our April 30, 2009 10-K. We completed this offering pursuant to Rule 903(a) and (b)(3) of Regulation S of the Act. Each sale of shares was completed as an “offshore transaction”, as defined in Rule 902(h) of Regulation S, on the basis that: (i) each investor was outside of the United States at the time the offer to purchase the shares was made; and (ii) at the time the subscription agreement for the shares was executed, the investor was outside of the United States or we had a reasonable belief that the investor was outside of the United States. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States. Each investor represented to us that the investor was not a U.S. person, as defined in Regulation S, and was not acquiring the shares for the account or benefit of a U.S. Person. Each purchaser represented their intention to acquire the securities for investment only and not with a view toward distribution. Appropriate legends have been affixed to the stock certificate issued to each purchaser in accordance with Regulation S confirming that the shares cannot be resold or transferred other than pursuant to Regulation S, registration under the Securities Act or an exemption from the registration requirements of the Securities Act. None of the securities were sold through an underwriter and accordingly, there were no underwriting discounts or commissions involved. No registration rights were granted to any of the purchasers.
 
Item 6.      Selected Financial Data
 
Not Applicable
 
 
-8-
 
 
Item 7.                   Management’s Discussion and Analysis of Financial Condition and Results of Operation
 
The following discussion of our financial condition, changes in financial condition and results of operations for the year ended April 30, 2009 should be read in conjunction with our audited financial statements and related notes for the year ended April 30, 2009.
 
Overview
 
We are a natural resource exploration stage company engaged in the participation in the drilling of oil and gas properties in the United States.
 
On December 1, 2005, we entered into a non-exclusive participation agreement (the “PB Energy Participation Agreement”) with PB Energy USA Ltd. (“PB Energy”).  PB Energy has the right to participate in certain wells to be drilled by Star of Texas Energy Services, Inc. (“Star of Texas Energy Services”).  Star of Texas Energy Services has arranged with land owners and leaseholders for the rights to drill exploration wells targeting the Barnett Shale formation in North Texas and has proposed to drill, as operator, one exploration well a month for twenty-four months.   As operator, Star of Texas Energy Services retains a 25% working interest in each well that is to be drilled by it as operator.  These rights are defined in the participation agreement to be entered into for each individual well drilled by Star of Texas Energy Services. Star of Texas Energy Services has the right to assign part or all of its 25% working interest to third parties.
 
The PB Energy Participation Agreement gives us the right, but not the obligation, to participate up to a maximum 25% working interest, subject to availability, in each exploration well to be drilled by Star of Texas Energy Services.  In order to purchase each 1% working interest in a well, we are required to pay a project payment of approximately $35,000 per 1% working participation interest.  This amount is based on an estimated gross cost for the horizontal drilling and completion attempt per well of $2,700,000 and the requirement under the individual well participation agreement that the 75% working interest participants are obligated to pay 100% of the actual drilling and completion costs.  In aggregate, we have the option to acquire up to a 25% working interest in each well by paying up to 33.33% of all costs and expenses incurred for the joint account under the operating agreement respecting the drilling and completion of each well.
 
In May 2006, we elected to participate in our first exploration well with Star of Texas Energy Services pursuant to the PB Energy Participation Agreement. To date, we have made cash call payments of $48,899 for a 1% working interest in the Malcolm-Star #1H natural gas horizontal well (“Malcolm-Star”). Based on our 1% working interest, we were obliged to pay for 1.333% of the costs for drilling and completion of the well, but we’ll only be entitled to receive a 1% revenue interest in the well.
 
The Malcolm-Star prospect consists of 211.8 acres in Wise County, Texas, a core gas area of the Barnett Shale play of North Texas. Star of Texas Energy Services has access to seismic geological data, which shows the area to be favorable for the drilling of a horizontal well. Star of Texas Energy Services commenced drilling the Malcolm-Star well on May 22, 2006. The well was drilled to a depth of 10,500 feet to test the Barnett Shale formation, which was approximately 2,000 feet farther than expected. At April 30, 2008, the company had paid Star of Texas Energy Services approximately $48,899 on the drilling, completion and tie-in of the well.  Star of Texas Energy Services has advised the Company, that, after the well was subjected to a fracture stimulation program, it began producing natural gas at a marginal rate of production, producing net income to Explortex of less than $40 per month. The company has no plans currently to participate in any more wells on this prospect.
 
With respect to this prospect, the company was informed in April that as a working interest owner on this prospect, it had been named as a 3rd party defendant in litigation between the operator of the well, Star of Texas Energy Services, and the driller, Kal Drilling. All legal costs have been covered by Star of Texas, and Explortex has been informed that its only potential liability would be in being forced to relinquish it’s 1% working interest in the well. This well is not deemed material to the future prospects of the company, as prospects now being considered are considerably larger in scope, and are outside of this geographic area.
 
 
-9-
 
 
The Company has been actively seeking producing oil properties, particularly ones with exploitation, or low-risk development potential. The Company believes current market conditions have created numerous opportunities in this area, and feels confident that it will successfully find an opportunity that fits its criteria in the coming month.  Given recent gas prices, the Company feels the current value of its 1% holding was overstated on the balance sheet. Although the well is producing, the additional costs for audit, legal and monitoring of the well, made carrying the full-cost value of the well impractical. The Company has decided that it would be prudent to write-off its investment in the Malcolm-Starr well, in order to save future audit and legal costs, while leaving more time for management to monitor the much larger transactions that they are contemplating. This is a non-cash charge, and will not affect revenues, unless management decides, for legal reasons, to turn ownership of the well over to the current operator. This scenario would also have minimal impact on the anticipated future revenues of the Company.
 
PLAN OF OPERATIONS
 
Our plan of operations for the next twelve months is to complete the following objectives within the time periods specified, subject to our obtaining the funding necessary for continued exploration:
 
1.                                       Identify oil or gas producing prospects, or exploratory prospects, with exceptional risk/reward characteristics in the current environment. We will pay particular attention to prospects with proven production potential, where the working interest owner or operator is capital-constrained.
 
 
2.                                       We intend to evaluate future participation in working interests in further Barnett Shale exploration wells, as proposed under the PB Energy Participation Agreement. It is unlikely we would proceed with a further 1% working interest in a Barnett Shale well, as evaluated by Star of Texas Energy Services, subject to us having sufficient financing. We expect the costs of the 1% working interest in the well to be approximately $45,000. We anticipate that we will have to raise additional funding in order to participate in new exploration wells.
 
3.                                       We anticipate spending approximately $6,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $72,000 over the next twelve months. The general and administrative expenses will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees and general office expenses.
 
As at April 30, 2009, we had cash reserves of $944 and a working capital deficit of $52,063.  On July 25, 2008, the company sold 500,000 shares of its common stock at $0.05, for total proceeds of $25,000. Subsequent to this, on March 17, 2009, the company sold an additional 700,000 shares at $.05, for a total of $35,000. The company feels it will need to raise additional funds to fund operations over the next six months.
 
During the twelve-month period, we may or may not generate any revenue dependent on the success of our 1% working interest in the Malcolm-Star well. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations.  We believe that debt financing will likely not be an alternative for funding additional exploration wells, as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund participation in additional exploration wells.  In the absence of such financing, we will not be able to continue exploration and our business plan will fail.  Even if we are successful in obtaining equity financing to fund additional exploration wells, there is no assurance that we will obtain the funding necessary to pursue any further exploration or have the funds to complete future wells.  If we do not continue to obtain additional financing, we will not be able to continue with our exploration plan.
 
 
-10-
 
 
We anticipate raising additional funding over the next several months in order to close the working capital deficit, as well as to provide funding for the acquisition of additional properties.  We anticipate that these additional funds, when obtained, will be sufficient to enable us to pay for our general and administrative expenses for the next six months. However, our ability to participate in further exploration wells will be subject to us obtaining additional financing as these expenditures will exceed our cash and working capital reserves. We are currently evaluating several prospects in the energy area, any one of which will require significant additional funding. We hope to have our next prospect selected and funded by the end of calendar year 2009, although there is no assurance as yet that this goal will ultimately be met in that time frame.
 
RESULTS OF OPERATIONS
 
Revenues
 
We have had minimal operating revenues since our inception on March 25, 2004 through to the twelve months ended April 30, 2009.  The Company has been actively seeking to acquire oil and gas prospects with existing production, and the potential for increased revenues through additional development. The Company feels confident it will be able to acquire such properties. As part of their ongoing review, the Company decide it would be prudent to write-off their investment in the Malcolm-Starr well as an impairment expense, due to its marginal rate of production, limited ability to have assigned reserves, and high legal and audit expense.
 
General and Administrative Expenses
 
Our general and administrative expenses for the years ended April 30, 2009 and 2008 are summarized below:
 
   
Year Ended
April 30, 2009
    
Year Ended
April 30, 2008
  
General and administrative expenses
            
Bank Charges
   $ 509     $ 287  
Office expenses
     6,279       801  
Professional Fees
     58,509       50,141  
Transfer agent and filing Fees
     10,413       2,183  
Travel and entertainment
     -       473  
Total general and administrative expenses
   $ 75,710     $ 53,885  
                 
 
Professional fees of $58,509 incurred during the year ended April 30, 2009 related to the expenses associated with being a reporting company under the Securities Exchange Act of 1934.
 
Transfer agent and filing fees represented amounts paid to keep our corporation in good standing with State regulators and with the establishment of our transfer agent.
 
LIQUIDITY AND CAPITAL RESOURCES
 
We had cash of $944 and a working capital deficit of $52,063 at April 30, 2009, compared to cash of $5,918 and a working capital deficit of $36,630 at April 30, 2008. 
 
 
-11-
 
Cash Used in Operating Activities
 
Cash used in operating activities was $64,974 for the year ended April 30, 2009, compared with cash used in operating activities of $51,409 for the year ended April 30, 2008.  We anticipate that cash used in operating activities will increase during the next year, as discussed under “Plan of Operations”.
 
Cash Used in Investing Activities
 
Cash was not used in investing activities for the year ended April 30, 2009, compared with $6,832 used in investing activities for the year ended April 30, 2008.  The decrease in cash used in investing activities is a result of reduced drilling, completion and tie-in costs of the Malcolm Star well during the period.
 
Cash from Financing Activities
 
We have funded our business to date primarily from sales of our common stock. From our inception, on March 25, 2004, to April 30, 2009, we have raised a total of $169,500 from private offerings of our securities. There were gross proceeds from the sale of shares of our common stock of  $60,000 during the year ended April 30, 2009, compared to $25,000 in such proceeds the year ended April 30, 2008.
 
There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of additional wells and our venture will fail.
 
Going Concern
 
We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive exploration activities. For these reasons our auditors stated in their report dated July 28, 2008, that they have substantial doubt we will be able to continue as a going concern.
 
Future Financings
 
We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned exploration activities.
 
Off-Balance Sheet Arrangements
 
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
 
Critical Accounting Policies
 
Investment in Oil and Gas Properties
 
We utilize the full cost method to account for our investment in oil and gas properties. Accordingly, all costs associated with acquisition and exploration of oil and gas reserves, including such costs as leasehold acquisition costs, interest costs relating to unproved properties, geological expenditures and direct internal costs are capitalized into the full cost pool. As of April 30, 2009, we had minimal proven oil and gas properties. When we obtain proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects including capitalized interest, if any, are not amortized until proved reserves associated with the projects can be determined. If the future exploration of unproved properties is determined uneconomical, the amounts of such properties are added to the capitalized cost to be amortized.
 
 
-12-
 
 
 
For unproven properties, we exclude from capitalized costs subject to depletion, all costs directly associated with the acquisition and evaluation of the unproved property until it is determined whether or not proved reserves can be assigned to the property. Until such a determination is made, we assess the property at least annually to ascertain whether impairment has occurred. In assessing impairment we consider factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data. The Company decided that based on its marginal rate of production, the low dollar value of that production, and the inability of the Company to get a professional reserve report, which would assign a reserve value to its current 1% holding in the Malcolm-Starr well, it would be prudent to write down the value of its investment to zero, defining the well as impaired.
 
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk
 
We do not hold any derivative instruments and do not engage in any hedging activities
 
 
-13-
 
 
Item 8.      Financial Statements and Supplementary Daa
 
The following audited financial statements of the Company are included in this annual report on Form 10-K:
 
 
 
 
 

 
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Explortex Energy Inc.
Centerville, Massachusetts

We have audited the accompanying balance sheets of Explortex Energy Inc. ("the Company") (an exploration stage company) as of April 30, 2009 and 2008, and the related statements of operations, stockholders' equity (deficit), and cash flows for the years ended April 30, 2009 and 2008, and for the period from March 25, 2004 (date of inception) to April 30, 2009.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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 financial position of Explortex Energy Inc. (an exploration stage company) as of April 30, 2009 and 2008, and the results of its operations and its cash flows for the years ended April 30, 2009 and 2008, and for the period from March 25, 2004 (date of inception) to April 30, 2009, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has only generated minimal revenue from operations since inception and has an accumulated deficit at April 30, 2009.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans regarding these matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ PETERSON SULLIVAN LLP

Seattle, Washington
July 27, 2009
 

 
F-1
 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
 
(Expressed in U.S. Dollars)
 
 
   
April 30,
2009
    
April 30,
2008
  
ASSETS
            
             
Current assets
            
Cash and cash equivalents
   $ 944      $ 5,918  
Oil and gas property, unproven (note 3)
             48,899  
                 
Total assets
   $ 944      $ 54,817  
                 
LIABILITIES
                
                 
Current liabilities
                
Accounts payable and accrued expenses
   $ 22,869      $ 12,410  
Related party loan (Note 4)
     30,138       30,138  
Total current liabilities
     53,007       42,548  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)
                
                 
Share capital
                
Common stock, $0.001 par value, 75,000,000 shares authorized, 4,100,000 and 3,600,000 issued and outstanding at April 30, 2009 and April 30, 2008, respectively.
     4,100       3,600  
    Common Stock issuable, 700,000 shares
     700          
    Additional paid-in capital
     164,700       105,900  
    Deficit accumulated during the exploration stage
     (221,563 )     (97,231 )
                 
Total stockholders’ equity (deficit)
     (52,063 )     12,269  
                 
Total liabilities and stockholders’ equity (deficit)
   $ 944      $ 54,817  
 
The accompanying notes are an integral part of these financial statements.
 
F-2

 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
 
(Expressed in U.S. Dollars)
 
   
Cumulative
March 25, 2004
(inception) to
April 30, 2009
    
Year
Ended
April 30, 2009
    
Year
Ended
April 30, 2008
  
Revenues
                  
Oil and natural gas sales
   $ 1,258     $ 277      $ 981  
Interest income
     116                  
                         
      1,374       277       981  
                         
Oprating expenses
                        
Bank charges
     1,354       509       287  
Management fees
     22,500       21,000       —  
Office expenses
     7,497       6,279       801  
Operating costs
     762               762  
Professional fees
     120,000       37,509       50,141  
Transfer agent and filing fees
     18,729       10,413       2,183  
Travel and entertainment
     3,196               473  
    Impairment of Oil & Gas Properties
     48,899       48,899          
      222,937       124,609       54,647  
                         
Net loss
   $ (221,563 )   $ (124,332 )   $ (53,666 )
                         
Basic and diluted loss per share
                        
Net loss per share
           $ (0.03 )   $ (0.01 )
                         
Weighted average number of common shares outstanding
             4,069,863       3,208,219  
                         
 
The accompanying notes are an integral part of these financial statements.
 
F-3
 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
For the period from inception (March 25, 2004) to April 30, 2009
 
(Expressed in U.S. Dollars)
 
 
           
Deficit
      
           
accumulated
      
       
Additional
  
during
  
Total
  
   
Common Stock
  
Common Stk. Issuable
  
paid-in
  
exploration
  
Stockholders’
  
   
Shares
  
Amount
  
Shares
  
Amount
  
capital
  
stage
  
equity
  
                               
Balance, March 25, 2004 (inception)
  
—
  
$
—
          
$
—
  
$
—
  
$
—
  
                               
Net loss for the period
  
—
  
—
          
—
  
(2,000
)
(2,000
)
                               
Balance, April 30, 2004
  
—
  
—
          
—
  
(2,000
)
(2,000
)
                               
Stock issued at $0.001 per share in May 2004
  
2,000,000
  
2,000
          
—
  
—
  
2,000
  
                               
Net loss for the period
  
—
  
—
          
—
  
(269
)
(269
)
                               
Balance, April 30, 2005
  
2,000,000
  
2,000
          
—
  
(2,269
)
(269
)
                               
Stock issued at $0.075 per share in January 2006
  
500,000
  
500
          
37,000
  
—
  
37,500
  
                               
Stock issued at $0.075 per share in April 2006
  
500,000
  
500
          
37,000
  
—
  
37,500
  
                               
Net loss for the period
  
—
  
—
          
—
  
(5,220
)
(5,220
)
                               
Balance, April 30, 2006
  
3,000,000
  
3,000
          
74,000
  
(7,489
)
69,511
  
                               
Stock issued at $0.075 per share in May 2006
  
100,000
  
100
          
7,400
  
—
  
7,500
  
                               
Net loss for the period
  
—
  
—
          
—
  
(36,076
)
(36,076
)
                               
Balance, April 30, 2007
  
3,100,000
  
3,100
          
81,400
  
(43,565
)
40,935
  
                               
Stock issued at $0.05 per share in February 2008
  
500,000
  
500
          
      4,500
  
—
  
25,000
  
                               
Net loss for the period
  
—
  
—
          
—
  
(53,666
)
(53,666
)
                               
Balance, April 30, 2008
  
3,600,000
  
$
3,600
          
$
105,900
  
$
(97,231
)
$
12,269
  
                                       
Stock issued at $0.05 per share in July 2008
  
500,000
    
500
            
24,500
    
—
    
25,000
  
                                       
Stock issuable at $0.05 per share in March, 2009
            
 
700,000
  
700
    
34,300
          
35,000
  
                                       
Net loss for the period
  
—
    
—
            
—
    
(124,332)
    
(124,332)
  
                                       
Balance, April 30, 2009
  
4,100,000
    
       4,100
  
700,000
  
700
    
164,700
    
(221,563)
    
(52,063)
  
 
The accompanying notes are an integral part of these financial statements
 
F-4

 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
 
(Expressed in U.S. Dollars)
 
   
Cumulative
March 25, 2004
(inception) to
April 30, 2009
    
Year
Ended
April 30,2009
    
Year
Ended
April 30, 2008
  
                   
Cash flows from (used in) operating activities
                  
Net loss for the period
   $ (221,563 )   $ (124,332 )   $ (53,666 )
Impairment of Oil & Gas Properties
     48,899       48,899          
    Changes in non-cash working capital items:
- accounts payable and accrued expenses
     22,869       10,459       2,257  
                         
Net cash used in operating activities
     (149,795 )     (64,974 )     (51,409 )
                         
Cash flows used in investing activities
                        
Oil and gas properties
     (48,899 )     —       (6,832 )
                         
Net cash used in investing activities
     (48,899 )     —       (6,832 )
                         
Cash flows from financing activities
                        
Proceeds from issuance of common stock
     169,500       60,000       25,000  
Due to a related party
     30,138       —       30,138  
                         
Net cash from financing activities
     199,638       60,000       55,138  
                         
Increase (decrease) in cash and cash equivalents
     944       (4,974 )     (3,103 )
                         
Cash and cash equivalents, beginning of period
     —       5,918       9,021  
                         
Cash and cash equivalents, end of period
   $ 944     $ 944     $ 5,918  
                         
 
The accompanying notes are an integral part of these financial statements
 
F-5

 
 
 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
  1.         Basis of Presentation
 
    a)                          Organization
 
Explortex Energy Inc. (“the Company”) was formed on March 25, 2004 under the laws of the State of Nevada.  On November 9, 2005, the Company changed its name from Anacot Technologies to Explortex Energy Inc.
 
The Company is in the business of exploring for oil and gas.  Although the Company currently has minimal revenues from its first producing well, it is actively seeking properties with existing production which have significant potential for additional development and production. The Company is confident it will be able to purchase a property which meets this criteria in the coming months.
 
The recoverability of resource property costs is dependent upon the existence of economically recoverable reserves, confirmation of the Company’s interest in the underlying properties, the ability of the Company to obtain necessary financing to complete the exploration and upon future profitable production.
 
    b)                        Going Concern
 
The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplates continuation of the Company as a going concern.  However, the Company has sustained substantial operating losses in recent years resulting in a substantial accumulated deficit.  As of April 30, 2009, the Company had a total of $944 in cash and working capital deficit of $52,063.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.  The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieving a profitable level of operations.  To meet these objectives, the Company plans to seek additional equity and expects to raise funds through private or public equity investment in order to support existing operations and expand the range and scope of its business.  There is no assurance that such additional funds will be available for the Company on acceptable terms, if at all.  Management believes that actions presently taken to revise the Company’s operating and financial requirements provide the opportunity for the Company to continue as a going concern.  The Company’s ability to achieve these objectives cannot be determined at this time.  There are no assurances that the Company will be successful in achieving these goals.
 
These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  These financial statements do not include any adjustments that might result from this uncertainty. The Company has not generated any material operating revenues to date.
 
 
F-6
 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
  2.        Significant Accounting Policies
 
    a)                         Cash and Cash Equivalents
 
Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased.  As at April 30, 2009 cash and cash equivalents consist of cash only.
 
    b)                         Accounting Estimates
 
The preparation of the financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of 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 and assumptions.
 
    c)                         Concentration of Credit Risk
 
The Company places its cash and cash equivalents with high credit quality financial institutions.  As of April 30, 2009 the Company had no balance in a bank beyond insured limits. The Company has limited revenues, which are derived from one well, in one specific location within a specific geographic region. There is no guarantee that revenues from this one source can continue with any degree of certainty, due to fluctuations in price, as well as operating performance of the well, and its operator.
 
    d)                        Oil and Gas Properties
 
The Company utilizes the full-cost method of accounting for petroleum and natural gas properties.  Under this method, the Company capitalizes all costs associated with acquisition, exploration and development of oil and natural gas reserves, including leasehold acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and costs of drilling of productive and non-productive wells into the full cost pool on a country by country basis.  As of April 30, 2009 the Company had no properties with proven reserves.  When the Company obtains proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves proved and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves.
 
 
F-7
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
 
The cost of unproved properties is not depleted until it is determined whether or not proved reserves can be assigned to the properties.  Until such determination is made the Company assesses annually whether impairment has occurred, and includes in the depletable base drilling exploration dry holes associated with unproved properties. In assessing impairment the Company considers factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, and geographic and geologic data.  The Company adds the amount of impairment assessed to the cost to be amortized subject to the ceiling test.  As of April 30, 2009,  the Company decided it would be prudent to write down the value of its 1% holding in the Malcolm-Starr well down to zero, due to its marginal rate of economic production, and the inability of the Company to establish a reserve value for its holding.
 
    e)                         Asset Retirement Obligations
 
The Company recognized a liability for future retirement obligations associated with the Company’s oil and gas properties.  The estimated fair value of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate.  This liability is capitalized as part of the cost of the related asset and amortized over its useful life.  This liability accretes until the Company settles the obligation.  At April 30, 2009 the future asset retirement of the Company related to the Malcolm-Star well is considered immaterial. The Company will be evaluating its options with respect to its sole current property in coming months, with one of its options being signing over the well to the current operator, which would negate any potential impact, albeit small, from this obligation. The Company has decided to perform a professional valuation of the current property in the coming months, and at that time, any obligations associated with keeping this property will be determined with more detail.
 
    f)                           Fair Value of Financial Instruments
 
The Company’s financial instruments consist of cash and cash equivalents and accounts payable and accrued expenses and related party loans.  The carrying amounts of these financial instruments approximate fair value due to the short-term nature of these items.  Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.
 
 
F-8

 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
 
    g)                        Income Taxes
 
The Company has adopted Statement of Financial Accounting Standards (SFAS”) No. 109, “Accounting for Income Taxes”, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns using the liability method.  Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statements and tax bases of assets and liabilities using enacted tax rated in effect in the periods in which the differences are expected to reverse.
 
In July 2006, the FASB issued FIN No. 48. This interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with SFAS No. 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The adoption of this interpretation did not have a material impact on the Company’s results of operations or financial position. As such, the Company has not recorded any liabilities for uncertain tax positions or any related interest and penalties for the past tax year. Since the Company has not filed a tax return since inception, all tax years remain open to audit.
 
    h)                        Comprehensive Income
 
The Company adopted SFAS No. 130, “Reporting Comprehensive Income” which requires such things as the inclusion of foreign currency translation adjustments to be reported separately in its Statement of Stockholders’ Equity as part of other comprehensive income.  The Company has no other comprehensive income for the periods presented.
 
    i)                             Loss Per Share
 
Loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period.  The Company has adopted SFAS No. 128, “Earnings Per Share”.  Diluted loss per share is equivalent to basic loss per share as there are no dilutive securities outstanding. Common stock issuable is considered outstanding as of the date granted for purposes of calculating the weighted average shares outstanding.
 
 
    j)                            Stock-based Compensation
 
Prior to May 1, 2006, the Company accounted for stock-based awards under the intrinsic value method, which followed the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related interpretations.  The intrinsic value method of accounting resulted in compensation expense for stock options to the extent that the exercise prices were set below the fair market price of the Company’s stock at the date of grant. As of May 1, 2006, the Company adopted SFAS No. 123(R) using the modified prospective method, which requires measurement of compensation cost for all stock-based awards at fair value on the date of grant and recognition of compensation over the service period for awards expected to vest.  The fair value of stock options is determined using the Black-Scholes valuation model, which is consistent with the Company’s valuation techniques previously utilized for options in footnote disclosure required under SFAS No. 123, “Accounting for Stock Based Compensation”, as amended by SFAS No. 148, “Accounting for Stock Based Compensation Transition and Disclosure”.
 
 
F-9
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
 
Since the Company did not issue stock options to its employees during the years ended April 30, 2009 or 2008,  or the cumulative period ended April 30, 2009, there is no effect on net loss or earnings per share had the Company applied the fair value recognition provisions of SFAS No. 123(R) to stock based employee compensation.  When the Company issues shares of common stock to employees and others, the shares of common stock are valued based on the market price at the date of common stock are approved for issuance.
 
    k)                         New Accounting Pronouncements
 
In May 2009, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 165, “Subsequent Events” (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be used. SFAS 165 is to be applied to interim and annual financial periods ending after June 15, 2009. The Company is evaluating the impact, if any, of adopting SFAS 165.
 
In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (“FSP FAS 157-4”). Based on the guidance, if an entity determines that the level of activity for an asset or liability has significantly decreased and that a transaction is not orderly, further analysis of transactions or quoted prices is needed, and a significant adjustment to the transaction or quoted prices may be necessary to estimate fair value in accordance with FAS 157. FSP FAS 157-4 is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009. There is no expected impact on the Company’s financial position or results of operations.
 
In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than- Temporary Impairments (“FSP 115-2”).  The guidance applies to investments in debt securities for which other-than-temporary impairments may be recorded. If an entity’s management asserts that it does not have the intent to sell a debt security and it is more likely than not that it will not have to sell the security before recovery of it’s cost basis, then an entity may separate other-than-temporary impairments into two components: 1) the amount related to credit losses (recorded in earnings), and 2) all other amounts (recorded in other comprehensive income). FSP 115-2 is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009. There is no expected impact on the Company’s financial position or results of operations. The Company is evaluating the impact, if any, of adopting FSP 115-2.
 
 
F-10
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
 
In April 2009, the FASB issued FSP FAS 107-1 and Accounting Principles Board (“APB”) 28-1, Interim Disclosures about Fair Value of Financial Instruments, (“FSP 107-1”). FSP 107-1 amends FAS No. 107, Disclosure about Fair Value of Financial Investments, to require an entity to provide disclosures about fair value of financial instruments in interim financial statements. This FSP is to be applied prospectively and is effective for interim and annual periods ending after June 15, 2009. There is no expected impact n the Company’s financial position or results of operations.
 
In October 2008, the FASB issued FSP FAS 157-3, Determining the Fair Value of a Financial asset When the Market for that Asset is Not Active (“FSP FAS 157-3”). FSP FAS 157-3 was effective upon issuance, including periods for which financial statements have not been issued. FSP FAS 157-3 clarified the application of FAS No. 157, Fair Value Measurements, (“FAS 157”) in an inactive market and provided an illustrative example to demonstrate how the fair value of a financial asset is determined when the market for that financial asset is inactive. The Company has evaluated that there is no impact of FSP FAS 157-3 on its financial statements.
 
In May 2008, the FASB issued Staff Position o. APB 14-1, “Accounting for the Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (“FSP APB 14-1”). FSP APB 14-1 states that convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are not addressed by paragraph 12 of Accounting Principles Board Opinion No. 14 and that issuers of such instruments should account separately for the liability and equity components of the instruments should account separately for the liability and equity components of the instruments in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for financial years beginning after December 15, 2008, and must be applied retrospectively to all periods presented. The Company has evaluated that there is no impact o FSP APB 14-1 on its financial statement.
 
In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guaranteed Insurance Contracts”(“SFAS 163”). SFAS 163 clarifies FASB Statement No 60, “According and Reporting By Insurance Enterprises”. SFAS 163 is effective for financial statement issued for finical years beginning after December 15, 2008, and interim periods within those fiscal years. The Company has evaluated that there is no impact of SFAS 163 on its financial statements.
 
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”(SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles (GAAP) for nongovernmental entities. The Company has evaluated that there is no impact of SFAS 162 on its financial statements.
 
 
 
F-11
 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
  3.        Oil and Gas Property, Unproven
 
In December of 2005, the Company entered into a participation agreement with PB Energy USA Ltd. (“PB”), for the right to participate up to a 25% working interest in twenty-four wells by paying up to 33%  of the leasing, drilling, completing and pipeline costs.  The wells were scheduled to target the Barnett Shale formation and will be located generally in the Dallas-Fort Worth area of North Texas.
 
In May 2006, the Company elected to participate in a 1% working interest in an exploration well, the Malcolm-Star #1H,  in the Barnett Shale, which represented 1.33% of the estimated leasing, drilling, completing and pipeline costs.
 
The Company now has a 1% working interest in the well. As of April 30, 2009, $48,899 has been spent on drilling, gathering and tie-in activities. The well did come in as a marginal natural gas producer, producing an income stream to the Company of approximately $40 per month. The total costs incurred and excluded from depletion for the Company’s oil and gas properties are summarized as follows:
 
 
 
 
F-12
 
 
 
EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
       
Accumulated
      
   
Drilling and
  
depletion and 
      
   
Gathering
  
amortization 
  
Total
  
Malcolm-Starr, Barnett Shale
              
               
Year ended April 30, 2008
  
$
48,899
  
—
  
$
48,899
  
               
Twelve months ended April 30, 2009
  
—
  
— 
  
—
  
               
Total oil and gas properties April 30, 2009
  
$
48,899
  
— 
  
$
48,899
  
 
Based on the status of the Company’s exploration activities, management has determined that the current well be declared impaired, and the Company wrote-off the cost of the investment as of April 30, 2009.
 
  4.         Related Party Transactions
 
On October 5, 2007, the Company entered into a loan agreement with the former sole officer and director of the Company, whereby the Company borrowed $30,000 for a six month term expiring April 5, 2008.  The loan is secured against the assets of the Company.  Pursuant to the loan agreement the Company had agreed to pay interest at the rate of ½% per month payable together with the repayment of the loan on the maturity date.  The holder of the note, who is no longer affiliated with the Company, has agreed to extend the note to May 5, 2010, and has agreed to waive any interest not already accrued, if the note is repaid during calendar year 2009. The Company has not accrued any additional interest during fiscal year 2009 due to these new loan provisions.
 
  5.         Income Taxes
 
 As of April 30, 2009, the Company has an estimated tax loss carry-forward for tax purposes of $221,500, if the impairment is deductible, which begins to expire in 2021.  This amount may be applied against future federal taxable income. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is generally reflected in current income.
 
The tax effects of temporary differences that give rise to the company’s deferred tax asset are as follows:
 
 
F-13

EXPLORTEX ENERGY INC.
(An exploration stage enterprise)
Notes to Financial Statements
April 30, 2009
 
(Expressed in U.S. Dollars)
 
 
Twelve months ended April 30,
  
2009
    
2008
  
             
Loss Carry forwards
   $ 77,500     $ 18,246  
                 
Valuation Allowances
     (77,500 )     (18,246 )
    $ —     $ —  
                 
 
  6.         Subsequent Events
 
On June 29, 2009, Jack Lennon resigned as a member of the board of directors of the Company  and from his position as sole officer of the Company.   Mr Lennon’s resignation was not a result of any disagreements relating to the Company’s operations, policies or practices.

On June 29, 2009, Steven Kurlander was appointed as President of the Corporation.  Mr Kurlander is also the sole Director, as well as theTreasurer and Secretary.


F-14
 
 
Item 9.     Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
 
None.
 
Item 9A.  Controls and Procedures
 
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of April 30, 2009, being the date of our most recently completed fiscal year. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, John Lennon. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are not effective, for the reasons listed below, in order to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC.
 
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
 
During the fiscal year ended April 30, 2009, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to affect, our internal control over financial reporting during the fiscal year ended April 30, 2009.
 
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’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 and includes those policies and procedures that:
 
(a)
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
 
(b
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 registrant are being made only in accordance with authorizations of management and directors of the registrant; and
 
(c
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.
 
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting as of April 30, 2009, utilizing the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In connection with the preparation of our financial statements for the year ended April 30, 2009, certain additional internal control weaknesses became evident to Mr. Lennon, that, in the aggregate, represent material weakness, including:
 
 
-14-
 
 
 
(i) 
lack of segregation of incompatible duties;
     
 
(ii) 
 
insufficient Board of Directors representation; and unsatisfactory outside oversight of Company activities due to this lack of additional board members,  particularly any from outside the Company.
     
 
(iii)
lack of effective oversight in an audit committee, with no designated, “Financial Expert, “or additional management necessary to effectively oversee audit related activities or company spending, with capital constraints making resolution of these inadequacies exceptionally difficult; this is particularly acute in that the Company’s internal controls with respect to financial reporting are not effective, and additional resources are needed to remedy this situation.
     
 
(iv)
lack of sufficient personnel in the Company’s finance and accounting department who have knowledge of complex accounting and financial reporting matters.
 
As part of the communications by Peterson Sullivan, LLP, or Peterson Sullivan, with Mr. Lennon our sole director and Chief Executive Officer, with respect to Peterson Sullivan’s audit procedures for fiscal 2009, Peterson Sullivan informed Mr. Lennon that these deficiencies constituted material weakness, as defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting Performed in Conjunction with an Audit of Financial Statements,” established by the Public Company Accounting Oversight Board, or PCAOB.
 
This annual report does not include an attestation report of the Company’s registered public accounting firm, regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission, that also permit the Company to provide only management’s report in this annual report
 
In accordance with Section 404 of the Sarbanes-Oxley Act of 2002, we intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies. We intend to consider the results of our remediation efforts and related testing as part of our fiscal year-end 2010 assessment of the effectiveness of our internal control over financial reporting. As part of resolving these weaknesses, the company plans on:
 
(i)  
Attempting to raise additional capital for the purpose of adding additional management personnel in the area of finance and operations
 
(ii)  
Attempting to increase, the number of members of our Board of Directors from one to three, with at least one being from outside the company
 
(iii)  
Forming a finance and audit oversight committee, which meets monthly, and includes the acting CFO
 
(iv  
Instituting spending limits, with additional sign –off controls necessary for any expenditures above certain levels, when additional personnel are available
 
Item 9B.   Other Information
 
Not applicable.
 
-15-
 
PART III
 
 
Item 10.   Directors and Executive Officers of the Registrant.
 
Our executive officers and directors and their respective ages as of July 27, 2009 are as follows:
 
Director:
 
Name of Director
  
Age
     
Steven Kurlander
  
51
     
Executive Officer:
    
 
Name of Executive Officer
  
Age
  
Office
         
Steven Kurlander
  
51
  
President, Secretary and Treasurer
 
The following describes the business experience of our director and executive officer, including other directorships held in reporting companies:
 
Steven Kurlander 51, Mr Kurlander has previously served as Victory Field Director for the Republican Party of Florida where his duties included building and managing an extensive grassroots organization for McCain/Palin Campaign.  Prior to that Mr. Kurlander served as Vice President/Chief Operating Officer of Expedientclosings, Inc. where his duties included building and managing a real estate and marketing company providing notary closing services, title processing, and business development support to law offices, mortgage companies, and title companies in the State of Florida, designation as exclusive closing agent by a number of title and mortgage companies in South Florida market and for a number of Condo Conversion development programs.

Previously Mr. Kurlander served as in house counsel for Peachtree Settlement Services supervising the structuring of lottery winnings.  Prior to that he served as General Counsel for Stern and Morrow Software Consulting/Sentry Works, Inc., County Legislator for the 9 th legislative district in Sullivan County, New York, Staff Attorney/Audit Business Specialist at Frontier Insurance Group, Editor and Publisher at The Independent Weekly Review and opened his own real estate practice in Monticello, New York.
 
Term of Office
 
Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.
 
Significant Employees
 
We have no significant employees other than the officer and director described above.
 
Committees of the Board of Directors 
 
We presently do not have an audit committee, compensation committee, nominating committee, an executive committee of our board of directors, stock plan committee or any other committees. However, our board of directors is considering establishing various committees during the current fiscal year.
 
 
-16-

 
 
Family Relationships
 
There are no family relationships among our directors or officers.
 
Compliance with Section 16(a) of the Securities Exchange Act of 1934
 
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than ten percent of the equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. Based on our review of the copies of such forms received by us, we believe that during the fiscal year ended April 30, 2009 all such filing requirements applicable to our officers and directors were complied with except as noted below:
 
Name and Principal Position
  
Number of Late
Reports
  
Transactions Not
Timely Reported
  
Known Failures to
File a Form
John Lennon, President, CEO, CFO and Director
  
1
  
1
  
Nil
 
Item 11.   Executive Compensation
 
Summary Compensation Table
 
The following table sets forth certain compensation information as to chief executive officer for the years ended April 30, 2009 and 2008.  Mr. Chris Cooper served as President until December 31, 2007 at which time Mr. John Lennon was elected as President. We do not have any other executive officers.
 
No other compensation was paid to Mr. Lennon other than the cash and stock option compensation set forth below.
 
Name
and
Principal
Position
  
Year
  
Salary
  
Bonus
  
Stock
Awards
  
Option
Awards
  
Non-Equity
Incentive Plan
Compensation
  
Non-Qualified
Deferred
Compensation
Earnings
  
All
Other
Compensation
  
Total
  
       
($)
  
($)
  
($)
  
($)
  
($)
  
($)
  
($)
  
($)
  
John J. Lennon, President
  
2009
  
 21000
  
Nil
  
Nil
  
Nil
  
Nil
  
Nil
  
Nil
  
   21000
  
                                       
John J. Lennon,
President
  
2008
  
7500
  
Nil
  
Nil
  
Nil
  
Nil
  
Nil
  
Nil
  
7500
  
 
Employment Agreements
 
We presently have a management agreement with Mr. Lennon. Generally, Mr. Lennon provides his services on a part-time basis for compensation of $2000/month. Mr. Kurlander does not have an employment agreement at this time.
 
Compensation of Directors
 
We do not pay our directors any fees or other compensation for acting as directors. We have not paid any fees or other compensation to any of our directors for acting as directors to date.
 
 
-17-

 
Stock Option Grants
 
We did not grant any stock options to any of our directors and officers during our most recent fiscal year ended April 30, 2009. We have not granted any stock options to any of our directors and officers since the end of our most recent fiscal year on April 30, 2009.
 
Exercises of Stock Options and Year-End Option Values
 
None of our directors or officers exercised any stock options (i) during our most recent fiscal year ended April 30, 2009, or (ii) since the end of our most recent fiscal year on April 30, 2009.
 
Outstanding Stock Options
 
None of our directors or officers holds any options to purchase any shares of our common stock.
 
Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of April 30, 2009 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors, (iii) each of our officers, and (iv) our officers and directors as a group. Each shareholder listed possesses sole voting and investment power with respect to the shares shown.
 
Title of class
  
Name and address
of beneficial owner
  
Amount and
nature of
beneficial owner(2)
  
Percentage of
class (1)
  
               
Directors and  Officers
              
               
Common Stock
  
Chris Cooper
5612 Olympic Street
Vancouver BC V6N 1Z5
Canada
  
175,000 shares
  
4.3%
  
               
Common Stock
  
All executive officers and directors as a group
(one person)
  
1,825,000
  
44.5%
  
 
(1)         The percentage of class is based on 4.1 million shares of common stock issued and outstanding as of April 30, 2009. 
 
 (2)        Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights.
 
 
-18-
 
Changes in Control
 
We are unaware of any contract, or other arrangement or provision of our Articles or by-laws, the operation of which may at a subsequent date result in a change of control of our company.
 
Item 13.   Certain Relationships and Related Transactions, any Director Independence
 
During the past fiscal year ended April 30, 2009, none of the following parties has had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
 
 
·                  Any of our directors or officers;
 
 
·                  Any person proposed as a nominee for election as a director;
 
 
·                  Any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock;
 
 
·                  Any member of the immediate family (including spouse, parents, children, siblings and in-laws) of any of the above persons.
 
Item 14.   Principal Accountant Fees and Services
 
The following table sets forth information regarding amounts billed, or expected to be billed, to us by our independent auditors, Peterson Sullivan LLP, Certified Public Accountants, for each of our last two fiscal years:
 
   
Year Ended April 30,
  
   
2009
  
2008
  
Audit and Quarterly Review Fees
  
$
25,053
  
$
20,500
  
Audit Related Fees
  
$
nil
  
$
nil
  
Tax Fees
  
$
nil
  
$
nil
  
All Other Fees
  
$
nil
  
$
nil
  
Total
  
$
25,053
  
$
20,500
  
 
Audit Fees
 
Audit fees are the aggregate fees billed by our independent auditor for the audit of our annual financial statements, reviews of our interim quarterly financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.
 
Tax Fees
 
Tax fees include fees charged for the preparation of federal income tax return and any state income tax filings as well as for advice on income tax matters.
 
All Other Fees
 
All other fees include fees billed for due diligence or other non attest service work performed.
 
 
-19-
 
 
Item 15.   Exhibits and Financial Statement Schedules
 
The following exhibits are included with this Annual Report on Form 10-K:
 
Exhibit 
    
Number
  
Description of Exhibit
     
3.1(1)
    
Articles of Incorporation
       
3.2(1)
    
By-Laws
       
3.3(1)
    
Certificate of Amendment, as filed with the Nevada Secretary of State
       
10.1(1)
    
Participation Agreement between Explortex Energy Inc. and PB Energy USA Ltd. dated December 1, 2005
       
10.2(1)
    
Participation Agreement between Explortex Energy Inc. and Star of Texas Energy Services, Inc. dated December 1, 2005
       
31.1(2)
  
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a- 14(b) of the Exchange Act.
     
32.1(2)
  
Certification of Chief Executive Officer and Chief Financial Officer pursuant Rule 13a- 14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
(1) 
Filed as an exhibit to our registration statement on Form SB-2 filed with the Commission on July 10, 2006.
   
(2) 
Filed as an exhibit to this annual report on Form 10-K
 
 

 
-20-
 
 
 
 
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
EXPLORTEX ENERGY INC.
   
   
 
By: /s/ Steven Kurlander
 
Steven Kurlander
 
Chief Executive Officer
and Chief Financial Officer
 
Date: July 27, 2009
 
In accordance with the Securities 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.
 
Signature
  
Title
  
Date
         
   
 
    
   
 
    
         
/S/ Steven Kurlander
  
President, Chief Executive Officer, Chief
    
Steven Kurlander
  
Financial Officer, Principal Accounting and
Director
    
 
 
 -21-