10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2013

OR

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

For the transition period from          to

Commission file number: 333-169507

BRENHAM OIL & GAS CORP.

(Exact Name Of Registrant As Specified In Its Charter)

Nevada	27-2413874
(State of Incorporation)	(I.R.S. Employer Identification No.)
601 Cien Street, Suite 235 Kemah, TX	77565-3077
(Address of Principal Executive Offices)	(ZIP Code)

  Registrant's Telephone Number, Including Area Code: (281) 334-9479

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  xNo ¨

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 xNo ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer, "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	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 ¨No x

The number of shares outstanding of each of the issuer’s classes of equity as of August 12, 2013 is 122,605,001 shares of common stock.

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Item	Description	Page
	PART I – FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	3
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	16
ITEM 4T.	CONTROLS AND PROCEDURES	16
	PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	17
ITEM 1A.	RISK FACTORS	17
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	17
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	17
ITEM 4.	MINE SAFETY DISCLOSURES	17
ITEM 5.	OTHER INFORMATION	17
ITEM 6.	EXHIBITS	17

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Financial Statements

Financial Statements
Unaudited Consolidated Balance Sheets – June 30, 2013 and December 31, 2012	4
Unaudited Consolidated Statements of Operations – Three and Six months Ended June 30, 2013 and 2012 and for the Period from November 7, 1997 (inception) to June 30, 2013	5
Unaudited Consolidated Statements of Cash Flows – Six months Ended June 30, 2013 and 2012 and for the Period from November 7, 1997 (inception) to June 30, 2013	6
Notes to Unaudited Consolidated Financial Statements	7

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BRENHAM OIL & GAS CORP.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2013	December 31, 2012
ASSETS
Current assets:
Cash and cash equivalents	$ 16,818	$ 6,679
Accounts receivable	2,300	-
Total current assets	19,118	6,679
Oil and gas properties	97,690	8,400
Total assets	$ 116,808	$ 15,079
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$ 22,863	$ 11,714
Accounts payable – related party	229,229	285,198
Total current liabilities	252,092	296,912
Long-term liabilities:
Asset retirement obligation	1,957	-
Total liabilities	254,049	296,912
Commitments and contingencies	-	-
Stockholders’ deficit:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding	-	-
Common stock, $0.0001 par value, 200,000,000 shares authorized; 122,768,473 and 110,577,093 shares issued, respectively; 122,605,001 and 110,413,621 shares outstanding, respectively	12,278	11,058
Additional paid-in capital	893,533	211,582
Accumulated deficit during the exploration stage	(1,041,340)	(502,761)
Less treasury stock, at cost; 163,472	(1,712)	(1,712)
Total stockholders’ deficit	(137,241)	(281,833)
Total liabilities and stockholders’ deficit	$ 116,808	$ 15,079

See accompanying notes to the unaudited consolidated financial statements.

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BRENHAM OIL & GAS CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2013 AND 2012 AND FOR

THE PERIOD FROM NOVEMBER 7, 1997 (INCEPTION) TO JUNE 30, 2013

(Unaudited)

	For the Three Months Ended June 30,		For the Six Months Ended June 30,		Inception to
	2013	2012	2013	2012	June 30, 2013
Oil and gas revenues	$ 8,079	$ 132	$ 16,722	$ 411	$ 128,612
Costs and expenses:
Lease operating expenses	7,206	-	14,391	-	14,391
General and administrative	58,465	57,134	540,743	77,088	1,160,565
Depletion and accretion	141	-	167	-	167
Total operating expenses	65,812	57,134	555,301	77,088	1,175,123
Operating loss	(57,733)	(57,002)	(538,579)	(76,677)	(1,046,511)
Other income (expense):
Interest income	-	-	-	-	19,123
Interest expense	-	-	-	-	(1,150)
Total other income	-	-	-	-	17,973
Loss before income taxes	(57,733)	(57,002)	(538,579)	(76,677)	(1,028,538)
Income tax expense	-	-	-	-	12,802
Net loss	$ (57,733)	$ (57,002)	$ (538,579)	$ (76,677)	$ (1,041,340)
Net loss per common share – basic and diluted	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average number of common shares outstanding – basic and diluted	118,658,527	110,415,753	116,272,563	110,369,550

See accompanying notes to the unaudited consolidated financial statements.

5

BRENHAM OIL & GAS CORP.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2013 AND 2012 AND FOR

THE PERIOD FROM NOVEMBER 7, 1997 (INCEPTION) TO JUNE 30, 2013

 (Unaudited)

	For the Six Months Ended June 30,		Inception to
	2013	2012	June 30, 2013
Cash flows from operating activities:
Net loss	$ (538,579)	$ (76,677)	$ (1,041,340)
Adjustments to reconcile net loss to cash used in operating activities:
Depletion and accretion	167	-	167
Stock-based compensation	316,000	5,000	527,020
Changes in operating assets and liabilities:
Accounts receivable	(2,300)	-	(2,300)
Accounts payable – related party	131,100	(4,000)	131,100
Accounts payable	11,149	(2,898)	22,863
Net cash used in operating activities	(82,463)	(78,575)	(362,490)
Cash flows from investing activities:
Payments for acquisition of oil and gas property	(50,000)	-	(50,000)
Net cash used in investing activities	(50,000)	-	(50,000)
Cash flows from financing activities:
Advances from related parties, net	80,102	79,323	345,420
Principal payments on debt	(37,500)	-	(37,500)
Payments for acquisition of treasury stock	-	(952)	(1,712)
Proceeds from sale of common stock	100,000	-	123,100
Net cash provided by financing activities	142,602	78,371	429,308
Net increase (decrease) in cash	10,139	(204)	16,818
Cash and cash equivalents, beginning of period	6,679	6,426	-
Cash and cash equivalents, end of period	$ 16,818	$ 6,222	$ 16,818
Supplemental disclosures:
Interest paid	$ -	$ -	$ 1,150
Income taxes paid	$ -	$ -	$ 12,802
Non-cash transactions:
Issuance of stock for oil and gas property	$ -	$ -	$ 8,400
Issuance of note payable for oil and gas property	$ 37,500	$ -	$ 37,500
Issuance of common stock to convert payable due to American International Industries, Inc.	$ 267,171	$ -	$ 267,171
Capitalized asset retirement costs	$ 1,868	$ -	$ 1,868

See accompanying notes to the unaudited consolidated financial statements.

6

BRENHAM OIL & GAS, CORP.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of Brenham Oil & Gas Corp. (“Brenham”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Brenham's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Organization, Ownership and Business

Brenham Oil & Gas, Inc. was incorporated under the laws of the State of Texas in November 1997 and became a wholly-owned subsidiary of American International Industries, Inc. ("American") in November 1997. On April 21, 2010, the Company was re-domiciled in Nevada as Brenham Oil & Gas Corp. and Brenham Oil & Gas, Inc. became a wholly-owned subsidiary of Brenham. American was issued 64,977,093 shares of common stock of Brenham in connection with the reorganization in exchange for all shares outstanding of Brenham Oil & Gas, Inc. The reorganization has been retroactively applied to the consolidated financial statements for all periods presented.

Brenham is an exploration stage company and will continue to be so until commencement of substantial production from its oil and gas operations.

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.  Significant estimates generally include those with respect to the amount of oil and gas depletion and asset retirement obligation.

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

Cash and Cash Equivalents

Brenham considers all short-term securities purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable consist primarily of receivables from oil and gas revenue and are carried at the expected net realizable value.

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Oil & Gas Properties, Full Cost Method

Brenham uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized.

Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities, are capitalized as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. Brenham assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred.  Impairment of unproved properties is assessed based on management's intention with regard to future development of individually significant properties and the ability of Brenham to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

Under this method, sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.  If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the consolidated statements of operations.

Costs of oil and gas properties are amortized using the units of production method under this method.  Amortization expense calculated per equivalent physical unit of production amounted to $0.48 per barrel of oil equivalent for the three and six months ended June 30, 2013.

Ceiling Test

In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense.  During the six months ended June 30, 2013 and 2012, no impairment of oil and gas properties was recorded.

Income Taxes

Brenham is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense.

Brenham has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of June 30, 2013, Brenham had not recorded any tax benefits from uncertain tax positions.

Net Loss Per Share

Net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Basic and diluted net losses per share were the same, as there were no common stock equivalents outstanding. 

8

Subsequent Events

Brenham has evaluated all transactions from June 30, 2013 through the financial statement issuance date for subsequent event disclosure consideration.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.

Note 2.  Oil and Gas Properties

Brenham uses the full cost method of accounting for oil and gas producing activities.  Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis.  Amortization of these unproved property costs begins when the properties become proved or their values become impaired and the corresponding costs are added to the capitalized costs subject to amortization.  During the three and six months ended June 30, 2013, depletion of oil and gas properties of $52 and $78, respectively, was recorded.  Costs of oil and gas properties are amortized using the units of production method.  Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool and generally, no gain or loss is recognized.

In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense.  During the six months ended June 30, 2013 and 2012, no impairment of oil and gas properties was recorded.

Below are the components of Brenham’s oil and gas properties recorded:

	June 30, 2013	December 31, 2012
Royalty interest in 24 acres in Washington County, Texas (a)	$ -	$ -
Royalty interest in 700 acres in the Permian Basin (b)	8,400	8,400
10% working interest in the Pierce Junction Field (c)	87,500	-
Lease of 394 acres in the Gillock Field (d)	-	-
Capitalized asset retirement costs	1,868	-
Total oil and gas properties	97,768	8,400
Accumulated depletion	(78)	-
Net capitalized costs	$ 97,690	$ 8,400

a.

Royalty interest in 24 acres in Washington County, Texas - We have an oil and gas mineral royalty interest covering a twenty-four acre tract of land located in Washington County, Texas, which is carried on the balance sheet at $0. The royalty interest is currently leased by Anadarko Petroleum Corporation for a term continuing until the covered minerals are no longer produced in paying quantities from the leased premises.  Royalties on the minerals produced are currently incidental and paid to Brenham as follows: (i) for oil and other liquid hydrocarbons, and (ii) for gas (including casing-head gas), the royalty is one-sixth of the net proceeds realized by Anadarko Petroleum Corporation on the sale thereof, less a proportionate part of ad valorem taxes and production, severance, or other excise taxes. In addition, Brenham is entitled to shut-in royalties of $1 per acre of land for every ninety day period within which one or more of the wells in leased premises, or lands pooled therewith, are capable of producing paying quantities, but such wells are either shut-in or production is not being sold.

9

b.

Royalty interest in 700 acres in the Permian Basin - On July 22, 2011, Brenham entered into an Asset Purchase and Sale Agreement with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc. (“Sellers”), pursuant to which Brenham acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The agreement provided for the Sellers to complete all oil lease assignments by August 15, 2011. The purchase consideration for the acquisition is the issuance to Sellers of 2,000,000 restricted shares of Brenham common stock valued at $8,400, with an additional 2,000,000 restricted shares to be issued contingent upon realization of certain production targets in 2012. On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance, Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue additional shares was removed.

c.

10% working interest in the Pierce Junction Field - On March 12, 2013, Brenham entered into an agreement with an effective date of January 1, 2013, to purchase a 10% working interest in the Pierce Junction Field for $50,000 cash and a $70,000 non-interest bearing note payable due on August 31, 2013.  On May 30, 2013, the holder of this note payable accepted $37,500 as full payment and Brenham recorded $32,500 as a reduction in the value of the oil and gas property due to the decrease in the consideration given to acquire it.

d.

Lease of 394 acres in the Gillock Field - Brenham leased 394 acres in Galveston County for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. (“KDT”) and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 and 200,000 shares of American restricted common stock.  The $131,100 is to be paid as follows: $100,000 on or before June 30, 2013 and $31,100 on or before October 30, 2013. KDT subsequently extended the payment terms for these amounts to on or before October 31, 2013. Brenham issued 3,326,316 shares of Brenham restricted common stock to American as payment in full for the 200,000 shares issued by American on Brenham’s behalf.  In 2002, KDT paid $1,175,000 for the original 437 acres and the mineral rights to 394 acres.  However, KDT assigned no value to the mineral rights.Due to the related parties having no basis in the mineral rights, Brenham expensed the costs associated with the transaction which totaled $447,100 and consisted of i) $316,000 of stock-based compensation calculated at the grant date fair value of the 3,326,316 shares of Brenham common stock issued to American (which equaled the grant date fair value of the common stock American issued to KDT and the Daniel Dror II Trust) and ii) the $131,100 related party payable.

The following table sets forth the changes in the total cost of oil and gas properties during the six months ended June 30, 2013:

Balance at beginning of period – December 31, 2012	$ 8,400
Acquisition of oil and gas interests:
Cash	87,500
Capitalized asset retirement costs	1,868
Balance at end of period – June 30, 2013	$ 97,768

Note 3. Payables - Related Party

Related party payables at June 30, 2013 represent $98,129 owed to American as advances to assist with Brenham's operating expenses and $131,100 owed for the acquisition of mineral rights for the Gillock Field from KDT and Daniel Dror II Trust of 2012. Related party payables at December 31, 2012 were comprised of $273,171 owed to American as advances to assist with Brenham's operating expenses, $8,571 owed to L. Rogers Hardy for travel and operating expenses, and $3,456 owed to Scott Gaille for operating expenses. KDT is owned by an entity which is controlled by the brother of Daniel Dror, Brenham’s Chairman, Chief Executive Officer, and President. Scott Gaille is the former President of Brenham and Bryant Mook and L. Rogers Hardy are Vice Presidents of Brenham. The advances to American are non-interest bearing and due on demand.

American will fully fund the operations of Brenham for the next twelve months.

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Note 4. Equity

Common Stock

In December 1997, Brenham sold 64,977,093 common shares to a related party for $1,000.

In April 2010, American, the sole stockholder of Brenham Oil & Gas, Inc., entered into a Separation and Distribution Agreement to spin off Brenham Oil & Gas, Inc. from its parent. In conjunction with this transaction, American formed Brenham Oil & Gas, Corp., a Nevada corporation, with authorized common stock of 200,000,000 shares and authorized preferred stock of 10,000,000 shares. Brenham issued 64,977,093 shares of common stock to American for all shares of Brenham Oil & Gas, Inc., of which American issued as a dividend 10,297,019 shares to the existing stockholders of American, on a one-for-one basis. Brenham issued 13,000,000 shares of common stock for cash consideration of $22,100 and 22,000,000 shares for services valued at $45,466.  American maintains control of Brenham through ownership of 65,346,390 shares of Brenham's common stock, representing about 53% of the outstanding shares as of June 30, 2013.

On July 22, 2011, Brenham entered into an Asset Purchase and Sale Agreement (the “Agreement”) with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc., pursuant to which Brenham acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The Agreement provides for the Sellers to complete all oil lease assignments by August 15, 2011. The purchase consideration for the acquisition is the issuance to Sellers of 2,000,000 restricted shares of Brenham common stock valued at $8,400, with an additional 2,000,000 restricted shares to be issued contingent upon realization of certain production targets in 2012. On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance, Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue additional shares was removed. This property is on the balance sheet as "Oil and gas properties" for $8,400 (Note 2).

On April 3, 2012, Brenham issued 100,000 shares valued at $5,000 to a third party for services.  For the year ended December 31, 2012, Brenham paid $1,101 to repurchase 12,000 shares of its common stock for treasury.  For the year ended December 31, 2011, Brenham paid $611 to repurchase 151,472 shares of its common stock for treasury, and issued 4,500,000 shares of its common stock valued at $18,900 for services to employees, directors and third parties, and 4,000,000 shares of its common stock valued at $16,800 to Brenham’s parent, American, for services.

On January 30, 2013, the Board of Directors approved and issued 3,340,000 shares of restricted common stock to AMIN to convert $267,171 owed to AMIN to equity.  These shares were issued during the six months ended June 30, 2013.

On February 28, 2013, Brenham leased 394 acres in Galveston County for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 and 200,000 shares of American restricted common stock.  Brenham issued 3,326,316 shares of Brenham restricted common stock to American as payment in full for the 200,000 shares issued by American on Brenham’s behalf.  

On February 28, 2013, Brenham announced that Bryant Mook has been appointed President and Chief Operating Officer.  Also, Mr. Mook and Brenham signed a stock purchase agreement whereby Brenham has agreed to issue 11,050,127 shares of Brenham common stock in exchange for $200,000, to be issued and paid as follows: 5,525,064 shares for $100,000 on June 30, 2013, and 5,525,063 shares for $100,000 on October 31, 2013.  In connection with this agreement, $100,000 in cash was received on June 5, 2013 and 5,525,064 shares of common stock were issued to Mr Mook.

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Stock options

On December 5, 2012, Brenham issued 3,000,000 stock options to Brenham’s Vice President - Exploration, Mr. L. Rogers Hardy, with an exercise price of $0.035 per share, expiring in 3 years, valued at $104,974 and recorded as share-based compensation.  Brenham estimated the fair value of each stock option at the grant date as $0.035 by using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2012 as follows:

	December 5, 2012
Dividend yield	0.0%
Expected volatility	423.12%
Risk free interest	0.75%
Expected lives	3 years

A summary of the status of Brenham's stock options to employees for the six months ended June 30, 2013 is presented below:

	Shares	Weighted Average Exercise Price	Intrinsic Value
Outstanding and exercisable as of December 31, 2012	3,000,000	$ 0.035
Granted	-	N/A
Exercised	-	N/A
Canceled / Expired	-	N/A
Outstanding and exercisable as of June 30, 2013	3,000,000	$ 0.035	$ -

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Quarterly Report, the terms "we", "us", "our" and the "Company" means Brenham Oil & Gas, Corp., a Nevada corporation, and its subsidiary, Brenham Oil & Gas, Inc. (collectively, "Brenham"). To the extent that we make any forward-looking statements in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report, we emphasize that forward-looking statements involve risks and uncertainties and our actual results may differ materially from those expressed or implied by our forward-looking statements. Our forward-looking statements in this Quarterly Report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties. Generally, forward-looking statements include phrases with words such as "expect", "anticipate", "intend", "plan", "believe", "seek", "estimate" and similar expressions to identify forward-looking statements.

Overview

Our business objective is to become an independent, oil and gas-focused, exploration and production company with the intent to acquire prospect inventory in the United States and international locations, with an initial focus on Africa. We believe that an experienced management team, equipped with industry-leading data, newly available seismic technologies, industry contacts and adequate funding, could acquire a prospect inventory that could be competitive with other relevant oil and gas companies. After considering numerous global oil and gas-producing regions in which to focus our exploration and development efforts, we decided that an initial focus on Africa was appropriate due to the largely unrealized hydrocarbon potential offered within this region. We believe that we can be successful in assembling such an inventory and that our potential asset portfolio would be attractive. Prior to joining Brenham, certain persons on our management team played a significant role in the assembly of asset portfolios in Africa.

The discussion of the results of operations represents our historical results. The following discussion may not be indicative of future results for many reasons, including the continuing trend in the financial markets, the credit crisis and related turmoil in the global financial system which may be expected to have a material adverse impact on our plan of operation and our liquidity and our financial condition. If conditions in the financial markets do not improve, our ability to access the capital markets or borrow money may be restricted at a time when we would like, or need, to raise capital. This could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations and capital expenditures in the future. Additionally, changing economic conditions could lead to reduced demand for natural gas and oil, or further reductions in the prices of natural gas and oil, or both, which could have a negative impact on our ability to implement our plan of operations and related financial positions, results of operations and cash flows. While the ultimate outcome and impact of the recent trends in the financial markets cannot be predicted, it may have a material adverse effect on our plan of operation, future liquidity, results of operations and financial condition.

The discussion of the results of operations represents our historical results. The following discussion may not be indicative of future results.

THREE AND SIX MONTHS ENDED JUNE 30, 2013 VERSUS THREE AND SIX MONTHS ENDED JUNE 30, 2012

Oil and gas revenues for the three months ended June 30, 2013 were $8,079, consisting of $7,872 for Brenham’s 10% working interest in the Pierce Junction Field and $207 for oil and gas mineral royalty interests.  Oil and gas revenues for the three months ended June 30, 2012 were $132 for oil and gas mineral royalty interests. Oil and gas revenues for the six months ended June 30, 2013 were $16,722, consisting of $16,275 for Brenham’s 10% working interest in the Pierce Junction Field and $447 for oil and gas mineral royalty interests.  Oil and gas revenues for the six months ended June 30, 2012 were $411 for oil and gas mineral royalty interests.

Lease operating expenses for the Pierce Junction Field were $7,206 and $14,391 for the three and six months ended June 30, 2013, respectively.

General and administrative expenses for the three months ended June 30, 2013 were $58,465 and consisted primarily of executive compensation and legal and professional expenses.  General and administrative expenses for the three months ended June 30, 2012 were $57,134, and consisted primarily of executive compensation, travel, and legal and professional expenses.  General and administrative expenses for the six months ended June 30, 2013 were $540,743 and consisted of $131,100 incurred in connection with the Gillock Field lease, $316,000 of stock-based compensation incurred in connection with the Gillock Field lease and $93,643 in executive compensation, travel, and legal and professional expenses.  General and administrative expenses for the six months ended June 30, 2012 were $77,088, and consisted primarily of executive compensation, travel, and legal and professional expenses.

13

Net loss for the three months ended June 30, 2013 was $57,733, compared to $57,002 for the three months ended June 30, 2012.  Net loss for the six months ended June 30, 2013 was $538,579, compared to $76,677 for the six months ended June 30, 2012.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2013 and December 31, 2012, total assets were $116,808 and $15,079, respectively. We had cash of $16,818 and $6,679 at June 30, 2013 and December 31, 2012, respectively.  At June 30, 2013, we had accounts receivable of $2,300.  At June 30, 2013, long-term assets consisted of oil and gas properties of $97,690.  At December 31, 2012, long-term assets consisted of oil and gas properties of $8,400.

At June 30, 2013, total liabilities were $254,049, consisting of $22,863 in accounts payable, $229,229 in accounts payable to related parties, and an asset retirement obligation of $1,957. At December 31, 2012, total liabilities were $296,912, consisting of $11,714 in accounts payable and $285,198 in accounts payable to related parties.

We had negative cash flow from operations of $82,463 during the six months ended June 30, 2013 as a result of a net loss of $538,579 and an increase in accounts receivable of $2,300, offset by stock-based compensation of $316,000, payable to related party of $131,100, depletion and accretion of $167, and an increase in accounts payable of $11,149.  We had negative cash flow from operations of $78,575 during the six months ended June 30, 2012 as a result of a net loss of $76,677, an increase in accounts receivable from related parties of $4,000, and a decrease in accounts payable of $2,898, offset by stock-based compensation of $5,000. 

For the six months ended June 30, 2013, cash used in investing activities was $50,000 for a payment made to acquire a 10% working interest in the Pierce Junction Field oil and gas property.

For the six months ended June 30, 2013, cash provided by financing activities was $142,602 consisting of advances from related parties of $80,102 and proceeds from the sale of common stock of $100,000, offset by principal payments on debt of $37,500.  For the six months ended June 30, 2012, cash provided by financing activities was $78,371, consisting of $79,323 in advances from related parties, partially offset by $952 for the repurchase of 11,000 shares of Brenham's common stock for treasury.

We are an exploration stage company and will continue to be so until commencement of substantial production from our future oil and gas properties, none of which have been identified to date, except for the Pierce Junction Field. Future revenue will depend upon successful selection of future prospects, drilling results, additional and timely capital funding at terms and conditions satisfactory to us, of which there can be no assurance, and access to suitable infrastructure. Further, we will not be able to commence our exploration program until we have entered into certain agreements with government agencies of respective countries and/or other oil and gas companies. Until then our primary sources of liquidity are expected to be net proceeds from future offerings and funds from future private and public equity placements and debt funding.

In July 2011, we purchased a lease with 20 oil wells situated on approximately 700 acres in the Permian Basin near Abilene, Texas.  We issued 2,000,000 shares of Common Stock with an additional 2,000,000 shares to be issued contingent upon realization of certain production targets in 2012.  The oil field contains estimated probable reserves of approximately 1.4 million barrels of oil.  The net present value (10% discount rate after development and operating costs) is approximately $20 million.  On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance, Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue additional shares was removed.

14

On February 28, 2013, Brenham leased 394 acres in Galveston County for the acquisition of mineral rights for the Gillock Field from KDT and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 and 200,000 shares of AMIN restricted common stock. The Board of Directors also authorized and the issuance of 3,326,316 shares of Brenham restricted common stock to AMIN as payment in full for the 200,000 shares issued by AMIN on Brenham’s behalf. In 2002, KDT paid $1,175,000 for the original 437 acres and 100% of the mineral rights, primarily because of the mineral rights attached to the property.  However, because this is a related party transaction, the value of the lease must be recorded at the original cost of the mineral rights to KDT, which cannot be separated from the total consideration paid by KDT.  Brenham recorded the lease at $0, the original cost of the mineral rights to KDT, and recorded stock-based compensation of $316,000 and other compensation $131,100 (Note 2). The acquired acreage is located just west of Galveston Bay, Galveston County, 35 miles southeast of Houston and 15 miles northwest of Galveston.  It is adjacent to and one location away from the Gillock, East Segment Field operated by Alta Mesa Services, and about two miles west of the Eagle Bay Field operated by Sandridge Onshore, LLC and Transtexas Gas Corp.  The conclusions of an internal reserve study of the 394 acre lease indicate proved undeveloped (PUD) undiscounted revenues of $73,162,300 and discounted NPV of 10% valued at $33,441,000, and possible reserves (POSS) undiscounted valued at $195,848,900 and discounted NPV of 10% valued at $81,454,100.  The total of the proved undeveloped and probable reserves, discounted at NPV 10% for a total of $114,895,200.

On March 12, 2013, Brenham entered into an agreement with an effective date of January 1, 2013, to purchase a 10% working interest in the Pierce Junction Field for $50,000 cash and a $70,000 non-interest bearing note payable due on August 31, 2013.  Brenham's asset acquisition includes eight producing wells with an additional seven wells scheduled for mechanical work-over that should add more oil reserves.  Additional offsetting acreage can be developed by Brenham on a well by well basis to produce additional oil reserves from several producing horizons.

We expect to incur substantial expenses and generate significant operating losses as we pursue our efforts to identify prospects, develop those prospects and as we:

·

purchase and analyze seismic data in order to identify future prospects;

·

opportunistically invest in additional oil and gas leases and concession licenses;

·

develop our discoveries which we determine to be commercially viable; and


·

incur expenses related to operating as a public company and compliance with regulatory requirements.

Our future financial condition and liquidity will be impacted by, among other factors, the success of selection of prospects, our future exploration and appraisal drilling program, the number of commercially viable oil and gas discoveries made and the quantities of oil and gas discovered, the speed with which we can bring such discoveries to production, and the actual cost of exploration, appraisal and development of our prospects.

Until such time as we can identify specific prospects, we cannot determine with any certainty the amount of capital that we will be required to raise to fund each potential prospect. To date, we have not begun negotiations with any investment bank, financial institution or other source of funding for the purpose of raising either equity or debt capital, nor have we negotiated with any potential joint venture partner for the purpose of pursuing any potential prospect. Only when and if we identify prospects and seek to enter into contracts, licenses or other arrangements to pursue such prospects will we be able to determine the amount of funding that will be required for each such prospect. We have no arrangements with our executive officers or principal shareholders to provide any funding and any funding that they may be requested to provide may be limited.

Additional funding may not be available to us on acceptable terms or at all. In addition, the terms of any financing may adversely affect the holdings or the rights of our shareholders. For example, if we raise additional funds by issuing additional equity securities, further dilution to our existing shareholders will result. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail one or more of our exploration and appraisal drilling programs. We also could be required to seek funds through arrangements with collaborators or others that may require us to relinquish rights to some of our prospects which we would otherwise develop on our own, or with a majority working interest.

15

Contractual Obligations

In the future, we may be party to the following contractual arrangements, which will subject us to further contractual obligations:

·

credit facilities;

·

contracts for the lease of drilling rigs;

·

contracts for the provision of production facilities;

·

infrastructure construction contracts; and


·

long term oil and gas property lease arrangements.

Off-Balance Sheet Arrangements

As of June 30, 2013 and December 31, 2012, we did not have any off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term "market risks" refers to the risk of loss arising from changes in commodity prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. All of our market risk sensitive instruments will be entered into for purposes of risk management and not for speculation.

Due to the historical volatility of commodity prices, if and when we commence production, we may enter into various derivative instruments to manage our exposure to volatility of commodity market prices. We may use options (including floors and collars) and fixed price swaps to mitigate the impact of downward swings in commodity prices to our cash flow. All contracts will be settled with cash and would not require the delivery of physical volumes to satisfy settlement. While in times of higher commodity prices this strategy may result in our having lower net cash inflows than we would otherwise have if we had not utilized these instruments, management believes the risk reduction benefits of such a strategy would outweigh the potential costs.

We may borrow under fixed rate and variable rate debt instruments that give rise to interest rate risk. Our objective in borrowing under fixed or variable rate debt is to satisfy capital requirements while minimizing our costs of capital.

ITEM 4T. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. As of June 30, 2013, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act. Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in internal controls. During the quarterly period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

16

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

For the six months ended June 30, 2013, there were no material changes from risk factors as disclosed in Company’s annual report for the year ended December 31, 2012.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following documents are filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Any document incorporated by reference is identified by a parenthetical reference to the SEC filing that included such document.

Exhibit No.	Description
31.1	Certification of CEO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002
31.2	Certification of CFO Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002
32.1	Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
32.2	Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

17

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

By /s/ Daniel Dror

Daniel Dror

Chief Executive Officer, President, and Chairman

August 12, 2013

By /s/ Sherry L. McKinzey

Sherry L. McKinzey

Director, Chief Financial Officer, and Vice-President

August 12, 2013

18

EX-31

CERTIFICATIONS

I, Daniel Dror, certify that:

1. I have reviewed this quarterly report of Brenham Oil & Gas, Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 12, 2013

/s/ Daniel Dror

CEO and Chairman

EX-31

CERTIFICATIONS

I, Sherry McKinzey, certify that:

1. I have reviewed this quarterly report of Brenham Oil & Gas, Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  August 12, 2013

/s/ Sherry McKinzey

CFO

EX-32

Statement Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

The undersigned, Daniel Dror, Chairman & CEO of Brenham Oil & Gas, Corp., a Nevada corporation, hereby makes the following certification as required by Section 906(a) of the Sarbanes-Oxley Act of 2002, with respect to the following of this report filed pursuant to Section 15(d) of the Securities Exchange Act of 1934: Quarterly Report of Form 10-Q for the period ended June 30, 2013.

The undersigned certifies that the above annual report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, and information contained in the above annual report fairly presents, in all respects, the financial condition of Brenham Oil & Gas, Corp. and results of its operations.

Date:  August 12, 2013

Daniel Dror

Chairman

/s/ Daniel Dror

EX-32

Statement Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

The undersigned, Sherry McKinzey, CFO of Brenham Oil & Gas, Corp., a Nevada corporation, hereby makes the following certification as required by Section 906(a) of the Sarbanes-Oxley Act of 2002, with respect to the following of this report filed pursuant to Section 15(d) of the Securities Exchange Act of 1934: Quarterly Report of Form 10-Q for the period ended June 30, 2013.

The undersigned certifies that the above annual report fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, and information contained in the above annual report fairly presents, in all respects, the financial condition of Brenham Oil & Gas, Corp. and results of its operations.

Date:  August 12, 2013

Sherry McKinzey

CFO

/s/ Sherry McKinzey

XML

Note 1 - Summary of Significant Accounting Policies: Ceiling Test (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Ceiling Test

Ceiling Test

In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense.  During the six months ended June 30, 2013 and 2012, no impairment of oil and gas properties was recorded.

XML

BRENHAM OIL & GAS CORP. - CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended		188 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 8,079	$ 132	$ 16,722	$ 411	$ 128,612
Costs and expenses:
Lease operating expenses	7,206	0	14,391	0	14,391
General and administrative	58,465	57,134	540,743	77,088	1,160,565
Depletion and accretion	141	0	167	0	167
Total operating expenses	65,812	57,134	555,301	77,088	1,175,123
Operating loss	(57,733)	(57,002)	(538,579)	(76,677)	(1,046,511)
Other income (expenses):
Interest income	0	0	0	0	19,123
Interest expense	0	0	0	0	(1,150)
Total other income	0	0	0	0	17,973
Loss before income taxes	(57,733)	(57,002)	(538,579)	(76,677)	(1,028,538)
Income tax expense	0	0	0	0	12,802
Net loss	$ (57,733)	$ (57,002)	$ (538,579)	$ (76,677)	$ (1,041,340)
Net loss per share - basic and diluted	$ 0.00	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Weighted average common shares outstanding - basic and diluted	118,658,527	110,415,753	116,272,563	110,369,550	0

XML

Note 1 - Summary of Significant Accounting Policies: Basis of Presentation (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of Brenham Oil & Gas Corp. (“Brenham”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Brenham's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

XML

Note 4. Equity: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Tables)

6 Months Ended

Jun. 30, 2013

Tables/Schedules

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

On December 5, 2012, Brenham issued 3,000,000 stock options to Brenham’s Vice President - Technology, Mr. L. Rogers Hardy, with an exercise price of 0.035 per share, expiring in 3 years, valued at $104,974 and recorded as share-based compensation.  Brenham estimated the fair value of each stock option at the grant date as $0.035 by using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2012 as follows:

	December 5, 2012
Dividend yield	0.0%
Expected volatility	423.12%
Risk free interest	0.75%
Expected lives	3 years

XML

Note 1 - Summary of Significant Accounting Policies: Income Taxes (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Income Taxes

Income Taxes

Brenham is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense.

Brenham has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of June 30, 2013, Brenham had not recorded any tax benefits from uncertain tax positions.

XML

Note 2. Oil and Gas Properties (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
Details
Depletion	$ 52	$ 78

XML

Note 1 - Summary of Significant Accounting Policies: Oil & Gas Properties, Full Cost Method (Details)	Jun. 30, 2013
Details
Amortization Expense Per Physical Unit of Production	0.48

XML

Note 4. Equity (Details) (USD $)	1 Months Ended			6 Months Ended	12 Months Ended
	Feb. 28, 2013	Jan. 31, 2013	Dec. 31, 1997	Jun. 30, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Apr. 21, 2010
Details
Shares issued to related party (in shares)			64,977,093
Shares issued to related party (in dollars)			$ 1,000
Common stock, shares authorized (in shares)				200,000,000	200,000,000
Preferred stock, shares authorized (in shares)				10,000,000	10,000,000
Common shares issued to parent (in shares)								64,977,093
Common shares issued as dividend (in shares)							10,297,019
Issuance of common shares for cash (in shares)				5,525,064			13,000,000
Issuance of common shares for cash				100,000			22,100
Issuance of common shares for services (in shares)					100,000	4,500,000	22,000,000
Issuance of common shares for services					5,000	18,900	45,466
American ownership of common stock (in shares)					65,346,390
American ownership of common stock (percentage)				53.00%
Issuance of common shares for oil & gas properties (in shares)						2,000,000
Issuance of common shares for oil & gas properties						8,400
Contingency for issuance of stock for oil & gas properties (in shares)						2,000,000
Rescission of contingency for issuance of stock for oil & gas properties (in shares)						(2,000,000)
Oil & gas properties - unproved					8,400
Treasury Stock, Value, Acquired, Cost Method					1,101	611
Treasury Stock, Shares, Acquired					12,000	151,472
Issuance of common shares to parent for services (in shares)						4,000,000
Issuance of common shares to parent for services						16,800
Stock Issued During Period, Shares, Issued for Noncash Consideration		3,340,000
Stock Issued During Period, Value, Issued for Noncash Considerations		267,171
Costs Incurred, Acquisition of Unproved Oil and Gas Properties	$ 131,100
Stock Issued During Period, Shares, Purchase of Assets	3,326,316
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number				3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price				$ 0.035

XML

Note 1 - Summary of Significant Accounting Policies: Organization, Ownership and Business (Details)	Apr. 21, 2010
Details
Common shares issued to parent (in shares)	64,977,093

XML

Note 1 - Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2013

Notes

Note 1 - Summary of Significant Accounting Policies

Note 1 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements of Brenham Oil & Gas Corp. (“Brenham”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Brenham's Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal year as reported in the Form 10-K have been omitted.

Organization, Ownership and Business

Brenham Oil & Gas, Inc. was incorporated under the laws of the State of Texas in November 1997 and became a wholly-owned subsidiary of American International Industries, Inc. ("American") in November 1997. On April 21, 2010, the Company was re-domiciled in Nevada as Brenham Oil & Gas Corp. and Brenham Oil & Gas, Inc. became a wholly-owned subsidiary of Brenham. American was issued 64,977,093 shares of common stock of Brenham in connection with the reorganization in exchange for all shares outstanding of Brenham Oil & Gas, Inc. The reorganization has been retroactively applied to the consolidated financial statements for all periods presented.

Brenham is an exploration stage company and will continue to be so until commencement of substantial production from its oil and gas operations.

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates generally include those with respect to the amount of oil and gas depletion and asset retirement obligation.

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

Cash and Cash Equivalents

Brenham considers all short-term securities purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable consist primarily of receivables from oil and gas revenue and are carried at the expected net realizable value.

Oil & Gas Properties, Full Cost Method

Brenham uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized.

Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities, are capitalized as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. Brenham assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred.  Impairment of unproved properties is assessed based on management's intention with regard to future development of individually significant properties and the ability of Brenham to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

Under this method, sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.  If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the consolidated statements of operations.

Costs of oil and gas properties are amortized using the units of production method under this method.  Amortization expense calculated per equivalent physical unit of production amounted to $0.48 per barrel of oil equivalent for the three and six months ended June 30, 2013.

Ceiling Test

In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense.  During the six months ended June 30, 2013 and 2012, no impairment of oil and gas properties was recorded.

Income Taxes

Brenham is a taxable entity and recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when the temporary differences reverse. The effect on the deferred tax assets and liabilities of a change in tax rates is recognized in income in the year that includes the enactment date of the rate change. A valuation allowance is used to reduce deferred tax assets to the amount that is more likely than not to be realized. Interest and penalties associated with income taxes are included in selling, general and administrative expense.

Brenham has adopted ASC 740-10 “Accounting for Uncertainty in Income Taxes” which prescribes a comprehensive model of how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740-10 states that a tax benefit from an uncertain position may be recognized if it is "more likely than not" that the position is sustainable, based upon its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. As of June 30, 2013, Brenham had not recorded any tax benefits from uncertain tax positions.

Net Loss Per Share

Net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Basic and diluted net losses per share were the same, as there were no common stock equivalents outstanding.

Subsequent Events

Brenham has evaluated all transactions from June 30, 2013, 2013 through the financial statement issuance date for subsequent event disclosure consideration.

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.

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Note 3. Payables - Related Party

6 Months Ended

Jun. 30, 2013

Notes

Note 3. Payables - Related Party

Note 3. Payables - Related Party

Related party payables at June 30, 2013 represent $98,129 owed to American as advances to assist with Brenham's operating expenses and $131,100 owed for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. (“KDT”) and Daniel Dror II Trust of 2012. Related party payables at December 31, 2012 were comprised of  $273,171 owed to American as advances to assist with Brenham's operating expenses, $8,571 owed to L. Rogers Hardy for travel and operating expenses, and $3,456 owed to Scott Gaille for operating expenses.  KDT is owned by an entity which is controlled by the brother of Daniel Dror, Brenham’s Chairman, Chief Executive Officer, and President. Scott Gaille is the former President of Brenham and Bryant Mook and L. Rogers Hardy are Vice Presidents of Brenham.  The advances to American are non-interest bearing and due on demand.

American will fully fund the operations of Brenham for the next twelve months.

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Note 1 - Summary of Significant Accounting Policies: Organization, Ownership and Business (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Organization, Ownership and Business

Organization, Ownership and Business

Brenham Oil & Gas, Inc. was incorporated under the laws of the State of Texas in November 1997 and became a wholly-owned subsidiary of American International Industries, Inc. ("American") in November 1997. On April 21, 2010, the Company was re-domiciled in Nevada as Brenham Oil & Gas Corp. and Brenham Oil & Gas, Inc. became a wholly-owned subsidiary of Brenham. American was issued 64,977,093 shares of common stock of Brenham in connection with the reorganization in exchange for all shares outstanding of Brenham Oil & Gas, Inc. The reorganization has been retroactively applied to the consolidated financial statements for all periods presented.

Brenham is an exploration stage company and will continue to be so until commencement of substantial production from its oil and gas operations.

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Note 4. Equity

6 Months Ended

Jun. 30, 2013

Notes

Note 4. Equity

Note 4. Equity

Common Stock

In December 1997, Brenham sold 64,977,093 common shares to a related party for $1,000.

In April 2010, American, the sole stockholder of Brenham Oil & Gas, Inc., entered into a Separation and Distribution Agreement to spin off Brenham Oil & Gas, Inc. from its parent. In conjunction with this transaction, American formed Brenham Oil & Gas, Corp., a Nevada corporation, with authorized common stock of 200,000,000 shares and authorized preferred stock of 10,000,000 shares. Brenham issued 64,977,093 shares of common stock to American for all shares of Brenham Oil & Gas, Inc., of which American issued as a dividend 10,297,019 shares to the existing stockholders of American, on a one-for-one basis. Brenham issued 13,000,000 shares of common stock for cash consideration of $22,100 and 22,000,000 shares for services valued at $45,466.  American maintains control of Brenham through ownership of 65,346,390 shares of Brenham's common stock, representing about 53% of the outstanding shares as of June 30, 2013.

On July 22, 2011, Brenham entered into an Asset Purchase and Sale Agreement (the “Agreement”) with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc., pursuant to which Brenham acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The Agreement provides for the Sellers to complete all oil lease assignments by August 15, 2011. The purchase consideration for the acquisition is the issuance to Sellers of 2,000,000 restricted shares of Brenham common stock valued at $8,400, with an additional 2,000,000 restricted shares to be issued contingent upon realization of certain production targets in 2012. On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance, Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue the additional shares was removed. This property is on the balance sheet as "Oil and gas properties” for $8,400(Note 2).

On April 3, 2012, Brenham 100,000 shares valued at $5,000 to a third party for services.  For the year ended December 31, 2012, Brenham paid $1,101 to repurchase 12,000 shares of its common stock for treasury.  For the year ended December 31, 2011, Brenham paid $611 to repurchase 151,472 shares of its common stock for treasury, and issued 4,500,000 shares of its common stock valued at $18,900 for services to employees, directors and third parties, and 4,000,000 shares of its common stock valued at $16,800 to Brenham’s parent, American, for services.

On January 30, 2013, the Board of Directors approved and issued 3,340,000 shares of restricted common stock to AMIN to convert $267,171 owed to AMIN to equity.  These shares were issued during the six months ended June 30, 2013.

On February 28, 2013, Brenham leased 394 acres in Galveston County for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 and 200,000 shares of AMIN restricted common stock.  Brenham issued 3,326,316 shares of Brenham restricted common stock American as payment in full for the 200,000 shares issued by American on Brenham’s behalf.

On February 28, 2013, Brenham announced that Bryant Mook has been appointed President and Chief Operating Officer (COO).  Also, Mr. Mook and Brenham signed a stock purchase agreement whereby Brenham has agreed to issue 11,050,127 shares of Brenham common stock in exchange for $200,000, to be issued and paid as follows: 5,525,064 shares for $100,000 on June 30, 2013, and 5,525,063 shares for $100,000 on October 31, 2013.  In connection with this agreement, $100,000 in cash was received on June 5, 2013 and 5,525,064 shares of common stock were issued to Mr Mook.

On December 5, 2012, Brenham issued 3,000,000 stock options to Brenham’s Vice President - Technology, Mr. L. Rogers Hardy, with an exercise price of 0.035 per share, expiring in 3 years, valued at $104,974 and recorded as share-based compensation.  Brenham estimated the fair value of each stock option at the grant date as $0.035 by using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2012 as follows:

	December 5, 2012
Dividend yield	0.0%
Expected volatility	423.12%
Risk free interest	0.75%
Expected lives	3 years

A summary of the status of Brenham's stock options to employees for the six months ended June 30, 2013 is presented below:

	Shares	Weighted Average Exercise Price	Intrinsic Value
Outstanding and exercisable as of December 31, 2012	3,000,000	$            0.035
Granted	-	N/A
Exercised	-	N/A
Canceled / Expired	-	N/A
Outstanding and exercisable as of June 30, 2013	3,000,000	$            0.035	$                     -

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Note 2. Oil and Gas Properties: Oil and gas properties (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Oil and Gas Property, Full Cost Method, Gross	$ 97,768	$ 8,400
Capitalized asset retirement costs	1,868
Oil and Gas Property, Full Cost Method, Depletion	(78)
Oil & gas properties	97,690	8,400
Royalty interest in 700 acres in the Permian Basin
Oil and Gas Property, Full Cost Method, Gross	8,400	8,400
10% working interest in the Pierce Junction Field
Oil and Gas Property, Full Cost Method, Gross	$ 87,500

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Note 4. Equity: Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) (USD $)	1 Months Ended
	Dec. 31, 2012
Details
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	3,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price	$ 0.035
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period	3 years
Allocated Share-based Compensation Expense	$ 104,974
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 0.035
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Method Used	Black-Scholes option-pricing model
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate	0.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate	423.12%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.75%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	3 years

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BRENHAM OIL & GAS CORP. Statement of Financial Position - Parenthetical (USD $)	Jun. 30, 2013	Dec. 31, 2012
Statement of Financial Position
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares issued (in shares)	122,768,473	110,577,093
Common stock, shares outstanding (in shares)	122,605,001	110,413,621
Treasury stock, at cost (in shares)	163,472	163,472

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Note 1 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Cash and Cash Equivalents

Cash and Cash Equivalents

Brenham considers all short-term securities purchased with a maturity of three months or less to be cash equivalents.

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BRENHAM OIL & GAS CORP. - CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		188 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013
Cash flows from operating activities:
Net loss	$ (538,579)	$ (76,677)	$ (1,041,340)
Adjustments to reconcile net loss to net cash used in operating activities:
Depletion and accretion	167	0	167
Stock-based compensation	316,000	5,000	527,020
Changes in current assets and liabilities:
Increase decrease in Accounts receivable	(2,300)	0	(2,300)
Increase decrease in Accounts receivable - related party	131,100	(4,000)	131,100
Increase decrease in Accounts payable	11,149	(2,898)	22,863
Net cash used in operating activities	(82,463)	(78,575)	(362,490)
Cash flows from investing activities:
Payments for acquisition of oil & gas properties	(50,000)	0	(50,000)
Net cash provided by investing activities	(50,000)	0	(50,000)
Cash flows from financing activities:
Loans from related parties	80,102	79,323	345,420
Principal payments on debt	(37,500)	0	(37,500)
Payments for acquisition of treasury stock	0	(952)	(1,712)
Proceeds from sale of common stock	100,000	0	123,100
Net cash provided by financing activities	142,602	78,371	429,308
Net increase (decrease) in cash	10,139	(204)	16,818
Cash and cash equivalents, beginning of period	6,679	6,426	0
Cash and cash equivalents, end of period	16,818	6,222	16,818
Supplemental schedule of cash flow information:
Interest paid	0	0	1,150
Taxes paid	0	0	12,802
Non-cash transactions:
Issuance of stock for oil & gas properties	0	0	8,400
Issuance of note payable for oil & gas properties	37,500	0	37,500
Issuance of common stock to convert payable due to American International Industries, Inc.	267,171	0	267,171
Capitalized asset retirement costs	$ 1,868	$ 0	$ 1,868

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BRENHAM OIL & GAS CORP. - Balance Sheet (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 16,818	$ 6,679
Accounts receivable	2,300
Total current assets	19,118	6,679
Oil & gas properties	97,690	8,400
Total assets	116,808	15,079
Current liabilities:
Accounts payable	22,863	11,714
Accounts payable - related party	229,229	285,198
Total current liabilities	252,092	296,912
Asset retirement obligation	1,957
Total liabilities	254,049	296,912
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding	0	0
Common stock, $0.0001 par value, 200,000,000 shares authorized; 122,768,473 and 110,577,093 shares issued, 122,605,001 and 110,413,621 shares outstanding	12,278	11,058
Additional paid-in capital	893,533	211,582
Accumulated deficit, during the exploration stage	(1,041,340)	(502,761)
Less treasury stock, at cost; 163,472 and 163,472 shares, respectively	(1,712)	(1,712)
Total stockholders' deficit	(137,241)	(281,833)
Total liabilities and stockholders' deficit	$ 116,808	$ 15,079

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Note 2. Oil and Gas Properties: Oil and gas properties, Schedule of Significant Acquisitions and Disposals (Details) (USD $)	6 Months Ended		188 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Dec. 31, 2012
Details
Oil & gas properties	$ 97,690		$ 97,690	$ 8,400
Payments for acquisition of oil & gas properties	87,500
Capitalized asset retirement costs	1,868	0	1,868
Oil and Gas Property, Full Cost Method, Gross	$ 97,768		$ 97,768	$ 8,400

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Note 2. Oil and Gas Properties: Oil and gas properties, Schedule of Significant Acquisitions and Disposals (Tables)

6 Months Ended

Jun. 30, 2013

Tables/Schedules

Oil and gas properties, Schedule of Significant Acquisitions and Disposals

Balance at beginning of period – December 31, 2012	$                           8,400
Acquisition of oil and gas interests:
Cash	87,500
Capitalized asset retirement costs	1,868
Balance at end of period – June 30, 2013	$                         97,768

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Note 1 - Summary of Significant Accounting Policies: Reclassifications (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Reclassifications

Reclassifications

Certain reclassifications have been made to amounts in prior periods to conform to the current period presentation. All reclassifications have been applied consistently to the periods presented.

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Note 3. Payables - Related Party (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Details
Accounts Payable - related Party - American	$ 98,129	$ 273,171
Accounts Payable - related Party - Daniel Dror II Trust of 2012 and Kemah Development Texas, L.P.	131,100
Accounts Payable - related Party - L. Rogers Hardy		8,571
Accounts Payable - related Party - Scott Gaille		$ 3,456

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Note 1 - Summary of Significant Accounting Policies: Oil & Gas Properties, Full Cost Method (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Oil & Gas Properties, Full Cost Method

Oil & Gas Properties, Full Cost Method

Brenham uses the full cost method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized.

Under this method, all costs, including internal costs directly related to acquisition, exploration and development activities, are capitalized as oil and gas property costs. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis. Amortization of these unproved property costs begins when the properties become proved or their values become impaired. Brenham assesses overall values of unproved properties, if any, on at least an annual basis or when there has been an indication that impairment in value may have occurred.  Impairment of unproved properties is assessed based on management's intention with regard to future development of individually significant properties and the ability of Brenham to obtain funds to finance their programs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized.

Under this method, sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool with no gain or loss recognized, unless the adjustment would significantly alter the relationship between capitalized costs and proved reserves.  If it is determined that the relationship is significantly altered, the corresponding gain or loss will be recognized in the consolidated statements of operations.

Costs of oil and gas properties are amortized using the units of production method under this method.  Amortization expense calculated per equivalent physical unit of production amounted to $0.48 per barrel of oil equivalent for the three and six months ended June 30, 2013.

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Note 1 - Summary of Significant Accounting Policies: Use of Estimates (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Use of Estimates

Use of Estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Significant estimates generally include those with respect to the amount of oil and gas depletion and asset retirement obligation.

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Note 2. Oil and Gas Properties

6 Months Ended

Jun. 30, 2013

Notes

Note 2. Oil and Gas Properties

Note 2.  Oil and Gas Properties

Brenham uses the full cost method of accounting for oil and gas producing activities.  Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells used to find proved reserves, and to drill and equip development wells including directly related overhead costs and related asset retirement costs are capitalized. Properties not subject to amortization consist of exploration and development costs that are evaluated on a property-by-property basis.  Amortization of these unproved property costs begins when the properties become proved or their values become impaired and the corresponding costs are added to the capitalized costs subject to amortization.  During the three and six months ended June 30, 2013, depletion of oil and gas properties of $52 and $78, respectively, was recorded.  Costs of oil and gas properties are amortized using the units of production method.  Sales of oil and natural gas properties are accounted for as adjustments to the net full cost pool and generally, no gain or loss is recognized.

In applying the full cost method, Brenham performs an impairment test (ceiling test) at each reporting date, whereby the carrying value of oil and gas properties is compared to the “estimated present value” of its proved reserves discounted at a 10-percent interest rate of future net revenues, based on current economic and operating conditions at the end of the period, plus the cost of properties not being amortized, plus the lower of cost or fair market value of unproved properties included in costs being amortized, less the income tax effects related to book and tax basis differences of the properties. If capitalized costs exceed this limit, the excess is charged as an impairment expense.  During the six months ended June 30, 2013 and 2012, no impairment of oil and gas properties was recorded.

Below are the components of Brenham’s oil and gas properties recorded:

	June 30, 2013	December 31, 2012
Royalty interest in 24 acres in Washington County, Texas (a)	$                                       -	$                                        -
Royalty interest in 700 acres in the Permian Basin (b)	8,400	8,400
10% working interest in the Pierce Junction Field (c)	87,500	-
Lease of 394 acres in the Gillock Field (d)	-	-
Capitalized asset retirement costs	1,868	-
Total oil and gas properties	97,768	8,400
Accumulated depletion	(78)	-
Net capitalized costs	$                           97,690	$                               8,400

(a)     Royalty interest in 24 acres in Washington County, Texas - We have an oil and gas mineral royalty interest covering a twenty-four acre tract of land located in Washington County, Texas, which is carried on the balance sheet at $0. The royalty interest is currently leased by Anadarko Petroleum Corporation for a term continuing until the covered minerals are no longer produced in paying quantities from the leased premises.  Royalties on the minerals produced are currently incidental and paid to Brenham as follows: (i) for oil and other liquid hydrocarbons, and (ii) for gas (including casing-head gas), the royalty is one-sixth of the net proceeds realized by Anadarko Petroleum Corporation on the sale thereof, less a proportionate part of ad valorem taxes and production, severance, or other excise taxes. In addition, Brenham is entitled to shut-in royalties of $1 per acre of land for every ninety day period within which one or more of the wells in leased premises, or lands pooled therewith, are capable of producing paying quantities, but such wells are either shut-in or production is not being sold.

(b)     Royalty interest in 700 acres in the Permian Basin - On July 22, 2011, Brenham entered into an Asset Purchase and Sale Agreement with Doug Pedrie, Davis Pedrie Associates, LLC and Energex Oil, Inc. (“Sellers”), pursuant to which Brenham acquired 700 acres of unproved property located in the Permian Basin near Abilene, Texas. The agreement provided for the Sellers to complete all oil lease assignments by August 15, 2011. The purchase consideration for the acquisition is the issuance to Sellers of 2,000,000 restricted shares of Brenham common stock valued at $8,400, with an additional 2,000,000 restricted shares to be issued contingent upon realization of certain production targets in 2012. On March 8, 2012, this agreement was rescinded and replaced with an agreement that in consideration for the Brenham share issuance, Brenham has a 2.5% overriding royalty interest in all of the leases associated with this property and any properties acquired or renewed in the future within a ten-mile radius. In addition, the contingency to issue additional shares was removed.

(c)     10% working interest in the Pierce Junction Field - On March 12, 2013, Brenham entered into an agreement with an effective date of January 1, 2013, to purchase a 10% working interest in the Pierce Junction Field for $50,000 cash and a $70,000 non-interest bearing note payable due on August 31, 2013.  On May 30, 2013, the holder of this note payable accepted $37,500 as full payment and Brenham recorded $32,500 as a reduction in the value of the oil and gas property due to the decrease in the consideration given to acquire it.

(d)   Lease of 394 acres in the Gillock Field - Brenham leased 394 acres in Galveston County for the acquisition of mineral rights for the Gillock Field from Kemah Development Texas, L.P. (“KDT”) and Daniel Dror II Trust of 2012 for $300 per acre, or $131,100 and 200,000 shares of American restricted common stock.  The $131,100 is to be paid as follows: $100,000 on or before June 30, 2013 and $31,100 on or before October 30, 2013. KDT subsequently extended the payment terms for these amounts to on or before October 31, 2013. Brenham issued 3,326,316 shares of Brenham restricted common stock to American as payment in full for the 200,000 shares issued by American on Brenham’s behalf.  In 2002, KDT paid $1,175,000 for the original 437 acres and the mineral rights to 394 acres. However, KDT assigned no value to the mineral rights. Due to the related parties having no basis in the mineral rights, Brenham expensed the costs associated with the transaction which totaled $447,100 and consisted of i) $316,000 of stock-based compensation calculated at the grant date fair value of the 3,326,316 shares of Brenham common stock issued to American (which equaled the grant date fair value of the common stock American issued to KDT and the Daniel Dror II Trust) and ii) the $131,100 related party payable.

The following table sets forth the changes in the total cost of oil and gas properties during the six months ended June 30, 2013:

Balance at beginning of period – December 31, 2012	$                           8,400
Acquisition of oil and gas interests:
Cash	87,500
Capitalized asset retirement costs	1,868
Balance at end of period – June 30, 2013	$                         97,768

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Note 1 - Summary of Significant Accounting Policies: Net Loss Per Share (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Net Loss Per Share

Net Loss Per Share

Net loss per common share is computed by dividing the net loss by the weighted average number of shares outstanding during a period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Basic and diluted net losses per share were the same, as there were no common stock equivalents outstanding.

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Note 1 - Summary of Significant Accounting Policies: Accounts Receivable (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Accounts Receivable

Accounts Receivable

Accounts receivable consist primarily of receivables from oil and gas revenue and are carried at the expected net realizable value.

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Note 2. Oil and Gas Properties: Oil and gas properties (Tables)

6 Months Ended

Jun. 30, 2013

Tables/Schedules

Oil and gas properties

	June 30, 2013	December 31, 2012
Royalty interest in 24 acres in Washington County, Texas (a)	$                                       -	$                                        -
Royalty interest in 700 acres in the Permian Basin (b)	8,400	8,400
10% working interest in the Pierce Junction Field (c)	87,500	-
Lease of 394 acres in the Gillock Field (d)	-	-
Capitalized asset retirement costs	1,868	-
Total oil and gas properties	97,768	8,400
Accumulated depletion	(78)	-
Net capitalized costs	$                           97,690	$                               8,400

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Note 1 - Summary of Significant Accounting Policies: Subsequent Events (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Subsequent Events

Subsequent Events

Brenham has evaluated all transactions from June 30, 2013, 2013 through the financial statement issuance date for subsequent event disclosure consideration.

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Document and Entity Information (USD $)	6 Months Ended
	Jun. 30, 2013	Aug. 12, 2013	Jun. 29, 2012
Document and Entity Information:
Entity Registrant Name	Brenham Oil & Gas Corp.
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Entity Central Index Key	0001501720
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		122,605,001
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Entity Public Float			$ 618,821

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Note 1 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2013

Policies

Recent Accounting Pronouncements

Recent Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.