10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant To Section 13 or 15(D) Of The Securities Exchange Act Of 1934

For the quarterly period ended July 31, 2014

o Transition Report Under Section 13 Or 15(D) Of The Securities Exchange Act Of 1934

For the transition period from _______________ to _______________

COMMISSION FILE NUMBER    333-175183

DIVERSIFIED RESOURCES INC.

(Exact name of registrant as specified in its charter)

NEVADA	98-0687026
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1789 W. Littleton Blvd., Littleton, CO 80120

(Address of principal executive offices, including zip code)

303-797-5417

(Issuer’s telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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

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

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 20,019,874 shares of common stock as of September 1, 2014.

1

DIVERSIFED RESOURCES, INC.

Index

		Page
Part I – FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
	Balance Sheets as of July 31, 2014 (unaudited) and October 31, 2013	3
	Statements of Operations for the three months ended July 31, 2014 and July 31, 2013 (unaudited)	4
	Statements of Operations for the nine months ended July 31, 2014 and July 31, 2013 (unaudited)	5
	Statements of Cash Flows for the nine months ended July 31, 2014 and July 31, 2013  (unaudited)	6
	Notes to Financial Statements (unaudited)	7 - 13
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	19
Part II – OTHER INFORMATION		19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 6.	Exhibits	20
SIGNATURES		21

2

PART I

ITEM 1.  FINANCIAL STATEMENTS

Diversified Resources, Inc.
CONSOLIDATED BALANCE SHEETS
	July 31,			October 31,
	2014			2013
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	112,112		$	69,433
Accounts receivable, trade		30,255			32,378
Prepaid expenses		109,528			8,870
Total current assets		251,895			110,681
LONG-LIVED ASSETS
Property and Equipment, net of accumulated depreciation
of $10,457 and $4,111 in 2014 and 2013 respectively		34,182			39,392
Oil and gas properties - proved (successful efforts method)
net of accumulated depletion of $75,493 and $56,726 in 2014 and 2013 respectively		2,587,213			2,604,418
Oil and gas properties - proved undeveloped (successful efforts method)		64,126			64,126
Total assets	$	2,937,416		$	2,818,617
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	115,176		$	185,251
Accounts payable, related party		127,736			130,361
Current portion of long term debt		4,864			4,692
Notes payable		248,895			299,379
Accrued interest		3,946			2,411
Accrued interest, related party		1,880			3,872
Accrued expenses		113,974			109,193
Total current liabilities		616,471			735,159
LONG TERM LIABILITIES
Long term debt, related party		107,070			107,070
Long term debt		10,280			13,765
Asset retirement obligation		228,375			222,375
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value  50,000,000 shares authorized:
none issued and outstanding		-			-
Common stock, $0.001 par value, 450,000,000 shares authorized,
20,019,874 and  14,563,150 shares issued and outstanding in 2014 and 2013 respectively		20,020			14,563
Additional paid in capital		6,075,692			4,734,138
Accumulated deficit		(4,120,492	)		(3,008,453	)
Total stockholders' equity		1,975,220			1,740,248
Total liabilities and stockholders' equity	$	2,937,416		$	2,818,617

See accompanying notes to the financial statements.

3

Diversified Resources, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended
	July 31,			July 31,
	2014			2013
Operating revenues
Oil and gas sales	$	46,352		$	17,831
Operating expenses
Exploration costs, including dry holes		-			16,500
Lease operating expenses		84,205			101,046
General and administrative		335,287			247,772
Depreciation expense		3,820			1,216
Depletion expense		9,974			3,000
Accretion expense		2,000			5,200
Total operating expenses		435,286			374,734
(Loss) from operations		(388,934	)		(356,903	)
Other income (expense)
Loss on debt extinguishment		-			(330,638)
Loss on disposition of assets
Interest expense		(7,245	)		(32,152	)
Other income (expense), net		(7,245	)		(362,790	)
Net (loss)	$	(396,179	)	$	(719,693	)
Net (loss) per common share
Basic and diluted	$	(0.02	)	$	(0.05	)
Weighted average shares outstanding
Basic and diluted		19,237,363			14,038,161

See accompanying notes to the financial statements.

4

Diversified Resources, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Nine Months Ended
	July 31,			July 31,
	2014			2013
Operating revenues
Oil and gas sales	$	68,992		$	49,944
Operating expenses
Exploration costs, including dry holes		41,801			49,520
Lease operating expenses		206,223			137,576
General and administrative		850,909			362,876
Depreciation expense		11,178			3,184
Depletion expense		14,074			10,400
Accretion expense		6,000			15,600
Total operating expenses		1,130,185			579,156
(Loss) from operations		(1,061,193	)		(529,212	)
Other income (expense)
Loss on debt extinguishment		-			(330,638)
Loss on disposition of assets		-			(34,480)
Interest expense		(50,846	)		(92,219	)
Other income (expense), net		(50,846	)		(457,337	)
Net (loss)	$	(1,112,039	)	$	(986,549	)
Net (loss) per common share
Basic and diluted	$	(0.06	)	$	(0.07	)
Weighted average shares outstanding
Basic and diluted		18,167,691			13,412,898

See accompanying notes to the financial statements.

5

Diversified Resources, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine Months Ended
	July 31,			July 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) operating activities	$	(1,299,731	)	$	(555,602	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets		-			65,582
Cash paid for oil and gas properties		-			(57,424	)
Cash paid for purchase of property and equipment		(1,278	)		(17,826	)
Net cash (used in) investing activities		(1,278	)		(9,668	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock		1,347,000			691,937
Proceeds from notes payable		-			79,965
Payment on notes payable		(3,312	)		(33,105)
Net cash provided by financing activities		1,343,688			738,797
INCREASE (DECREASE) IN CASH		42,679			173,527
BEGINNING BALANCE		69,433			1,051
ENDING BALANCE	$	112,112		$	174,578
Cash paid for income taxes	$	-		$	-
Cash paid for interest	$	21,316		$	34,706
Supplemental schedule of non-cash investing and
financing activities:
Conversion of preferred stock to common stock	$	-		$	49,992
Conversion of debt for common stock	$	-		$	395,877
Acquisition of vehicle with note	$	-		$	19,965
Issuance of common stock for Natural Resource Group, Inc. Common Stock	$	14,872		$	-
Forgiveness of related party notes	$	14,040		$	-
Assumption of liabilites by former officer and shareholder	$	283,701		$	-

See accompanying notes to the financial statements.

6

DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

NOTE 1 – BASIS OF PRESENTATION

The interim consolidated financial statements of Diversified Resources, Inc. (“we”, “us”, “our”, “Diversified”, or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair presentation of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, interest rates, drilling risks, geological risks, the timing of acquisitions, and our ability to obtain additional capital. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Diversified’s Annual Report on Form 10-K for the year ended October 31, 2013 as filed with the Securities and Exchange Commission (“SEC”) on February 13, 2014 and the Form 8-K/A filed May 29, 2014.  The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with US GAAP. Accordingly, these consolidated financial statements do not include all of the information and footnotes required by US GAAP for annual consolidated financial statements.

Although, from a legal standpoint, we acquired Natural Resource Group, Inc. (“NRG”) on November 21, 2013, for financial reporting purposes the acquisition of NRG constituted a recapitalization, and the acquisition was accounted for as a reverse merger, whereby NRG was deemed to have acquired us.  Consequently, this report contains the historical financial statements of NRG for the three and nine months ended July 31, 2013.  From and after November 21, 2013, NRG’s financial statements have been consolidated with our financial statements.

The consolidated financial statements are unaudited, but, in management's opinion, include all adjustments (which, unless otherwise noted, include only normal recurring adjustments) necessary for a fair presentation of such consolidated financial statements.

NOTE 2 – ORGANIZATION AND GOING CONCERN

Diversified Resources Inc. (“the Company”) was incorporated in the State of Nevada on March 19, 2009 to pursue mineral extraction in the United States.

Effective November 21, 2013 we acquired 100% of the outstanding shares of Natural Resource Group, Inc. in exchange for 14,872,157 shares of our common stock

NRG was incorporated in Colorado in 2000 but was relatively inactive until December 2010.  In December 2010, NRG acquired oil and gas wells, leases and other properties from Energy Oil and Gas, Inc.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the conditions below raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The Company sustained operating losses during the years ended October 31, 2013 and 2012 and during the nine months ended July 31, 2014 and 2013. As of July 31, 2014, the Company has a negative working capital in the amount of $364,576. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.

Management’s plans include obtaining additional debt or equity financing to fund operations; however, there can be no assurance that management will be successful in its efforts to obtain additional funding.

On June 15, 2009 the Company leased two mining claims in Esmerelda County, Nevada, in the Dunfee Mine Area.  The lease includes all additional claims within one mile of these claims.  The area was the subject of a geological report on September 11, 2009.  The term of the lease is 20 years and is renewable for an additional 20 years assuming all conditions of the lease are met. The lease was terminated on November 21, 2013 in connection with the acquisition of NRG.

7

DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

In November 2013, the Company entered into an agreement to exchange securities with Natural Resource Group, Inc (“NRG”), an oil and gas exploration company, whereby the shareholders of NRG received 14,872,157 shares of Diversified Resources, Inc.’s $0.001 par value common shares. The President sold 2,680,033 shares of the Company’s common stock to the Company for nominal consideration.  The shares purchased from the President were returned to the status of authorized but unissued shares. Additionally, the former principals of the Company assumed all of the debts of the Company at the date of the exchange. The exchange was consummated on November 21, 2013.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated unaudited financial statements include the accounts of Diversified Resources, Inc. and its wholly owned subsidiary, Natural Resource Group, Inc. Any inter-company accounts and transactions have been eliminated.

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates of oil and gas reserve quantities provide the basis for the calculation of depletion, depreciation, and amortization, and impairment, each of which represents a significant component of the financial statements.  Actual results could differ from those estimates.

Revenue Recognition

We recognize oil and gas revenue from interests in producing wells as the oil and gas is sold. Revenue from the purchase, transportation, and sale of natural gas is recognized upon completion of the sale and when transported volumes are delivered. We recognize revenue related to gas balancing agreements based on the sales method. Our net imbalance position at July 31, 2014 and 2013 was immaterial.

Accounting for Oil and Gas Activities

Successful Efforts Method   We account for crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs to acquire mineral interests in crude oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Capitalized costs of producing crude oil and natural gas properties, along with support equipment and facilities, are amortized to expense by the unit-of-production method based on proved crude oil and natural gas reserves on a field-by-field basis, as estimated by our qualified petroleum engineers. Upon sale or retirement of depreciable or depletable property, the cost and related accumulated depreciation, depletion and amortization amounts are eliminated from the accounts and the resulting gain or loss is recognized. Repairs and maintenance are expensed as incurred.

 Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization (“DD&A”) for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.

8

DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

Proved Property Impairment   We review individually significant proved oil and gas properties and other long-lived assets for impairment at least annually at year-end, or quarterly when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amount of a property exceeds its estimated undiscounted future cash flows, the carrying amount is reduced to estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and gas production, commodity prices based on published forward commodity price curves as of the date of the estimate, operating and development costs, and a risk-adjusted discount rate.

Unproved Property Impairment   Our unproved properties consist of leasehold costs and allocated value to probable and possible reserves from acquisitions. We assess individually significant unproved properties for impairment on a quarterly basis and recognize a loss at the time of impairment by providing an impairment allowance. In determining whether a significant unproved property is impaired we consider numerous factors including, but not limited to, current exploration plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property.

Exploration Costs   Geological and geophysical costs, delay rentals, amortization of unproved leasehold costs, and costs to drill wells that do not find proved reserves are expensed as oil and gas exploration. We carry the costs of an exploratory well as an asset if the well finds a sufficient quantity of reserves to justify its capitalization as a producing well and as long as we are making sufficient progress assessing the reserves and the economic and operating viability of the project.  Geological and geophysical costs were $41,801 and $49,520 for the nine months ended July 31, 2014 and 2013, respectively, and are included in Exploration Costs in the accompanying financial statements.

Asset Retirement Obligations   Asset retirement obligations (“ARO”) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our oil and gas properties that can reasonably be estimated, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset.  The asset retirement cost is determined at current costs and is inflated into future dollars using an inflation rate that is based on the consumer price index. The future projected cash flows are then discounted to their present value using a credit-adjusted risk-free rate. After initial recording, the liability is increased for the passage of time, with the increase being reflected as accretion expense and included in our DD&A expense in the statement of operations. Subsequent adjustments in the cost estimate are reflected in the liability and the amounts continue to be amortized over the useful life of the related long-lived asset.

The following table reconciles the asset retirement obligation for nine months ended July 31, 2013 and year ended October 31, 2013:

	2014		2013
Asset retirement obligation as of beginning of period	$	222,375	$	203,889
Liabilities added		0		0
Liabilities settled		0		0
Revision of estimated obligation		0		0
Accretion expense on discounted obligation		6,000		18,486
Asset retirement obligation as of end of period	$	228,375	$	222,375

9

DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

Property and Equipment

Property and equipment consists of production buildings, furniture, fixtures, equipment and vehicles which are recorded at cost and depreciated using the straight-line method over the estimated useful lives of five to fifteen years.

Maintenance and repairs are charged to expense as incurred.

Income Taxes

We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes.  Under this standard, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance when we cannot make the determination that it is more likely than not that some portion or all of the related tax asset will be realized. Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

The Company follows ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The Interpretation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Contingent Liabilities

The Company records contingent liabilities when the amounts were incurred and determinable otherwise the Company will disclose the matter(s) and provide a range or best estimate of the contingency in the notes to the financial statements. As of July 31, 2014 there were no legal proceedings against the Company. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. As of July 31, 2014, there were no contingent liabilities that required disclosure or accrual in the Company’s financial statements.

Loss Per Share

The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. During periods when losses occur, common stock equivalents, if any, are not considered in the computation as their effect would be anti-dilutive.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Topic 606: Revenue from Contracts with Customers.  ASU No. 2014-09 is effective for the Company as of April 1, 2017.  Management is evaluating the effect, if any, this pronouncement will have on the Company’s consolidated financial statements.

The Company does not believe that any other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

NOTE 4 – Participation Agreement

In connection with the convertible promissory note described in Note 6, the Company entered into a participation agreement with a nonaffiliated company whereby the maker of the promissory note would advance up to $350,000 to conduct additional development of the underlying leases at the Garcia Field and drill and complete three additional wells on the acreage. During 2012, $250,000 was advanced to the Company. In consideration of making the promissory note, the lender was assigned a 1% overriding royalty interest in the 4,600 acre field and a 20% modified net profits interest in the existing four producing wells in the Garcia Field and a 20% modified net profits interest in three additional wells to be drilled on said acreage. The Company valued the net profits interest and the overriding royalty interest at $136,599 using 10% present value over the estimated life of the wells. The amount was recorded as a debt discount and is being amortized using the effective interest rate method over the life of the promissory note (3 years).

10

DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

Additionally, the lender has the right, at any point during the period of the note, to convert the remaining principal balance on the note to a working interest (see Note 6).

The modified net profits interest is based on the gross proceeds from the sale of oil, gas and other minerals in the four producing wells in the Garcia Field and three additional wells to be drilled. The 20% is applied to 100% of the Company’s net revenue interest in the wells which cannot be less than 80% and is reduced by any of the following expenditures:

● any overriding royalties or other burden on production in excess of the 80% net revenue interest;

● production, severance and similar taxes assessed by any taxing authority based on volume or value of the production;

● direct costs incurred in producing oil or natural gas, or the operating or producing such wells excluding administrative, supervisory or other indirect costs;

● costs reasonably incurred to process the production for market;

● costs reasonably incurred in transportation, delivery, storage or marketing the production.

NOTE 5 – Notes Payable

Notes Payable Affiliates—In December 2010, the Company entered into a purchase and sale agreement to acquire certain oil and gas assets located in Adams, Broomfield, Huerfano, Las Animas, Morgan and Weld Counties Colorado. The Company issued 2,500,000 shares of its $0.0001 par value Common Stock and a promissory note for $360,000 bearing interest at 10% with an original maturity date of March 1, 2011. The shares were valued at $1 per share based on sales of the Company’s common stock to third-parties. The promissory note is collateralized by the property and equipment transferred and was subsequently subrogated to a convertible promissory note on January 12, 2012.  On July 30, 2013, the maturity date of the note was extended to December 11, 2015.  The balance on the note is $107,070 at July 31, 2014 with interest accrued in the amount of $1,880.

NOTE 6 – Long Term Debt

Convertible Promissory Note—On January 12, 2012 the Company entered into a convertible promissory note bearing interest at 10%, due January 11, 2014 which was extended to November 1, 2014.  The note is collateralized by a first priority deed of trust on approximately 4,600 acres of oil and gas leasehold interests in the Garcia Field together with the existing wells and equipment in the field. The terms provide for an initial draw of $150,000 with the potential for two subsequent draws of $100,000 each. The Company has drawn $250,000 on the facility and the balance at July 31, 2014 is $248,895. The lender has the right to convert the principal to a 10% working interest in the collateral as well as a 10% interest in all wells owned by the Company in the Garcia Field in which the lender does not have the 20% modified net profits interest described in note 4. In the event the principal is less than $350,000, the conversion shall be reduced proportionately.  The Company has the right to prepay the note without penalties or fees after giving the lender ten days’ notice of its intent. If lender does elect to convert within 10 days after receiving said notice, the conversion rights terminate.  The Company recorded a discount to the debt of $136,599 and recognized accretion of the discount in the amounts of $19,516 and $52,654 for the nine months ended July 31, 2014 and 2013 respectively and $-0- and $19,467 for the three months ended July 31, 2014 and 2013 respectively. The Company reviewed the conversion feature for beneficial conversion features and embedded derivatives, and determined that neither applied.

Convertible Promissory Note—On May 18, 2012 the Company borrowed $70,000 bearing interest at 10%, due May 31, 2014. The note was paid in full in June 2014.

Installment Loan—the Company entered into an installment loan on July 4, 2013 bearing interest of 5.39%. The loan is payable in monthly installments of $464 over 48 months commencing August 4, 2013.  The loan is collateralized by a vehicle.

The following summarizes the notes payable at:

	July 31, 2014			October 31, 2013
Convertible promissory note	$	248,895		$	248,895
Debt Discount, net of amortization		--			(19,516	)
Convertible promissory note		--			70,000
Installment loan		15,144			18,457
		264,039			317,836
Current portion long term debt		(4,864	)		(4,692	)
Current portion promissory notes		(248,895	)		(299,379	)
Long term debt	$	10,280		$	13,765

11

DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

NOTE 7 – INCOME TAXES

No provision was made for federal income tax for the three and nine months ended July 31, 2014 and 2013, since the Company had net operating losses.

NOTE 8 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 450,000,000 common shares of par value at $0.001 and 50,000,000 preferred shares of par value at $0.001. As of July 31, 2014, 20,019,874 shares of common stock and no preferred shares were issued and outstanding. During the nine months ended July 31, 2014, the Company sold 2,577,750 shares of its common stock for cash of $1,347,000.

NOTE 9 – RELATED PARTY TRANSACTIONS

During the year ended October 31, 2013, Philip F. Grey, the President loaned $14,040 to the Company.  The loan was payable on demand, carried no interest and had no maturity date.  Philip F. Grey forgave the loan as of November 21, 2013.

Natural Resource Group, Inc. has an office lease for office space in Littleton, Colorado, with Spotswood Properties, LLC, a Colorado limited liability company (“Spotswood”), and an affiliate of the president, effective January 1, 2009, for a three-year term. Commencing July 1, 2010 the Company entered into a new lease for office space for a 3 year period ending July 1, 2013. The lease provides for the payment of $2,667 per month plus utilities and other incidentals. The president of the Company owns 50% of Spotswood. The Company is of the opinion that the terms of the lease are no less favorable than could be obtained from an unaffiliated party. Spotswood was paid $23,998 in the nine months ended July 31, 2014.  The Company has accrued liability in the amount of $13,333 for accrued rent.  Natural Resource Group, Inc. is currently leasing the office space on a month to month basis under the same terms and conditions as the lease that expired July 31, 2013.

The Company paid a director and shareholder $53,700 and $132,650 in the three and nine months ended July 31, 2014, respectively and $45,730 in the three and nine months ended July 31, 2013, each, for financial public relations consulting.

The Company paid the President’s brother $15,685 and $39,685 in the three and nine months ended July 31, 2014, respectively and $9,000 and $9,600 in the three and nine months ended July 31, 2013, respectively for landman consulting services. 

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Legal--We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.  

Environmental--We accrue for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable.

Acquisition

On June 6, 2014, the Company entered into an agreement, which was amended on August 11, 2014, to acquire all of the shares of an independent oil and gas company for cash of $6,000,000 and 900,000 restricted shares of the Company’s common stock.  The assets of the independent oil and gas company include:

● 48 producing oil and gas wells, all of which will be operated by us after closing,

● leases covering approximately 10,400 gross and net acres, and

● miscellaneous equipment.

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DIVERSIFIED RESOURCES INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

July 31, 2014

If the acquisition is completed, we will have an average working interest of approximately 100% (80% net revenue interest) in the 48 producing wells and leases. The oil and gas properties are located in the Horseshoe-Gallup field in San Juan County, New Mexico.

The closing of the transaction is subject to completion of title reviews and other conditions which are normal for a transaction of this nature. The Company has made a $100,000 deposit towards the purchase price as of July 31, 2014. The seller will retain this deposit if the transactions does not close by September 30, 2014, provided that the seller meets all of the other conditions required for closing.

NOTE 11 – SUBSEQUENT EVENTS

The Company sold 90,000 shares of its common stock for $90,000 in cash in August and September 2014.

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

The following discussion should be read in conjunction with our financial statements included as part of this report.

Unless the context otherwise requires, references to the “Company”, “Diversified”, “we”, “us” or “our” mean Diversified Resources, Inc. and its consolidated subsidiaries.

Cautionary Statements Regarding Forward-Looking Statements.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Forward-looking statements include statements regarding our plans, beliefs or current expectations and may be signified by the words “could”, “should”, “expect”, “project”, “estimate”, “believe”, “anticipate”, “intend”, “budget”, “plan”, “forecast”, “predict” and other similar expressions.  Forward-looking statements appear throughout this Form 10-Q with respect to, among other things:  profitability; planned capital expenditures; estimates of oil and gas production; future project dates; estimates of future oil and gas prices; estimates of oil and gas reserves; our future financial condition or results of operations; and our business strategy and other plans and objectives for future operations.  Forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those contained in any forward-looking statement.

While we have made assumptions that we believe are reasonable, the assumptions that support our forward-looking statements are based upon information that is currently available and is subject to change.  All forward-looking statements in the Form 10-Q are qualified in their entirety by the cautionary statement contained in this section.  We do not undertake to update, revise or correct any of the forward-looking information.  It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K.

We were incorporated on March 19, 2009 in Nevada.  In 2009, we leased two unpatented mining claims located in Esmeralda County, Nevada.  In January 2011, we staked an additional twenty unpatented mining claims in the same area.  Due to the lack of capital, we terminated the mining lease in November 2013. We have no plans to conduct any work on the unpatented mining claims.

On November 21, 2013 we acquired 100% of the outstanding shares of Natural Resource Group, Inc. in exchange for 14,872,157 shares of our common stock.

NRG was incorporated in Colorado in 2000 but was relatively inactive until December 2010.  In December 2010, NRG acquired oil and gas wells, leases and other properties from Energy Oil and Gas, Inc.

In December 2010 NRG acquired oil and gas properties from Energy Oil and Gas, Inc. for 2,500,000 shares of its common stock and a promissory note in the principal amount of $360,000.  As of July 31, 2014, the principal amount of this note was $107,070.

Included as part of the acquisition were:

Garcia Field

● leases covering 4,600 gross (4,600 net) acres,

● four wells which produce natural gas and naturals gas liquids;

● a refrigeration/compression plant which separates natural gas liquids from gas produced from the four wells; and

● one injection well;

The Garcia Field is located in Las Animas County, Colorado, approximately 10 miles from Trinidad, Colorado.  

Denver-Julesburg Basin

● leases covering 1,400 gross (1,400 net) acres,

● three shut-in wells which need to be recompleted; and

● three producing oil and gas wells.

Subsequent to December 2010, leases covering 160 acres in the Garcia Field were sold and leases covering 960 acres in the Garcia Field expired.  In 2013, we acquired a 640 acre lease (100% working interest, 80% net revenue interest) in the D-J Basin. The Denver/Julesburg (“D-J”) Basin is located in Northeastern Colorado.

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Horseshoe – Gallup Field

On June 6, 2014, the Company entered into an agreement, which was amended on August 11, 2014, to acquire all of the shares of an independent oil and gas company for cash of $6,000,000 and 900,000 restricted shares of our common stock.  The assets of the independent oil and gas company include:

● 48 producing oil and gas wells, all of which will be operated by us after closing,

● leases covering approximately 10,400 gross and net acres, and

● miscellaneous equipment.

If the acquisition is completed, we will have an average working interest of approximately 100% (80% net revenue interest) in the 48 producing wells and the leases. The oil and gas properties are located in the Horseshoe-Gallup field in San Juan County, New Mexico.

The purchase price for the oil and gas properties, subject to ordinary closing adjustments, will be payable in cash of $6,000,000 and 900,000 restricted shares of our common stock. The Company has made a $100,000 deposit towards the purchase price as of July 31, 2014. The seller will retain this deposit if the transactions does not close by September 30, 2014, provided that the seller meets all of the other conditions required for closing.

The closing of the transaction is subject to our completion of title reviews and other conditions which are normal for a transaction of this nature.

The following table shows our net production of oil, gas and natural gas liquids for the periods indicated:

	Nine Months Ended July 31,
	2014		2013
Production:
Oil (Bbls)		421		440
Gas (Mcf)		2,087		4,008
Natural Gas Liquids (gallons)		24,867		28,020

The following table shows, as of July 31 2014, our producing wells, developed acreage, and undeveloped acreage, excluding service (injection and disposal) wells:

	Productive Wells				Developed Acreage				Undeveloped Acreage(1)
Location	Gross		Net		Gross		Net		Gross		Net
Colorado:
Garcia Field		5		5		200		200		4,400		4,400
D-J Basin		4		3.75		160		160		760		760

(1) Undeveloped acreage includes leasehold interests on which wells have not been drilled or completed to the point that would permit the production of commercial quantities of natural gas and oil regardless of whether the leasehold interest is classified as containing proved undeveloped reserves.

As of July 31, 2014 we were not drilling, or reworking any oil or gas wells and one well in the Garcia Field was awaiting completion.

During the nine months ending July 31, 2015, we plan to:

● Stimulate one well in the Denver-Julesburg basin at an approximate cost of $175,000;

● Drill three development wells in the Garcia field at an approximate cost of $420,000

● Re-equip existing wells in the Garcia Field at an approximate cost of $250,000

● Drill at least one well in the D-J Basin to the Codell/Niobrara formations (7,800 feet).  The cost to drill, and if warranted complete, the well will be approximately $1,200,000.

● Drill three new vertical wells in the Horseshoe Gallup Field with an approximate cost of $1,050,000

● Stimulate existing wells in the Horseshoe Gallup Filed with an approximate cost of $200,000

15

Results of Operations

In November 2013, the Company entered into an agreement to exchange securities with Natural Resource Group, Inc. (“NRG”), an oil and gas exploration company, whereby the shareholders of NRG received 14,872,157 shares of the Company’s common stock. The then President of the Company sold 2,680,033 shares of the Company’s common stock to the Company for nominal consideration.  The 2,680,033 shares were returned to the status of authorized but unissued shares. Additionally, the former principals of the Company assumed all of the debts of the Company at the date of the exchange. The exchange was consummated on November 21, 2013 and was accounted for as a recapitalization of the Company whereby NRG was the accounting acquirer and issued 5,250,000 shares of common stock for the net assets of the Company. 

           The financial statements of NRG as of October 31, 2013 and, 2012 were included as part of an 8-K/A report we filed with the Securities and Exchange Commission on May 29, 2014.  The 8-K/A can be reviewed on the SEC’s website (www.sec.gov). 

Material changes of certain items in our statements of operations included in our financial statements for the periods presented are discussed below. 

For the three months ended July 31, 2014 compared to the three months ended July 31, 2013

For the three months ended July 31, 2014 we reported a loss of $(396,179) or $(0.02) per share compared to a net loss of $(719,693) or $(0.05) per share for the three months ended July 31, 2013. The decrease in the net loss of $(323,514) principally resulted from a loss of $330,638 on disposition of assets during the three months ending July 31, 2013, with no comparable loss in 2014.

Oil and gas sales were $46,352 and $17,831 for the three months ending July 31, 2014 and 2013 respectively; an increase of $28,521 (160%).  The increase is principally attributable to the timing of when the loads were picked up by the transportation company.

Exploration costs were $0 and $16,500 for the three months ending July 31, 2014 and 2013 respectively; a decrease of $16,500 (100%).   The company did not incur any exploration activities during three months ended July 31, 2014.

Lease operating expenses were $84,205 and $101,046 for the three months ending July 31, 2014 and 2013 respectively; a decrease of $16,841 (17%).  The decrease is principally attributable to additional compressor leases at the Garcia Field.  Increased compression expenses arose because the Company added additional compression facilities at the Garcia Field during three months ended July 31, 2013. The fluctuations are considered normal in the ordinary course of business.

General and administrative expenses were $335,287 and $247,772 for the three months ending July 31, 2014 and 2013 respectively; an increase of $87,515 (35%).  Professional services and other consultants accounted for approximately $70,000 of the increase and the balance of $26,970 consisted of miscellaneous general and administrative expenses.  The increase in professional and consulting services is attributable to becoming a public company in period ending July 31, 2014 versus being a private company in the same period in 2013.  The increase in other miscellaneous expenses is considered normal in the ordinary course of business.

Depreciation expense was $3,820 and $1,216 for the three months ending July 31, 2014 and 2013 respectively; an increase of $2,604 (214%). The increase arises from the Company adding additional equipment in the 2014 period.

Depletion expense was $9,974 and $3,000 for the three months ending July 31, 2014 and 2013 respectively; an increase of $6,974 (232%). The increase arises from the increased production in 2014 period.

Accretion expense was $2,000 and $5,200 for the three months ending July 31, 2014 and 2013 respectively; a decrease of $3,200 (62%).  The decrease is a result of changes in the estimated asset retirement obligation assumptions.

Interest expense was $7,245 and $32,152 for the three months ending July 31, 2014 and 2013 respectively; a decrease of $24,907 (77%). The decrease arises from decreased amortization of the debt discount which concluded in January 2014.

For the nine months ended July 31, 2014 compared to the nine months ended July 31, 2013

For the nine months ended July 31, 2014 we reported a loss of $(1,112,039) or $(0.06) per share compared with a net loss of $(986,545) or $(0.07) per share for the nine months ended July 31, 2013. The increase in the net loss of $(125,494) principally arises from increased operations and costs associated with becoming a public company in the period ending July 31, 2014 versus being a private company in the same period in 2013.

Oil and gas sales were $68,992 and $49,944 for the nine months ending July 31, 2014 and 2013 respectively; an increase of $19,048 (38%).  The change is primarily due to the timing of when Oil was picked up by the transportation company.

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Exploration costs were $41,801 and $49,520 for the nine months ending July 31, 2014 and 2013 respectively; a decrease of $7,719 (16%).   The decrease is principally attributable to decreased exploration activities during 2014. 

Lease operating expenses were $206,223 and $137,576 for the nine months ending July 31, 2014 and 2013 respectively; an increase of $68,647 (50%). The increase is principally attributable to additional compressor leases at the Garcia Field. Increased compression expenses arose because the Company added additional compression facilities at the Garcia Field not present throughout 2013. The fluctuations are considered normal in the ordinary course of business.

General and administrative expenses were $850,909 and $362,872 for the nine months ending July 31, 2014 and 2013 respectively; an increase of $488,033 (134%).  The following table summarizes the fluctuations.

Professional Fees	$	212,119
Land, exploration and engineering consultants		77,608
Travel		17,721
Financial public relations consultants		102,586
Insurance		21,984
Filing fees and stock transfer costs		14,438
Miscellaneous other		41,577
	$	488,033

Professional fees, land, exploration and engineering consultants, financial public relation consultants and filing fees and stock transfer costs increases are a result of the Company becoming public in the nine months ending July 31, 2014 as opposed to being private in the nine months ending July 31, 2013 and are considered normal in the ordinary course of business. In addition, during the nine months ending July 31, 2014, the Company paid consulting fee in relations to the fund raising activates.

Increases in insurance, filing fees, and miscellaneous costs are considered normal in the ordinary course of business.

Depreciation expense was $11,178 and $3,184 for the nine months ending July 31, 2014 and 2013 respectively; an increase of $7,994 (251%). The increase arises from the Company adding additional equipment in the 2014 period.

Depletion expense was $14,074 and $10,400 for the nine months ending July 31, 2014 and 2013 respectively; an increase of $3,674 (35%). The increase resulted from the increased production in 2014 period.

Accretion expense was $6,000 and $15,600 for the nine months ending July 31, 2014 and 2013 respectively; a decrease of $9,600 (62%).  The decrease is a result of changes in the estimated asset retirement obligation assumptions.

The Company incurred a loss on the disposal of oil and gas compression equipment in the nine months ended July 31, 2013 of $34,480, and $0 in the nine months ending July 31, 2014 because the Company did not have any disposals in the 2014 period.

Interest expense was $50,846 and $92,219 for the nine months ending July 31, 2014 and 2013 respectively; a decrease of $41,373 (45%). The decrease arises from decreased amortization of the debt discount which concluded in January 2014.

Liquidity and Capital Resources

Our sources and (uses) of funds for the nine months ended July 31, 2014 and 2013 are shown below:

	Nine Months ended July 31,
	2014			2013
Cash used in operations	$	(1,299,731	)	$	(555,602	)
Proceeds from sale of assets					65,582
Purchase of oil and gas properties		--			(57,424)
Purchase of equipment		(1,278	)		(17,826	)
Sale of common stock		1,347,000			691,937
Loans		--			79,965
Payment on notes payable		(3,312	)		(33,105)

Between October 1, 2013 and July 31, 2014 we sold 2,802,000 shares of our common stock to a group of private investors for cash of $1,421,750.

17

As of July 31, 2014, operating expenses were approximately $95,600 per month, which amount includes salaries and other corporate overhead, but excludes expenses associated with drilling, completing or reworking wells, lease operating expenses and interest expense.

The Company’s material future contractual obligations as of July 31, 2014 are summarized as follows:

Total		10/31/14		10/31/2015		10/31/2016		Thereafter
$	371,109	$	250,092	$	112,022	$	5,225	$	3,771

We estimate our capital requirements for the twelve months ending July 31, 2015 will be as follows:

Drilling, completing, and well work-overs	$	3,295,000
Seismic work	$	40,000

Any cash generated by operations, after payment of general, administrative and lease operating expenses, will be used to drill and, if warranted, complete oil/gas/ngl wells, acquire oil and gas leases covering lands which are believed to be favorable for the production of oil, gas, and natural gas liquids, and to fund working capital reserves.  Our capital expenditure plans are subject to periodic revision based upon the availability of funds and expected return on investment.

Trends

The factors that will most significantly affect future operating results will be:

● the sale prices of crude oil;

● the amount of production from oil, gas and gas liquids wells in which we have an interest;

● lease operating expenses;

● the availability of drilling rigs, drill pipe and other supplies and equipment required to drill and complete wells; and

● corporate overhead costs.

Revenues will also be significantly affected by our ability to maintain and increase oil, gas and natural gas liquids production.

Other than the foregoing, we do not know of any trends, events or uncertainties that have had, or are reasonably expected to have, a material impact on our revenues or expenses.

It is expected that our principal source of cash flow will be from the sale of crude oil, natural gas and natural gas liquids which are depleting assets. Cash flow from the sale of oil/gas/ngl production depends upon the quantity of production and the price obtained for the production. An increase in prices will permit us to finance operations to a greater extent with internally generated funds, may allow us to obtain equity financing more easily or on better terms. However, price increases heighten the competition for oil prospects, increase the costs of exploration and development, and, because of potential price declines, increase the risks associated with the purchase of producing properties during times that prices are at higher levels.

A decline in hydrocarbon prices (i) will reduce cash flow which in turn will reduce the funds available for exploring for and replacing reserves, (ii) will increase the difficulty of obtaining equity and debt financing and worsen the terms on which such financing may be obtained, (iii) will reduce the number of  prospects which have reasonable economic terms, (iv) may cause us to permit leases to expire based upon the value of potential  reserves in relation to the costs of exploration, (v) may result in marginally productive wells being abandoned as non-commercial, and (vi) may increase the difficulty of obtaining financing. However, price declines reduce the competition for oil properties and correspondingly reduce the prices paid for leases and prospects.

We plan to generate profits by acquiring, drilling and/or completing productive wells.  However, we plan to obtain the funds required to drill, and if warranted, complete new wells with any net cash generated by operations, through the sale of securities, from loans from third parties or from third parties willing to pay our share of the cost of drilling and completing the wells as partners/participants in the resulting wells.  We do not have any commitments or arrangements from any person to provide us with any additional capital.  We may not be successful in raising the capital needed to drill oil wells.  Any wells which may be drilled may not produce oil.

Other than as disclosed above, we do not know of any:

● trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, any material increase or decrease in liquidity; or

● significant changes in expected sources and uses of cash.

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Critical Accounting Policies and Estimates

See Notes 2 and 3 to the financial statements included as part of this report for a description of our critical accounting policies.

Recent Accounting Pronouncements

 In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Topic 606: Revenue from Contracts with Customers.  ASU No. 2014-09 is effective for the Company as of April 1, 2017.  Management is evaluating the effect, if any, this pronouncement will have on the Company’s consolidated financial statements.

The Company does not believe that any other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

Not applicable.

ITEM 4.  CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of our management, including our

Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report on Form 10-Q.  Disclosure controls and procedures are procedures designed with the objective of ensuring that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, such as this Form 10-Q, is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and is communicated to our management, including our Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.  Based on that evaluation, our management concluded that, as of July 31, 2014, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended July 31, 2014, that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

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

During the quarter ended July 31, 2014 the Company sold 1,260,000 shares of its common stock to private investors at a price of $0.50 per share. The $630,000 in proceeds was used for operations. The Company relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 in connection with the sale of these shares. The persons who acquired these shares were sophisticated investors and were provided full information regarding the Company's business and operations. There was no general solicitation in connection with the offer or sale of these securities. The persons who acquired these shares acquired them for their own accounts. The certificates representing these shares will bear a restricted legend providing that they cannot be sold except pursuant to an effective registration statement or an exemption from registration. No commission was paid to any person in connection with the sale of these shares.

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ITEM 6.  EXHIBITS

2.1	Purchase and sale agreement, dated as of June 6, 2014, by and between BIYO Operators, Inc. and Diversified Resources, Inc.
2.2	Amendment, dated August 11, 2014, to the purchase and sale agreement, dated as of June 6, 2014, by and between BIYO Operators, Inc. and Diversified Resources, Inc.
31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Paul Laird.
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Paul Laird.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Paul Laird.

101 The following materials are filed herewith: (i) XBRL Instance, (ii) XBRL Taxonomy Extension Schema, (iii) XBRL Taxonomy Extension Calculation, (iv) XBRL Taxonomy Extension Labels, (v) XBRL Taxonomy Extension Presentation, and (vi) XBRL Taxonomy Extension Definition. In accordance with Rule 406T of Regulation S-T, the information in these exhibits is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Exchange Act of 1934, and otherwise is not subject to liability under these sections and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, except as expressly set forth by the specific reference in such filing.

20

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 thereunto duly authorized.

	DIVERSIFIED RESOURCES, INC.
Date: September 11, 2014	By:	/s/ Paul Laird
		Paul Laird, Principal Executive, Financial and
		Accounting Officer

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EX-2.1

Exhibit 2.1

PURCHASE AND SALE AGREEMENT

HORSESHOE-GALLUP FIELD

On the Ute Mountain Ute Reservation in San Juan County, New Mexico

This Purchase and Sale Agreement (the “Agreement“) is entered into and effective this 6th day of June 2014, by and between BIYA Operators, Inc., a New Mexico corporation with a principal business address of PO Box 5226, Farmington, New Mexico 87499 (herein referred to as the “Seller”), andDiversified Resources, Inc., a Nevada corporation with its principal place of business located at 1789 W. Littleton Blvd., Littleton, Colorado 80120 (herein referred to as the “Purchaser”).

RECITALS:

WHEREAS, the Seller is the owner of certain oil and gas assets located on the Ute Mountain Ute (hereinafter “UMU”) Reservation in New Mexico, the Navajo Reservation in New Mexico, and federally held land in New Mexico which are more particularly described in Exhibits __, attached hereto and incorporated by reference herein; and

WHEREAS, the Seller desires to sell, and Purchaser desires to purchase one hundred percent (100%) of Seller’s ownership interests in the properties described in Exhibits __, and the Parties desire to memorialize the terms and conditions of the purchase and the sale thereof.

WHEREAS, the Seller is selling one hundred percent (100%) of all of Seller’s rights, title, and interest, including associated equipment and mineral leases in certain assets as described in this Agreement and the attached Exhibits, and Purchaser desires to purchase a one hundred percent (100%) of all Seller’s interest in such assets.

NOW THEREFORE, in consideration of the mutual promises and conditions hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller and Purchaser hereby agree as follows:

ARTICLE I

Definitions

1.1           “Assets” shall encompass the terms Federal Assets, Navajo Assets and UMU Assets, collectively, and mean 100.000000% of Seller’s right, title and interest in and to the following:

a.           Leases: Oil, gas and other mineral leaseholds listed and described in Exhibit __ and individually attached as Exhibit __ (collectively the “Leases”).

b.           Rights in Production: All working interests, carried working interests, rights of assignment and reassignment, net revenue interests, record title interests, undeveloped locations on the Leases, reversionary interests, back-in interests, overriding royalties, production payments, net profits interests, mineral and royalty interests, and any other interest of any kind which were created under, or in any way related to, the Leases, Wells or any Seller Agreement (the “Rights in Production”).

c.           Wells: All of Seller's right, title and interest in and to (including fixtures and improvements) producing, non-producing and shut-in oil and gas wells and saltwater disposal or injection wells, such wells being described on Exhibit __ (the “Wells”).

d.           Contracts: Unit Agreements, orders and decisions of regulatory authorities establishing or relating to units, unit operating agreements, joint operating agreements, gas purchase agreements, gas balancing agreements, oil purchase agreements, gathering agreements, transportation agreements, processing or treating agreements, farm-out agreements, farm-in agreements, subleases, and any other agreement to the extent assignable which in any way relates to, or is associated with, the Leases, Mineral Development Agreement, Rights in Production, or Wells (the “Contracts”).

e.           Easements:  Rights-of-Way, easements, and servitudes appurtenant to or used in connection with the Leases, Mineral Development Agreement, Rights in Production, and/or Wells (the “Easements”).

f.           Permits: Permits and licenses of any nature owned, held or operated in connection with the operations for the exploration and production of oil, gas and other minerals to the extent the same are used or obtained in connection with any of the Leases, Contracts, Seller Agreements, Easements or Wells (“Permits”).

g.           Equipment. Personal property, surface equipment, down-hole equipment and pipelines, machinery, fixtures, buildings, moveable or immovable mixed property and inventory used or obtained in connection with the Leases, Easements, Wells, Contracts, or Permits (“Equipment”).  The term “Equipment” shall specifically include, but is not limited to, that Equipment listed on Exhibit __. Any equipment listed on Exhibit __ shall be specifically excluded from the definition of “Equipment” and shall not be transferred to Purchaser under this Agreement.

h.           Production.  All oil, natural gas, natural gas liquids, helium, or any other hydrocarbons or commercially viable gases produced from any Asset after the Effective Date.

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i.           Records. Copies of records relating to the Assets described in Articles 1.9 (a) – (h) owned by Seller including, but not limited to, all (i) mineral development agreements of any kind, lease, land and division order files (including any abstracts of title, title opinions, certificates of title, title curative documents, and division orders contained therein along with any other documents or files relating to Assignor’s land rights in any Asset; (ii) any contracts or agreements associated with or related to the Assets; (iii) all well, facility and historic production files relating to the Assets (the “Well Files”), and (iv) all geological files, including, but not limited to, structure maps, seismic data, maps, logs and the like relating to the Assets, (the “Geologic Data”), such Geologic Data being accepted “as is”, “where is” by Assignee without warranty or representation of any nature or kind as to the accuracy, completeness, materiality, validity or fitness for any purpose of such Geologic Data and with all faults and same is delivered for the purpose of Purchaser’s independent evaluation and any use or reliance thereon is at Purchaser’s sole risk.

j.           Remaining Interests: All other rights and interests in, to, or under, or derived from the Assignor’s interests in or related to the Assets, even if improperly described in this definition or omitted from the Exhibits. It is the intention of the Parties that all of Assignor’s right, title, and interests in any and all oil and gas properties associated in any way with the Assets be assigned to the Assignee.

k.           Seller Agreements: Any agreement entered into by Seller with the Navajo Tribe, the Ute Mountain Ute Tribe, or the Federal government.

1.2            “Assignment and Bill of Sale” shall mean that particular Assignment and Bill of Sale executed between the Parties at Closing.

1.3           “Effective Date” shall mean June 6, 2014.

1.4           “Closing Date” shall mean August 11, 2014, extendable to not later than September 7, 2014, pursuant to the terms of Article 9.2.

1.5           “Federal Assets” shall mean those Assets described on Exhibit __.

1.6           “Horseshoe-Gallup Field” shall mean that acreage described in the attached Exhibit __.

1.7           “Navajo Assets” shall mean those Assets described on Exhibit __.

1.8            “Net Revenue Interest” shall mean that share of hydrocarbons or other commercially viable gases, specifically including helium, produced from or allocated to a particular Lease, unit, undeveloped acreage under the Mineral Development Agreement or other Seller Agreement, or Well (or the share of revenues received from the sale of hydrocarbons or other commercially viable gases specifically including helium from or allocated to a particular Lease, unit or Well)

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that a party is entitled to receive by virtue of its ownership of such Lease, unit or Well after deducting any hydrocarbons or other commercially viable gases specifically including helium or proceeds or revenues allocable to any royalty interest, overriding royalty interest, production payment, net profits interest or other similar interest, other than taxes, that constitutes a burden on such interest or is measured by or payable out of the production of hydrocarbons other commercially viable gases specifically including helium or the proceeds realized from the sale or other disposition thereof.

1.9            “Permitted Encumbrances” shall mean

a.           Liens for current taxes or assessments not yet delinquent or, if delinquent, being contested in good faith by appropriate actions diligently pursued;

b.           Materialmen's, mechanic's, repairman's, employee's, contractor's, operator's and other similar liens or charges arising in the ordinary course of business (i) foreclosure of which is barred by applicable limitations periods, or (ii) for amounts not yet delinquent (including any amounts being withheld as provided by law), or, if delinquent, being contested in good faith by appropriate actions diligently pursued; provided that the assigning Party takes such steps as may be reasonably required to ensure that such liens or charges do not result in the foreclosure on the affected Asset;

c.           All rights to consent by, required notices to, filings with, or other actions by governmental authorities in connection with the transfer of the Assets or any portion thereof;

d.           All rights reserved to or vested in any governmental authorities to control or regulate any of the Assets in any manner and all obligations and duties under all applicable laws, rules and orders of any such governmental authorities or under any franchise, grant, license or permit issued by any such governmental authorities;

e.           The leases, unit agreements, pooling agreements, operating agreements, development agreements, production sales contracts, and other contracts, agreements and instruments applicable to the Assets.

f.           Easements, rights-of-way, servitudes, permits, surface leases, surface use and/or right-of-way agreements, licenses, and other rights relating to or restricting surface operations which do not materially detract from the value of or materially interfere with the use or ownership of the Assets subject thereto or affected thereby;

1.10           “Public Company Audit” shall mean an audit sufficient to meet the standards of all governmental and regulatory authorities to which the Purchaser is subject.

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1.11           “Purchaser” or “DRI” shall mean Diversified Resources, Inc., a Nevada corporation or any subsidiary thereof.

1.12            “Seller” or “BIYA” shall mean BIYA Operators, Inc., a New Mexico corporation.

1.13           “Tribe” or “Tribal” shall refer to the Ute Mountain Ute Tribeor the Navajo Tribe.

1.14           “UMU Assets” shall mean those Assets described on Exhibit __.

1.15           “UMU Mineral Development Agreement” shall mean the Mineral Development Agreement by and between the Ute Mountain Ute Tribe and BIYA Operators, Inc. dated April 15, 2008, attached as Exhibit __.

1.16           “UMU Mineral Development Amendment” shall mean the First Amendment to the Mineral Development Agreement by and between the Ute Mountain Ute Tribe and BIYA Operators, Inc. which was approved by the Resolution of the Ute Mountain Ute Tribal Counsel dated November 7, 2012.  The Mineral Development Amendment is attached as Exhibit __. The Resolution of the Ute Mountain Ute Tribal Counsel dated November 7, 2012 is attached as Exhibit __.

ARTICLE II

Purchase and Sale

2.1           Conveyance.    Subject to the terms, conditions and consideration hereinafter set forth, and specifically those expressed in Article 2.2 (a), Seller agrees to sell, and Purchaser agrees to purchase, the Assets. The Assets shall be transferred to Purchaser pursuant to an Assignment, Conveyance and Bill of Sale to be executed at Closing.

2.2           Purchase Price.   In addition to the consideration set out in 2.2 (a), the Purchase Price to be paid to Seller by Purchaser for the Assets is Six Million Dollars U.S. Dollars ($6,000,000.00) (the “Purchase Price”). The Purchase Price, less any earnest money or other prepayment or deduction, shall be paid to Seller by Purchaser at the Closing.

a. Stock Compensation.  In addition to the Purchase Price, Purchaser shall also tender to Seller 900,000 shares of the Purchaser’s common stock.  For the purpose of this Agreement the stock shall be valued at $1.00 per share.  However, Purchaser makes no representation or guarantee of any kind concerning the actual value or liquidity of such shares.  Seller acknowledges that the stock is not currently liquid, and that the stock will be restricted as described in Exhibit __.  Any adjustments to, or deductions from, the Purchase Price under this Agreement shall be applied to the Purchase Price described above, and shall not affect the Stock Compensation.

b. The total consideration being paid thus being $6,900,000.

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c. Proof of Funds. Purchaser shall provide Seller with proof of funds in the amount of $5,900,000 U.S. Dollars no later than July 31, 2014.  “Proof of Funds” shall mean either (a) an account at a financial institution in the name of Purchaser, and under the control of Purchaser, containing at least $5,900,000 or (b) a legally binding letter of commitment to fund the entire remaining Purchase Price ($5,900,000.00 U.S.) from a financial institution with the at least $100,000,000.00 U.S. under its management and control such as Macquarie Bank Limited – Houston, Independence Bank of Houston, Mutual of Omaha Bank, or similar financial institution.  If Purchaser fails to provide Proof of Funds by July 31, 2014 this Agreement shall be voidable by Seller.

d. Adjusted Conveyance and Purchase Price.  In the event that:

ii. The Conditions Precedent stated in Article 7.1 (e) fail, and/or the Representations and Warranties stated in Article 5.1 fail as applied only to the Navajo Assets, then:

a. The Navajo Assets shall not be assigned to Purchaser at the Closing.  The portion of the Purchase Price allocated to the Navajo Assets shall be held in a mutually agreed escrow account until such time as the relevant Conditions Precedent and/or Representations and Warranties are met or cured by Seller.  Upon meeting and/or curing the relevant Conditions Precedent and/or Representations and Warranties, the Navajo Assets shall be assigned to Purchaser and the funds held in escrow shall be released to Seller.  For the purposes of this provision, the portion of the Purchase Price that is allocated to the Navajo Assets is $175,000.

b. If Seller has not met and/or cured the relevant Conditions Precedent and/or Representations and Warranties by December 31, 2014 (or a later date mutually agreed to by the Parties in writing) the Navajo Assets shall not be conveyed to Seller under this or any other Agreement.  The Navajo Assets shall be deemed to have been removed from the definition of Assets.  The Purchase Price shall be reduced by the amount assigned to the Navajo Assets (the “Adjusted Purchase Price”).  The funds held in the escrow account shall be returned to Purchaser.  The Parties shall work in good faith to remove or adjust any Exhibits necessary to reflect the removal of the Navajo Assets from this Agreement.

iii. The Conditions Precedent stated in Article 7.1 (f) fail, and/or the Representations and Warranties stated in Article 5.1 fail as applied only to the Federal Assets, then:

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1. The Federal Assets shall not be assigned to Purchaser at the Closing.  The portion of the Purchase Price allocated to the Federal Assets shall be held in a mutually agreed escrow account until such time as the relevant Conditions Precedent and/or Representations and Warranties are met or cured by Seller.  Upon meeting and/or curing the relevant Conditions Precedent and/or Representations and Warranties, the Federal Assets shall be assigned to Purchaser and the funds held in escrow shall be released to Seller.  For the purposes of this provision, the portion of the Purchase Price that is allocated to the Federal Assets is $75,000.

2. If Seller has not met and/or cured the relevant Conditions Precedent and/or Representations and Warranties by December 31, 2014 (or a later date mutually agreed to by the Parties in writing) the Federal Assets shall not be conveyed to Seller under this or any other Agreement.  The Federal Assets shall be deemed to have been removed from the definition of Assets.  The Purchase Price shall be reduced by the amount assigned to the Federal Assets (the “Adjusted Purchase Price”).  The funds held in the escrow account shall be returned to Purchaser.  The Parties shall work in good faith to remove or adjust any Exhibits necessary to reflect the removal of the Federal Assets from this Agreement.

2.3           Deposit. A deposit in the amount of $100,000.00 shall be paid by Purchaser on June 6, 2014 (the “Deposit”).  Such Deposit shall be made to a mutually acceptable escrow agent and account or a mutually acceptable third party attorney’s trust account.

a. Condition Precedent to Purchaser’s Obligation to make the Deposit. The obligation of Purchaser to make the Deposit shall be subject to the following condition:

i. Prior to June 6, 2014, Seller shall arrange an in-person meeting between Purchaser and a representative of the Tribe.  Seller shall use best efforts to ensure that the representative has the authority and ability to convey that the Tribe is generally amenable to the transaction and obligations discussed in this Agreement, and shall convey such sentiment to Purchaser.  If the Tribe or the Tribe’s representative indicates that the Tribe is not amenable Parties entering this Agreement, this Agreement shall be voidable by either Party.  In the case of either Party electing to void this Agreement under this Article, no Deposit shall be made.

b. Seller shall be entitled to retain the Deposit in the event that:

i. Purchaser fails to provide Proof of Funds by July 31, 2014; or

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ii. The Conditions Precedent stated in Article 7.1 (b), are satisfied, all of Seller’s warranties and representations are effectuated, kept and maintained as applied to the UMU Assets, and the Closing does not occur through no fault of the Seller.

c. Purchaser shall be entitled to a return of the Deposit in the event that:

i. Purchaser terminates or voids this Agreement under any provision of the Agreement which authorizes such termination or voiding; or

ii. The Conditions Precedent stated in Article 7.1 (b) do not occur or are not met; or

iii. Seller fails to keep, maintain or effectuate any of its warranties or representations as applied to the UMU Assets; or

iv. Seller has failed to keep sufficient accounting and other records to such a degree that it is not possible for Purchaser or Purchaser’s agents acting in good faith to complete a Public Company Audit prior to Closing.

2.4           Balance of the Purchase Price. At the Closing, Purchaser shall pay Seller the remaining balance of the Purchase Price, or Adjusted Purchase Price if applicable, in certified funds or wire transfer delivered to Seller’s address herein or such banking institution as Seller shall direct, and deliver stock certificates in the correct amount to Seller at Seller’s notice address herein set forth. Such funds shall be immediately available.

2.5           Allocation of Purchase Price among Assets.  The Purchase Price shall be allocated among the Federal Assets, Navajo Assets and UMU Assets as expressed herein and in Exhibit __.

2.6           Allocation of the Purchase Price among Tangibles and Intangibles. The Purchase Price shall be allocated among tangibles and intangibles comprising the Assets as described on Exhibit __.  Purchaser and Seller agree to be bound by the allocation of the Purchase Price among tangible and intangible Assets set forth herein for all purposes; to consistently report such allocations for all federal, tribal, state and local tax purposes; and to timely file all reports required by the Internal Revenue Service concerning the Purchase Price allocations.

ARTICLE III

Assignment of Mineral Development Agreement, Earned Leases, and Rights

3.1 Assignment of Mineral Development Agreement. Pursuant to the Assignment, Conveyance, and Bill of Sale Seller shall assign, convey and transfer 100.000000% of its right, title and interest in and to the Assets to Purchaser at Closing.

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3.2 Copies of Earned Leases. Within 30 days of the execution of this Agreement, Seller shall provide Purchaser with true and correct copies of all Earned Leases.

3.3 Assignment of Leases. Purchaser shall prepare and Seller shall execute, acknowledge and deliver to Purchaser assignments of all Earned Leases (“Assignments”) at the Closing.  Each such Assignment shall be in substantially the form set out in Exhibit __ (“Lease Assignment”), and shall include a special warranty of title against claims arising, by, through or under Seller but not otherwise, subject to any Permitted Encumbrances.  To the extent transferable, Seller shall grant to Purchaser and its successors and assigns, full power and right of substitution and subrogation in and to all covenants, indemnities and warranties (including warranties of title) given or made to Seller by its predecessors in title.  The effective date of the Assignments shall be the Closing Date. Each such Assignment shall be made subject to the terms of the Earned Leases, and shall provide that Purchaser shall abide by the terms thereof.

ARTICLE IV

Assumption of Liabilities and Indemnification

4.1 Payment of Invoices. After the Closing, Seller will pay only that portion of invoices received that are applicable to work performed or material received in the period prior to the Closing; other charges and invoices will be returned to the vendor for rebilling to Purchaser.  Similarly, after the Closing, Purchaser will pay only that portion of invoices received that are applicable to work performed or material received in the period on or after the Closing; other charges and invoices will be returned to the vendor for rebilling to Seller.

4.2 Liabilities after Closing and Indemnities. Purchaser shall observe and comply with all covenants, terms, and provisions, express or implied, contained in the Leases, Easements, Permits, Mineral Development Agreement and any other contracts or agreements relating to the Assets at the time of Closing.  This Purchase and Sale Agreement is made subject to the terms of all such agreements.  Purchaser shall assume and be responsible for its proportionate share of all obligations of Seller accruing under such agreements after the Closing.

4.3 Payment of Taxes. All real estate, occupation, ad valorem, personal property, tribal, or other taxes and charges of any kind on any of the Equipment or tangible assets for the current tax year shall be prorated as of the Closing Date.  Ad valorem, property or other taxes on the mineral estate, the producing Leases, or the produced minerals, which are based on the production and/or revenue received and which are taxed in a year following

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the year of production, shall be subject to proration based on the production and revenue received up to the Closing Date. Purchaser shall be responsible for its proportionate share of the taxes based on production and revenue from the Closing Date and thereafter, regardless of the year in which the tax is due or paid. Seller shall be responsible for all oil and gas severance taxes, production taxes, windfall profits taxes, and any other similar taxes applicable to oil and gas production occurring prior to the Closing Date, and Purchaser shall be responsible for its proportionate share of all such taxes applicable to oil and gas production occurring on and after the Closing Date. Seller shall pay all such items for all periods prior to such date. Purchaser shall be responsible for its proportionate share of all sales, use and similar tax arising out of the sale of the Assets.

Should this purchase and sale constitute an isolated or occasional sale and not be subject to sales or use tax with any of the taxing authorities having jurisdiction over this transaction, no sales tax will be due to Seller from Purchaser. Seller and Purchaser agree to cooperate in demonstrating that the requirements for an isolated or occasional sale or any other sales tax exemption have been met.

4.4 Other Payments. Seller shall cause any other obligation or lien upon the Assets or associated with the Assets to be paid in full from the balance of the Purchase Price at Closing within 30 days of the Closing Date.

ARTICLE V

Representations and Warranties

5.1 Seller’s Representations and Warranties. Seller represents and warrants to Purchaser that the following statements are true and accurate:

a.           Seller Agreements, Leases and Contracts in Full Force and Effect. The Seller Agreements, Leases and Contracts are in full force and effect.  Concerning the Seller Agreements, Leases and Contracts, Seller warrants that it is not in breach in any material respect of the terms and provisions thereof, nor, to Seller’s knowledge is any third party in breach in any material respect of the terms and provisions thereof, and no notice of breach, default or termination has been received or is believed to be imminent by Seller, or to the knowledge of Seller, by any other party.

b.           No Additional Amendments in Existence. Seller warrants that, other than the UMU Development Agreement Amendment and any amendments attached in Exhibit __, there have been no amendments to, or modifications of, any Seller Agreement, Contract or Lease.

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c.           Leases.  Seller holds mineral leasehold interests in the Leases.  Seller warrants that these interests are free and clear of any liens, claims, burdens or encumbrances, except for those specifically disclosed as Permitted Encumbrances.  Seller further warrants that the Leases are in full force and effect, and that Seller is not in breach in any material respect of the terms and provisions of the Leases, and that no notice of breach, default or termination has been received by Seller, either directly or indirectly. Seller warrants that the Net Revenue Interest of the Leases stated on Exhibit __ are accurate, and that all burdens on production of any kind are outlined in Exhibit __.

d.           Seller Agreements. Seller warrants that the Net Revenue Interest stated on Exhibit __ of any undeveloped acreage under the UMU Mineral Development Agreement which is not subject to a lease is accurate, and that all burdens on production of any kind are outlined in Exhibit __.

e.           Assets. Seller holds the rights to certain interests in the Assets free and clear of any liens, claims, burdens or encumbrances.  Any contracts relating to the Assets are in full force and effect, Seller is not in breach in any material respect of the terms and provisions thereof, and no notice of breach, default or termination has been received by Seller, either directly or indirectly. Seller further warrants that it has valid and enforceable title, free and clear of any liens, claims, burdens or encumbrances to the Equipment.

f.           Complete Obligation. Seller further warrants that the documents provided by Seller as Exhibits to this Agreement, together with applicable law, contain the entirety of Seller’s obligation concerning the Assets, and no other understanding or agreement exists between Seller and any third party in relation to the subject matter of this Agreement, except as otherwise stated in this Agreement.

g.           Failure of Warranty.  Failure of any of the warranties stated in Articles 4 (a) - 4 (f) as applied to the UMU Assets shall make this Agreement voidable by Purchaser and, upon such election to void the Agreement, entitle Purchaser to a full and immediate refund of all payments made to Seller in accordance with this Agreement, along with all costs and attorney fees Purchaser incurs as a result of such failure.  Failure of any of the warranties stated in Articles 5 (a) - 5 (f) as applied to the Federal Assets or Navajo Assets shall necessitate an Adjusted Conveyance and Adjusted Purchase Price as discussed in Article 2.2.

h.           Authorization.  Seller is a corporation duly organized and validly existing, in good standing, under the laws of the state of New Mexico.  Seller has the corporate power and authority to own its property and carry on its business as now conducted and to enter into and carry out the terms of this Agreement.

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i.           Validly Executed. This Agreement has been duly and validly executed and delivered on behalf of the Seller and constitutes a valid obligation of the Seller, enforceable in accordance with its terms.  Seller is not subject to any charter, operating agreement, bylaw, lien, encumbrance of any kind, agreement, instrument, order, ownership dispute, or decree of any court or governmental body (other than any required Tribal or governmental approval) which would delay, hinder or prevent consummation of the transactions contemplated by this Purchase and Sale Agreement and/or the Assignment, Conveyance and Bill of Sale.

j.           No Violation of Contractual Restrictions.  Subject to required Tribal and governmental consents, the execution, delivery, and performance of this Agreement does not conflict with or violate any agreement or instrument to which Seller is a party or by which it or the Assets are bound.

k.           No Litigation.  There is no action, suit, arbitration, proceeding, claim, or investigation by any person, entity, administrative agency, or governmental body pending or, to its knowledge, threatened, against Seller before any court, arbitrator or governmental agency that in anyway concerns the Assets.

l.           Bankruptcy.  There are no bankruptcy, reorganization, or receivership proceedings pending, being contemplated by, or to its knowledge, threatened against Seller.

m.           Broker’s Fees. It has not incurred any obligation for brokers, finders, or similar fees for which Purchaser or its affiliates would be liable or responsible in any way.

n.           Rentals.  Seller hereby warrants that no rental payments are due concerning the Assets.

o.           Preferential Rights.  Except for the Preferential Right discussed in Article 7, Seller is aware of no preferential rights held by any third personwhich will be triggered by the execution of this Agreement or any Assignment delivered pursuant hereto.

p.           Warranty of Title.  Seller represents and warrants to Purchaser that Seller has marketable and defensible title (as those terms are commonly used in the industry) to the Leases in Exhibit A free and clear of all claims arising by, through or under Seller, but not otherwise.  Seller makes no warranty of title concerning the leases, except with respect to any claims arising by, through or under Seller.  Seller agrees to indemnify Purchaser solely regarding claims of any and all persons claiming by, through or under Seller, but not otherwise.  Seller expressly disclaims any liability for title issues concerning the leases which arose prior to Seller taking a legal interest in any leases concerned.

q.     Ordinary Course of Business. After the execution of this Agreement and prior to Closing, Seller shall use and maintain the Assets in substantially the same manner in which they have been used and maintained prior to this Agreement. Unless Seller and Purchaser agree, Seller shall only enter into agreements or transactions in relation to the Assets which

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(i) individually involve a fair market value of less than $10,000, and (i) are entered into in the ordinary course of business consistent with past practices. Seller shall not materially alter the Assets (other than the use of supplies and consumables) or remove any improvements, Equipment or property which comprise the Assets. However, Seller shall have the right to make any changes, repairs or modifications, or incur any expenditures necessary to prevent or react to an emergency or environmental incident.

r.           Disclaimer of Additional Representations and Warranties».  Except for the representations and warranties provided in this article and the Assignment, Conveyance and Bill of Sale to be executed at the Closing, Seller makes no, and disclaims any, warranty or representation of any kind, either express, implied, statutory, or otherwise, including, without limitation, the accuracy or completeness of any data, reports, records, projections, information, or materials now or heretofore furnished or made available to Purchaser in connection with this Agreement.

s.           No Warranty as to Oil and Gas Potential. Purchaser acknowledges that Seller makes no warranties regarding the oil and gas potential related to or the likelihood of success of any development or exploration concerning the Assets.

5.2 Purchaser’s Representations and Warranties. Purchaser represents, warrants, and agrees as follows:

a.           Authorization.  Purchaser is a corporation duly organized and validly existing, in good standing, under the laws of the state of Nevada.  Purchaser has the corporate power and authority to own its property and carry on its business as now conducted and to enter into and carry out the terms of this Agreement.

b.           Validly Executed. This Agreement has been duly and validly executed and delivered on behalf of the Purchaser and constitutes a valid obligation of the Purchaser, enforceable in accordance with its terms.  Purchaser is not subject to any charter, operating agreement, bylaw, lien, encumbrance of any kind, agreement, instrument, order, ownership dispute, or decree of any court or governmental body (other than any required Tribal or governmental approval) which would delay, hinder or prevent consummation of the transactions contemplated by this Purchase and Sale Agreement and/or the Assignment, Conveyance and Bill of Sale.

c.           Compliance with Applicable Agreements; Laws. Purchaser shall comply with all applicable laws, ordinances, rules and regulations and shall promptly obtain and maintain all permits and bonds required by public authorities in connection with the Assets purchased.

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d.           Broker’s Fees. Purchaser has not incurred any obligation for brokers, finders, or similar fees for which Seller or its affiliates would be liable or responsible in any way.  Purchaser has incurred the finder’s fee described on Exhibit __.  However, Seller shall not have any liability for such finder’s fee, and, to the extent Seller ever incurs any liability for such finder’s fee, Purchaser agrees to fully indemnify Seller up to the amount of the finder’s fee.

e.           Acceptance of Assets on “as is, where is” Basis. Purchaser has made all inspections of the Assets, financials, and other such documents as it deems necessary, and, subject to Seller’s representations and warranties, and the satisfaction of the conditions precedent, Purchaser will accept at Closing the Assets in “as is, where is” condition, with an expressed acceptance and understanding of the representation and disclaimers contained herein.

ARTICLE VI

Title Matters

6.1 Availability of Title Records. At least 30 days prior to Closing, Seller will have made available to Purchaser, without express or implied warranty of any kind regarding accuracy, such information in Seller’s possession regarding Seller’s title to the Assets, which information Purchaser may copy at its sole cost and expense (unless prohibited by agreement between Seller and a third party).

6.2 Source of Seller’s Interests. Seller affirms that all of the mineral rights to be transferred, sold, conveyed or assigned under this Agreement were created under the Seller Agreements, Leases and Contracts.

ARTICLE VII

Conditions Precedent

7.1 Conditions Precedent to the Obligations of Either Party.    The obligations of Seller and Purchaser to effect the transactions contemplated herein shall be subject to the following conditions:

a. Parties shall have agreed to the form of all Exhibits referenced herein.

b. Conditions Precedent Applicable to the Ute Mountain Ute Assets. Seller shall obtain, at Seller’s sole cost, written consent of the Ute Mountain Ute Tribe to the Parties entering this Agreement and the Assignment, Conveyance and Bill of Sale so far as such documents apply to the Ute Mountain Ute Assets.

i. Agreement in Full Force and Effect. The Parties shall obtain written documentation from the Tribe that (1) waives any past or current breaches of the UMU Mineral Development Agreement by Seller; (2) affirms the validity, full force and effect of the Mineral Development Agreement; (3) waives any past or current breaches of any Ute Mountain Ute Leases by Seller; and (4) affirms the validity, full force and effect of the Ute Mountain Ute Leases.

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c. Interior Approval of this Agreement and Assignment, Conveyance, and Bill of Sale. To the extent necessary, the Parties shall obtain the approval of the Secretary of the Interior to this Purchase and Sale Agreement, and the Assignment, Conveyance and Bill of Sale.

d. Tribal Waiver of, or Failure to Execute, the Preferential Right.  Pursuant to the terms of the Mineral Development Agreement, the Tribe has retained a Preferential Right concerning the Horseshoe-Gallup Field.  The effect of this Agreement and the Assignment, Conveyance and Bill of Sale is contingent on the Tribe either (i) waiving such Preferential Right prior to Closing; or (ii) failing to execute such Preferential Right prior to the Preferential Right expiring.

e. The Ute Mountain Ute Tribe shall also specify in writing:

1. The degree to which the conditional rights discussed in Article 6.01 of the Mineral Development Agreement have been earned and are effective as applied to Seller; and either:

2. That no obligations of the Seller stated in Articles 4 or 5 of the UMU Mineral Development Agreement remain incomplete or unfulfilled and that Purchaser shall therefore have no obligations under Articles 4 or 5 of the UMU Mineral Development Agreement; or

3. The obligations stated in Articles 4 and 5 of the UMU Mineral Development Agreement that remain unfulfilled by Seller, the degree to which Purchaser shall be obligated to perform such obligations, and the timeframe for completing such obligations.

f. Conditions Precedent Applicable to the Navajo Lease. To the extent necessary, Seller shall obtain written consent of the Navajo Tribe to the Parties entering this Agreement and the Assignment, Conveyance and Bill of Sale so far as such documents apply to the Navajo Assets.  Seller shall also prove that it has valid marketable title to the Navajo Assets.

g. Conditions Precedent Applicable to the Federal Lease. To the extent necessary, Seller shall obtain written consent of the Federal Government to the Parties entering this Agreement and the Assignment, Conveyance and Bill of Sale so far as such documents apply to the Federal Assets.

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7.2 Conditions Precedent to Obligations of Seller. The obligations of Seller to effect the transactions contemplated herein shall be subject to the following conditions:

a.           The representations and warranties of Purchaser herein shall be true and accurate as of and on the Closing Date, with the same effect as though made at such time; and

b.           Purchaser shall have performed all obligations and complied with all covenants required by this Agreement to be performed or complied with prior to the Closing Date.

7.3 Conditions Precedent to Obligations of Purchaser.    The obligations of Purchaser to effect the transactions contemplated herein shall be subject to the following conditions:

a.           The representations and warranties herein made by Seller shall be true and accurate as of and on the Closing Date, with the same effect as though made at such time.

b.           Seller shall have performed all obligations and complied with all covenants required by this Agreement to be performed or complied with prior to or on Closing Date;

c.           No material change in the operation or make-up of the Assets shall have occurred since the Effective Date of this Agreement, other than changes in the ordinary course of business.

d.           The completion of a Public Company Audit Purchaser and/or Purchaser’s agents of Seller’s financial records pertaining to the Assets, with which Seller shall cooperate fully.

ARTICLE VIII

Environmental

8.1 Horseshoe-Gallup Remediation.  Pursuant to Article V of the Mineral Development Agreement, Seller agreed to perform certain environmental remediation on the Horseshoe-Gallup Field.  Pursuant to Article 7.1 (b) of this Agreement, Seller shall obtain in writing a statement from the Tribe prior to Closing listing what remedial work has been completed, what remedial work remains to be done, the extent to which Purchaser is obligated for such remedial work, and the time frame for its completion.

8.2 Environmental Review. Promptly upon signing this Agreement, Purchaser shall have access to environmental data in Seller’s files in relation to the Assets.  The Parties will work in good faith to secure such access.  Purchaser specifically acknowledges that such access is given as a courtesy only, and that (with the exception of the information provided pursuant to Article 7.1) Seller makes no representations whatsoever as to the accuracy,

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completeness, or reliability of any such environmental information provided to Purchaser. Except for the information provided pursuant to Article 7.1, Purchaser acknowledges that it relies and depends on and uses any and all such environmental information exclusively and entirely at its own risk and without any resource to Seller whatsoever. Seller shall cooperate with Purchaser for the performance by Purchaser of any additional environmental testing at Purchaser’s sole expense. The Parties shall work together to complete such testing prior to Closing.

8.3 Material Contamination. If, as a result of information provided pursuant to this Article, or any additional information which Purchaser obtains from other sources, or any such testing done by Purchaser, Purchaser determines in its good faith opinion prior to Closing that the environment associated with the Assets has been materially contaminated, Purchaser shall notify Seller of such determination in writing at least ten days prior to Closing.  Such notification shall include (i) detailed description of such determination; (ii) a copy of any environmental assessment, report, data or information pertaining to such claims, and (iii) Purchaser’s good faith calculation of the amount by which such claims have diminished the value of the Assets. For the purpose of this Agreement, “Material Contamination” shall mean the violation of existing federal or state laws or regulations existing as of the Effective Date to the extent that the aggregate of all environmental damage claims made by Purchaser under this Article exceed $10,000.00 either (i) in potential fines, penalties or damage payments; or (ii) remediation costs.

8.4 Remedies for Material Contamination. Upon notification of Material Contamination the Parties may either:

a.           Prior to or at Closing, mutually agree in writing separate and apart from this Agreement that Seller shall correct or make arrangements for the correction of such Material Contamination and that Closing shall proceed as scheduled with Seller indemnifying Purchaser against all damages attributable to such Material Contamination and without reduction of the Purchase Price; however, the estimated cost to correct attributable to such damages shall be placed in an escrow account requiring dual signatures for release until such time as the Material Contamination is corrected; or

b.           Prior to or at Closing mutually agree in writing that Purchaser shall correct or make arrangements for the correction of such Material Contamination and the Parties shall proceed to Closing with a reduction of the purchase Price in an amount mutually agreed to by the Parties with the Purchaser defending, indemnifying and holding Seller harmless against all damages attributable to such Material Contamination; or

c.           Prior to or at Closing Purchaser agrees to waive such Material Contamination and assume all liability and obligations relating thereto.

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Each Party shall cooperate with the other’s corrective work, and any operations unreasonably interfering with the corrective work shall cease until correction is completed.

d.           If the Parties are unable to agree on one of the above options, either Party shall be entitled to terminate this Agreement without further liability.

ARTICLE IX

Closing

9.1 Closing Date.  Unless mutually agreed upon as to any extension, the Closing of the transactions contemplated in this Agreement shall be held on August 11, 2014 (the “Closing” or “Closing Date”) at Seller’s office in Farmington, New Mexico.

9.2 Extension of Closing Date. So long as Purchaser has provided Proof of Funds in accordance with the terms of Article 2, for the purposes of completing the Public Company Audit, Purchaser may request an extension of the Closing Date to comply with Federal statutory and regulatory requirements to September 7, 2014.  Consent to such request by Seller shall not be unreasonably withheld.

9.3 Delivery of Documents. On the Closing Date, Seller shall deliver an executed Assignment, Conveyance and Bill of Sale, and any other documents as may be necessary to transfer the Assets to Purchaser, including without limitation any separate assignments of the Assets on such officially approved forms as Purchaser may provide in sufficient counterparts as necessary to satisfy applicable statutory and regulatory requirements.  Any additional documents necessary to effect this Agreement shall be timely provided and executed by the Parties hereto in good faith.

9.4 Payment of Remaining Purchase Price and Stock Compensation. At the Closing, upon and against delivery of the documents and materials described herein, Purchaser shall pay Seller the remaining balance of the Purchase Price (or Adjusted Purchase Price if applicable) in certified funds or by wire transfer as set out in Article 2.4.  Purchaser shall also effectuate the transfer of the Stock Compensation to Seller at the Closing.

ARTICLE X

Miscellaneous

10.1 No Third Party Beneficiaries. This Agreement is for the benefit of Purchaser and Seller only and not for the benefit of any third party.

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10.2 Further Assurances.    The Parties to this Agreement shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered such documents and instruments and shall take other action as may be necessary or advisable to carry out their respective obligations under this Agreement.

10.3 Assignment.    No party may assign its rights or delegate its duties or obligations under this Agreement without prior written consent of the other party.

10.4 Headings.    The headings of the articles and sections of the Agreement are for convenience of reference only and shall not limit, or otherwise affect any of the terms or provisions of this Agreement.

10.5 Dispute Resolution.  Any dispute arising from or related to this Agreement between the Parties shall be subject to the exclusive jurisdiction of the courts in San Juan County, New Mexico.

10.6 Force Majeure. In the event any Asset is damaged by fire, flood, vandalism or other disaster beyond the control of Seller prior to Closing, Seller may (i) repair the damage at its sole cost, or (ii) reduce the Purchase Price by the cost of the damage.  In the event that Seller and Purchaser cannot agree any issue arising out of this Article 10.6, this Agreement shall be voidable by either Party.

10.7 Books and Records.  With the exception of tax returns and related documents, Seller shall deliver to Purchaser originals or copies of any books, records or documents which relate to the Assets within 24 hours of the Deposit being paid.

10.8 Notice. All notices and consents to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered either by personal delivery, or courier or delivery service, addressed to the Parties at the following addresses:

Seller	Purchaser
BIYA Operators, Inc.	Diversified Resources, Inc.
Attn: Richard Baldwin	Attn: Paul Laird
1409 W. Aztec Blvd., #5	1789 W. Littleton Blvd.
Aztec, NM 87410	Littleton, CO 80120

or such other address or email either Party shall have previously designated by written notice given to the other Party in the manner herein above set forth.  Notices shall be deemed given when received, or when delivered and receipted for (or upon the date of attempted delivery where delivery is refused) if hand delivered, sent by courier or delivery service.

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10.9 Publicity. Seller and Purchaser shall consult with each other regarding any and all press releases or other public or private announcements made concerning this Agreement.  However, Seller acknowledges that Purchaser is a publicly traded company and is required by applicable law to make certain public disclosures, and Seller hereby consents to Purchaser making such disclosures.

10.10 Governing Law.    This Agreement shall be construed in accordance with, and governed by, the laws of the state of New Mexico, along with applicable Tribal and Federal law.

10.11 Survival.    All of the covenants, agreements, representations, warranties and terms of all kinds set forth in this Agreement shall survive the Closing.

10.12 Commissions or Fees. Purchaser and Seller, for itself and its directors, partners, employers, employees, and agents warrants, covenants and represents to the other Party that, except as expressly provided in this Agreement, neither it nor any of its directors, employees, employers, partners, or agents has been given or received from the other Party any commission, fee, rebate, gift or other thing or service in connection with this Agreement.  If necessary, each Party agrees that their books and records shall be available for audit to prove the truth of this Article 10.12.

10.13 Counterparts.    This Agreement may be executed by the parties in counterparts, each of which shall be deemed an original instrument, all of which together shall constitute one and the same Agreement.

10.14 Exhibits. All of the Exhibits referred to in this Agreement are hereby incorporated into this Agreement by reference and constitute a part of this Agreement.  Each Party to this Agreement shall receive a complete copy of the Exhibits prior to the Closing.

10.15 Expenses and Recording. All fees, costs and expenses incurred by Purchaser or Seller in negotiating this Agreement or consummating the transactions contemplated by this Agreement shall be paid by the Party incurring the same including, without limitation, legal and accounting fees, costs and expenses.  Purchaser shall be responsible for the filing and recording of the assignments, conveyances or other instruments required to convey title to the Assets and bear all documentary, filing and recording fees and expenses incurred in connection therewith.

10.16 Parties in Interest.    This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and permitted assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any other person or entity any benefits, rights or remedies whatsoever.

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10.17 Waiver and Severability.    No waiver by either party of any breach or default hereof by the other shall be deemed to be a waiver of any preceding or succeeding breach or default hereof, and no waiver shall be operative unless the same shall be in writing. Should any provision of this Agreement be declared invalid by a court of competent jurisdiction, the remaining provisions hereof shall remain in full force and effect regardless of such declaration.

10.18 Entire Agreement; Amendment.    This Agreement contains the entire agreement between the Parties concerning the subject matter herein, and supersedes all prior oral or written agreements, commitments, understandings, or information otherwise furnished by Seller or Purchaser with respect to such matters. This Agreement may not be altered or amended, nor any rights or conditions hereunder waived, except by mutual agreement of the Parties in writing.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

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IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the date first above written.

SELLER:

BIYA Operators, Inc.

BY:

TITLE:

PURCHASER:

DIVERSIFIED RESOURCES, INC.

BY:

TITLE:

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EX-2.2

Exhibit 2.2

AMENDMENT TO THAT PURCHASE AND SALE AGREEMENT

By and Between

BIYA OPERATORS, INC.

and

DIVERSIFIED RESOURCES, INC.

dated

June 6, 2014

AMENDMENT

This Amendment to the Purchase and Sale Agreement: Horseshoe Gallup Field by and between BIYA Operators, Inc. and Diversified Resources, Inc. dated June 6, 2014 (this "Amendment"), is dated August 11, 2014, and is entered into between BIYA Operators, Inc., a New Mexico corporation ("Seller") and Diversified Resources, Inc., a Nevada corporation ("Buyer").

RECITALS

Whereas, the Parties entered into a Purchase and Sale Agreement: Horseshoe Gallup Field on or about June 6, 2014 (the “PSA”); and

Whereas the Buyer and the Seller have agreed to amend the referenced agreement to reflect a change in the closing date and a complete purchase of all BIYA Operators Inc. stock rather than an asset purchase; and

Whereas, Seller owns all of the issued and outstanding shares (the "Shares") of BIYA Operators, Inc., a New Mexico corporation (the "Company"); and

Whereas, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, the Shares, subject to the terms and conditions set forth herein;

Now, therefore, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

PRELIMINARY MATTERS

Effect of Amendment on PSA

This Amendment shall amend, restate and replace certain terms and provisions of the PSA.  Except where effected by this Amendment the PSA shall remain in full force and effect.  In the event of a conflict between this Amendment and the PSA, this Amendment shall govern.  Hereinafter, the PSA and Amendment shall collectively be referred to as the “Agreement”.  The Articles, Sections, terms and provisions of the PSA are hereby amended, restated and replaced as follows:

ARTICLE I

Definitions

Section 1.01Definitions. The Defined Terms listed in Article I of the PSA have been reincorporated into Exhibit A along with additional Defined Terms.

ARTICLE II

Purchase and Sale

This Article II shall replace Article II of the PSA in its entirety.  Article II shall now read as follows:

Section 2.01Purchase and Sale.Subject to the terms and conditions set forth herein, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase from Seller, the Shares, free and clear of all Encumbrances, for the consideration specified in Section 2.02.

Section 2.02Purchase Price.The aggregate purchase price for the Shares shall be Six Million, Nine Hundred Thousand Dollars ($6,900,000.00) payable as follows unless adjusted pursuant to Article 8, Section 10.6 or other provision of the Agreement (the "Purchase Price").

(a)           Buyer shall pay to Seller at Closing $6,000,000.00, less any earnest money or other prepayment or deduction.

(b)           Buyer shall also tender to Seller 900,000 shares of the Buyer’s common stock (the “Stock Compensation”).  For the purpose of the Agreement the stock shall be valued at $1.00 per share.  However, Buyer makes no representation, warranty or guarantee of any kind concerning the actual value or liquidity of such shares.  Seller acknowledges that the stock in not currently liquid, and that the stock will be subject to certain restrictions on trading.  Any adjustments to, or deductions from, the Purchase Price shall be applied to the cash compensation described in Section 2.02 (a) and shall not affect the Stock Compensation.

Section 2.03Escrow Deposit. On or about June 5, Buyer made a deposit of $100,000.00 to the COLTAF account of Hart and Hart, P.C., 1624 Washington St., Denver, CO 80203 (the “Escrow Deposit”).  The Parties hereby agree that Hart and Hart, P.C. is a mutually acceptable escrow agent.

(a)           Seller shall be entitled to retain the Escrow Deposit in the event that:

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(i)           The Conditions Precedent stated in Section 7.01 are satisfied, all of Seller’s warranties and representations are effectuated, kept and maintained, and the Closing does not occur by September 30, 2014 through no fault of the Seller.

(b)           Buyer shall be entitled to a return of the Deposit in the event that:

(i)           Buyer terminates or voids the Agreement under any provision which authorizes such termination or voiding; or

(ii)          Any of the Conditions Precedent stated in 7.01 do not occur or are not met; or

(iii)         Seller fails to keep, maintain or effectuate any of its warranties or representations; or

(iv)        Seller has failed to keep sufficient accounting and other records to such a degree that it is not possible for Buyer or Buyer’s agents acting in good faith to complete a Public Company Audit prior to Closing; or Seller fails to cooperate with Buyer to such a degree that it is not possible for Buyer or Buyer’s agents acting in good faith to complete a Public Company Audit prior to Closing.

Section 2.04Closing.The Closing shall occur at the Seller’s office in Farmington, New Mexico on September 30, 2014, or any date mutually agreed to the Parties ("Closing Date").

Section 2.05Transactions to be effected at the Closing.

(a)           At the Closing, Buyer shall deliver to Seller:

(i)           the Purchase Price, less any adjustment pursuant to Article 8, Section 10.6 or other provision of this Agreement, by wire transfer or certified funds; and

(ii)          the Stock Compensation; and

(iii)         fully executed Transaction Documents.

(b)           At the Closing, Seller shall:

(i)           Deliver to Buyer fully executed Transaction Documents and any stock certificates or other instruments evidencing ownership along with all other agreements, documents, instruments or certificates required to be delivered by Seller at or prior to the Closing this transaction.

(c)           Seller, or an independent escrow agent designated by Seller, shall pay all Liabilities of the Company, not including the ordinary occurring monthly expenses, but specifically including those creditors listed in Exhibit F which are due and owing as of the Closing Date.

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(i)           Disputed Liabilities. In the event that a third party alleges outstanding Liabilities in existence as of the Closing Date, and Seller either disputes the Liability or the third party has failed to provide invoicing or other documentation in support of that Liability to such a degree that it cannot be paid in good faith at Closing, then funds equal 125% of the alleged Liability shall be paid by Buyer to a third party escrow account until the matter is resolved.  The amount paid to the escrow agent under this paragraph shall be deducted from the Purchase Price paid to Buyer at Closing.  These funds shall not be released to Seller until the alleged Liability is either (i) paid in full; (ii) acknowledged not to be due and owing by the third party in writing; or (iii) found not to be due and owing by a court of competent jurisdiction.  Seller hereby acknowledges that the UMU Tribe has told Buyer that the Company owes the UMU Tribe past due royalties. This paragraph shall specifically apply to such royalties.

Section 2.06Withholding Tax.Buyer and the Company shall be entitled to deduct and withhold from the Purchase Price all Taxes that Buyer and the Company may be required to deduct and withhold under any provision of Tax Law. All such withheld amounts shall be treated as delivered to Seller hereunder.

ARTICLE III

Assignment of Mineral Development Agreement, Earned Leases and Rights

Article III of the PSA entitled Assignment of Mineral Development Agreement, Earned Leases and Rights is hereby deleted in its entirety and shall be given no effect.

ARTICLE IV

Assumption of Liabilities and Indemnification

Section 4.01Undisclosed Liabilities.The Company has no liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent, accrued or unaccrued, matured or unmatured or otherwise ("Liabilities"), except (a) those which are reflected or reserved against in the financial documents provided to Buyer by Seller, and (b) those which have been incurred in the ordinary course of business consistent with past practice since the financial documents were provided to Seller.  Seller, or an independent third party escrow agent designated by Seller, shall, contemporaneously with the Closing, pay all Liabilities of the Company which are due and owing as shown in Exhibit F as of the Closing Date pursuant to Section 2.05.  Buyer shall not have any liability for Liabilities incurred prior to the Closing Date and Seller shall be solely responsible for paying such Liabilities.

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Section 4.02Indemnification by Seller.Seller shall indemnify and defend Buyer and its Affiliates (including the Company) and their respective Representatives (collectively, the "Buyer Indemnitees") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:

(a)           Any material inaccuracy in or b-reach of any of the representations or warranties of Seller contained in the Agreement or in any certificate or instrument delivered by or on behalf of Seller pursuant to the Agreement as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date; or

(b)           any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to the Agreement.

Section 4.03Indemnification By Buyer. Buyer shall indemnify and defend each of Seller and its Affiliates and their respective Representatives (collectively, the "Seller Indemnitees") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of, with respect to or by reason of:

(a)           Any material inaccuracy in or breach of any of the representations or warranties of Buyer contained in the Agreement or in any certificate or instrument delivered by or on behalf of Buyer pursuant to the Agreement as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date; or

(b)           any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to the Agreement.

ARTICLE V

Representations and warranties of the Parties

This Article V shall replace Article V of the PSA in its entirety.  Article V shall now read as follows:

Seller represents and warrants to Buyer that the statements contained in this Article III are true and correct as of the date hereof.

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ARTICLE V

Section 5.01Capitalization.

(a)           The authorized capital stock of the Company consists of 50,000 shares of common stock, par value $1.00 ("Common Stock").  50,000 shares are issued and outstanding and constitute the Shares. All of the Shares have been duly authorized, are validly issued, fully paid and non-assessable, and are owned of record and beneficially by Seller, free and clear of all Encumbrances. Seller is the sole owner of 100% of the Shares.  There are no other owners or holder of any Shares or interest in the Company of any kind.  Upon consummation of the transactions contemplated by this Agreement, Buyer shall own all of the Shares, free and clear of all Encumbrances.

(b)           There are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the Common Stock of the Company or obligating Seller or the Company to issue or sell any shares of capital stock of, or any other interest in, the Company. The Company does not have outstanding or authorized any stock appreciation, phantom stock, profit participation or similar rights. There are no voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Shares.

Section 5.02No Subsidiaries.The Company does not own, or have any interest in any shares or have an ownership interest in any other Entity.

Section 5.03Company Agreements, Leases and Contracts in Full Force and Effect. The Company Agreements, Leases and Contracts are in full force and effect.  Concerning the Company Agreements, Leases and Contracts, Seller warrants that it is not in breach in any material respect of the terms and provisions thereof, nor, to Seller’s knowledge is any third party in breach in any material respect of the terms and provisions thereof, and no notice of breach, default or termination has been received or is believed to be imminent by Seller, or to the knowledge of Seller, by any other party.

Section 5.04Leases.  Seller holds mineral leasehold interests in the Leases.  Seller warrants that these interests are free and clear of any liens, claims, burdens or encumbrances, except for those specifically disclosed as Permitted Encumbrances.  Seller further warrants that the Leases are in full force and effect, and that Seller is not in breach in any material respect of the terms and provisions of the Leases, and that no notice of breach, default or termination has been received by Seller, either directly or indirectly. Seller warrants that the Net Revenue Interest of the Leases stated on Exhibit B are accurate, and that all burdens on production of any kind are outlined in Exhibit C.

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Section 5.05Other Development Agreements. Seller warrants that the Net Revenue Interest stated on Exhibit C of any undeveloped acreage under the UMU Mineral Development Agreement or other agreement of any kind in which the Company has development rights, but is not subject to a lease is accurate, and that all burdens on production of any kind are outlined in Exhibit C.

Section 5.06Assets. Seller holds the Assets free and clear of any liens, claims, burdens or encumbrances except for the Permitted Encumbrances and those shown on the provided financial disclosures.  Any contracts relating to the Assets are in full force and effect, Seller is not in breach in any material respect of the terms and provisions thereof, and no notice of breach, default or termination has been received by Seller, either directly or indirectly. Seller further warrants that it has valid and enforceable title, free and clear of any liens, claims, burdens or encumbrances to the Equipment except those already mentioned.

Section 5.07Complete Obligation. Seller further warrants that the documents provided by Seller as Exhibits to this Agreement, together with applicable law, contain the entirety of Seller’s obligation concerning the Company and Assets, and no other understanding or agreement exists between Seller and any third party in relation to the subject matter of this Agreement, except as otherwise stated in this Agreement

Section 5.08Failure of Warranty.  Failure of any of the warranties stated in Sections 5.01 – 5.07 shall make this Agreement voidable by Buyer and, upon such election to void the Agreement, entitle Buyer to a full and immediate refund of all payments beyond the deposit made to Seller in accordance with this Agreement.

Section 5.09Authorization.  Seller is a corporation duly organized and validly existing, in good standing, under the laws of the state of New Mexico.  Seller has the corporate power and authority to own its property and carry on its business as now conducted and to enter into and carry out the terms of this Agreement.

Section 5.10Validly Executed. This Agreement has been duly and validly executed and delivered on behalf of the Seller and constitutes a valid obligation of the Seller, enforceable in accordance with its terms.  Seller is not subject to any charter, operating agreement, bylaw, lien, encumbrance of any kind, agreement, instrument, order, ownership dispute, or decree of any court or governmental body (other than any required Tribal or governmental approval) which would delay, hinder or prevent consummation of the transactions contemplated by this Agreement.

Section 5.11No Violation of Contractual Restrictions.  The execution, delivery, and performance of this Agreement does not conflict with or violate any agreement or instrument to which Company is a party.

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Section 5.12No Litigation.  There is no action, suit, arbitration, proceeding, claim, or investigation by any person, entity, administrative agency, or governmental body pending or, to its knowledge, threatened, against Seller before any court, arbitrator or governmental agency that in anyway concerns the Assets.

Section 5.13Bankruptcy.  There are no bankruptcy, reorganization, or receivership proceedings pending, being contemplated by, or to its knowledge, threatened against Company.

Section 5.14Rentals.  Seller hereby warrants that no rental payments are due concerning the Leases or any other Assets.

Section 5.15Preferential Rights.  Seller is aware of no preferential rights held by any third personwhich will be triggered by the execution of this Agreement.

Section 5.16Warranty of Title.  Seller represents and warrants to Buyer that (a) Seller has marketable and defensible title (as those terms are commonly used in the industry) to the Leases in Exhibit C free and clear of all claims; (b) the MDA is in full force and effect, and (c) Exhibit B accurately lists those assets which are considered by Seller to have “clouded title”.  Seller agrees to indemnify Buyer for any failure of title in regards to the Leases, MDA or other Assets except for those listed on Exhibit B as having “clouded title”.

Section 5.17Ordinary Course of Business. After the execution of this Agreement and prior to Closing, Seller shall operate the Company in substantially the same manner in which it has been operated prior to this Agreement.  Unless Seller and Buyer agree, Seller shall only enter into agreements or transactions which (i)

Section 5.18 individually involve a fair market value of less than $10,000, and (i) are entered into in the ordinary course of business consistent with past practices.  Seller shall not materially alter any Assets (other than the use of supplies and consumables) or remove any improvements, Equipment or property which comprise the Assets.  However, Seller shall have the right to make any changes, repairs or modifications, or incur any expenditures necessary to prevent or react to an emergency or environmental incident.

Section 5.19No Warranty as to Oil and Gas Potential. Buyer acknowledges that Seller makes no warranties regarding the oil and gas potential related to or the likelihood of success of any development or exploration concerning the Assets.

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Section 5.20Material Contracts. Seller shall provide Buyer with all material contracts to which the Company is a party.

Section 5.21Insurance.True and complete copies of all current insurance policies or binders of every and all type maintained by Seller or its Affiliates (including the Company) and relating to the assets, business, operations, employees, officers and directors of the Company (collectively, the "Insurance Policies") have been provided to the Seller. Such Insurance Policies are in full force and effect, shall remain in full force and effect following the consummation of the transactions contemplated by this Agreement, and all premiums have been timely paid.

Section 5.22Title Matters.

(a)           Availability of Title Records. Seller has made available to Buyer, without express or implied warranty of any kind regarding accuracy, such information in Seller’s possession regarding Company’s title to the Assets.

(b)           Source of Company’s Interests. Seller affirms that all of the mineral rights of the Company were created under the Company Agreements, Leases and Contracts.

(c)           Inspection. Buyer has made such inspection as it deems necessary.

Section 5.23Compliance With Laws; Permits.

(a)           Compliance with Applicable Law. The Company has complied, and is now complying, with all Laws applicable to it or its business, properties or assets.

(b)           Permits. All permits required for the Company to conduct its business have been obtained by it and are valid and in full force and effect. All fees and charges with respect to such permits as of the date hereof have been paid in full.  

Section 5.24Employee Benefit Matters.

(a)           Current Employees and Contractors. Exhibit D contains a list of all individuals who are employees of the Seller as well as all individuals who are independent contractors of the Seller.

(b)           Employee Contracts. Seller has provided to Company copies of all Employment Agreements of current employees to Buyer.  Seller has also provided any Company policy manuals or similar documents that outline all obligations to employees of any kind, including but not limited to pensions, retirement plans, profit sharing, stock options, or additional compensation or obligations of any kind (collectively the “Employee Contracts”).

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(c)           Compliance with Employee Contracts. Seller warrants that Company is in full compliance of all Employee Contracts and agrees to fully indemnify Buyer for any liability that accrues under any Employee Contract due to actions or omissions prior to the Closing Date.   

(d)           Mr. Baldwin to be President of Company Effective as of the Closing Date, Richard Baldwin shall be an employee of Company pursuant to the terms of the Employment Contract attached as Exhibit E.  Mr. Baldwin’s title shall be President of BIYA Operators, Inc. or a substantially similar title.

Section 5.25Taxes.

(a)           Tax Returns. All Tax Returns required to be filed on or before the Closing Date by the Company have been, or will be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all respects. All Taxes due and owing by the Company (whether or not shown on any Tax Return) have been, or will be, timely paid.

(b)           Taxes Paid. The Company has withheld and paid or will pay at closing from the purchase price any amount due or owing to any employee, independent contractor, creditor, customer, shareholder or other party.

(c)           Tribal Taxes and other Payments Paid. The Company has paid, or will pay at closing from the purchase price, all taxes, royalties and payments of all kinds which are due and payable to the UMU Tribe.

(d)           No Tax Encumbrances. There are no I.R.S. or state government liens for Taxes (other than for current Taxes not yet due and payable) upon the assets of the Company.

(e)           No Tax Settlements. The Company is not a party to, or bound by, any closing agreement or offer in compromise with any taxing authority.

(f)           Tax Indemnity. Seller shall fully indemnify Buyer for any liability that ever accrues in relation to taxes accrued prior to the Closing, including liability that accrued as a result of good faith errors by Seller, Company, or the Affiliates or agents of either.

Section 5.26Brokers.No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller.

10

Section 5.27Notice of Certain Events.

(a)           From the date hereof until the Closing, Seller shall promptly notify Buyer in writing of any occurrence or omission which could have a Material Adverse Effect including but not limited to:

(i)          any fact, circumstance, event or action the existence, occurrence or taking of which (A) has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (B) has resulted in, or could reasonably be expected to result in, any representation or warranty made by Seller hereunder not being true and correct or (C) has resulted in, or could reasonably be expected to result in, the failure of any of the conditions set forth in Section 7.01 to be satisfied;

(b)           Buyer's receipt of information pursuant to this Section 5.27 (a) shall not operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.

Section 5.28Confidentiality. From and after the Closing, Seller shall, and shall cause its Affiliates to, hold, and shall use its best efforts to cause its or their respective Representatives to hold, in confidence any and all information, whether written or oral, concerning the Company, except to the extent that Seller can show that such information (a) is generally available to and known by the public through no fault of Seller, any of its Affiliates or their respective Representatives; or (b) is lawfully acquired by Seller, any of its Affiliates or their respective Representatives from and after the Closing from sources which are not prohibited from disclosing such information by a legal, contractual or fiduciary obligation.

(a)           Full Disclosure. No representation or warranty by Seller in this Agreement, Exhibits or other document furnished to Buyer contains any untrue statement of a material fact, omits to state a material fact, or are in anyway misleading.

Buyer represents and warrants to Seller that the statements contained in this 0 are true and correct as of the date hereof.

Section 5.29Investment Purpose. Buyer is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Buyer acknowledges that the Shares are not registered under the Securities Act of 1933, as amended, or any state securities laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act of 1933, as amended or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.

11

Section 5.30Authorization.  Buyer is a corporation duly organized and validly existing, in good standing, under the laws of the state of Nevada.  Buyer has the corporate power and authority to own its property and carry on its business as now conducted and to enter into and carry out the terms of this Agreement.

Section 5.31Validly Executed. This Agreement has been duly and validly executed and delivered on behalf of the Buyer and constitutes a valid obligation of the Buyer, enforceable in accordance with its terms.  Buyer is not subject to any charter, operating agreement, bylaw, lien, encumbrance of any kind, agreement, instrument, order, ownership dispute, or decree of any court or governmental body (other than any required Tribal or governmental approval) which would delay, hinder or prevent consummation of the transactions contemplated by this Purchase and Sale Agreement and/or the Assignment, Conveyance and Bill of Sale.

Section 5.32Broker’s Fees. Except for Kurt Gerlach and Jennifer Northrup, Buyer has not incurred any obligation for brokers, finders, or similar fees for which Seller or its affiliates would be liable or responsible in any way.  Buyer shall pay Kurt Gerlach 1.8% of the Purchase Price at the Closing and 0.2% of the Purchase Price to Jennifer Northrup at the Closing.  Buyer has incurred the finder’s fee described on Exhibit F.  Buyer shall be solely responsible for the finder’s fee, Seller shall not have any liability for such broker/finder’s fee, and, to the extent Seller ever incurs any liability for such finder’s fee, Buyer agrees to fully indemnify Seller up to the amount of the broker/finder’s fee.

Section 5.33Acceptance of Assets on “as is, where is” Basis. Buyer has made all inspections of the Company, Assets, financials, and other such documents as it deems necessary, and, subject to Seller’s representations and warranties, and the satisfaction of the conditions precedent, Buyer will accept at Closing the Company and Assets in “as is, where is” condition, with an expressed acceptance and understanding of the representation and disclaimers contained herein.

ARTICLE VI

Title Matters

Article VI of the PSA shall remain unchanged.

ARTICLE VII

Conditions Precedent to closing

This Article VII shall replace Article VII of the PSA in its entirety.  Article VII shall now read as follows:

12

Section 7.01Conditions to Obligations of Buyer.The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following conditions:

(a)           The General Counsel of the UMU Tribe, or other high ranking official of the UMU Tribe, shall provide written assurances that (i) the MDA is in full force and effect; (ii) Company has a right to develop and explore the acreage covered by the MDA; and (iii) the Leases described in 4.03 of the MDA have been earned by Company and will be issued upon written request by Company.  In the event that the UMU Tribe does not provide such written assurances the Agreement shall be voidable by the Buyer any time before Closing, and Buyer shall be entitled to a return of its escrow deposit upon voiding of the Agreement.

(b)           The Bureau of Indian Affairs (“BIA”) performed an environmental inspection in 2014 on some, or all, of the acreage subject to the MDA.  The Parties shall obtain a copy of the BIA Report no later than September 15, 2014.

(c)           From the Effective Date of the Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in a Material Adverse Effect.

(d)           Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary to consummate the transactions contemplated by this Agreement. This shall include, but is not limited to, documents requested by Macquarie Bank Limited – Houston which must be created and/or provided by the UMU Tribe.

(e)           The representations and warranties herein made by Seller shall be true and accurate as of and on the Closing Date, with the same effect as though made at such time.

(f)           Seller shall have performed all obligations and complied with all covenants required by this Agreement to be performed or complied with prior to or on Closing Date;

(g)           No material change in the operation or make-up of the Assets shall have occurred since the Effective Date of this Agreement, other than changes in the ordinary course of business.

(h)           The completion of a Public Company Audit Buyer and/or Buyer’s agents of Seller’s financial records pertaining to the Assets, with which Seller shall cooperate fully.

13

Section 7.02Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment or Seller's waiver, at or prior to the Closing, of each of the following conditions:

(a)           The representations and warranties of Buyer herein shall be true and accurate as of and on the Closing Date, with the same effect as though made at such time; and

(b)           Buyer shall have performed all obligations and complied with all covenants required by this Agreement to be performed or complied with prior to the Closing Date.

ARTICLE VIII

Environmental

(a)           Article 8.1 shall be deleted from the PSA and have no effect. All other provisions of Article VIII shall remain unchanged.

ARTICLE IX

Closing

Article 9.1 shall be amended to read as follows:

(a)           Article 9.1 shall be amended to read as follows:

The Closing shall occur at the Seller’s office in Farmington, New Mexico on September 30, 2014, or any date mutually agreed to by the Parties.

(b)           Article 9.2 shall be deleted and shall have no effect.

(c)           Article 9.3 shall be amended to read as follows:

At the Closing, Seller shall deliver fully executed Transaction Documents to Buyer in accordance with Section 2.05.  Any additional documents necessary to effect the Agreement shall be timely provided and executed by the Parties hereto in good faith.

(d)           Article 9.4 shall remain unchanged.

14

ARTICLE X

Miscellaneous

The following Section shall be added to Article X of the PSA.

Section 10.19  Tax Treatment of Indemnification Payments.Any indemnification payments pursuant to this Agreement shall be treated as an adjustment to the Purchase Price by the parties for Tax purposes, unless otherwise required by Law.

Except as stated herein, Article X of the PSA shall remain unchanged.

[SIGNATURE PAGE FOLLOWS]

15

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.

SELLERS

Richard Baldwin

Debbie Baldwin

COMPANY

BIYA OPERATORS, INC.

By:

Richard Baldwin, President

BUYERS

DIVERSIFIED RESOURCES, INC.

By

Paul G. Laird, Chairman & CEO

16

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Paul Laird, certify that;

1.     I have reviewed this quarterly report on Form 10-Q of Diversified Resources, Inc.;

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 the 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 15a-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.

September 11, 2014	/s/ Paul Laird
	Paul Laird,
	Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Paul Laird, certify that;

1.     I have reviewed this quarterly report on Form 10-Q of Diversified Resources, Inc.;

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 the 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 15a-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.

September 11, 2014	/s/ Paul Laird
	Paul Laird,
	Principal Financial Officer

EX-32

EXHIBIT 32

In connection with the quarterly report of Diversified Resources, Inc., (the “Company”) on Form 10-Q for the quarter ended July 31, 2014 as filed with the Securities Exchange Commission (the “Report”) Paul Laird, the Principal Executive and Financial Officer of the Company, certifies pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the company.

September 11, 2014	/s/ Paul Laird
	Paul Laird, Principal Executive and Financial Officer

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Note 8 - Stockholders' Equity (Details) (USD $)	9 Months Ended
	Jul. 31, 2014	Oct. 31, 2013
Details
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, No Par Value	$ 0.001
Common Stock, Shares Issued	20,019,874	14,563,150
Development Stage Entities, Stock Issued, Shares, Issued for Cash	2,577,750
Development Stage Entities, Stock Issued, Value, Issued for Cash	$ 1,347,000

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Note 3 - Summary of Significant Accounting Policies: Loss Per Share (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Loss Per Share

Loss Per Share

The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. During periods when losses occur, common stock equivalents, if any, are not considered in the computation as their effect would be anti-dilutive.

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Note 4 - Participation Agreement

9 Months Ended

Jul. 31, 2014

Notes

Note 4 - Participation Agreement

NOTE 4 – Participation Agreement

In connection with the convertible promissory note described in Note 6, the Company entered into a participation agreement with a nonaffiliated company whereby the maker of the promissory note would advance up to $350,000 to conduct additional development of the underlying leases at the Garcia Field and drill and complete three additional wells on the acreage. During 2012, $250,000 was advanced to the Company. In consideration of making the promissory note, the lender was assigned a 1% overriding royalty interest in the 4,600 acre field and a 20% modified net profits interest in the existing four producing wells in the Garcia Field and a 20% modified net profits interest in three additional wells to be drilled on said acreage. The Company valued the net profits interest and the overriding royalty interest at $136,599 using 10% present value over the estimated life of the wells. The amount was recorded as a debt discount and is being amortized using the effective interest rate method over the life of the promissory note (3 years).

Additionally, the lender has the right, at any point during the period of the note, to convert the remaining principal balance on the note to a working interest (see Note 6).

The modified net profits interest is based on the gross proceeds from the sale of oil, gas and other minerals in the four producing wells in the Garcia Field and three additional wells to be drilled. The 20% is applied to 100% of the Company’s net revenue interest in the wells which cannot be less than 80% and is reduced by any of the following expenditures:

any overriding royalties or other burden on production in excess of the 80% net revenue interest;

production, severance and similar taxes assessed by any taxing authority based on volume or value of the production;

direct costs incurred in producing oil or natural gas, or the operating or producing such wells excluding administrative, supervisory or other indirect costs;

costs reasonably incurred to process the production for market;

costs reasonably incurred in transportation, delivery, storage or marketing the production.

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Note 2 - Organization and Going Concern (Details) (USD $)	Jul. 31, 2014
Details
Capital	$ 364,576

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Note 6 - Long Term Debt: The Following Summarizes The Notes Payable At (Tables)

9 Months Ended

Jul. 31, 2014

Tables/Schedules

The Following Summarizes The Notes Payable At:

The following summarizes the notes payable at:

	July 31, 2014		October 31, 2013
Convertible promissory note	$	248,895	$	248,895
Debt Discount, net of amortization		--		(19,516)
Convertible promissory note		--		70,000
Installment loan		15,144		18,457
		264,039		317,836
Current portion long term debt (Current portion of long term debt)		(4,864)		(4,692)
Current portion promissory notes (Notes payable)		(248,895)		(299,379)
Long term debt	$	10,280	$	13,765

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Note 5 - Notes Payable (Details) (USD $)	Jul. 31, 2014	Oct. 31, 2013
Details
Long term debt, related party	$ 107,070	$ 107,070
Accrued interest, related party	$ 1,880	$ 3,872

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Note 6 - Long Term Debt (Details) (USD $)	3 Months Ended		9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013	Oct. 31, 2013
Details
Notes payable	$ 248,895		$ 248,895		$ 299,379
Debt Instrument, Unamortized Discount	136,599		136,599
Accretion of Discount	$ 0	$ 19,467	$ 19,516	$ 52,654

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Note 3 - Summary of Significant Accounting Policies

9 Months Ended

Jul. 31, 2014

Notes

Note 3 - Summary of Significant Accounting Policies

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated unaudited financial statements include the accounts of Diversified Resources, Inc. and its wholly owned subsidiary, Natural Resource Group, Inc. Any inter-company accounts and transactions have been eliminated.

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates of oil and gas reserve quantities provide the basis for the calculation of depletion, depreciation, and amortization, and impairment, each of which represents a significant component of the financial statements.  Actual results could differ from those estimates.

Revenue Recognition

We recognize oil and gas revenue from interests in producing wells as the oil and gas is sold. Revenue from the purchase, transportation, and sale of natural gas is recognized upon completion of the sale and when transported volumes are delivered. We recognize revenue related to gas balancing agreements based on the sales method. Our net imbalance position at July 31, 2014 and 2013 was immaterial.

Accounting for Oil and Gas Activities

Successful Efforts Method   We account for crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs to acquire mineral interests in crude oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Capitalized costs of producing crude oil and natural gas properties, along with support equipment and facilities, are amortized to expense by the unit-of-production method based on proved crude oil and natural gas reserves on a field-by-field basis, as estimated by our qualified petroleum engineers. Upon sale or retirement of depreciable or depletable property, the cost and related accumulated depreciation, depletion and amortization amounts are eliminated from the accounts and the resulting gain or loss is recognized. Repairs and maintenance are expensed as incurred.

 Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization (“DD&A”) for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.

Proved Property Impairment   We review individually significant proved oil and gas properties and other long-lived assets for impairment at least annually at year-end, or quarterly when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amount of a property exceeds its estimated undiscounted future cash flows, the carrying amount is reduced to estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and gas production, commodity prices based on published forward commodity price curves as of the date of the estimate, operating and development costs, and a risk-adjusted discount rate.

Unproved Property Impairment   Our unproved properties consist of leasehold costs and allocated value to probable and possible reserves from acquisitions. We assess individually significant unproved properties for impairment on a quarterly basis and recognize a loss at the time of impairment by providing an impairment allowance. In determining whether a significant unproved property is impaired we consider numerous factors including, but not limited to, current exploration plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property.

Exploration Costs   Geological and geophysical costs, delay rentals, amortization of unproved leasehold costs, and costs to drill wells that do not find proved reserves are expensed as oil and gas exploration. We carry the costs of an exploratory well as an asset if the well finds a sufficient quantity of reserves to justify its capitalization as a producing well and as long as we are making sufficient progress assessing the reserves and the economic and operating viability of the project.  Geological and geophysical costs were $41,801 and $49,520 for the nine months ended July 31, 2014 and 2013, respectively, and are included in Exploration Costs in the accompanying financial statements.

Asset Retirement Obligations   Asset retirement obligations (“ARO”) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our oil and gas properties that can reasonably be estimated, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset.  The asset retirement cost is determined at current costs and is inflated into future dollars using an inflation rate that is based on the consumer price index. The future projected cash flows are then discounted to their present value using a credit-adjusted risk-free rate. After initial recording, the liability is increased for the passage of time, with the increase being reflected as accretion expense and included in our DD&A expense in the statement of operations. Subsequent adjustments in the cost estimate are reflected in the liability and the amounts continue to be amortized over the useful life of the related long-lived asset.

The following table reconciles the asset retirement obligation for nine months ended July 31, 2013 and year ended October 31, 2013:

	2014		2013
Asset retirement obligation as of beginning of period	$	222,375	$	203,889
Liabilities added		0		0
Liabilities settled		0		0
Revision of estimated obligation		0		0
Accretion expense on discounted obligation		6,000		18,486
Asset retirement obligation as of end of period	$	228,375	$	222,375

Property and Equipment

Property and equipment consists of production buildings, furniture, fixtures, equipment and vehicles which are recorded at cost and depreciated using the straight-line method over the estimated useful lives of five to fifteen years.

Maintenance and repairs are charged to expense as incurred.

Income Taxes

We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes.  Under this standard, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance when we cannot make the determination that it is more likely than not that some portion or all of the related tax asset will be realized. Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

The Company follows ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The Interpretation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

Contingent Liabilities

The Company records contingent liabilities when the amounts were incurred and determinable otherwise the Company will disclose the matter(s) and provide a range or best estimate of the contingency in the notes to the financial statements. As of July 31, 2014 there were no legal proceedings against the Company. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. As of July 31, 2014, there were no contingent liabilities that required disclosure or accrual in the Company’s financial statements.

Loss Per Share

The Company computes net loss per share in accordance with ASC Topic 260, “Earnings per Share,” Under the provisions of the standard, basic and diluted net loss per share is computed by dividing the net loss available to common stockholders for the period by the weighted average number of shares of common stock outstanding during the period. During periods when losses occur, common stock equivalents, if any, are not considered in the computation as their effect would be anti-dilutive.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Topic 606: Revenue from Contracts with Customers.  ASU No. 2014-09 is effective for the Company as of April 1, 2017.  Management is evaluating the effect, if any, this pronouncement will have on the Company’s consolidated financial statements.

The Company does not believe that any other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

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Note 6 - Long Term Debt: The Following Summarizes The Notes Payable At (Details) (USD $)	Jul. 31, 2014	Oct. 31, 2013
Details
Current portion of long term debt	$ (4,864)	$ (4,692)
Notes payable	$ (248,895)	$ (299,379)

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CONSOLIDATED BALANCE SHEETS (Unaudited for July 31, 2014) (USD $)	Jul. 31, 2014		Oct. 31, 2013
CURRENT ASSETS
Cash	$ 112,112		$ 69,433
Accounts receivable, trade	30,255		32,378
Prepaid expenses	109,528		8,870
Total current assets	251,895		110,681
Property and Equipment	34,182	[1]	39,392	[2]
Oil and gas properties - proved (successful efforts method)	2,587,213	[3]	2,604,418	[4]
Oil and gas properties - proved undeveloped (successful efforts method)	64,126		64,126
Total assets	2,937,416		2,818,617
CURRENT LIABILITIES
Accounts payable	115,176		185,251
Accounts payable, related party	127,736		130,361
Current portion of long term debt	4,864		4,692
Notes payable	248,895		299,379
Accrued interest	3,946		2,411
Accrued interest, related party	1,880		3,872
Accrued expenses	113,974		109,193
Total current liabilities	616,471		735,159
LONG TERM LIABILITIES
Long term debt, related party	107,070		107,070
Long term debt	10,280		13,765
Asset retirement obligation	228,375		222,375
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY
Common stock	20,020		14,563
Additional paid in capital	6,075,692		4,734,138
Accumulated deficit	(4,120,492)		(3,008,453)
Total stockholders' equity	1,975,220		1,740,248
Total liabilities and stockholders' equity	$ 2,937,416		$ 2,818,617

[1] Net of accumulated depreciation of $10,457 in 2014.

[2] Net of accumulated depreciation of $4,111 in 2013.

[3] Net of accumulated depletion of $75,493 in 2014.

[4] Net of accumulated depletion of $56,726 in 2013.

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Note 1 - Basis of Presentation

9 Months Ended

Jul. 31, 2014

Notes

Note 1 - Basis of Presentation

NOTE 1 – BASIS OF PRESENTATION

The interim consolidated financial statements of Diversified Resources, Inc. (“we”, “us”, “our”, “Diversified”, or the “Company”) are unaudited and contain all adjustments (consisting primarily of normal recurring accruals) necessary for a fair presentation of the results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for a full year or for previously reported periods due in part, but not limited to, interest rates, drilling risks, geological risks, the timing of acquisitions, and our ability to obtain additional capital. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in Diversified’s Annual Report on Form 10-K for the year ended October 31, 2013 as filed with the Securities and Exchange Commission (“SEC”) on February 13, 2014 and the Form 8-K/A filed May 29, 2014.  The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and in accordance with US GAAP. Accordingly, these consolidated financial statements do not include all of the information and footnotes required by US GAAP for annual consolidated financial statements.

Although, from a legal standpoint, we acquired Natural Resource Group, Inc. (“NRG”) on November 21, 2013, for financial reporting purposes the acquisition of NRG constituted a recapitalization, and the acquisition was accounted for as a reverse merger, whereby NRG was deemed to have acquired us.  Consequently, this report contains the historical financial statements of NRG for the three and nine months ended July 31, 2013.  From and after November 21, 2013, NRG’s financial statements have been consolidated with our financial statements.

The consolidated financial statements are unaudited, but, in management's opinion, include all adjustments (which, unless otherwise noted, include only normal recurring adjustments) necessary for a fair presentation of such consolidated financial statements.

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Note 10 - Commitments and Contingencies (Details) (USD $)	Jul. 31, 2014
Details
Earnest Money Deposits	$ 100,000

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Note 3 - Summary of Significant Accounting Policies: Property and Equipment (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Property and Equipment

Property and Equipment

Property and equipment consists of production buildings, furniture, fixtures, equipment and vehicles which are recorded at cost and depreciated using the straight-line method over the estimated useful lives of five to fifteen years.

Maintenance and repairs are charged to expense as incurred.

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Note 3 - Summary of Significant Accounting Policies: Contingent Liabilities (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Contingent Liabilities

Contingent Liabilities

The Company records contingent liabilities when the amounts were incurred and determinable otherwise the Company will disclose the matter(s) and provide a range or best estimate of the contingency in the notes to the financial statements. As of July 31, 2014 there were no legal proceedings against the Company. Neither the Company nor any of its officers or directors is involved in any other litigation either as plaintiffs or defendants, and have no knowledge of any threatened or pending litigation against them or any of the officers or directors. As of July 31, 2014, there were no contingent liabilities that required disclosure or accrual in the Company’s financial statements.

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Note 2 - Organization and Going Concern

9 Months Ended

Jul. 31, 2014

Notes

Note 2 - Organization and Going Concern

NOTE 2 – ORGANIZATION AND GOING CONCERN

Diversified Resources Inc. (“the Company”) was incorporated in the State of Nevada on March 19, 2009 to pursue mineral extraction in the United States.

Effective November 21, 2013 we acquired 100% of the outstanding shares of Natural Resource Group, Inc. in exchange for 14,872,157 shares of our common stock

NRG was incorporated in Colorado in 2000 but was relatively inactive until December 2010.  In December 2010, NRG acquired oil and gas wells, leases and other properties from Energy Oil and Gas, Inc.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern; however, the conditions below raise substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. The Company sustained operating losses during the years ended October 31, 2013 and 2012 and during the nine months ended July 31, 2014 and 2013. As of July 31, 2014, the Company has a negative working capital in the amount of $364,576. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations and/or obtaining additional financing from its shareholders or other sources, as may be required.

Management’s plans include obtaining additional debt or equity financing to fund operations; however, there can be no assurance that management will be successful in its efforts to obtain additional funding.

On June 15, 2009 the Company leased two mining claims in Esmerelda County, Nevada, in the Dunfee Mine Area.  The lease includes all additional claims within one mile of these claims.  The area was the subject of a geological report on September 11, 2009.  The term of the lease is 20 years and is renewable for an additional 20 years assuming all conditions of the lease are met. The lease was terminated on November 21, 2013 in connection with the acquisition of NRG.

In November 2013, the Company entered into an agreement to exchange securities with Natural Resource Group, Inc (“NRG”), an oil and gas exploration company, whereby the shareholders of NRG received 14,872,157 shares of Diversified Resources, Inc.’s $0.001 par value common shares. The President sold 2,680,033 shares of the Company’s common stock to the Company for nominal consideration.  The shares purchased from the President were returned to the status of authorized but unissued shares. Additionally, the former principals of the Company assumed all of the debts of the Company at the date of the exchange. The exchange was consummated on November 21, 2013.

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Statement of Financial Position - Parenthetical (USD $)	Jul. 31, 2014	Oct. 31, 2013
Statement of Financial Position
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	450,000,000	450,000,000
Common Stock, Shares Issued	20,019,874	14,563,150
Common Stock, Shares Outstanding	20,019,874	14,563,150

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Note 3 - Summary of Significant Accounting Policies: Principles of Consolidation (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated unaudited financial statements include the accounts of Diversified Resources, Inc. and its wholly owned subsidiary, Natural Resource Group, Inc. Any inter-company accounts and transactions have been eliminated.

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Document and Entity Information (USD $)	9 Months Ended
	Jul. 31, 2014	Apr. 30, 2014
Document and Entity Information
Entity Registrant Name	Diversified Resources Inc.
Document Type	10-Q
Document Period End Date	Jul. 31, 2014
Amendment Flag	false
Entity Central Index Key	0001509692
Current Fiscal Year End Date	--10-31
Entity Common Stock, Shares Outstanding		18,445,867
Entity Public Float		$ 0
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	2014
Document Fiscal Period Focus	Q3

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Note 3 - Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Cash and Cash Equivalents

Cash and cash equivalents

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

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CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013
Operating revenues
Oil and gas sales	$ 46,352	$ 17,831	$ 68,992	$ 49,944
Operating expenses
Exploration costs, including dry holes		16,500	41,801	49,520
Lease operating expenses	84,205	101,046	206,223	137,576
General and administrative	335,287	247,772	850,909	362,876
Depreciation expense	3,820	1,216	11,178	3,184
Depletion expense	9,974	3,000	14,074	10,400
Accretion expense	2,000	5,200	6,000	15,600
Total operating expenses	435,286	374,734	1,130,185	579,156
(Loss) from operations	(388,934)	(356,903)	(1,061,193)	(529,212)
Other income (expense)
Loss on debt extinguishment		(330,638)		(330,638)
Loss on disposition of assets				(34,480)
Interest expense	(7,245)	(32,152)	(50,846)	(92,219)
Other income (expense), net	(7,245)	(362,790)	(50,846)	(457,337)
Net (loss)	$ (396,179)	$ (719,693)	$ (1,112,039)	$ (986,549)
Net (loss) per common share - Basic and diluted	$ (0.02)	$ (0.05)	$ (0.06)	$ (0.07)
Weighted average shares outstanding - Basic and diluted	19,237,363	14,038,161	18,167,691	13,412,898

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Note 7 - Income Taxes

9 Months Ended

Jul. 31, 2014

Notes

Note 7 - Income Taxes

NOTE 7 – INCOME TAXES

No provision was made for federal income tax for the three and nine months ended July 31, 2014 and 2013, since the Company had net operating losses.

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Note 6 - Long Term Debt

9 Months Ended

Jul. 31, 2014

Notes

Note 6 - Long Term Debt

NOTE 6 – Long Term Debt

Convertible Promissory Note—On January 12, 2012 the Company entered into a convertible promissory note bearing interest at 10%, due January 11, 2014 which was extended to November 1, 2014.  The note is collateralized by a first priority deed of trust on approximately 4,600 acres of oil and gas leasehold interests in the Garcia Field together with the existing wells and equipment in the field. The terms provide for an initial draw of $150,000 with the potential for two subsequent draws of $100,000 each. The Company has drawn $250,000 on the facility and the balance at July 31, 2014 is $248,895. The lender has the right to convert the principal to a 10% working interest in the collateral as well as a 10% interest in all wells owned by the Company in the Garcia Field in which the lender does not have the 20% modified net profits interest described in note 4. In the event the principal is less than $350,000, the conversion shall be reduced proportionately.  The Company has the right to prepay the note without penalties or fees after giving the lender ten days’ notice of its intent. If lender does elect to convert within 10 days after receiving said notice, the conversion rights terminate.  The Company recorded a discount to the debt of $136,599 and recognized accretion of the discount in the amounts of $19,516 and $52,654 for the nine months ended July 31, 2014 and 2013 respectively and $0 and $19,467 for the three months ended July 31, 2014 and 2013 respectively. The Company reviewed the conversion feature for beneficial conversion features and embedded derivatives, and determined that neither applied.

Convertible Promissory Note—On May 18, 2012 the Company borrowed $70,000 bearing interest at 10%, due May 31, 2014. The note was paid in full in June 2014.

Installment Loan—the Company entered into an installment loan on July 4, 2013 bearing interest of 5.39%. The loan is payable in monthly installments of $464 over 48 months commencing August 4, 2013.  The loan is collateralized by a vehicle.

The following summarizes the notes payable at:

	July 31, 2014		October 31, 2013
Convertible promissory note	$	248,895	$	248,895
Debt Discount, net of amortization		--		(19,516)
Convertible promissory note		--		70,000
Installment loan		15,144		18,457
		264,039		317,836
Current portion long term debt (Current portion of long term debt)		(4,864)		(4,692)
Current portion promissory notes (Notes payable)		(248,895)		(299,379)
Long term debt	$	10,280	$	13,765

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Note 3 - Summary of Significant Accounting Policies: Income Taxes (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Income Taxes

Income Taxes

We account for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes.  Under this standard, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using the enacted tax rates in effect for the year in which the differences are expected to reverse.  Deferred tax assets are reduced by a valuation allowance when we cannot make the determination that it is more likely than not that some portion or all of the related tax asset will be realized. Interest and penalties on tax deficiencies recognized in accordance with ACS accounting standards are classified as income taxes in accordance with ASC Topic 740-10-50-19.

The Company follows ASC 740-10-05 Accounting for Uncertainty in Income Taxes. The Interpretation prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

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Note 3 - Summary of Significant Accounting Policies: Use of Estimates (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Use of Estimates

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Estimates of oil and gas reserve quantities provide the basis for the calculation of depletion, depreciation, and amortization, and impairment, each of which represents a significant component of the financial statements.  Actual results could differ from those estimates.

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Note 10 - Commitments and Contingencies

9 Months Ended

Jul. 31, 2014

Notes

Note 10 - Commitments and Contingencies

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Legal--We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. We accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.  

Environmental--We accrue for losses associated with environmental remediation obligations when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded at their undiscounted value as assets when their receipt is deemed probable.

Acquisition

On June 6, 2014, the Company entered into an agreement, which was amended on August 11, 2014, to acquire all of the shares of an independent oil and gas company for cash of $6,000,000 and 900,000 restricted shares of the Company’s common stock.  The assets of the independent oil and gas company include:

48 producing oil and gas wells, all of which will be operated by us after closing,

leases covering approximately 10,400 gross and net acres, and

miscellaneous equipment.

If the acquisition is completed, we will have an average working interest of approximately 100% (80% net revenue interest) in the 48 producing wells and leases. The oil and gas properties are located in the Horseshoe-Gallup field in San Juan County, New Mexico.

The closing of the transaction is subject to completion of title reviews and other conditions which are normal for a transaction of this nature. The Company has made a $100,000 deposit towards the purchase price as of July 31, 2014. The seller will retain this deposit if the transactions does not close by September 30, 2014, provided that the seller meets all of the other conditions required for closing.

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Note 8 - Stockholders' Equity

9 Months Ended

Jul. 31, 2014

Notes

Note 8 - Stockholders' Equity

NOTE 8 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue 450,000,000 common shares of par value at $0.001 and 50,000,000 preferred shares of par value at $0.001. As of July 31, 2014, 20,019,874 shares of common stock and no preferred shares were issued and outstanding. During the nine months ended July 31, 2014, the Company sold 2,577,750 shares of its common stock for cash of $1,347,000.

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Note 9 - Related Party Transactions

9 Months Ended

Jul. 31, 2014

Notes

Note 9 - Related Party Transactions

NOTE 9 – RELATED PARTY TRANSACTIONS

During the year ended October 31, 2013, Philip F. Grey, the President loaned $14,040 to the Company.  The loan was payable on demand, carried no interest and had no maturity date.  Philip F. Grey forgave the loan as of November 21, 2013.

Natural Resource Group, Inc. has an office lease for office space in Littleton, Colorado, with Spotswood Properties, LLC, a Colorado limited liability company (“Spotswood”), and an affiliate of the president, effective January 1, 2009, for a three-year term. Commencing July 1, 2010 the Company entered into a new lease for office space for a 3 year period ending July 1, 2013. The lease provides for the payment of $2,667 per month plus utilities and other incidentals. The president of the Company owns 50% of Spotswood. The Company is of the opinion that the terms of the lease are no less favorable than could be obtained from an unaffiliated party. Spotswood was paid $23,998 in the nine months ended July 31, 2014.  The Company has accrued liability in the amount of $13,333 for accrued rent.  Natural Resource Group, Inc. is currently leasing the office space on a month to month basis under the same terms and conditions as the lease that expired July 31, 2013.

The Company paid a director and shareholder $53,700 and $132,650 in the three and nine months ended July 31, 2014, respectively and $45,730 in the three and nine months ended July 31, 2013, each, for financial public relations consulting.

The Company paid the President’s brother $15,685 and $39,685 in the three and nine months ended July 31, 2014, respectively and $9,000 and $9,600 in the three and nine months ended July 31, 2013, respectively for landman consulting services. 

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Note 11 - Subsequent Events

9 Months Ended

Jul. 31, 2014

Notes

Note 11 - Subsequent Events

NOTE 11 – SUBSEQUENT EVENTS

The Company sold 90,000 shares of its common stock for $90,000 in cash in August and September 2014.

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Note 9 - Related Party Transactions (Details) (USD $)	0 Months Ended	3 Months Ended		9 Months Ended
	Jul. 31, 2014	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013
Details
Payments to Suppliers				$ 23,998
Accrued Rent, Current	13,333	13,333		13,333
Cost of Services	53,700	53,700		132,650	45,730
Cost of Services, Oil and Gas		$ 15,685	$ 9,000	$ 39,685	$ 9,600

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Note 3 - Summary of Significant Accounting Policies: Accounting For Oil and Gas Activities (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Accounting For Oil and Gas Activities

Accounting for Oil and Gas Activities

Successful Efforts Method   We account for crude oil and natural gas properties under the successful efforts method of accounting. Under this method, costs to acquire mineral interests in crude oil and natural gas properties, drill and equip exploratory wells that find proved reserves, and drill and equip development wells are capitalized. Capitalized costs of producing crude oil and natural gas properties, along with support equipment and facilities, are amortized to expense by the unit-of-production method based on proved crude oil and natural gas reserves on a field-by-field basis, as estimated by our qualified petroleum engineers. Upon sale or retirement of depreciable or depletable property, the cost and related accumulated depreciation, depletion and amortization amounts are eliminated from the accounts and the resulting gain or loss is recognized. Repairs and maintenance are expensed as incurred.

 Assets are grouped in accordance with the Extractive Industries - Oil and Gas Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). The basis for grouping is a reasonable aggregation of properties with a common geological structural feature or stratigraphic condition, such as a reservoir or field.

Depreciation, depletion and amortization of the cost of proved oil and gas properties are calculated using the unit-of-production method. The reserve base used to calculate depreciation, depletion and amortization (“DD&A”) for leasehold acquisition costs and the cost to acquire proved properties is the sum of proved developed reserves and proved undeveloped reserves. With respect to lease and well equipment costs, which include development costs and successful exploration drilling costs, the reserve base includes only proved developed reserves. Estimated future dismantlement, restoration and abandonment costs, net of salvage values, are taken into account.

Proved Property Impairment   We review individually significant proved oil and gas properties and other long-lived assets for impairment at least annually at year-end, or quarterly when events and circumstances indicate a decline in the recoverability of the carrying values of such properties, such as a negative revision of reserves estimates or sustained decrease in commodity prices. We estimate future cash flows expected in connection with the properties and compare such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amount of a property exceeds its estimated undiscounted future cash flows, the carrying amount is reduced to estimated fair value. Fair value may be estimated using comparable market data, a discounted cash flow method, or a combination of the two. In the discounted cash flow method, estimated future cash flows are based on management’s expectations for the future and include estimates of future oil and gas production, commodity prices based on published forward commodity price curves as of the date of the estimate, operating and development costs, and a risk-adjusted discount rate.

Unproved Property Impairment   Our unproved properties consist of leasehold costs and allocated value to probable and possible reserves from acquisitions. We assess individually significant unproved properties for impairment on a quarterly basis and recognize a loss at the time of impairment by providing an impairment allowance. In determining whether a significant unproved property is impaired we consider numerous factors including, but not limited to, current exploration plans, favorable or unfavorable exploration activity on the property being evaluated and/or adjacent properties, our geologists' evaluation of the property, and the remaining months in the lease term for the property.

Exploration Costs   Geological and geophysical costs, delay rentals, amortization of unproved leasehold costs, and costs to drill wells that do not find proved reserves are expensed as oil and gas exploration. We carry the costs of an exploratory well as an asset if the well finds a sufficient quantity of reserves to justify its capitalization as a producing well and as long as we are making sufficient progress assessing the reserves and the economic and operating viability of the project.  Geological and geophysical costs were $41,801 and $49,520 for the nine months ended July 31, 2014 and 2013, respectively, and are included in Exploration Costs in the accompanying financial statements.

Asset Retirement Obligations   Asset retirement obligations (“ARO”) consist of estimated costs of dismantlement, removal, site reclamation and similar activities associated with our oil and gas properties. We recognize the fair value of a liability for an ARO in the period in which it is incurred when we have an existing legal obligation associated with the retirement of our oil and gas properties that can reasonably be estimated, with the associated asset retirement cost capitalized as part of the carrying cost of the oil and gas asset.  The asset retirement cost is determined at current costs and is inflated into future dollars using an inflation rate that is based on the consumer price index. The future projected cash flows are then discounted to their present value using a credit-adjusted risk-free rate. After initial recording, the liability is increased for the passage of time, with the increase being reflected as accretion expense and included in our DD&A expense in the statement of operations. Subsequent adjustments in the cost estimate are reflected in the liability and the amounts continue to be amortized over the useful life of the related long-lived asset.

The following table reconciles the asset retirement obligation for nine months ended July 31, 2013 and year ended October 31, 2013:

	2014		2013
Asset retirement obligation as of beginning of period	$	222,375	$	203,889
Liabilities added		0		0
Liabilities settled		0		0
Revision of estimated obligation		0		0
Accretion expense on discounted obligation		6,000		18,486
Asset retirement obligation as of end of period	$	228,375	$	222,375

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Note 3 - Summary of Significant Accounting Policies: Recent Accounting Pronouncements (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Topic 606: Revenue from Contracts with Customers.  ASU No. 2014-09 is effective for the Company as of April 1, 2017.  Management is evaluating the effect, if any, this pronouncement will have on the Company’s consolidated financial statements.

The Company does not believe that any other recently issued accounting pronouncements will have a material impact on its financial position, results of operations or cash flows.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash (used in) operating activities	$ (1,299,731)	$ (555,602)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets		65,582
Cash paid for oil and gas properties		(57,424)
Cash paid for purchase of property and equipment	(1,278)	(17,826)
Net cash (used in) investing activities	(1,278)	(9,668)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of common stock	1,347,000	691,937
Proceeds from notes payable		79,965
Payment on notes payable	(3,312)	(33,105)
Net cash provided by financing activities	1,343,688	738,797
INCREASE (DECREASE) IN CASH	42,679	173,527
BEGINNING BALANCE	69,433	1,051
ENDING BALANCE	112,112	174,578
Cash paid for interest	21,316	34,706
Supplemental schedule of non-cash investing and financing activities:
Conversion of preferred stock to common stock		49,992
Conversion of debt for common stock		395,877
Acquisition of vehicle with note		19,965
Issuance of common stock for Natural Resource Group, Inc. Common Stock	14,872
Forgiveness of related party notes	14,040
Assumption of liabilites by former officer and shareholder	$ 283,701

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Note 5 - Notes Payable

9 Months Ended

Jul. 31, 2014

Notes

Note 5 - Notes Payable

NOTE 5 – Notes Payable

Notes Payable Affiliates—In December 2010, the Company entered into a purchase and sale agreement to acquire certain oil and gas assets located in Adams, Broomfield, Huerfano, Las Animas, Morgan and Weld Counties Colorado. The Company issued 2,500,000 shares of its $0.0001 par value Common Stock and a promissory note for $360,000 bearing interest at 10% with an original maturity date of March 1, 2011. The shares were valued at $1 per share based on sales of the Company’s common stock to third-parties. The promissory note is collateralized by the property and equipment transferred and was subsequently subrogated to a convertible promissory note on January 12, 2012.  On July 30, 2013, the maturity date of the note was extended to December 11, 2015.  The balance on the note is $107,070 at July 31, 2014 with interest accrued in the amount of $1,880.

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Note 3 - Summary of Significant Accounting Policies: Accounting For Oil and Gas Activities: Schedule of Asset Retirement Obligations (Tables)

9 Months Ended

Jul. 31, 2014

Tables/Schedules

Schedule of Asset Retirement Obligations

	2014		2013
Asset retirement obligation as of beginning of period	$	222,375	$	203,889
Liabilities added		0		0
Liabilities settled		0		0
Revision of estimated obligation		0		0
Accretion expense on discounted obligation		6,000		18,486
Asset retirement obligation as of end of period	$	228,375	$	222,375

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Note 3 - Summary of Significant Accounting Policies: Revenue Recognition (Policies)

9 Months Ended

Jul. 31, 2014

Policies

Revenue Recognition

Revenue Recognition

We recognize oil and gas revenue from interests in producing wells as the oil and gas is sold. Revenue from the purchase, transportation, and sale of natural gas is recognized upon completion of the sale and when transported volumes are delivered. We recognize revenue related to gas balancing agreements based on the sales method. Our net imbalance position at July 31, 2014 and 2013 was immaterial.