NOTES PAYABLE

3 Months Ended

Jun. 30, 2011

3. NOTES PAYABLE

	June 30, 2011		March 31, 2011
Blackwood Ventures LLC	$	31,945	$	31,320
Litigation settlement with Joseph “Chip” Langston		120,000		120,000
PE Consulting		-		13,250
Lothian Put Option holders		2,499,050		2,663,649
Litigation settlement with Thomas Pernice		110,227		-
		2,761,222		2,828,219
Less current portion		252,172		144,570
Notes payable, less current portion	$	2,509,050	$	2,683,649

Blackwood Ventures LLC

Through March 31, 2010, Blackwood Ventures LLC made advances to the Company totaling $426,000, which were assessed interest at an annual rate of 8%. Accrued interest is payable quarterly. Of the amount advanced, $250,000 and related accrued interest were subject to a Convertible Debenture Agreement. Pursuant to the terms of the Debenture, in lieu of receiving cash, Blackwood had the right to receive shares of the Company’s common stock as payment for accrued interest at a conversion price of 5% over the bid price on the date of payment. The advances are convertible into common stock of the Company at price per share of $ 0.19. The debenture matured on September 30, 2010.

For the year ended March 31, 2010, the Company issued 2,600,410 shares of its common stock to Blackwood in exchange for the cancellation of $489,078 of loans, advances, accrued compensation, and accrued interest.

As of June 30, 2011 principal and accrued interest is $31,945. Interest charged to operations on the debenture during the quarters ended June 30, 2011 and 2010 amounted to $625 and $577, respectively.

Lothian Oil Note Payable

In February 2006, certain option agreements with shareholders of Lothian Oil, Inc. were modified and granted the shareholders a put option to require the Company to purchase said options for a price of $4.00 per share less the purchase price of $1.50 per share by making demand between April 1, 2008 and April 10, 2008 (“Put Option”). The Put Holders exercised their rights in the required period, but the Company had insufficient funds to meet the demand and these obligations totaling $2,147,770 were recognized as a liability by the Company.

In February 2010, the Company entered into novation agreements with the option holders to convert the put option liabilities into unsecured notes payable totaling $2,489,780. These notes are assessed interest at an annual rate of 4% and mature on September 30, 2011, when the principal balances and accrued interest thereon are due; however, the Company has the right to extend the maturity dates to September 30, 2012 with an increase in the interest rate charged on the notes to 6% per annum. The Company recognized a loss of $342,010 on the conversion, which was charged to operations in March 2010. As of March 31, 2011, the principal balance of the note was reduced by $186,508, and accrued interest of $13,024 was written off, due to the June 13, 2011 litigation settlement with Thomas Pernice (see below).

Interest accrued on these notes and charged to operations for the quarters ended June 30, 2011 and 2010 amounted to $34,933 and $37,762 respectively. The balance of this obligation, including accrued interest, is $2,499,050 on June 30, 2011. The entire amount is classified as long-term because the Company exercised its right to extend the maturity to September 30, 2012.

Litigation Settlement with Joseph “Chip” Langston

On August 2, 2011 a litigation settlement was reached with Joseph “Chip” Langston, the Company’s former Chief Financial Officer. The settlement covered the Langston Family Partnership and Buccaneer Energy Corporation v. Glen Rose Petroleum Corporation and the Glen Rose Petroleum Corporation v. Joseph Langston matters.

In the settlement agreement, Mr. Langston agreed to discontinue and withdraw all legal claims with prejudice in exchange for receiving $80,000 in a lump sum payment and $3,333 each month for twelve (12) months thereafter and returning all shares of the Company’s common stock in which he or anyone related to him had beneficial control or ownership. The initial payment of $80,000 was made when the settlement was signed on August 2, 2011. The monthly payments commenced on October 1, 2011. As of June 30, 2011, $110,000 of these payments was recorded as a current payable, while the remaining $10,000 in monthly payments was recorded as a non-current payable.

Litigation Settlement with Thomas Pernice

On June 13, 2011 a litigation settlement was reached with Thomas Pernice, a Lothian Oil Put Option holder, for the lump sum payment $110,227 to Mr. Pernice. The principal balance and accrued interest related to Mr. Pernice’s portion of the Lothian Oil Put Option, totaling $199,532, was written off as of March 31, 2011. A gain of $89,305, which is the difference between the principal balance and accrued interest written off and the lump sum payment, was recorded as a gain on the litigation settlement for the three months ended June 30, 2011. The lump sum payment of $110,227 was made to Mr. Pernice on July 27, 2011.

Buccaneer Energy Corporation

In prior periods, the Company had a note payable recorded from Buccaneer Energy Corporation which during the year ended March 31, 2009 advanced $32,500 to UHC Petroleum Corporation. This note was subject to a lawsuit with a former officer of the Company. The lawsuit was settled on August 2, 2011 and the balance of the note plus accrued interest was written off and credited to operations as of March 31, 2011.

Other

A short-term loan of $65,000 to a related party is recorded within the accounts payable as of June 30, 2011. The loan was repaid in full at the beginning of July 2011.