Risk Factors

In addition to the other information included in this proxy statement/prospectus, including the matters addressed in the section entitled “Note Regarding Forward-Looking Statements,” you should carefully consider the matters described below relating to the proposed Acquisition. Although Armada and Mesa believe that the matters described below cover the material risks related to the Acquisition that are currently known or reasonably foreseeable, they may not contain all of the information that is important to you in evaluating the Acquisition. Accordingly, you are urged to read this entire proxy statement/prospectus, including all appendices. Please also refer to the additional risk factors identified in the periodic reports and other documents of Armada and Mesa; see “Where You Can Find More Information” beginning on page 168.

Risks Relating to the Transaction

The price of Armada common stock might decline, which would decrease the value of the Acquisition Consideration to be received by Mesa stockholders in the Acquisition.

The market price of Armada common stock may vary significantly from the price on the date of the Acquisition Agreement or from the price on the date on which Mesa stockholders receive shares of Armada’s stock. Upon completion of the Acquisition, Mesa stockholders will be entitled to receive 0.40 shares of Armada common stock for each share of Mesa common stock that they own. The exchange ratio is fixed and will not be adjusted for changes in the stock prices of either company before the Acquisition is completed. As a result, any changes in the market price of Armada common stock will have a corresponding effect on the market value of the Acquisition Consideration. Neither party, however, has a right to terminate the Acquisition Agreement based on changes in the market price of Armada or Mesa common stock.

Stock price changes may result from a variety of factors that are beyond the control of Armada and Mesa, including, but not limited to:

We may fail to realize the anticipated benefits of the Acquisition.

Armada and Mesa entered into the Acquisition Agreement with the expectation that the Acquisition would result in various benefits, including, among other things, the ability for Mesa’s strong conventional, producing assets to provide cash flow; the ability of PUD drilling locations to provide immediate, low risk drilling opportunities; low-cost entry into the Niobrara Shale through Armada’s existing leases and options to acquire additional acreage; an attractive foothold in the Mississipian Lime through Mesa’s existing leases; the ability to more easily access the capital markets; and project management capabilities. The success of the Acquisition will depend, in part, on Mesa’s ability to realize such anticipated benefits from combining the business of Armada and Mesa. The anticipated benefits of the Acquisition may not be realized fully, or at all, or may take longer to realize than expected. Failure to achieve anticipated benefits could result in increased costs and decreases in the amounts of expected revenues of the combined company.

The market price for shares of Armada common stock may be affected by factors different from those affecting the market price for shares of Mesa common stock.

Upon completion of the Acquisition, holders of Mesa stock will become holders of Armada common stock. Armada’s business differs in certain respects from that of Mesa and, accordingly, the results of operations of Armada will be affected by some factors different from those currently affecting the results of operations of Mesa. In particular, Mesa is a growth-oriented E&P company with a definitive focus on growing reserves and net asset value per share, primarily through the acquisition and enhancement of high quality producing properties and the development of highly diversified developmental drilling opportunities. Mesa currently owns producing oil and natural gas properties in Plaquemines and Lafourche Parishes in Louisiana as well as producing and developmental properties in Garfield and Major Counties, OK and Wyoming County, NY. Armada, however, is an independent oil and gas company focused on discovering, acquiring and developing multiple objective onshore oil and natural gas resources in prolific and productive geological formations in North America. Armada holds strategic acreage positions in and around the Laramie and Hanna Basins in Southern Wyoming including a nearly contiguous 26,000+ acre site near existing infrastructure in the liquids-rich Niobrara formation and a footprint in the Eagle Ford shale play in Texas. For a discussion of the businesses of Armada and Mesa and of certain important factors to consider in connection with those businesses, see the documents included or incorporated as exhibits to this proxy statement/prospectus and referred to in the section entitled “Where You Can Find More Information” beginning on page 168.

Mesa stockholders may receive a lower return on their investment after the Acquisition.

Although Armada and Mesa believe that the Acquisition will create multiple financial, operational and strategic benefits for the combined company and its stockholders, these benefits may not be achieved. The combination of Armada’s and Mesa’s business, even if conducted in an efficient, effective and timely manner, may not result in combined financial performance that is better than what each company would have achieved independently if the Acquisition had not occurred.

The rights of Mesa stockholders will change as a result of the Acquisition.

Following completion of the Acquisition and subsequent dissolution of Mesa, Mesa stockholders will become stockholders of Armada, a Nevada corporation. There will be differences between your rights as a stockholder of Mesa, on the one hand, and the rights to which you will be entitled as stockholder of Armada, on the other hand. For a more detailed discussion of the differences between the rights of stockholders of Mesa and Armada, see “Comparison of Stockholder Rights” beginning on page 160.

Directors and executive officers of Mesa have interests in the Acquisition that may differ from the interests of Mesa stockholders including, if the Acquisition is completed, the receipt of financial and other benefits.

You should be aware that executive officers and directors of Mesa have interests in the Acquisition that are different from your interest because they have stock-based awards that will be assumed by Armada and will be subject to the same exchange ratio as the Acquisition Consideration. In addition, the Acquisition Agreement provides for director and officer indemnification arrangements for each of Mesa’s directors and executive officers who are currently covered by Mesa’s indemnification arrangements and a directors’ and officers’ liability insurance policy that will continue for two years following completion of the Acquisition. Additionally, it is anticipated that certain of Mesa’s directors and executive officers will continue in similar positions after the completion of the Acquisition. These, and certain other additional interests of Mesa’s directors and executive officers, may create potential conflicts of interest and cause some of these persons to view the proposed Acquisition differently than you view it, as a stockholder. For a more detailed discussion of these interests see “The Acquisition – Interests of Mesa’s Executive Officers and Directors in the Acquisition” beginning on page 78.

The Acquisition Agreement and voting agreements contain provisions that may discourage other companies from trying to acquire Mesa for greater consideration than what Armada has agreed to pay.

The Acquisition Agreement and voting agreements contain provisions that may discourage a third party from submitting a business combination proposal to Mesa that might result in greater value to Mesa stockholders than the proposed Acquisition. Under the terms of the Acquisition Agreement these provisions include a general prohibition on Mesa from soliciting any acquisition proposal or offers for competing transactions. Additionally, if Mesa receives a proposal for an alternative transaction or if another person or entity seeks to discuss or negotiate an alternative transaction with Mesa, Mesa must promptly notify Armada of such activities and keep Armada informed on a reasonably prompt basis of any material developments. Mesa is also required to pay a termination fee of $250,000 if the Acquisition Agreement is terminated in specified circumstances. See “The Acquisition Agreement – Termination Fees.”

In addition, under the terms of the voting agreements, directors and executive officers of Mesa, owning and having the right to consent for an aggregate of approximately 37% of Mesa’s common stock, have agreed with Armada to consent in favor of the Acquisition and have also agreed to vote their shares against alternative transaction proposals and not to sell or transfer their shares until after the Acquisition.

These provisions could discourage a third party that might have an interest in acquiring all or a significant part of Mesa from considering or proposing an acquisition, even if that party were prepared to pay consideration with a higher per share value than the current proposed Acquisition Consideration. Furthermore, the termination fee may result in a potential competing acquirer proposing to pay a lower per share price to acquire Mesa than it might otherwise have proposed to pay.

Although Armada has obtained a tax opinion from legal counsel regarding the tax consequences to Mesa’s stockholders of the Acquisition, the Assignment and Assumption, the Dissolution and the distribution of the Acquisition Consideration to Mesa’s stockholders, neither Armada nor Mesa obtained a ruling from the IRS and the opinion of tax counsel does not preclude the IRS from adopting a position contrary to those expressed in the opinion.

Assuming the Acquisition is completed according to the terms of the Acquisition Agreement as described in this registration statement on Form S-4, and based upon customary assumptions and certain representations as to factual matters by Mesa and Armada, and subject to the qualifications contained herein and in the Wilk Auslander opinion letter included as Exhibit 8.1 to this Form S-4, it is the opinion of Wilk Auslander that the Acquisition will be treated for U.S. federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code. No ruling has been or will be sought from the IRS as to the U.S. federal income tax consequences of the Acquisition, and the following summary and the opinion of Wilk Auslander is not binding on the IRS or any court of law nor will it preclude the IRS from adopting a position contrary to those expressed in the opinion.

The integration process could adversely impact Armada’s and Mesa’s ongoing operations.

Armada and Mesa have operated independently and until completion of the Acquisition will continue to operate independently. It is possible that the integration process could result in the loss of employees, the disruption of Mesa’s ongoing business or inconsistencies in standards, controls, procedures or policies that adversely affect the combined company’s ability to achieve the anticipated benefits of the Acquisition. Integration efforts between the two companies will also divert management attention and resources. The integration may take longer than anticipated and may have adverse results.

Armada and Mesa may waive one or more of the conditions of the Acquisition Agreement without resoliciting stockholder approval for the Acquisition and may terminate the Acquisition Agreement even after it has been adopted by Mesa stockholders.

Each of the conditions to Armada’s and Mesa’s obligations to complete the Acquisition may be waived, in whole or in part, to the extent permitted by applicable law, by agreement of Armada and Mesa if the condition is a condition to both Armada’s and Mesa’s obligation to complete the Acquisition, or by the party for which such condition is a condition of its obligation to complete the Acquisition. The boards of directors of Armada and Mesa may evaluate the materiality of any such waiver to determine whether amendment of this proxy statement/prospectus and resolicitation of stockholder approval is necessary. If Armada and Mesa determine that a waiver is not significant enough to require resolicitation of stockholder approval, Mesa will have the discretion to complete the Acquisition without seeking further stockholder approval. In addition, Armada and Mesa can agree at any time to terminate the Acquisition Agreement, even if Mesa stockholders have already consented to adopt and approve the Acquisition Agreement and the transactions contemplated thereby.

If the Acquisition is not consummated by April 30, 2013, either Armada or Mesa may choose not to proceed with the Acquisition.

Either Armada or Mesa may terminate the Acquisition Agreement if the Acquisition has not been completed by April 30, 2013, unless the party seeking to terminate breached any provision of the Acquisition Agreement and the breach was the principal cause of the failure of the Acquisition to occur by that date. See “The Acquisition Agreement – Termination” beginning on page 153.

If the conditions to the Acquisition are not met, the Acquisition may not occur.

Specified conditions set forth in the Acquisition Agreement must be satisfied or waived to complete the Acquisition. For a more complete discussion of the conditions to the Acquisition, please see the section entitled “The Acquisition Agreement – Conditions to the Acquisition” beginning on page 152. The following conditions, in addition to other customary closing conditions, must be satisfied or waived before either Armada or Mesa, as applicable, is obligated to complete the Acquisition:

Additionally, the following conditions must be satisfied or waived before Armada is obligated to complete the Acquisition:

The following conditions must be satisfied or waived before Mesa is obligated to complete the Acquisition:

Failure to complete the Acquisition could have adverse consequences.

If the Acquisition is not completed:

Armada and Mesa could also be subject to litigation related to any failure to complete the Acquisition or related to any enforcement proceeding commenced against Armada or Mesa to perform their respective obligations under the Acquisition Agreement. If the Acquisition is not completed, these risks may materialize and may adversely affect Armada’s and Mesa’s business, financial results and stock price.

Risks Relating To Armada’s Business and the Oil and Gas Industry

Unless the context requires otherwise, references in this section of “Risk Factors” to the “Company,” “we,” “our,” and “us,” refer to Armada Oil, Inc. and its wholly owned subsidiaries.

We have a history of operating losses and expect to continue suffering losses for the foreseeable future.

We have incurred losses since our company was organized in November 6, 1998. Moreover, in each of the fiscal years ended March 31, 2012 and 2011, we recorded net losses of $534,222 and $183,666, respectively. From inception (November 6, 1998) through December 31, 2012, we recorded a cumulative net loss of $4,823,556. We cannot anticipate when, if ever, our operations will become profitable.

Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.

We have a limited operating history on which to base an evaluation of its business and prospects. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of development. We cannot assure you that we will be successful in addressing the risks we may encounter, and our failure to do so could have a material adverse effect on our business, prospects, financial condition and results of operations. Our future operating results will depend on many factors, including:

To achieve profitable operations in the future, we must, alone or with others, successfully manage the factors stated above, as well as continue to develop ways to enhance our production efforts. Despite our best efforts, we may not be successful in our efforts. There is a possibility that some of our wells may never produce oil or natural gas.

We may be unable to obtain additional capital required to implement our business plan, which could restrict our ability to grow.

Future acquisitions and future drilling/development activity may require additional capital that exceeds our operating cash flow. In addition, our administrative costs (such as salaries, insurance expenses and general overhead expenses, as well as legal compliance costs and accounting expenses) will require cash resources.

We may pursue sources of additional capital through various financing transactions or arrangements, including joint venturing of projects, debt financing, equity financing or other means. We may not be successful in identifying suitable financing transactions in the time period required or at all, and we may not obtain the required capital by other means. If we are not succeed in raising additional capital, our resources may be insufficient to fund our planned operations in 2013 or thereafter.

Any additional capital raised through the sale of equity will dilute the ownership percentage of our stockholders. Raising any such capital could also result in a decrease in the nominal fair market value of our equity securities because our assets would be owned by a larger pool of outstanding equity. The terms of securities we issue in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of other derivative securities, and issuances of incentive awards under equity employee incentive plans, all of which may have a dilutive effect to existing investors.

Our ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both generally and in the oil and gas industry in particular), our limited operating history, the location of our oil and natural gas properties, prices of oil and natural gas on the commodities markets (which will impact the amount of asset-based financing available to us) and the departure of key employees. Further, if oil or natural gas prices decline, our revenues will likely decrease and such decreased revenues may increase our need for additional capital. If the amount of capital we are able to raise from financing activities, together with revenues from our operations, is not sufficient to satisfy our capital needs (even if we reduce our operations), we may be required to cease operations, divest our assets at unattractive prices or obtain financing on unattractive terms.

The possibility of a global financial crisis may significantly impact our business and financial condition for the foreseeable future .

The credit crisis and related turmoil in the global financial system may adversely impact our business and financial condition, and we may face challenges if conditions in the financial markets remain challenging. Our ability to access the capital markets may be restricted at a time when we would prefer or be required to raise financing. Such constraints could have a material negative impact on our flexibility to react to changing economic and business conditions. The economic situation could also have a material negative impact on the contractors upon whom we are dependent for drilling our wells, causing them to fail to meet their obligations to us. Additionally, market conditions could have a material negative impact on any crude oil hedging arrangements we may employ in the future if our counterparties are unable to perform their obligations or seek bankruptcy protection.

Our future success is dependent on our acquisition and development of producing and reserve rich properties.

We are in the early stages of the acquisition of our portfolio of leaseholds and other natural resource holdings. We will continue to supplement our current portfolio with additional sites and leaseholds. Our ability to meet our growth and operational objectives will depend on the success of our acquisitions, and there is no assurance that the integration of future assets and leaseholds will be successful.

In addition to acquiring producing properties, we may also grow our business through the acquisition and development of exploratory oil and gas prospects, which is the riskiest method of establishing oil and gas reserves .

In addition to acquiring producing properties, we may acquire, drill and develop exploratory oil and gas prospects that are profitable to produce. Developing exploratory oil and gas properties requires significant capital expenditures and involves a high degree of financial risk. The budgeted costs of drilling, completing, and operating exploratory wells are often exceeded and can increase significantly when drilling costs rise. Drilling may be unsuccessful for many reasons, including title problems, weather, cost overruns, equipment shortages, and mechanical difficulties. Moreover, the successful drilling or completion of an exploratory oil or gas well does not ensure a profit on investment. Exploratory wells bear a much greater risk of loss than development wells. We cannot assure you that our exploration, exploitation and development activities will result in profitable operations. If we are unable to successfully acquire and develop exploratory oil and gas prospects, our results of operations, financial condition and stock price will be materially adversely affected.

Exploratory drilling involves many risks that are outside our control and which may result in a material adverse effect on our business, financial condition or results of operations.

The business of exploring for and producing oil and gas involves a substantial risk of investment loss. Drilling oil and gas wells involves the risk that the wells may be unproductive or that, although productive, the wells may not produce oil or gas in economic quantities. Other hazards, such as unusual or unexpected geological formations, pressures, fires, blowouts, power outages, sour gas leakage, loss of circulation of drilling fluids or other conditions may substantially delay or prevent completion of any well. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic if water or other deleterious substances are encountered that impair or prevent the production of oil or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. There can be no assurance that oil and gas will be produced from the properties in which we have interests.

Crude oil and natural gas development, re-completion of wells from one reservoir to another reservoir, restoring wells to production and drilling and completing new wells are speculative activities and involve numerous risks and substantial and uncertain costs .

Our growth will be materially dependent upon the success of our future development program. Drilling for crude oil and natural gas and reworking existing wells involves numerous risks, including the risk that no commercially productive crude oil or natural gas reservoirs will be encountered. The cost of drilling, completing and operating wells is substantial and uncertain, and drilling operations may be curtailed, delayed or cancelled as a result of a variety of factors beyond our control, including: unexpected drilling conditions; pressure or irregularities in formations; equipment failures or accidents; inability to obtain leases on economic terms, where applicable; adverse weather conditions and natural disasters; compliance with governmental requirements; and shortages or delays in the availability of drilling rigs or crews and the delivery of equipment.

Drilling or reworking is a highly speculative activity. Even when fully and correctly utilized, modern well completion techniques such as hydraulic fracturing and horizontal drilling do not guarantee that we will find crude oil and/or natural gas in our wells. Hydraulic fracturing involves pumping a fluid with or without particulates into a formation at high pressure, thereby creating fractures in the rock and leaving the particulates in the fractures to ensure that the fractures remain open, thereby potentially increasing the ability of the reservoir to produce oil or gas. Horizontal drilling involves drilling horizontally out from an existing vertical well bore, thereby potentially increasing the area and reach of the well bore that is in contact with the reservoir. Our future drilling activities may not be successful and, if unsuccessful, such failure would have an adverse effect on our future results of operations and financial condition. We cannot assure you that our overall drilling success rate or our drilling success rate for activities within a particular geographic area will not decline. We may identify and develop prospects through a number of methods, some of which do not include lateral drilling or hydraulic fracturing, and some of which may be unproven. The drilling and results for these prospects may be particularly uncertain. Our drilling schedule may vary from our capital budget. The final determination with respect to the drilling of any scheduled or budgeted prospects will be dependent on a number of factors, including, but not limited to: the results of previous development efforts and the acquisition, review and analysis of data; the availability of sufficient capital resources to us and the other participants, if any, for the drilling of the prospects; the approval of the prospects by other participants, if any, after additional data has been compiled; economic and industry conditions at the time of drilling, including prevailing and anticipated prices for crude oil and natural gas and the availability of drilling rigs and crews; our financial resources and results; the availability of leases and permits on reasonable terms for the prospects; and the success of our drilling technology.

Title deficiencies could render our leases worthless, which could have adverse effects on our financial condition or results of operations.

The existence of a material title deficiency can render our lease worthless and can result in a large expense to our business. It is our practice in acquiring oil and gas leases or undivided interests in oil and gas leases to forgo the expense of retaining lawyers to examine the title to the oil or gas interest to be placed under lease or already placed under lease. Instead, we rely upon the judgment of oil and gas landmen who perform the field work in examining records in the appropriate governmental office before attempting to place under lease a specific oil or gas interest. We do not anticipate that we, or the person or company acting as operator of the wells located on the properties that we lease or may lease in the future, will obtain counsel to examine title to the lease until the well is about to be drilled. As a result, we may be unaware of deficiencies in the marketability of the title to the lease. Such deficiencies may render the lease worthless. Additionally, we rely on the owners of the leases that are subject to any farmin agreement in which we participate to assign us title to the leases that are subject to the agreement at the appropriate time based on the terms of the agreement. The failure by these owners to provide us with an assignment of such leases in a timely matter could negatively affect the value of these leases, or our rights to use them, which could potentially have an adverse effect on our financial condition or results of operations.

We may not be able to develop oil and gas reserves on an economically viable basis and our reserves and production may decline as a result.

To the extent that we succeed in discovering additional oil and/or natural gas reserves, we cannot assure that these reserves will be capable of production levels that are commercially viable. On a long-term basis, our viability depends on our ability to find or acquire, develop and commercially produce additional oil and natural gas reserves. Without the addition of reserves through acquisition, exploration or development activities, our reserves and production will decline over time as reserves are produced. Our future reserves will depend not only on our ability to develop then-existing properties, but also on our ability to identify and acquire additional suitable producing properties or prospects, to find markets for the oil and natural gas we develop and to effectively distribute our production into our markets.

Future oil and gas exploration may involve unsuccessful efforts, not only from dry holes, but from wells that are marginally productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-downs of connected wells resulting from extreme weather conditions, problems in storage and distribution and adverse geological and mechanical conditions. While we will endeavor to effectively manage these conditions, they cannot be totally eliminated and could diminish our revenue and cash flow levels and result in the impairment of our oil and natural gas interests.

Future investment in exploration projects would increase the risks inherent in our oil and gas activities and our drilling operations may not be successful.

We intend to develop a portfolio consisting of a mix of existing production and developmental drilling opportunities. Should we choose at a later date to invest in projects that are more exploratory in nature, those projects would come with greater risks than in acquisitions and developmental drilling. Any particular success in exploration does not assure that we will discover meaningful levels of reserves. There can be no assurance that future exploration activities would be successful. We cannot be sure that an overall drilling success rate or production operations within a particular area will ever come to fruition and, in any event, production rates inevitably decline over time. We may not recover all or any portion of the capital investment in our wells or the underlying leaseholds.

Unsuccessful drilling activities would have a material adverse effect upon our results of operations and financial condition.

Drilling for and producing oil and natural gas are high risk activities with many uncertainties that could impact the economic viability of our leasehold interests and properties .

Our future success will depend on the success of our exploration, development, and production activities. Our oil and natural gas exploration and production activities are subject to numerous risks beyond our control; including the risk that drilling will not result in commercially viable oil or natural gas production. Our decision to purchase, explore, develop or otherwise exploit prospects or properties will depend in part on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. Our cost of drilling, completing and operating wells is often uncertain before drilling commences. Overruns in budgeted expenditures are common risks that can make a particular project uneconomical. Further, many factors may curtail, delay or cancel drilling, including the following:

The presence of one or a combination of these factors at our properties could adversely affect our business, financial condition and/or results of operations.

Only one of our current properties has proved “reserves” and, to the extent that any of our current wells produce oil and/or gas, there is no guarantee that they will continue to do so.

 Only one of our properties currently has proved “reserves,” as that term is defined in Rule 4-10(26) of Regulation S-X of the Exchange Act. Although we received revenues of $77,289 from the sale of oil for the 2012 fiscal year and $57,758 from the sale of oil for the nine months ended December 31, 2012, there is no guarantee that any of our wells will continue to produce oil and/or gas in the future, and we will likely see a decline or complete end of production of any oil and/or gas.

Our financial condition and results of operations could be negatively impacted as a result of our lack of geographic diversification of our oil and gas interests.

Our business focus is on the oil and gas industry in a limited number of geographic areas, currently in parts of Texas and Wyoming. Larger companies have the ability to manage their risk by geographic diversification. It is our intent to pursue opportunities in other geographic areas as those opportunities present themselves as is discussed above. However, we will continue to have a lack of diversification for the near future. As a result, we could be impacted more acutely by factors affecting our industry in the regions in which we operate than we would if our business were more diversified, thereby enhancing our risk profile. If we do not diversify our operations, our financial condition and results of operations could be negatively impacted.

Investment in developmental drilling and/or recompletion of existing wells in Texas and Wyoming includes significant risk.

There are significant uncertainties as to the future costs and timing of drilling and completing new wells and/or recompleting existing wells. Our drilling operations may be curtailed, delayed, or canceled as a result of a variety of factors, including:

Drilling initiatives on the “Overland Trail” and “Bear Creek” projects may not prove successful.

We recently acquired Armada Oil and Gas, Inc. along with its interest in the Overland Trail and Bear Creek projects, located in Wyoming. Our primary initiative for the Overland Trail Project to identify and exploit resources from potential sandstone reservoirs in the Upper and Lower parts of the Permian-Pennsylvanian age Casper Formation with secondary targets in the Niobrara Formation.

There is no guarantee that our efforts on the Overland Trail and Bear Creek projects will ever produce commercial volumes of oil or gas, which could have a material adverse effect upon our results of operations.

We currently hold an option to purchase additional acreage in Wyoming, though we do not currently have sufficient funds to exercise those options.

Pursuant to the Share Exchange Agreement, we assumed a purchase and option agreement (the “ Purchase and Option Agreement ”) dated as of February 7, 2012 and amended on September 25, 2012, between Armada Oil and Gas and TR Energy, Inc. (“ TR Energy ”) through which we received leasehold interests in 1,280 acres of land, engineering data, and 2D seismic, as well as an option to purchase leasehold interests to an additional 23,700 acres on or before September 30, 2014, at a purchase price of $1,000 per net acre, subject to us making certain prior installment payments for a separate 320 acre unit of land. We do not currently have sufficient funds to purchase all of the additional acreage from TR Energy and there is no guarantee that we will obtain the necessary funding to exercise its option to purchase the additional acreage.

If we declare bankruptcy or default under the terms of the Purchase and Option Agreement we are required to assign all of the leasehold interests we obtained from TR Energy under the Purchase and Option Agreement, as well as new leasehold interests acquired with the assistance of TR Energy, back to TR Energy.

Pursuant to the terms of the Purchase and Option Agreement, if we declare bankruptcy or default under the terms of the Purchase and Option Agreement we are required to assign all leasehold interests we received from TR Energy pursuant to the Purchase and Option Agreement, as well as new leasehold interests acquired with the assistance of TR Energy, back to TR Energy. Further, all moneys previously paid related to leasing, title, lease extensions and associated costs will not be refunded to us.

We currently have commitments to drill certain wells on the property located in the “Overland Trail and Bear Creek” projects in order to maintain certain of our leasehold interests.

We must drill a vertical test within 60 days from the date the field operations of the first seismic program we undertake is concluded, provided the weather permits drilling activity, to test the Casper formation at a depth of 9,500 feet. On or before 120 days from drilling the first well, we must drill a second test well to a depth of 9,500 feet. Should any delays arise in fulfilling the drilling obligations beyond our control (such as permitting, weather, environmental, etc.), we have the right to select a later date on which the vertical test well must be drilled, in mutual agreement with TR Energy. Total burdens on any of the acreage acquired pursuant to the Purchase and Option Agreement shall not exceed 25% and net revenue will be 75%. In the event any lease is already burdened with a 25% royalty interest, TR Energy shall reserve a 1% overriding royalty interest.

Strategic relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.

Our ability to successfully acquire additional properties, to increase our oil and natural gas reserves, to participate in drilling opportunities and to identify and enter into commercial arrangements with customers will depend on developing and maintaining close working relationships with our strategic partners and industry participants and our ability to select and evaluate suitable properties and to consummate transactions in a highly competitive environment. These realities are also subject to change and our inability to maintain close working relationships with our strategic partners and other industry participants or continue to acquire suitable properties may impair our ability to execute our business plan. To continue to develop our business, we will endeavor to use the business relationships of members of our management to enter into strategic relationships, which may take the form of joint ventures with other private parties and contractual arrangements with other oil and gas companies, including those that supply equipment and other resources which we may use in our business. We may not be able to establish these strategic relationships, or if established, we may not be able to adequately maintain them. In addition, the dynamics of our relationships with strategic partners may require us to incur expenses or undertake activities we would not otherwise be inclined to in order to fulfill our obligations to these partners or maintain relationships. If our strategic relationships are not established or maintained, our business prospects may be limited, which could diminish our ability to conduct our operations.

Because we do not operate all of our properties, we could have limited influence over their development.

Our wells located in Archer and Young counties are currently operated and maintained by Baron Energy, Inc. Our lack of control could result in the following:

Either of these events could materially reduce the value of our properties.

We must reach agreements with third parties to supply us with expertise, services and infrastructure necessary to operate our business and the loss of access to this expertise, these services and/or infrastructure cold cause our business to suffer by reducing our revenues and increasing our costs.

We have certain contemplated strategic vendor relationships that will be critical to our strategy. We cannot assure that these relationships can be maintained or obtained on terms favorable to us. Our success depends on substantially obtaining relationships with strategic partners, such as banks, accounting firms, legal firms and operational entities. If we are unable to obtain or maintain relationships with strategic partners, our business, prospects, financial condition and results of operations may be materially adversely affected.

Our agreement with Anadarko requires us to expend funds for exploration work on Anadarko’s property without any reimbursement or guarantee of future payments.

On November 2, 2012, we entered into a Seismic and Farmout Option Contract (the “ Farmout Contract ”) with Anadarko E & P Company LP and Anadarko Land Corp. (collectively, “ Anadarko ”) (the Farmout Contract has an effective date of October 22, 2012), pursuant to which Anadarko granted us the right to a conduct 3D seismic on certain lands owned by Anadarko (the “ Contract Acreage ”). Within ten (10) days after the execution of the Farmout Contract, Anadarko will execute in our favor a mineral permit (“ Permit ”) granting us the non-exclusive right until May 1, 2013, to enter upon and conduct the 3D Survey operations on and across the Contract Acreage. In the event we do not finish the 3D Survey on or before May 1, 2013, the Farmout Contract and the rights and options granted therein automatically terminates. In consideration of the Permit, we agreed to deliver to Anadarko, at our expense, a copy of the results of the data acquired in connection with the entire 3D survey we conduct Additionally, we agreed to make a commitment to drill a test well at a location of its choice on the Contract Acreage on or before August 1, 2013.

If we (i) drill an Initial Test Well or Continuous Option Test Well capable of production in paying quantities to Initial Contract Depth or Option Contract Depth, respectively, (ii) complete it as a producer, (iii) submit evidence thereof, and (iv) otherwise comply with and perform all other terms, covenants, and conditions of the Farmout Contract, all in the manner and time therein provided, then we will earn and be entitled to receive from Anadarko, a Lease, effective 30 days from the date of the release of the rotary rig from the Test Well covering all of Anadarko’s Oil and Gas Estate in the respective drillsite section limited to those depths and formations lying between the surface of the earth and 100 feet below the total depth drilled (the “ Earned Depth ”). The Lease earned by us will (i) be for a primary term of three (3) years; (ii) provide for a lessor’s royalty of twenty percent (20%), proportionately reduced in accordance with the interest leased (“ Royalty ”); (iii) be without warranty of title; and (iv) be subject to any gas sales, purchase, transportation or gathering contracts affecting the leased lands on the date of the Farmout Contract.

There is no guarantee we will be able to undertake all of the exploration work provided for in the Farmout Contract or that if we do there will locate commercially viable amounts of oil on the Contract Acreage, in which case we will not be able to recover any of the moneys we expended pursuant to the Farmout Contract.

We are dependent on certain key personnel .

We are dependent on the services of our President and Chief Executive Officer, James J. Cerna, Jr. The loss of services of Mr. Cerna could impair our ability to complete acquisitions of producing assets and leaseholds, perform relevant managerial services and maintain key relationships with third parties, which could have a material adverse effect on our business, financial condition and results of operations.

We have a very small management team and the loss of any member of our team may prevent us from implementing our business plan in a timely manner.

We currently have two executive officers and a limited number of consultants upon whom our success largely depends. We do not maintain key-man life insurance policies on our executive officers or consultants, the loss of which could seriously harm our business, financial condition and results of operations. In such an event, we may not be able to recruit personnel to replace our executive officers or consultants in a timely manner, or at all, on acceptable terms.

If we are unable to successfully recruit qualified managerial and field personnel having experience in oil and gas exploration, we may not be able to continue our operations.

In order to successfully implement and manage our business plan, we will depend upon, among other things, successfully recruiting qualified managerial and field personnel having experience in the oil and gas exploration business. Competition for qualified individuals is intense. We may not be able to find, attract and retain qualified personnel on acceptable terms. If we are unable to find, attract and retain qualified personnel with technical expertise, our business operations could suffer.

Startups in the oil and gas industry are subject to substantial competition .

The oil and gas industry is highly competitive. Other oil and gas companies may seek to acquire oil and gas leases and other properties and services that we require to operate its business in the planned areas. This competition is increasingly intense as prices of oil and natural gas have risen in recent years. Additionally, other companies engaged in our line of business may compete with us from time to time in obtaining capital from investors. Competitors include larger companies who may have access to greater resources, may be more successful in the recruitment and retention of qualified employees and may conduct their own refining and petroleum marketing operations, which may give them a competitive advantage. If we are unable to compete effectively or respond adequately to competitive pressures, our results of operation and financial condition may be materially adversely affected.

We have no experience in drilling wells in the Niobrara Shale Formation.

We have no experience in drilling new development wells in the Niobrara Shale Formation. We have limited information with respect to the ultimate recoverable reserves and the production decline rate in the Niobrara Shale Formation. In addition, the fracturing of the Niobrara Shale Formation may be more extensive and complicated than exploration activities of the geological formations in other areas and may require larger expenditures of funds than expected.

We may not be able to determine reserve potential or identify liabilities associated with our current properties or any future properties. We may also not be able to obtain protection from vendors against possible liabilities, which could cause us to incur losses.

We have conducted a very limited review of our current properties, such review and evaluation might not necessarily reveal all existing or potential reserves and/or problems. This is also true for any future acquisitions made by us. Inspections may not always be performed on every well, and environmental problems, such as groundwater contamination, are not necessarily observable even when an inspection is undertaken. Even when problems are identified, a vendor may be unwilling or unable to provide effective contractual protection against all or part of those problems, and we may assume environmental and other risks and liabilities in connection with the acquired properties.

Drilling wells could result in liabilities, which could endanger our interests in our prospective properties and assets.

There are risks associated with the drilling of oil and natural gas wells, including encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, sour gas releases, fires and spills. The occurrence of any of these events could significantly reduce our future revenues or cause substantial losses, impairing our future operating results. We may become subject to liability for pollution, blow-outs or other hazards.

The payment of such liabilities could reduce the funds available to us or could, in an extreme case, result in a total loss of our properties and assets. Moreover, we may not be able to maintain adequate insurance in the future at rates that are considered reasonable. Oil and natural gas production operations are also subject to all the risks typically associated with such operations, including premature decline of reservoirs and the invasion of water into producing formations.

We currently maintain liability insurance but it may not be sufficient to cover liabilities we may incur.

Our involvement in the exploration for and development of oil and natural gas properties may result in our becoming subject to liability for pollution, blow-outs, property damage, personal injury or other hazards. Such risks may not, in all circumstances be insurable or, in certain circumstances, we may choose not to obtain insurance to protect against specific risks due to the high premiums associated with such insurance or for other reasons. We currently maintain general liability insurance coverage, but it may not be sufficient to cover liabilities we may incur. The payment of such uninsured liabilities would reduce the funds available to us. If we suffer a significant event or occurrence that is not fully insured we could be required to divert funds from capital investment or other uses towards covering our liability for such events.

If we or our operators fail to maintain adequate insurance, our business could be materially and adversely affected.

Our operations are subject to risks inherent in the oil and gas industry, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution, earthquakes and other environmental risks. These risks could result in substantial losses due to injury and loss of life, severe damage to and destruction of property and equipment, pollution and other environmental damage, and suspension of operations. We could be liable for environmental damages caused by us and/or previous property owners. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition and results of operations.

Our prospective drilling contractor or operator may be required to maintain insurance of various types to cover our operations with policy limits and retention liability customary in the industry. The occurrence of a significant adverse event on such prospects that is not fully covered by insurance could result in the loss of all or part of our investment in a particular prospect which could have a material adverse effect on our financial condition and results of operations.

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

The business of oil and gas exploration and development is subject to substantial regulation under federal, state, local and foreign laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of oil and gas and related products and other matters. Amendments to current laws and regulations governing operations and activities of oil and gas exploration and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to our oil and gas properties and the oil and gas industry generally, will not be changed in a manner which may adversely affect our progress and cause delays, inability to explore and develop or abandonment of these interests.

Permits, leases, licenses and approvals are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted in respect of our activities or, if granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses and approvals will not contain terms and provisions which may adversely affect our exploration and development activities.

Shortages of rigs, equipment, supplies and personnel could delay or otherwise adversely affect our cost of operations or our ability to operate according to our business plans.

If drilling activity increases in Wyoming, Texas, and/or other locations in which we operate, a shortage of drilling and completion rigs, field equipment and qualified personnel could develop. These costs have recently increased sharply and could continue to do so. The demand for, and wage rates of, qualified drilling rig crews generally rise in response to the increasing number of active rigs in service and could increase sharply in the event of a shortage. Shortages of drilling and completion rigs, field equipment or qualified personnel could delay, restrict or curtail our exploration and development operations, which could in turn harm our operating results.

To the extent that we establish reserves, we will be required to replace, maintain or expand our reserves in order to prevent our reserves and production from declining, which would adversely affect cash flows and income.

In general, production from oil and gas properties declines over time as reserves are depleted, with the rate of decline depending on reservoir characteristics. If we establish reserves, of which there is no assurance, and we are not successful in our subsequent exploration and development activities or in subsequently acquiring properties containing proved reserves, our proved reserves will decline as the oil and gas contained in the reserves are produced. Our future oil and gas production is highly dependent upon our ability to economically find, develop or acquire reserves in commercial quantities.

To the extent cash flow from operations is reduced, either by a decrease in prevailing prices for oil and gas or an increase in finding and development costs, and external sources of capital become limited or unavailable, our ability to make the necessary capital investment to maintain or expand our asset base of oil and gas reserves would be impaired. Even with sufficient available capital, our future exploration and development activities may not result in additional proved reserves, and we might not be able to drill productive wells at acceptable costs.

The oil and gas exploration and production industry is historically a cyclical industry and market fluctuations in the prices of oil and gas could adversely affect our business.

Prices for oil and gas tend to fluctuate significantly in response to factors beyond our control. These factors include:

Changes in commodity prices may significantly affect our capital resources, liquidity and expected operating results. Price changes will directly affect revenues and can indirectly impact expected production by changing the amount of funds available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Significant declines in prices could result in non-cash charges to earnings due to impairment.

Changes in commodity prices may also significantly affect our ability to estimate the value of producing properties for acquisition and divestiture and often cause disruption in the market for oil and gas producing properties, as buyers and sellers have difficulty agreeing on the value of the properties. Price volatility also makes it difficult to budget for and project the return on acquisitions and the development and exploitation of projects. We expect that commodity prices will continue to fluctuate significantly in the future.

Estimates of oil and natural gas reserves that we or our consultants make may be inaccurate and our actual revenues may be lower than our financial projections.

We make estimates of oil and natural gas reserves using various assumptions, including assumptions as to oil and natural gas prices, drilling and operating expenses, other capital expenditures, taxes and availability of funds. Some of these assumptions are inherently subjective, and the accuracy of our reserve estimates relies in part on the ability of our management team, engineers and other advisors to make accurate assumptions. We depend to a significant degree on third party engineering firms to evaluate our properties.

In addition, economic factors beyond our control such as interest rates and commodity prices will also impact the value of our reserves. The process of estimating oil and natural gas reserves is complex and requires us to use a number of assumptions in the evaluation of available geological, geophysical, engineering and economic data for each property. Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves may vary substantially from those we estimate. If actual production results vary substantially from our reserve estimates, this could materially reduce our revenues and result in the impairment of our oil and natural gas interests.

Competitive industry conditions may negatively affect our ability to conduct operations.

We operate in the highly competitive areas of oil and gas exploration, development, and production. We compete with other oil and gas companies for the purchase of leases, most of which have materially greater economic resources than we do. These leases include exploration prospects as well as properties with proved reserves. Factors that affect our ability to compete in the marketplace include:

Our competitors include major integrated oil companies, independent energy companies, and affiliates of major interstate and intrastate pipelines, many of which possess greater financial, technological and other resources than we do.

Our decision to drill a prospect, whether developmental or exploratory, is subject to a number of factors and we may decide to alter our drilling schedule or not drill at all, which may adversely impact our reserves, if any, and production capability.

We describe our current properties and our plans to explore these properties in this report; whether we ultimately drill or continue to drill a prospect may depend on multiple factors, including, but not limited to, the following:

We are constantly gathering data about our prospects, and it is possible that additional information may cause us to alter our drilling schedule or determine that a prospect should not be pursued at all. You should understand that our plans regarding our prospects are subject to change.

Weather, unexpected subsurface conditions, and other unforeseen hazards may adversely impact our ability to conduct business.

There are many operating hazards in exploring for and producing oil and gas, including:

In addition, any of the foregoing may result in environmental damages for which we could be liable. We cannot ensure that we will be able to maintain adequate insurance at rates we consider reasonable to cover our possible losses from operating hazards. The occurrence of a significant event not fully insured or indemnified against could materially and adversely affect our financial condition and results of operations.

Our inability to obtain necessary facilities and equipment could hamper our operations.

Oil and natural gas exploration and development activities are dependent on the availability and cost of drilling and related equipment, transportation, power and technical support in the particular areas where these activities will be conducted. To the extent that we conduct our activities in remote areas or “in the water” environments, needed facilities may not be proximate to these areas which will increase our expenses. Demand for limited equipment and facilities or access restrictions may affect the availability of such equipment to us and may delay exploration and development activities. The quality and reliability of necessary facilities may also be unpredictable and we may be required to make efforts to standardize our facilities, which may entail unanticipated costs and delays. Shortages and/or the unavailability of necessary equipment or other facilities will impair our activities, either by delaying our activities, increasing our costs or both.

Our ability to sell oil and natural gas and/or receive market prices for oil and natural gas may be adversely affected by pipeline and gathering system capacity constraints and various transportation interruptions.

If drilling in the Niobrara Shale Formation continues to be successful, the amount of oil and natural gas being produced by us and others could exceed the capacity of the various gathering and intrastate or interstate transportation pipelines currently available in these areas. If that occurs, it will be necessary for new pipelines and gathering systems to be built. Because of the current economic climate, certain pipeline projects that are planned for the Niobrara Shale Formation area may not be undertaken for lack of financing. In such event, we might have to shut in one or more of our wells awaiting a pipeline connection or capacity and/or sell oil and natural gas production at significantly lower prices than those quoted on NYMEX or than we currently project, which would adversely affect our results of operations.

Prices and markets for oil and natural gas are unpredictable and tend to fluctuate significantly, which could reduce profitability, growth and the value of our business.

Oil and natural gas are commodities whose prices are determined based on world demand, supply and other factors, all of which are beyond our control. World prices for oil and natural gas have fluctuated widely in recent years. The average price per barrel of oil was $61.95 in 2009, $79.48 in 2010 and $94.88 in 2011, and the average wellhead price per thousand cubic feet of natural gas was $3.67 in 2009, $4.48 in 2010 and $3.95 in 2011 (source: U.S. Energy Information Administration). We expect that prices will continue to fluctuate in the future. Price fluctuations will have a significant impact upon our revenue, the return from our reserves and on our financial condition generally. Price fluctuations for oil and natural gas commodities may also impact the investment market for companies engaged in the oil and gas industry.

Factors beyond our control affect our ability to market production and our financial results.

The ability to market oil and gas produced from our wells depends upon numerous factors beyond our control. These factors include:

Additionally, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Also, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially adversely affect our financial performance. Accordingly, we may be unable to market all of the oil or gas that we might produce. In addition, we may be unable to obtain favorable prices of the oil and gas that we might produce.

Certain federal income tax deductions currently available with respect to oil and gas exploration and development may be eliminated as a result of future legislation.

Among the changes contained in the President’s Fiscal Year 2013 budget proposal, released by the White House on February 13, 2012, is the elimination of certain U.S. federal income tax deductions and credits currently available to oil and gas exploration and production companies. Such proposed changes include, but are not limited to, (i) the repeal of the percentage depletion allowance for oil and gas properties; (ii) the elimination of current deductions for intangible drilling and development costs; (iii) the elimination of the deduction for certain U.S. production activities; and (iv) an extension of the amortization period for certain geological and geophysical expenditures. Recently, members of the U.S. Congress have considered similar changes to the existing federal income tax laws that affect oil and gas exploration and production companies. It is unclear, however, whether any such changes will be enacted or, if enacted, how soon such changes would be effective. The passage of any legislation as a result of the budget proposal or any other similar change in U.S. federal income tax law could eliminate or defer certain tax deductions that are currently available with respect to oil and gas exploration and development, and any such change could negatively affect our financial condition, results of operations and cash flows.

Risks Relating to Mesa’s Business and the Oil and Gas Industry

Unless the context requires otherwise, references in this section of “Risk Factors” to the “Company,” “we,” “our,” and “us,” refer to Mesa Energy Holdings, Inc., and its subsidiaries.

If we are unable to generate or obtain sufficient capital to fund our capital budgets, business operations could be harmed and if we do obtain additional capital in the form of equity financing, existing stockholders could suffer substantial dilution.

We anticipate funding our currently anticipated drilling and recompletion programs using cash flow generated from operations, cash reserves and additional borrowings on our senior credit facility. To the extent that we pursue additional drilling and acquisitions in 2013 and subsequent years, which is a distinct possibility, additional capital would likely be required. There can be no assurance that additional financing will be available for those activities in amounts or on terms acceptable to us. An inability to obtain additional capital could restrict our ability to acquire additional properties and implement our business plan. Any additional equity financing could involve substantial dilution to then existing stockholders.

Our current lack of diversification could increase the risk of an investment in our company .

Our business focus is on the oil and gas industry in a limited number of geographic areas, currently in south Louisiana, north central Oklahoma and western New York. Larger companies have the ability to manage their risk by greater geographic diversification. It is our intent to pursue opportunities in other geographic areas as those opportunities present themselves as is discussed above. However, we may continue to have a lack of diversification for the near future. As a result, we could be impacted more acutely by factors affecting our industry in the regions in which we operate than we would if our business were more diversified, thereby enhancing our risk profile. If we do not further diversify our operations, our financial condition and results of operations could be negatively impacted.

Future investment in exploration projects would increase the risks inherent in our oil and gas activities and our drilling operations may not be successful.

We intend to develop a portfolio consisting of a balanced and diversified mix of existing production and developmental drilling opportunities. Should we choose at a later date to invest in projects that are more exploratory in nature, those projects would come with greater risks than in acquisitions and developmental drilling. Any particular success in exploration does not assure that we will discover meaningful levels of reserves. There can be no assurance that future exploration activities would be successful. We cannot be sure that an overall drilling success rate or production operations within a particular area will ever come to fruition and, in any event, production rates inevitably decline over time. We may not recover all or any portion of the capital investment in our wells or the underlying leaseholds. Unsuccessful drilling activities would have a material adverse effect upon our results of operations and financial condition.

Investment in developmental drilling and/or recompletion of existing wells in south Louisiana does not come without risk.

Additionally, there are significant uncertainties as to the future costs and timing of drilling and completing new wells and/or recompleting existing wells. Our drilling operations may be curtailed, delayed, or canceled as a result of a variety of factors, including:

Because we may not operate all of our properties, we could have limited influence over their development.

Although we intend to operate or otherwise directly control the operation of all our properties, there may be certain situations wherein we acquire non-operated properties as part of an acquisition package or elect to allow others to operate. In that event, we would have limited influence over the operations of those properties. Our lack of control could result in the following:

Either of these events could materially reduce the value of our properties.

Drilling initiatives in the Java Field may not prove successful.

The primary target for production of natural gas in our Java Field property is the Marcellus Shale. The amount of natural gas that can be commercially produced from any shale gas reservoir depends upon the rock and shale formation quality, the original free gas content of the shales, the thickness of the shales, the reservoir pressure, the rate at which gas is released from the shales, the existence of any natural fractures through which the gas can more easily flow to the well bore and the success of the hydraulic fracturing of the formation.

There is no guarantee that the potential drilling locations we now have or may acquire in the future will ever produce commercial volumes of natural gas, which could have a material adverse effect upon our results of operations.

We have no experience in drilling wells to the Marcellus Shale and less information regarding reserves and decline rates in the Marcellus Shale than in other areas of our operations.

We have no experience in drilling new development wells in the Marcellus Shale. As of the date hereof, we own 19 existing wells on our Java Field properties. Although we have recompleted two of those wells in the Marcellus Shale and the initial results have been promising, we have limited information with respect to the ultimate recoverable reserves and the production decline rate in the Marcellus Shale than we have in our other areas of operation. To the extent that we decide to re-enter and recomplete other existing wells, the wells will be susceptible to mechanical problems such as casing collapse and lost equipment in the wellbore. In addition, the fracturing of the Marcellus Shale will be more extensive and complicated than fracturing the geological formations in our other areas and will require greater volumes of water than conventional gas wells. The management of water and the treatment of produced water from Marcellus Shale wells may be more costly than the management of produced water from other geologic formations. These Marcellus Shale wells may also require horizontal drilling which would further increase our development costs.

We do not own all of the land on which our pipelines are located or on which we may seek to locate pipelines in the future, which could disrupt our operations and growth.

We do not own the land on which our pipelines have been constructed, but we do have right-of-way and easement agreements from landowners, some of which may require annual payments to maintain the agreements and most of which have a perpetual term. New pipeline infrastructure construction may subject us to more onerous terms or to increased costs if the design of a pipeline requires redirecting. Such costs could have a material adverse effect on our business, results of operations and financial condition.

Pending New York legislative initiatives and environmental studies of the effect of hydraulic fracturing may limit our exploration and developmental efforts in the Marcellus Shale in New York.

The New York Department of Environmental Conservation is currently engaged in an environmental review of the impacts of hydraulic fracturing in the Marcellus Shale in New York. Until such time as this review has been completed, New York has imposed a moratorium on high volume hydraulic fracturing. Additionally, bills have been introduced in the New York state legislature that, if enacted, could result in the imposition of a permanent moratorium on hydraulic fracturing operations in the state. The imposition of such a moratorium or any negative outcome of an environmental study leading to restrictions, limitations or prohibitions on hydraulic fracturing in New York could limit our exploration and developmental efforts in the Marcellus shale. This could have a material adverse effect on our business, financial condition and results of operations and our ability to execute our business plan.

If we are unable to continue to retain the services of Randy M. Griffin, Ray L. Unruh, David L. Freeman and/or Rachel L. Dillard or if we are unable to successfully recruit qualified managerial and field personnel having experience in oil and gas exploration, our operations could suffer.

Our success depends to a significant extent upon the continued services of Messrs. Randy M. Griffin, our Chief Executive Officer, Ray L. Unruh, our President, David L. Freeman, our Executive Vice President and Gulf Coast Area Manager, and Ms. Rachel L. Dillard, our Chief Financial Officer. Loss of the services of any of these officers could have a material adverse effect on growth, revenues and prospective business. We currently do not have key-man insurance covering any of these officers. In order to successfully implement and manage our business plan, we will be dependent upon, among other things, successfully recruiting qualified managerial and field personnel having experience in the oil and gas development and production business. Competition for qualified individuals is intense. There can be no assurance that we will be able to find and attract new employees and retain existing employees or that we will be able to find, attract and retain qualified personnel on acceptable terms.

Our directors and executive officers control a significant portion of our stock and, if they choose to vote together, could have sufficient voting power to control the vote on substantially all corporate matters.

As of November 23, 2012, Mesa’s directors and executive officers beneficially owned approximately 37% of its outstanding common stock in the aggregate. Our directors and executive officers, in their capacities as stockholders, may have significant influence over our policies and affairs, including the election of future directors. Should they act as a group, they could have substantial influence on the election of our directors and on substantially all other corporate matters. Furthermore, such concentration of voting power could enable those stockholders to delay or prevent another party from taking control of our company even where such change of control transaction might be desirable to other stockholders.

We may have difficulty managing growth in our business.

Because of the relatively small size of our company, growth in accordance with our long-term business plans, if achieved, will place a significant strain on our financial, technical, operational and management resources. As we increase our activities and the number of projects we are evaluating or in which we participate, there will be additional demands on our financial, technical, operational and management resources. The failure to continue to upgrade our technical, administrative, operating and financial control systems or the occurrence of unexpected expansion difficulties, including the recruitment and retention of required personnel could have a material adverse effect on our business, financial condition and results of operations and our ability to timely execute our business plan.

Risks Relating to Our Industry :

We may not be able to develop oil and gas reserves on an economically viable basis and our reserves and production may decline as a result.

To the extent that we succeed in discovering additional oil and/or natural gas reserves, we cannot assure that these reserves will be capable of production levels that are commercially viable. On a long-term basis, our viability depends on our ability to find or acquire, develop and commercially produce additional oil and natural gas reserves. Without the addition of reserves through acquisition, exploration or development activities, our reserves and production will decline over time as reserves are produced. Our future reserves will depend not only on our ability to develop then-existing properties, but also on our ability to identify and acquire additional suitable producing properties or prospects, to find markets for the oil and natural gas we develop and to effectively distribute our production into our markets.

Future oil and gas exploration may involve unsuccessful efforts, not only from dry holes, but from wells that are marginally productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-downs of connected wells resulting from extreme weather conditions, problems in storage and distribution and adverse geological and mechanical conditions. While we will endeavor to effectively manage these conditions, they cannot be totally eliminated and could diminish our revenue and cash flow levels and result in the impairment of our oil and natural gas interests.

Estimates of oil and natural gas reserves that we make may be inaccurate and our actual revenues may be lower than our financial projections.

We make estimates of oil and natural gas reserves using various assumptions, including assumptions as to oil and natural gas prices, drilling and operating expenses, other capital expenditures, taxes and availability of funds. Some of these assumptions are inherently subjective, and the accuracy of our reserve estimates relies in part on the ability of our management team, engineers and other advisors to make accurate assumptions. We depend to a significant degree on third-party engineering firms to evaluate our properties.

In addition, economic factors beyond our control such as interest rates and commodity prices will also impact the value of our reserves. The process of estimating oil and natural gas reserves is complex and requires us to use a number of assumptions in the evaluation of available geological, geophysical, engineering and economic data for each property. Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves may vary substantially from those we estimate. If actual production results vary substantially from our reserve estimates, this could materially reduce our revenues and result in the impairment of our oil and natural gas interests.

Subject to the above, third-party estimates of our proved reserves as of December 31, 2011, were 3,511,500 BOE compared to 20,498 BOE as of December 31, 2010. This dramatic increase in proved developed reserves is the result of the acquisition of Tchefuncte Natural Resources, LLC (“ TNR ”) and subsequent enhancement and recompletion activities in the Lake Hermitage and Valentine Fields.

We are dependent upon transportation and storage services provided by third parties.

We are dependent upon transportation services provided by barge operators and various interstate and intrastate pipeline companies for the delivery and sale of oil and gas production. The performance of transportation services by interstate pipelines and the rates charged for such services are subject to the jurisdiction of the Federal Energy Regulatory Commission or state regulatory agencies. An inability to obtain transportation services at competitive rates could hinder processing and marketing operations and/or affect our sales margins.

Competitive industry conditions may negatively affect our ability to conduct operations.

We operate in the highly competitive areas of oil and gas exploration, development, and production. We compete with other oil and gas companies for the purchase of leases, most of which have materially greater economic resources than we do. These leases include exploration prospects as well as properties with proved reserves. Factors that affect our ability to compete in the marketplace include:

Our competitors include major integrated oil companies, independent energy companies, and affiliates of major interstate and intrastate pipelines and national and local gas gatherers, many of which possess greater financial, technological and other resources than we do.

Our decision to drill a prospect, whether developmental or exploratory, is subject to a number of factors and we may decide to alter our drilling schedule or not drill at all.

We describe our current properties and our plans to explore these properties in this report. Our proved properties are in various stages of evaluation and range from existing wells to be recompleted in other zones to drilling prospects which may require additional testing, data processing and interpretation. Whether we ultimately drill or continue to drill a prospect may depend on multiple factors, including, but not limited to, the following:

We are constantly gathering data about our prospects, and it is possible that additional information may cause us to alter our drilling schedule or determine that a prospect should not be pursued at all. You should understand that our plans regarding our prospects are subject to change.

Weather, unexpected subsurface conditions, and other unforeseen hazards may adversely impact our ability to conduct business.

There are many operating hazards in exploring for and producing oil and gas, including:

In addition, any of the foregoing may result in environmental damages for which we could be liable. We cannot assure you that we will be able to maintain adequate insurance at rates we consider reasonable to cover our possible losses from operating hazards. The occurrence of a significant event not fully insured or indemnified against could materially and adversely affect our financial condition and results of operations.

A shortage of drilling rigs and other equipment and geophysical service crews could hamper our ability to exploit any oil and gas resources we may acquire.

Because of the level of oil and gas exploration activities in the United States, competition for available drilling rigs and related services and equipment is significant, and these rigs and related items are expensive and sometimes difficult to obtain. We may not be able to procure the necessary drilling rigs and related services and equipment, or the cost of such items may be prohibitive. Our ability to generate revenues from oil and gas production could be hampered as a result of this and our business could suffer.

Drilling wells could result in liabilities, which could endanger our interests in our prospective properties and assets.

There are risks associated with the drilling of oil and natural gas wells, including encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, sour gas releases, fires and spills. The occurrence of any of these events could significantly reduce our future revenues or cause substantial losses, impairing our future operating results. We may become subject to liability for pollution, blow-outs or other hazards. We carry insurance with respect to these hazards as appropriate to our activities, but such insurance has limitations on liability that may not be sufficient to cover the full extent of such liabilities. The payment of such liabilities could reduce the funds available to us or could, in an extreme case, result in a total loss of our properties and assets. Moreover, we may not be able to maintain adequate insurance in the future at rates that are considered reasonable. Oil and natural gas production operations are also subject to all the risks typically associated with such operations, including premature decline of reservoirs and the invasion of water into producing formations.

Decommissioning costs are unknown and may be substantial; unplanned costs could divert resources from other projects.

We are responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we may use for production of oil and gas reserves. Abandonment and reclamation of these facilities and the costs associated therewith is often referred to as “decommissioning.” We have a cash escrow account in place with the State of New York for these potential costs in the Java Field and, commensurate with the closing of the acquisition of TNR, established Site Specific Trust Accounts (“ SSTA ”) with the State of Louisiana to address these costs in our Louisiana fields. The SSTA’s are funded with a combination of cash and letters of credit drawn against our senior credit facility. The cash portion of the accounts was determined by management to be a reasonable estimate of the abandonment costs likely to be incurred in the two years subsequent to closing of the acquisition. If decommissioning is required before economic depletion of these properties or if the actual cost of decommissioning exceeds the value of the escrow account or the reserves remaining at any particular time to cover such decommissioning costs, we may have to draw on funds from other sources to satisfy such costs. The use of other funds to satisfy such decommissioning costs could impair our ability to focus capital investment in other areas of our business.

Our inability to obtain necessary facilities and equipment could hamper our operations.

Oil and natural gas exploration and development activities are dependent on the availability and cost of drilling and related equipment, transportation, power and technical support in the particular areas where these activities will be conducted. To the extent that we conduct our activities in remote areas or “in the water” environments, needed facilities may not be proximate to these areas which will increase our expenses. Demand for limited equipment and facilities or access restrictions may affect the availability of such equipment to us and may delay exploration and development activities. The quality and reliability of necessary facilities may also be unpredictable and we may be required to make efforts to standardize our facilities, which may entail unanticipated costs and delays. Shortages and/or the unavailability of necessary equipment or other facilities will impair our activities, either by delaying our activities, increasing our costs or both.

Our ability to sell natural gas and/or receive market prices for natural gas may be adversely affected by pipeline and gathering system capacity constraints and various transportation interruptions.

The amount of natural gas being produced by us and others could exceed the capacity of the various gathering and intrastate or interstate transportation pipelines currently available in areas where we operate. If that occurs, it will be necessary for new pipelines and gathering systems to be built. Because of the current economic climate, certain pipeline projects that are planned may not be undertaken for lack of financing or other reasons. In addition, capital constraints could limit our ability to build intrastate gathering systems necessary to transport our gas from our properties to interstate pipelines. In such event, we might have to shut in one or more of our wells awaiting a pipeline connection or capacity and/or sell natural gas production at significantly lower prices than those quoted on NYMEX or than we currently project, which would adversely affect our results of operations.

Prices and markets for oil and natural gas are unpredictable and tend to fluctuate significantly, which could reduce profitability, growth and the value of our business.

Oil and natural gas are commodities whose prices are determined based on world demand, supply and other factors, all of which are beyond our control. World prices for oil and natural gas have fluctuated widely in recent years. The average price per barrel was $61.95 in 2009, $79.48 in 2010 and $94.88 in 2011, and the average wellhead price per thousand cubic feet of natural gas was $3.67 in 2009, $4.48 in 2010 and $3.95 in 2011 (source: U.S. Energy Information Administration). We expect that prices will continue to fluctuate in the future. Price fluctuations will have a significant impact upon our revenue, the return from our reserves and on our financial condition generally. Price fluctuations for oil and natural gas commodities may also impact the investment market for companies engaged in the oil and gas industry. Although we have hedges in place for a significant portion of our oil and gas production, decreases in the prices of oil and natural gas could still have a material adverse effect on our consolidated financial condition, the future results of our operations and quantities of reserves recoverable on an economic basis.

Compliance with environmental and other government regulations could be costly and could negatively impact production.

Our operations are subject to numerous federal, state and local laws and regulations governing the operation and maintenance of our facilities and the discharge of materials into the environment or otherwise relating to environmental protection. These laws and regulations may:

Under these laws and regulations, we could be liable for personal injury and clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. We maintain limited insurance coverage for sudden and accidental environmental damages. We do not believe that insurance coverage for environmental damages that occur over time is available at a reasonable cost. Also, we do not believe that insurance coverage for the full potential liability that could be caused by sudden and accidental environmental damages is available at a reasonable cost. Accordingly, we may be subject to liability or we may be required to cease production from some or all of our properties in the event of significant environmental damage.

Factors beyond our control affect our ability to market production and our financial results.

The ability to market oil and gas produced from our wells depends upon numerous factors beyond our control. These factors include:

Additionally, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Also, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially adversely affect our financial performance.

Because of these factors, we may be unable to market all of the oil or gas that we might produce. In addition, we may be unable to obtain favorable prices of the oil and gas that we might produce.

Our insurance may be inadequate to cover liabilities we may incur.

Our involvement in the exploration for and development of oil and natural gas properties may result in our becoming subject to liability for pollution, blow-outs, property damage, personal injury or other hazards. Although we carry insurance in accordance with industry standards to address such risks, such insurance has limitations on liability that may not be sufficient to cover the full extent of such liabilities. In addition, such risks may not, in all circumstances be insurable or, in certain circumstances, we may choose not to obtain insurance to protect against specific risks due to the high premiums associated with such insurance or for other reasons. The payment of such uninsured liabilities would reduce the funds available to us. If we suffer a significant event or occurrence that is not fully insured, or if the insurer of such event is not solvent, we could be required to divert funds from capital investment or other uses towards covering our liability for such events.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating the removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling and production operations to be conducted and no assurance can be given that such permits will be received. Environmental standards imposed by federal, state, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages. We generally maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks. To date we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in the future and this may affect our ability to expand or maintain our operations.

Drilling activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations.

In general, our drilling activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our consolidated results of operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

We believe that our operations comply, in all material respects, with all applicable environmental regulations.

Risks Relating to Armada’s Common Stock

Unless the context requires otherwise, references in this section of “Risk Factors” to the “Company,” “we,” “our,” and “us,” refer to Armada Oil, Inc., and references to stock or shares are to Armada’s common stock.

The value and transferability of shares may be adversely impacted by the limited trading market for our stock on the OTCQB, which is a quotation system, not an issuer listing service, market or exchange. Because buying and selling stock on the OTCQB is not as efficient as buying and selling stock through an exchange, it may be difficult for you to sell your shares or you may not be able to sell your shares for an optimum trading price.

The OTCQB is a regulated quotation service that displays real-time quotes, last sale prices and volume limitations in over-the-counter securities. When fewer shares of a security are being traded on the OTCQB, volatility of prices may increase and price movement may outpace the ability to deliver accurate quote information. Lower trading volumes in a security may result in a lower likelihood of an individual’s orders being executed, and current prices may differ significantly from the price one was quoted by the OTCQB at the time of the order entry. The dealer’s spread (the difference between the bid and ask prices) may be large and may result in substantial losses to the seller of securities on the OTCQB if the common stock or other security must be sold immediately.

The trading price of our common stock historically has been volatile and may not reflect its value.

The trading price of our common stock has, from time to time, fluctuated widely and in the future may be subject to similar fluctuations. The trading price may be affected by a number of factors including the risk factors set forth herein, as well as our operating results, financial condition, general economic conditions, market demand for our common stock, and various other events or factors both in and out of our control. In recent years, broad stock market indices, in general, and smaller capitalization companies, in particular, have experienced substantial price fluctuations. In a volatile market, we may experience wide fluctuations in the market price of our common stock. These fluctuations may have a negative effect on the market price of our common stock.

If securities analysts do not initiate coverage, discontinue any such coverage of our common stock, or publish unfavorable research or reports about our business, this may have a negative impact on the market price of our common stock.

The trading market for our common stock may be affected by, among other things, the research and reports that securities analysts publish about our business and our company. We do not have any control over these analysts. There is no guarantee that securities analysts will cover our common stock. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is the subject of an unfavorable report, our stock price and trading volume would likely decline. If one or more of these analysts ceases to cover our company or fails to publish regular reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

Certain of our stockholders will own in excess of 10% of our issued and outstanding shares of common stock; this ownership interest may preclude other stockholders from influencing significant corporate decisions.

Following the Acquisition, certain of our stockholders will own in excess of 10% of our issued and outstanding shares of common stock; as a result, these stockholders may be able to exercise a controlling influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, and may have significant control over our management and policies. These stockholders’ interests may at times be different from yours. For example, they may support proposals and actions with which you may disagree or which are not in your interests. The concentration of ownership could delay or prevent a change in control of our company or otherwise discourage a potential acquirer from attempting to obtain control of our company, which in turn could reduce the price of our common stock. In addition, these stockholders could use their voting influence to maintain our existing management and directors in office, delay or prevent changes of control of our company, or support or reject other management and Board of Director proposals that are subject to stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions. For detailed information regarding share ownership see the beneficial ownership table included in this prospectus.

Our directors and executive officers control a significant portion of our stock and, if they choose to vote together, could have sufficient voting power to control the vote on substantially all corporate matters.

After giving effect to the Acquisition, our directors and executive officers will beneficially own approximately 33% of our outstanding common stock in the aggregate. Our directors and executive officers, in their capacities as stockholders, may have significant influence over our policies and affairs, including the election of future directors. Should they act as a group, they would have the power to elect all of our directors and to control the vote on substantially all other corporate matters without the approval of other stockholders. Furthermore, such concentration of voting power could enable those stockholders to delay or prevent another party from taking control of our company even where such change of control transaction might be desirable to other stockholders.

We may compete for the time and efforts of our officers and directors.

Certain of the persons who will be officers and/or directors of Armada after the Acquisition are also directors and/or employees of other companies. Except for Messrs. Griffin, Cerna and Unruh, none of our directors anticipates devoting the majority of their time to our matters. Except for Messrs. Griffin and Cerna and Ms. Dillard we currently have no consulting or employment agreements with any of our directors or officers imposing any specific condition regarding their continued employment by us.

We have a large number of restricted shares outstanding, a portion of which may be sold under Rule 144 which may reduce the market price of our shares.

Of the approximately 54,026,822 shares of our common stock that will be issued and outstanding after giving effect to the Acquisition (assuming no exercises of options or warrants of either Armada or Mesa subsequent to the date of this proxy statement/prospectus), a total of 14,964,954 shares will be deemed “restricted securities,” within the meaning of Rule 144 of the Securities Act (“ Rule 144 ”). Absent registration under the Securities Act, the sale of such shares is subject to Rule 144, as promulgated under the Securities Act.

Rule 144 under the Securities Act, which permits the resale, subject to various terms and conditions, of limited amounts of restricted securities after they have been held for a minimum holding period will not immediately apply to our common stock because we were at one time designated as a “shell company.” Pursuant to Rule 144(i), securities issued by a current or former “shell company” that otherwise meet the holding period and other requirements of Rule 144 nevertheless cannot be sold in reliance on Rule 144 until one year after the date on which the issuer filed current “Form 10 Information” (as defined in Rule 144(i)) with the SEC reflecting that it ceased being a shell company, and provided that at the time of a proposed sale pursuant to Rule 144, the issuer has satisfied certain reporting requirements under the Exchange Act. We believe this requirement to file “Form 10 Information” has been satisfied by the filing by Armada of a Current Report on Form 8-K on September 28, 2011. Because, as a former “shell company,” the reporting requirements of Rule 144(i) will apply regardless of holding period, the restrictive legends on certificates cannot be removed except in connection with an actual sale that is subject to an effective registration statement under, or an applicable exemption (including under Rule 144) from the registration requirements of, the Securities Act.

The possibility that substantial amounts of our common stock may be sold under Rule 144 into the public market may adversely affect prevailing market prices for the common stock and could impair our ability to raise capital in the future through the sale of equity securities.

There are options to purchase shares of our common stock currently outstanding.

After giving effect to the Acquisition, we will have options outstanding to purchase an aggregate of approximately 2,094,800 shares of our common stock to various persons and entities. The exercise prices of these options will range from $0.375 to $4.15, of which approximately 947,200 have vested as of the date of this proxy statement/prospectus. If issued, the shares underlying these options would increase the number of shares of our common stock currently outstanding and will dilute the holdings and voting rights of our then-existing stockholders.

There are warrants to purchase shares of our common stock issued which, if exercised, may obligate us to issue a significant number of shares of our common stock at prices below the market price for our common stock, which may cause significant dilution to our existing stockholders.

After giving effect to the Acquisition, there will be a total of up to 7,525,896 warrants issued and outstanding which, if exercised, would obligate us to issue an equal number of shares of our common stock to the holders of those warrants. The warrants are comprised of: (a) 1,174,785 warrants exercisable at a price of $1.25 per share at various dates through December 14, 2013; (b) 2,520,000 warrants exercisable at a price of $2.00 per share through March 30, 2017; (c) 2,520,000 warrants exercisable at a price of $3.00 per share through March 30, 2019; (d) up to 1,111,111 warrants exercisable at a price of $1.25 per share through December 31, 2015; and (e) 200,000 warrants exercisable at a price of $2.50 per share through June 15, 2017 (which will be issued in substitution of existing Mesa warrants). The exercise price of the warrants may be substantially lower than the quoted price for our common stock at the time of exercise. To the extent that we do issue any shares of common stock upon the exercise of any of the warrants, such issuance may cause significant dilution to our existing stockholders.

There are unvested restricted stock awards currently outstanding.

After giving effect to the Acquisition, we will have unvested restricted stock awards outstanding for an aggregate of 348,000 shares of our common stock to various persons. If such awards vest in accordance with their terms and such shares are issued, such shares would increase the number of shares of our common stock currently outstanding and will dilute the holdings and voting rights of our then-existing stockholders.

We have the ability to issue additional shares of our common stock without asking for stockholder approval, which could cause your investment to be diluted.

Our Articles of Incorporation authorize our Board to issue up to 100,000,000 shares of common stock and up to 1,000,000 shares of preferred stock. The power of the Board to issue shares of common stock or warrants or options to purchase shares of common stock is generally not subject to stockholder approval.

Accordingly, any time the Board determines that it is in the best interests of the corporation to issue shares of its common stock, your investment will be diluted.

We may issue preferred stock which may have greater rights than our common stock.

Our Articles of Incorporation authorize our Board to issue up to 1,000,000 shares of preferred stock. Currently no preferred shares are issued and outstanding; however, we can issue shares of our preferred stock in one or more series and can set the terms of the preferred stock without seeking any further approval from our common stockholders. Any preferred stock that we issue may rank ahead of our common stock in terms of dividend priority or liquidation premiums and may have greater voting rights than our common stock. In addition, such preferred stock may contain provisions allowing them to be converted into shares of common stock, which could dilute the value of common stock to current stockholders and could adversely affect the market price, if any, of our common stock.

Our compliance with changing laws and rules regarding corporate governance and public disclosure may result in additional expenses to us which, in turn, may adversely affect our ability to continue our operations.

Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002, new SEC regulations and, in the event we are ever approved for listing on a stock exchange, stock exchange rules, will require an increased amount of management attention and external resources. We intend to continue to invest all reasonably necessary resources to comply with evolving standards, which may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. This could have an adverse impact on our ongoing operations.

Our common stock is a “penny stock,” and because “penny stock” rules will apply, you may find it difficult to sell the shares of our common stock you acquired in this offering.

Our common stock is a “penny stock” as that term is defined under Rule 3a51-1 of the Exchange Act. Generally, a “penny stock” is a common stock that is not listed on a securities exchange and trades for less than $5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stocks in start-up companies are among the riskiest equity investments. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the U.S. Securities & Exchange Commission. The document provides information about penny stocks and the nature and level of risks involved in investing in the penny stock market. A broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser, and obtain the purchaser’s written agreement to the purchase. Many brokers choose not to participate in penny stock transactions. Because of the penny stock rules, there is less trading activity in penny stocks and you are likely to have difficulty selling your shares.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (“ FINRA ”) has adopted rules that require that in recommending an investment to a customer, a broker/dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

We do not intend to pay dividends for the foreseeable future.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. We currently intend to retain future earnings, if any, to support the development and expansion of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize their investment.

Investor relations activities, nominal “float” and supply and demand factors may affect the price of our stock.

We expect to utilize various techniques such as non-deal road shows and investor relations campaigns in order to create investor awareness of us. These campaigns may include personal, video and telephone conferences with investors and prospective investors in which our business practices are described. We may provide compensation to investor relations firms and pay for newsletters, websites, mailings and email campaigns that are produced by third parties based upon publicly-available information concerning us. We will not be responsible for the content of analyst reports and other writings and communications by investor relations firms, or from other publicly available information, not authorized by us. We do not intend to review or approve the content of such analysts’ reports or other materials based upon analysts’ own research or methods. Investor relations firms should generally disclose when they are compensated for their efforts, but whether such disclosure is made or complete is not under our control. In addition, our investors may be willing, from time to time, to encourage investor awareness through similar activities. Investor awareness activities may also be suspended or discontinued which may impact the trading market our common stock.

The SEC and FINRA enforce various statutes and regulations intended to prevent manipulative or deceptive devices in connection with the purchase or sale of any security and carefully scrutinize trading patterns and company news and other communications for false or misleading information, particularly in cases where the hallmarks of “pump and dump” activities may exist, such as rapid share price increases or decreases. We and our stockholders may be subjected to enhanced regulatory scrutiny and the limited trading markets in which our shares may be offered or sold which have often been associated with improper activities concerning penny-stocks, such as the OTC Bulletin Board, the OTCQB or Pink Sheets. Securities regulators have often cited thinly-traded markets, small numbers of holders, and awareness campaigns as components of their claims of price manipulation and other violations of law when combined with manipulative trading, such as wash sales, matched orders or other manipulative trading timed to coincide with false or touting press releases. There can be no assurance that our or third parties’ activities, or the small number of potential sellers or small percentage of stock in the “float,” or determinations by purchasers or holders as to when or under what circumstances or at what prices they may be willing to buy or sell stock will not artificially impact (or would be claimed by regulators to have affected) the normal supply and demand factors that determine the price of the stock.

The Consent Solicitation

This section contains information for Mesa stockholders about the Consent Solicitation that Mesa will be conducting to allow its stockholders to consider and consent to a resolution approving the Acquisition Agreement. Mesa is mailing this proxy statement/prospectus to its stockholders on or about [•], 2013. Together with this proxy statement/prospectus, Mesa is sending a notice of the Consent Solicitation and a form of consent that Mesa’s Board of Directors is soliciting for use pursuant to the Consent Solicitation.

Date and Duration

Mesa will be soliciting the consent of its stockholders beginning on [•], 2013, through the earliest date on which it receives consents representing the majority of its issued and outstanding shares as of November 23, 2012. Mesa will not be holding a formal meeting of its stockholders . We do not expect representatives of GBH CPAs, PC, Mesa’s independent registered public accounting firm, to be available to respond to questions in connection with Mesa’s solicitation of written consents of stockholders relating to the matters referred to below.

Matters to be Considered

In the Consent Solicitation, Mesa stockholders will be asked to consider and consent to a resolution approving:

Consents

If you are a stockholder of record (that is, you hold stock certificates registered in your own name), you may consent by completing and returning the written consent accompanying this proxy statement/prospectus or by telephone or through the Internet by following the instructions described on the written consent attached hereto. If your shares are held through a bank, broker, trustee or other nominee (that is, if your shares are held beneficially in “street name”), you will receive separate voting instructions from your bank, broker, trustee or other nominee with your proxy materials. Although most banks, brokers, trustees and other nominees offer telephone and Internet voting, availability and specific processes will depend on the specific nominee’s voting arrangements. You can revoke a consent at any time before Mesa has received a sufficient number of consents to approve the proposals set forth herein or the Consent Solicitation is completed by submitting a properly executed consent of a later date by mail, telephone or Internet in the manner described above.

If your shares are held beneficially in street name, you should follow the instructions of your bank, broker, trustee or other nominee regarding the revocation of written consents.

All shares represented by valid consents that Mesa receives through this solicitation, and that are not revoked, will be counted either in favor or against the Acquisition in accordance with the instructions on holder’s written consent. Mesa is not holding a meeting of its stockholders, so there will be no “yea” or “nay” vote, as such. However, because the proposal requires the affirmative consent of the holders of a majority of Mesa’s outstanding common stock, simply not delivering an executed written consent in favor of the proposals will have the same practical effect as a vote against the proposals would have if they were being considered at a meeting of stockholders.

Solicitation of Consents

Mesa will bear the entire cost of soliciting written consents from its stockholders, except that Armada and Mesa will share equally the costs of printing this proxy statement/prospectus. In addition to solicitation of written consents by mail, Mesa will request that banks, brokers, trustees and other record holders send written consents and proxy material to the beneficial owners of Mesa common stock and secure their voting instructions, if necessary. Mesa will reimburse the record holders for their reasonable expenses in taking those actions.

Record Date

Mesa’s Board of Directors has fixed the close of business on November 23, 2012, as the record date for determining the Mesa stockholders entitled to receive notice and the opportunity to sign a consent pursuant to the Consent Solicitation. At that time, 84,330,477 shares of Mesa common stock were outstanding, held by approximately 159 holders of record.

Required Vote

Because Mesa is seeking stockholder approval by soliciting written consents, each proposal must receive a number of consents representing at least a majority of the outstanding shares of Mesa’s common stock entitled to submit consents to be approved. You are urged to send in your consent. Only Mesa stockholders of record as of the close of business on the Record Date will be entitled to sign a written consent pursuant to the Consent Solicitation. You are entitled to one vote for each full share of Mesa common stock you held as of the Record Date.

Mesa’s Board of Directors urges Mesa stockholders to complete, date and sign the accompanying written consent and return it promptly in the enclosed postage paid envelope, or to consent by telephone or through the Internet.

Abstentions, failures to consent and broker non-consents will have the same effect as a vote against approval of the Acquisition Agreement. A broker is not permitted to consent on the proposal to approve the Acquisition Agreement without instruction from the beneficial owner of the Mesa shares held by the broker.

Consents of Shares Owned by Directors and Executive Officers

As of the record date, directors and executive officers of Mesa and their affiliates owned (directly or indirectly) and had the right to consent approximately 31,215,551 shares of Mesa common stock, representing approximately 37% of the outstanding shares of Mesa common stock. Randy M. Griffin, Mesa’s Chairman of the Board and Chief Executive Officer, Ray L. Unruh, its President, Secretary, and Director, Rachel L. Dillard, its Chief Financial Officer, David L. Freeman, its Executive Vice President - Gulf Coast Area Manager, James J. Cerna, Jr., its Director, Kenneth T. Hern, its Director, and Fred B. Zaziski, its Director, in their capacities as stockholders of Mesa, have agreed to consent in favor of the Acquisition. These stockholders have also agreed to vote their shares against alternative transaction proposals and not to sell or transfer their shares. The voting agreements will terminate if the Acquisition Agreement terminates.

Consenting by Telephone or Through the Internet

Many stockholders of Mesa have the option to submit their written consents or voting instructions by telephone or electronically through the Internet instead of submitting written consents by mail on the enclosed written consent. Please note that there are separate arrangements for using the telephone and the Internet depending on whether your stock certificates are registered in your name or in the name of a brokerage firm or bank. You should check your written consent or the voting instruction form forwarded by your broker, bank, trustee or other nominee of record to see which options are available.

Mesa stockholders of record (those holding stock certificates registered in their own names) may submit consents:

Please note that although there is no charge to you for voting your consent by telephone or electronically through the Internet, there may be costs associated with electronic access such as usage charges for Internet service providers and telephone companies. Mesa does not cover these costs; they are solely your responsibility.

Delivery of Proxy Materials

To reduce the expenses of delivering duplicate proxy materials to Mesa stockholders, Mesa may rely on SEC rules that permit it to deliver only one proxy statement/prospectus to multiple stockholders who share an address unless Mesa receives contrary instructions from any stockholder at that address. If you share an address with another stockholder and have received only one proxy statement/prospectus, and if you are a stockholder of record (that is, you hold stock certificates registered in your own name).you may call Mesa at 972-490-9595 or write Mesa as specified below to request a separate copy of this document and it will promptly send it to you at no cost to you:

Mesa Energy Holdings, Inc.

5220 Spring Valley Road, Suite 615

Dallas, Texas 75254

Attn: Linda Smith

If your shares are held through a bank, broker, trustee or other nominee (that is, if your shares are held beneficially in “street name”), you should contact your bank, broker, trustee or other nominee.

Recommendations of Mesa’s Board of Directors

Mesa’s Board of Directors has determined that the Acquisition Agreement and the strategic business combination contemplated thereby are advisable and in the best interests of Mesa stockholders and has unanimously approved and adopted the Acquisition Agreement. Mesa’s Board of Directors unanimously recommends that Mesa stockholders “CONSENT TO” the approval of the Acquisition Agreement.

Information About the Companies

Armada Oil, Inc.

10777 Westheimer Road

Suite 1100

Houston, Texas 77042

Based in Houston, Texas, Armada Oil, Inc. is an independent oil and gas company focused on discovering, acquiring and developing multiple objective onshore oil and natural gas resources in prolific and productive geological formations in North America. Armada Oil, Inc. controls strategic acreage positions in and around the Laramie and Hanna Basins in Southern Wyoming that includes a nearly contiguous 26,000+ acre lease position near existing infrastructure in the liquids-rich Niobrara formation and a footprint in the Eagle Ford shale play in Texas.

Additional information about Armada Oil, Inc. and its subsidiaries is available throughout this proxy statement/prospectus. See “Background of Armada” beginning on page 84.

Mesa Energy Holdings, Inc.

5220 Spring Valley Road

Suite 615

Dallas, Texas 75254

Headquartered in Dallas, TX, Mesa Energy Holdings, Inc. is a growth-oriented Exploration and Production company with a definitive focus on growing reserves and net asset value per share, primarily through the acquisition and enhancement of high quality producing properties and the development of highly diversified developmental drilling opportunities. The company currently owns producing oil and natural gas properties in Plaquemines and Lafourche Parishes in Louisiana as well as producing and developmental properties in Garfield and Major Counties, OK and Wyoming County, NY. After the Acquisition is completed, Mesa Energy Holdings, Inc. will file a Certificate of Dissolution with the Secretary of State of Delaware and its corporate existence will cease.

Additional information about Mesa and its subsidiaries is available throughout this proxy statement/prospectus. See “Background of Mesa” beginning on page 97.

Mesa Energy, Inc.

c/o Mesa Energy Holdings, Inc.

5220 Spring Valley Road

Suite 615

Dallas, Texas 75254

Mesa Energy, Inc. is a wholly owned subsidiary of Mesa Energy Holdings, Inc. through which it conducts its operations. Upon completion of the Acquisition, Mesa Energy, Inc., and its subsidiaries will become wholly owned subsidiaries of Armada Oil, Inc.

The Acquisition

The following discussion contains material information about the Acquisition. The discussion is subject, and qualified in its entirety by reference, to the Acquisition Agreement attached as Appendix A to this proxy statement/prospectus. You are urged to read carefully this entire proxy statement/prospectus, including the Acquisition Agreement included as Appendix A, for a more complete understanding of the Acquisition. The information about each of Mesa and Armada included in this section is intended to be a summary and certain important information may be missing. For additional information about Armada and Mesa see “Where You Can Find More Information” beginning on page 168.

Armada’s and Mesa’s Boards of Directors have approved the Acquisition Agreement. The Acquisition Agreement provides that (i) immediately prior to the Acquisition, Mesa will assign to MEI, and MEI will assume, all of Mesa’s pre - Acquisition assets and liabilities as set forth in the Acquisition Agreement, and (ii) Armada will purchase from Mesa 100% of the issued and outstanding shares of MEI. Following the Acquisition, (i) MEI and its subsidiaries will become wholly owned subsidiaries of Armada and will continue their corporate existence under the laws of their states of incorporation. MEI will continue under the name Mesa Energy, Inc., or such other name as Armada may specify. As soon as practicable thereafter (i) Mesa will distribute to each holder of record of Mesa common stock as of the close of business on the business day immediately preceding the closing date of the Acquisition, the Acquisition Consideration received from Armada that each Mesa stockholder is entitled to receive, and (ii) Mesa will file a Certificate of Dissolution with the Secretary of State of Delaware and it will be dissolved.

The Acquisition Consideration

As consideration for the Acquisition, Mesa will receive from Armada, for each share of Mesa common stock outstanding as of the close of business on the business day immediately preceding the closing date of the Acquisition (other than shares owned by Mesa as treasury stock), and will then distribute to the holder of record of each such share at that time, 0.40 newly-issued shares of Armada common stock. Shares of Armada common stock, other than the Acquisition Consideration, which are issued and outstanding at the completion of the Acquisition will remain outstanding and those stock certificates will be unaffected by the Acquisition. Shares of Armada common stock will continue to trade on the OTCQB under the symbol “ AOIL ” following the Acquisition.

Background to the Acquisition

On July 16, 2012, Armada entered into an engagement agreement with C. K. Cooper pursuant to which C. K. Cooper provided Armada with investment banking services in connection with a possible capital formation. During the week of August 13, 2012 representatives of C. K. Cooper and Mr. James J. Cerna, Jr., the Chief Executive Officer of Armada and a Director of each of Armada and of Mesa engaged in preliminary and general discussions and analysis relating to impact of possible strategic mergers or acquisitions. During these discussions, the possibility of a business combination between Armada and Mesa was raised. The combination was discussed in general terms of how it could solve certain challenges for each company: Mesa could use a public markets-focused management team member and an additional asset with potentially significant upside, Armada could use steady production and an experienced operations team, while both companies needed more aggregate size in order to efficiently utilize the benefits of being public entities.

C. K. Cooper is a leading boutique investment bank that offers in-depth research, trading and investment banking capabilities and maintains a strong expertise in the exploration and production sub-sector of the energy market, with over 16 years of experience within the oil and gas sector. Armada and Mesa ultimately selected C. K. Cooper to assist in the potential business combination between the two companies because of their extensive knowledge of the energy market and their involvement in dozens of transactions in this sector over the past two years, as documented in their presentations, as well as because of their familiarity with both companies’ areas of operations and specific assets.

On August 23, 2012, after composing a brief analysis of the potential merits of such a business combination, C. K. Cooper sent a short presentation to Mr. Cerna describing what C. K. Cooper believed to be the pros and cons for each of Armada and Mesa in a business combination.

On August 27, 2012, Mr. Cerna shared the presentation and concept with Randy M. Griffin, Chairman and Chief Executive Officer of Mesa. It was concluded that the possibility of a business combination between Armada and Mesa merited further analysis. Messrs. Cerna and Griffin determined that the best and most cost effective course of action would be for a small group of members of each board to meet in C.K. Cooper’s offices in Irvine, CA in order to further evaluate the potential transaction. Concern about the need for the discussions to be highly confidential was a factor in limiting the number of people involved in the initial meeting.

On September 13, 2012, C. K. Cooper met with Mr. Griffin and Ray Unruh, President and a Director of Mesa, Mr. Cerna and David Moss, a Director of Armada, as well as Kenneth Hern, a Director of both companies, at C. K. Cooper’s corporate office in Irvine, California. C. K. Cooper presented a detailed business combination presentation, with theoretical terms, to show the potential quantitative and qualitative merits of a combination. Everyone in attendance came to a general consensus that a business combination would be beneficial for both companies and that C. K. Cooper should make a formal presentation to the full Boards of Directors of each company. A general discussion of a possible exchange rate range took place at the September 13, 2012, meeting in Irvine, CA, and a range of possible values was discussed then and in subsequent telephone conversations between Messrs. Griffin and Cerna. The range of possible exchange rates that was discussed was between 0.325 and 0.35 shares of Armada common stock for each share of Mesa common stock. The proposed management and board structure for the combined company was also discussed to some extent at this meeting.

On September 18, 2012, Mr. Griffin informed the remaining two members of the Mesa board of the proposed transaction and provided a set of information for their review. September 28, 2012, was set as the date for a formal board presentation.

C. K. Cooper’s presentations to Armada’s and Mesa’s boards referenced below, each of which were substantially the same except for updating certain share price information for accuracy, included an overview of each of Mesa and Armada, including their areas of operations, their financial statements and capital structure as reported in each company’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K, their net asset value based upon their acreage currently under control and a liquidity and trading analysis based upon each company’s share performance over the past six months.

In their presentation C. K. Cooper indicated that Armada currently has a management team with a successful track record of running public oil and gas companies and the availability of a strong engineering team with over 40 years of experience in the region. In addition, Armada has relationships with larger oil and gas companies that could supply additional acreage on a farm out or joint venture basis. Armada, however, lacks sufficient size to raise capital in the public markets. Additionally, the presentation pointed to the fact that Armada has under its control a significant acreage position with conventional drilling opportunities in the Casper Formation, as well as upside unconventional potential in the Niobrara Formations,

C. K. Cooper’s presentation also explained that Mesa’s management brings over 35 years of oil and gas exploration and production experience and has had success in generating positive cash flowing assets and reserves, but that Mesa needed to alter its image in order to reposition itself for full market recognition. Additionally, the presentation noted that Mesa’s current approach to develop the company is to increase its production within its existing acreage position and to identify and develop low-risk/high-value areas in South Louisiana, as well as to explore the company’s Mississippian Lime opportunities.

After discussing each of Armada and Mesa as currently situated, the presentation then described some of the potential benefits of a business combination for the combined entity, including:

The presentation then set forth some of the potential benefits of a business combination for Armada, including:

The presentation then described some of the potential benefits of a business combination for Mesa, including:

The presentation then set forth certain comparative market valuations comparing each of Armada, Mesa and the combined entity after the completion of the proposed business combination with other small oil and gas companies, such as Abraxas Petroleum Corp., American Standard Energy Corp., Callon Petroleum Co., Saratoga Resources Inc. and Synergy Resources Corp. Specifically, the presentation compared the market capitalization, enterprise value, mean cash flow per share (CFPS), mean earnings before interest, taxation, depreciation and amortization (EBITDA) and the present value of estimated future oil and gas revenues, net of estimated direct expenses, discounted at an annual discount rate of 10% (PV10) as publicly reported by each company. Each of these measures were presented on an actual basis for fiscal 2011 and on a projected basis for fiscal 2012 and 2013 by utilizing mean analyst estimates.

This valuation showed that, subject to C. K. Cooper’s assumptions regarding the capitalization of the combined entity, the inferred value of the combined entity could be greater than the current combined enterprise value of Armada and Mesa if the proposed business combination took place and was able to address a market inefficiency currently affecting each of Armada and Mesa, in part due to the size of both companies and the fact that they are not currently listed on a national exchange, that is causing both companies to receive a lesser valuation multiple than their peers. The presentation also outlined how the combined entity would potentially be able to up-list onto a national exchange, along with the steps that would have to be taken by each of Armada and Mesa to accomplish the proposed business combination and a potential timeline of events.

In addition, C. K. Cooper’s presentation outlined what a potential twelve month strategy could look like for the combined entity, including a potential up-listing onto a national exchange, beginning investor outreach and possible capital formations that could now be accomplished with the larger entity. A potential timeline of these events was also described. A snapshot was shown of the capitalization the combined entity could have, utilizing both companies’ publicly reported balance sheets and assuming additional capital formation took place after the proposed business combination was completed to enable the acceleration of both companies’ development plans. Based on this potential capitalization, a net asset valuation showed the projected value of the combined entity twelve months after the proposed business combination closes, based on Armada and Mesa’s internal projections of the production they could have at that time.

A telephonic conference was held on September 24, 2012, in which C. K. Cooper addressed the full Board of Directors of Armada regarding the details of the proposed transaction. C. K. Cooper made a detailed presentation outlining how Armada and Mesa could benefit from a business combination. The Board of Directors inquired on multiple levels about how the combined company would be positioned compared to pre-combined Armada, specifically from the standpoint of current and future stockholders, as well as how the business combination would position Armada to qualify for a potential listing of its common stock on a national securities exchange. The Board of Directors also asked detailed questions about Mesa, including about its reserves estimates and its reserves engineer, existing Mesa debt, its current borrowing capabilities based on its assets, as well as details regarding the Mississippi Lime acreage that Mesa has under lease. In addition, capital allocation of the combined company and the timing of the proposed business combination were also discussed. All of the information presented to Armada’s Board of Directors was based upon publicly available information disclosed in Mesa’s quarterly and annual reports. After Armada’s Board of Directors agreed that consideration of the proposed transaction should be pursued, Mesa and Armada entered into a mutual confidentiality agreement dated September 25, 2012.

On September 28, 2012, C. K. Cooper delivered a presentation and discussion about the proposed business combination to the full Board of Directors and management of Mesa in Dallas, Texas. Mesa’s Board of Directors asked questions about the different accounting methods of each company and which one the combined company would use. Mesa’s Board of Directors also asked about the land and title work Armada has done, the option and purchase agreement Armada has to acquire additional acreage in Wyoming and details about its anticipated joint venture partner(s). The proposed go-forward strategy of the combined company was discussed, along with how the capital would be allocated among Mesa and Armada’s properties. Mesa’s Board of Directors also inquired as to how potential investors would view the combined company with its more balanced asset base and how quickly the company could qualify for a listing on a national securities exchange. After additional discussion and deliberation on the matter, Mesa’s Board of Directors agreed that Mesa should continue to pursue the proposed transaction.

On September 28, 2012, Armada and Mesa executed a joint agreement to engage C. K. Cooper as joint financial advisor for the proposed business combination. Additionally, Armada and Mesa, and their respective legal counsel, began drafting a non-binding Letter of Intent (the “ LOI ”) setting forth the proposed terms of the business combination and on October 1, 2012, both Armada and Mesa executed the LOI. A proposed exchange rate, subject to due diligence, was formally proposed by Armada in the non-binding section of the letter of intent, and was accepted by Mesa.

Mesa’s Board of Directors considered the possibility of a conflict of interest on the part of C. K. Cooper, given that Armada had previously retained C. K. Cooper to provide investment banking services, but concluded that, given the non-competitive nature of the business operations of the two companies, the high cost of hiring a separate financial advisor and the duty of C.K. Cooper to fairly deal with both sides, having a separate financial advisor was not warranted. In addition, the Board contemplated that a separate expert would be retained by the Mesa Board to render a fairness opinion.

In its capacity as financial advisor, C. K. Cooper agreed to, upon request:

The Companies agreed to jointly pay C. K. Cooper, as compensation for its services under the engagement,

The number of shares to be issued as part of the Transaction Fee is to be determined by dividing the transaction value and by the inferred price per share utilized in the transaction.

In addition, the Companies agreed to reimburse C. K. Cooper for all reasonable out-of- pocket expenses (including any reasonable fees and disbursements of C. K. Cooper's outside advisers) incurred in connection with the engagement, up to a maximum of $10,000 in any calendar month or $50,000 in the aggregate.

Further, the Companies agreed that if a business combination is successfully completed, C. K. Cooper will have a right of first refusal to act as the lead placement agent or lead underwriter, as the case may be, or such other role as necessary and appropriate, for at least 50% of the value of any public or private offering of equity securities (with certain exceptions), at fees, and upon terms, customary and consistent with industry practice.

The Companies or C. K. Cooper may terminate the engagement after November 28, 2012, upon 15 days’ advance notice. In the event that C. K. Cooper terminates the engagement, C. K. Cooper shall not be entitled to any further payment from this engagement as set forth above.

The Companies agreed to indemnify, subject to customary conditions and limitations C. K. Cooper, any controlling person of C. K. Cooper and each of their respective directors, officers, employees, agents, affiliates and representatives against any losses, claims, damages, expenses or liabilities to which an indemnified party may become liable arising out of or relating to the engagement, unless such liabilities resulted from the negligence, willful misconduct, or breach of the engagement agreement by any indemnified party.

On October 3, 2012, Armada and Mesa both issued a press release after market close announcing the signing of the LOI to pursue the proposed business combination. The LOI was also filed by each company with the SEC as an exhibit to a Current Report on Form 8-K. The LOI called for a proposed exchange ratio of 0.325 shares of Armada common stock for every share of Mesa common stock and outlined the proposed management and Board structures, the engagement of C. K. Cooper, and the date/time of a joint investor presentation regarding the proposed transaction.

On October 4, 2012, Armada and Mesa conducted a telephonic joint investor presentation regarding the proposed business combination and laid out the primary drivers and vision behind the proposed transaction. The presentation covered the background, operations, financial statements and strategy behind each company individually as well as of the proposed combined company. The combination terms, go-forward strategy and proposed listing on a national securities exchange were also discussed.

Beginning on October 4, 2012, Armada and Mesa, and their respective legal counsel, began to draft a definitive agreement for the proposed business combination and began conducting the necessary due diligence required to finalize the agreement. After discussions between the companies, their legal counsel and their respective auditors and tax advisors, it was agreed that the business combination be structured, to the extent possible, to ensure that it would qualify as a tax-free reorganization.

Mesa formally retained Moyes & Co. by written agreement on October 8, 2012, to render a fairness opinion regarding the proposed Acquisition to Mesa’s Board of Directors.

Mesa agreed to pay Moyes & Co. for its services on an hourly basis as follows:

Moyes & Co. agreed to use best efforts to complete the fairness opinion under a budget for professional fees of $50,000.00.

In addition, Mesa agreed to pay Moyes & Co. a one-time charge of $10,000.00 upon issuance of the fairness opinion.

Mesa also agreed to pay Moyes & Co.’s out-of-pocket expenses, including reasonable third-party expenses.

As of February 19, 2013, $60,086 of hourly fees, the $10,000 flat fee and $166 of expenses have been paid to or invoiced by Moyes & Co. Additional fees and expenses may be incurred.

On November 6, 2012, as a result of extensive due diligence and the findings of Moyes & Co., Mr. Griffin concluded that he believed that an exchange ratio of 0.40 would better represent the collective interests of Mesa shareholders and proposed a revised exchange ratio to Mr. Cerna. After a telephonic meeting of the Armada board and additional negotiations between Mr. Griffin and Mr. Cerna, Armada agreed in principle to increase the exchange ratio to 0.40 shares of Armada common stock for every share of Mesa common stock.

On November 13, 2012, Moyes & Co. delivered a written fairness opinion to Mesa’s Board of Directors that, as of that date and based upon and subject to the considerations and limitations set forth in its written fairness opinion, its work described in its written fairness opinion and other factors it deemed relevant, the consideration to be received by the holders of Mesa common stock is fair from a financial point of view to such holders. The fairness opinion related to the fairness, from a financial point of view, of the transaction for Mesa stockholders, including the estimated value of Armada’s stock. (The full text of the written fairness opinion of Moyes & Co., which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the fairness opinion, is included in Appendix D to this proxy statement/prospectus. Holders of Mesa common stock should read the fairness opinion completely and carefully for a description of the procedures followed, assumptions made, matters considered and limitations on the review undertaken. Moyes & Co. provided its fairness opinion for the information of Mesa’s Board of Directors in connection with the evaluation of the Acquisition. Moyes & Co.’s fairness opinion is not intended to be and does not address any other aspect of the proposed Acquisition. Moyes & Co. is not obligated to update its fairness opinion for, or otherwise consider, events occurring after the date of the fairness opinion.)

On November 13, 2012, the Boards of Directors of Armada and Mesa met separately, and each unanimously approved the Acquisition Agreement and the transactions contemplated thereby. On November 14, 2012, the Chief Executive Officers of each of the companies executed the Acquisition Agreement.

Mesa did not consider any alternatives to a business combination with Armada. No other proposals were made by any other party, either before or after the LOI was signed.

Mr. Griffin and Mr. Cerna, in their capacities as Chief Executive Officers of the respective companies, were responsible for negotiating the terms of the transaction. They each had extensive input from other directors of their respective companies and members of their staffs in the evaluation of each company’s properties and the proposed transaction. Mr. Cerna recused himself from all votes regarding the transaction by both boards. Mr. Hern was very supportive of the idea in a general sense but was not directly involved in the negotiations and recused himself from board votes on both sides. Mr. Cerna and Mr. Hern were not involved in the subsequent due diligence process.

Armada’s Reasons for the Acquisition

Armada’s Board of Directors believes that the Acquisition is in the best interest of Armada and its stockholders and approved the Acquisition Agreement after it consulted with Armada’s senior management with respect to strategic and operational matters and with its legal advisors with respect to the Acquisition Agreement and related issues. In making its determination regarding the Acquisition, Armada Board of Directors discussed a number of factors including:

Armada’s Board of Directors believes that the Acquisition is more favorable to Armada’s stockholders than continuing to operate Armada as an independent company because of the uncertain returns to their stockholders in light of Armada’s business, operations, financial condition, strategy and prospects. Armada’s Board of Directors recognized, in particular, that Armada would continue to face significant challenges in executing its strategy of focusing on the development of its current acreage position. Armada’s Board of Directors concluded that, because of Mesa’s access to currently producing properties and Mesa’s strong operating team with a history of identifying quality oil acquisitions, the combined company would have the critical mass to help raise capital efficiently, facilitate liquidity and spur rapid growth, thereby creating a solid platform to recognize value for stockholders.

In determining whether to approve the Acquisition Agreement and the Acquisition, Armada’s Board of Directors, among other things:

Armada’s Board of Directors, in consultation with its legal counsel, financial advisors and accounting advisors, also considered a variety of risks and other potential negative factors concerning the Acquisition Agreement and the Acquisition and the material negative factors considered by Armada’s Board of Directors include:

The foregoing discussion of the factors considered by Armada’s Board of Directors is not exhaustive, but Armada believes it includes many of the material factors considered by Armada’s Board of Directors in its consideration of the Acquisition, the Acquisition Agreement and the transactions contemplated thereby. After considering these factors, Armada’s Board of Directors concluded that the considerations in favor of the Acquisition, the Acquisition Agreement and the transactions contemplated thereby outweighed the negative factors. In view of the wide variety of factors considered, Armada’s Board of Directors did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual directors may have assigned different weights to various factors. Armada’s Board of Directors unanimously approved and adopted the Acquisition Agreement and the strategic business combination contemplated thereby and concluded them to be in the best interests of Armada’s stockholders based upon the totality of the information presented to and considered by it.

Mesa’s Reasons for the Acquisition

Mesa’s Board of Directors believes that the Acquisition is in the best interest of Mesa and its stockholders and approved the Acquisition Agreement after it consulted with Mesa’s senior management with respect to strategic and operational matters and with its legal advisors with respect to the Acquisition Agreement and related issues. In making its determination regarding the Acquisition, Mesa’s Board of Directors discussed a number of factors including:

Mesa’s Board of Directors believes that the Acquisition is more favorable to Mesa’s stockholders than continuing to operate Mesa as a separate company because of the uncertain returns to their stockholders in light of Mesa’s recent stock price trends. Mesa’s Board of Directors recognized, in particular, that without more critical mass, additional diversification into unconventional resource plays, a listing on a national securities exchange and increased access to capital, Mesa is likely to continue to face significant challenges in executing its business strategy. Although the development of its current acreage position in the Mississippian Limestone is progressing well, Mesa’s Board of Directors concluded that Armada’s access to a large strategic acreage position in the Niobrara shale, a high profile oil and gas play in which many major oil and gas companies have acquired large acreage positions, would address the diversification issues outlined above and serve to accelerate growth in a positive and strategic manner. Other considerations included Armada’s sound, proven management team with prior experience in building a public company and the fact that the combined company is likely to have the critical mass to obtain a listing on a national securities exchange, raise capital more efficiently, facilitate liquidity and spur rapid growth, thereby creating a solid platform to recognize value for stockholders.

Mesa’s Board of Directors considered all the terms and conditions of the Acquisition Agreement, including:

Mesa’s Board of Directors also considered a variety or risks and other potential negative factors concerning the Acquisition Agreement and the Acquisition and the material negative factors considered by Mesa’s Board of Directors include:

The foregoing discussion of the factors considered by Mesa’s Board of Directors is not exhaustive, but Mesa believes it includes all of the material factors considered by Mesa’s Board of Directors in its consideration of the Acquisition, the Acquisition Agreement and the transactions contemplated thereby. After considering these factors, Mesa’s Board of Directors concluded that the considerations in favor of the Acquisition, the Acquisition Agreement and the transactions contemplated thereby outweighed the negative factors. In view of the wide variety of factors considered, Mesa’s Board of Directors did not find it practicable to quantify or otherwise assign relative weights to the foregoing factors. In addition, individual directors may have assigned different weights to various factors. Mesa’s Board of Directors unanimously approved and adopted the Acquisition Agreement and the strategic business combination contemplated thereby, concluded them to be in the best interests of Mesa’s stockholders and recommended that the stockholders approve the Acquisition Agreement, based upon the totality of the information presented to and considered by it.

Fairness Opinion

Mesa retained Moyes & Co. solely to provide a fairness opinion to Mesa’s Board of Directors in connection with the Acquisition. Mesa instructed Moyes & Co. to evaluate the fairness, from a financial point of view, of the Acquisition Consideration to be paid to the holders of Mesa common stock in the Acquisition. The text of the written fairness opinion of Moyes & Co., which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the fairness opinion, is included in Appendix D to this proxy statement/prospectus. Holders of Mesa common stock should read the fairness opinion completely and carefully for a description of the procedures followed, assumptions made, matters considered and limitations on the review undertaken. Moyes & Co. provided its fairness opinion for the information of Mesa’s Board of Directors in connection with the evaluation of the Acquisition. Moyes & Co.’s fairness opinion is not intended to be and does not address any other aspect of the proposed Acquisition. Moyes & Co. is not obligated to update its fairness opinion for, or otherwise consider, events occurring after the date of the fairness opinion.

Moyes & Co. is a firm that provides advice on oil and gas and other energy investments domestically and internationally with offices in Dallas, Houston, and London. It is in the business of providing fair market valuations and appraisals for exploration and production companies and assets and assists in asset sales and farm-out transactions. Based on information provided by Moyes & Co., its professional team has practical operating and technical experience in domestic and international energy projects, and the senior management of the firm each have over 30 years of industry experience and are registered engineers and geologists with considerable commercial and valuation experience. The firm manages an energy database that includes data on 36,700 companies; 61,000 projects; 4,162 transactions of global assets and corporations; technical, geologic, and engineering information; capital and operating cost data; and contract and foreign tax attributes.

Mesa selected Moyes & Co. to render the fairness opinion based on the significant oil and gas transactional experience of Moyes & Co. described above, Moyes & Co.’s location in Dallas, which we believed would make the process more efficient, an interview by Mr. Griffin of one of the partners of Moyes & Co. and discussion with the members of Mesa’s Board members and management.

To Mesa’s knowledge, there was no material relationship that existed during the past two years or is mutually understood to be contemplated between Moyes & Co., its affiliates, and/or unaffiliated representatives and Mesa or its affiliates, other than the engagement to provide the fairness opinion as described herein.

Moyes & Co. did not recommend the amount of Acquisition Consideration to be paid to the holders of Mesa common stock in the Acquisition, which was determined solely by negotiations between Mesa and Armada.

The following information was furnished by Moyes & Co. In arriving at its opinion, Moyes & Co.:

Mesa does not currently plan to obtain an updated fairness opinion, because Mesa believes that there has been no material change in the asset base, business, prospects, financial condition or results of operations of either company that would warrant an updated opinion.

The following is a summary of the material financial analyses performed by Moyes & Co. in connection with the preparation of its Fairness Opinion. The preparation of analyses and a fairness opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. Therefore, this summary does not purport to be a complete description of the analyses performed by Moyes & Co.

Moyes & Co. made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor considered by it. Accordingly, the analyses described below must be considered as a whole, and considering any portion of the analyses, without considering all analyses together, could create a misleading or incomplete view of the processes underlying Moyes & Co.’s analyses and opinion. Except as otherwise noted, the following quantitative information, to the extent that it is based upon market data, is based upon market data as it existed on or before November 9, 2012, and is not necessarily indicative of current market conditions.

Financial Analyses

The value for both Mesa and Armada are principally based on an asset up approach, starting from a technical value of each company’s individual assets, derived from a discounted cash flow analysis for the producing properties and either a farm-in premium or an acreage value for the undeveloped acreage, plus adjustments for working capital and debt.

Assets usually trade at a discount to their risked technical value and the discount is dependent on the factors such as reserves uncertainty, technical and operational risks, the effect of operatorship, portfolio effects/concentration risk and the state of the geographical markets for each of the assets. Actual transactions for producing properties are benchmarked relative to their risked technical value to determine the appropriate discount factors of the risked technical value for each reserve category to arrive at the value for a given transaction.

Proved Developed Producing Reserves trade at between 100% and 60% of their before tax PV10, Proved Non-Producing Reserves trade at between 70% and 40% of their NPV10, Proved Undeveloped Reserves trade at between 70% and 30% of their NPV10 and Probable Reserves trade at between 10% and 35% of their NPV10. It is rare that purchasers allocate value to Possible Reserves, unless the Reserves are in an active Unconventional Resource Play.

Moyes & Co. performed a discounted cash flow analysis on the developed portions of the leasehold and utilized comparable transactions as the valuation method on the undeveloped portions of the leasehold. The values were then adjusted based on the above factors to arrive at the Fair Market Value.

The pricing used in the analyses was based on NYMEX Strip pricing as of November 1, 2012 for West Texas Intermediate Crude and Henry Hub Natural Gas plus or minus a differential for gravity adjustment and transportation. The following are the yearly averages of the commodity prices utilized by Moyes & Co.:

Mesa Financial Analyses

Moyes & Co. performed a discounted cash flow analysis on the developed portions of Mesa’s leasehold, beginning with a third party reserve report prepared by Collarini Associates dated July 1, 2012. Moyes & Co. rolled forward the cash flow assumption in that report to an effective date of November 1, 2012, by updating Mesa’s production since June 30, 2012 and changing the price deck to the November 1, 2012 NYMEX Strip pricing to aid in determining the Fair Market Value of Mesa’s Louisiana Assets, which constitute Mesa’s developed leasehold.

Moyes & Co. then utilized comparable transactions as the valuation method to aid in determining the Fair Market Value of Mesa’s undeveloped leasehold. These comparable transactions are historical corporate and/or asset acquisition and divestitures, which include oil and gas leases as well as associated production, reserves and equipment. These transactions:

• occurred after January 1, 2011;

• had sufficient valuation and financial data disclosed;

• were either publicly announced or were private transactions known by Moyes & Co.; and

• were geographically located in the same areas as Mesa’s leasehold.

The asset values for the developed and undeveloped leasehold were then adjusted by risk factors that Moyes & Co. deemed appropriate from its prior expertise, including reserves uncertainty, technical and operational risks, the effect of operatorship, portfolio effects/concentration risk and the state of the geographical markets for each of the assets, to arrive at the Fair Market Value of Mesa’s assets.

After determining the Fair Market Value of Mesa’s assets, Moyes & Co. added Mesa’s working capital and subtracted Mesa’s debt to arrive at the value of Mesa.

Armada Financial Analyses

Moyes & Co. utilized comparable transactions as the valuation method to aid in determining the Fair Market Value of Armada’s Eagle Ford acreage. These comparable transactions are historical corporate and/or asset acquisition and divestitures, which include oil and gas leases as well as associated production, reserves and equipment. These transactions:

• occurred after January 1, 2011; 

• had sufficient valuation and financial data disclosed; 

• were either publicly announced or were private transactions known by Moyes & Co.; and 

• were geographically located in the same areas as Armada’s leasehold 

Moyes & Co. valued Armada’s Wyoming acreage at cost.

Armada’s farm-in agreement with Anadarko was valued based on both an acreage transaction value and a farm-in premium. Comparable transactions in the Niobrara, as described above, value the acreage at between $1,000 and $1,500 per acre. Additionally, Moyes & Co. estimated what a typical farm-in agreement would value the acreage, based its expertise and knowledge of past transactions. Both of the valuation methods results in similar values for the farm-in agreement with Anadarko.

The asset values for the leasehold were then adjusted by risk factors that Moyes & Co. deemed appropriate from its prior expertise, including reserves uncertainty, technical and operational risks, the effect of operatorship, portfolio effects/concentration risk and the state of the geographical markets for each of the assets, to arrive at the Fair Market Value of Armada’s assets.

Additionally, Moyes & Co. valued the synergies Armada would receive by completing the proposed Transaction with Mesa at an estimated $3.5 million. These synergies are the following:

After determining the Fair Market Value of Armada’s assets and the synergies of the Transaction, Moyes & Co. added Armada’s working capital to arrive at the value of Armada.

Range of Values

The following range of values was determined by Moyes & Co. for each of Mesa and Armada:

⁽¹⁾ In millions of dollars.