- Amended Annual Report (10-K/A)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

AMENDMENT #1

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2008

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

Commission File No.: 333-141993

PETROCORP INC.
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(Exact Name of Registrant as Specified in Its Charter)

DELAWARE

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(State or Other Jurisdiction of Incorporation

or Organization)

20-5134664

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(I.R.S. Employer Identification No.)

1065 Dobbs Ferry Road, White Plains, New York 10607

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(Address of Principal Executive Offices)

(914) 674-4373

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(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.0001

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form

10-K. o

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes  No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of February 28, 2009: $10,248,000.

The number of shares of the registrant’s common stock outstanding as of February 28, 2009: 22,680,000.

EXPLANATORY NOTE

On December 22, 2009 we received a comment letter from the Securities and Exchange Commission relating to our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 which we filed with the Securities and Exchange Commission on April 9, 2009 (the “Original Report”). The primary purpose of this amendment to the Original Report (the “Amendment”) is to respond to the comment letter.

In this Amendment we have revised the discussion of our controls and procedures and our internal control over financial reporting included in Item 9A, “Disclosure Controls and Procedures”.

This Amendment includes information contained in the Original Report, and we have made no attempt in the Amendment to modify or update the disclosures presented in the Original Report, except as identified above. The disclosures in this Amendment continue to speak as of the date of the Original Report, and do not reflect events occurring after the filing of the Original Report. Accordingly, this Amendment should be read in conjunction with our other filings made with the Securities and Exchange Commission subsequent to the filing of the Original Report, including any amendments to those filings. The filing of this Amendment shall not be deemed to be an admission that the Original Report, when made, included any untrue statement of a material fact or omitted to state a material fact necessary to make a statement not misleading.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934 (the “Exchange Act”) require public companies to maintain “disclosure controls and procedures,” which are defined as controls and other procedures that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

We conducted an evaluation, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of December 31, 2008. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2008, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles. Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies, that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Management has identified the following two material weaknesses which have caused management to conclude that, as of December 31, 2008, our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the year ending December 31, 2008. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the issuer’s principal executive and principal financial officers and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:



Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;



Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the issuer; and



Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of the end of our most recent fiscal year, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC guidance on conducting such assessments. Based on that evaluation, they concluded that, as of December 31, 2008, such internal control over financial reporting was not effective. This was due to deficiencies that existed in the design or operation of our internal control over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal control over financial reporting that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; and (2) inadequate segregation of duties consistent with control objectives of having segregation of the initiation of transactions, the recording of transactions and the custody of assets. The aforementioned material weaknesses were identified by our Chief Financial Officer in connection with the review of our financial statements as of December 31, 2008.

Management believes that the material weaknesses set forth in items (1) and (2) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management's report in this annual report.

Management's Remediation Initiatives

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

We will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. First, we will create a position to segregate duties consistent with control objectives of having separate individuals perform (i) the initiation of transactions, (ii) the recording of transactions and (iii) the custody of assets. Second, we will create a senior position to focus on financial reporting and standardizing and documenting our accounting procedures with the goal of increasing the effectiveness of the internal controls in preventing and detecting misstatements of accounting information. Third, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us. We anticipate the costs of implementing these remediation initiatives will be approximately $50,000 to $100,000 a year in increased salaries, legal and accounting expenses.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.

We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2010. Additionally, we plan to test our updated controls and remediate our deficiencies by December 31, 2009.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the fourth quarter of 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART IV

Item 15. Exhibits, Financial Statement Schedules

31.1	Certification Pursuant to Rule 13a-14(a) and 15d-14(a) (4)*
31.2	Certification Pursuant to Rule 13a-14(a) and 15d-14(a) (4)*
32	Certification Pursuant to Section 1350 of Title 18 of the United States Code*

*Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 19, 2010	Petrocorp Inc .

	By:	/s/ James Fitzsimons
		James Fitzsimons
		Chief Executive Officer

	By:	/s/ Stephen M. Siedow
		Stephen M. Siedow
		Chief Financial Officer

Item 8. Financial Statements and Supplementary Data

Petrocorp Inc.

(An Exploration Stage Company)

December 31, 2008 and 2007

Index to Consolidated Financial Statements

Contents	Page(s)

Report of Independent Registered Public Accounting Firm	F-2

Balance Sheets at December 31, 2008 and 2007	F-3

Consolidated Statements of Operations for the year ended December 31, 2008 and 2007 and for the period	F-4
June 19, 2006 (inception) through December 31, 2008

Consolidated Statement of Stockholders’ Equity for the period June 19, 2006 (inception) through	F-5
December 31, 2008

Consolidated Statements of Cash Flows for the year ended December 31, 2008 and 2007 and for the period	F-6
June 19, 2006 (inception) through December 31, 2008

Notes to the Consolidated Financial Statements	F-7 to F-17

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Petrocorp Inc.

White Plains , New York

We have audited the accompanying consolidated balance sheets of Petrocorp Inc. and subsidiaries (an exploration stage company) (collectively, “Petrocorp” or the “Company”) as of December 31, 2008 and 2007 and the related statements of operations, stockholders’ equity and cash flows for the years then ended, and for the period June 19, 2006 (inception) through December 31, 2008. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The Company’s consolidated balance sheet as of December 31, 2008, and the related statements of operations, stockholders’ equity and cash flows for the year then ended have been restated. The restatements of the financial statements are described in Note 3.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company at December 31, 2008 and 2007 and the results of its operations and its cash flows for the years then ended, and for the period June 19, 2006 (inception) through December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company had a deficit accumulated during the exploration stage, a net loss from operations and net cash used in operations for the year ended December 31, 2008. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Li & Company, PC

Li & Company, PC

Skillman, New Jersey

April 3, 2009

(Except for Notes 2, 3 and 5, which were March 15, 2010)

F-2

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets


	December 31, 2008		December 31, 2007
	(As Restated)

Assets
Current Assets:
Cash	$	556,035	$	827,755
Revenue receivables		33,962		-
Total Current Assets		589,997		827,755

Oil and Gas Properties (successful efforts method):
Undeveloped acreage		1,497,643		385,286
Less depletion, depreciation and amortization		(3,750)		-
Total undeveloped acreage		1,493,893		385,286

Total Assets	$	2,083,890	$	1,213,041


Liabilities and Stockholders' Equity
Current Liabilities:
Accrued expenses	$	71,317	$	18,886
State of Alaska lease payable		-		279,500
Notes payable to majority stockholder		734,058		440,000
Total Current Liabilities		805,375		738,386

Stockholders Equity:
Preferred stock; $.0001 par value; 1,000,000 shares authorized:
none issued or outstanding		-		-
Common stock; $.0001 par value; 100,000,000 shares authorized,
22,680,000 and 21,880,000 shares issued and outstanding, respectively		2,268		547
Additional paid-in capital		1,711,182		562,629
Deficit accumulated during the development stage		(434,935)		(88,521)
Total Stockholders' Equity		1,278,515		474,655

Total Liabilities and Stockholders' Equity	$	2,083,890	$	1,213,041

See accompanying notes to the consolidated financial statements.
F-3

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Statements of Operations

					For the Period from
	For the Year		For the Year		June 19, 2006
	Ended		Ended		(inception) through
	December 31, 2008		December 31, 2007		December 31, 2008
	(As Restated)				(As Restated)

OIL AND GAS REVENUES EARNED
DURING THE EXPLORATION STAGE	$	24,151	$	-	$	24,151

COST OF REVENUES
DURING THE EXPLORATION STAGE
Oil and gas		18,838		-		18,838
Depletion, depreciation and amortization		3,750		1,071		4,821
Exploration costs		5,709		-		5,709
Production taxes		7,386		-		7,386
		35,683		1,071		36,754

GROSS PROFIT (LOSS)		(11,532)		(1,071)		(12,603)

OPERATING EXPENSES
Salary - president and majority stockholder		120,000		10,000		130,000
Professional fees - CFO and secretary		104,200		-		104,200
Professional fees		52,168		20,600		72,768
General and administrative		29,599		5,648		61,844
Impairment of equipment		-		16,929		16,929
		305,967		53,177		385,741

LOSS FROM OPERATIONS		(317,499)		(54,248)		(398,344)

OTHER (INCOME) EXPENSES
Interest income		(1,718)		-		(1,718)
Interest expense		359		-		359
Interest expense - related parties		30,274		6,076		36,350
		28,915		6,076		34,991

LOSS BEFORE TAXES		(346,414)		(60,324)		(433,335)

INCOME TAX PROVISION		-		800		1,600

NET LOSS	$	(346,414)	$	(61,124)	$	(434,935)

NET LOSS PER COMMON SHARE -
BASIC AND DILUTED	$	(0.02)	$	(0.00)

Weighted Common Shares Outstanding -
basic and diluted		22,680,000		20,342,500

See accompanying notes to the consolidated financial statements.
F-4

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Statement of Stockholders' Equity
For the Period from June 19, 2006 (inception) through December 31, 2008


				Additional		Deficit accumulated		Total
	Number of			Paid-in		During the		Stockholders'
	Shares	Amount		Capital		Exploration Stage		Equity

Balance, June 19, 2006 (inception)	-	$	-	$	-	$	-	$	-

Shares issued to President for cash
at $0.01 per share	20,000,000		2,000		(1,900)				100
Shares issued to President for cash
at $0.01 per share	600,000		60		29,940				30,000
Net loss							(27,397)		(27,397)

Balance, December 31, 2006	20,600,000		2,060		28,040		(27,397)		2,703

Shares issued to President for cash
at $0.01 per share	480,000		48		23,952				24,000
Contributed capital					3,000				3,000
Shares issued to President for cash
at $0.01 per share	800,000		80		499,920				500,000
Interest contribution					6,076				6,076
Net loss							(61,124)		(61,124)

Balance, December 31, 2007	21,880,000		2,188		560,988		(88,521)		474,655

Shares issued for cash at $0.10 per share	800,000		80		999,920				1,000,000
Salary contribution					120,000				120,000
Interest contribution					30,274				30,274
Net loss							(346,414)		(346,414)

Balance, December 31, 2008	22,680,000	$	2,268	$	1,711,182	$	(434,935)	$	1,278,515

See accompanying notes to the consolidated financial statements.
F-5

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows

					For the Period from
	For the Year		For the Year		June 19, 2006
	Ended		Ended		(inception) through
	December 31, 2008		December 31, 2007		December 31, 2008
	(As Restated)				(As Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(346,414)	$	(61,124)	$	(434,935)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Depletion, depreciation and amortization		3,750		1,071		4,821
Impairment of equipment		-		16,929		16,929
Capital contribution		-		3,000		3,000
Salary contribution		120,000		-		120,000
Interest contribution		30,274		6,076		36,350
Changes in operating assets and liabilities:
Revenue receivable		(33,962)		-		(33,962)
Accrued expenses		52,431		(943)		71,317
State of Alaska lease payable		(279,500)		279,500		-
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(453,421)		244,509		(216,480)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		-		(18,000)		(18,000)
Investment in gas and oil properties		(728,299)		(385,286)		(1,113,585)
NET CASH USED IN INVESTING ACTIVITIES		(728,299)		(403,286)		(1,131,585)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - majority stockholder		-		440,000		440,000
Repayment of notes payable - majority stockholder		(90,000)		-		(90,000)
Proceeds from sale of common stock		1,000,000		524,000		1,554,100
NET CASH PROVIDED BY FINANCING ACTIVITIES		910,000		964,000		1,904,100

NET CHANGE IN CASH		(271,720)		805,223		556,035
Cash, Beginning of Period		827,755		22,532		-
CASH, END OF PERIOD	$	556,035	$	827,755	$	556,035

SUPPLEMENTAL DISCLOSURE OF
CASH FLOWS INFORMATION:
Interest paid	$	359	$	-	$	359
Income tax paid	$	-	$	-	$	-

NON-CASH FINANCING AND INVESTING TRANSACTIONS:
Salary contribution	$	120,000	$	-	$	120,000
Interest contribution	$	30,274	$	6,076	$	36,350
Issuance of notes payable - majority stockholder in exchange
for oil and gas properties	$	384,058	$	-	$	384,058

See accompanying notes to the consolidated financial statements.
F-6

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Note 1 - Organization and Operations

Petrocorp, Inc., an exploration stage company, was incorporated on June 19, 2006 under the laws of the State of Delaware. Prior to September 2007, the Company’s business model provided telephonic conferencing services to businesses, organizations and individuals in North America. Due to capital constraints and because its executives could no longer serve the Company without compensation, the Company decided to change its business directions.

On September 20, 2007, the Company entered the oil and gas exploration and production business with the acquisition of three separate farm-out agreements from James Fitzsimons. Mr. Fitzsimons also purchased 17,800,000 shares of the Company’s common stock from certain shareholders, resulting in him owning 84.5% of the Company’s then outstanding shares for $454,000. Mr. Fitzsimons was elected a director of the Company.

On October 19, 2007, the Company amended its certificate of incorporation changing its name to “Petrocorp Inc.” and effectuated a five for one forward stock split which increased the authorized common stock to 100,000,000 shares at $.0001 par value.

On August 13, 2008, the Company’s board of directors approved a stock dividend on its outstanding common stock. The ratio for the stock dividend was four shares to each share owned (4:1).

All share and per share amounts have been restated to reflect these common stock transactions.

Note 2 - Summary of Significant Accounting Policies

Basis of presentation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The consolidated financial statements include the accounts of Petrocorp Inc. and its wholly-owned subsidiaries: Petrocorp (Oklahoma) Inc., Union Energy (Alaska) LLC, Mac Oil SpA and Petrocorp Italia SRL (collectively, “Petrocorp” or the “Company”). All intercompany accounts and transactions have been eliminated.

Exploration stage company

The Company is an exploration stage company as defined by Statement of Financial Accounting Standards No. 7 “Accounting and Reporting by Development Stage Enterprises” (“SFAS No. 7”). Although the Company has recognized some nominal amount of revenue, the Company is still devoting substantially all of its efforts on establishing the business and, therefore, still qualifies as a development stage company. All losses since inception have been considered part of the Company’s exploration stage activities.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification

Certain amounts in the prior periods consolidated financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported losses.

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

F-7

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Oil and gas properties

The Company’s oil and gas exploration and production activities are accounted for using the successful efforts method. Under this method, all property acquisition costs and costs of exploratory and development wells are capitalized when incurred, pending determination of whether the well has found proved reserves. If an exploratory well does not find proved reserves, the costs of drilling the well are charged to expense and included within cash flows from investing activities in the Consolidated Statements of Cash Flows pursuant to Statement of Financial Accounting Standards No. 19 “ Financial Accounting and Reporting by Oil and Gas Producing Companies” (“SFAS No. 19”). The costs of development wells are capitalized whether productive or nonproductive. Oil and gas lease acquisition costs are also capitalized. Interest cost is capitalized as a component of property cost for significant exploration and development projects that require greater than six months to be readied for their intended use.

Other exploration costs, including certain geological and geophysical expenses and delay rentals for oil and gas leases, are charged to expense as incurred. The sale of a partial interest in a proved property is accounted for as a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the unit-of-production amortization rate. A gain or loss is recognized for all other sales of proved properties and is classified in other operating revenues. Maintenance and repairs are charged to expense, and renewals and betterments are capitalized to the appropriate property and equipment accounts.

Unevaluated properties are assessed periodically on a property-by-property basis and any impairment in value is charged to expense. If the unevaluated properties are subsequently determined to be productive, the related costs are transferred to proved oil and gas properties. Proceeds from sales of partial interests in unproved leases are accounted for as a recovery of cost without recognizing any gain until all costs are recovered.

The Company reviews its proved oil and gas properties for impairment whenever events and circumstances indicate a decline in the recoverability of their carrying value may have occurred. The Company estimates the expected undiscounted future cash flows of its oil and gas properties and compares such undiscounted future cash flows to the carrying amount of the oil and gas properties to determine if the carrying amount is recoverable. If the carrying amount exceeds the estimated undiscounted future cash flows, the Company will adjust the carrying amount of the oil and gas properties to fair value. The factors used to determine fair value include, but are not limited to, recent sales prices of comparable properties, estimates of proved reserves, future commodity pricing, future production estimates, anticipated capital expenditures, and a discount rate commensurate with the risk associated with realizing the expected cash flows projected.

The provision for depreciation, depletion and amortization (“DD&A”) of oil and gas properties is calculated on a field-by-field basis using the unit-of-production method. Oil is converted to natural gas equivalents, Mcfe, at the rate of one barrel to six Mcf. Taken into consideration in the calculation of DD&A are estimated future dismantlement, restoration and abandonment costs, which are net of estimated salvage values.

Furniture, equipment and other

Furniture and other office and field equipment are recorded at cost. Costs of renewals and improvements that substantially extend the useful lives of the assets are capitalized. Leasehold improvements are amortized over the lesser of five years or the life of the lease. Maintenance and repairs are expensed when incurred. Depreciation of other property and equipment is computed using the straight-line method over their estimated useful lives of three to ten years. Upon retirement or disposition of assets, the costs and related accumulated depreciation are removed from the accounts with the resulting gains or losses, if any, reflected in results of operations.

In September 2007, the Company recorded an impairment charge of $16,929 related to its telephonic equipment when the Company changed the direction of its efforts from telephonic conferencing services to the oil and gas sector.

Fair value of financial instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties. The carrying amounts of financial assets and liabilities, such as cash, revenue receivables, accounts payable, accrued expenses, and the State of Alaska payable approximate their fair values because of the short maturity of these instruments. The notes payable to majority stockholder approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at December 31, 2008 and 2007.

Revenue recognition

The Company follows the guidance of the United States Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 101 “Revenue Recognition” (“SAB No. 101”), as amended by SAB No. 104 (“SAB No. 104”) for revenue recognition. The Company recognizes revenue when it is realized or realizable and earned less estimated future doubtful accounts. The Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured. The Company derives revenue primarily from the sale of produced natural gas and crude oil. The Company reports revenue as the gross amount received before taking into account production taxes and transportation costs, which are reported as separate expenses. Revenue is recorded in the month the Company’s production is delivered to the purchaser, but payment is generally received between thirty (30) and ninety (90) days after the date of production. No revenue is recognized unless it is determined that title to the product has transferred to the purchaser. At the end of each month, the Company estimates the amount of production delivered to the purchaser and the price the Company will receive.

F-8

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Income taxes

The Company recognizes deferred income tax liabilities and assets for the expected future tax consequences of events that have been recognized in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Net loss per common share

Statement of Financial Accounting Standards No. 128 “ Earnings per Share” (“SFAS No. 128”), requires dual presentation of basic and diluted earnings or loss per share (“EPS”) for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution; diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic loss per share is computed by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if dilutive securities and other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company, unless the effect is anti-dilutive. The Company had no potentially dilutive securities for the years ended December 31, 2008 or 2007.

Recently issued accounting pronouncements

In June 2003, the Securities and Exchange Commission (“SEC”) adopted final rules under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”), as amended by SEC Release No. 33-8934 on June 26, 2008. Commencing with its annual report for the year ending December 31, 2009, the Company will be required to include a report of management on its internal control over financial reporting. The internal control report must include a statement

•	Of management’s responsibility for establishing and maintaining adequate internal control over its financial reporting;

•	Of management’s assessment of the effectiveness of its internal control over financial reporting as of year end; and

•	Of the framework used by management to evaluate the effectiveness of the Company’s internal control over financial reporting.

Furthermore, in the following fiscal year, it is required to file the auditor’s attestation report separately on the Company’s internal control over financial reporting on whether it believes that the Company has maintained, in all material respects, effective internal control over financial reporting.

In December 2007, the FASB issued FASB Statement No. 141 (Revised 2007) “Business Combinations” (“SFAS No. 141(R)”), which requires the Company to record fair value estimates of contingent consideration and certain other potential liabilities during the original purchase price allocation, expense acquisition costs as incurred and does not permit certain restructuring activities previously allowed under Emerging Issues Task Force Issue No. 95-3 to be recorded as a component of purchase accounting. SFAS No. 141(R) applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company has not determined the effect that the adoption of SFAS No. 141(R) will have on its financial statements.

In December 2007, the FASB issued FASB Statement No. 160 “Non-controlling Interests in Consolidated Financial Statements - an amendment of ARB No. 51” (“SFAS No. 160”), which causes non-controlling interests in subsidiaries to be included in the equity section of the balance sheet. SFAS No. 160 applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, except for the presentation and disclosure requirements, which shall be applied retrospectively for all periods presented. The Company has not determined the effect that the adoption of SFAS No. 160 will have on its financial statements.

In March 2008, the FASB issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 (“SFAS No. 161”). This statement changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No. 161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In years after initial adoption, this statement requires comparative disclosures only for periods subsequent to initial adoption. The Company does not expect the application of SFAS No. 161 to have a material effect on its financial statements.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on its financial statements.

F-9

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Note 3 - Restatements of Previously Issued Financial Statements

Subsequent to the original issuance of the Company’s consolidated financial statements for the year ended December 31, 2008 as included in its annual report on Form 10-K filed with the United States Securities and Exchange Commission on April 9, 2009, the Company’s management identified certain accounting misstatements during the period. As a result of issues identified in the review of its consolidated financial statements for the year ended December 31, 2008, its Board of Directors, in consultation with management and Li & Company, PC, its independent registered public accounting firm, concluded that its previously issued consolidated financial statements for the year then ended, should no longer be relied upon because of certain accounting misstatements in those financial statements. Accordingly, the Company has restated its previously issued consolidated financial statements for the period. Details of the misstatements are set out below:

Misstatements for the year ended December 31, 2008:


	Misstatements Dr (Cr)			Impact to Statement of Operations

(i) To reclassify undeveloped acreage previously misclassified as developed acreage
Developed acreage	$	(307,803	)
Undeveloped acreage		307,803

(ii) To reclassify accumulated amortization - undeveloped acreage previously misclassified as accumulated amortization - developed acreage
Accumulated amortization - undeveloped acreage	$	(3,750	)
Accumulated amortization - developed acreage		3,750

(iii) To separate professional fees - officers from professional fees
Professional fees - officers	$	104,200
Professional fees		(104,200	)

(iv) To separate interest expense - related parties from interest expense
Interest expense - related parties	$	30,274
Interest expense		(30,274	)

(iv) To reclassify issuance of notes payable - majority stockholder in exchange for oil and gas properties in statement of cash flows
Investment in gas and oil properties	$	384,058
Proceeds from notes payable - majority stockholder		(384,058	)


				$	-

F-10

The following tables present the impact of the above mentioned adjustments to the financial information

Balance sheet information:

The restated balance sheet is set out as follows:

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Balance Sheets


	December 31, 2008		December 31, 2008		December 31, 2008
	(As Previously		(Adjustments)		(As Restated)
	Reported)

Assets
Current Assets:
Cash	$	556,035	$		$	556,035
Revenue receivables		33,962				33,962
Total Current Assets		589,997		-		589,997

Oil and Gas Properties (successful efforts method):
Developed acreage		307,803		(307,803)		-
Less depletion, depreciation and amortization		(3,750)		3,750		-
Total Developed Acreage		304,053		(304,053)		-

Undeveloped acreage		1,189,840		307,803		1,497,643
Less depletion, depreciation and amortization		-		(3,750)		(3,750)
Total Undeveloped Acreage		1,189,840		304,053		1,493,893

Total Oil and Gas Properties		1,493,893		-		1,493,893

Total Assets	$	2,083,890	$	-	$	2,083,890


Liabilities and Stockholders' Equity
Current Liabilities:
Accrued expenses	$	71,317	$		$	71,317
State of Alaska lease payable		-				-
Notes payable to majority stockholder		734,058				734,058
Total Current Liabilities		805,375		-		805,375

Stockholders Equity:
Preferred stock; $.0001 par value; 1,000,000 shares authorized:
none issued or outstanding		-				-
Common stock; $.0001 par value; 100,000,000 shares authorized,
22,680,000 and 21,880,000 shares issued and outstanding, respectively		2,268				2,268
Additional paid-in capital		1,711,182				1,711,182
Deficit accumulated during the development stage		(434,935)				(434,935)
Total Stockholders' Equity		1,278,515		-		1,278,515

Total Liabilities and Stockholders' Equity	$	2,083,890	$	-	$	2,083,890

See accompanying notes to the consolidated financial statements.
F-11

Statements of operations information:

The restated statement of operations is set out as follows:

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Statements of Operations


	For the Year		For the Year		For the Year
	Ended		Ended		Ended
	December 31, 2008		December 31, 2008		December 31, 2008
	(As Previously Reported)		(Adjustments		(As Restated)

OIL AND GAS REVENUES EARNED
DURING THE EXPLORATION STAGE	$	24,151	$	-	$	24,151

COST OF REVENUES
DURING THE EXPLORATION STAGE
Oil and gas		18,838		-		18,838
Depletion, depreciation and amortization		3,750		-		3,750
Exploration costs		5,709		-		5,709
Production taxes		7,386		-		7,386
		35,683		-		35,683

GROSS PROFIT (LOSS)		(11,532)		-		(11,532)

OPERATING EXPENSES
Salary - president and majority stockholder		120,000		-		120,000
Professional fees - CFO and secretary				104,200		104,200
Professional fees		156,368		(104,200)		52,168
General and administrative		29,599		-		29,599
		305,967		-		305,967

LOSS FROM OPERATIONS		(317,499)		-		(317,499)

OTHER (INCOME) EXPENSES
Interest income		(1,718)				(1,718)
Interest expense		30,633		(30,274)		359
Interest expense - related parties		-		30,274		30,274
		28,915		-		28,915

LOSS BEFORE TAXES		(346,414)		-		(346,414)

INCOME TAX PROVISION		-		-		-

NET LOSS	$	(346,414)	$	-	$	(346,414)

NET LOSS PER COMMON SHARE -
BASIC AND DILUTED	$	(0.02)	$	-	$	(0.02)

Weighted Common Shares Outstanding -
basic and diluted		22,680,000		22,680,000		22,680,000

See accompanying notes to the consolidated financial statements.
F-12

Statement of cash flows information:

The restated statement of cash flows is set out as follows:

Petrocorp Inc.
(An Exploration Stage Company)
Consolidated Statements of Cash Flows


	For the Year		For the Year		For the Year
	Ended		Ended		Ended
	December 31, 2008		December 31, 2008		December 31, 2008
	(As Previously Reported)		(Adjustments)		(As Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(346,414)	$	-	$	(346,414)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Depletion, depreciation and amortization		3,750		-		3,750
Impairment of equipment		-		-		-
Capital contribution		-		-		-
Salary contribution		120,000		-		120,000
Interest contribution		30,274		-		30,274
Changes in operating assets and liabilities:
Revenue receivable		(33,962)		-		(33,962)
Accrued expenses		52,431		-		52,431
State of Alaska lease payable		(279,500)		-		(279,500)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(453,421)		-		(453,421)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		-		-		-
Investment in gas and oil properties		(1,112,357)		384,058		(728,299)
NET CASH USED IN INVESTING ACTIVITIES		(1,112,357)		384,058		(728,299)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable - majority stockholder		384,058		(384,058)		-
Repayment of notes payable - majority stockholder		(90,000)		-		(90,000)
Proceeds from sale of common stock		1,000,000		-		1,000,000
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,294,058		(384,058)		910,000

NET CHANGE IN CASH		(271,720)		-		(271,720)
Cash, Beginning of Period		827,755				827,755
CASH, END OF PERIOD	$	556,035	$	-	$	556,035

SUPPLEMENTAL DISCLOSURE OF
CASH FLOWS INFORMATION:
Interest paid	$	359	$		$	359
Income tax paid	$	-	$	-	$	-

NON-CASH FINANCING AND INVESTING TRANSACTIONS:
Salary contribution	$	120,000	$	-	$	120,000
Interest contribution	$	30,274	$	-	$	30,274
Issuance of notes payable - majority stockholder in exchange
for oil and gas properties	$	-	$	384,058	$	384,058

See accompanying notes to the consolidated financial statements.
F-13

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Note 4 – Going Concern

The consolidated financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business. At December 31, 2008, the Company had a deficit accumulated during the exploration stage of $434,935, a net loss of $346,414 with revenues of $24,151 and cash used in operations of $453,421 for the year then ended. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

While the Company is attempting to generate measurable revenues, the Company’s cash position may not be sufficient to support its daily operations. Management intends to raise additional capital through sales of its securities or loans from its majority shareholder. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan, generate sufficient revenues and raise additional capital. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Note 5 - Oil and Gas Properties

Leasehold Acreage

Petrocorp owns interests in undeveloped oil and natural gas acreage in the locations set forth below as of December 31, 2008 and 2007. These ownership interests generally take the form of working interests in oil and natural gas leases or licenses that have varying terms.

	December 31, 2008				December 31, 2007
State or Country	Gross		Net		Gross		Net

Alaska		24,280		24,280		24,280		24,280

Oklahoma		6,379		2,809		6,379		2,809

Canada		286,713		286,713		-		-

Italy (1)		-		-		-		-

Netherlands (2)		-		-		-		-

Total undeveloped acreage		317,372		313,802		30,659		27,089

(1) On January 20, 2009, the Government of Italy made the preliminary award of the competitive oil and gas exploration licenses, “Fiorenzuola D'Arda” located in the Po Valley and “Montottone” located in the Marche region, in favor of Mac Oil SpA, our subsidiary. On March 24, 2009, the Government of Italy made the preliminary award of the competitive oil and gas exploration license, “Melzo” located in the Po Valley, again in favor of Mac Oil SpA. The three Italy licenses cover a net surface area of 115,760 hectares (285,827 acres).

The Company also has two competitive oil and gas exploration license applications pending awaiting adjudication by the Ministry of Economic Development in Italy covering a net surface area of 27,240 hectares (67,259 acres).

(2) One license application pending covering a net surface area of 68,284 hectares (168,602 acres).

F-14

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Leasehold Acreage Costs

Petrocorp has capitalized leasehold acreage costs in undeveloped oil and natural gas acreage in the locations set forth below as of December 31, 2008 and 2007:

	December 31, 2008				December 31, 2007
State or Country	Developed acreage		Undeveloped acreage		Developed acreage		Undeveloped acreage

Alaska		-		442,086		-		369,500

Oklahoma		-		520,050		-		15,786

Canada		-		277,130		-		-

Italy (1)		-		228,868		-		-

Netherlands (2)		-		25,760		-		-

Total capitalized leasehold costs		-		1,493,894		-		385,286

Oil and Gas Drilling Activity

The Company owns working interests in one gross (.5 net) producing oil well and two gross (1.0 net) producing gas wells at December 31, 2008. Of the three gross productive wells one had dual completions. At December 31, 2008, Petrocorp had six gross wells in progress.

Note 6 - Notes Payable to Majority Stockholder

At December 31, 2007, the Company had $440,000 in unsecured, non-interest bearing notes (two), payable on demand with its president and majority stockholder James Fitzsimons. In June 2008, the Company repaid a $90,000 unsecured, non-interest bearing note with Mr. Fitzsimons.

On December 1, 2008, Mr. Fitzsimons transferred his 78.5% stock ownership in Petrocorp Inc. and three outstanding promissory notes (totaling $734,058) to Soladino Investments SA (“Soladino”), a Swiss corporation owned by Mr. Fitzsimons. At December 31, 2008, the Company has a note payable to Soladino for $734,058. The note is secured by the Company’s oil and gas leases, is non interest bearing and payable upon demand.

During the years ended December 31, 2008 and 2007, the Company imputed interest expense related to these notes of $30,274 and $6,076, respectively. Interest was imputed at an implied rate of 6% per annum and the amounts were recorded as capital contributions by the Company.

Note 7 - Stockholders’ Equity

Common stock

On September 30, 2006, the Company issued 20,000,000 shares of common stock to its founders at par value ($.0001 per share). During the period July 1 through December 31, 2006, the Company sold 600,000 shares of its common stock in a private placement at $0.05 per share (an aggregate of $30,000) to 16 individuals. During the period from January 1 through September 30, 2007, the Company sold 480,000 shares of its common stock at $0.05 per share (an aggregate of $24,000) to 24 individuals.

On December 27, 2007, the Company sold 800,000 shares of its common stock to one investor at $.625 per share (an aggregate of $500,000). On March 18, 2008, the Company sold 800,000 shares of its common stock to one investor at $1.25 per share (an aggregate of $1,000,000). These shares were sold in transactions exempt from registration under Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). These shares are not registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The purchasers of these shares represented that they were acquiring the shares for their own account, for investment, and that the purchasers were not US Persons within the meaning of Regulation S. The Company has no obligation to register the resale of these shares under the Securities Act. The proceeds from the sale of these shares will be used for working capital purposes.

F-15

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Note 8 - Income Taxes

Deferred tax assets

The Company incurred no income taxes for the years ended December 31, 2008 and 2007. The expected income tax benefit for the years ended December 31, 2008 and 2007 was approximately $78,100 and $12,200, respectively.

The components of deferred tax assets at December 31, 2008 and 2007 are:


	December 31, 2008			December 31, 2007

Net deferred tax assets – Non-current:

Expected income tax benefit from NOL carry-forwards	$	95,800		$	17,700
Less valuation allowance		(95,800	)		(17,700	)

Deferred tax assets, net of valuation allowance	$	-		$	-

Income taxes in the statements of operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

	For the Year		For the Year
	December 31,		December 31,
	2008		2007

Federal statutory income tax rate	34	%	34	%
Change in valuation allowance on net operating loss carry-forwards	(34)	%	(34)	%
Effective income tax rate	0	%	0	%

The Company’s net operating loss carry-forwards of approximately $275,600 at December 31, 2008 are available to offset future taxable income, if any, and expire in 2028.

Note 9 - Related Party Transactions

On August 12, 2008, the Company acquired from its president, James Fitzsimons, a 50% working interest (41.25% net revenue interest) in the Snake Creek prospect, a 3,200 gross (3,022 net) acre gas development project located in northern Okmulgee County, Oklahoma. The first well on this acreage, the Snake Creek #1, spaced on 160 acres, has been successfully drilled and completed. The Middle Dutcher zone was fracture stimulated and is in production. The Company reimbursed Mr. Fitzsimons for his historic costs (acreage and drilling) by issuing a secured, non-interest bearing note, payable on demand for $210,917 and assumed responsibility for all further costs.

On November 30, 2008, the Company acquired from Mr. Fitzsimons, a 100% working interest (81.25% net revenue interest) in the Spanish Peak prospect, a 2,041 gross (900 net) acre gas development project located in Okmulgee County, Oklahoma. The Company reimbursed Mr. Fitzsimons for his historic costs (acreage) by issuing a secured, non-interest bearing note, payable on demand for $173,141 and assumed responsibility for all further costs.

On December 1, 2008, James Fitzsimons transferred his 78.5% stock ownership in Petrocorp Inc. and three outstanding promissory notes (totaling $734,058) to Soladino Investments SA (“Soladino”), a Swiss corporation owned by Mr. Fitzsimons. The Company issued Soladino a $734,058 note, which is secured by the Company’s oil and gas leases, is non interest bearing and payable upon demand.

The Company was provided management services by its president, Mr. Fitzsimons during 2008 at no cost. The Company recorded the $120,000 estimated value of these services as compensation expense and as a capital contribution.

The Company was provided accounting services by Mr. Siedow, its chief financial officer. Mr. Siedow was paid $77,700 in 2008 and $2,300 in 2007 for these services.

The Company was provided legal and administrative services and office space by Mr. Hariton, our Corporate Secretary. Mr. Hariton was paid $26,500 in 2008 and $16,000 in 2007 for these services.

F-16

Petrocorp, Inc.

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

December 31, 2008 and 2007

Note 10 - Subsequent Event

On March 31, 2009, the Company purchased 171 oil and gas lease interests totaling 3,827 gross (2,666 net) acres in Okfuskee and Okmulgee Counties, Oklahoma from CH4 Energy, Inc., a company controlled by Soladino Investments SA at a cost of $583,823. The Company reimbursed Soladino for its historic costs (acreage) by issuing a secured, non-interest bearing note, payable on demand for $583,823 and assumed responsibility for all further costs. The leases are held in the name of Frontier Land, Inc. as fiduciary trustee for the benefit of the Company’s subsidiary Petrocorp (Oklahoma) Inc.