MIME-Version: 1.0 X-Document-Type: Workbook Content-Type: multipart/related; boundary="----=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e" This document is a Single File Web Page, also known as a Web Archive file. If you are seeing this message, your browser or editor doesn't support Web Archive files. Please download a browser that supports Web Archive, such as Microsoft Internet Explorer. ------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Workbook.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"

This page should be opened with Microsoft Excel XP or newer.

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet01.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
Document And Entity Information (USD $)
6 Months Ended
Mar. 31, 2012
May 21, 2012
Document and Entity Information [Abstract]
Entity Registrant Name West Texas Resources, Inc.
Document Type 10-Q
Current Fiscal Year End Date --09-30
Entity Common Stock, Shares Outstanding 13,106,500
Entity Public Float $ 0
Amendment Flag false
Entity Central Index Key 0001518985
Entity Current Reporting Status Yes
Entity Voluntary Filers No
Entity Filer Category Smaller Reporting Company
Entity Well-known Seasoned Issuer No
Document Period End Date Mar 31, 2012
Document Fiscal Year Focus 2012
Document Fiscal Period Focus Q2
------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet02.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
BALANCE SHEETS (USD $)
Mar. 31, 2012
Sep. 30, 2011
Current Assets
Cash $ 42,641 $ 169,346
Other receivables 10,016
Total Current Assets 52,657 169,346
Oil and gas properties, using successful effort accounting 145,873 18,750
Equipment - water truck, net of accumulated depreciation of $5,096 and $0 at March 31, 2012 and September 30, 2011, respectively 30,663 35,759
TOTAL ASSETS 229,193 223,855
Current Liabilities
Payroll liabilities 3,857
Investment Payable 43,750
Other payables 9,366
Total Current Liabilities 56,973
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding      
Common stock, $0.001 par value; 200,000,000 shares authorized; 13,106,500 shares issued and outstanding 13,107 13,107
Additional paid-in capital 292,795 292,795
Accumulated deficit (133,682) (82,047)
Total Shareholders' Equity 172,220 223,855
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 229,193 $ 223,855
------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet03.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
BALANCE SHEETS (Parentheticals) (USD $)
Mar. 31, 2012
Sep. 30, 2011
Accumulated depreciation (in Dollars) $ 5,096 $ 0
Preferred stock par value (in Dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 13,106,500 13,106,500
Common stock, shares outstanding 13,106,500 13,106,500
------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet04.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
STATEMENTS OF OPERATIONS (USD $)
3 Months Ended 6 Months Ended 16 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Mar. 31, 2012
Mar. 31, 2011
Mar. 31, 2012
General and administrative expenses $ 35,426 $ 65,742 $ 147,789
Operating Loss (35,426) (65,742) (147,789)
Other income (expenses)
Lease income 10,016 19,203 19,203
Depreciation expense (2,980) (5,096) (5,096)
Loss Before Income Taxes (28,390) (51,635) (133,682)
Income taxes               
Net Loss $ (28,390) $ (51,635) $ (133,682)
Basic and diluted weighted average number of common shares outstanding (in Shares) 13,106,500 12,144,500 13,106,500 7,540,266
Basic and diluted net loss per share (in Dollars per share) $ 0 $ 0
------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet05.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
STATEMENTS OF SHAREHOLDERS' EQUITY (USD $)
Common Stock [Member]
Capital Units [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance at Dec. 09, 2010
Issuance of common stock for cash $ 962 $ 239,538 $ 240,500
Issuance of common stock for cash (in Shares) 962,000
Issuance of options for services 400,000 65,402 65,402
Net loss (82,047) (82,047)
Balance at Sep. 30, 2011 13,107 400,000 292,795 (82,047) 223,855
Balance (in Shares) at Sep. 30, 2011 13,106,500
Net loss (51,635) (51,635)
Balance at Mar. 31, 2012 $ 13,107 $ 400,000 $ 292,795 $ (133,682) $ 172,220
Balance (in Shares) at Mar. 31, 2012 13,106,500
------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet06.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
STATEMENTS OF CASH FLOWS (USD $)
6 Months Ended 16 Months Ended
Mar. 31, 2012
Mar. 31, 2012
Cash flows from operating activities
Net loss $ (51,635) $ (133,682)
Adjustments to reconcile net loss to net cash from operating activities:
Stock-based compensation 65,402
Depreciation expense 5,096 5,096
Changes in operating assets and liabilities:
Other receivables (10,016) (10,016)
Payroll liabilities 3,857 3,857
Other payables 9,366 9,366
Net cash used in operating activities (43,332) (59,977)
Cash flows from investing activities
Investment - West Texas Royalties (83,373) (102,123)
Purchase of Water Truck (35,759)
Net cash used in investing activities (83,373) (137,882)
Cash flows from financing activities
Proceeds from sale of common stock 240,500
Net cash from financing activities 240,500
Net increase (decrease) in cash (126,705) 42,641
Cash, beginning of period 169,346
Cash, end of period $ 42,641 $ 42,641
------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet07.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
1. Organization and Summary of Significant Accounting Policies
6 Months Ended
Mar. 31, 2012
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
1. 
Organization and Summary of Significant Accounting Policies

Organization and business

Texas Resources Energy, Inc. (“TREI”) was incorporated under the laws of Nevada on December 9, 2010, as a wholly-owned subsidiary of Russian Resources Energy, Inc., a Texas corporation (“RREI”), and then spun off to the shareholders of RRIE on the same date. On March 31, 2011, TREI changed its name to West Texas Resources, Inc. (the “Company”). The Company intends to engage in the acquisition, exploration and development of oil and gas properties in North America. From its inception, the Company has devoted its activities to developing a business plan, raising capital and acquiring operating assets.

The Company is in the development stage, it has not generated any revenues from operations, it has no assurance of any future revenues or its ability to obtain additional capital to fund future acquisitions, or, if such funds might be available, that they will be obtainable on terms satisfactory to the Company.

Basis of presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S.) for interim financial information and with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”) and reflect all adjustments, consisting of normal recurring adjustments and other adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company, for the respective periods presented. The results of operations for an interim period are not necessarily indicative of the results that may be expected for any other interim period or the year as a whole. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes for the year ended September 30, 2011.

Liquidity and management’s plans

The Company has not generated any revenues from oil and gas exploration and there is no assurance that the Company will generate revenues in the future. The Company’s ability to generate revenue primarily depends on its success in investigation and exploration of oil and gas properties.  The Company incurred a net loss of $51,635 during the six months ended March 31, 2012 and a net loss of 133,682 from inception to March 31, 2012. Also, the Company had a cash balance of $42,641, a working capital deficit of $4,316 and a stockholders’ equity of $172,220 at March 31, 2012.

The Company will require upto $1 million of additional capital in order to fund its proposed operations over the next 12 months. Management plans to continue to seek sources of financing on favorable terms; however, there are no assurances that any such financing can be obtained on favorable terms, if at all.   Management expects to monitor and control the Company’s operating costs until cash is available through financing or operating activities.  There are no assurances that the Company will be successful in achieving these plans.  The Company anticipates that losses will continue until such time, if ever, as the Company is able to generate sufficient revenues to support its operations.

Oil and gas properties

The Company uses the successful efforts method of accounting for oil and gas producing activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells that find proved reserves, to drill and equip development wells and related asset retirement costs are capitalized. Costs to drill exploratory wells that do not find proved reserves, geological and geophysical costs, and costs of carrying and retaining unproved properties are expensed.

Unproved oil and gas properties that are individually significant are periodically assessed for impairment of value, and a loss is recognized at the time of impairment by providing an impairment allowance. Other unproved properties are amortized based on the Company's experience of successful drilling and average holding period. Capitalized costs of producing oil and gas properties, after considering estimated residual salvage values, are depreciated and depleted by the unit-of-production method.  

On the sale or retirement of a complete unit of a proved property, the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in income.  On the sale of an entire interest in an unproved property for cash or cash equivalent, gain or loss on the sale is recognized, taking into consideration the amount of any recorded impairment if the property had been assessed individually. If a partial interest in an unproved property is sold, the amount received is treated as a reduction of the cost of the interest retained.

Impairment of long-lived assets

The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 360-10-35, Impairment or Disposal of Long-Lived Assets. In accordance with ASC 360-10-35, long-lived assets are reviewed for events of changes in circumstances, which indicate that their carrying value may not be recoverable. The Company believes there has been no impairment of the value of such assets at March 31, 2012.

Asset retirement obligations 

ASC 410-20, Asset Retirement Obligations, clarifies that a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. ASC 410-20 requires a liability to be recognized for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated.

Cash, cash equivalents, and other cash flow statement supplemental information

The Company considers all liquid investments with an original maturity of three months or less that are readily convertible into cash to be cash equivalents.  The Company places its cash equivalents with high credit quality financial institutions.  Accounts at these institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000.  At March 31, 2012, the Company did not have cash balances in excess of the FDIC insurance limit.  The Company performs ongoing evaluations of these institutions to limit its concentration of risk exposure.  Management believes this risk is not significant due to the financial strength of the financial institutions utilized by the Company.

Furniture, fixtures and equipment

Furniture, fixtures and equipment are carried at cost depreciated using the straight-line method over their estimated useful lives. Gain or loss on retirement or sale or other disposition of these assets is included in income in the period of disposition.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.

Income taxes

The Company reports certain expenses differently for financial and tax reporting purposes and, accordingly, provides for the related deferred taxes.  Income taxes are accounted for under the liability method in accordance with ASC 740, Income Taxes .

Basic and diluted net income (loss) per share

Basic net income (loss) per share is based upon the weighted average number of common shares outstanding.  Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised.  Dilution is computed by applying the treasury stock method.  Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.  For the six months ended March 31, 2012, all common stock equivalents were anti-dilutive.

Stock-based payments

Compensation costs for all share-based awards are measured based on the grant date fair value and are recognized over the vesting period. The Company has no awards with market or performance conditions. Excess tax benefits will be recognized as an addition to additional paid-in-capital.

Fair value of financial instruments

The accounting standards regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash and other current assets and liabilities to approximate their fair values because of the short period of time between the origination of such instruments and their expected realization.

The Company has also adopted ASC 820-10 (formerly SFAS 157, “Fair Value Measurements”) which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

·
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

·
Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

·
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

As of March 31, 2012, the Company did not identify any assets or liabilities that are required to be presented on the balance sheet at fair value in accordance with ASC 820-10.

Recent Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassification of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update (“ASU”) No. 2011-05, in order to defer only those changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. The amendments are being made to allow the FASB time to redeliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. All other requirements in ASU 2011-05 not affected by this ASU are effective for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of the standard update to impact its financial position or results of operations, as it only requires a change in the format of presentation.

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet08.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
2. Risks and Uncertainties
6 Months Ended
Mar. 31, 2012
Concentration Risk Disclosure [Text Block]
2. 
Risks and Uncertainties

The Company is a startup company subject to the substantial business risks and uncertainties inherent to such an entity, including the potential risk of business failure.

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet09.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
3.Equipment
6 Months Ended
Mar. 31, 2012
Property, Plant and Equipment [Table Text Block]
3.
Equipment

In August 2011, the Company purchased a water truck for $35,759 cash. In October 2011, the Company's water truck was placed in service pursuant to a lease arrangement with an unaffiliated third party.  The lease requires the lessee to pay the Company $2,500 per month plus 10% of the revenue collected by the lessee from its use or sublease of the truck. The lease is for a term of two years and the lessee has the option to purchase the truck at the end of the lease term for 75% of the Company's purchase price.  

The Company calculated the depreciation of the truck using straight-line method with a useful life of three years. For the six months ended March 31, 2012, the Company recorded depreciation expense of $5,096 and lease income of $19,203. As of March 31, 2012, the lease income receivable was $10,016 due to the lessee’s cash flow problems.

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet10.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
4.Oil and Gas Properties
6 Months Ended
Mar. 31, 2012
Oil and Gas Properties [Text Block]
4.
Oil and Gas Properties

In September 2011, the Company acquired a 31.25% working interest in an exploratory oil and gas drilling prospect covering 120 acres in Eastland County, Texas, for $18,750 cash.

In October 2011, West Texas Royalties, Inc., the operator of the Company's Eastland County prospect, began drilling and fracturing operations at the initial well and the Company made additional investment of $83,373 and $43,750 in November 2011 and March 2012 respectively.  As of March 31, 2012, no revenue has yet to be derived from the wells the Company has an interest in and the total amount of the investment was $145,873 and the investment payable was $43,750.  The Company has a payable balance of $43,750 to West Texas Royalties as of March 31, 2012.

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet11.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
5.Shareholders' Equity
6 Months Ended
Mar. 31, 2012
Stockholders' Equity Note Disclosure [Text Block]
5.
Shareholders’ Equity

The Company is authorized to issue 200,000,000 shares of common stock, par value of $0.001, and 10,000,000 shares of preferred stock, par value of $0.001.

Commencing on January 24, 2011, the Company began the sale of up to 2,000,000 shares of its common stock at $.25 per share in a private placement.  During fiscal 2011, the Company sold 962,000 shares for gross proceeds of $240,500. No selling commissions were incurred with respect to these sales of stock.

As of March 31, 2012, the Company had 13,106,500 shares of common stock issued and outstanding and had not issued any of its preferred stock.

On September 15, 2011, the Company adopted the West Texas Resources, Inc. 2011 Stock Incentive Plan (the “Plan”) providing for the grant of non-qualified stock options and incentive stock options to purchase its common stock and for grant of restricted and unrestricted grants. The Company has reserved 3,000,000 shares of its common stock under the Plan. All officers, directors, employees and consultants to the Company are eligible to participate under the Plan. The purpose of the Plan is to provide eligible participants with an opportunity to acquire an ownership interest in the Company.

The Company issued options to certain consultants to purchase 400,000 shares of the Company’s common stock. The options vest immediately and expire on September 15, 2016. The fair value of each share-based award was estimated using the Black-Scholes option pricing model or a lattice model. The fair value of these options, determined to be $65,402, was included in general and administrative expenses for the year ended September 30, 2011.

The following assumptions were used in the fair value method calculation:

 
Volatility: 83%

 
Risk free rate of return: 1%

 
Expected term: 5 years

The following information applies to all options outstanding at March 31, 2012:

 
Weighted average exercise price: $0.25

 
Options outstanding and exercisable: 400,000

 
Average remaining life: 4.5 years

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/Sheet12.html Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii"
6.Subsequent Events
6 Months Ended
Mar. 31, 2012
Subsequent Events [Text Block]
6.
Subsequent Events

Events subsequent to March 31, 2012 have been evaluated through the date these financial statements were issued to determine whether they should be disclosed to keep the financial statements from being misleading.   Management found no other subsequent events that should be disclosed.

------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e Content-Location: file:///C:/c49a86c5_16dc_4710_a81e_d47d0dbcf10e/Worksheets/filelist.xml Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset="us-ascii" ------=_NextPart_c49a86c5_16dc_4710_a81e_d47d0dbcf10e--