West Canyon Energy 10Q/A 2009 Q2 Quarterly report (amended)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q/A
Amendment No. 1

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedDecember 31, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________________ to ____________________________

Commission File Number333-130673

WEST CANYON ENERGY CORP.
(Exact name of registrant as specified in its charter)

Nevada	20-8756823
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

20333 State Highway 249, Suite 200 – 113 Houston TX	77070-26133
(Address of principal executive offices)	(Zip Code)

281.378.1563
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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. [X] YES [ ] NO

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

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ]	(Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act
[ ] YES [X] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. [ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
21,006,666 common shares issued and outstanding as of April 8,2009.

PART I - FINANCIAL INFORMATION

Item1. Financial Statements.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)

		December 31,
		2008			June 30, 2008
		(UNAUDITED)			(AUDITED)

ASSETS
Current Assets
Cash and Cash Equivalents	$	92,434		$	99,445
Advances to Operators		991,888			662,585
Accounts Receivable		49,394			17,078
Prepaid Expenses		2,049			450
Total Current Assets		1,135,765			779,558
Unproved Interest		6,640,285			6,404,735
Deferred Financing Costs, net		38,281			-
Furniture & Equipment, net		4,100			4,257
Total Assets	$	7,818,431		$	7,188,550

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable - Trade	$	217,443		$	18,727
Accrued Interest Payable		57,839			59,871
Accrued Liabilities		19,445			69,784
Other Liabilities		901			6,340
Advances		740,000			-
Loan from Shareholders		300			300
Total Current Liabilities		1,035,928			155,022
Notes Payable		1,900,000			1,900,000
Total Liabilities		2,935,928			2,055,022
STOCKHOLDERS’ EQUITY
Common Stock
Authorized: 150,000,000 shares, par value $0.001
Issued and Outstanding: 20,506,667 and 20,406,667
shares, respectively		20,507			20,407
Additional Paid-In Capital		6,361,869			6,231,969
Deficit Accumulated During the Exploration Stage		(1,496,186	)		(1,123,739	)
Accumulated Other Comprehensive Income (Loss)		(3,687	)		4,891
Total Stockholders' Equity		4,882,503			5,133,528
Total Liabilities and Stockholders' Equity	$	7,818,431		$	7,188,550

The accompanying notes are an integral part of these statements.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Stated in U.S. Dollars)

		Cumulative
		Period												Three
		from Inception,			Six Months			Six Months			Three Months			Months
		July 27, 2004			Ended			Ended			Ended			Ended
		to December 31,			December 31,			December 31,			December 31,			December 31,
		2008			2008			2007			2008			2007

Revenue	$	-		$	-		$	-		$	-		$	-

Operating Expenses
General & Administrative		1,722,083			658,184			323,476			149,231			267,604
Total Operating Expenses		1,722,083			658,184			323,476			149,231			267,604
Net Loss from Operations		(1,722,083	)		(658,184	)		(323,476	)		(149,231	)		(267,604	)
Interest Income (Expense)		(174,183	)		(114,343	)		1,518			(71,400	)		1,336
Other Income		400,080			400,080						400,080
Income (Loss) Before Income		(1,496,186	)		(372,447	)		(321,958	)		179,449			(266,268	)
Taxes
Income Taxes		-			-			-			-			-
Net income (loss)		(1,496,186	)		(372,447	)		(321,958	)		179,449			(266,268	)
Foreign Currency Translation		(3,687	)		(8,578	)		5,127			(5,498	)		5,127
Comprehensive income (loss)	$	(1,499,873	)	$	(381,025	)	$	(316,831	)	$	173,951		$	(261,141	)

Basic and Diluted earnings (loss)
per share				$	(0.02	)	$	(0.02	)	$	0.01		$	(0.01	)

Number of common shares
used in basic computation					20,495,254			16,886,341			20,506,667			19,751,667

Number of common shares used
in diluted computation					20,495,254			16,886,341			24,066,331			19,751,667

The accompanying notes are an integral part of these statements.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Stated in U.S. Dollars)

		Cumulative			Six Months			Six Months
		Period			Ended			Ended
		from Inception,			December 31,			December 31,
		July 27, 2004 to			2008			2007
		December 31,
		2008
Operating Activities
Net loss	$	(1,496,186	)	$	(372,447	)	$	(321,958	)

Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation		2,167			157			0
Amortization of deferred financing costs		28,219			28,219			0
Non-cash payment of compensation		445,000			130,000			0
Advances to operators, receivables and prepaids		(999,929	)		(363,218	)		16,152
Accounts payable and accrued liabilities		188,226			44,145			7,010
Other liabilities		901			(5,439	)		0
Net Cash Used in Operating Activities		(1,831,602	)		(538,583	)		(298,796	)

Investing Activities
Unproved interests		(2,149,133	)		(59,850	)		(1,486,988	)
Acquisition, net of cash acquired		401,056			0			401,056
Loans to affiliated company		(2,750,000	)		0			(1,450,000	)
Net Cash Used in Investing Activities		(4,498,077	)		(59,850	)		(2,535,932	)

Financing Activities
Proceeds from issuance of common stock		3,900,500			0			2,700,000
Advances from shareholder		200,000			0			0
Shareholder loan		25,000			0			0
Proceeds from convertible debt		1,900,000			0			500,000
Deferred financing costs		(140,000	)		(140,000	)		0
Proceeds from advances		740,000			740,000			0
Repayments of advances from shareholder		(199,700	)		0			(199,700	)
Net Cash Provided by Financing Activities		6,425,800			600,000			3,000,300
Effect of exchange rate on cash		(3,687	)		(8,578	)		5,127
Increase (decrease) In Cash During The Period		92,434			(7,011	)		170,699

Cash, Beginning Of Period		0			99,445			60,846

Cash, End Of Period	$	92,434		$	92,434		$	231,545

Supplemental disclosure of noncash investing
activities:
Shareholder loan contributed to capital in May 2007	$	25,000		$	-		$	-
Acquisition of PetroSouth Energy Corp BVI:
Issuance of 5,653,333 shares of common stock	$	2,011,876		$	-		$	2,011,876
Forgiveness of demand loans receivable from
affiliated company	$	2,750,000		$	-		$	1,450,000

The accompanying notes are an integral part of these statements.

WESTCANYONENERGYCORP. ANDSUBSIDIARY
(ANEXPLORATIONSTAGECOMPANY)
CONSOLIDATEDSTATEMENTS OFSTOCKHOLDERS'EQUITY
PERIODFROM JULY 27, 2004(INCEPTION) TODECEMBER 31, 2008
(UNAUDITED)

								DEFICIT
								ACCUMULATED			ACCUMULATED
					ADDITIONAL			DURING THE			OTHER
	COMMON STOCK				PAID-IN			EXPLORATION			COMPREHENSIVE
	SHARES		AMOUNT		CAPITAL			STAGE			INCOME		TOTAL

Balance July 27, 2004 (date of Inception)	-	$	-	$	-		$	-		$	-	$	-

Issuance of Common Stock for cash at
$0.0005, January 2005	11,000,000		11,000		(5,500	)		-					5,500

Issuance of Common Stock for cash at
$0.005, June 2005	2,400,000		2,400		9,600			-					12,000

Issuance of Common Stock for cash at
$0.10, September 2005	180,000		180		17,820			-					18,000

Net Loss								(37,796	)				(37,796	)
Balance, June 30, 2006	13,580,000	$	13,580		21,920			(37,796	)	$	-	$	(2,296	)

Issuance of Common Stock for cash at
$3.75, May 2007	53,333		53		199,947			-					200,000

Shareholder Loan Contributed to Capital
May 2007					25,000			-					25,000

Issuance of Common Stock for cash at
$3.75, June 2007	266,667		267		999,733			-					1,000,000

Net Loss	0		0		-			(110,974	)				(110,974	)
Balance, June 30, 2007	13,900,000	$	13,900		1,246,600			(148,770	)	$	-	$	1,111,730

Issuance of Common Stock for cash at
$5.00, August 2007	300,000		300		1,499,700			-					1,500,000

Issuance of Common Stock for cash at
$3.75, May 2007; closed September 2007	53,334		53		199,947			-					200,000

Issuance of Common Stock at $0.35 for all
of the issued and outstanding common
shares of PetroSouth Energy Corp. BVI,
October 2, 2007	5,653,333		5,654		2,006,222		-						2,011,876
Issuance of Common Stock for cash at
$5.00, October 11, 2007, net	100,000		100		482,400		-						482,500
Issuance of Common Stock for cash at
$5.00, November 28, 2007, net	100,000		100		482,400		-						482,500
Issuance of Common Stock for services
$1.05, June 23, 2008	300,000		300		314,700								315,000
Net Loss							(974,969	)					(974,969	)
Foreign Currency Translation										4,891			4,891
Balance, June 30, 2008	20,406,667	$	20,407	$	6,231,969	$	(1,123,739	)	$	4,891		$	5,133,528
Issuance of Common Stock for services
$1.30, July 22, 2008	100,000		100		129,900								130,000
Net Loss							(372,447	)					(372,447	)
Foreign Currency Translation										(8,578	)		(8,578	)
Balance, December 31, 2008	20,506,667	$	20,507	$	6,361,869	$	(1,496,186	)	$	(3,687	)	$	4,882,503

The accompanying notes are an integral part of these statements.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. ORGANIZATION

The Company was incorporated in the State of Nevada on July 27, 2004 under the name of Mobridge Explorations, Inc. The Company is an Exploration Stage Company as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7. Effective April 30, 2007 the Company completed a merger with its’ subsidiary PetroSouth Energy Corp. As a result the Company name was changed from Mobridge Explorations Inc. to PetroSouth Energy Corp. During the year ended June 30, 2007, the Company abandoned the mineral property located in the Province of Ontario, Canada and focused its effort on expanding its operations in the oil and gas industry through additional equity financing and the acquisition of a company engaged in the oil and gas industry. On October 2, 2007 the Company completed the acquisition of all of the issued and outstanding common stock of PetroSouth Energy Corp. BVI, a privately-owned British Virgin Islands corporation engaged in oil and gas exploration, pursuant to a share exchange agreement entered into with PetroSouth Energy Corp. BVI and its shareholders on September 30, 2007. The Company currently has participation stakes in three separate Colombian blocks representing 197,333 acres. As a result of the share purchase transaction, PetroSouth Energy Corp. BVI is now a wholly-owned subsidiary of the Company, and the Company has become an oil and gas exploration and development company. All operations and efforts of the Company are focused in the oil and gas industry and are subject to the related risks of the industry.

Effective April 11, 2008, the Company completed a merger with its’ subsidiary, West Canyon Energy Corp. As a result, the Company name was changed from PetroSouth Energy Corp. to West Canyon Energy Corp.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Presentation

The unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. The results of operations for such interim periods are not necessarily indicative of the results of operations for a full year. It is management’s opinion that all adjustments necessary to properly state the results for the interim period have been made to these consolidated financial statements. All such adjustments were of a normal and recurring nature. All intercompany transactions are eliminated upon consolidation. These unaudited interim consolidated financial statements and notes included herein should be read in conjunction with the Company’s audited consolidated financial statements and notes for the year ended June 30, 2008, included in the Company’s Annual Report on Form 10-KSB. The accounting principles applied in the preparation of these interim consolidated financial statements are consistent with those applied for the year ended June 30, 2008.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

b) Principles of Consolidation

The consolidated financial statements include the accounts of the Company’s subsidiary. PetroSouth Energy Corp. BVI is a wholly owned subsidiary acquired in October 2007. All intercompany transactions are eliminated upon consolidation. Management does not believe the Company to be the primary beneficiary of any entity, nor does Management believe the Company to hold any variable interests.

c) Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original maturity of three months or less at the time of issuance to be cash equivalents.

d) Concentration of Credit Risk

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash deposits held by financial institutions. Cash is maintained at two financial institutions. The Company places cash deposits with highly rated financial institutions located in the United States and Colombia. At times, cash balances held in financial institutions in the United States may be in excess of FDIC insurance limits. Balances held in Colombia are not subject to FDIC protection. The Company believes the financial institutions are financially strong and the risk of loss is minimal. The Company has not experienced any losses with respect to the related risks and does not believe its exposure to such risk is more than nominal.

e) Use of Estimates and Assumptions

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

f) Financial Instruments

The fair values of financial instruments, which includes cash, accounts receivable, advances to operators, accounts payable, accrued liabilities, loan from shareholder, loans and convertible debentures approximate their carrying values due to the relatively short maturity of these instruments.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

g) Accounting for Oil and Gas Properties

The Company follows the full cost method of accounting for its oil and gas properties. Accordingly, all costs incidental to the acquisition, exploration and development of oil and gas properties, including costs of undeveloped leaseholds, dry holes and leasehold equipment, are capitalized. All costs related to production activities, including workover costs incurred solely to maintain or increase levels of production from an existing completion interval, are charged to expense as incurred.

Capitalized costs are depleted by an equivalent unit-of-production method, converting gas to oil at the ratio of six thousand cubic feet of natural gas to one barrel of oil. Depletion is calculated using the capitalized costs, including estimated asset retirement costs, plus the estimated future expenditures (based on current costs) to be incurred in developing proved reserves, net of estimated salvage values.

Unproved properties are excluded from amortized capitalized costs until it is determined whether or not economically recoverable reserves can be assigned to such properties. The Company assesses its unproved properties for impairment annually. Significant unproved properties are assessed individually.

The Company recognizes liabilities for retirement obligations associated with tangible long-lived assets, such as producing well sites, when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated.

h) Income Taxes

Potential income tax benefits are not recognized in the accounts until realization is more likely than not. The Company adopted SFAS No. 109, Accounting for Income Taxes, as of its inception. Pursuant to SFAS No. 109 the Company is required to compute deferred tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

i) Basic and Diluted Net Loss Per Share

The Company computes net loss per share in accordance with Statement of Financial Accounting Standard No. 128, "Earnings per Share" (“SFAS 128”). SFAS 128 requires presentation of both basic and diluted earnings (loss) per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.

As of December 31, 2008 and 2007, there were 6,526,666 and 6,526,666 warrants outstanding, respectively that were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive. These warrants reflect the 5 for 1 reverse stock split that was effective November 7, 2008.

As of December 31, 2008, there was $1,900,000 of convertible notes outstanding under which 3,559,664 shares could be acquired upon full conversion and are included in the computation of diluted earnings per share. As of December 31, 2007, there was $500,000 of convertible notes outstanding that were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The basic and diluted net loss per share calculation has been adjusted for the five for one reverse stock split, effective November 7, 2008.

j) Stock Based Compensation

Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”) requiring, that compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). Prior to January 1, 2006, the Company accounted for share-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) and related interpretations. The Company also followed the disclosure requirements of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure. The implementation of SFAS 123R did not have an impact on the consolidated financial statements of the Company.

k) Foreign Currency Translation Adjustments

The U.S. dollar is the functional currency for the Company’s consolidated operations except its Colombian subsidiary, which uses the Colombian peso as the functional currency. The Company’s U.S. operations and Colombian operations do not engage in transactions other than in their functional currencies. As such, the Company had no earnings impact from foreign currency transaction gains and losses. The assets and liabilities of the Company’s Colombian subsidiary are translated into U.S. dollars based on the current exchange rate in effect at the balance sheet date. Colombian income and expenses are translated at average rates for the periods presented. Translation adjustments have no effect on net income and are included in accumulated other comprehensive income in stockholders’ equity. The Company has an immaterial deferred tax asset due to a translation loss.

l) Comprehensive Loss

Statement of Financial Accounting Standard No. 130, Reporting Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. Cumulative losses resulting from the translation of the Company’s consolidated financial statements of $3,687 are recorded as accumulated other comprehensive income (loss) at December 31, 2008.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

m) Recent Accounting Pronouncements

In March 2008, FASB issued SFAS No. 161 “Disclosures about Derivative Investments and Hedging Activities” (SFAS 161). SFAS 161 requires a company with derivative instruments to disclose information that should enable financial statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and how derivative instruments and related hedged items affect a company’s financial position, financial performance, and cash flows. SFAS 161 is effective for us beginning in our first quarter of fiscal year 2010. Because SFAS 161 applies only to financial statement disclosure, it will not have any impact on our consolidated financial position, results of operations or cash flows.

In December 2007, FASB issued SFAS No. 141(R)“Business Combinations” (SFAS 141R). SFAS 141R defines a business combination as a transaction or other event in which an acquirer obtains control of one or more businesses. Under SFAS 141R, all business combinations are accounted for by applying the acquisition method (previously referred to as the purchase method), under which the acquirer measures all identified assets acquired, liabilities assumed, and noncontrolling interests in the acquiree at their acquisition date fair values. Certain forms of contingent consideration and certain acquired contingencies are also recorded at their acquisition date fair values. SFAS 141R also requires that most acquisition related costs be expensed in the period incurred. SFAS 141R is effective for us beginning in our first quarter of fiscal year 2010. SFAS 141R will change our accounting for business combinations on a prospective basis.

In December 2007, FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements – an amendment of ARB No. 51” (SFAS 160). SFAS 160 requires a company to recognize noncontrolling interests (previously referred to as “minority interests”) as a separate component in the equity section of the consolidated statement of financial position. It also requires the amount of consolidated net income specifically attributable to the noncontrolling interests be identified in the consolidated statement of income. SFAS 160 also requires changes in ownership interest to be accounted for similarly, as equity transactions; and when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary and the gain or loss on the deconsolidation of the subsidiary be measured at fair value. SFAS 160 is effective for us beginning in our first quarter of fiscal year 2010. The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.

3. BUSINESS COMBINATIONS

On September 30, 2007, the Company entered into a share exchange agreement with PetroSouth Energy Corp., a private British Virgin Islands corporation (“PetroSouth Energy Corp. BVI”), and the former shareholders of PetroSouth Energy Corp. BVI. The closing of the transaction contemplated in the share exchange agreement and the acquisition of all of the issued and outstanding common stock in the capital of PetroSouth Energy Corp. BVI occurred on October 2, 2007.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

3. BUSINESS COMBINATIONS(Continued)

In exchange for all of the issued and outstanding shares of PetroSouth Energy Corp. BVI, the Company issued to the nominee of the shareholders of PetroSouth Energy Corp. BVI, an aggregate of (i) 28,266,666 common shares of our common stock and (ii) 28,266,666 warrants to purchase common shares in the capital of PetroSouth Energy Corp. at $1.25 per common share. As a result, the former shareholders of PetroSouth Energy Corp. BVI now own approximately 29% of our issued and outstanding common stock. If the former shareholders of PetroSouth Energy Corp. BVI exercised all of the 28,266,666 warrants received by them pursuant to the share exchange agreement, they would own approximately 45% of our issued and outstanding stock.

The total consideration for the acquisition was $4,761,876, which is comprised of common stock issued to the nominee of the former shareholders of PetroSouth Energy Corp. BVI of $2,011,876, as well as the forgiveness of demand notes receivable from PetroSouth Energy Corp. BVI in the amount of $2,750,000 upon completion of the merger.

The primary reason for the acquisition was to acquire the participation stakes in two separate Colombian blocks representing 133,333 acres of unproved prospects. The Company now has a 20% participation stake in the 108,333 acre Talora Block that lies just southwest of Bogotá, Colombia. The Company also has a 16% participation stake in the 25,000 acre Buenavista Block that lies just northeast of Bogotá, Colombia. Certain statutory licensing requirements may limit the Company’s ability to exercise full ownership rights until the licenses are granted by the Colombian government.

Final Purchase Price Allocation

Under the purchase method of accounting, the total final purchase price was allocated to PetroSouth Energy Corp. BVI’s assets and liabilities based on their estimated fair values as of October 2, 2007, as set forth in the unaudited table below. No goodwill was recorded as a result of this acquisition.

Cash	$	401,056
Accounts Receivable		43,402
Furniture & Equipment		6,267
Unproved Interest		4,491,152
Accounts Payable		(180,001	)

	$	4,761,876

The consolidated statements of operations for the three and six month periods ended December 31, 2008 and 2007 includes the activity of the acquired company since the date of acquisition.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

4. UNPROVED INTEREST

Effective September 16, 2008 the Company, through their Colombian subsidiary, entered into a farm out agreement with Delavaco Energy Colombia Inc. Sucursal Colombia, a subsidiary of Delavaco Energy Inc., for the sale of the Company’s 16% participating interest in its Buenavista oil and gas property in Colombia. The total purchase price the Company was to receive for the sale was $4,000,000, of which $200,000 was paid. The balance of $3,800,000 was to be paid on the earlier of (i) 30 days from a Liquidity Event by Delavaco (as defined by the farm out agreement), or (ii) December 31, 2008.

The assignment of the Buenavista interest was made as at the effective date of the agreement, with closing to occur on the date that the balance payment was made. In the event that the balance payment was not made within the time period required, the Buenavista interest would revert back to the Company. The farm out agreement contained certain conditions precedent to closing that had to be satisfied or waived prior to closing and as such the Company can provide no assurance that such conditions will be satisfied or waived as necessary. As of December 31, 2008 the balance of payment was not made by Delavaco and the Buenavista interest reverted back to the Company and the $200,000 deposit was recorded as Other Income.

On July 25, 2008 the Company, through their Colombian subsidiary, entered into a non-binding letter of intent agreement with Delavaco Energy Colombia Inc. Sucursal Colombia, a subsidiary of Delavaco Energy Inc., for the sale of the Company’s 20% participating interest in its Talora oil and gas property in Colombia. The total purchase price the Company was to receive for the sale was $3,500,000. The Company received a nonrefundable advance on sale of $200,000. The non-binding letter of intent agreement provided for an exclusivity period of 120 days, which expired on or about November 30, 2008. The $200,000 advance on sale was recorded as Other Income.

Effective November 19, 2008 the Company has repurchased a 25% interest back from Cobra Oil & Gas in the North Semitropic project located in the San Joaquin Basin, Kern County, CA for a payment of $134,438, that includes the original $34,000 deposit plus the remaining balance of $100,438, which was paid by Cobra as the total prospect acquisition fee.

5. ADVANCES

In November and December 2008, the Company received advances of $600,000 and $140,000, respectively, from a lender. The parties are in process of negotiating the terms, including the potential of an equity investment; however, no definitive agreements have been signed.

6. CONVERTIBLE NOTES PAYABLE

In December 2007, the Company received $500,000, which was included in the consolidated financial statements as an Advance from Lender. On January 24, 2008, the Company converted the Advance from Lender into a Convertible Promissory Note (the “Note”) to Stealth Energy Ventures AG (“Stealth”), in the amount of $500,000. The Note is payable on February 17, 2010 and will accrue interest at the rate of 9%, which is paid semi-annually starting 180 days from the issuance of the Note. The outstanding principal amount of the Note is convertible by Stealth into common shares at a conversion rate based upon 100% of the average closing prices for the 10 trading days immediately preceding the conversion date. The Note is secured against substantially all the assets of the Company.

On February 5, 2008, the Company issued a Convertible Promissory Note (“Note 2”) to Stealth Energy Ventures AG (“Stealth”), in the amount of $750,000. Note 2 is payable on February 5, 2010 and will accrue interest at the rate of 9%, which is paid semi-annually starting 180 days from the issuance of the Note 2. The outstanding principal amount of Note 2 is convertible by Stealth into common shares at a conversion rate based upon 100% of the average closing prices for the 10 trading days immediately preceding the conversion date. Note 2 is secured against substantially all the assets of the Company.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

6. CONVERTIBLE NOTES PAYABLE(continued)

On March 10, 2008, the Company issued a Convertible Promissory Note (“Note 3”) to Stealth Energy Ventures AG (“Stealth”), in the amount of $300,000. Note 3 is payable on March 10, 2010 and will accrue interest at the rate of 9%, which is paid semi-annually starting 180 days from the issuance of the Note 3. The outstanding principal amount of Note 3 is convertible by Stealth into common shares at a conversion rate based upon 100% of the average closing prices for the 10 trading days immediately preceding the conversion date. Note 3 is secured against substantially all the assets of the Company.

On June 2, 2008, the Company issued a Convertible Promissory Note (“Note 4”) to Stealth Energy Ventures AG (“Stealth”), in the amount of $350,000. Note 4 is payable on June 2, 2010 and will accrue interest at the rate of 9% which is paid semi-annually starting 180 days from the issuance of Note 4. The outstanding principal amount of Note 4 is convertible by Stealth into common shares at a conversion rate based upon 100% of the average closing prices for the 10 trading days immediately preceding the conversion date. Note 4 is secured against substantially all the assets of the Company.

The Company’s convertible notes payable are due in 2010 and will require total payments of $1.9 million upon maturity.

In connection with the Convertible Promissory Notes, the Company entered into a services agreement with a Financial Consultant whereby the Company agreed to pay a finder’s fee of 3.5% of the gross proceeds of the Convertible Promissory Notes. These fees of $66,500 have been recorded as deferred financing costs. Such deferred financing costs will be amortized to financing costs over the respective two-year terms of the Convertible Promissory Notes using a method that approximates the interest method.

7. COMMON STOCK

During the period from July 27, 2004 (Inception) to December 31, 2008, the Company issued 102,533,333 shares of common stock (20,506,667 on a split-adjusted basis) for total cash proceeds of $3,935,500.

Effective April 30, 2007, the Company effected a ten for one stock split of its’ authorized, issued and outstanding common stock. As a result, its’ authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 750,000,000 shares of common stock with a par value of $0.001.

Effective November 7, 2008, the Company effected a five for one reverse stock split of its authorized, issued and outstanding common stock. As a result, its authorized capital decreased from 750,000,000 shares of common stock with a par value of $0.001 to 150,000,000 shares of common stock with a par value of $0.001.

The effects of the stock splits have been reflected in the Company's financial statements as if the stock splits were effective at the Company's inception (July 27, 2004).

At December 31, 2008, the Company had the following outstanding non-transferable warrants, as adjusted for the five for one reverse stock split, all of which were issued in conjunction with the private placement of certain common shares:

53,333 share purchase warrants exercisable into one common share at a price of US $6.25 per warrant until May 1, 2010

266,667 share purchase warrants exercisable into one common share at a price of US $6.25 per warrant until June 25, 2010

300,000 share purchase warrants exercisable into one common share at a price of US $7.50 per warrant until August 27, 2010

53,333 share purchase warrants exercisable into one common share at a price of US $6.25 per warrant until September 21, 2010

5,653,333 share purchase warrants exercisable into one common share at a price of US $6.25 per warrant until October 2, 2010

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

7. COMMON STOCK(continued)

100,000 share purchase warrants exercisable into one common share at a price of US $7.50 per warrant until October 11, 2010

100,000 share purchase warrants exercisable into one common share at a price of US $7.50 per warrant until November 28, 2010

At December 31, 2008, no warrants have been exercised and all warrants were out of the money. The warrants are exercisable upon issuance for a term of thirty-six months.

8. STOCK BASED COMPENSATION

During the six months ended December 31, 2008, a certain member of management was granted shares of common stock (the “Shares”) as compensation for services provided to the Company. The Shares were fully vested at grant date. The Shares have all ordinary and normal rights of other shares of common stock of the Company. The fair value of the Shares on the date of the grant is expensed over the applicable vesting period. There were no grants of shares of common stock to management during the six month period ended December 31, 2007.

The Company estimates the fair value of equity awards based on the closing price on the grant date of the share. The following table presents a summary of the Company’s unvested shares, as adjusted for the five for one reverse stock split, as of December 31, 2008, including changes from grant date to December 31, 2008.

	Equity Unit			Grant-Date
Equity Awards	Awards			Fair Value

Unvested at June 30, 2008	-			-
Granted	100,000		$	130,000
Vested	(100,000	)		(130,000	)
Forfeited	-			-


Unvested at December 31, 2008	-		$	-

The aggregate fair value of the shares that vested during the six months ended December 31, 2008 was $130,000. As of December 31, 2008, the Company’s unrecognized compensation cost related to unvested shares was $0.

9. INCOME TAXES

The Company follows the provisions of SFAS No. 109, “Accounting for Income Taxes,” which provides for recognition of a deferred tax asset for deductible temporary timing differences, including operating loss carry forwards and organization costs, net of a “valuation allowance.”

The provision for income taxes consists of current and deferred taxes and differs from amounts that would be calculated by applying federal statutory rates to income before taxes, due to the effect of tax rate differentials of the Company’s Colombian subsidiary and nondeductible items such as entertainment limitations and stock issued to non-U.S. persons for non-U.S. services.

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

9. INCOME TAXES(continued)

The provision (benefit) for income taxes consists of the following for the six months ended December 31, 2008 and 2007:

		2008		2007


Current:
Federal	$	-	$	-
State		-		-
Foreign		-		-
Total current		-		-

Deferred:		-		-
Federal		-		-
State		-		-
Foreign		-		-
Total deferred		-		-

Total benefit	$	-	$	-

A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income (loss) before income taxes is as follows:

Computed tax at the federal statutory rate of 34%	$	(126,632	)	$	(109,466	)
Colombian subsidiary tax rate differential		1,167			1,036
Nondeductible items		71,400
Other		2,190
Valuation allowance changes affecting the provision for		51,875			108,430
income taxes
Total benefit	$	-		$	-
Effective income tax rate		0%			0%

The tax effect of temporary differences which give rise to significant portions of deferred tax assets or liabilities at December 31, 2008 are as follows:

Deferred tax asset, current	$	-

Deferred tax asset, noncurrent
Net operating loss carry forward		18,929
Amortizable assets		415,017

Deferred tax liability, noncurrent		-

Total net deferred tax asset, noncurrent		433,946

Total net deferred tax asset		433,946
Valuation allowance		(433,946	)
	$	-

WEST CANYON ENERGY CORP. AND SUBSIDIARY
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

9. INCOME TAXES(continued)

Deferred tax assets have resulted primarily from the Company’s future deductible temporary differences. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion, or all, of the deferred tax asset may not be realized. The Company’s ability to realize the deferred tax assets depends upon the generation of sufficient future taxable income to allow the utilization of the deductible temporary differences and tax planning strategies. Management evaluates the reliability of the deferred tax assets and the need for a valuation allowance annually. At this time, based on current facts and circumstances, potential benefit of the deferred tax assets has not been recognized in the consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the deferred tax assets in future years. At December 31, 2008, the Company has a net operating loss carry forward of $55,673 that expires in 2028. The Company had no uncertain tax positions as of December 31, 2008.

10. COMMITMENTS

The Company entered into a lease agreement for office space in Colombia. At December 31, 2008, the Company’s future minimum lease payments under the lease are $900 for the year ended June 30, 2009.

The Company also has a lease agreement for office space in the U.S., which is on a month-to-month term, at a rate of $260 per month.

On July 2, 2008, the Company entered into a consulting agreement with Summit Consulting Limited to retain the services of Shane Reeves as President and Director of the Company. Pursuant to the terms of the agreement, the Company has agreed to pay monthly management fees of $8,000 as compensation for the services to be rendered to the Company. In addition, the agreement provides for the issuance of 100,000 shares of common stock, on a split-adjusted basis, upon entering into the agreement and upon each annual renewal of the agreement. On July 22, 2008 the Company approved the issuance of 100,000 shares of common stock, on a split-adjusted basis, to Shane Reeves pursuant to the terms of the agreement. On January 29, 2009, the Company entered into an amending agreement with Summit Consulting to extend the term of the consulting agreement from July 2, 2009 to December 31, 2009.

On January 29, 2009, the Company entered into an executive employment agreement effective December 1, 2008, with Felipe Pimienta Barrios to retain his services as Chief Financial Officer and Director of the Company. Pursuant to the terms of the agreement, the Company has agreed to pay monthly management fees of $4,000 as compensation for the services to be rendered to the Company. In addition, the agreement provides for the issuance of 500,000 shares of common stock, on a split-adjusted basis, upon entering into the agreement and upon each annual renewal of the agreement.

11. GOING CONCERN

These consolidated financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $1,496,186 and further losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through private placements and public offerings of its common stock. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.

Item2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "US$" refer to United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report and unless otherwise indicated, the terms “we”, “us”, “our”, “our company” and “West Canyon” refer to West Canyon Energy Corp. and our wholly owned subsidiary PetroSouth Energy Corp., a BVI company, unless otherwise indicated.

General Overview

We were incorporated on July 27, 2004, under the name Mobridge Explorations Inc. Since inception, we were a company primarily engaged in the acquisition and exploration of mineral properties. Pursuant to a mineral property option agreement dated July 6, 2005, we were granted an option to acquire a 100% undivided right, title and interest of a total of 15 mineral claim units, known as the Chambers Township claim block, located in the Sudbury Mining Division of Ontario, Canada. On November 1, 2006, the mineral property agreement was terminated.

Because we had not discovered any economically viable mineral deposits on the Chambers Township claim block, we decided to change the direction of our exploration activities to the oil and gas sector. On April 30, 2007, we completed a merger with our subsidiary, PetroSouth Energy Corp. with PetroSouth Energy as the surviving corporation. Concurrently, our board of directors approved a 10 for one stock split of our authorized, issued and outstanding shares of common stock. As a result, our authorized capital increased from 75,000,000 shares of common stock with a par value of $0.001 to 750,000,000 shares of common stock with a par value of $0.001.

On October 2, 2007, we completed the acquisition of all the issued and outstanding common stock of PetroSouth Energy Corp. BVI pursuant to a share exchange agreement dated September 30, 2007 among our company, as purchaser, and all of the shareholders of PetroSouth Energy Corp. BVI, as vendors.

Effective April 11, 2008, we completed a merger with our subsidiary, West Canyon Energy Corp. As a result, we changed our name from “PetroSouth Energy Corp.” to “West Canyon Energy Corp.” We changed the name of our company to better reflect the proposed future direction and business of our company. The change of name became effective with the Over-the-Counter Bulletin Board at the opening for trading on April 11, 2008, under the new stock symbol “WCYO”.

Effective November 7, 2008, we effected a five (5) for one (1) reverse stock split of our authorized, issued and outstanding shares of common stock. As a result our authorized capital decreased from 750,000,000 shares of common stock with a par value of $0.001 to 150,000,000 shares of common stock with a par value of $0.001. Our CUSIP number is 951736206 and our new stock symbol is “WCYN”.

Our Current Business

Upon the completion of the acquisition of PetroSouth Energy Corp. BVI, we became an exploration stage company engaged in the exploration and production of oil and gas properties.

During the quarter ended December 31, 2008, our wholly owned subsidiary, PetroSouth Energy Corp. BVI, had participation stakes in three separate Colombian blocks representing 197,333 acres and potential reserves of 222.01 million barrels of oil (MMBO) cumulatively. On January 19, 2009, we announced that we have repurchased a 25% interest from Cobra Oil and Gas in the North Semitropic project located in the San Joaquin Basin, Kern County, CA for a payment of $134,438, that includes the original $34,000 deposit plus the remaining balance of $100,438 which Cobra paid as the total prospect acquisition fee.

We currently have the following participation stakes:

Talora Exploration and Exploitation Contract dated September 16, 2006 (Southwest of Bogotá, Colombia)

We have a 20% participation stake in the Talora Exploration and Exploitation Contract southwest of Bogotá, Colombia. The Talora Exploration and Exploitation Contract was effective September 16, 2004 and has a surrender date of September 16, 2032. The operator and majority partner is Petroleum Equipment International with a 60% participation stake. Gran Tierra Energy, Inc., which purchased Argosy Energy International, has the remaining 20% participation stake. The 108,333-acre contiguous parcel of land contains five prospects with combined potential reserves of 209 million barrels of oil (MMBO). The Exploration and Exploitation Contract associated with the block was originally signed on September 16, 2004, providing for a 6 year exploration period and 28 year production period. The Talora contract area covers 108,336 acres and is located approximately 47 miles southwest of Bogotá, Colombia. There are currently no reserves, as this is an exploration block. We commenced drilling on the Laura-1 exploration well on December 27, 2006 and it was subsequently plugged and abandoned in January 2007. Drilling of this well has fulfilled the commitment for the second exploration phase of the contract, ending December 31, 2006. The third exploration phase has begun and there is one commitment to drill a well associated with it. The property will be returned to the government upon expiration of the production contract. As a result, there will be no reclamation costs.

On July 25, 2008 we, through our Colombian subsidiary, entered into a non-binding letter of intent agreement with Delavaco Energy Colombia Inc. Sucursal Colombia, a subsidiary of Delavaco Energy Inc., for the sale of our 20% participating interest in its Talora oil and gas property in Colombia. The total purchase price we were to receive for the sale was $3,500,000. We received a nonrefundable advance on sale of $200,000. The non-binding letter of intent agreement provided for an exclusivity period of 120 days, which expired on or about November 30, 2008. The $200,000 advance on sale was recorded as Other Income.

Buenavista Exploration and Production Contract dated November 8, 2004 (Northeast of Bogotá, Colombia)

We have a 16% participation stake in the Buenavista Exploration and Production Contract northeast of Bogotá, Colombia. The Buenavista Exploration and Production Contract was effective November 8, 2004 and has a surrender date of November 8, 2032. The operator and majority partner is UTO with an 84% participation stake. The 25,000-acre contiguous parcel of land contains the Bolivar field, the Bolivar prospect and three leads, representing with combined potential reserves of over 13 million barrels of oil (MMBO). The Bolivar Field represents potential reserves of 2.95 million barrels of oil. Included in the field is the La Luna formation, covering an area of 700 acres. The Exploration and Production Contract associated with the block was originally signed on November 8, 2004, providing for a 6 year exploration period and 28 year production period. The Buenavista contract area covers 25,000

acres and is located northeast of Bogotá, Colombia. The Buenavista Block is located 38 miles northwest of Colombia’s largest oil fields, the Cusiana/Cupiagua complex. Our Bolivar 1 well is currently tapping the La Luna Reservoir at approximately 3,000 feet, while producing 90 barrels of oil per day and is still being tested to determine if commercial production can be achieved. We acquired the 16% participation in the Buenavista Exploration and Production Contract through an Assignment Agreement dated August 30, 2007.

Effective September 16, 2008 we, through our Colombian subsidiary, entered into a farm out agreement with Delavaco Energy Colombia Inc. Sucursal Colombia, a subsidiary of Delavaco Energy Inc., for the sale of the our 16% participating interest in its Buenavista oil and gas property in Colombia. The total purchase price we were to receive for the sale was $4,000,000, of which $200,000 was paid. The balance of $3,800,000 was to be paid on the earlier of (i) 30 days from a Liquidity Event by Delavaco (as defined by the farm out agreement), or (ii) December 31, 2008.

The assignment of the Buenavista interest was made as at the effective date of the agreement, with closing to occur on the date that the balance payment was made. In the event that the balance payment was not made within the time period required, the Buenavista interest would revert back to our company. The farm out agreement contained certain conditions precedent to closing that had to be satisfied or waived prior to closing and as such we could provide no assurance that such conditions would have be satisfied or waived as necessary. As of December 31, 2008 the balance of payment was not made by Delavaco and the Buenavista interest reverted back to our company and the $200,000 deposit was recorded as Other Income.

On January 19, 2009 we announced that we completed our 70km 3D seismic shoot in our Buenavista Block and are currently evaluating this new information for two new drilling locations. The two well packages will consist of one development well and one exploratory well to begin drilling operations by the end of March 2009.

Carbonera Exploration and Exploitation Contract dated October 2, 2007 (Northeast of Bogotá, Colombia)

We acquired a 6% share interest in the Carbonera Exploration and Exploitation Contract. The “Carbonera Contract” encompasses a 64,000 acre concession located northeast of Bogotá near the Venezuelan border in the Catatumbo Basin region of northern Colombia. The 6% interest was acquired for US $420,000 and other considerations from Omega Energy Colombia, which is in partnership with our company on several other exploration concessions in Colombia. The operator of the Carbonera Contract is Well Logging Ltd and the concession is currently being evaluated for a combination of gas and condensate. (Gas: 4.0 MMCF/ Day and Condensate: 60 BBL/Day). Additional Wells are in the planning stage.

Kern County, CA Farmout Agreement

On February 1, 2008, we entered into a formal farmout agreement with Transco Oil & Gas, Inc. relating to Transco’s leases on approximately 3,290 acres in Kern County, CA. The plan under the farmout agreement is to drill the first test well in order to exploit the potential of two target horizons. We will earn the entire interest in the properties once drilling is completed.

We are responsible for our pro rata share of the delay rentals on the leasehold. Any additional leases to be acquired will be decided between both parties and costs to acquire new leases will be shared equally.

Transco will retain the 6% of the 8/8ths overriding royalty interests and 15% back-in working interests. Transco will deliver to us, a 77% net revenue interest on the drill site acreage. We will earn a 100% working interest in the first test well, which will become an 85% working interest. We are responsible for 100% of the prospect acquisition, drilling, testing and completion costs for the first well.

On June 16, 2008 we entered into an Assignment of Farmout Interest agreement between our company and Cobra Oil & Gas Company regarding the change in ownership of the Farmout Agreement dated February 1, 2008 between our company and Transco Oil & Gas Inc. and the 25% interest in the North Semitropic Prospect that we held as a result of that Farmout Agreement. The consideration paid by Cobra for the assignment was the sum of $34,000.

On January 19, 2009, we announced that we have repurchased the 25% interest from Cobra Oil and Gas in the North Semitropic project located in the San Joaquin Basin, Kern County, CA for a payment of $134,438, that includes the original $34,000 deposit plus the balance of $100,348 which Cobra paid as the total prospect acquisition fee.

Spring Creek Red River Prospect

On March 25, 2008, we entered into a letter of intent with Slope County Oil Company to acquire their existing leases in the Spring Creek Red River Prospect for the payment of $240,000 and $7,500 in geologist fees.

Cash Requirements

We anticipate a cash requirement in the amount of $2,935,000 during the next 12 months, mostly for drill commitments, seismic, infrastructure costs and professional fees. Accordingly, we will require additional funds to implement our exploration and development programs. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. We need to raise additional funds in the immediate future in order to proceed with our exploration program.

Over the next 12 months we anticipate that we will incur the following cash requirements:

		Amount

Advertising	$	10,000
Rent		5,000
Office Expenses		10,000
Travel		15,000
Printing and Website		10,000
Interest Expense		215,000
Salaries		150,000
Professional Fees		120,000
Exploration and Development Costs		2,400,000

Total	$	2,935,000

Research and Development Expenditures

To date, execution of our business plan has largely focused on exploration of oil and gas resources on those properties subject to which we have a participation stake. We currently do not have any plan for research and development.

Intellectual Property, Patents and Trademarks

We do not have any intellectual property rights, patents or trademarks.

Employees

We currently do not anticipate any significant changes in the number of our employees. We currently have two employees.

Results of Operations

Three month Summary ended December 31, 2008 and 2007

		Three Months Ended
		December 31
		2008			2007
Revenue	$	Nil		$	Nil
Operating Expenses	$	149,231		$	267,604
Interest Income (expense)	$	(71,400	)	$	1,336
Other Income	$	400,080		$	Nil
Net Income (Loss)	$	179,449		$	(266,268	)

Expenses

Three month Summary ended December 31, 2008 and 2007

		Three Months Ended
		December 31
		2008		2007
General and administrative	$	149,231	$	267,604

Operating expenses for the three months ended December 31, 2008, decreased by 44% as compared to the comparative period in 2007 primarily as a result of decreased general and administrative expenses due to lower public relations and professional fees.

Six month Summary ended December 31, 2008 and 2007

		Six Months Ended
		December 31
		2008			2007
Revenue	$	Nil		$	Nil
Operating Expenses	$	658,184		$	323,476
Interest Income (expense)	$	(114,343	)	$	1,518
Other Income	$	400,080		$	Nil
Net Loss	$	(372,447	)	$	(321,958	)

Expenses

Six month Summary ended December 31, 2008 and 2007

		Six Months Ended
		December 31
		2008		2007
General and administrative	$	658,184	$	323,476

Operating expenses for the six months ended December 31, 2008, increased by 103% as compared to the comparative period in 2007 primarily as a result of increased general and administrative expenses due to our company's increased operating activities in the oil and gas industry, increased management and consulting fees, and higher professional fees.

Revenue

We have not earned any revenues from operations since inception and we do not anticipate earning such revenues until such time as we have entered into commercial production of our oil and gas projects. We are currently in the

exploration stage of our business and we can provide no assurances that we will discover commercially exploitable resources on our properties, or if such resources are discovered, that we will be able to enter into commercial production.

Liquidity and Financial Condition

Working Capital
		At		At	Percentage
		December 31,		June 30,	Increase/
		2008		2008	(Decrease)
Current Assets	$	1,135,765	$	779,558	46%
Current Liabilities	$	1,035,928	$	155,022	568%
Working Capital	$	99,837	$	624,536	(84%)

Cash Flows
		Six Months Ended		Six Months Ended
		December 31,		December 31,
		2008		2007
Net Cash (Used by) Operating Activities	$	(538,583	)	(298,796	)
Net Cash (Used by) Investing Activities	$	(59,850	)	(2,535,932	)
Net Cash (Used by) Provided by Financing Activities	$	600,000		3,000,300
Increase (Decrease) in Cash During the Period	$	(7,011	)	170,699

As of December 31, 2008, our total assets were $7,818,431 and our total liabilities were $2,935,928 and we had a working capital surplus of $99,837. Our financial statements report a net loss of $372,447 for the six months ended December 31, 2008, and a net loss of $1,496,186 for the period from July 27, 2004 (inception) to December 31, 2008.

We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed. In this regard we have raised additional capital through equity offerings and loan transactions.

The continuation of our business is dependent upon obtaining further financing, a successful program of exploration, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Critical Accounting Policies

Basis of Presentation

The financial statements of our company have been prepared in accordance with generally accepted accounting principles in the United States of America. Our fiscal year end is June 30.

Principles of Consolidation

The consolidated financial statements include the accounts of our company’s subsidiary. PetroSouth Energy Corp. BVI is a wholly owned subsidiary acquired in October 2007. All intercompany transactions are eliminated upon consolidation. Management does not believe our company to be the primary beneficiary of any entity, nor does Management believe our company to hold any variable interests.

Cash and Cash Equivalents

Our company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Use of Estimates and Assumptions

Financial Instruments

The carrying value of cash, accounts receivable, advances to operators, accounts payable, accrued liabilities and loan from shareholder and convertible debentures approximates their fair value because of the short maturity of these instruments.

Accounting for Oil and Gas Properties

Our company follows the full cost method of accounting for our oil and gas properties. Accordingly, all costs incidental to the acquisition, exploration and development of oil and gas properties, including costs of undeveloped leasehold, dry holes and leasehold equipment, are capitalized. All costs related to production activities, including workover costs incurred solely to maintain or increase levels of production from an existing completion interval, are charged to expense as incurred.

Unproved properties are excluded from amortized capitalized costs until it is determined whether or not economically recoverable reserves can be assigned to such properties. Our company assesses its unproved properties for impairment annually. Significant unproved properties are assessed individually.

Our company recognizes liabilities for retirement obligations associated with tangible long-lived assets, such as producing well sites, when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated.

Income Taxes

Potential income tax benefits are not recognized in the accounts until realization is more likely than not. Our company adopted SFAS No. 109, Accounting for Income Taxes, as of our inception.

Pursuant to SFAS No. 109 our company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these consolidated financial statements because our company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Basic and Diluted Net Loss Per Share

Our company computes net loss per share in accordance with Statement of Financial Accounting Standard No. 128, "Earnings per Share" (“SFAS 128”). SFAS 128 requires presentation of both basic and diluted earnings (loss) per share (EPS) on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.

As of December 31, 2008, there was $1,900,000 of convertible notes outstanding, under which 3,559,664 shares could be acquired upon full conversion and are included in the computation of diluted earnings per share. As of December 31, 2007, there was $500,000 of convertible notes outstanding that were not included in the computation of diluted earnings (loss) per share because the effect would have been anti-dilutive.

Stock Based Compensation

Effective January 1, 2006, our company adopted the provisions of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (“SFAS 123R”) requiring that compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award). Prior to January 1, 2006, our company accounted for share-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) and related interpretations. Our company also followed the disclosure requirements of Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standards No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure. The implementation of SFAS 123R did not have an impact on the consolidated financial statements of our company.

On July 2, 2008, we entered into a consulting agreement with Summit Consulting Limited to retain the services of Shane Reeves as President and Director of our company. Pursuant to the terms of the Agreement, we have agreed to pay monthly management fees of $8,000 as compensation for the services to be rendered to us. In addition, the Agreement provides for the issuance of 500,000 shares of common stock upon entering into the Agreement and upon each annual renewal of the agreement. On January 29, 2009 we entered into an amending agreement with Summit Consulting to extend the term of the consulting agreement from July 2, 2009 to December 31, 2009.

On January 29, 2009, we entered into an executive employment agreement with Felipe Pimenta Barrios, our chief financial officer and director. Pursuant to the terms of the agreement, we agree to pay to Felipe Pimenta Barrios a monthly salary of $4,000. The agreement is effective December 1, 2008 and shall continue for a period of twelve months. In addition, the agreement provides for the issuance of 500,000 shares of common stock, on a split-adjusted basis, upon entering into the agreement and upon each annual renewal of the agreement.

Comprehensive Loss

Statement of Financial Accounting Standard No. 130, Reporting Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. Adjustments resulting from the translation of our company’s consolidated financial statements of $3,687 are recorded as accumulated other comprehensive loss at December 31, 2008.

Recently Issued Accounting Standards

In December 2007, FASB issued SFAS No. 141 (revised 2007), “Business Combinations” (SFAS 141R). SFAS 141R defines a business combination as a transaction or other event in which an acquirer obtains control of one or more businesses. Under SFAS 141R, all business combinations are accounted for by applying the acquisition method (previously referred to as the purchase method), under which the acquirer measures all identified assets acquired, liabilities assumed, and noncontrolling interests in the acquiree at their acquisition date fair values. Certain forms of contingent consideration and certain acquired contingencies are also recorded at their acquisition date fair values. SFAS 141R also requires that most acquisition related costs be expensed in the period incurred. SFAS 141R is effective for us beginning in our first quarter of fiscal year 2010. SFAS 141R will change our accounting for business combinations on a prospective basis.

Item 3. Quantitative Disclosures About Market Risks.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

Item4. Controls and Procedures.

Management’s Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and

reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of December 31, 2008, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president (who is acting as our principal executive officer) and our chief financial officer (who is acting as our principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our quarter ended December 31, 2008 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item1. Legal Proceedings.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors.

Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.

Risks Related to Our Business

Because we may never earn revenues from our operations, our business may fail and then investors may lose all of their investment in our company.

We have no history of revenues from operations. We have never had significant operations and have no significant assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.

We expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from future acquisitions, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their investment in our company.

We have a history of losses and have negative cash flows from operations, which raises substantial doubt about our ability to continue as a going concern.

We have not generated any revenues since our incorporation and we will continue to incur operating expenses without revenues until we are in commercial deployment. To date we have had negative cash flows from operations and we have been dependent on sales of our equity securities and debt financing to meet our cash requirements and have incurred net losses from inception to December 31, 2008 of $1,496,186. Our net cash used in operations for the six months ended December 31, 2008 was $538,583. As of December 31, 2008 we had working capital surplus of $99,837. We do not expect positive cash flow from operations in the near term. There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that drilling and completion costs increase beyond our expectations; or we encounter greater costs associated with general and administrative expenses or offering costs. The occurrence of any of the aforementioned events could adversely affect our ability to meet our business plans. We cannot provide assurances that we will be able to successfully execute our business plan. These circumstances raise substantial doubt about our ability to continue as a going concern. If we are unable to continue as a going concern, investors will likely lose all of their investments in our company.

There is no assurance that we will operate profitably or will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when customers will purchase our services, the size of customers’ purchases, the demand for our services, and the level of competition and general economic conditions. If we cannot generate positive cash flows in the future, or raise sufficient financing to continue our normal operations, then we may be forced to scale down or even close our operations.

We will depend almost exclusively on outside capital to pay for the continued exploration and development of our properties. Such outside capital may include the sale of additional stock and/or commercial borrowing. There is no guarantee that sufficient capital will continue to be available to meet these continuing development costs or that it will be on terms acceptable to us. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment.

A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been and will be primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

We have no history of revenues from operations and have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. The success of our company is significantly dependent on a successful acquisition, drilling, completion and production program. Our company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate recoverable reserves or operate on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of our development. We are engaged in the business of exploring and, if warranted, developing commercial reserves of oil and gas. Our properties are in the exploration stage. Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.

Nature of Oil and Gas Exploration and Development involves many risks that we may not be able to overcome.

Oil and gas exploration and development is very competitive and involves many risks that even a combination of experience, knowledge and careful evaluation may not be able to overcome. As with any petroleum property, there can be no assurance that oil or gas will be extracted from any of the properties subject to our exploration and production contracts. Furthermore, the marketability of any discovered resource will be affected by numerous factors beyond our control. These factors include, but are not limited to, market fluctuations of prices, proximity and capacity of pipelines and processing equipment, equipment availability and government regulations (including, without limitation, regulations relating to prices, taxes, royalties, land tenure, allowable production, importing and exporting of oil and gas and environmental protection). The extent of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital.

The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

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 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 operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, 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 which we may elect not to insure against due to prohibitive premium costs and other reasons. 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.

Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on our financial position.

Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labor, and other risks are involved. We may become subject to liability for pollution or hazards against which we cannot adequately insure or which we may elect not to insure. Incurring any such liability may have a material adverse effect on our financial position and operations.

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

The business of resource exploration and development is subject to regulation 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 the properties subject to our exploration and production contracts 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.

All or a portion of our interest in our properties may be lost if we are unable to obtain significant additional financing, as we are required to make significant expenditures on the exploration and development of our properties.

Our ability to continue exploration and, if warranted, development of our properties will be dependent upon our ability to raise significant additional financing. If we are unable to obtain such financing, a portion of our interest in our properties may be lost or our properties may be lost entirely and revert back to the government of Colombia. We have limited financial resources and no material cash flow from operations and we are dependent for funds on our ability to sell our common shares, primarily on a private placement basis. There can be no assurance that we will be able to obtain financing on that basis in light of factors such as the market demand for our securities, the state of financial markets generally and other relevant factors.

We anticipate that we may need to obtain additional bank financing or sell additional debt or equity securities in future public or private offerings. There can be no assurance that additional funding will be available to us for exploration and development of our projects or to fulfill our obligations under the applicable petroleum prospecting licenses. Although historically we have announced additional financings to proceed with the development of some of our properties, there can be no assurance that we will be able to obtain adequate financing in the future or that the terms of such financing will be favorable. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of our projects with the possible loss of our petroleum prospecting licenses.

We will require substantial funds to enable us to decide whether our non-producing properties contain commercial oil and gas deposits and whether they should be brought into production, and if we cannot raise the necessary funds we may never be able to realize the potential of these properties.

Our decision as to whether our unproved properties contain commercial oil and gas deposits and should be brought into production will require substantial funds and depend upon the results of exploration programs and feasibility studies and the recommendations of duly qualified engineers, geologists, or both. This decision will involve consideration and evaluation of several significant factors including but not limited to: (1) costs of bringing a property into production, including exploration and development work, preparation of production feasibility studies, and construction of production facilities; (2) availability and costs of financing; (3) ongoing costs of production; (4) market prices for the oil and gas to be produced; (5) environmental compliance regulations and restraints; and (6) political climate, governmental regulation and control. If we are unable to raise the funds necessary to properly evaluate our unproved properties, then we may not be able to realize any potential of these properties.

We have licenses in respect of our properties, but our properties may be subject to prior unregistered agreements, or transfers which have not been recorded or detected through title searches, and are subject to a governmental right of participation, resulting in a possible claim against any future revenues generated by such properties.

We have licenses with respect to our oil and gas properties and we believe our interests are valid and enforceable given that they have been granted directly by the government of Colombia, although we have not obtained an opinion of counsel or any similar form of title opinion to that effect. However, these licenses do not guarantee title against all possible claims. The properties may be subject to prior unregistered agreements, or transfers which have not been recorded or detected through title research. If the interests in our properties are challenged, we may have to expend funds defending any such claims and may ultimately lose some or all of any revenues generated from the properties if we lose our interest in such properties.

The majority of our projects are located in Colombia where oil and gas exploration activities may be affected in varying degrees by political and government regulations which could have a negative impact on our ability to continue our operations.

The majority of our projects in which we have participation stakes are located in Colombia. Exploration activities in Colombia may be affected in varying degrees by political instabilities and government regulations relating to the oil and gas industry. Any changes in regulations or shifts in political conditions are beyond our control and may adversely affect our business. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, export controls, income taxes, expropriations of property, environmental legislation and safety. The status of Colombia as a developing country may make it more difficult for us to obtain any required financing for our projects. The effect of all these factors cannot be accurately predicted. Notwithstanding the progress achieved in restructuring Colombia political institutions and revitalizing its economy, the present administration, or any successor government, may not be able to sustain the progress achieved. While the Colombia economy has experienced growth in recent years, such growth may not continue in the future at similar rates or at all. If the economy of Colombia fails to continue its growth or suffers a recession, we may not be able to continue our operations in that country. We do not carry political risk insurance.

The potential profitability of oil and gas ventures depends upon factors beyond the control of our company.

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, 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. Additionally, due to world-wide 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 affect our financial performance.

Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas which may be acquired or discovered will be affected by

numerous factors beyond our control. These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. The extent of these factors cannot be accurately predicted but the combination of these factors may result in our company not receiving an adequate return on invested capital.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring the licenses.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs. Accordingly, there is a high degree of competition for desirable oil and gas properties for drilling operations and necessary drilling equipment, as well as for access to funds. There can be no assurance that the necessary funds can be raised or that any projected work will be completed. There are other competitors that have operations in the properties in Colombia and the presence of these competitors could adversely affect our ability to acquire additional property interests.

Risks Related to Our Common Stock

Trading of our stock may be restricted by the SEC’s “Penny Stock” regulations which may limit a stockholder's ability to buy and sell our stock.

The U.S. Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.

Financial Industry Regulatory Authority (“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, 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.

Trading in our common stock on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

Shares of our common stock are currently quoted on the OTC Bulletin Board. The trading price of our common stock has been subject to wide fluctuations. Trading prices of our common stock may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common stock will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common stock, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.

Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We are engaged in the business of exploring and, if warranted, developing commercial reserves of oil and gas. Our properties are primarily in the exploration stage only. Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.

Risks Related to Our Company

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.

Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 150,000,000 shares of common stock with a par value of $0.001. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.

Our By-laws do not contain anti-takeover provisions which could result in a change of our management and directors if there is a take-over of our company.

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

On January 29, 2009, we entered into an amending agreement with Summit Consulting Limited, a company for which our president is a principle. The amending agreement amends a consulting agreement dated July 2, 2008. Under the amending agreement, we have extended the term of the consulting agreement to December 31, 2009.

Item 6. Exhibits.

Exhibits required by Item 601 of Regulation S-K

Number	Description

(3)	Articles of Incorporation and Bylaws

3.1	Articles of Incorporation (incorporated by reference to our registration statement on form SB-2 filed on January 6, 2006)

3.2	By-laws (incorporated by reference to our registration statement on form SB-2 filed on January 6, 2006)

3.3	Articles of Merger (incorporated by reference to our current report on Form 8-k filed on May 1, 2007)

3.4	Certificate of Change (incorporated by reference to our current report on Form 8-k filed on May 1, 2007)

3.5	Articles of Merger filed with the Nevada Secretary of State on March 27, 2008, effective April 11, 2008 (incorporated by reference to our current report on Form 8-k filed on April 11, 2008)

Number	Description

(10)	Material Contracts

10.1	Share Exchange Agreement among all shareholders of PetroSouth Energy Corp. BVI and our company dated September 30, 2007 (incorporated by reference to our current report, on Form 8-K filed on October 3, 2007)

10.2	Commercial Agreement for the Talora Block between Petroleum Equipment International (PEI), David Craven, and dated October 24, 2006 for 20% participation stake in the Tolara Block near Bogotá, Colombia (incorporated by reference to our current report, on Form 8-K filed on October 3, 2007)

10.3	Buenavista Assignment Agreement between UTI, PetroSouth Energy Corp., BVI, Petroleum Equipment International Ltda. dated August 30, 2007 for participation stake in the Buenavista Block near Bogotá, Colombia (incorporated by reference to our current report, on Form 8-K filed on October 3, 2007)

10.4	Carbonera Exploration and Exploitation Contract (incorporated by reference to our current report, on Form 8-K filed on October 29, 2007)

10.5	Convertible Promissory Note dated January 17, 2008 (incorporated by reference to our current report, on Form 8-K filed on February 1, 2008)

10.6	Farmout Agreement “North Semitropic Prospect” dated February 1, 2008 (incorporated by reference to our current report, on Form 8-K filed on February 12, 2008)

10.7	March 25, 2008 letter of intent with Slope County Oil Company (incorporated by reference to our current report, on Form 8-K filed on April 3, 2008)

10.8	Convertible Promissory Note dated March 10, 2008 (incorporated by reference to our current report, on Form 8-K filed on April 3, 2008)

10.9	Convertible Promissory Note dated February 5, 2008 and entered into on April 30, 2008 (incorporated by reference to our current report, on Form 8-K filed on May 1, 2008)

10.10	Convertible Promissory Note dated June 2, 2008 (incorporated by reference to our current report, on Form 8-K filed on June 9, 2008)

10.11	Assignment of Farmout Interest dated June 16, 2008 (incorporated by reference to our current report, on Form 8-K filed on June 26, 2008)

10.12	Consulting agreement between our company and Summit Consulting Limited dated effective the 2^nd day of July 2008 (incorporated by reference to our current report, on Form 8-K filed on July 29, 2008)

10.13	Executive Employment Agreement with Felipe Pimenta Barrios (incorporated by reference to our current report, on Form 8-K filed on January 30, 2009)

10.14	Amending Agreement with Summit Consulting Limited (incorporated by reference to our current report, on Form 8-K filed on January 30, 2009)

Number	Description

(14)	Code of Ethics

14.1	Code of Ethics (incorporated by reference to our annual report on Form 10-KSB filed on September 28, 2007)

(21)	Subsidiaries of the Small Business Issuer

21.1	PetroSouth Energy Corp. BVI, a British Virgin Islands corporation

(31)	Section 302 Certifications

31.1*	CEO Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

31.2*	CFO Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

(32)	Section 906 Certification

32.1*	CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*	CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*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.

	WEST CANYON ENERGY CORP.
	(Registrant)


Dated: April 15, 2009	/s/ Shane Reeves
	Shane Reeves
	President and Director
	(Principal Executive Officer)

Dated: April 15, 2009	/s/ Felipe Pimenta Barrios
	Felipe Pimenta Barrios
	Chief Financial Officer and Director
	(Principal Financial Officer and Principal
	Accounting Officer)

West Canyon Energy (WCYN) 10-Q/A2009 Q2 Quarterly report (amended)