Aztec Oil & Gas (AZGSQ) 8-K Regulation FD Disclosure

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  July 14, 2009 (May 31, 2009)

AZTEC OIL & GAS, INC.

(Exact Name of Registrant as Specified in Charter)

Nevada

(State or Other Jurisdiction of

Incorporation or Organization)

000-32015	87-0439834
(Commission File Number)	(I.R.S. Employer Identification No.)

Aztec Oil & Gas, Inc.

One Riverway, Suite 1700

Houston, Texas 77056

 (Address of principal executive offices including zip code)

(713) 840-6444

(Registrant’s telephone number, including area code)

ITEM 7.01 - Regulation FD Disclosure

Aztec Oil & Gas, Inc. filed their quarterly report for the period ending May 31, 2009, attached herewith, with the Pick OTC Markets.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AZTEC OIL & GAS, INC.

By:  //s// Franklin C. Fisher, Jr.                

 Franklin C. Fisher, CEO and Chairman

Aztec Oil & Gas, Inc.

Quarterly Report

Period Ending May 31, 2009

Item 1 Exact name of the issuer and the address of its principal executive offices	1
Item 2 Shares outstanding.	1
Item 3 Interim financial statements.	2
Consolidated Balance Sheets	3
Consolidated Statements Of Operations	4
Consolidated Statements Of Cash Flow	5
Consolidated Statements Of Changes In Stockholders’ Deficit	6
Item 4 Management’s discussion and analysis or plan of operation.	9
Item 5 Legal proceedings.	10
Item 6 Defaults upon senior securities.	10
Item 7 Other information.	10
Item 8 Exhibits.	10
Item 9 Certifications.	10

Item 1 Exact name of the issuer and the address of its principal executive offices.

Aztec Oil & Gas, Inc.

One Riverway, Ste 1700

Houston, TX 77056

Item 2 Shares outstanding.

	Period end date;	Number of shares authorized	Number of shares outstanding*
Common Stock	May 31, 2009	100,000,000	33,363,666
Series A Preferred	May 31, 2009	100,000	100,000

*All outstanding shares are freely tradable.

Item 3 Interim financial statements.

SCHMUCK, SMITH, TEES & COMPANY

A PROFESSIONAL CORPORATION

CERTIFIED PUBLIC ACCOUNTANTS

3500 WASHINGTON AVE., SUITE 200

HOUSTON, TEXAS  77007-5945

(713) 880-4900

FAX (713) 880-4910

To the Board of Directors

Aztec Oil & Gas Corporation, Inc.

Houston, Texas

We have compiled the accompanying balance sheet of Aztec Oil & Gas Corporation, Inc., as of May 31, 2009, and the related statements of income for the three months and six months then ended, and cash flow as of May 31, 2009, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants.

A compilation is limited to presenting in the form of financial statements information that is the representation of management.  We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or any other form of assurance on them.

Management has elected to omit some of the disclosures required by generally accepted accounting principles.  If the omitted disclosures were included in the financial statemetns, they might influence the user's conclusions about the Company's financial position, results of operations, and cash flows.  Accordingly, these financial statements are not designed for those who are not informed about such matters.

SCHMUCK, SMITH, TEES & CO., P.C.

July 13, 2009

Section 2 – Quarterly Reporting                                                                    

Consolidated Balance Sheets

(Unaudited)

	May 31, 2009	August 31, 2008
ASSETS
Current assets:
Cash	$1,066,324	$       290,323
Accounts receivable	34,562	175,559
Prepaid expenses and other current assets	117,134	8,597
Total current assets	1,218,020	474,479
Oil and natural gas properties, successful efforts method of accounting net of accumulated depreciation, depletion, amortization and impairment of $1,597,117 and $962,280, respectively	1,837,628	2,124,314
Computers and equipment, net of accumulated depreciation of $2,106 and $674, respectively	4,935	4,054
TOTAL ASSETS	$     3,060,583	$     2,602,847
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$       224,966	$       206,115
Accounts payable and accrued liabilities – related party	386,252	229,538
Salary payable	230,322	59,296
Notes payable and line of credit	409,408	400,000
Refundable subscriptions	-	200,000
Common stock payable	32,167	12,167
Notes payable to related parties	957,743	595,560
Total current liabilities	2,240,858	1,702,676
Asset retirement obligations	34,720	30,812
Total liabilities	2,275,578	1,733,488
Minority interest	3,138,965	2,375,973
Stockholders’ deficit:
Preferred stock, Series A, $.001 par value, 100,000 shares authorized, issued and outstanding	100	100
Common stock, $.001 par value, 100,000,000 shares authorized, 33,363,666 and 32,468,427 shares issued and outstanding, respectively	33,363	32,468
Additional paid-in capital	4,613,870	4,537,525
Accumulated deficit	(7,001,293)	(6,076,707)
Total stockholders’ deficit	(2,353,960)	(1,506,614)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$      3,060,583	$     2,602,847

See accountant’s report.

AZTEC OIL & GAS, INC.

Consolidated Statements of Operations

(Unaudited)

	Three Months Ended		Nine Months Ended
	May 31, 2009	May 31, 2008	May 31, 2009	May 31, 2008
Oil and gas revenue	$    37,665	$     87,168	$   401,069	$   179,666
Operating expenses:
General and administrative	341,693	202,763	939,057	565,927
Oil and gas expenses	27,036	17,766	88,014	44,046
Depreciation, depletion, amortization and accretion	32,090	1,230	107,062	12,400
Impairment  of oil and gas properties	-	-	530,511	-
Total operating expenses	400,819	221,759	1,664,644	622,373
Other income (expense)
Interest expense	(29,399)	(18,640)	(72,158)	(53,958)
Interest income	-		-	22
Total other income / (expense)	(29,399)	(18,640)	(72,158)	(53,936)
NET LOSS BEFORE MINORITY INTEREST	(392,553)	(153,231)	(1,335,733)	(496,643)
Minority Interest	12,776	(25,447)	411,147	(50,004)
NET LOSS	$  (379,777)	$  (178,678)	$  (924,586)	$  (546,647)
Net loss per share - basic and diluted	$     (0.01)	$       (0.01)	$     (0.03)	$     (0.02)
Weighted average shares outstanding
- basic and diluted	33,363,666	32,170,616	33,127,715	31,648,218

See accountant’s report.

AZTEC OIL & GAS, INC.

Consolidated Statements of Cash Flow

(Unaudited)

	Nine Months Ended
	May 31, 2009	May 31, 2008
Cash flows used in operating activities:
Net loss	$    (924,586)	$    (546,647)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	97,240	56,464
Depletion, depletion, amortization and accretion	107,062	12,400
Impairment of properties	530,511	-
Minority Interest	(411,041)	50,004
Changes in:
Accounts receivable	140,997	35,417
Prepaid expenses	(108,537)	(4,298)
Accounts payable and accrued liabilities	18,851	(42,147)
Accounts payable and accrued liabilities – related party	156,714	158,773
Salary payable	171,026	23,853
Net cash used in operating activities	(221,763)	(256,181)
Cash flows from investing activities:
Acquisition of oil and gas properties	(345,547)	(1,531,578)
Change in restricted cash	-	740,000
Capital expenditures	(2,313)	(2,954)
Refundable subscriptions	(200,000)	-
Net cash used in investing activities	(547,860)	(794,532)
Cash flows from financing activities:
Proceeds from limited partners, net of syndication costs	1,258,000	1,044,878
Distributions to limited partners	(83,967)	(59,542)
Proceeds from notes payable and line of credit	27,482	301,583
Proceeds from notes payable - related party	362,183	-
Payments on notes payable	(18,074)	(24,302)
Net cash provided by financing activities	1,545,624	1,262,617
Net increase (decrease) in cash	776,001	211,904
Cash at beginning of period	290,323	4,771
Cash at end of period	1,066,324	216,675
Cash paid during the period for:
Interest	$      25,564	$   15,668
Income taxes	-	-
Non-cash investing and financing transactions
Subscription receivable	$                -	$         -

See accountant’s report.

Consolidated Statements of Changes in Stockholders’ Deficit

For the Three and Six Months Ended May 31, 2009

	Preferred Shares	Preferred Stock	Common Shares	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Totals
Balances, August 31, 2008	100,000	$       100	32,467,655	$   32,468	$    4,537,525	$ (6,076,707)	$ (1,506,614)
Stock Issued for Services	-	-	724,372	724	65,516		66,240
Net Income	-	-	-	-		(527,509)	(527,509)
Balances, November 30, 2008	100,000	100	33,192,027	33,192	4,603,041	(6,604,216)	(1,967,883)
Stock Issued for Services	-	-	170,867	171	10,829	-	11,000
Net Income	-	-	-	-		(17,300)	(17,300)
Balances, May 31, 2009	100,000	$       100	33,362,894	$   33,363	$    4,613,870	$ (6,621,516)	$ (1,974,183)
Net Income	-	-	-	-		(379,777)	(379,777)
Balances, May 31, 2009	100,000	$       100	33,362,894	$   33,363	$    4,613,870	$ (7,001,293)	$ (2,353,960)

See accountant’s report.

AZTEC OIL & GAS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim consolidated financial statements of Aztec Oil & Gas, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in Aztec’s Annual Report filed with the SEC on Form 10-KSB for the year ended August 31, 2008.  In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.  Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for fiscal 2008 as reported in the Form 10-KSB have been omitted.

NOTE 2 - INVESTMENT IN DRILLING PARTNERSHIP

Aztec has a controlling financial interest in the 2006A LP, 2006B LP, 2007A LP, VIIIA LP and VIIIB LP, therefore, the financial statements of all five partnerships are consolidated with those of Aztec and the other partners’ equity is recorded as minority interest.  At May 31, 2009, minority interest was $3,138,965

During the three months ended May 31, 2009, Aztec Oil & Gas Inc. completed the funding of its fifth new drilling partnership, the Aztec Oil & Gas VIIIB Oil & Gas Drilling Partnership.  In this new Partnership, Aztec, through its wholly-owned subsidiary, Aztec Energy, LLC, retained a thirty percent ownership and acts as the Managing General Partner. Another Aztec subsidiary, Aztec Drilling & Operating, LLC, serves as the Partnership’s drilling company and operator.

NOTE 3 – OIL AND GAS PROPERTIES

Oil and gas properties at May 31, 2009 and August 31, 2008 consisted of the following:

	May 31, 2009	August 31, 2008
Proved leasehold costs	$         123,555	$          109,189
Unproved leasehold costs	190,764	190,764
Costs of wells and development	3,088,348	2,757,166
Capitalized asset retirement costs	32,080	29,475
Total cost of oil and gas properties	3,434,745	3,086,594
Accumulated depletion, depreciation, amortization and impairment	(1,597,117)	(962,280)
Oil and gas properties, net	$       1,837,628	$      2,124,314

Aztec reviews proved oil and natural gas properties and other long-lived assets for impairment. These reviews are performed at least annually and more frequently if events and circumstances, (such as downward revision of the reserve estimates or commodity prices) indicate a decline in the recoverability of the carrying value of such properties. Aztec estimates the undiscounted future cash flows expected in connection with the properties and compares such future cash flows to the carrying amount of the properties to determine if the carrying amount is recoverable. When the carrying amounts of the properties exceed their estimated undiscounted future cash flows, the carrying amounts of the properties are reduced to their estimated fair value. The factors used to determine fair value include, but are not limited to, estimates of proved reserves, future commodity prices, the timing of future production, future capital expenditures and a risk-adjusted discount rate. There were no asset impairments for the three months ended May 31, 2009 or May 31, 2008.

NOTE 4 – NOTES PAYABLE AND LINE OF CREDIT

Aztec has an agreement with CSI Energy, LP (“CSI”), a company controlled by our Chief Executive Officer, wherein CSI has agreed to provide Aztec with funds as needed to permit Aztec to meet its monthly operating expenses and other obligations as they become due over the twelve month period following May 31, 2009.  As part of this arrangement, Aztec holds notes totaling $557,743, payable to CSI.  The notes bear interest at a rate ranging from 2% to 9% per annum and all notes due prior to May 31, 2009 were extended to August 31, 2009.

Aztec holds notes totaling $438,000 payable to our Chief Executive Officer for funds advanced to Aztec.  The notes bear interest rates ranging from 2% to 9% per annum and are due in full on August 31, 2009.

Aztec financed its directors’ and officers’ insurance policy in the amount of $27,482 on September 1, 2008, of which $9,408 remains outstanding as of May 31, 2009.  The note bears an interest rate of 9.12% and expires on August 31, 2009.

On May 31, 2007, Aztec executed a loan agreement establishing a line of credit with Amegy Bank National Association.  The line of credit agreement was amended on February 14, 2008 to increase the amount of the line of credit from $200,000 to $400,000.  Interest on any outstanding balances is charged at one-half of one percent above the Amegy Bank National Association prime rate.  At May 31, 2009, the prime rate was three and one quarter percent (3.25%), making the loan rate three and three quarters percent (3.75%).  As of May 31, 2009, the amount outstanding under this facility was $400,000.  Our Chief Executive Officer has personally guaranteed any amount in excess of the original $200,000 amount.  Aztec has extended the line of credit through September 30, 2009.

NOTE 5 - ASSET RETIREMENT OBLIGATIONS

The following is a description of the changes to the Company's asset retirement obligations for the three months ended May 31, 2009 and May 31, 2008:

	Three months ended
	May 31, 2009	May 31, 2008
Asset retirement obligations at beginning of quarter	$          31,649	$                 -
Additions	2,604	-
Accretion expense	466	-
Asset retirement obligations at end of quarter	$          34,719	$                -

NOTE 6 - EQUITY

During the quarter ended May 31, 2009, Aztec did not issue any stock, but accrued $20,000 for officer compensation and $5,500 for director compensation as stock payable to be issued in the next quarter.

Item 4 Management’s discussion and analysis or plan of operation.

A. Plan of Operation.

1. Describe the issuer’s plan of operation for the next twelve months. This description should include such matters as:

Aztec’s principal business objective is to purchase, initiate and/or participate in oil and gas interests utilizing strategies that seek to manage and reduce the risk associated with traditional exploration and production operations; and to sponsor oil and gas drilling programs sold through FINRA registered broker dealers to accredited investors.

The Company feels that their business plan will provide sufficient funding to sustain itself for the next twelve months.  However, there can be no assurances to that effect.  In the event the Company requires additional funds, the Company will have to seek loans or equity placements to cover such cash needs.  There is no assurance additional capital will be available to the Company on acceptable terms.

Management is in the process of expanding its present drilling program business, placed through FINRA registered broker dealers, and seeking other businesses or properties to acquire so that it can expand its operations. The analysis of new businesses and property acquisition opportunities and evaluating new business strategies will be undertaken by or under the supervision of the Company’s Officers and Directors. In analyzing prospective business opportunities, management will consider, to the extent applicable, the available technical, financial and managerial resources of any given business venture. Management will also consider the nature of present and expected competition; potential advances in research and development or exploration; the potential for growth and expansion; the likelihood of sustaining a profit within given time frames; the perceived public recognition or acceptance of products, services, trade or service marks; name identification; and other relevant factors. The Company anticipates that the results of operations of a specific business venture may not necessarily be indicative of the potential for future earnings, which may be impacted by a change in marketing strategies, business expansion, changing or substantially augmenting management, and other factors.

Management will analyze all relevant factors and make a determination based on a composite of available information, without reliance on any single factor. The period within which the Company will decide to participate in a given business venture cannot be predicted and will depend on certain factors, including the time involved in identifying businesses, the time required for the Company to complete its analysis of such businesses, the time required to prepare appropriate documentation and other circumstances.

i. a discussion of how long the issuer can satisfy its cash requirements and whether it will have to raise additional funds in the next twelve months;

(See A1 above)

ii. a summary of any product research and development that the issuer will perform for the term of the plan;

(See A1 above)

iii. any expected purchase or sale of plant and significant equipment; and

(See A1 above)

iv. any expected significant changes in the number of employees.

(See A1 above)

B. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

1. Full fiscal years.

i. Any known trends, events or uncertainties that have or are reasonably likely to have a material impact on the issuer's short-term or long-term liquidity;

Oil prices appear headed for a rise and on a long term basis are anticipated to increase substantially which will aid Issuer. Issuer can operate profitably at today’s energy prices on a well by well basis, and on a total firm basis with a reasonable increase in revenue which is anticipated.

ii. Internal and external sources of liquidity;

Issuer has a good banking relationship with Amegy Bank of Texas, and is also able to borrow for short term needs from Franklin C Fisher, Jr and his controlled entities.

iii. Any material commitments for capital expenditures and the expected sources of funds for such expenditures;  N/A

iv. Any known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations;  No

v. Any significant elements of income or loss that do not arise from the issuer's continuing operations;  No

vi. The causes for any material changes from period to period in one or more line items of the issuer's financial statements; and    Oil and natural gas pricing

vii. Any seasonal aspects that had a material effect on the financial condition or results of operation.

No, except natural gas prices normally rise in the winter months and fall in the summer.

2. Interim Periods.

Issuer formed and funded more drilling partnerships under its sponsored drilling programs through FINRA licensed broker dealers, and intends to continue to do so.

C. Off-Balance Sheet Arrangements.

Not applicable; the issuer has no off-balance sheet arrangements.

Item 5 Legal proceedings.

See Initial Disclosure Statement filed on 7/13/2009.

Item 6 Defaults upon senior securities.

----None---

Item 7 Other information.

----None---

Item 8 Exhibits.

See Initial Disclosure Statement filed on 7/13/2009

Item 9 Certifications.

I, Franklin C Fisher, Jr., certify that:

1. I have reviewed this Quarterly Disclosure Statement of Aztec Oil & Gas, Inc.;

2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and

3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

By: //s// Franklin C Fisher, Jr.

Franklin C Fisher, Jr.

Date: July 13, 2009

I, Larry Hornbrook, certify that:

1. I have reviewed this Quarterly Disclosure Statement of Aztec Oil & Gas, Inc.;

2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and

3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

By:    //s// Larry Hornbrook

Larry Hornbrook

Date: July 13, 2009