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):
February 1, 2006

BASELINE OIL & GAS CORP.
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(Exact Name of Registrant as Specified in its Charter)

Nevada 333-116890 30-0226902
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State of Commission IRS Employer
Incorporation File Number I.D. Number

20022 Creek Farm, San Antonio, Texas 78259
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Address of principal executive offices

Registrant's telephone number: (210) 481-5177

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(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))

Item 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

On February 1, 2006, Baseline Oil & Gas Corp. ("we" or the "Company")
completed a private placement (the "February Private Placement") to accredited
investors in which we received gross proceeds of $9,000,000 by selling an
aggregate of 8,181,819 shares of our newly-issued Common Stock at $1.10 per
share.

We paid aggregate placement agent commissions of $675,000 (or 7.5% of the
gross proceeds of the February Private Placement) and issued three (3) - year
warrants to our placement agents to purchase an aggregate of 259,090 shares of
Common Stock at an exercise price of $1.32 per share.

As further set forth in Item 8.01 below, from the net proceeds of the
February Private Placement, we funded our 50% share of the $7,000,000 remaining
purchase price under that certain Purchase Agreement dated January 16, 2006,
between New Albany-Indiana LLC ("New Albany") and Aurora Energy, Ltd. (the
"Aurora Purchase Agreement"). We also raised sufficient capital in the February
Private Placement to fund our 50% share (approximately $2,250,000) of New
Albany's anticipated costs and expenses with respect to drilling an initial 10
well program on the properties acquired under the Aurora Purchase Agreement,
which we expect to commence during the first quarter of 2006. The balance of the
net proceeds (approximately $2.5 million) will be used by the Company for
general working capital. As of February 1, 2006, we owned a non-manager member's
interest in New Albany, and had approximately $4.8 million in cash and cash
equivalents.

The issuance of the shares described above was exempt from registration
under Section 4(2) of the Securities Act of 1933, as amended (the "Securities
Act") and Rule 506 of Regulation D promulgated thereunder.

After giving effect to shares of Common Stock issued in the February
Private Placement, we presently have 40,521,069 shares of Common Stock
outstanding as of the date hereof. The following table sets forth certain
information regarding the beneficial ownership of our Common Stock as of
February 1, 2006 by (i) each person who, to our knowledge, beneficially owns
more than 5% of our Common Stock;

(ii) each of our current directors and executive officers; and (iii) all of our
current directors and executive officers as a group:

Name of Percent of
Beneficial Owner Number of Shares Outstanding Shares
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Barrie Damson (Chairman & CEO) 11,894,250 (1) 25.6%
Alan Gaines (Vice Chairman & Director) 11,894,250 (1) 25.6%
Carey Birmingham (President) 433,000 (2) 1.1%
Richard d'Abo (Director) 1,366,000 (3)(4) 3.3%
Richard Cohen (CFO) 375,000 (5) *
Lance T. Shaner (6) 4,847,700 (7) 12.0%
Benjamin W. Hulburt (6) 2,908,620 (8) 7.2%
Thomas F. Shields (6) 2,908,620 (8) 7.2%
All Officers & Directors as a Group 25,962,250
(5 persons) (1)(2)(3)(4)(5) 48.1%

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* Less than 1%

(1) Includes 6,000,000 shares underlying a stock option, exercisable at $.05 per
share. Holder has agreed that, upon Closing of Acquired Assets, number of shares
underlying option will be reduced such that immediately following the Closing,
holder will own no more than 9.99% of our Common Stock on a fully-diluted basis.

(2) Includes 100,000 shares underlying a stock option, exercisable at $.05 per
share.

(3) Includes 936,000 shares underlying a convertible promissory note.

(4) Includes 250,000 shares underlying a stock option, exercisable at $.05 per
share.

(5) Includes 175,000 shares underlying a stock option, exercisable at $0.94 per
share.

(6)This individual is one of the "Management Designees" as defined in the
Purchase Agreement described in Item 8.01 below. See our current Report on Form
8-K dated January 16, 2006, as filed with the SEC on January 17, 2006.

(7) Includes 20,000 shares underlying a stock option, exercisable at $1.00 per
share.

(8) Includes 12,000 shares underlying a stock option, exercisable at $1.00 per
share.

Item 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.

On February 1, 2006, Mr. Carey Birmingham, our President and a member of
our Board of Directors, resigned as a member of our Board, and the Board of
Directors filled such vacancy by appointing Mr. Barrie Damson, age 69, as our
Chairman and Chief Executive Officer. Mr. Brimingham will continue to serve as
our President. Below is the professional biography of Mr. Damson:

Mr. Barrie Damson: Mr. Damson, age 69, joined the Board of Directors and
became our Chairman/CEO upon the Closing of the February Private Placement.
Since 1988, Mr. Damson has been the President and Chairman of Damson Financial
Resources, Inc., a private company specializing in oil and gas, real estate and
venture capital investments. Prior to forming Damson Financial, he was President
and Chairman of Damson Oil Corporation, a publicly traded oil and gas
exploration, development and production company that also served as the general
partner of private and publicly traded oil and gas and real estate limited
partnerships. Mr. Damson also served as President and Chairman of Bronco Oil
Corp and Delta Minerals Corp. He has also served as a director of the
Independent Petroleum Association of America, the Domestic Petroleum Council and
Viking Resources International. Mr. Damson was a founding member and Vice
Chairman of the American Business Conference. He also served as chairman of the
New York City Economic Development Corporation. He currently serves on the
Dean's Council of the Harvard School of Public Health and the Board of Trustees
of the Hospital for Special Surgery in New York. He has also served as a
Governor of the American Stock Exchange and a member of its executive committee
and chairman of its audit committee. Mr. Damson received his Bachelor's degree
from Harvard University, and his Juris Doctorate from New York University.

Item 8.01 OTHER EVENTS.

On February 1, 2006, New Albany-Indiana, LLC, a Delaware limited liability
company of which we own 50% of the membership interests ("New Albany"),
completed its acquisition of certain oil and gas leases and other rights from
Aurora Energy, Ltd., a Nevada corporation ("Aurora"), pursuant to a certain
purchase agreement, dated as of November 15, 2005 (the "Aurora Purchase
Agreement"), between New Albany and Aurora. The total purchase price under the
Aurora Purchase Agreement (for the Indiana Leases, Aurora's rights under a
certain Farmout and Participation Agreement with a third party ("Farmout
Agreement") and the grant of the Aurora Option (as defined in the following
paragraph) was $10,500,000 of which $3,500,000 had already been paid and the
balance of $7,000,000 was paid to Aurora on February 1, 2006.

Pursuant to the Aurora Purchase Agreement, New Albany acquired an
undivided 48.75% working interest (40.7% net revenue interest) in (i) certain
oil, gas and mineral leases covering acreage in several counties in the State of
Indiana (the "Indiana Leases") and (ii) all of Aurora's rights under the Farmout
Agreement. In addition, in connection with the Aurora Purchase Agreement, New
Albany was granted an option from Aurora (the "Aurora Option"), exercisable by
New Albany for a period of eighteen (18) months after the date of such
agreement, to acquire a fifty percent (50%) working interest in any and all
acreage leased or acquired by Aurora or its affiliates in four (4) additional
counties in Indiana.

New Albany is expected to commence an initial 10 well drilling program
during the first quarter of 2006 on the properties acquired under the Aurora
Purchase Agreement.

New Albany is a joint venture entity formed by us, Rex Energy Operating
Corp. ("Rex Energy") and certain affiliates of Rex Energy, for the purpose of
acquiring a working interest in certain leasehold interests located in the New

Albany Play within the Illinois Basin in Indiana. Rex Energy Wabash, LLC ("Rex
Wabash"), an affiliate of Rex Energy, is the Managing Member of New Albany and
will manage the day-to-day operations of New Albany. On January 30, 2006, Rex
Energy withdrew as a member from New Albany and assigned its membership
interests to several of its affiliates. Pursuant to the limited liability
company operating agreement of New Albany, membership interests in New Albany
are presently held as follows: the Company - 50%; Lance T. Shaner - 23.01%; Rex
Energy II Limited Partnership - 11.11%; Douglas Oil & Gas Limited Partnership -
11.11%; Shaner & Hulburt Capital Partners Limited Partnership - 3.77% and Rex
Wabash - 1%.

As we previously reported in our Report on Form 8-K, filed with the SEC on
January 17, 2006, we entered into a purchase agreement (the "Purchase
Agreement") on January 16, 2006 with Rex Energy and its affiliates. The Purchase
Agreement provides in part that we will purchase at the closing (currently
scheduled to occur on or about May 1, 2006), among other assets, the 50%
outstanding membership interests in New Albany which we do not already own. The
purchase price for such 50% New Albany membership interest will be payable in
such number of shares of our common stock, $.001 par value ("Common Stock"),
equal to the quotient of (x) the total capital contributions made by Rex Energy
and its affiliates to New Albany from the inception of New Albany to the Closing
Date of the Purchase Agreement; divided by (y) $1.10 (which amount is the same
price per share paid by investors in our February Private Placement). Rex Energy
and its affiliates have contributed 50% of the $10,500,000 purchase price paid
by New Albany under the Aurora Purchase Agreement and we have contributed the
other 50%.

On February 2, 2006, the Company issued a press release announcing the
closing of the February Private Placement and the transactions contemplated by
the Aurora Purchase Agreement, a copy of which is filed as Exhibit 99.1 hereto.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits

Exhibit No. Description
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99.1 Press Release dated February 2, 2006

SIGNATURES

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

Dated: February 3, 2006

BASELINE OIL & GAS CORP.

By: /s/ Carey G. Birmingham
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Carey G. Birmingham, President

Exhibit Index

Exhibit No. Description
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99.1 Press Release dated February 2, 2006