Gulf United Energy, Inc. - FORM 10-Q

Attached files

file	filename
EX-31.2 - Gulf United Energy, Inc.	ex31-2.htm
EX-32.1 - Gulf United Energy, Inc.	ex32-1.htm
EX-32.2 - Gulf United Energy, Inc.	ex32-2.htm
EX-31.1 - Gulf United Energy, Inc.	ex31-1.htm
EXCEL - IDEA: XBRL DOCUMENT - Gulf United Energy, Inc.	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended May 31, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________to ____________________

Commission File Number 000-52322

GULF UNITED ENERGY, INC.

(Exact name of registrant as specified in its charter)

Nevada

(State or other jurisdiction of incorporation or organization)

P.O. Box 22165, Houston, Texas

(Address of principal executive offices)

20-5893642

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

77227-2165

(Zip Code)

Registrant’s telephone number, including area code:

(713) 942-6575

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. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller 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 ¨				Smaller reporting company þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

As of July 10, 2012, there were 551,517,726 shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

TABLE OF CONTENTS

Part I. Financial Information

Item 1	Financial Statements

	Consolidated Balance Sheets - May 31, 2012 (unaudited) and August 31, 2011	F-2

	Consolidated Statements of Operations and Comprehensive Loss (unaudited) - For the Three and Nine Months Ended May 31, 2012 and 2011 and the Period From Inception (September 19, 2003) through May 31, 2012	F-3

	Consolidated Statements of Cash Flows (unaudited) - For the Nine Months Ended May 31, 2012 and 2011 and the Period from Inception (September 19, 2003) through May 31, 2012	F-4

	Consolidated Statements of Changes in Stockholders' Equity (Deficiency) and Comprehensive Loss (unaudited) for the Period from Inception (September 19, 2003) through May 31, 2012	F-5

	Notes to the Consolidated Financial Statements (Unaudited)	F-6

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3	Quantitative and Qualitative Disclosures About Market Risk	8

Item 4	Controls and Procedures	8

	Part II. Other Information

Item 1	Legal Proceedings	9

Item 1A	Risk Factors	9

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	11

Item 3	Defaults Upon Senior Securities	11

Item 4	Mining Safety Disclosures	11

Item 5	Other Information	11

Item 6	Exhibits	11

	Signatures	12

	EX-31.1 (EXHIBIT 31.1)

	EX-31.2 (EXHIBIT 31.2)

	EX-32.1 (EXHIBIT 32.1)

	EX-32.2 (EXHIBIT 32.2)

Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts included in this Report including, without limitation, statements in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this Report, regarding our financial condition, estimated working capital, business strategy, the plans and objectives of our management for future operations and those statements preceded by, followed by or that otherwise include the words “believe”, “expects”, “anticipates”, “intends”, “estimates”, “projects”, “target”, “goal”, “plans”, “objective”, “should”, or similar expressions or variations on such expressions are forward-looking statements. We can give no assurances that the assumptions upon which the forward-looking statements are based will prove to be correct. Because forward-looking statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements including, but not limited to, our ability to identify and exploit available corporate acquisition, farm-in and/or joint venture opportunities in the energy sector in Colombia and Peru and, more generally, in Latin America, our ability to establish technical and managerial infrastructure, our ability to raise required capital on acceptable terms and conditions, our ability to take advantage of, and successfully participate in such opportunities, our ability to successfully operate, or influence our joint venture partners’ operation of, the projects in which we participate in a cost effective and efficient way; future economic conditions, political and regulatory stability and changes and volatility in energy prices. A description of some of the risks and uncertainties that could cause our actual results to differ materially from those described by the forward-looking statements in this Quarterly Report on Form 10-Q appears in the section captioned “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on November 29, 2011 and Item 1A of this Quarterly Report on Form 10-Q.

Except as otherwise required by the federal securities laws, we disclaim any obligations or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

QUARTERLY REPORT

FINANCIAL STATEMENTS

May 31, 2012

(Unaudited)

F-1

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Balance Sheets

	May 31,			August 31,
	2012			2011
	(Unaudited)			(Audited)
ASSETS
Current Assets
Cash	$	3,098,921		$	7,251,657
Prepaid expenses		65,736			4,443
Total Current Assets		3,164,657			7,256,100

Fixed Assets:
Computer Equipment		25,391			12,255
Software License		62,563			62,563
Less: Accumulated Depreciation		(55,765	)		(35,696	)
Net Fixed Assets		32,189			39,122

Other Assets
Investments in oil and gas properties (Notes 3 and 8)		19,288,590			20,160,581
Total Other Assets		19,288,590			20,160,581

Total Assets	$	22,485,436		$	27,455,803

LIABILITIES
Current
Accounts payable and accrued liabilities	$	1,157,192		$	282,286
Accounts payable to operators of working interests		-			974,769
Loans payable related parties (Note 6)		26,574			26,574
Stockholder loans payable and accrued interest (Net of note discount of
$110,277 at August 31, 2011) (Note 7)		-			1,389,634
Total Current Liabilities		1,183,766			2,673,263

Total Liabilities		1,183,766			2,673,263
STOCKHOLDERS' EQUITY
Preferred Stock, 50,000,000 shares authorized, none issued or outstanding		-			-
Common Stock
Authorized:
700,000,000 shares with a par value of $0.001
Issued and Outstanding:
548,517,726 as of May 31, 2012 and		548,518			454,668
454,667,726 as of August 31, 2011
Additional paid-in capital		50,291,808			42,445,865
Common stock subscribed		200,000			824,600
Accumulated other comprehensive loss		(485	)		(29	)
Deficit Accumulated During The Development Stage		(29,738,171	)		(18,942,564	)
Total Stockholders' Equity		21,301,670			24,782,540
Total Liabilities and Stockholders' Equity	$	22,485,436		$	27,455,803

The accompanying notes are an integral part of these consolidated financial statements.

F-2

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

													Period From
													Inception
													(September 19, 2003)
	Three Months Ended May 31,						Nine Months Ended May 31,						Through
	2012			2011			2012			2011			May 31, 2012

Revenues	$	-		$	-		$	-		$	-		$	-

Cost of Sales		-			-			-			-			-

Gross Profit		-			-			-			-			-

General and administrative expenses		1,668,140			1,906,383			3,366,628			3,630,754			8,902,950
General and administrative expenses - related parties		53,842			-			187,897			8,000,000			9,274,940

Operating Loss		(1,721,982	)		(1,906,383	)		(3,554,525	)		(11,630,754	)		(18,177,890	)

Other (Income) and Expense
Gain on settlement of debt		-			-			-			-			(3,333	)
Interest expense		-			234,519			-			1,089,358			1,089,358
Interest expense - related parties		220,000			-			220,000			442,184			1,851,374
Impairment of oil and gas properties		7,027,032			-			7,027,032			-			7,027,032
Interest Income		(697	)		(7,811	)		(5,950	)		(8,625	)		(20,867	)

Loss from continuing operations		(8,968,317	)		(2,133,091	)		(10,795,607	)		(13,153,671	)		(28,121,454	)
Gain (Loss) from discontinued operations		-			30,000			-			350,000			(1,616,717	)
Net Loss	$	(8,968,317	)	$	(2,103,091	)	$	(10,795,607	)	$	(12,803,671	)	$	(29,738,171	)

Basic And Diluted Loss per share
from continuing operations	$	(0.02	)	$	-		$	(0.02	)	$	(0.04	)	$	(0.24	)

Basic And Diluted Loss per share
from discontinued operations	$	-			-		$	-		$	-		$	(0.01	)

Basic And Diluted Net Loss per share	$	(0.02	)	$	-		$	(0.02	)	$	(0.03	)	$	(0.25	)

Weighted Average Shares Outstanding		500,470,504			454,389,948			473,465,689			374,967,587			117,601,153

Comprehensive Income (Loss)
Net Loss	$	(8,968,317	)	$	(2,103,091	)	$	(10,795,607	)	$	(12,803,671	)	$	(29,738,171	)
Currency exchange gain (loss)		112			-			(456	)		(29	)		(485	)
Net Comprehensive Loss	$	(8,968,205	)	$	(2,103,091	)	$	(10,796,063	)	$	(12,803,700	)	$	(29,738,656	)

The accompanying notes are an integral part of these consolidated financial statements.

F-3

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Cash Flow

(Unaudited)

							Period From
							Inception
							(September 19, 2003)
	Nine Months Ended May 31,						Through
	2012			2011			May 31, 2012
Cash Flows From Operating Activities
Net loss for the period	$	(10,795,607	)	$	(12,803,671	)	$	(29,738,171	)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation expense		20,069			16,009			55,766
Increase in deposit		-			(4,668	)		-
Common stock issued for prepaid expenses/services		14,625			-			14,625
Expenses/services paid by issuance of common stock		219,500			9,086,800			10,260,500
Accrued interest added to shareholder loans		-			9,021			731,355
Stock based compensation		218,339			-			293,111
Loan discount amortization		110,277			1,193,551			1,809,023
Non-cash portion of interest expense		-			-			3,333
Gain on settlement of debt		-			-			(3,333	)
Foreign currency translation loss		(456	)		346			(485	)
Impairment of investment in joint venture projects		-			-			1,951,210
Impairment of oil and gas properties		7,027,032			-			7,027,032
Change in operating assets and liabilities
Payroll taxes receivable		-			39,153			-
Prepaid expenses		(36,918	)		(286,664	)		(41,361	)
Accounts payable and accrued liabilities		874,906			(493,199	)		981,960
Net cash used by operating activities		(2,348,233	)		(3,243,322	)		(6,655,435	)
Cash Flows From Investing Activities
Capital Expenditures		(13,136	)		(6,628	)		(87,954	)
Investment in oil and gas projects		(7,129,810	)		(10,571,290	)		(22,494,391	)
Advances to and investment in joint venture properties		-			-			(250,000	)
Net cash used by investing activities		(7,142,946	)		(10,577,918	)		(22,832,345	)

Cash Flows From Financing Activities
Proceeds from sale of common stock		6,838,354			25,822,119			33,274,023
Proceeds of bridge financing		-			3,800,000			3,800,000
Principal payment on bridge financing		-			(3,800,000	)		(3,800,000	)
Increase in loans payable to related parties		-			-			226,574
Proceeds from (payments on) shareholder loans		(1,499,911	)		(2,189,685	)		913,896
Net cash provided by financing activities		5,338,443			23,632,434			32,586,701
(Decrease)/Increase In Cash During The Period		(4,152,736	)		9,811,194			3,098,921
Cash, Beginning Of Period		7,251,657			19,679			-

Cash, End Of Period	$	3,098,921		$	9,830,873		$	3,098,921

The accompanying notes are an integral part of these consolidated financial statements.

F-4

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) and Comprehensive Loss

Period from Inception (September 19, 2003) through May 31, 2012

(Unaudited)

													DEFICIT
											ACCUMULATED		ACCUMULATED
	COMMON SHARES				ADDITIONAL			COMMON			OTHER		DURING THE
			PAR		PAID-IN			SHARES			COMPREHENSIVE		DEVELOPMENT
	NUMBER		VALUE		CAPITAL			SUBSCRIBED			LOSS		STAGE			TOTAL
Balance, September 19,
2003 (date of inception)		-	$	-	$	-		$	-		$	-	$	-		$	-
Capital stock issued for cash:
October 2003 at $0.001		2,500,000		2,500		-			-			-		-			2,500
November 2003 at $0.005		160,000		160		640			-			-		-			800
December 2003 at $0.005		1,400,000		1,400		5,600			-			-		-			7,000
June 2004 at $0.01		1,000,000		1,000		9,000			-			-		-			10,000
July 2004 at $0.25		23,000		23		5,727			-			-		-			5,750
Net loss for the period		-		-		-			-			-		(15,880	)		(15,880	)
Balance, August 31, 2004		5,083,000		5,083		20,967			-			-		(15,880	)		10,170
Net loss for the year		-		-		-			-			-		(16,578	)		(16,578	)
Balance, August 31, 2005		5,083,000		5,083		20,967			-			-		(32,458	)		(6,408	)
November 10, 2005 Stock
Split Adjustment		20,332,000		20,332		(20,332	)		-			-		-			-
Net loss for the year		-		-		-			-			-		(31,577	)		(31,577	)
Balance, August 31, 2006		25,415,000		25,415		635								(64,035	)		(37,985	)
Capital stock issued for investment:
January 2007 at $0.735 per share		185,000		185		135,790			-			-		-			135,975
July 2007 at $0.735 per share		750,000		750		550,500			-			-		-			551,250
Net loss for the year		-		-		-			-			-		(257,804	)		(257,804	)
Balance, August 31, 2007		26,350,000		26,350		686,925								(321,839	)		391,436
Net loss for the year		-		-		-			-			-		(378,039	)		(378,039	)
Balance, August 31, 2008		26,350,000		26,350		686,925								(699,878	)		13,397
Net loss for the year		-		-		-			-			-		(1,353,766	)		(1,353,766	)
Balance, August 31, 2009		26,350,000		26,350		686,925			-			-		(2,053,644	)		(1,340,369	)
Capital stock issued for settlement
of name issue:
January 2010 at $0.01 per share		50,000		50		450			-			-		-			500
Capital stock issued to buy
subsidiary:
March 2010 at $0.032 per share		300,000		300		9,300			-			-		-			9,600
Capital stock issued for cash:
March 2010 at $0.01 per share		59,750,000		59,750		527,750			-			-		-			587,500
Capital stock issued for services:
March 2010 at $0.01 per share		20,750,000		20,750		186,750			-			-		-			207,500
April 2010 at $0.01 per share		1,500,000		1,500		13,500			-			-		-			15,000
Capital stock issued for oil and
gas properties:
March 2010 at $0.01 per share		40,000,000		40,000		384,000			200,000			-		-			624,000
Capital stock issued for loan
conversion:
March 2010 at $0.01 per share		20,000,000		20,000		180,000			200,000			-		-			400,000
Shareholder loan interest forgiven		-		-		631,444			-			-		-			631,444
Capital stock issued with short-
term debt:
April 2010 at $0.065 per share		17,500,000		17,500		671,894			-			-		-			689,394
May 2010 at $0.065 per share		5,000,000		5,000		191,970			-			-		-			196,970
June 2010 at $0.087 per share		2,500,000		2,500		113,810			-			-		-			116,310
July 2010 at $0.075 per share		3,000,000		3,000		125,571			-			-		-			128,571
July 2010 at $0.120 per share		500,000		500		26,773			-			-		-			27,273
August 2010 at $0.120 per share		500,000		500		26,773			-			-		-			27,273
Capital stock issued for oil and
gas properties:
June 2010 at $0.01 per share		20,000,000		20,000		180,000			(200,000	)		-		-			-
July 2010 at $0.052 per share		56,000,000		56,000		2,856,000			-			-		-			2,912,000
Capital stock issued for loan
conversion:
June 2010 at $0.01 per share		20,000,000		20,000		180,000			(200,000	)		-		-			-
Net loss for the period		-		-		-			-			-		(2,315,199	)		(2,315,199	)
Balance, August 31, 2010		293,700,000		293,700		6,992,910			-			-		(4,368,843	)		2,917,767

The accompanying notes are an integral part of these consolidated financial statements.

F-5

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) and Comprehensive Loss

Period from Inception (September 19, 2003) through May 31, 2012

(Unaudited)

													DEFICIT
										ACCUMULATED			ACCUMULATED
	COMMON SHARES				ADDITIONAL		COMMON			OTHER			DURING THE
			PAR		PAID-IN		SHARES			COMPREHENSIVE			DEVELOPMENT
	NUMBER		VALUE		CAPITAL		SUBSCRIBED			LOSS			STAGE			TOTAL


Capital stock issued for services:
September 2010 at $0.06 per share		2,500,000		2,500		147,500		-			-			-			150,000
October 2010 at $0.057 per share		1,200,000		1,200		67,200		-			-			-			68,400
December 2010 at $0.081 per share		40,000,000		40,000		7,960,000		-			-			-			8,000,000
January 2011 at $0.063 per share		2,700,000		2,700		167,400		(170,100	)		-			-			-
February 2011 at $0.15 per share		304,000		304		60,496		-			-			-			60,800
March 2011 at $0.30 per share		125,000		125		37,375		(37,500	)		-			-			-
March 2011 at $0.26 per share		2,000,000		2,000		515,000		-			-			-			517,000
July 2011 at $0.162 per share		-		-		-		824,600			-			-			824,600
Capital stock issued for cash:
December 2010 at $0.20 per share		3,875,000		3,875		746,915		-			-			-			750,790
January 2011 at $0.20 per share		9,750,000		9,750		1,878,553		25,000			-			-			1,913,303
February 2011 at $0.30 per share		83,388,726		83,389		23,074,637		-			-			-			23,158,026
March 2011 at $0.020 per share		125,000		125		24,875		(25,000	)		-			-			-
Capital stock subscribed for services:
September 2010 at $0.063 per share		-		-		-		170,100			-			-			170,100
February 2011 at $0.30 per share		-		-		-		37,500			-			-			37,500
Capital stock issued with short-
term debt:
September 2010 at $0.043 per share		6,500,000		6,500		272,073		-			-			-			278,573
October 2010 at $0.047 per share		1,000,000		1,000		45,524		-			-			-			46,524
October 2010 at $0.043 per share		1,500,000		1,500		62,787		-			-			-			64,287
November 2010 at $0.047 per share		1,500,000		1,500		68,286		-			-			-			69,786
Januuary 2011 at $0.047 per share		1,500,000		1,500		68,286		(69,786	)		-			-			-
February 2011 at $0.047 per share		1,000,000		1,000		45,524		(46,524	)		-			-			-
March 2011 at $0.047 per share		1,000,000		1,000		46,752		(47,752	)		-
Capital stock subscribed with
short-term debt:
November 2010 at $0.047 per share		-		-		-		139,572			-			-			139,572
November 2010 at $0.049 per share		-		-		-		24,490			-			-			24,490
Capital stock issued for oil and
gas properties:
November 2010 at $0.09 per share		1,000,000		1,000		89,000		-			-			-			90,000
Compensation expense paid by
stock option and grant issuance		-		-		74,772		-			-			-			74,772
Net loss		-		-		-		-			-			(14,573,721	)		(14,573,721	)
Other comprehensive loss -
Cumulative currency transalation adjustment											(29	)					(29	)
Total comprehensive loss		-		-		-		-			-			-			(14,573,750	)
Balance, August 31, 2011		454,667,726		454,668		42,445,865		824,600			(29	)		(18,942,564	)		24,782,540

The accompanying notes are an integral part of these consolidated financial statements.

F-6

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) and Comprehensive Loss

Period from Inception (September 19, 2003) through May 31, 2012

(Unaudited)

													DEFICIT
										ACCUMULATED			ACCUMULATED
	COMMON SHARES				ADDITIONAL		COMMON			OTHER			DURING THE
			PAR		PAID-IN		SHARES			COMPREHENSIVE			DEVELOPMENT
	NUMBER		VALUE		CAPITAL		SUBSCRIBED			LOSS			STAGE			TOTAL


Capital stock issued for services:
September 2011 at $0.162 per share		5,100,000		5,100		819,500		(824,600	)		-			-			-
November 2011 at $0.117 per share		500,000		500		58,000		-			-			-			58,500
Capital stock issued for cash:
April 2012 at $0.08 per share		88,250,000		88,250		6,750,104		-			-			-			6,838,354
Capital stock subscribed for interest expense:
April 2012 at $0.08 per share		-		-		-		200,000			-			-			200,000
Compensation expense paid by stock option and grant issuance		-		-		218,339		-			-			-			218,339
Net loss		-		-		-		-			-			(10,795,607	)		(10,795,607	)
Other comprehensive loss -
Cumulative currency transalation adjustment											(456	)					(456	)
Total comprehensive loss		-		-		-		-			-			-			(10,796,063	)
Balance, May 31, 2012		548,517,726	$	548,518	$	50,291,808	$	200,000		$	(485	)	$	(29,738,171	)	$	21,301,670

The accompanying notes are an integral part of these consolidated financial statements.

F-7

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Note 1 – Organization and Basis of Presentation

Gulf United Energy, Inc. (“Gulf United” or the “Company”), together with its 100% owned subsidiaries, is an international oil and gas exploration company concentrating on opportunities in South America. The Company currently has limited operations and is a development stage company as defined by the Financial Accounting Standards Board (FASB) Accounting Standards for Development Stage Entities. The Company was incorporated in the State of Nevada on September 19, 2003. Gulf United’s asset portfolio includes participation in two hydrocarbon exploration blocks operated by SK Innovation Co. Ltd. (“SK Innovation” – Formerly SK Energy, Ltd.). SK Innovation is a subsidiary of SK Innovation Group, one of South Korea’s top five industrial conglomerates. SK Innovation is Korea’s largest petroleum refiner and is currently active in 29 blocks in 16 countries. The Company also has a participating interest in Block XXIV Peru and the Peru TEA operated by Upland Oil and Gas.

Interim Financial Statements

In the opinion of management, the accompanying consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) which are necessary to provide a fair presentation of operating results for the interim periods presented. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosures needed for a fair presentation may be determined in that context. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), have been condensed or omitted in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. These consolidated financial statements should be read in connection with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2011, filed on November 29, 2011. The results of operations presented for the quarter ended May 31, 2012 are not necessarily indicative of the results to be expected for the year. Interim financial data presented herein are unaudited.

These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $29,738,171 and further losses are anticipated in the development of our business raising substantial doubt about the Company’s ability to continue as a going concern. Our 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. The Company raised substantial equity and debt during the year ended August 31, 2011. Notwithstanding, we do not have any credit facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts debt and equity financings. There is no assurance that we can raise additional debt or equity capital from external sources. The Company has no control over the amount of funds that it may receive in financings and the time frame in which they may be received. The 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.

F-8

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Note 2 – Summary of Significant Accounting Policies

Basis of Accounting

The Company maintains its accounts on the accrual method of accounting in accordance GAAP. The accompanying consolidated financial statements of the Company have been prepared in accordance with GAAP and the rules of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments necessary for a fair presentation of consolidated financial position and the results of operations have been reflected herein.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentration of credit risk at this time consist principally of cash. The Company places its cash with high credit quality financial institutions. At times, such amounts may exceed FDIC limits; however, these deposits typically may be redeemed upon demand and therefore bear minimal risk. In monitoring this credit risk, the Company periodically evaluates the stability of the financial institutions.

Use of Estimates

The preparation of financial statements in conformity with GAAP 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. Certain of our more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, and our observance of trends in the industry and information available from other outside sources, as appropriate. Different, reasonable estimates could have been used in the current period. Additionally, changes in accounting estimates are reasonably likely to occur from period to period. These, and other, factors could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

Cash

Cash includes cash in a demand deposit account and a money market account with a Houston bank. In addition, the Company has established a cash account in Bogota, Colombia as required by local regulations. This account is maintained in Colombian pesos.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash, accounts payable, accrued liabilities and debt. It is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these instruments. The fair value of these financial instruments approximates their carrying values.

The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest and discount rates that approximate prevailing market rates. In determining fair values, there are three levels of inputs used to determine value. Level 1 inputs are quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs which include risk inherent in the asset or liability.

Software License and Fixed Assets

The value of the software license and other fixed assets (computer equipment) is stated at cost. Depreciation is computed using the straight-line method over the thirty six-month estimated useful life of the software and other fixed assets.

F-9

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Any costs associated with maintenance and upgrades will be charged to expense as incurred. When the asset is retired or otherwise disposed of, the costs and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is recognized in income for the period; significant renewals and betterments are capitalized. Deductions are made for retirements resulting from renewals or betterments.

Impairment of Long-lived Assets

The Company evaluates impairment when events or circumstances indicate that a long-lived asset’s carrying value may not be recovered. These events include market declines, decisions to sell an asset and adverse changes in the legal or business environment. If events or circumstances indicate that a long-lived asset’s carrying value may not be recoverable, the Company estimates the future undiscounted cash flows from the asset for which the lowest level of separate cash flows may be determined, to determine if the asset is impaired. If the total undiscounted future cash flows are less than the carrying amount for the asset, the Company estimates the fair value of the asset through reference to sales data for similar assets, or by using a discounted cash flow approach. The asset’s carrying value is then adjusted downward to the estimated fair value. These cash flow estimates and assumptions could change significantly either positively or negatively. In June 2012, the Company announced that a determination had been made to cease efforts to test and complete the Tamandua #1 well on the CPO-4 prospect in Colombia. As a result of the determination to cease efforts to complete the Tamandua #1 well, the Company recorded an impairment charge of $7,027,032 to write off costs attributable to the drilling of the Tamandua #1 well on the Company’s CPO-4 block. As of May 31, 2012, the Company had recorded approximately $960,000 of total expected costs of $2.5 million on the Cachirre #1 well. See “Note 10 – Subsequent events.” None of these costs were impaired at May 31, 2012.

Inflation

The Company's results of operations have not been significantly affected by inflation and management does not expect inflation to have a significant effect on its operations in the foreseeable future.

Oil and gas properties

The Company follows the full cost method of accounting for its oil and gas properties, whereby all costs incurred in connection with the acquisition, exploration for and development of petroleum and natural gas reserves, if any, are capitalized. Such costs include costs of acquisition, geological and geophysical activities, rentals on non-producing leases, drilling, completing and equipping of oil and gas wells and administrative costs directly attributable to those activities and asset retirement costs. Disposition of oil and gas properties will be accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capital costs and proved reserves, if any, of oil and gas, in which case the gain or loss will be recognized in the consolidated statements of operations.

As of May 31, 2012, the Company had oil and gas property investments in the amount of $19,288,590 that are excluded from depletion because reserves have not been proven to be associated with those properties. If any proved reserves are found and when its quantity can be estimated, costs in excess of the present value of estimated future net revenues will be charged to impairment expense. The Company will apply the full cost ceiling test on a quarterly basis on the date of the latest consolidated balance sheet presented. It is not known at this time if any recoverable reserves of oil and gas exist.

In June 2012, the Company announced that a determination had been made to cease efforts to test and complete the Tamandua #1 well on the CPO-4 prospect in Colombia. As a result of the determination to cease efforts to complete the Tamandua #1 well, the Company recorded an impairment charge of $7,027,032 to write off costs attributable to the drilling of the Tamandua #1 well on the Company’s CPO-4 block. As of May 31, 2012, the Company had recorded approximately $960,000 of total expected costs of $2.5 million on the Cachirre #1 well. See “Note 10 – Subsequent events.” None of these costs were impaired at May 31, 2012.

Asset retirement costs will be recognized when an asset is placed in service and will be included in the amortization base and will be amortized over proved reserves, if any, using the units of production method. Depletion of proved oil and gas properties will be calculated on the units-of-production method based upon estimates of proved reserves, if any. Such calculations include the estimated

F-10

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

future costs to develop proved reserves, if any. Costs of unproved properties are not included in the costs subject to depletion. These costs will also be assessed quarterly for impairment.

Asset Retirement Obligation

GAAP requires that an asset retirement obligation (ARO) associated with the retirement of a tangible long-lived asset be recognized as a liability in the period in which it is incurred and becomes determinable. Under this method, when liabilities for dismantlement and abandonment costs, excluding salvage values, are initially recorded, the carrying amount of the related oil and natural gas properties is increased.

The fair value of the ARO asset and liability is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate. Accretion of the liability is recognized each period using the interest method of allocation, and the capitalized cost is depleted using the units of production method. Should either the estimated life or the estimated abandonment costs of a property change materially upon the Company’s quarterly review, a new calculation is performed using the same methodology of taking the abandonment cost and inflating it forward to its abandonment date and then discounting it back to the present using the Company’s credit-adjusted, risk-free rate.

The carrying value of the asset retirement obligation is adjusted to the newly calculated value, with a corresponding offsetting adjustment to the asset retirement cost related to oil and gas property accounts. At May 31, 2012, the Company had no material asset retirement obligations.

Basic Loss per Share

The Company is required to provide basic and diluted earnings (loss) per common share information. The basic net loss per common share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss applicable to common stockholders, adjusted on an "as if converted" basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the period ended May 31, 2012, there were no potentially dilutive securities issued, therefore, diluted net loss per common share equals basic net loss per share. Common stock subscribed was not included in diluted earnings per share because the results were anti-dilutive. During the twelve months ended August 31, 2011, the Company issued five-year warrants to purchase up to 1 million shares of common stock at an exercise price of $0.30. In addition, in June 2011 the Company adopted the 2011 Stock Incentive Plan (the “2011 Plan”) under which the Company may issue stock grants and stock options to Company employees, directors and consultants up to 45,000,000 shares which may not exceed 1,000,000 shares to any individual during any fiscal year. These stock grants and stock options generally vest over a three-year period, beginning on the first anniversary from the date of each grant. As of May 31, 2012, the Company has granted, to employees and independent directors of the Company, a total of 1,950,000 shares in restricted stock grants and stock options to purchase 3,500,000 shares at a weighted average exercise price of $0.31 per share.

Potential dilutive securities as of May 31, 2012 have been considered, but the potential dilutive effect of these securities is not believed to be material and would be anti-dilutive. The Company reported net losses in the nine months ended May 31, 2012 as well as a cumulative net loss; accordingly, the effects of any additional shares would be anti-dilutive. The weighted average number of common and common equivalent shares outstanding was 473,465,689 and 374,967,587 for the nine months ended May 31, 2012 and 2011, respectively.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Gulf United Energy, Inc. and its wholly-owned subsidiaries, Gulf United Energy del Peru, Ltd., Gulf United Energy Cuenca Trujillo, Ltd. and Gulf United Energy de Colombia, Ltd. as of May 31, 2012. All significant inter-company transactions and balances have been eliminated in the consolidation.

Accounting for Uncertain Tax Positions

GAAP provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an entity’s financial statements. GAAP requires an entity to recognize the financial statement impact of a tax position when it is more likely that not that the position will be sustained upon examination. The Company believes that all significant tax positions utilized by the Company will more likely than not be sustained upon examination. As of the period ended May 31, 2012, the

F-11

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the fiscal year 2008 forward (with limited exceptions). Tax penalties and interest, if any, would be accrued as incurred and would be classified as tax expense in the consolidated statements of operations and comprehensive loss.

Stock-Based Compensation Arrangements

GAAP requires all share-based payments to employees, including grants of employee stock options, to be based on their fair values. In accordance with the provisions of GAAP, share-based compensation cost is measured at the grant date, based on the calculated fair value of the award. The Company recognizes compensation cost net of a forfeiture rate and recognizes the compensation cost for only those awards expected to vest on a straight-line basis over the requisite service period of the award, which is generally the vesting term. The Company estimated the forfeiture rate based on its historical experience and its expectations of future forfeitures. We currently expect no forfeitures. This stock-based compensation is recognized as general and administrative expense over the employee’s requisite service period (generally the vesting period of the equity award). We apply the fair value method in accounting for stock option grants using the Black-Scholes Method.

We grant restricted stock and stock options to employees and directors as incentive compensation. The restricted stock and options generally vest over three years, beginning on the first anniversary of the grant date. The vesting of these shares and options is dependent upon the continued service of the grantees with the Company. Upon the occurrence of a change in control, each outstanding share of restricted stock and stock option will immediately vest.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The following summarizes the assumptions used in the option-pricing model and the method for determining the assumptions:

		Method of Determining Assumptions
Risk-free rate	1.67%; 0.89%	U.S. treasury yield for 5-year treasury notes in effect at June 14, 2011 and November 1, 2011, respectively.
Expected years until exercise	5.00	Full option term
Expected stock volatility	100%; 94%	Historical Gulf United Energy, Inc. volatility at August 31, 2011 and November 1, 2011, respectively.
Dividend yield	-	Historical record and plan

At May 31, 2012, total compensation cost related to non-vested options and awards granted to employees and independent directors not yet recognized is approximately $1,103,000 and is expected to be recognized over a period of less than three years.

Stock Options

Information relating to stock options is summarized as follows:

			Weighted		Weighted
	Number of		Average		Average
	Shares		Exercise		Contractual		Aggregate
	Underlying		Price per		Life in		Intrinsic
	Options		Share		Years		Value

Balance outstanding - August 31, 2011		3,000,000	$	0.32		4.6	$	725,764
Granted		500,000		0.27		5.0		89,694
Exercised		-
Forfeited		-
Expired		-

Balance outstanding - May 31, 2012		3,500,000	$	0.31		4.7	$	815,458

Currently exercisable — May 31, 2012		-	$	0.00		-	$	-

F-12

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

The weighted average grant-date fair value of options granted during the nine months ended May 31, 2012 was $0.27 per share.

Restricted Stock Awards

At May 31, 2012, our employees and directors had been awarded 1.95 million restricted shares of our common stock that vest over the service period of up to three years. The restricted stock awards were valued based on the closing price of our common stock on the measurement date, typically the date of grant, and compensation expense is recorded on a straight-line basis over the restricted share vesting period.

The following table summarizes the restricted stock awards activity during the nine months ended May 31, 2012:

			Weighted
			Average Grant
			Date Fair
	Number of		Value per
	Shares		Share

Balance outstanding — August 31, 2011		1,200,000	$	0.32
Granted		750,000		0.29
Vested		0		-
Forfeited		0		-


Balance outstanding — May 31, 2012		1,950,000	$	0.31

Total grant date fair value of shares vesting during the period		0	$	-

Non-cash stock-based compensation expense was $218,339 for the nine months ended May 31, 2012, and $74,772 for the year ended August 31, 2011.

Recently Issued Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS (ASU 2011-04), which amends ASC 820, Fair Value Measurement. ASU 2011-04 does not extend the use of fair value accounting, but provides guidance on how it should be applied where its use is already required or permitted by other standards within U.S. GAAP or International Financial Reporting Standards (IFRS). ASU 2011-04 changes the wording used to describe many requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, ASU 2011-04 clarifies the FASB’s intent about the application of existing fair value measurements. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011 and is applied prospectively. The Company does not believe the adoption of this change will have any material impact on the consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220)-Presentation of Comprehensive Income. ASU 2011-05 requires that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 is effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption of this standard is permitted and the Company has adopted this update.

F-13

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Note 3 - Investments

Investment in Joint Venture Entities - Sold

As reported in the Company’s Form 8K filed with the SEC on November 5, 2010, the Company closed on an agreement with its former joint venture partner, Cia. Mexicana de Gas Natural, S.A. de C.V., to sell all of the Company’s shares in Fermaca LNG de Cancun, S.A. de C.V. and Fermaca Gas de Cancun, S.A. de C.V. for a total amount of $1,000,000 of which $50,000 was paid upon entry into the sale agreement, $150,000 of which was paid at the close of the transaction, $120,000 of the next $150,000 was paid as of February 28, 2011 with the remaining $30,000 paid in March, 2011. Because the Company is no longer involved in any downstream oil and gas activities, and because the Company has no further involvement in the joint ventures, the amounts related to the joint ventures have been reclassified to discontinued operations in accordance with GAAP. The next installment of $150,000 was due on May 1, 2011 and the following $150,000 installments were due on August 1, 2011 and November 1, 2011. The final payment of $200,000 was due February 1, 2012. As of April 5, 2012, none of these installments have been paid. No interest accrues on the installments; however, the contract provides for 7% interest to be paid on late payments. Management is currently negotiating an extended repayment schedule; however, there is no certainty that all or any of the installments will be paid. We have recognized payments as gain on the sale of the joint venture investment as the sales proceeds are received. Because the sale of the joint venture interests ended the Company’s investments in pipeline and LNG infrastructure, the gain from the sale and the impairment losses have been reclassified to discontinued operations. As of May 31, 2012, the unrecorded present value of the $650,000 in installments receivable cannot be determined because the timing of the payments, if any, is uncertain.

Investments in oil and gas properties

Colombia CPO-4

In July 2010, the Company acquired from SK Innovation, subject to regulatory approval, an undivided twelve and one-half percent (12.5%) participating interest in the CPO-4 block located in the Llanos Basin of Colombia. Block CPO-4 consists of 345,592 gross acres (43,200 net) and is located approximately 70 miles southeast of Bogotá. This block is operated by SK Innovation. Approximately 530 square kilometers of 3-D seismic data has been acquired and interpreted in the northern portion of the acreage. Interpretation and study of this seismic data is ongoing. Tamandua-1 was the first well drilled on CPO-4. Due to conditions in the wellbore, the working interest partners’ elected to abandon the bottom section of the well and discontinue testing of the well after inconclusive results in the C-7 and C-9 sands. In April 2012, Tamandua-1 was temporarily abandoned to allow re-entry for future testing and evaluation. The Company and the other working interest owners moved the rig to the Cachirre location and began drilling on May 18, 2012. The Cachirre well has an expected total depth of approximately 9,500 feet. As of May 31, 2012, the Company had recorded approximately $960,000 of total expected costs of $2.5 million on the Cachirre #1 well. See “Note 10 – Subsequent events.” None of these costs were impaired at May 31, 2012. In June 2012, SK Innovation and the Company elected to abandon the Tamandua-1 well and the Cachirre #1 well. See “Note 10 - Subsequent Events”.

The assignment to the Company of the interest in CPO-4 is conditioned upon the approval by ANH, the National Hydrocarbon Agency of Colombia, and the Republic of Korea. To date, we have not obtained the written approvals from the Republic of Korea or the ANH. The approval from the Republic of Korea will be requested after the Company has received the approval from the ANH. The farmout agreement with SK Innovation, as amended, requires these approvals by October 31, 2012. Pursuant to the existing farmout with SK Innovation, if the Company does not receive the approvals by October 31, 2012, the agreement calls for a thirty day grace period during which the Company and SK Innovation have agreed to meet to discuss possible amendments to the farmout agreement which would facilitate, or avoid the need for, the approvals. As SK Innovation has already extended the arbitrary cut-off date set forth in the farmout agreement three times, including the most recent extension to October 31, 2012, we believe that the Company and SK Innovation have a good working relationship. If the Company and SK Innovation are unable to agree upon any additional amendments during such thirty day grace period, SK Innovation has the right to terminate the farmout agreement. If SK Innovation elects to exercise its termination right as the result of the failure to obtain the written approvals from the ANH or the Republic of Korea, the Company’s interest in Block CPO-4 will be deemed re-assigned back to SK Innovation, and the Company will

F-14

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

have the right to have returned any amounts paid under the farmout agreement, without interest ($12,829,003 has been paid through May 31, 2012). In such event, our business would be materially adversely affected.

Impairment

Peru Z-46

In July 2010, the Company acquired from SK Innovation, subject to regulatory approval, an undivided forty percent (40%) participating interest in Block Z-46, an approximately 2.8 million acre offshore block in Peru. Block Z-46 has over 5,600 km of reprocessed 2-D seismic data and two wells drilled by Repsol in the 1990’s that established the presence of hydrocarbons. On December 30, 2010, we began acquiring approximately 2,900 kilometers of 2-D seismic data to further delineate prospects in anticipation of a focused 3-D seismic data acquisition in the future. During 2011, we acquired an additional 3,134 km of 2D seismic data to further delineate prospects in anticipation of a focused 3D acquisition in the future. Based on this data, prospective drilling sites would be determined and site prep would begin as the proper environment and other approvals have been obtained.

The assignment to the Company of the participation interest in Block Z-46 is conditioned upon the approval of the assignment by Perupetro. On March 13, 2012, the Company received a certificate of qualification from Perupetro, which sets forth Perupetro’s determination that the Company has the legal, technical, economic, and financial capacity to assume the assignment from SK Innovation of the 40% working interest in Block Z-46. The letter of qualification is an important milestone in the approval of the assignment, which is subject to official ratification and issuance of a Supreme Decree by the government of the Republic of Peru. The farmout agreement with SK Innovation required approval from Perupetro by May 30, 2012. The Company and SK Innovation are working to further extend the deadline for approval based on Perupetro’s qualification described above. As SK Innovation has already extended the arbitrary cut-off date set forth in the farmout agreement, including the most recent extension to May 30, 2012, we believe that the Company and SK Innovation have a good working relationship. If the Company and SK Innovation are unable to agree upon any additional amendments during such thirty day grace period, SK Innovation has the right to terminate the agreement. If SK Innovation elects to exercise its termination right, the Company’s interest in Block Z-46 will be deemed re-assigned back to SK Innovation, and the Company will have the right to have returned any amounts paid under the farmout agreement, without interest ($5,586,941 has been paid through May 31, 2012). In such event, our business would be materially adversely affected.

Peru Block XXIV and TEA

On July 31, 2010, the Company entered into an amendment to the participation agreement dated March 12, 2010 covering blocks XXIV Peru and the Peru TEA. Under the terms of the amendment, the Company acquired an undivided 5% working interest in Block XXIV and an undivided 2% working interest in the Peru TEAs. The assignment to the Company of the interests in Block XXIV and the Peru TEA are also subject to the approval of Perupetro, along with certain governmental agencies of the Republic of Peru. Until such time as the approvals are received, Upland is holding the Block XXIV and Peru TEA interests in escrow. Upland has begun the process of obtaining the necessary approvals on behalf of the Company.

Block XXIV is located in the Sechura/Talara Basin in Peru. Block XXIV consists of 276,137 gross acres (13,807 net) of which approximately 80,000 are offshore and 196,000 are onshore. The offshore portion of the block is highly prospective. During 2011, Upland acquired 200 km of 2D seismic data on Block XXIV which is currently in processing. Going forward, we understand that Upland will conduct further geologic studies with the goal to determine two onshore seismically defined drilling locations during fiscal year 2012 in seismically defined locations.

F-15

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Technical Evaluation Areas I, II, III, and IV of the Peru TEA are contiguous blocks that together comprise 40,321,163 gross acres (806,423 net). The Peru TEA runs south on the western flank of the Andes Mountains from the border with Ecuador to near Lima. This greenfield opportunity will require geological evaluation, including the acquisition of aeromagnetic survey and 2-D seismic data, before we evaluate drilling opportunities. During 2011, Upland completed a gravity aeromagnetic and satellite imaging study on the TEA which will be used to narrow the areas of interest for further geologic study.

At May 31, 2012, the Company does not have the cash or other resources to fund all of the costs described above, which are summarized below. At May 31, 2012, the Company’s investment in oil and gas properties and estimated remaining fiscal 2012 commitments are as follows:

			Remaining
	Total Costs		Fiscal 2012
	To Date		Commitment

Block XXIV and TEA – Peru	$	4,306,367	$	700,000
Block Z-46 – Peru		8,619,240		405,000
CPO-4 – Colombia		6,362,983		2,740,000
	$	19,288,590	$	3,845,000

Note 4 – Stockholders’ Equity

Preferred Stock

As of May 31, 2012, the Company has authorized 50 million shares of blank check preferred stock, none of which are issued and outstanding. Our board of directors has the authority, without action by the shareholders, to designate and issue preferred stock in one or more series. Our board of directors may also designate the rights, preferences, and privileges of each series of preferred stock.

Common Stock

As of May 31, 2012, the Company had 548,517,726 shares of its $0.001 par value common stock issued and outstanding. The following schedule is a summary of the transactions in the Company’s common stock since August 31, 2011:

Total shares issued and outstanding as of August 31, 2011:		454,667,726
Shares previously subscribed for services rendered	September, 2011	5,100,000
Shares issued for services to be rendered	November, 2011	500,000
Shares issue for cash	April, 2012	88,250,000

Total shares issued and outstanding as of May 31, 2012:		548,517,726

Note 5 – Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has incurred tax net operating losses of approximately $19,939,000 which commence expiring in 2023 if not previously utilized. In accordance with GAAP, the Company is required to compute tax asset benefits for net operating loss carryforwards. The potential benefit of net operating loss carryforwards has been offset by a valuation allowance in these 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.

F-16

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

The valuations of the tax loss carryforward and the valuation allowance thereon were as follows:

	May 31, 2012			August 31, 2011
Net operating loss carryforward benefit	$	6,779,262		$	5,558,982
Stock-based compensation expense		99,658			25,422
Impairment loss on oil and gas properties		2,389,191			-
Loss from discontinued operations		544,411			544,411
Total deferred tax asset		9,799,322			6,128,815
Less: Valuation allowance		(9,799,322	)		(6,128,815	)
Net deferred tax asset	$	-		$	-

A reconciliation between the Company’s effective tax rate and the U.S. statutory tax rate is as follows:

	May 31, 2012			August 31, 2011
Provision for taxes (benefit) at U.S. statutory rate	$	(3,670,507	)	$	(4,955,065	)
Increase in deferred tax asset valuation allowance		3,670,507			4,955,065 .
Effective taxes	$	-		$	-
Effective tax rate		0	%		0	%

At May 31, 2012, the Company had approximately $19,939,000 of federal net operating loss carryforwards for tax reporting purposes available to offset future taxable income. The federal net operating loss carryforwards expire on various dates from 2023 through 2031. Under the Tax Reform Act of 1986, the amounts of and benefits from net operating losses carried forward may be impaired or limited in certain circumstances. Events which may cause limitations in the amount of net operating losses the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50 percent over a three-year period.

The Company has determined that an ownership change has occurred. Because of ownership change, utilization of the net operating loss carryforwards may be subject to an annual limitation under Section 382 of the Internal Revenue Code, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards before utilization. Further, until a study is completed and any limitations known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefit will not impact its effective tax rate. Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance.

Note 6 – Loans Payable to Related Parties

Notes payable to related parties consists of the following as of May 31, 2012 and August 31, 2011:

Unsecured loans to related parties

26,574

Two stockholders and former directors of the Company provided these loans. The loans are non-interest bearing, unsecured and payable upon demand.

F-17

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Note 7 – Stockholder Loans Payable and Accrued Interest

Unsecured loans and accrued interest payable to stockholders at May 31, 2012 and August 31, 2011:

	May 31, 2012		August 31, 2011
Short-term debt	$	-	$	1,400,000
Less: total note discount for stock issued		-		(623,232	)
Add: amortization of note discount		-		512,955
Add: accrued interest		-		99,911
Total shareholder loans payable and accrued interest	$	-	$	1,389,634

During the nine months ended May 31, 2012, the Company used cash to retire short-term notes which totaled approximately $1,400,000 as of August 31, 2011.

The notes bore interest at 8% annually with all interest and principal due at maturity. The notes were discounted based on the fair market value of the common stock received (determined with the assistance of an independent valuation expert) as a percentage of the total fair market value of all consideration received. The resulting note discount was amortized as additional interest expense over the twelve month life of each note and was calculated based on a normal amortization schedule using the interest method.

The weighted average interest rates on stockholder loans payable based on the face amount of the debt at May 31, 2012 and August 31, 2011 were 0% and 8.0%, respectively.

Note 8 - Commitments and Contractual Obligations

Oil and Gas Investment Commitments

Colombia Block CPO-4

Tamandua-1 was the first well drilled on CPO-4. The Company and other working interest owners moved the drilling rig to the Cachirre location and began drilling on May 18, 2012. The Cachirre well had an expected total depth of approximately 9,500 feet. In June 2012, SK Innovation and the Company elected to abandon the Tamandua-1 well and the Cachirre well. See “Note 10 - Subsequent Events”. The expected remaining commitment for fiscal 2012 is $2.7 million which includes approximately $1.54 million for the Cachirre well.

Peru Block Z-46

Gulf United and our Block Z-46 partner have reprocessed 5,600 kilometers of 2-D seismic data. On December 31, 2010, we began acquiring an additional 2,904 kilometers of infill 2-D seismic data focused in the southern portion of the block where several 2-D defined Tertiary prospects are stacked with 2-D defined Paleozoic prospects. Based on the results of the new 2-D seismic data, we plan to acquire 3-D seismic data in calendar year 2012 to be used in the selection of drilling locations. No independent engineering estimates have been prepared at this time. In December 2011, the joint venture partners approved the work plan and budget for Z-46. Pursuant to existing agreements, under the work plan and budget, our current obligation on Z-46 during fiscal year 2012 is approximately $0.4 million, and during fiscal year 2013 will be approximately $16.0 million.

Peru Block XXIV and TEA

F-18

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

conduct further geologic studies to determine one or two seismically defined drilling locations. Based on a rough cost estimate from Upland, our expected commitment for fiscal 2012 is estimated at $200,000.

Note 9 - Related Party Transactions

The Company and James M. Askew entered into an amendment to his consulting agreement pursuant to which the Company will pay Mr. Askew a monthly cash fee of $10,000 per month, beginning September 1, 2011 until the expiration or termination of the agreement. During the nine months ended May 31, 2012, Mr. Askew was paid $90,000 under his agreement and the Company recognized $71,565 in travel and entertainment expenses paid or payable to Mr. Askew.

Rodeo Resources, Ltd. (“Rodeo”), a related party, was paid $22,032 in general and administrative expenses during the nine months ended May 31, 2012. On April 11 and 17, Rodeo loaned the company a total of $200,000 which was then paid to SK Innovation Co, Ltd. (“SK”) for accounts payable to SK. On April 19, 2012, the Company repaid the loan plus $20,000 in cash interest expense. On June 4, 2012, the board of directors authorized the issuance of 2,500,000 shares of the Company’s restricted common stock valued at $200,000 to Rodeo in consideration for making the loan. The company recognized this as additional interest expense. The effective annual interest rate for this loan was 600% for the cash interest and 6,600% for the total interest expense.

Note 10 – Subsequent Events

Employment Agreements and Incentive Plan Awards

In June 2012, the Board of Directors authorized the Company to amend the employment agreements for each of the Company’s executive officers. In connection therewith, the employment agreement by and between the Company and John Connally III, our president, chief executive officer, and chairman, was amended and restated to extend the term of his agreement for an additional three years. Additionally, the employment agreements by and between the Company, Jim Ford, Ernest B. Miller, James C. Fluker III, and David Pomerantz, each of whom are named executive officers of the Company, were each extended for an additional one year.

Also in June 2012, the Compensation Committee of the Board of Directors awarded Mr. Connally a cash bonus of $450,000 and a ten-year option to purchase up to 3 million shares of common stock at an exercise price of $0.08 per share pursuant to Mr. Connally’s employment agreement. The Compensation Committee also awarded each of Messrs. Ford, Miller, and Fluker cash bonuses of $100,000 and ten-year options to purchase up to 1 million shares of common stock at an exercise price of $0.08 per share pursuant to their respective employment agreements. Mr. Pomerantz was awarded a cash bonus of $84,000 and a ten-year option to purchase up to 1 million shares of common stock at an exercise price of $0.08 per share pursuant to his employment agreement. Each of the Company’s independent directors, John N. Seitz and Thomas G. Loeffler, were also each awarded ten-year options to purchase up to 1 million shares of common stock at an exercise price of $0.08 per share. All of the options awarded described above were made under the Company’s 2011 Stock Incentive Plan, and vest equally over a period of three years beginning on the date of the grant.

F-19

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Notes to the Consolidated Financial Statements

May 31, 2012

(Unaudited)

Consulting Agreement

Effective June 4, 2012, the Company entered into a one-year consulting agreement with Randell Ford pursuant to which the consultant will provide advice to the board of directors relating to certain of the Company’s strategic and business development activities. In consideration for providing the consulting services, the consultant will be issued 500,000 shares of restricted common stock.

Cachirre #1

As reported in its Form 8-K filed with the SEC on June 27, 2012, in June 2012, the Cachirre #1 well was drilled to a measured depth of 9,486 feet in the southeast corner of Block CPO-4. An evaluation of the initial test results collected from the wellbore indicated that the primary targeted zones below a measured depth of 8,750 feet were water-wet. As of May 31, 2012, the Company had recorded approximately $960,000 of total expected costs of $2.5 million on the Cachirre #1 well. None of these costs were impaired at May 31, 2012. SK elected to abandon the well. On June 26, 2012, the Company notified SK Innovation that it has elected to abandon the well consistent with SK’s decision. If further testing of the C-9 section of the Cachirre #1 is conducted by a working interest partner on a sole-risk basis, the Company would have the right to buy back into the well by paying its proportionate share of incurred costs plus a penalty (based on the Company’s proportionate share of testing and completion costs of the C-9). The Company’s decision to not participate in the testing of the C-9 section, and the payment of any penalties to buy back into the well, is limited to the Cachirre #1 well, and does not affect the Company’s current plans to participate in any future development or exploration activity in the area or elsewhere on Block CPO-4.

Note 11 – Supplemental Disclosures – Consolidated Statements of Cash Flows

Supplemental Disclosure of Non-Cash, Investing and Financing Activities:

						Period From
						Inception Through
		Nine Months Ended May 31,				May 31, 2012
		2012		2011
Investment advances paid from shareholder loans	$	-	$	-	$	1,263,985
Common stock issued for investment in joint venture projects	$	-	$	-	$	687,225
Common stock issued or subscribed for expenses/services	$	219,500	$	9,086,800	$	10,260,500
Common stock issued for prepaid expenses/services	$	14,625	$	-	$	14,625
Common stock issued for oil and gas properties	$	-	$	90,000	$	3,646,000
Common stock issued or subscribed in connection with short-term notes	$	-	$	623,232	$	1,809,023
Interest forgiven on shareholder loan payable	$	-	$	-	$	631,444
Common stock issued in conversion of shareholder loan	$	-	$	-	$	400,000
Capital expenditures acquired with accounts payable	$	-	$	-	$	31,282

Settlement of loan payable by assignment of investment:
Loan payable	$	-	$	-	$	(200,000	)
Investment	$	-	$	-	$	200,000
Warrants issued for non-employee compensation	$	-	$	538,411	$	538,411
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest	$	132,000	$	328,970	$	527,714
Income taxes	$	-	$	-	$	-

F-20

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” above and “Risk Factors” included in our Form 10-K for the fiscal year ended August 31, 2011, filed with the SEC on November 29, 2011 (the “2011 Form 10-K”), for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

The following discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared on the accrual basis of accounting, whereby revenues are recognized when earned, and expenses are recognized when incurred. These consolidated financial statements as of May 31, 2012, and for the nine months ended May 31, 2012 are unaudited. In the opinion of management, such financial statements include the adjustments and accruals necessary for a fair presentation of the results for the interim periods. These interim results are not necessarily indicative of results for a full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted in these financial statements as of May 31, 2012 and for the periods ended May 31, 2012. You should read this discussion and analysis together with such financial statements and the notes thereto.

Our Properties

The following is a brief summary of our properties:

Property	Gross Acres	Net Acres	Working Interest(1)	Operator
Colombia Property
Block CPO-4	345,592	43,200	12.5%	SK Innovation

Peru Properties
Block Z-46	2,803,411	1,121,411	40.0%	SK Innovation
Block XXIV	276,137	13,807	5.0%	Upland
TEA Area I, II, III, IV	40,321,163	806,423	2.0%	Upland

(1) The assignment of the working interests in Block Z-46, Block XXIV, and the Peru TEA are subject to the approval of PeruPetro S.A. and the Peruvian government; the assignment of our interest in Block CPO-4 is subject to the approval of the National Hydrocarbon Agency of Colombia and the Republic of Korea.

Block CPO-4. Block CPO-4 is located in the Llanos Basin of Colombia. Block CPO-4 consists of 345,592 gross acres (43,200 net) and is located approximately 70 miles southeast of Bogotá. This block is operated by SK Innovation. Gulf United and our Block CPO-4 partners have reprocessed 1,350 kilometers of 2-D seismic data and 530 square kilometers of 3-D seismic data shot on the northern portion of acreage. Interpretation and study of this seismic data is ongoing. Tamandua-1 was the first well drilled on CPO-4. Due to conditions in the wellbore, the working interest partners’ elected to abandon the bottom section of the well and discontinue testing of the well after inconclusive results in the C-7 and C-9 sands. In June 2012, Tamandua-1 was temporarily abandoned to allow re-entry for future testing and evaluation. The Company and the other working interest owners moved the rig to the Cachirre location and began drilling on May 18, 2012. In June 2012, the Cachirre #1 well was drilled to a measured depth of 9,486 feet in the southeast corner of Block CPO-4. An evaluation of the initial test results collected from the wellbore indicated that the primary targeted zones below a measured depth of 8,750 feet were water-wet. SK Innovation elected to abandon the well. In June 2012, the Company notified SK Innovation that it has elected to abandon the well consistent with SK Innovation’s decision.

Block Z-46. Block Z-46 is located in the Trujillo Basin offshore Peru. Block Z-46 consists of 2,803,411 gross acres (1,121,411 net) and is located in northern Peru. Water depths on the block range from 50 meters to 1000 meters. This block is operated by SK Innovation. Gulf United and our Block Z-46 partner have reprocessed 5,600 kilometers of 2-D seismic data. On December 31, 2010, we began acquiring an additional 2,904 kilometers of infill 2-D seismic data focused in the southern portion of the block where several 2-D defined Tertiary prospects are stacked with 2-D defined Paleozoic prospects. Based on the results of the new 2-D seismic data, we plan to acquire 3-D seismic data in calendar year 2012 to be used in the selection of drilling locations. No independent

-4-

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.

engineering estimates have been prepared at this time. In December 2011, the joint venture partners approved the work plan and budget for Z-46. Pursuant to existing agreements, under the work plan and budget, our current obligation on Z-46 during fiscal year 2012 is approximately $0.4 million, and during fiscal year 2013 will be approximately $16.0 million.

Block XXIV. Block XXIV is located in the Sechura/Talara Basin in Peru. Block XXIV consists of 276,137 gross acres (13,807 net) of which approximately 80,000 are offshore and 196,000 are onshore. The offshore portion of the block is highly prospective. During 2011, Upland acquired 200 km of 2D seismic data on Block XXIV which is currently in processing. Going forward, we understand that Upland will conduct further geologic studies to prepare to drill two onshore wells during fiscal 2012 in seismically defined locations.

TEA I, II, III, IV. Technical Evaluation Areas I, II, III, and IV of the Peru TEA are contiguous blocks that together comprise 40,321,163 gross acres (806,423 net). The Peru TEA runs south on the western flank of the Andes Mountains from the border with Ecuador to near Lima. This greenfield opportunity will require geological evaluation, including the acquisition of aeromagnetic survey and 2-D seismic data, before we evaluate drilling opportunities. During 2011, Upland completed a gravity aeromagnetic and satellite imaging study on the TEA which will be used to narrow the areas of interest for further geologic study.

Results of Operations for Three and Nine Months Ended May 31, 2012

We have not earned any revenues during the period from inception through May 31, 2012. We have not attained profitable operations and are, therefore, dependent upon obtaining additional debt or equity financing. If we are unable to obtain additional financing, there is substantial doubt that we will be able to continue as a going concern.

Set forth below is a summary of our commitments under existing agreements (which excludes funds that may be required for general working capital purposes):

Contractual Obligations	Payments due by period (in thousands)
	Remainder of FYE 2012			FYE 2013			FYE 2014		Total
Commitments under employment agreements	$	360		$	1,383		$	-	$	1,743
Commitments under consulting contracts		45			180			-		225
Commitments under participation and farmout agreements:
Block CPO-4		2,740	(1)		4,900	(1)		-		7,640	(1)
Block Z-46		405	(2)		15,999	(3)		-		16,404
Block XXIV		500			-			-		500
Peru TEA		200			-			-		200
Total	$	4,250		$	22,462		$	-	$	26,712

(1)

The remaining fiscal year 2012 obligation on Block CPO-4 is $2.74 million which includes drilling the second phase 1 well at an estimated cost of $2.5 million and estimated joint operating costs of approximately $240,000. The 2013 estimated obligation includes $2.24 million for 3-D seismic expense and $1.7 million for seismic acquisition costs incurred subsequent to July 31, 2010 owed to Houston American Energy 30 days after ANH approval, and estimated joint operating costs of approximately $960,000. An expanded drilling program may be implemented in which an additional two wells will be drilled. Assuming an additional two wells are drilled, our additional estimated fiscal year 2013 obligation on CPO-4 will be increased by approximately $6.1 million. These additional amounts are not included in the above table.

(2)	The remaining fiscal year 2012 obligation on Block Z-46 is approximately $405,000 in joint operating costs.

-5-

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.

(3)

The fiscal year 2013 obligation includes a payment of $2.9 million for past costs due to SK Innovation 30 days after final approval of interest transfer. The work program and budget for Z-46 was approved in December 2011. Based on the work program, the estimated obligation on Z-46 for fiscal year 2013 is approximately $16.0 million, which consists of an estimated $9.8 million for the 3-D seismic acquisition, approximately $1.4 million for joint operating expenses, and an estimated $1.9 million for VAT.

Liquidity and Capital Resources

On April 19 and April 20, 2012, the Company consummated a private offering under 4(2) of the Securities Act of 1933, as amended, pursuant to which it sold to accredited investors 88,250,000 unregistered shares of its common stock at a purchase price of $0.08 per share for gross proceeds of $7,060,000 and net proceeds of $6,838,354. Based on the assumptions herein, we will be required to raise at least $28 million more during fiscal 2012 and 2013 to fund our anticipated expenditures.

Additionally, a component of our business strategy is to acquire additional oil and gas interests in Colombia and Peru should attractive opportunities be identified, although none have been identified to date. If we do identify a potential acquisition and/or if the initial drilling program on CPO-4 is successful and additional wells are drilled, we will need to raise significantly more than $28 million to fund the acquisition and/or the accelerated drilling program on CPO-4.

Future equity financings may be dilutive to our stockholders, and the terms of future equity financings may include preferences or rights superior to our common stock. Debt financings may involve a pledge of assets and will rank senior to our common stock. We have historically financed our operations through best efforts private debt and equity financing. We do not have any credit or equity facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts financings. There is no assurance that we can raise additional capital from external sources subsequent to this offering. Failure to raise additional capital, on favorable terms or at all, will have a material adverse effect on our operations, could result in the loss of our interests in our exploration projects, and will likely cause us to curtail or cease operations.

-6-

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.

Results of Operations

Three and nine months ended May 31, 2012, compared to the three and nine months ended May 31, 2011

In the three months and nine months ended May 31, 2011, certain amounts have been reclassified to be consistent with the three months and nine months ended May 31, 2012.

($ in Thousands)	For the three months ended May 31,						For the nine months ended May 31,
	2012			2011			2012			2011
Revenue	$	-		$	-		$	-		$	-

Office and other		21			19			52			31
Depreciation expense		7			6			20			16
Salary and related expenses		1,366			1,174			2,346			1,795
Professional fees		215			317			762			1,083
Consulting		45			355			184			8,654
Travel		68			35			191			52
Shareholder loan and other interest		220			235			220			1,531
Total operating expense		1,942			2,141			3,775			13,163
Interest income		(1	)		(8	)		(6	)		(9	)
Gain on sale of joint venture investment		-			30			-			350
Impairment on oil and gas properties		7,027			-			7,027			-
Net loss for the period	$	(8,968	)	$	(2,103	)	$	(10,796	)	$	(12,804	)

Operating Expenses

For the quarter ended May 31, 2012, operating expenses decreased $199,000 as compared to the same quarter in 2011. The decrease occurred primarily due to the $102,000 reduction in professional fees as well as the $310,000 decrease in consulting expense offset by a $192,000 increase in salary and related expenses and $33,000 in increased travel expense. For the nine months ended May 31, 2012, operating expenses decreased $9,388,000 as compared to the same nine months in 2011. The decrease occurred primarily due to the $8,470,000 reduction in consulting expenses, $321,000 reduction in professional fees as well as the $1,312,000 decrease in interest expenses offset by a $551,000 increase in salary and related expenses and a $139,000 increase in travel expense.

Net Loss

The Company incurred a net loss of $8,968,000 for the quarter ended May 31, 2012 which is $6,865,000 more than the net loss of $2,103,000 incurred for the quarter ended May 31, 2011. The increased loss is due primarily to the recognition of impairment on oil and gas properties offset by the reduction in expenses noted above as well as the gain on sale of joint venture investment recognized in 2011. For the nine months ended May 31, 2012 versus May 31, 2011, there was a $2,008,000 reduction in net loss for the reasons noted above.

Net Loss Applicable to Common Shareholders

For the quarters ended May 31, 2012 and May 31, 2011, our net loss per share was $0.02 and $0.00, respectively. For the nine months ended May 31, 2012 and May 31, 2011, our net loss per share was $0.02 and $0.03, respectively

Cash flows

For the nine months ended May 31, 2012, the Company's operating activities used cash of $2,348,233 compared to net cash used of $3,243,322 for the nine months ended May 31, 2011. During the current nine months period, investing activities used cash of $7,142,946 primarily for investment in oil and gas properties versus $10,577,918 for the comparable period in 2011.

-7-

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Cont.

The Company's financing activities generated cash of $6,838,354 from sale of restricted common stock and used cash of approximately $1,500,000 to pay short-term shareholder notes payable in the nine months ended May 31, 2012, compared to $25,822,119 cash provided by sale of restricted common stock offset by principal payments on shareholder loans in the same period in 2011.

For the period from inception-to-date, the Company used cash of $6,655,435 in operating activities, used $22,832,345 in investing activities and $32,586,701 was provided from financing activities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company's periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with the participation of the Company's principal executive officer and principal financial officer, of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act).

-8-

GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Based upon the evaluation, the Company's principal executive officer and principal financial officer concluded that as of May 31, 2012, its disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. In addition, the Company's principal executive officer and principal financial officer concluded that its disclosure controls and procedures were effective at a reasonable assurance level to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is designed to provide reasonable assurance as to the reliability of the Company's financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Changes in Internal Control over Financial Reporting

In connection with the evaluation of the Company's internal controls during the Company's last fiscal quarter covered by this report required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, the Company's principal executive officer and principal financial officer have determined that as of May 31, 2012, there were no changes to the Company's internal controls over financial reporting that have materially affected, or are reasonably likely to materially effect, the Company's internal controls over financial reporting.

PART II- OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

Except as set forth below, there have been no material changes to the risk factors previously disclosed under Item 1 of the Company’s Form 10-K filed with the United States Securities and Exchange Commission on November 29, 2011. These risk factors should be read in conjunction with those in the Company’s Form 10-K.

We will need to raise capital to fund our fiscal 2012 and 2013 operations and to fund additional acquisitions. Failure to meet our capital requirements in the future will cause us to curtail future growth plans or cut back our operations.

At May 31, 2012, the Company has current assets of $3,164,657, current liabilities of $1,183,766, and a resulting working capital of $1,980,891. We currently have no sources of revenue. At May 31, 2012, we estimated that we would need approximately $4.25 million to fund our contractual commitments for the remaining portion of fiscal 2012 (excluding funds required for general working capital purposes). Moreover, we will require approximately $25.0 million to fund our contractual commitments during fiscal 2013 (excluding funds required for general working capital purposes). This will require that we raise at least $28 million during fiscal 2012 and 2013 to fund our anticipated expenditures (which does not include an additional estimated $6.1 million that we may be required to fund assuming two additional wells are drilled).

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GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

Future equity financings may be dilutive to our stockholders, and the terms of future equity financings may include preferences or rights superior to our common stock. Debt financings may involve a pledge of assets and will rank senior to our common stock. We have historically financed our operations through best efforts private debt and equity financing. We do not have any credit or equity facilities available with financial institutions, stockholders or third party investors, and will continue to rely on best efforts financings. There is no assurance that we can raise additional capital from external sources. Failure to raise additional capital, on favorable terms or at all, will have a material adverse effect on our operations, could result in the loss of our interests in our exploration projects, and will likely cause us to curtail or cease operations.

The Company has no other sources of financing and will continue to rely on best efforts for equity, equity equivalent, or debt financings and borrowings from stockholders. There are no additional commitments from or assurances that we will be able to obtain additional capital on terms favorable to the Company or at all. Failure to raise additional capital, on favorable terms or at all, will have a material adverse effect on our operations, could result in the loss of our interests in our exploration projects, and will likely cause us to curtail or cease operations

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GULF UNITED ENERGY, INC. AND SUBSIDIARIES

(A Development Stage Company)

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

There were no unregistered sales of the Company’s equity securities during the quarter ended May 31, 2012, other than those previously reported in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

Item 6. Exhibits

31.1* Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2* Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1* Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2* Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following materials from Gulf United Energy, Inc.’s Quarterly Report on Form 10-Q for the quarter ended May 31, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Cash Flows; (iv) Consolidated Statements of Shareholders’ Equity (Deficiency) and Comprehensive Loss; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text

* Filed herewith.

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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.

Dated: July 16, 2012	GULF UNITED ENERGY, INC. (Registrant)

	/s/ John B. Connally III John B. Connally III Chief Executive Officer (Principal Executive Officer)

	/s/ David Pomerantz David Pomerantz Chief Financial Officer (Principal Financial and Accounting Officer)

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Gulf United Energy, Inc. - FORM 10-Q - July 16, 2012

Attached files

Gulf United Energy, Inc. Reports