SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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:

January 31, 2018

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-52392

AMAZING ENERGY OIL AND GAS, CO.

(Exact name of registrant as specified in its charter)

Nevada	82-0290112
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification Number)

701 S Taylor Street

Suite 470, LB 113

Amarillo, Texas 79101

(Address of principal executive office)

Registrant’s telephone number, including area code: (806) 322-1922

Indicate by check mark whether the Registrant (i) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant was required to file such reports), and (ii) has been subject to such filing requirements for the past 90 days.   YES [X]   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 (SS 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 [X]   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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	[  ]	Accelerated Filer	[  ]
Non-accelerated Filer (Do not check if smaller reporting company)	[  ]	Smaller Reporting Company	[X]

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

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 76,786,010 as of March 14, 2018.  

---

AMAZING ENERGY OIL AND GAS, CO.

TABLE OF CONTENTS

			Page
PART I.	FINANCIAL INFORMATION		3
Item 1.	Financial Statements (unaudited)		3
		Consolidated Balance Sheets – January 31, 2018 and July 31, 2017	3
		Consolidated Statements of Operations – for the three and six months ended January 31, 2018 and 2017	4
		Consolidated Statements of Cash Flows – for the six months ended January 31, 2018 and 2017	5
		Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		15
Item 4.	Controls and Procedures		15
PART II.	OTHER INFORMATION		16
Item 1.	Legal Proceedings		16
Item 1A.	Risk Factors		16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		16
Item 3.	Defaults Upon Senior Securities		16
Item 4.	Mine Safety Disclosures		16
Item 5.	Other Information		16
Item 6.	Exhibits		17
SIGNATURES			19
EXHIBIT INDEX			20

The accompanying notes are an integral part of these financial statements

-2-

---

PART I

ITEM 1.

FINANCIAL STATEMENTS.

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

				January 31, 2018					July 31, 2017
					(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents			$	994,213		$	756,603
	Oilfield service receivable				115,703			64,392
	Oil and gas receivables				15,369			39,901
	Prepaid expenses and other current assets				56,875			67,843
		TOTAL CURRENT ASSETS			1,182,160			928,739
	Property and equipment, net of accumulated depreciation of $369,324 and $306,292				484,660			545,812
OIL AND GAS PROPERTIES, Full Cost Method
	Evaluated properties, net of accumulated depletion of $1,254,355 and $1,179,955				6,046,341			5,919,082
	Other assets and restricted cash				76,622			76,622
		TOTAL ASSETS		$	7,789,783		$	7,470,255
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Accounts payable			$	154,502		$	77,618
	Accrued liabilities				32,087			62,203
	Revenue payable to interest owners				421,232			421,423
	Interest payable, related parties				309,130			244,009
	Current portion of convertible debt, related party				430,893			430,892
	Note payable on acquisition, related party				-			104,167
	Note payable				-			50,000
	Notes payable, related parties				-			347,500
	Equipment note payable, current portion				10,247			10,006
		TOTAL CURRENT LIABILITIES			1,358,091			1,747,818
LONG TERM LIABILITIES:
	Asset retirement obligation				188,122			183,397
	Equipment note payable, net of current portion				29,804			34,981
	Common stock payable				262,500			-
	Convertible debt, related party, net of current portion				2,650,277			2,650,278
		TOTAL LONG-TERM LIABILITIES			3,130,703			2,868,656
			TOTAL LIABILITIES		4,488,794			4,616,474
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS’ EQUITY:
	Preferred stock, no par value, 10,000,000 shares authorized
	Series A Preferred Stock, $0.01 par value, 9,000 shares issued and outstanding, liquidation preference $900,000				90			90
	Series B Preferred Stock, $0.01 par value, 50,000 shares issued and outstanding, liquidation preference $900,000				500			500
	Common stock, $0.001 par value, 3,000,000,000 shares authorized, 75,076,010 and 66,581,040 issued and outstanding				75,076			66,581
	Additional paid-in capital				33,356,989			28,814,857
	Accumulated deficit				(30,131,665)			(26,028,247)
		TOTAL STOCKHOLDERS’ EQUITY			3,300,989			2,853,781
			TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	7,789,783		$	7,470,255

The accompanying notes are an integral part of these financial statements

-3-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

				For the three months ended						For the six months ended
				January 31, 2018			January 31, 2017			January 31, 2018			January 31, 2017
REVENUE
	Oilfield service revenue			$	49,732		$	76,465		$	126,742		$	162,671
	Oil and gas sales				41,382			65,037			111,976			119,254
			TOTAL GROSS REVENUE		91,114			141,502			238,718			281,925
OPERATING EXPENSES
	Oil and gas production expenses				14,739			40,902			44,298			63,608
	Oilfield service and lease operating expenses				2,292			108,588			44,577			136,411
	Selling, general and administrative expenses				1,366,014			281,292			3,998,603			573,172
	Depreciation expense				30,834			31,689			61,606			53,939
	Depletion expense				42,055			27,782			74,400			56,393
	Accretion expense				2,363			2,181			4,725			4,898
	Gain on sale of mineral rights				-			(50,000)			-			(50,000)
			TOTAL OPERATING EXPENSES		1,458,297			442,434			4,228,209			838,421
LOSS FROM OPERATIONS					(1,367,183)			(300,932)			(3,989,491)			(556,496)
OTHER INCOME (EXPENSE)
	Interest income				326			174			418			2,726
	Interest expense				695			(5,629)			(3,062)			(19,667)
	Interest expense, related parties				(54,539)			(61,630)			(111,235)			(123,260)
			TOTAL OTHER INCOME (EXPENSE)		(53,518)			(67,085)			(113,879)			(140,201)
NET LOSS					(1,420,701)			(368,017)			(4,103,370)			(696,697)
		Deemed capital distribution on acquisition of common control entity			-			-			-			(423,648)
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS				$	(1,420,701)		$	(368,017)		$	(4,103,370)		$	(1,120,345)
NET LOSS PER COMMON SHARE, Basic and diluted				$	(0.02)		$	(0.01)		$	(0.06)		$	(0.01)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – basic and diluted					69,585,268			64,411,053			68,274,458			63,884,346

The accompanying notes are an integral part of these financial statements

-4-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

			Six months ended
			January 31, 2018			January 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss			$	(4,103,370)		$		(696,697)
Adjustments to reconcile net loss to net cash (used) by operating activities:
	Common stock issued for services			422,069				12,375
	Gain on sale of leasehold and mineral rights			-				(50,000)
	Depreciation expense			61,606				53,939
	Depletion expense			74,400				56,393
	Accretion expense			4,725				4,898
	Stock based compensation			2,166,058				-
Changes in operating assets and liabilities
	Oilfield service receivable			(51,311)				-
	Oilfield service receivable, related party			-				40,378
	Oil and gas receivable			24,532				17,847
	Prepaid expenses and other current assets			10,968				(48,279)
	Accounts payable			76,884				(225,410)
	Revenue payable to interest owners			(240)				(134,329)
	Accrued liabilities			(30,116)				1,573
	Interest payable, related parties			65,121				106,144
		NET CASH USED IN OPERATING ACTIVITIES		(1,278,674)				(861,168)
CASH FLOWS FROM INVESTING ACTIVITIES
	Proceeds from optioned mineral properties			-				50,000
	Proceeds from sale of working interests, oil and gas properties			-				656,596
	Purchase of secured letter of credit, restricted			-				(50,000)
	Acquisition of property and equipment			(454)				(218,271)
	Acquisition of oil and gas properties			(201,659)				(50,410)
		NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES		(202,113)				387,915
CASH FLOWS FROM FINANCING ACTIVITIES
	Proceeds from sale of common stock and common stock payable			2,225,000				1,603,961
	Payments on equipment note payable			(4,936)				(3,976)
	Payments on note payable, non-related party			(50,000)				(57,500)
	Proceeds on notes payable, related parties			25,000				-
	Payments on notes payable, related parties			(372,500)				-
	Payments on notes payable on acquisition, related party			(104,167)				(270,833)
		NET CASH PROVIDED BY FINANCING ACTIVITIES		1,718,397				1,271,652
NET INCREASE IN CASH AND CASH EQUIVALENTS				237,610				798,399
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD				756,603				344,148
CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	994,213		$		1,142,547
NON-CASH INVESTING AND FINANCING ACTIVITIES:
	Equipment acquired with note payable			-				52,992
	Deemed capital distribution on acquisition of common control entity			-				423,648
	Acquisition of common control entity in exchange for related party note and oilfield services receivable, related party (Note 6)			-				571,745
	Common stock issued for common stock payable			-				32,250

The accompanying notes are an integral part of these financial statements

-5-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

NOTE 1 – NATURE OF OPERATIONS

Amazing Energy Oil and Gas, Co. is incorporated in the State of Nevada.  Through its primary subsidiary, Amazing Energy, Inc., also a Nevada corporation, the Company operates its main business of exploration, development, and production of oil and gas in the Permian Basin of West Texas.  On October 7, 2014, the Company entered into a change in control agreement with certain shareholders of Amazing Energy, Inc.  The change in control agreement was the first step in a reverse merger process whereby the shareholders of Amazing Energy, Inc. would control about 95% of the shares of common stock of Amazing Energy Oil and Gas, Co., and Amazing Energy Oil and Gas, Co. would own 100% of the outstanding shares of common stock of Amazing Energy, Inc.  This entire reverse merger process was completed in July of 2015.

Amazing Energy, Inc. was formed in 2010 as a Texas corporation and then changed its domicile to Nevada in 2011. The Company owns interests in oil and gas properties located in Texas. The Company is primarily engaged in the acquisition, exploration and development of oil and gas properties and the production and sale of oil and natural gas. Amazing Energy, LLC was formed in December 2008 as a Texas Limited Liability Company. In December of 2010, Amazing Energy, Inc. and Amazing Energy, LLC were combined as commonly controlled entities.

On July 31, 2016, the Company acquired Gulf South Securities, Inc. (“GSSI”). GSSI was organized to be active in various aspects of the securities industry and was registered as a broker-dealer with the Financial Industry Regulatory Authority (“FINRA”) and the Securities and Exchange Commission (“SEC”). The Company allowed GSSI’s FINRA registration to lapse as of February 28, 2017.  

On April 15, 2016, the Company entered into an agreement with Jed Miesner, the Chairman of the Company’s board of directors, to acquire all of his interest (100% of the total outstanding shares of common stock) of Jilpetco, Inc., a Texas corporation (“Jilpetco”) in consideration of $500,000. Jilpetco is engaged in the business of operating and providing oilfield services to oil and gas properties. As a result, Jilpetco became a wholly owned subsidiary corporation of the Company. On August 25, 2016, the foregoing agreement was amended to extend the closing date to August 31, 2016 and exclude certain property therefrom. The parties agreed to allow Jed Miesner to assign certain accounts receivable and to exclude certain personal property from the transaction. In addition, the $500,000 consideration for the acquisition is in the form of a note payable at 6% interest. (See Note 7).

Effective August 31, 2016, the Company completed the acquisition of Jilpetco. The Company and Jilpetco were under common control at the time of the acquisition. The difference between the purchase price and historical cost of the net assets acquired was recorded as a deemed capital distribution of $423,648 as of August 1, 2016.  Intercompany balances and transactions between the entities are eliminated in consolidation of the financial statements.

On January 8, 2018, the Company dissolved Gulf South Securities, Inc.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

This summary of significant accounting policies is presented to assist in understanding the financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

The financial statements are presented on a consolidated basis and include all of the accounts of Amazing Energy Oil and Gas, Co. and its wholly owned subsidiaries, Amazing Energy, Inc., Amazing Energy LLC, Kisa Gold Mining, Inc., Gulf South Securities, Inc. and Jilpetco, Inc.  All significant intercompany balances and transactions have been eliminated.

In the opinion of management, the accompanying unaudited interim balance sheets and statements of operations and cash flows contain all adjustments, consisting of normal recurring items, necessary to present fairly, in all material respects, the financial position of the Company as of January 31, 2018, and the results of its operations and its cash flows for the three and six months ended January 31, 2018 and 2017. The operating and financial results for the Company for the six months ended January 31, 2018 are not necessarily indicative of the results that may be expected for the year ending July 31, 2018.

Going Concern

These consolidated financial statements have been prepared in accordance with U.S. GAAP to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.

-6-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

As shown in the accompanying financial statements, the Company has incurred operating losses since inception. As of January 31, 2018, the Company has limited financial resources with which to achieve the objectives and obtain profitability and positive cash flows. As shown in the accompanying consolidated balance sheets, the Company has an accumulated deficit of $30,131.665.  At January 31, 2018, the Company's working capital deficit was $175,931.  Achievement of the Company's objectives will be dependent upon the ability to obtain additional financing, to locate profitable mineral properties and generate revenue from current and planned business operations, and control costs. The Company plans to fund its future operations by joint venturing, obtaining additional financing from investors, and/or lenders, and attaining additional production. However, there is no assurance that the Company will be able to achieve these objectives, therefore substantial doubt about its ability to continue as a going concern exists.  Although management believes that it will be able to obtain the necessary funding to allow the Company to remain a going concern through the methods discussed above, there can be no assurances that such methods will prove successful.  The financial statements do not include adjustments relating to the recoverability of recorded assets nor the implications of associated bankruptcy costs should the Company be unable to continue as a going concern.

Revenue and Cost Recognition

The Company uses the sales method of accounting for oil and gas revenues. Under this method, revenues are recognized based on the actual volumes of gas and oil sold to purchasers. The volume sold may differ from the volumes the Company may be entitled to, based on the Company’s individual interest in the property. Periodically, imbalances between production and nomination volumes can occur for various reasons. In cases where imbalances have occurred, a production imbalance receivable or liability will be recorded when determined. Costs associated with production are expensed in the period in which they are incurred.

The Company also provides oilfield services to both related party entities and outside oil and gas well owners.  Revenue and costs are recognized on an accrual basis and associated revenue and expense recognized in the period in which service was provided.  

Receivables

Oilfield service receivables are carried at original invoice amount less an estimate for doubtful accounts. Management determines the allowance by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history and current economic conditions. Receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded as income when received.

Oil and gas receivables consist of oil and natural gas revenues due under normal trade terms. Management reviews receivables periodically and reduces the carrying amount by a valuation allowance that reflects management’s best estimate of the amount that may not be collectible. As of January 31, 2018, management estimated uncollectable accounts at $45,603 .

Revenue payable to interest holders

The Company provides oilfield services which includes interest owner accounting and subsequent disbursement of the interest owners’ pro-rata share of oil proceeds from a given lease.  Generally, the pro-rata share of oil proceeds less any applicable pro-rata share of operating expenses is distributed to the interest owner within two months of sale of oil and natural gas.  The revenue payable liability comprises those proceeds which have yet to be distributed to interest owners as a result of the time required to process administrative functions and process payment.   

Asset Retirement Obligations

The Company accounts for its future asset retirement obligations by recording the fair value of the liability during the period in which it was incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company depletes the amount added to proved oil and gas property costs and gathering assets using the units-of-production method. The Company's asset retirement obligation consists of costs related to the plugging of wells, removal of facilities and equipment and site restoration on its oil and gas properties and gathering assets. The asset retirement liability is allocated to operating expense using a systematic and rational method

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and certain assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Management’s estimates include estimates of impairment in carrying value of assets and liabilities, and collectability of recorded oilfield services

-7-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

receivables, stock-based compensation, deferred income taxes, asset retirement obligations, oil and gas property ceiling tests, and depreciation, depletion and amortization. Actual results could differ from these estimates.

Risks and uncertainties

The Company’s operations are subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating an emerging oil and gas business, including the potential risk of business failure.

Concentration of risks

The Company’s cash is placed with a highly rated financial institution, and the Company periodically reviews the credit worthiness of the financial institutions with which it does business. At times, the Company’s cash balances are in excess of amounts guaranteed by the Federal Deposit Insurance Corporation.

The Company’s oil and gas revenue originated from production from its properties in Texas.  Each revenue stream is sold to a single customer through month to month contracts.  While this creates a customer concentration, there are alternate buyers of the production in event the sole customer is unable or unwilling to purchase.

The Company sells its oil and gas production to only two customers. Oil production is sold to Rio Energy International, Inc. and natural gas production is sold to Trans-Pecos Natural Gas Company, LLC. As a result, during the fiscal years ended January 31, 2018 and 2017, these customers represented 100% of its oil and gas revenue (“major customers”).

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less when acquired to be cash equivalents.

Restricted Cash

As of January 31, 2018, the Company has a letter of credit in the amount of $50,000 in favor of the Texas Railroad Commission as a bond for reclamation on its oil and gas properties.

Income Taxes

The Company accounts for income taxes using the liability method. The liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of (i) temporary differences between financial statement carrying amounts of assets and liabilities and their basis for tax purposes and (ii) operating loss and tax credit carry-forwards for tax purposes. Deferred tax assets are reduced by a valuation allowance when management concludes that it is more likely than not that a portion of the deferred tax assets will not be realized in a future period.

Fair value of financial instruments

Financial instruments consist of cash and various notes payable. The estimated fair value of convertible debt, related party approximates $8.9 Million at January 31, 2018 based on its common stock equivalents and exchange trading price.

Property, plant, and equipment

Property, plant, and equipment are stated at cost. Improvements which significantly increase an asset’s value or significantly extend its useful life are capitalized and depreciated over the asset’s remaining useful life. When property, plant or equipment is sold at a price either higher or lower than its carrying amount, or un-depreciated cost at the date of disposal, the difference between the sale proceeds over the carrying amount is recognized as gain, while a loss is recognized when the carrying amount exceeds the sale proceeds. Property, plant, and equipment are depreciated on a straight-line basis over their useful lives, which are typically five to seven years for equipment.

Oil and gas properties

The Company uses the full cost method of accounting for exploration and development activities as defined by the Securities and Exchange Commission. Under this method of accounting, the costs of unsuccessful, as well as successful, exploration and

-8-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

development activities are capitalized as properties and equipment. This includes any internal costs that are directly related to property acquisition, exploration and development activities but does not include any costs related to production, general corporate overhead or similar activities. Gain or loss on the sale or other disposition of oil and gas properties is not recognized, unless the gain or loss would significantly alter the relationship between capitalized costs and proved reserves. Oil and gas properties include costs that are excluded from costs being depleted or amortized. Oil and natural gas property costs excluded represent investments in unevaluated properties and include non-producing leasehold, geological, and geophysical costs associated with leasehold or drilling interests and exploration drilling costs. The Company allocates a portion of its acquisition costs to unevaluated properties based on relative value. Costs are transferred to the full cost pool as the properties are evaluated over the life of the reservoir.

Depletion and amortization

The depletion base for oil and natural gas properties includes the sum of all capitalized costs net of accumulated depreciation, depletion, and amortization (“DD&A”), estimated future development costs and asset retirement costs not included in oil and natural gas properties, less costs excluded from amortization. The depletion base of oil and natural gas properties is amortized on a units-of-production method.

Long-Lived Assets

The Company reviews long-lived assets which include property, plant and equipment and oil and gas properties for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events relating to recoverability may include significant unfavorable changes in business conditions or a forecasted inability to achieve break-even operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows and reports any impairment at the lower of the carrying amount or the fair value less costs to sell.

Ceiling test

Future production volumes from oil and gas properties are a significant factor in determining the full cost ceiling limitation of capitalized costs. Under the full cost method of accounting, the Company is required to periodically perform a “ceiling test” that determines a limit on the book value of oil and gas properties. If the net capitalized cost of proved oil and gas properties, net of related deferred income taxes, plus the cost of unproved oil and gas properties, exceeds the present value of estimated future net cash flows discounted at 10 percent, net of related tax affects, plus the cost of unproved oil and gas properties, the excess is charged to expense and reflected as additional accumulated DD&A. The ceiling test calculation uses a commodity price assumption, which is based on an un-weighted arithmetic average of the price on the first day of each month for each month within the prior 12-month period and excludes future cash outflows related to estimated abandonment costs. The Company did not recognize impairment on its oil and gas properties during the years ended July 31, 2017 and 2016. Due to the volatility of commodity prices, should oil and natural gas prices decline in the future, it is possible that a write-down could occur. Proved reserves are estimated quantities of crude oil, natural gas, and natural gas liquids, which geological and engineering data demonstrate with reasonable certainty to be recoverable from known reservoirs under existing economic and operating conditions. The independent engineering estimates include only those amounts considered to be proved reserves and do not include additional amounts which may result from new discoveries in the future, or from application of secondary and tertiary recovery processes where facilities are not in place or for which transportation and/or marketing contracts are not in place.

The determination of oil and gas reserves is a subjective process, and the accuracy of any reserve estimate depends on the quality of available data and the application of engineering and geological interpretation and judgment. Estimates of economically recoverable reserves and future net cash flows depend on a number of variable factors and assumptions that are difficult to predict and may vary considerably from actual results. In particular, reserve estimates for wells with limited or no production history are less reliable than those based on actual production. Subsequent re- evaluation of reserves and cost estimates related to future development of proved oil and gas reserves could result in significant revisions to proved reserves. There other issues, such as changes in regulatory requirements, technological advances, and other factors, which are difficult to predict, could also affect estimates of proved reserves in the future.

Gains and losses on the sale of oil and gas properties are not generally reflected in income. Sales of less than 100% of the Company’s interest in the oil and gas property are treated as a reduction of the capital cost of the field, with no gain or loss recognized, as long as doing so does not significantly affect the unit-of-production depletion rate. Costs of retired equipment, net of salvage value, are usually charged to accumulated depreciation.

-9-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

Stock-based compensation

Compensation cost for equity awards is based on the fair value of the equity instrument on the date of grant.  The Company estimates the fair value of options to purchase common stock using the Black-Scholes model, which requires the input of some subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them ("expected life"), the estimated volatility of the Company's common stock price over the expected term ("volatility"), employee forfeiture rate, the risk-free interest rate and the dividend yield. Changes in the subjective assumptions can materially affect the estimate of fair value of stock-based compensation. Options granted have a ten-year maximum term and varying vesting periods as determined by the Board of Directors.  The value of shares of common stock awards is determined by the Company’s Board of Directors.

For options issued with service vesting conditions, compensation cost is recognized over the vesting period.  For options issued with performance conditions, compensation cost is recognized if and when the Company concludes that the performance condition will be achieved, net of an estimate of pre-vesting forfeitures.  For options issued with market conditions, compensation cost is recognized over the requisite service period and discounted by the probability of the condition thereof being met.  

Environmental laws and regulations

The Company is subject to extensive federal, state, and local environmental laws and regulations. Environmental expenditures are expensed or capitalized depending on their future economic benefit. The Company believes that it is in compliance with existing laws and regulations.

Fair value measurements

When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used.  The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall.  The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.  Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs.  The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date.  At January 31, 2018 and July 31, 2017, the Company had no assets or liabilities accounted for at fair value on a recurring basis.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers” (ASU 2014-09), which supersedes the revenue recognition requirements in FASB Accounting Standards Codification (ASC) Topic 605, “Revenue Recognition”. The guidance requires that an entity recognize revenue in a way that depicts the transfer of promised goods or services to customers in the amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. The guidance will be effective for annual reporting periods beginning after December 15, 2017 and will be effective for the Company on August 1, 2018, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. The Company is currently evaluating the new standard and its impact on the Company’s consolidated financial statements.

 

In March 2016, the FASB issued ASU No. 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for stock-based compensation, including income tax consequences and balance sheet and cash flow statement classification of awards. The update is effective for fiscal years beginning after December 15, 2016, with early adoption permitted.  The Company is currently considering the effects of adoption of this ASU.

In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update provides guidance on classification for cash receipts and payments related to eight specific issues. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of implementing this update on the consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business. The update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether

-10-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The update is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company will apply the provisions of the update to potential future acquisitions occurring after the effective date.

Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

NOTE 3 – EARNINGS PER SHARE

Basic Earnings Per Share (“EPS”) is computed by dividing net income (loss) by the weighted-average number of shares outstanding during the period and includes no dilution.  Diluted EPS reflects the potential dilution of securities that could occur from common shares issuable through convertible debt, convertible preferred stock and warrants.

The outstanding securities at January 31, 2018 and 2017, that could have a dilutive effect on future periods are as follows:

	January 31, 2018			January 31, 2017
Conversion option on related party debt		13,019,886			11,832,724
Convertible preferred stock		6,490,000			6,490,000
Stock options		28,085,000			-
Warrants		4,917,551			2,674,576
Total potential dilution		52,512,437			20,997,300

For the three and six months ended January 31, 2018 and 2017, the effect of this potential dilution has not been recognized since it would have been anti-dilutive.

NOTE 4 – OILFIELD SERVICE RECEIVABLE, RELATED PARTY

As of January 31, 2018 and July 31, 2017, the balance of oilfield service receivables due from Gulf South Energy Partners, LLC, a related party, was $45,603 and $31,404, respectively.  Management has determined repayment as unlikely and, consequently has fully reserved the balance of the account as uncollectible.    

NOTE 5 – PROPERTY AND EQUIPMENT

As of January 31, 2018 and July 31, 2017, the property and equipment asset balance was composed of the following:

	January 31, 2018			July 31, 2017
Drilling equipment	$	600,000		$	600,000
Other equipment		253,984			253,531
Less: Accumulated depreciation		(369,324)			(307,718)
Total property and equipment	$	484,660		$	545,812

NOTE 6 – OIL AND GAS PROPERTIES  

The Company is currently participating in oil and gas exploration activities in Texas. The Company’s oil and gas properties are located entirely in the United States.

The Company has leasehold rights located within approximately 70,000 contiguous acres in Pecos County, Texas, which lies within the Permian Basin. The property is located in the Northeast region of the County. The Pecos leasehold is comprised of multiple leases, and the Company has a variable working interest in twenty-four wells on these leases. The Company has drilled twenty-four wells throughout this property, with twenty-one producing and three shut-in. The oil and gas property balances at January 31, 2018 and July 31, 2017 are set forth in the table below:

-11-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

	January 31, 2018			July 31, 2017
Proved leasehold costs	$	2,080,861		$	2,049,593
Cost of wells and development		5,090,949			4,920,558
Asset retirement obligation, asset		128,886			128,886
Total cost of oil and gas properties		7,300,696			7,099,037
Less: Accumulated depletion		(1,254,355)			(1,179,955)
Oil and gas properties, net full cost method	$	6,046,341		$	5,919,082

For the year ended July 31, 2017, the Company sold an 11% working interest in four wells and a 60% working interest in three wells for a total of $656,596 in cash to Gulf South Energy Partners, a related entity controlled by Robert Bories, a member of the Company’s Board of Directors.  The sale of working interests in seven wells resulted in a reduction in oil and gas properties of $656,596 for the year ended July 31, 2017.  Gain or loss was not recognized on this sale since the sale did not significantly alter the relationship between capitalized costs and proved reserves.

 

NOTE 7 – COMMON CONTROL ACQUISITION OF JILPETCO, INC.

On April 15, 2016, the Company entered into an agreement with Jed Miesner, the Chairman of the Company’s Board of Directors, to acquire all his interest (100% of the total outstanding shares of common stock) in Jilpetco, Inc., a Texas corporation (“Jilpetco”) in consideration of $500,000.  Jilpetco is engaged in the business of operating and providing oilfield services to oil and gas properties, including the Company’s.

On August 25, 2016, the foregoing agreement was amended to extend the closing date to August 31, 2016 and exclude certain property therefrom. The parties agreed to allow Jed Miesner to exclude certain oilfield service receivables for $71,745 from the transaction. In addition, the $500,000 in additional consideration for the acquisition was in the form of a note payable at 6% interest calling for monthly payments of principal and interest totaling $511,962 and maturing on December 25, 2017 (Note 7 – Notes Payable, Related Parties).  The Note called for five monthly payments of $50,752 commencing on September 25, 2016, and twelve payments of $21,517 commencing on January 25, 2017.

The Company completed the acquisition of Jilpetco on August 31, 2016 (Note 1 - Nature of Operations).  

NOTE 8 – NOTES PAYABLE– RELATED PARTIES

Convertible debt, related parties

On January 3, 2011, the Company formalized a loan agreement with Jed and Lesa Miesner, the Company’s CEO and Chairman and his spouse, for $1,940,000. The loan is scheduled to mature on December 31, 2030, bear interest at the rate of 8% per annum, and collateralized with a leasehold deed of trust covering certain leasehold interests in Pecos County, Texas.  At January 31, 2018 and 2017, the current component of this loan was $248,704 and 191,092, respectively. The long-term amounts at January 31, 2018 and 2017 were $1,691,296 and $1,748,971 respectively.

On December 30, 2010, Amazing Energy, LLC, a wholly owned subsidiary of the Company,  formalized loan agreements with Petro Pro Ltd., an entity controlled by Jed Miesner for $1,100,000. The loan is scheduled to mature on December 31, 2030, bear interest at the rate of 8% per annum and are collateralized with a leasehold deed of trust covering certain leasehold interests in Pecos County, Texas. At January 31, 2018 and 2017, the current component of this loan was $141,018 and $108,315 respectively.  The long-term amounts at January 31, 2018 and 2017, were $958,982 and $991,685, respectively.

On December 30, 2010, Amazing Energy, LLC, (a wholly owned subsidiary of the Company) entered into a $2,000,000 line of credit facility with JLM Strategic Investments LP, an entity controlled by Jed Miesner. Funds advanced on the line of credit mature on December 31, 2030, bear interest at the rate of 8% per annum and are collateralized with a leasehold deed of trust covering certain leasehold interests in Pecos County, Texas. There was a reduction in this debt of $287,303 on July 31, 2016 by the issuance of the Series A Preferred Stock (see below).  At January 31, 2018 and 2017, the current component of this loan was $41,170 and $30,162, respectively.  The long-term amounts at January 31, 2018 and 2017, were $Nil and $8,258, respectively.

Terms of the notes, as amended, provide for adjustment to the interest rate beginning February 1, 2017 from 8% to a rate of 6% through February 1, 2019, and a rate of Prime plus 2% for the remaining years. The notes also included a conversion feature that

-12-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

allows the principal and accrued interest of the loans to be converted into common stock of Amazing Energy, Inc. at $0.60 per share at the option of related party note holders.

Principal maturities for the two loan agreements and the credit facility outstanding at January 31, 2018 for the remaining terms are summarized by year as follows:

		Principal Maturities
Year ending January 31,		Jed Miesner				Petro Pro, Ltd.				JLM Strategic Investments, LP				Total
2018		$	248,704			$	141,018			$	41,170			$	430,893
2019			62,290				35,319				-				97,608
2020			67,273				38,144				-				105,417
2021			72,655				41,196				-				113,851
2022			78,467				44,492				-				122,959
Subsequent years			1,410,611				799,831				-				2,210,442
		$	1,940,000			$	1,100,000			$	41,170			$	3,081,170

At January 31, 2018, Mr. Miesner has waived any event of default on the delinquent payments of principal and interest due on the loans and credit facility.  

 

As of January 31 and July 31, 2017, the accrued and unpaid interest on this related party convertible debt was as follows:

	January 31, 2018			July 31, 2017
Jed and Lesa Meisner	$	194,638		$	135,959
Petro Pro, Ltd.		110,362			77,090
JLM Strategic Investments, LP		4,130			2,885
Total accrued interest, related party convertible notes	$	309,130		$	215,934

At January 31, 2018, the balance of the convertible debt and accrued interest was convertible to 13,019,886 shares of common stock at a conversion price of $0.60 per share.

Related party interest expense on the convertible debt for the three months ended January 31, 2018 and 2017, was $46,597 and $61,630, respectively. Related party interest expense for the six months ended January 31, 2018 and 2017, was $93,195 and $123,360 respectively.   

Note payable on acquisition, related party

On April 15, 2016, the Company entered into an agreement with Jed Miesner, the Chairman of the Company’s Board of Directors, to acquire all of his interest (100% of the total outstanding shares of common stock) in Jilpetco, Inc., a Texas corporation (“Jilpetco”) for consideration of $500,000 and oilfield service receivables of $71,745.  On August 25, 2016, the Company announced that the foregoing agreement was amended to extend the closing date to August 31, 2016 and excluded certain property therefrom. The parties agreed to allow Jed Miesner to assign certain accounts receivable and to exclude certain personal property from the transaction.

In addition, the $500,000 consideration for the acquisition was in the form of a note payable at 6% interest calling for monthly payments of principal and interest and maturing on December 25, 2017. On December 19, 2017, the Company made the final principal payment on the note payable on acquisition, related party.

For the three months ended January 31, 2018, the Company made principal payments of $41,667 plus interest of $1,367 on this note. For the three months ended January 31, 2017, the Company made principal payments of $120,833 plus interest of $2,257.

For the six months ended January 31, 2018, the company made principal payments of $104,167 plus interest of $3,416 on this note.  For the six months ended January 31, 2017, the Company made principal payments of $270,833 plus interest of $4,446

Notes payable, related parties

On May 27, 2016, Jilpetco entered into loan agreements (the “May 2016 Notes”) with Tony Alford, Robert Bories, Robert

-13-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

Manning, Petro Pro Ltd., and Reese Pinney.  Messrs. Alford and Manning are members of the Board of Directors and Miesner is Chairman. Messrs. Bories and Pinney are officers of the Company. The aggregate principal amount of the notes was $180,000.

The notes were scheduled to mature on November 23, 2016 and bore interest at the rate of 8% per annum. and included an initial participation fee of $18,000 equal to 10% of the principal amount of the loans.  On August 15, 2016, the loan agreements were modified to accept additional amounts from all the individual noteholders except Mr. Manning. An additional total of $50,000 was subsequently advanced on these notes, and an additional participation fee of $5,000 was incurred.

On November 23, 2016, the Noteholders waived any event of default and commenced discussion to extend or replace the loans with new loan agreements.  On January 6, 2017, the Company paid 25% of the principal, $57,500, paid the initial 10% participation fee of $23,000, and paid the accrued interest through November 23, 2016, $8,035, for a grand total of $88,536 paid.

On May 31, 2017, the noteholders agreed to extend the maturity date of the Notes to December 31, 2017.  As consideration for the change in terms, the Company issued to the noteholders an aggregate 460,000 shares of the Company’s common stock with a fair value of $105,800 based on the closing share price of $0.23.  This modification was accounted for as an extinguishment, and the $105,800 was expensed as a financing fee associated with debt modification.

On July 21, 2017, the Company entered into additional loan agreements (the “July 2017 Notes”) with Robert Bories, Robert Manning, Petro Pro Ltd., and Rolf Berg. The aggregate principal amount of the new notes was $175,000.  The notes bear interest at a rate of 8% per annum and incurred a participation fee of $17,500 equal to 10% of the principal amounts of the loans.  

On August 4, 2017, the Company entered into additional loan agreement (remainder of the “July 2017 Notes”) with Tony Alford.  Mr. Alford’s new note was $25,000.  The notes bear interest at a rate of 8% per annum and incurred a participation fee of $2,500 equal to 10% of the principal amounts of the loans.  The July 2017 Notes were due January 21, 2018

On December 15, 2017 and January 2, 2018, respectively, the Company made the following principal, interest and financing participation fee payments on the May 2016 and July 2017 Notes, which included paying in full all principal balances, accrued interest and financing fees on the May 2016 and July 2017 notes:

		Notes payable, related parties									Interest and financing fees payable
		May 2016 Notes			July 2017 Notes			Total			May 2016 Interest			July 2017 Interest			July 2017 fee			Total
Petro Pro Ltd.		$	48,750		$	50,000		$	98,750		$	3,716		$	1,844		$	5,000		$	10,560
Robert Bories			48,750			50,000			98,750			3,716			1,844			5,000			10,560
Tony Alford			48,750			25,000			73,750			3,716			844			2,500			7,060
Robert Manning			15,000			25,000			40,000			1,143			922			2,500			4,565
Reese Pinney			11,250			-			11,250			859			-			-			859
Rolf Berg			-			50,000			50,000			-			1,844			5,000			6,844
Total		$	172,500		$	200,000		$	372,500		$	13,150		$	7,298		$	20,000		$	40,448

Related party interest expense on these May 2016 and July 2017 Notes for three months ended January 31, 2018 and 2017 was $5,892 and $123,718 respectively.  For the six months ended January 31, 2018 and 2017, interest expense, related party was $12,789 and $2,188, respectively.

For the three- and six-months ended January 31, 2018, the Company made principal payments of $372,500 plus interest and participation fee of $40,448 on the May 2016 and July 2017 notes.

For the three months ended January 31, 2018 and 2017, interest expense, related parties on all notes was $54,539 and $61,630, respectively.  For the six months ended January 31, 2018 and 2017, interest expense, related parties on all notes was $111,235 and $123,260, respectively.

NOTE 9 – NOTE PAYABLE AND LINE OF CREDIT

On July 21, 2017, the Company entered into a loan agreement with an unrelated party.  The principal amount of the note was $50,000.  The note matured on January 21, 2018 and bore interest at a rate of 8% per annum and included a participation fee of $5,000 equal to 10% of the principal amounts of the loan. For the three and six months ended January 31, 2018, interest expense

-14-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

on the note was $700 and $1,722 , respectively.  

During the three months ended January 31, 2018, principal payments of $50,000 were made on the note.  During the three months ended January 31, 2018, the Company also paid $6,844 in accrued interest and participation fee.  

NOTE 10 – EQUIPMENT NOTE PAYABLE

On September 13, 2016, the Company entered into a retail installment sale contract and security agreement (the “Equipment Note”) for the purchase of equipment.  The Equipment Note is collateralized by a tractor loader backhoe.  The principal amount of the equipment note was $52,992, and it bears interest at 4.75% per annum.  The equipment note requires 60 monthly installment payments of $994 through September 13, 2021.  

Principal maturities for the equipment note payable at January 31, 2018 for the remaining term are summarized by year as follows:

For the year ended January 31,
2018			$	10,247
2019				10,745
2020				11,265
2021				7,794
2022				-
			$	40,051

For the three months ended January 31, 2018 and 2017, interest expense on the note was $499 and $615, respectively. For the six months ended January 31, 2018 and 2017, interest expense on the note was $1,028 and $809, respectively.

NOTE 11 – ASSET RETIREMENT OBLIGATIONS  

During the year ended July 31, 2017, the Company revised its asset retirement obligation to reflect the sale of certain working interests in its oil and gas properties considered to be subject to remediation exposure for the Company.  The decrease in present value liability was subtracted from the Company’s asset retirement obligation asset.

The information below reconciles the value of the asset retirement obligation for three months ended January 31, 2018 and 2017, respectively:

	For the three months ended
	January 31, 2018			January 31, 2017
Beginning balance	$	185,759		$	213,935
Accretion expense		2,363			2,181
Revisions in estimated cash flows		-			(37,217)
Ending balance, January 31, 2018	$	188,122		$	178,899

The information below reconciles the value of the asset retirement obligation for six months ended January 31, 2018 and 2017, respectively:

	For the six months ended
	January 31, 2018			January 31, 2017
Beginning balance	$	183,397		$	211,218
Accretion expense		4,725			4,898
Revisions in estimated cash flows		-			(37,217)
Ending balance, January 31, 2018	$	188,122		$	178,899

-15-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

NOTE 12 – COMMITMENTS AND CONTINGENCIES

The Company is subject to contingencies because of environmental laws and regulations. Present and future environmental laws and regulations applicable to the Company's operations could require substantial capital expenditures or could adversely affect its operations in other ways that cannot be predicted at this time.

Legal contingency

On September 7, 2017, Amazing Energy LLC and Jilpetco Inc. were served with a lawsuit, in Cause No. P-7600-83-CV in the 83^rd District Court in Pecos County, Texas. The nature of the litigation is that Amazing Energy & Jilpetco were joined as defendants in a case in Pecos County, Texas, between Fredrick Bartlett Wulff, Sr. et al plaintiffs and Benedum & Trees, LLC et al defendants.  The suit alleges breach of lease, breach of implied duty to explore and develop, and requests a declaratory judgment that the leases are terminated, and the suit requests an accounting of lease production. The case is in the early stages of discovery as to the claims against the Company. Management intends to seek an early resolution but will vigorously defend the case. It is too early in the litigation to evaluate the likely outcome or to evaluate the range of losses, as the lease interests involved are small fractional interests. In the opinion of the Company’s management, none of the pending litigation, disputes or claims against it, if decided adversely, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

On December 11, 2017, Amazing Energy LLC and Jilpetco Inc. were each served with a summons and complaint in Cause No. P-7813-83-CV in the 83^rd District Court in Pecos County, Texas. Amazing Energy and Jilpetco were named as defendants in a case by Rumson Royalty Company as the plaintiff.  The suit alleges Amazing Energy and Jilpetco have suspended certain royalty and/or overriding interest payments owed to the plaintiff, and requests a declaratory judgment seeking the plaintiff’s share of production proceeds and reasonable attorney’s fees. Management will vigorously defend the case. It is too early in the litigation to evaluate the likely outcome or to evaluate the financial impact of the lawsuit, if any. In the opinion of the Company’s Management, none of the pending litigation, disputes or claims against it, if decided adversely, will have a material adverse effect on the Company’s financial condition, cash flows or results of operations

Lease commitments

The Company’s principal executive offices are in leased office space in Amarillo, Texas. The leased office space consists of approximately 3,700 square feet and is leased through February 28, 2019 at an annual cost of approximately $52,000.

Oil and gas lease commitments

The Company is obligated to pay royalties to holders of oil and natural gas interests in its Texas operations.  The Company is also obligated to pay working interest holders a pro-rata portion of revenue in oil operations net of shared operating expenses.  The amounts are based on monthly oil and gas sales and are charged monthly net of oil and gas revenue and recognized as “Revenue Payable to Interest Owners” on the Company’s Consolidated Balance Sheet.  

The Company is also obligated to pay certain ‘bonus’ lease payments related to certain of its Pecos, TX lease properties.  The Company is required to pay $27,000 each year on the JT Walker lease, with the first payment due August 7, 2017.   The Company is also required to pay $200,000 every five years on the JPMorgan lease, with the first payment due August 7, 2017.  The Company is current in its lease payments under these leases.  These payments are included in Oil and Gas Properties – Leasehold acquisition costs (Note 5) in accordance with full-cost accounting.

NOTE 13 – BUSINESS SEGMENTS   

The Company is currently organized into two segments, which represent two operating units.  Oil and gas operations include activities related to production and sales of oil and natural gas.  Oilfield services include a variety of services to the energy industry, including drilling and completion of wells.  Both segments operate in Texas.

-16-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

The Company’s segment disclosures are as follows:

Oil and gas properties
	January 31, 2018			January 31, 2017
Oilfield services		-			-
Oil and gas operations		6,046,341			5,919,082
Total oil and gas properties	$	6,046,341		$	5,919,082

Property and equipment, net
	January 31, 2018			January 31, 2017
Oilfield services	$	469,261		$	527,683
Oil and gas operations		15,399			18,129
Total property and equipment, net	$	484,660		$	545,812

Total assets
	January 31, 2018			July 31, 2017
Oilfield services	$	1,191,216		$	1,178,139
Oil and gas operations		6,598,567			6,292,116
Total assets	$	7,789,783		$	7,470,255

Capital expenditures
	For the three months ended
	January 31, 2018			January 31, 2017
Oilfield services	$	454		$	14,781
Oil and gas operations		28,908			104,454
Total capital expenditures	$	29,362		$	119,235

Capital expenditures
	For the six months ended
	January 31, 2018			January 31, 2017
Oilfield services	$	454		$	266,624
Oil and gas operations		201,659			55,049
Total capital expenditures	$	202,113		$	321,673

Operations for the three months ended January 31, 2018
	Oil and gas operations			Oilfield services			Total
Total revenues	$	41,382		$	49,732		$	91,114
Depletion, depreciation and amortization		(45,853)			(29,399)			(75,252)
Operating expenses		(1,246,028)			(137,017)			(1,383,045)
Income (loss) from operations		(1,250,499)			(116,684)			(1,367,183)
Other income (expense)		(51,620)			(1,898)			(53,518)
NET INCOME (LOSS)	$	(1,302,119)		$	(118,582)		$	(1,420,701)

-17-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

Operations for the three months ended January 31, 2017
	Oil and gas operations			Oilfield services			Total
Total revenues	$	65,037		$	76,465		$	141,502
Depletion, depreciation and amortization		(31,507)			(30,144)			(61,651)
Operating expenses		(178,449)			(202,334)			(380,783)
Income (loss) from operations		(144,919)			(156,013)			(300,933)
Other income (expense)		(63,971)			(3,114)			(67,085)
NET INCOME (LOSS)	$	(208,889)		$	(159,127)		$	(368,017)

Operations for the six months ended January 31, 2018
	Oil and gas operations			Oilfield services			Total
Total revenues	$	11,1976		$	126,742		$	238,718
Depletion, depreciation and amortization		(81,854)			(58,877)			(140,731)
Operating expenses		(3,878,376)			(209,102)			(4,087,478
Income (loss) from operations		(3,848,254)			(141,237)			(3,989,491
Other income (expense)		(108,017)			(5,862)			(113,879)
NET INCOME (LOSS)	$	(3,956,271)		$	(147,100)		$	(4,103,370)

Operations for the six months ended January 31, 2017
	Oil and gas operations			Oilfield services			Total
Total revenues	$	119,254		$	162,671		$	281,925
Depletion and depreciation		(58,637)			(56,593)			(115,230)
Operating expenses		(375,087)			(348,104)			(723,191)
Income (loss) from operations		(314,470)			(242,026)			(556,496)
Other income (expense)		(139,440)			(761)			(140,201)
NET INCOME (LOSS)	$	(453,910)		$	(242,787)		$	(696,697)

During the three months ended January 31, 2018 and 2017, $3,338 and $6,310, respectively, of revenue was recognized to Petro Pro, Ltd., a related party, for oilfield services.  During the six months ended January 31, 2018 and 2017, $7,231 and $12,119, respectively, of revenue was recognized to Petro Pro, Ltd., a related party, for oilfield services

NOTE 14 – STOCKHOLDERS’ EQUITY

Common stock

The Company is authorized to issue 3,000,000,000 shares of its common stock. All shares of common stock are equal to each other with respect to voting, liquidation, dividend, and other rights. Owners of shares are entitled to one vote for each share owned at any Shareholders’ meeting. The common stock of the Company does not have cumulative voting rights, which means that the holders of more than fifty percent (50%) of the shares voting in an election of directors may elect all of the directors if they choose to do so.

Preferred stock

The Company is authorized to issue 10,000,000 shares of its preferred stock with a no-par value per share.  

 

During the three months ended January 31, 2018, the Company had the following equity transactions:

-18-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

Common shares issued for cash

For the year ended July 31, 2017, the Company issued 6,169,084 shares of common stock at $0.26 per share for proceeds of $1,603,961.  

On August 11, 2017, the Board of Directors approved an offering of common shares at $0.25 to raise $2,000,000 (the “Offering”). The Offering is for a total of 8,000,000 restricted common shares at $0.25 per share. As of January 31, 2018, 7,850,000 common shares had been sold for a total of $1,954,650.  

As of January 31, 2018, the Company received proceeds of $262,500 pursuant to the Offering which are classified as Common Stock Payable.  

Common shares issued in lieu of cash for services

On January 20, 2017, the Company issued 112,500 shares of common stock with a total fair value of $44,625 ($12,275 earned in the fiscal year end July 31, 2017) for services provided by a vendor. The shares were issued at an average fair value of $0.40 per share.

On October 3, 2017, the Company issued 100,000 shares of common stock with a fair value of $40,000 for services provided by a vendor. The shares were issued at a fair value of $0.40 per share.

On December 5, 2017, the Company issued 500,000 shares of common stock with a fair value of $365,000 for services provided by two vendors.  The shares were issued at a fair value of $0.73 per share which approximated the fair value of the shares at the date of issuance.

On January 28, 2018, the Company issued 3,000 shares of common stock with a fair value of $2,070 for services provided by a vendor.  The shares were issued at a fair value of $0.69 per share which approximated the fair value of the shares at the date of issuance.

On January 31, 2018, the Company issued 41,970 shares of common stock with a fair value of $15,000 for professional services.  The shares were issued at a fair value of $0.35 per share which approximated the fair value for the period in which the services were performed.

Common shares issued for extensions of notes payable, related parties

On May 27, 2017, the related party noteholders of notes payable (Note 7) agreed to extend the maturity date of the Notes to December 31, 2017.  As consideration for the change in terms, the Company issued to the noteholders an aggregate 460,000 shares of the Company’s common stock with a fair value of $105,800 based on the closing share price of $0.23.

Stock Options

In February 2017, the Board of Directors adopted and approved the 2017 Stock Option.  The Stock Option Plan is administered by the Board of Directors and provides for the grant of stock options to eligible individual including directors, executive officers and advisors that have furnished bona fide services to the Company.

The Stock Option plan also has terms and conditions, including without limitations that the exercise price for incentive stock options granted under the Stock Option Plan must equal the stock's fair market value, based on the closing price per share of common stock, at the time the stock option is granted.  The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology.  Options granted under the Plan have a ten-year maximum term and varying vesting periods as determined by the Board.  The Company's policy is to issue new shares to satisfy option exercises.

On August 11, 2017, the Board of Directors authorized the grant of 5,835,000 options to purchase shares of common stock of the Company to certain officers related to their employment agreements (the “Listing Options”).  The Listing Options will vest and be immediately exercisable on the date the Company's stock is traded on the American Stock Exchange, the New York Stock Exchange, or any of the NASDAQ trading tiers.  The Listing Options shall have an exercise price equal to the closing price on the date such trading commences.  As of January 31, 2018, management has determined the probability of such an event is doubtful and, therefore, has not recognized any compensation expense to date regarding the Listing Options.

-19-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

On August 11, 2017, the Board of Directors authorized the grant of 11,750,000 options to purchase shares of common stock of the Company to certain officers. The options have an exercise price of $0.40 and expire five years from the date of grant.  2,937,500 of the options vested immediately on the grant date and the remainder shall vest 25% annually upon each anniversary of the grant date.   For the three months ended January 31, 2018, the Company recognized a fair value of $179,572 for the vested options and the ratable recognition of unvested options as stock-based compensation.  For the six months ended January 31, 2018, the Company recognized a fair value of $1,077,431 for the vested options and the ratable recognition of unvested options as stock-based compensation.  Unrecognized compensation related to the option grant is $1,795,719 as of January 31, 2018, to be recognized over the remaining life of the options.

On August 11, 2017, the Board of Directors authorized the grant of 10,000,000 options to purchase shares of common stock of the Company to its Chief Executive Officer.  The options have an exercise price of $0.40 per share and expire five years from the date of grant.  2,000,000 options vested on the date of grant.   The fair value of the grant was $489,047 which was recognized as stock-based compensation at the date of grant. The remaining 8,000,000 options contained market and performance conditions, of which 4,000,000 options are to vest based on market conditions being met and 4,000,000 options will vest upon achievement of certain performance objectives.  Management has assessed the likelihood of market conditions and the probability of performance conditions being realized and recognize a fair value of $36,679 in stock-based compensation for the three months ending January 31, 2018, and $85,583 for the six months ending January 31, 2018.

On September 26, 2017, the Board of Directors also authorized the grant of 500,000 options to purchase shares of common stock of the Company to certain directors.  These options have an exercise price of $0.40 and expire on September 26, 2021.  The fair value of the grant was $137,056 which the Company recognized as stock-based compensation for the six months ended January 31, 2018.  The options vested immediately at the date of grant.

The Company has estimated the fair value of all option grants using the Black-Scholes model with the following information and range of assumptions:

	For the six months ended
	January 31, 2018			January 31, 2017
Options issued		28,085,000			-
Exercise price	$	0.40			NA
Expected volatility		175.1% to 200.1%			NA
Expected term		4 to 5 years			NA
Risk-free rate		1.57% to 1.74%			NA

There were no options granted during the three months ended January 31, 2018.

The following is a summary of the Company's options issued for the six months ended January 31, 2018:

	For the six months ended
	Options			Price
Beginning balance		-			-
Issued		28,085,000		$	0.40
Exercised		-			-
Expired		-			-
Ending balance		28,085,000		$	0.40

The following table summarizes additional information about the options as of January 31, 2018:

Date of Grant		Options outstanding		Options exercisable			Exercise price			Remaining term (years)
August 11, 2017		5,835,000			-		$	0.40			4.53
August 11, 2017		11,750,000			2,937,500			0.40			4.53
August 11, 2017		10,000,000			2,000,000			0.40			4.53
September 26, 2017		500,000			500,000			0.40			3.65
Total options		28,085,000			5,437,500		$	0.40			4.51

-20-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

Total compensation charged against operations was $216,250 for the three months ended January 31, 2018.  Total compensation charged against operations was $1,789,117 for the six months ended January 31, 2018.   These costs were classified under management and administrative expense.  The intrinsic value of the exercisable options was $1,576,875 based on the closing price of the Company's common stock of $0.69 at January 31, 2018.  No options were issued for the three and six months ended January 31, 2017.

The total value of the option awards is expensed ratably over the vesting period as defined in each grant.  As of January 31, 2018, the unrecognized compensation cost related to stock-based options and awards was $2,443,705 to be recognized over the requisite service period as defined in each grant.

Warrants

On September 24, 2017, the Company issued 1,000,000 warrants to purchase shares of the Company's common stock for the price of $0.40 per share to members of the Company's Board of Directors and consultants in lieu of cash for services.  The term of each warrant is 4 years commencing with the issuance date.

On November 28, 2017, the Company issued 1,200,000 warrants to purchase shares of the Company's common stock for the price of $0.50 to a consultant in lieu of cash for services.  The term of the warrants is two years from the date of issuance and vest at a rate of 100,000 per month from the date of issuance.  The fair value of the warrants at the date of issuance was $457,045, which will be charged to operations ratably over twelve months.  For the three months ended January 31, 2018, the Company charged $76,174 to operations related to the warrant grant.  As of January 31, 2018, 200,000 warrants were exercisable.

On January 31, 2018, the Company issued 17,975 warrants to purchase shares of the Company's common stock for the price of $0.74 per share to consultants in lieu of cash for services.  The term of each warrants is 5 years commencing on the issuance date.

On January 31, 2018, the Company issued 25,000 warrants to purchase shares of the Company's common stock for the price of $0.65 per share to consultants in lieu of cash for services.  The term of each warrants is 3 years commencing on the issuance date.

The Company has estimated the fair value of these warrant grants using the Black-Scholes model with the following information and assumptions for the three months ended January 31, 2018 and 2017:

	For the three months ended
	January 31, 2018			January 31, 2017
Warrants issued		1,242,975			-
Weighted average exercise price	$	0.69			NA
Weighted average volatility		170.43%			NA
Weighted average term (years)		3.84			NA
Weighted average risk-free rate		2.39%			NA

The Company has estimated the fair value of these warrant grants using the Black-Scholes model with the following information and assumptions for the six months ended January 31, 2018 and 2017:

	For the three months ended
	January 31, 2018			January 31, 2017
Warrants issued		2,242,975			-
Exercise price	$	0.40			NA
Expected volatility		176.70%			NA
Expected term		3.66			NA
Risk-free rate		1.55%			NA

The fair value of the warrants was $757,811, of which $102,828 and $376,940 has been recognized as stock-based compensation for the three months and six months ended January 31, 2018, respectively.  As of January 31, 2018, there is $380,871 unrecognized compensation cost related to the warrants.

-21-

---

AMAZING ENERGY OIL AND GAS, CO. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2018

The following is a summary of the Company's warrants issued for the three and six months ended January 31, 2018 and 2017:

	For the three months ended
	January 31, 2018					January 31, 2017
	Warrants			Price (a)		Warrants			Price (a)
Beginning balance	3,674,576		$	0.60			2,674,576		$	0.60
Issued	1,242,975			0.69			-			-
Exercised	-			-			-			-
Ending balance	4,917,551		$	0.55			2,674,576		$	0.60

	For the six months ended
	January 31, 2018					January 31, 2017
	Warrants			Price (a)		Warrants			Price (a)
Beginning balance	2,674,576		$	0.60			2,674,576		$	0.60
Issued	2,242,975			0.41			-			-
Exercised	-			-			-			-
Ending balance	4,917,551		$	0.55			2,674,576		$	0.60

(a)

Weighted average

The following table summarizes information about the warrants as of January 31, 2018:

Issue Date		Expiration Date		Warrants		Exercisable		Exercise price			Remaining life (years)
July 31, 2016		July 31, 2019		2,674,576		2,674,576			0.60			1.75
September 26, 2017		September 26, 2021		1,000,000		1,000,000			0.40			3.91
November 28, 2017		November 28, 2020		1,200,000		200,000			0.50			2.83
January 31, 2018		January 31, 2023		17,975		17,975			0.74			5.00
January 31, 2018		January 31, 2021		25,000		25,000			0.65			3.00
				4,917,551		3,917,551			0.54			2.47

NOTE 15 – SUBSEQUENT EVENTS

The Company issued 1,710,000 shares of its common stock at $0.25 per share pursuant to the Offering (Note 14) for proceeds of $427,500.  The Company also received proceeds of $135,000 pursuant to the Offering which are classified as Common Stock Payable for which common shares have yet to be issued.

On March 09, 2018 Amazing Energy Oil and Gas, Co. entered into an assignment and assumption agreement with E-Land Ventures, LLC (“E-Land”), whereby the Company assumed the assignment of certain working interest partners and investments (the “Working Interests”), totaling $200,000 from E-Land.  The Working Interests will be deployed in developing the Company’s holdings in Pecos County, Texas.  The Company’s CEO, Will McAndrew III, is the sole member of E-Land Ventures, LLC.

-22-

---

ITEM 2.

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

The following discussion is management’s assessment of the current and historical financial and operating results of the Company and of its financial condition. It is intended to provide information relevant to an understanding of the Company’s financial condition, changes in its financial condition and its results of operations and cash flows and should be read in conjunction with its unaudited financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three months ended January 31, 2018 and in its Annual Report on Form 10-K for the year ended July 31, 2017. Note that any reference to “Amazing”, the “Company”, “we”, “us” or “our” mean Amazing Energy Oil and Gas, Co.

Cautionary Statement Regarding Forward-Looking Statements

This Management’s Discussion and Analysis includes a number of forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: “believe,” “expect,” “plan”, “estimate,” “anticipate,” “intend,” “project,” “will,” “predicts,” “seeks,” “may,” “would,” “could,” “potential,” “continue,” “ongoing,” “should” and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from our predictions. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Corporate Background

Amazing Energy Oil and Gas, Co. is incorporated in the State of Nevada.  Through its primary subsidiary, Amazing Energy, Inc., also a Nevada corporation, the Company operates its main business of exploration, development, and production of oil and gas in the Permian Basin of West Texas.  On October 7, 2014, the Company entered into a change in control agreement with certain shareholders of Amazing Energy, Inc.  The change in control agreement was the first step in a reverse merger process whereby the shareholders of Amazing Energy, Inc. would control about 95% of the shares of common stock of Amazing Energy Oil and Gas, Co., and Amazing Energy Oil and Gas, Co. would own 100% of the outstanding shares of common stock of Amazing Energy, Inc.  This entire reverse merger process was completed in July of 2015.

Amazing Energy, Inc., a wholly owned subsidiary of Amazing Energy Oil and Gas, Co., was formed in 2010 as a Texas corporation and re-domiciled to Nevada in 2011.  The Company owns interests in oil and gas properties located in Texas.  The Company is primarily engaged in the acquisition, exploration and development of oil and gas properties and the production and sale of oil and natural gas.  Amazing Energy, LLC was formed in December 2008 as a Texas limited liability company.  In December of 2010, Amazing Energy, Inc. and Amazing Energy, LLC were combined as commonly controlled entities.

Overview of Current Operations

Through January 31, 2018, the Company has drilled twenty-four wells on its leasehold in Pecos County, Texas. Twenty-one of the twenty-four wells are currently productive, and three wells are shut in. During the quarter ended January 31, 2018, the Company drilled and completed zero wells on its properties.

Compliance with Government Regulations

The oil and gas industry in the United States is subject to extensive regulation by federal, state and local authorities.  At the federal level, various federal rules, regulations and procedures apply, including those issued by the U.S. Department of Interior, the U.S. Department of Transportation Office of Pipeline Safety (the “DOT”) and the U.S. Environmental Protection Agency (the “EPA”).  At the state and local level, various agencies and commissions regulate drilling, production and midstream activities.  For the state of Texas, the regulatory agency is the Texas Railroad Commission.  These federal, state and local authorities have various permitting, licensing and bonding requirements.  Various remedies are available for enforcement of these federal, state and local rules, regulations and procedures, including fines, penalties, revocation of permits and licenses, actions affecting the value of leases, wells or other assets, suspension of production, and, in certain cases, criminal prosecution.  As a result, there can be no assurance that we will not incur liability for fines, penalties or other remedies that are available to these federal, state and local authorities.  However, we believe that we are currently in material compliance with federal, state and local rules, regulations and procedures, and that continued substantial compliance with existing requirements will not have a material adverse effect on our financial position, cash flows or results of operations.

-23-

---

Transportation and Sale of Oil

Sales of crude oil are negotiated with Rio Energy International, Inc., via a crude oil purchase agreement which is subject to a month to month term, and a 30-day notice termination clause.  The agreement specifies the pricing terms and transportation deductions, amongst other terms.  Our sales of crude oil are affected by the availability, terms and cost of transportation.

Regulation of Production

Oil and gas production is regulated under a wide range of federal and state statutes, rules, orders and regulations.  State and federal statutes and regulations require permits for drilling operations, drilling bonds and reports concerning operations.  The state in which we operate, Texas, has regulations governing conservation matters, including provisions for the unitization or pooling of oil and gas properties, the establishment of maximum rates of production from oil and gas wells, the regulation of spacing, and requirements for plugging and abandonment of wells.  Also, Texas imposes a severance tax on production and sales of oil, and gas within its jurisdiction.  The failure to comply with these rules and regulations can result in substantial penalties.  Our competitors in the oil and gas industry are subject to the same regulatory requirements and restrictions that affect our operations.

Environmental Matters and Regulation

Our oil and natural gas exploration, development and production operations are subject to stringent laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Numerous federal, state and local governmental agencies, such as the EPA, issue regulations that often require difficult and costly compliance measures that carry substantial administrative, civil and criminal penalties and may result in injunctive obligations for non-compliance. These laws and regulations may require the acquisition of a permit before drilling commences; restrict the types, quantities and concentrations of various substances that can be released into the environment in connection with drilling and production activities; limit or prohibit construction or drilling activities on certain lands lying within wilderness, wetlands, ecologically or seismically sensitive and other protected areas; require action to prevent or remediate pollution (from current or former operations), such as plugging abandoned wells or closing pits; take action resulting in the suspension or revocation of necessary permits, licenses and authorizations; and/or require that additional pollution controls be installed and impose substantial liabilities for pollution resulting from our operations or related to our owned or operated facilities. Liability under such laws and regulations is often strict (i.e., no showing of “fault” is required) and can be joint and several. Moreover, it is not uncommon for neighboring landowners and other third-parties to file claims for personal injury and property damage allegedly caused by the release of hazardous substances, hydrocarbons or other waste products into the environment. Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent and costly pollution control or waste handling, storage, transport, disposal or cleanup requirements could materially adversely affect our operations and financial position, as well as the oil and natural gas industry in general. Our management believes that we are in substantial compliance with applicable environmental laws and regulations and we have not experienced any material adverse effect from compliance with these environmental requirements. This trend, however, may not continue in the future.

Waste Handling. The Resource Conservation and Recovery Act, as amended, and comparable state statutes and regulations promulgated thereunder, affect oil and natural gas exploration, development and production activities by imposing requirements regarding the generation, transportation, treatment, storage, disposal and cleanup of hazardous and non-hazardous wastes. With federal approval, the individual states administer some or all the provisions of the Resource Conservation and Recovery Act, sometimes in conjunction with their own, more stringent requirements. Although most wastes associated with the exploration, development and production of crude oil and natural gas are exempt from regulation as hazardous wastes under the Resource Conservation and Recovery Act, such wastes may constitute “solid wastes” that are subject to the less stringent non-hazardous waste requirements. Moreover, the EPA or state or local governments may adopt more stringent requirements for the handling of non-hazardous wastes or categorize some non-hazardous wastes as hazardous for future regulation. Indeed, legislation has been proposed from time to time in Congress to re-categorize certain oil and natural gas exploration, development and production wastes as “hazardous wastes.” Also, in December 2016, the EPA agreed in a consent decree to review its regulation of oil and gas waste. It has until March 2019 to determine whether any revisions are necessary. Any such changes in the laws and regulations could have a material adverse effect on our capital expenditures and operating expenses.

Administrative, civil and criminal penalties can be imposed for failure to comply with waste handling requirements. We believe that we are in substantial compliance with applicable requirements related to waste handling, and that we hold all necessary and up-to-date permits, registrations and other authorizations to the extent that our operations require them under such laws and regulations. Although we do not believe the current costs of managing our wastes, as presently classified, to be significant, any legislative or regulatory reclassification of oil and natural gas exploration and production wastes could increase our costs to manage and dispose of such wastes.

-24-

---

Remediation of Hazardous Substances. The Comprehensive Environmental Response, Compensation and Liability Act, as amended, which we refer to as CERCLA or the “Superfund” law, and analogous state laws, generally impose liability, without regard to fault or legality of the original conduct, on classes of persons who are considered to be responsible for the release of a “hazardous substance” into the environment. These persons include the current owner or operator of a contaminated facility, a former owner or operator of the facility at the time of contamination, and those persons that disposed or arranged for the disposal of the hazardous substance at the facility. Under CERCLA and comparable state statutes, persons deemed “responsible parties” are subject to strict liability that, in some circumstances, may be joint and several for the costs of removing or remediating previously disposed wastes (including wastes disposed of or released by prior owners or operators) or property contamination (including groundwater contamination), for damages to natural resources and for the costs of certain health studies. In addition, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment. During our operations, we use materials that, if released, would be subject to CERCLA and comparable state statutes. Therefore, governmental agencies or third parties may seek to hold us responsible under CERCLA and comparable state statutes for all or part of the costs to clean up sites at which such “hazardous substances” have been released.

Water Discharges. The Federal Water Pollution Control Act of 1972, as amended, also known as the “Clean Water Act,” the Safe Drinking Water Act, the Oil Pollution Act and analogous state laws and regulations promulgated thereunder impose restrictions and strict controls regarding the unauthorized discharge of pollutants, including produced waters and other gas and oil wastes, into navigable waters of the United States, as well as state waters. The discharge of pollutants into regulated waters is prohibited, except in accordance with the terms of a permit issued by the EPA or the state. Spill prevention, control and countermeasure plan requirements under federal law require appropriate containment berms and similar structures to help prevent the contamination of navigable waters in the event of a petroleum hydrocarbon tank spill, rupture or leak. The Clean Water Act and regulations implemented thereunder also prohibit the discharge of dredge and fill material into regulated waters, including jurisdictional wetlands, unless authorized by an appropriately issued permit. The EPA has also adopted regulations requiring certain oil and natural gas exploration and production facilities to obtain individual permits or coverage under general permits for storm water discharges. In addition, on June 28, 2016, the EPA published a final rule prohibiting the discharge of wastewater from onshore unconventional oil and gas extraction facilities to publicly owned wastewater treatment plants, which regulations are discussed in more detail below under the caption “–Regulation of Hydraulic Fracturing.” Costs may be associated with the treatment of wastewater or developing and implementing storm water pollution prevention plans, as well as for monitoring and sampling the storm water runoff from certain of our facilities. Some states also maintain groundwater protection programs that require permits for discharges or operations that may impact groundwater conditions.

The Oil Pollution Act is the primary federal law for oil spill liability. The Oil Pollution Act contains numerous requirements relating to the prevention of and response to petroleum releases into waters of the United States, including the requirement that operators of offshore facilities and certain onshore facilities near or crossing waterways must develop and maintain facility response contingency plans and maintain certain significant levels of financial assurance to cover potential environmental cleanup and restoration costs. The Oil Pollution Act subjects owners of facilities to strict liability that, in some circumstances, may be joint and several for all containment and cleanup costs and certain other damages arising from a release, including, but not limited to, the costs of responding to a release of oil to surface waters.

Non-compliance with the Clean Water Act or the Oil Pollution Act may result in substantial administrative, civil and criminal penalties, as well as injunctive obligations. We believe we are in material compliance with the requirements of each of these laws.

Air Emissions. The federal Clean Air Act, as amended, and comparable state laws and regulations, regulate emissions of various air pollutants through the issuance of permits and the imposition of other requirements. The EPA has developed, and continues to develop, stringent regulations governing emissions of air pollutants at specified sources. New facilities may be required to obtain permits before work can begin, and existing facilities may be required to obtain additional permits and incur capital costs to remain in compliance. For example, on August 16, 2012, the EPA published final regulations under the federal Clean Air Act that establish new emission controls for oil and natural gas production and processing operations, which regulations are discussed in more detail below in “Regulation of Hydraulic Fracturing.” Also, on May 12, 2016, the EPA issued a final rule regarding the criteria for aggregating multiple small surface sites into a single source for air-quality permitting purposes applicable to the oil and gas industry. This rule could cause small facilities, on an aggregate basis, to be deemed a major source, thereby triggering more stringent air permitting processes and requirements. These laws and regulations may increase the costs of compliance for some facilities we own or operate, and federal and state regulatory agencies can impose administrative, civil and criminal penalties for non-compliance with air permits or other requirements of the federal Clean Air Act and associated state laws and regulations. We believe that we are in substantial compliance with all applicable air emissions regulations and that we hold all necessary and valid construction and operating permits for our operations. Obtaining or renewing permits has the potential to delay the development of oil and natural gas projects.

-25-

---

Climate Change. In December 2009, the EPA issued an Endangerment Finding that determined that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to public health and the environment because, according to the EPA, emissions of such gases contribute to warming of the earth’s atmosphere and other climatic changes. In May 2010, the EPA adopted regulations establishing new greenhouse gas emissions thresholds that determine when stationary sources must obtain permits under the Prevention of Significant Deterioration, or PSD, and Title V programs of the Clean Air Act. On June 23, 2014, in Utility Air Regulatory Group v. EPA, the U.S. Supreme Court held that stationary sources could not become subject to PSD or Title V permitting solely because of their greenhouse gas emissions. The Court ruled, however, that the EPA may require installation of best available control technology for greenhouse gas emissions at sources otherwise subject to the PSD and Title V programs. On August 26, 2016, the EPA proposed changes needed to bring the EPA’s air permitting regulations in line with the Supreme Court’s decision on greenhouse gas permitting. The proposed rule was published in the Federal Register on October 3, 2016 and the public comment period closed on December 2, 2016.

Additionally, in September 2009, the EPA issued a final rule requiring the reporting of greenhouse gas emissions from specified large greenhouse gas emission sources in the U.S., including natural gas liquids fractionators and local natural gas distribution companies, beginning in 2011 for emissions occurring in 2010. In November 2010, the EPA expanded the greenhouse gas reporting rule to include onshore and offshore oil and natural gas production and onshore processing, transmission, storage and distribution facilities, which may include certain of our facilities, beginning in 2012 for emissions occurring in 2011. In October 2015, the EPA amended the greenhouse gas reporting rule to add the reporting of greenhouse gas emissions from gathering and boosting systems, completions and workovers of oil wells using hydraulic fracturing, and blowdowns of natural gas transmission pipelines.

The EPA has continued to adopt greenhouse gas regulations applicable to other industries, such as its August 2015 adoption of three separate, but related, actions to address carbon dioxide pollution from power plants, including final Carbon Pollution Standards for new, modified and reconstructed power plants, a final Clean Power Plan to cut carbon dioxide pollution from existing power plants, and a proposed federal plan to implement the Clean Power Plan emission guidelines. Upon publication of the Clean Power Plan on October 23, 2015, more than two dozen states as well as industry and labor groups challenged the Clean Power Plan in the D.C. Circuit Court of Appeals. On February 9, 2016, the Supreme Court stayed the implementation of the Clean Power Plan while legal challenges to the rule proceed. Because of this continued regulatory focus, future greenhouse gas regulations of the oil and gas industry remain a possibility. In addition, the U.S. Congress has from time to time considered adopting legislation to reduce emissions of greenhouse gases and almost one-half of the states have already taken legal measures to reduce emissions of greenhouse gases primarily through the planned development of greenhouse gas emission inventories and/or regional greenhouse gas cap and trade programs. Although the U.S. Congress has not adopted such legislation at this time, it may do so in the future and many states continue to pursue regulations to reduce greenhouse gas emissions. Most of these cap and trade programs work by requiring major sources of emissions, such as electric power plants, or major producers of fuels, such as refineries and gas processing plants, to acquire and surrender emission allowances corresponding with their annual emissions of greenhouse gases. The number of allowances available for purchase is reduced each year until the overall greenhouse gas emission reduction goal is achieved. As the number of greenhouse gas emission allowances declines each year, the cost or value of allowances is expected to escalate significantly.

In December 2015, the United States participated in the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change in Paris, France (the “Paris Accords”). The Paris Accords call for the parties to undertake “ambitious efforts” to limit the average global temperature, and to conserve and enhance sinks and reservoirs of greenhouse gases. The Agreement went into effect on November 4, 2016. On June 1, 2017, President Trump announced the United States would withdraw from the Paris Accords.  The Agreement establishes a framework for the parties to cooperate and report actions to reduce greenhouse gas emissions. Also, on June 29, 2016, the leaders of the United States, Canada and Mexico announced an Action Plan to, among other things, boost clean energy, improve energy efficiency, and reduce greenhouse gas emissions. The Action Plan specifically calls for a reduction in methane emissions from the oil and gas sector by 40% to 45% by 2025.

Restrictions on emissions of methane or carbon dioxide that may be imposed could adversely affect the oil and natural gas industry. At this time, it is not possible to accurately estimate how potential future laws or regulations addressing greenhouse gas emissions would impact our business. It also remains unclear whether and how the results of the 2016 U.S. election could impact the regulation of greenhouse gas emissions at the federal and state level.

In addition, claims have been made against certain energy companies alleging that greenhouse gas emissions from oil and natural gas operations constitute a public nuisance under federal and/or state common law. As a result, private individuals may seek to enforce environmental laws and regulations against us and could allege personal injury or property damages. While our business is not a party to any such litigation, we could be named in actions making similar allegations. An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition.

-26-

---

Moreover, there has been public discussion that climate change may be associated with extreme weather conditions such as more intense hurricanes, thunderstorms, tornadoes and snow or ice storms, as well as rising sea levels. Another possible consequence of climate change is increased volatility in seasonal temperatures. Some studies indicate that climate change could cause some areas to experience temperatures substantially colder than their historical averages. Extreme weather conditions can interfere with our production and increase our costs and damage resulting from extreme weather may not be fully insured. However, at this time, we are unable to determine the extent to which climate change may lead to increased storm or weather hazards affecting our operations.

Regulation of Hydraulic Fracturing

Hydraulic fracturing is an important common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from tight formations, including shales. The process, which involves the injection of water, sand and chemicals under pressure into formations to fracture the surrounding rock and stimulate production, is typically regulated by state oil and natural gas commissions. However, legislation has been proposed in recent sessions of Congress to amend the Safe Drinking Water Act to repeal the exemption for hydraulic fracturing from the definition of “underground injection,” to require federal permitting and regulatory control of hydraulic fracturing, and to require disclosure of the chemical constituents of the fluids used in the fracturing process. Furthermore, several federal agencies have asserted regulatory authority over certain aspects of the process. For example, the EPA has recently taken the position that hydraulic fracturing with fluids containing diesel fuel is subject to regulation under the Underground Injection Control program, specifically as “Class II” Underground Injection Control wells under the Safe Drinking Water Act.

In addition, the EPA plans to develop a Notice of Proposed Rulemaking by June 2018, which would describe a proposed mechanism - regulatory, voluntary, or a combination of both - to collect data on hydraulic fracturing chemical substances and mixtures. Also, on June 28, 2016, the EPA published a final rule prohibiting the discharge of wastewater from onshore unconventional oil and gas extraction facilities to publicly owned wastewater treatment plants. The EPA is also conducting a study of private wastewater treatment facilities (also known as centralized waste treatment, or CWT, facilities) accepting oil and gas extraction wastewater. The EPA is collecting data and information related to the extent to which CWT facilities accept such wastewater, available treatment technologies (and their associated costs), discharge characteristics, financial characteristics of CWT facilities, and the environmental impacts of discharges from CWT facilities.

On August 16, 2012, the EPA published final regulations under the federal Clean Air Act that establish new air emission controls for oil and natural gas production and natural gas processing operations. Specifically, the EPA’s rule package includes New Source Performance standards to address emissions of sulfur dioxide and volatile organic compounds and a separate set of emission standards to address hazardous air pollutants frequently associated with oil and natural gas production and processing activities. The final rule seeks to achieve a 95% reduction in volatile organic compounds emitted by requiring the use of reduced emission completions or “green completions” on all hydraulically-fractured wells constructed or refractured after January 1, 2015. The rules also establish specific new requirements regarding emissions from compressors, controllers, dehydrators, storage tanks and other production equipment. The EPA received numerous requests for reconsideration of these rules from both industry and the environmental community, and court challenges to the rules were also filed. In response, the EPA has issued, and will likely continue to issue, revised rules responsive to some of the requests for reconsideration. On May 12, 2016, the EPA amended its regulations to impose new standards for methane and volatile organic compounds emissions for certain new, modified, and reconstructed equipment, processes, and activities across the oil and natural gas sector. On the same day, the EPA finalized a plan to implement its minor new source review program in Indian country for oil and natural gas production, and it issued for public comment an information request that will require companies to provide extensive information instrumental for the development of regulations to reduce methane emissions from existing oil and gas sources. These standards, as well as any future laws and their implementing regulations, may require us to obtain pre-approval for the expansion or modification of existing facilities or the construction of new facilities expected to produce air emissions, impose stringent air permit requirements, or mandate the use of specific equipment or technologies to control emissions.

Furthermore, there are certain governmental reviews either underway or being proposed that focus on environmental aspects of hydraulic fracturing practices. The EPA is currently evaluating the potential impacts of hydraulic fracturing on drinking water resources. On December 13, 2016, the EPA released a study examining the potential for hydraulic fracturing activities to impact drinking water resources, finding that, under some circumstances, the use of water in hydraulic fracturing activities can impact drinking water resources. Also, on February 6, 2015, the EPA released a report with findings and recommendations related to public concern about induced seismic activity from disposal wells. The report recommends strategies for managing and minimizing the potential for significant injection-induced seismic events. Other governmental agencies, including the U.S. Department of Energy, the U.S. Geological Survey, and the U.S. Government Accountability Office, have evaluated or are evaluating various other aspects of hydraulic fracturing. These ongoing or proposed studies could spur initiatives to further regulate hydraulic fracturing and could ultimately make it more difficult or costly for us to perform fracturing and increase our costs of compliance and doing business.

-27-

---

Several states, including Texas, and local jurisdictions, have adopted, or are considering adopting, regulations that could restrict or prohibit hydraulic fracturing in certain circumstances, impose more stringent operating standards and/or require the disclosure of the composition of hydraulic fracturing fluids. The Texas Legislature adopted legislation, effective September 1, 2011, requiring oil and gas operators to publicly disclose the chemicals used in the hydraulic fracturing process. The Texas Railroad Commission adopted rules and regulations implementing this legislation that apply to all wells for which the Texas Railroad Commission issues an initial drilling permit after February 1, 2012. The law requires that the well operator disclose the list of chemical ingredients subject to the requirements of OSHA for disclosure on an internet website and file the list of chemicals with the Texas Railroad Commission with the well completion report. The total volume of water used to hydraulically fracture a well must also be disclosed to the public and filed with the Texas Railroad Commission. Also, in May 2013, the Texas Railroad Commission adopted rules governing well casing, cementing and other standards for ensuring that hydraulic fracturing operations do not contaminate nearby water resources. The rules took effect in January 2014. Additionally, on October 28, 2014, the Texas Railroad Commission adopted disposal well rule amendments designed, among other things, to require applicants for new disposal wells that will receive non-hazardous produced water and hydraulic fracturing flowback fluid to conduct seismic activity searches utilizing the U.S. Geological Survey. The searches are intended to determine the potential for earthquakes within a circular area of 100 square miles around a proposed new disposal well. The disposal well rule amendments, which became effective on November 17, 2014, also clarify the Texas Railroad Commission’s authority to modify, suspend or terminate a disposal well permit if scientific data indicates a disposal well is likely to contribute to seismic activity. The Texas Railroad Commission has used this authority to deny permits for waste disposal wells.

There has been increasing public controversy regarding hydraulic fracturing with regard to the use of fracturing fluids, induced seismic activity, impacts on drinking water supplies, use of water and the potential for impacts to surface water, groundwater and the environment generally. A number of lawsuits and enforcement actions have been initiated across the country implicating hydraulic fracturing practices. If new laws or regulations that significantly restrict hydraulic fracturing are adopted, such laws could make it more difficult or costly for us to perform fracturing to stimulate production from tight formations as well as make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process could adversely affect groundwater. In addition, if hydraulic fracturing is further regulated at the federal, state or local level, our fracturing activities could become subject to additional permitting and financial assurance requirements, more stringent construction specifications, increased monitoring, reporting and recordkeeping obligations, plugging and abandonment requirements and also to attendant permitting delays and potential increases in costs. Such legislative changes could cause us to incur substantial compliance costs, and compliance or the consequences of any failure to comply by us could have a material adverse effect on our financial condition and results of operations. Currently, it is not possible to estimate the impact on our business of newly enacted or potential federal, state or local laws governing hydraulic fracturing.

Other Regulation of the Oil and Natural Gas Industry

The oil and natural gas industry is extensively regulated by numerous federal, state and local authorities. Legislation affecting the oil and natural gas industry is under constant review for amendment or expansion, frequently increasing the regulatory burden. Also, numerous departments and agencies, both federal and state, are authorized by statute to issue rules and regulations that are binding on the oil and natural gas industry and its individual members, some of which carry substantial penalties for failure to comply. Although the regulatory burden on the oil and natural gas industry increases our cost of doing business and, consequently, affects our profitability, these burdens generally do not affect us any differently or to any greater or lesser extent than they affect other companies in the industry with similar types, quantities and locations of production.

The availability, terms and cost of transportation significantly affect sales of oil and natural gas. The interstate transportation and sale for resale of oil and natural gas is subject to federal regulation, including regulation of the terms, conditions and rates for interstate transportation, storage and various other matters, primarily by FERC. Federal and state regulations govern the price and terms for access to oil and natural gas pipeline transportation. FERC’s regulations for interstate oil and natural gas transmission in some circumstances may also affect the intrastate transportation of oil and natural gas.

Although oil and natural gas prices are currently unregulated, Congress historically has been active in oil and natural gas regulation. We cannot predict whether new legislation to regulate oil and natural gas might be proposed, what proposals, if any, might actually be enacted by Congress or the various state legislatures, and what effect, if any, the proposals might have on our operations. Sales of condensate and oil and natural gas liquids are not currently regulated and are made at market prices.

Drilling and Production. Our operations are subject to various types of regulation at the federal, state and local level. These types of regulation include requiring permits for the drilling of wells, drilling bonds and reports concerning operations. The state, and some counties and municipalities, in which we operate also regulate one or more of the following:

the locations of wells;

the method of drilling and casing wells;

-28-

---

the timing of constructions or drilling activities, including seasonal wildlife closures;

the rates of productions or “allowables”;

the surface use and restoration of properties upon which wells are drilled;

the plugging and abandoning of wells; and

notice to, and consultation with, surface owners and other third-parties

State laws regulate the size and shape of drilling and spacing units or proration units governing the pooling of oil and natural gas properties. Some states allow forced pooling or integration of tracts to facilitate exploration while other states rely on voluntary pooling of lands and leases. In some instances, forced pooling or unitization may be implemented by third parties and may reduce our interest in the unitized properties. In addition, state conservation laws establish maximum rates of production from oil and natural gas wells, generally prohibit the venting or flaring of natural gas and impose requirements regarding the ratability of production. These laws and regulations may limit the amount of oil and natural gas we can produce from our wells or limit the number of wells or the locations at which we can drill. Moreover, each state generally imposes a production or severance tax with respect to the production and sale of oil, natural gas and natural gas liquids within its jurisdiction. States do not regulate wellhead prices or engage in other similar direct regulation, but we cannot assure you that they will not do so in the future. The effect of such future regulations may be to limit the amounts of oil and natural gas that may be produced from our wells, negatively affect the economics of production from these wells or to limit the number of locations we can drill.

Federal, state and local regulations provide detailed requirements for the abandonment of wells, closure or decommissioning of production facilities and pipelines and for site restoration in areas where we operate. The U.S. Army Corps of Engineers and many other state and local authorities also have regulations for plugging and abandonment, decommissioning and site restoration. Although the U.S. Army Corps of Engineers does not require bonds or other financial assurances, some state agencies and municipalities do have such requirements.

Natural Gas Sales and Transportation. Historically, federal legislation and regulatory controls have affected the price of the natural gas we produce and the manner in which we market our production. FERC has jurisdiction over the transportation and sale for resale of natural gas in interstate commerce by natural gas companies under the Natural Gas Act of 1938 and the Natural Gas Policy Act of 1978. Since 1978, various federal laws have been enacted which have resulted in the complete removal of all price and non-price controls for sales of domestic natural gas sold in “first sales,” which include all of our sales of our own production. Under the Energy Policy Act of 2005, FERC has substantial enforcement authority to prohibit the manipulation of natural gas markets and enforce its rules and orders, including the ability to assess substantial civil penalties.

FERC also regulates interstate natural gas transportation rates and service conditions and establishes the terms under which we may use interstate natural gas pipeline capacity, which affects the marketing of natural gas that we produce, as well as the revenues we receive for sales of our natural gas and release of our natural gas pipeline capacity. Commencing in 1985, FERC promulgated a series of orders, regulations and rule makings that significantly fostered competition in the business of transporting and marketing gas. Today, interstate pipeline companies are required to provide nondiscriminatory transportation services to producers, marketers and other shippers, regardless of whether such shippers are affiliated with an interstate pipeline company. FERC’s initiatives have led to the development of a competitive, open access market for natural gas purchases and sales that permits all purchasers of natural gas to buy gas directly from third-party sellers other than pipelines. However, the natural gas industry historically has been very heavily regulated; therefore, we cannot guarantee that the less stringent regulatory approach currently pursued by FERC and Congress will continue indefinitely into the future nor can we determine what effect, if any, future regulatory changes might have on our natural gas related activities.

Under FERC’s current regulatory regime, transmission services are provided on an open-access, non-discriminatory basis at cost-based rates or negotiated rates. Gathering service, which occurs upstream of jurisdictional transmission services, is regulated by the states onshore and in state waters. Although its policy is still in flux, FERC has in the past reclassified certain jurisdictional transmission facilities as non-jurisdictional gathering facilities, which has the tendency to increase our costs of transporting gas to point-of-sale locations.

Oil Sales and Transportation. Sales of crude oil, condensate and natural gas liquids are not currently regulated and are made at negotiated prices. Nevertheless, Congress could reenact price controls in the future.

Our crude oil sales are affected by the availability, terms and cost of transportation. The transportation of oil in common carrier pipelines is also subject to rate regulation. FERC regulates interstate oil pipeline transportation rates under the Interstate Commerce Act and intrastate oil pipeline transportation rates are subject to regulation by state regulatory commissions. The basis for intrastate oil pipeline regulation, and the degree of regulatory oversight and scrutiny given to intrastate oil pipeline rates, varies from state to state. Insofar as effective interstate and intrastate rates are equally applicable to all comparable shippers, we believe

-29-

---

that the regulation of oil transportation rates will not affect our operations in any materially different way than such regulation will affect the operations of our competitors.

Further, interstate and intrastate common carrier oil pipelines must provide service on a non-discriminatory basis. Under this open access standard, common carriers must offer service to all shippers requesting service on the same terms and under the same rates. When oil pipelines operate at full capacity, access is governed by prorationing provisions set forth in the pipelines’ published tariffs. Accordingly, we believe that access to oil pipeline transportation services generally will be available to us to the same extent as to our competitors.

State Regulation. Texas regulates the drilling for, and the production, gathering and sale of, oil and natural gas, including imposing severance taxes and requirements for obtaining drilling permits. Texas currently imposes a 4.6% severance tax on oil production and a 7.5% severance tax on natural gas production. States also regulate the method of developing new fields, the spacing and operation of wells and the prevention of waste of oil and natural gas resources. States may regulate rates of production and may establish maximum daily production allowable from oil and natural gas wells based on market demand or resource conservation, or both. States do not regulate wellhead prices or engage in other similar direct economic regulation, but we cannot assure you that they will not do so in the future. The effect of these regulations may be to limit the amount of oil and natural gas that may be produced from our wells and to limit the number of wells or locations we can drill.

The petroleum industry is also subject to compliance with various other federal, state and local regulations and laws. Some of those laws relate to resource conservation and equal employment opportunity. We do not believe that compliance with these laws will have a material adverse effect on us

OSHA and Other Laws and Regulations

We are subject to the requirements of the federal Occupational Safety and Health Act (“OSHA”) and comparable state statutes.  The OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of CERCLA and similar state statutes require that we organize and/or disclose information about hazardous materials used or produced in our operations.  These laws also require the development of risk management plans for certain facilities to prevent accidental releases of pollutants.  We believe that we are in substantial compliance with these applicable requirements and with other OSHA and comparable requirements.

Competition

The oil and natural gas industry is intensely competitive, and we compete with other companies that have greater resources. Many of these companies not only explore for and produce oil and natural gas, but also carry on midstream and refining operations and market petroleum and other products on a regional, national or worldwide basis. These companies may be able to pay more for productive oil and natural gas properties and exploratory prospects or to define, evaluate, bid for and purchase a greater number of properties and prospects than our financial or human resources permit. In addition, these companies may have a greater ability to continue exploration activities during periods of low oil and natural gas market prices. Our larger or more integrated competitors may be able to absorb the burden of existing, and any changes to, federal, state and local laws and regulations more easily than we can, which would adversely affect our competitive position. Our ability to acquire additional properties and to discover reserves in the future will be dependent upon our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment. In addition, because we have fewer financial and human resources than many companies in our industry, we may be at a disadvantage in bidding for exploratory prospects and producing oil and natural gas properties. Further, oil and natural gas compete with other forms of energy available to customers, primarily based on price. These alternate forms of energy include electricity, coal and fuel oils. Changes in the availability or price of oil and natural gas or other forms of energy, as well as business conditions, conservation, legislation, regulations and the ability to convert to alternate fuels and other forms of energy may affect the demand for oil and natural gas.

Office and Other Facilities

Our corporate headquarters are located in Amarillo, Texas. We believe that our facilities are adequate for our current operations.

Employees

As of January 31, 2018, we had 6 full-time employees.  We regularly use independent contractors and consultants to perform various drilling and other services.  None of our employees are represented by a labor union or covered by any collective bargaining agreement.

-30-

---

Research and Development Expenditures

None.

Reports to Security Holders

We file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, proxy statements and other documents with the SEC under the Exchange Act.  The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington DC 20549.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  Also, the SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC.  The public can obtain any document we file with the SEC at www.sec.gov.

PLAN OF OPERATION  

Title to Properties

As is customary in the oil and natural gas industry, we initially conduct only a cursory review of the title to our properties. When we determine to conduct drilling operations on those properties, we conduct a thorough title examination and perform curative work with respect to significant defects prior to commencement of drilling operations. To the extent title opinions or other investigations reflect title defects on those properties, we are typically responsible for curing any title defects at our expense. We generally will not commence drilling operations on a property until we have cured any material title defects on such property. We have obtained title opinions on substantially all our producing properties and believe that we have satisfactory title to our producing properties in accordance with standards generally accepted in the oil and natural gas industry. Prior to completing an acquisition of producing oil and natural gas leases, we perform title reviews on the most significant leases and, depending on the materiality of properties, we may obtain a title opinion, obtain an updated title review or opinion or review previously obtained title opinions. Our oil and natural gas properties are subject to customary royalty and other interests, liens for current taxes and other burdens which we believe do not materially interfere with the use of or affect our carrying value of the properties.

Oil and Gas Leases

The typical oil and natural gas lease agreement covering our acreage position in Pecos County provides for the payment of royalties to the mineral owners for all oil and natural gas produced form any wells drilled on the leased premises.  The lessor royalties and other leasehold burdens on our properties generally range from 20% to 25%, resulting in a net revenue interest to the working interest owners generally ranging from 75% to 80%.

Overview

We are in the business of exploration, development, and production of oil and gas in the Permian Basin of West Texas. This basin, which is one of the major producing basins in the United States, is characterized by an extensive production history, a favorable operating environment, mature infrastructure, long reserve life, multiple producing horizons, enhanced recovery potential and a large number of operators. The Permian Basin is characterized by high volumes oil and liquids rich natural gas, multiple vertical and horizontal target horizons, extensive production history, long-lived reserves and high drilling success rates.  As of January 31, 2018, the Company has leasehold rights located within approximately 70,000 acres in Pecos County, Texas.  We believe that our concentrated acreage position provides us with an opportunity to achieve cost, operating and recovery efficiencies in the development of our drilling inventory.  Our activities are primarily focused on vertical development of the Queen formation over the Central Basin platform, which separates the Midland Basin from the Delaware Basin, all of which are part of the Permian Basin in West Texas. Additional drilling targets could include the Greyburg, San Andreas and Devonian zones.

Our near-term success depends primarily on attracting developmental capital to continue to drill, develop reserves and increase production within the leased acreage that we currently control.  We are also open to acquiring oil and gas producing properties that would be accretive to our shareholders. We are the operator of 100% of our Permian Basin acreage. This operating control allows us to better execute on our strategies of enhancing returns through operational and cost efficiencies and increasing ultimate hydrocarbon recovery by seeking to continually improve our drilling techniques, completion methodologies and reservoir evaluation processes. Additionally, as the operator of all of our acreage, we retain the ability to increase or decrease our capital expenditure program based on commodity price outlooks. This operating control also enables us to obtain data needed for efficient exploration of our prospects.

We have been operating at a net loss situation.  Given current oil prices, and the inherent expenses of running a public company in the oil and gas industry, it is uncertain if and when we may achieve profitable operations as a small company.

-31-

---

The Company is no longer active in the gold exploration business.  Kisa Gold Mining, Inc. (“Kisa”), a wholly owned subsidiary of the Company, granted Afranex Gold Limited (“Afranex”) an option to purchase all of the outstanding common stock of Kisa or purchase all of Kisa’s right, title and interest in certain mining permits and associated assets of Kisa. On January 3, 2017, Afranex paid a $50,000 non-refundable option fee to the Company, as consideration for extending the option period to March 31, 2017. Afranex agreed to pay the Company a total of $120,000 in cash consideration to exercise the option.   On March 29, 2017, Afranex exercised the option and paid the Company $120,000 in cash and took transfer of all of Kisa’s right, title and interest in and to all of the mining claims.  For the fiscal year ended July 31, 2017, the Company recognized a gain on sales of mineral rights of $170,000 because the carrying value of the mineral interest was zero. Afranex elected to take possession of the claims by acquiring all of Kisa’s right, title and interest in certain mining permits and associated assets of Kisa. The Company executed a Quitclaim deed with Afranex whereby 38 Kisa claims and 50 Luna claims were conveyed to Afranex.

Commodity Prices.

Our results of operations are heavily influenced by commodity prices. Factors that may impact future commodity prices, including the price of oil and natural gas, include: (1) weather conditions in the United States and where the Company's property interests are located; (2) economic conditions, including demand for petroleum-based products, in the United States and the rest of the world; (3) actions by OPEC, the Organization of Petroleum Exporting Countries; (4) political instability in the Middle East and other major oil and natural gas producing regions; (5) governmental regulations; (6) domestic tax policy; (7) the price of foreign imports of oil and natural gas; (8) the cost of exploring for, producing and delivering oil and natural gas; (9)  the discovery rate of new oil and natural gas reserves; (9) the rate of decline of existing and new oil and natural gas reserves; (10) available pipeline and other oil and natural gas transportation capacity; (11) the ability of oil and natural gas companies to raise capital; (12) the overall supply and demand for oil and natural gas; and (13) the availability of alternate fuel sources.

The Company cannot predict the occurrence of events that may affect future commodity prices or the degree to which these prices will be affected, the prices for any commodity that we produce will generally approximate current market prices in the geographic region of the production. Furthermore, the Company has not entered into any derivative contracts, including swap agreements for oil and gas.

Plan for Fiscal 2018   

We plan to continue raising funds to continue drilling shallow oil and gas wells located within the 70,000 acres, in Pecos County, where our leasehold rights exist.  We anticipate raising such funds through joint ventures working interest holder participation, whereby the company would retain a carried working interest participation because of its existing lease ownership.  In order to keep the leasehold in good standing, we adhere to the Continuous Drilling Clause for each respective lease and meet the requirements found therein.  Capital expenditures and thus drilling activity for fiscal 2018 depend, to a significant extent, on the future market prices for oil. The Company plans to complete the well that was drilled in 2017 and any wells drilled in 2018 to place those wells into production.

The Company’s Expansion Strategy includes the following:

·

Capital Expenditure Strategy for Pecos Asset

o

Pecos County acreage represents the main revenue driver for Amazing Energy.

o

Management plans to implement a monthly capital budget to drill additional wells

o

Through its wholly owned oilfield services subsidiary, Jilpetco, the Company owns and operates their own rigs and can drill a well in a target pay zone in a shorter amount of time than if relying on third-party drillers. Increasing not only the production and reserves for the Company more efficiently, but also fueling the growth of Jilpetco.

·

Seeking to Acquire Additional Acreage

o

Potential pipeline in place to acquire cash flow from producing properties

o

The company is geographically agnostic within the U.S. and is comfortable participating in both operated and non-operated transactions in most geological basins located in the lower 48 States.

·

Growth through JV/ Farm Out

o

The Company intends to initiate discussions with other operators for the purpose of forming joint-ventures on current acreage as well as any acreage acquired in the future.

o

Any such joint-ventures could allow Amazing to leverage the resources and know-how of leading operators to drive significant shareholder value within Amazing.

-32-

---

RESULTS OF OPERATIONS

The following table presents selected financial and operational data for the three- and six-month periods ended January 31, 2018 and 2017, respectively.

Oil and Gas Production and Revenue

	Three months ended January 31,
	2018			2017			Change			% Change
Revenue, oil and gas sales	$	41,382		$	65,037		$	(23,655)			(36.4%)
Number of BOE sold		1,928			2,481			(553)			(22.3%)
Average price per BOE	$	21.47		$	26.21		$	(4.74)			(18.1%)
Net production (BOE)		2,140			2,771			(631)			(22.8%)
Average daily net production (BOE)		23.3			30.1			(6.8)			(22.4%)

	Six months ended January 31,
	2018			2017			Change			% Change
Revenue, oil and gas sales	$	111,976		$	119,254		$	(7,278)			(6.1%)
Number of BOE sold		4,665			5,012			(347)			(6.9%)
Average price per BOE	$	24.00		$	23.79		$	0.21			0.9%
Net production (BOE)		4,851			5,353			(502)			(9.4%)
Average daily net production (BOE)		26.4			29.1			(2.7)			(9.4%)

During the three-month period ended January 31, 2018, net production was 2,140 BOE, or an average of 23.3 BOE per day, as compared to 2,771 BOE, or an average of 30.1BOE per day during the corresponding three-month period in 2017.

During the three-month period ended January 31, 2018, the Company sold 1,928 BOE at an average price of $21.47 per BOE, for net revenues of $41,382, as compared to 2,481 BOE at an average price of $26.21 per BOE, for net revenues of $65,037 during the comparative period in 2017.

During the six-month period ended January 31, 2018, net production was 4,851 BOE, or an average of 26.4 BOE per day, as compared to 5,353 BOE, or an average of 29.1 BOE per day during the corresponding six-month period in 2017.

During the six-month period ended January 31, 2018, the Company sold 4,665 BOE at an average price of $24.00 per BOE, for net revenues of $111,976, as compared to 5,012 BOE at an average price of $23.79 per BOE, for net revenues of $119,254 during the comparative period in 2017.

Operating Expenses

	Three months ended January 31,
	2018			2017			Change			% Change
Oil and gas production expenses	$	14,379		$	40,902		$	(26,163)			(64.0%)
Oilfield service and lease operating expenses		2,292			108,588			(106,296)			(97.9%)
Depletion, depreciation and amortization		75,252			61,652			13,600			22.1%
Selling, general and administrative expenses		1,366,014			281,292			1,084,722			385.6%
Gain on sale of mineral rights		-			(50,000)			50,000			(100.0%)
Total operating expenses	$	1,458,297		$	442,434		$	1,015,863			229.6%

	Six months ended January 31,
	2018			2017			Change			% Change
Oil and gas production expenses	$	44,298		$	63,608		$	(19,310)			(30.4%)
Oilfield service and lease operating expenses		44,577			136,411			(91,834)			(67.3%)
Depletion, depreciation and amortization		140,731			115,230			25,501			22.1%
Selling, general and administrative expenses		3,998,603			573,172			3,425,431			597.6%
Gain on sale of mineral rights		-			(50,000)			50,000			(100.0%)
Total operating expenses	$	4,228,209		$	838,421		$	3,339,788			398.3%

-33-

---

Oilfield service and lease operating expenses

Lease operating expenses decreased $106,296 from $108,588 for the three months ended January 31, 2017 to $ 2,292 for the quarter ended January 31, 2018. This decrease for the comparable three-month period was primarily due to decreased activity in the Company’s development and production program as the Company had a restricted budget for the quarter.  In the prior year the Company was involved in a rework program for the WWJD C-1, C-2, C-3, and C-4 wells which was capital intensive.    

 For the six months ended January 31, 2018, lease operating expenses decreased $91,834 to $44,577 from $136,411 for the six months ended January 31, 2017. This decrease for the comparable six-month period was primarily due to decreased activity in the Company’s development and production program. In the prior year the Company was involved in a rework program for the WWJD C-1, C-2, C-3, and C-4 wells which was capital intensive. The prior year rework program began in Sept 2016 and was active through January 2017.  For the current year, there were not any proposals to participate in a rework or recompletion program during the six-month period. 

Depletion, depreciation and amortization of asset retirement obligation liability accretion (“DD&A”)

Depletion of oil and gas properties is calculated under the units of production method, following the full cost method of accounting.

For the three-month period ended January 31, 2018, DD&A was $75,252 as compared to $61,652 for the three-month period ended January 31, 2017.  For the six-month period ended January 31, 2018, DD&A was $140,731 compared to $115,230for the six months ended January 31, 2017.  The increase in DD&A of $13,600 and $25,501 for the respective three- and six-month comparable periods was primarily due to decrease in proved reserves for the current period relative to the prior year.

General and Administrative Expenses

For the three months ended January 31, 2018, the Company’s selling, general and administrative expenses were $1,366,014 compared to $281,292 for the comparative quarter ended January 31, 2017. For the six months ended January 31, 2018, the Company’s selling, general and administrative expenses were $3,998,603 compared to $573,172 for the comparative six-months ended January 31, 2017.  The increase of $1,084,722 and $3,425,431 for the comparable three- and six- month comparable periods were the result of stock-based compensation in the form of stock options, warrants and stock grants for officers, directors and consultants totaling $2,534,627.  During the six months ended January 31, 2018, the Company also paid salary expenses totaling $375,083 related to certain employment agreements executed during the quarter.  

Liquidity and Capital Resources

BALANCE SHEET INFORMATION	January 31, 2018			July 31, 2017
Working capital deficit	$	175,931		$	818,267
Total assets		7,789,783			7,470,255
Accumulated deficit		(30,131,665)			(26,028,247)
Stockholders’ equity		3,300,989			2,853,781

WORKING CAPITAL	January 31, 2018			July 31, 2017
Current assets	$	1,182,160		$	928,739
Current liabilities		1,358,091			1,747,006
Working capital deficit	$	175,931		$	818,267

	For the six months ended
CASH FLOWS	January 31, 2018			January 31, 2017
Cash flow used by operating activities	$	(1,278,673)		$	(861,168)
Cash flow provided (used) by investing activities		(202,113)			387,915
Cash flow provided by financing activities		1,718,397			1,271,652
Net increase in cash during period	$	237,611		$	798,399

-34-

---

The Company had a working capital deficit of $175,931 as of January 31, 2018, compared to a working capital deficit of $818,267 as of July 31, 2017. The change in the working capital deficit was primarily due to additional accruals related to employment agreements executed during the three months ended January 31, 2018.

The Company continues to seek sufficient capital to expand its drilling program. The most cost-effective source of capital would be joint-ventured working interest participation funds. A typical joint venture would involve 100% of the drilling and completion funds provided by such working interest participant who would receive a 75% working interest in the applicable wells. We would retain a 25% carried working interest in such a drilling program.

The Company’s operating cash flow is dependent upon many factors, including production levels, sales volume, oil and gas prices and other factors that may be beyond its control.

Critical Accounting Policies and Recent Accounting Pronouncements

The Company has identified the policies below as critical to business operations and the understanding of the Company’s financial statements. The impact of these policies and associated risks is discussed throughout Management’s Discussion and Analysis where such policies affect the Company’s reported and expected financial results. A complete discussion of the Company’s accounting policies is included in Note 3 of the July 31, 2017, Notes to Consolidated Financial Statements included in its annual Form 10-K Report for the year ended July 31, 2017.

Principles of Consolidation

The Company’s consolidated financial statements include all its subsidiaries.

The following table shows the wholly owned subsidiaries of Amazing Energy Oil and Gas, Co. engaged in the oil, gas, and mining business:

Name of Subsidiary	State of Incorporation		Ownership Interest				Principal Activity
Amazing Energy, Inc.	Nevada			100	%		Oil and gas exploration, development, and products
Amazing Energy, LLC	Texas			100	%		Ownership oil and gas leases
Kisa Gold Mining, Inc.	Alaska			100	%		Inactive
Gulf South Securities, Inc.	Delaware			100	%		Dissolved
Jilpetco, Inc.	Texas			100	%		Operator and Oilfield services

On July 31, 2016, we completed the acquisition of Gulf South Securities, Inc. (“GSSI”), a broker-dealer registered with the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) and on August 31, 2016, we acquired Jilpetco, Inc., a Texas corporation engaged in the business of operating and providing oilfield services to oil and gas properties. On February 28, 2017, GSSI allowed its FINRA broker/dealer registration to lapse and GSSI has subsequently ceased operations.  The Company dissolved GSSI with the Delaware Secretary of State’s office on January 8, 2018.

Oil and Gas Reserve Information

The information regarding the Company’s oil and gas reserves, the changes thereto and the estimated future net cash flows are dependent upon reservoir evaluation, price and other assumptions used in preparing its annual reserve study. A qualified independent petroleum engineer was engaged to prepare the estimates of the Company’s oil and gas reserves in accordance with applicable reservoir engineering standards and in accordance with Securities and Exchange Commission guidelines. However, there are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and the timing of development expenditures. These uncertainties are greater for properties which are undeveloped or have a limited production history. Changes in prices and cost levels, as well as the timing of future development costs, may cause actual results to vary significantly from the data presented. The Company’s oil and gas reserve data represent estimates only and are not intended to be a forecast or fair market value of its assets.

-35-

---

Full Cost Method of Accounting

The Company accounts for its oil and natural gas operations using the full cost method of accounting. Under this method, all costs associated with property acquisition, exploration and development of oil and gas reserves are capitalized. Costs capitalized include acquisition costs, geological and geophysical expenditures, lease rentals on undeveloped properties and cost of drilling and equipping productive and non-productive wells. Drilling costs include directly related overhead costs. All of the Company’s properties are located within the continental United States.

Capitalized Interest Costs

Currently, we do not capitalize interest costs on oil and gas projects under development, including the costs of unproved leasehold and property acquisition costs, wells in progress and related facilities. However, we may begin capitalizing interest in the future. During the three-month periods ended January 31, 2018 and 2017, we didn’t capitalize any interest.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4.

CONTROLS AND PROCEDURES

Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company's management, including the President and Principal Executive Officer ("PEO") and Principal Financial Officer ("PFO"), of the effectiveness of the design and operations of the Company's disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation, the PEO and the PFO have concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures. 

Management of the Company believes that these material weaknesses are due to the small size of the company's accounting staff. The small size of the Company's accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of such remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

PEO and PFO Certifications

Appearing immediately following the Signatures section of this report there are Certifications of the PEO and the PFO.  The Certifications are required in accordance with Section 03 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certifications).  This Items of this report which you are currently reading is the information concerning the Evaluation referred to in Section 302 Certifications and this information should be read in conjunction with Section 302 Certifications for a more complete understanding of the topics presented.

Changes in Internal Control over Financial Reporting

There have been no changes during the quarter ended January 31, 2018 in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

PART II

ITEM 1.

LEGAL PROCEEDINGS.

None.

ITEM 1A.

RISK FACTORS.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

-36-

---

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The Company sold 7,700,000 shares of its Common Stock at $0.25 per share for total proceeds of $1,925,000 for the three months ended January 31, 2018 pursuant to the Offering (see Note 14 Stockholders’ Equity).  For the six months ended January 31, 2018, the Company sold 8,900,000 shares of its Common Stock at $0.25 per share for total proceeds of $2,225,000.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY SECURITIES.

Not Applicable.

ITEM 5.

OTHER INFORMATION.

None

-37-

---

ITEM 6.

EXHIBITS.

		Incorporated by Reference
Exhibit Number	Description of Document	Form		Date		Number		Filed herewith
3.1	Articles of Incorporation for Silver Crest Mines, Inc. dated September 11, 1968	10-SB12G		01/08/07		3.1
3.3	Articles of Incorporation of Silver Crest Resources, Inc. dated January 28, 2003	10-SB12G		01/08/07		3.3
3.8	Certificate of Amendment to Articles of Incorporation for a Nevada Corporation dated August 14, 2006	10-SB12G		01/08/07		3.8
3.9	Articles of Incorporation for Kisa Gold Mining, Inc. dated July 28, 2006	10-SB12G		01/08/07		3.9
3.10	Articles of Incorporation for Niagara Mining and Development Company, Inc. dated January 11, 2005	10-SB12G		01/08/07		3.10
3.11	Amended Bylaws adopted September 12, 2007	10-KSB		03/26/08		3.11
3.12	Articles of Incorporation – Amazing Energy, Inc.	10-K		11/13/15		3.12
3.13	Bylaws – Amazing Energy, Inc.	10-K		11/13/15		3.13
3.14	Articles of Organization – Amazing Energy LLC	10-K		11/13/15		3.14
3.15	Operating Agreement – Amazing Energy LLC	10-K		11/13/15		3.15
3.16	Articles of Incorporation – Gulf South Securities, Inc.	10-K		11/14/16		3.16
3.17	Bylaws of Gulf South Securities, Inc.	10-K		11/14/16		3.17
3.18	Articles of Incorporation – Jilpetco, Inc.	10-K		11/14/16		3.18
3.19	Bylaws of Jilpetco, Inc.	10-K		11/14/16		3.19
14.1	Code of Conduct and Ethics of Gold Crest Mines, Inc. adopted March 3, 2008		8-K		03/03/08		14.1
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002								X
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002								X
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002								X
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002								X
101.INS	XBRL Instance Document								X
101.SCH	XBRL Taxonomy Extension – Schema								X
101.CAL	XBRL Taxonomy Extension – Calculation								X
101.DEF	XBRL Taxonomy Extension – Definition								X
101.LAB	XBRL Taxonomy Extension – Label								X
101.PRE	XBRL Taxonomy Extension – Presentation								X

-38-

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned thereunto duly authorized on March 16, 2018.

	AMAZING ENERGY OIL AND GAS, CO.
	By:	WILLARD MCANDREW III
		Willard McAndrew III
		Principal Executive Officer
	By:	STEPHEN SALGADO
		Stephen Salgado
		Principal Financial Officer and Principal Accounting Officer

-39-

---

EXHIBIT INDEX

		Incorporated by Reference
Exhibit Number	Description of Document	Form	Date	Number	Filed herewith
2.1	Articles of Merger dated October 15, 2014	8-K	10/17/14	2.1
3.1	Articles of Incorporation for Silver Crest Mines, Inc. dated September 11, 1968	10-SB12G	01/08/07	3.1
3.2	Articles of Merger of Domestic Corporations into Silver Crest Mines, Inc. dated December 20, 1982	10-SB12G	01/08/07	3.2
3.3	Articles of Incorporation of Silver Crest Resources, Inc. dated January 28, 2003	10-SB12G	01/08/07	3.3
3.4	Articles of Merger between Silver Crest Mines, Inc. into Silver Crest Resources, Inc. as filed in Nevada dated June 11, 2003	10-SB12G	01/08/07	3.4
3.5	Articles of Merger between Silver Crest Mines, Inc. into Silver Crest Resources, Inc. as filed in Idaho dated June 11, 2003	10-SB12G	01/08/07	3.5
3.6	Articles of Exchange of Niagara Mining and Development Company, Inc., and Silver Crest Resources, Inc. as filed in Nevada dated August 4, 2006	10-SB12G	01/08/07	3.6
3.7	Articles of Exchange of Niagara Mining and Development Company, Inc., and Silver Crest Resources, Inc. as filed in Idaho dated August 4, 2006	10-SB12G	01/08/07	3.7
3.8	Certificate of Amendment to Articles of Incorporation for a Nevada Corporation dated August 14, 2006	10-SB12G	01/08/07	3.8
3.9	Articles of Incorporation for Kisa Gold Mining, Inc. dated July 28, 2006	10-SB12G	01/08/07	3.9
3.10	Articles of Incorporation for Niagara Mining and Development Company, Inc. dated January 11, 2005	10-SB12G	01/08/07	3.10
3.11	Amended Bylaws adopted September 12, 2007	10-KSB	03/26/08	3.11
3.12	Articles of Incorporation – Amazing Energy, Inc.	10-K	11/13/15	3.12
3.13	Bylaws – Amazing Energy, Inc.	10-K	11/13/15	3.13
3.14	Articles of Organization – Amazing Energy LLC	10-K	11/13/15	3.14
3.15	Operating Agreement – Amazing Energy LLC	10-K	11/13/15	3.15
3.16	Articles of Incorporation – Gulf South Securities, Inc.	10-K	11/14/16	3.16
3.17	Bylaws of Gulf South Securities, Inc.	10-K	11/14/16	3.17
3.18	Articles of Incorporation – Jilpetco, Inc.	10-K	11/14/16	3.18
3.19	Bylaws of Jilpetco, Inc.	10-K	11/14/16	3.19
10.1	Employment Contract of Thomas H. Parker	10-SB12G/A	08/06/07	3.11
10.2	Employment Contract of Chris Dail	10-SB12G	07/08/07	10
10.3	Option and Royalty Sales Agreement between Gold Crest Mines, Inc. and the heirs of the Estate of J.J. Oberbillig	10-KSB	03/26/08	10.3
10.4	Option and Real Property Sales Agreement between Gold Crest Mines, Inc. and JJO, LLC, an Idaho limited liability company and personal representative of the Estate of J.J. Oberbillig	10-KSB	03/26/08	10.4
10.5	Mining Lease and Option to Purchase Agreement dated March 31, 2008, between Gold Crest Mines, Inc. and Bradley Mining Company, a California Corporation	10-Q	08/11/08	10.5
10.6	Golden Lynx, LLC, Limited Liability Company Agreement dated April 18, 2008, between Kisa Gold Mining, Inc. and Cougar Gold LLC	10-Q	08/11/08	10.6
10.7	AKO Venture Agreement dated May 5, 2008, between Kisa Gold Mining, Inc. and Newmont North America Exploration Limited, a Delaware Corporation	10-Q	08/11/08	10.7

-40-

---

10.8	Luna Venture Agreement dated May 5, 2008, between Kisa Gold Mining, Inc. and Newmont North America Exploration Limited, a Delaware Corporation	10-Q	08/11/08	10.8
10.9	Chilly Venture Agreement dated May 5, 2008, between Kisa Gold Mining, Inc. and Newmont North America Exploration Limited, a Delaware Corporation	10-Q	08/11/08	10.9
10.10	Purchase Agreement dated March 13, 2009, between Gold Crest Mines, Inc. and Frank Duval	10-K	03/25/09	10.9
10.11	Master Earn-In Agreement dated March 28, 2011, between Kisa Gold Mining, Inc. and North Fork LLC	10-Q	05/18/11	10.1
10.12	Terms Sheet and Loan Agreement and amendments thereto between Kisa Gold Mining, Inc. and Afranex Gold Limited	10-KSB	04/17/13	10.12
10.13	Amendment to Terms Sheet and Loan Agreement between Kisa Gold Mining, Inc. and Afranex Gold Limited	10-Q	08/14/13	10.1
10.14	Change in Control Agreement with certain shareholders of Amazing Energy, Inc.	8-K	10/08/14	10.1
10.15	Stock Exchange Agreement with Jilpetco, Inc. dated 8-10-2015	8-K	08/12/15	10.1
10.16	Termination of Stock Exchange Agreement	10-Q	12/15/15	10.1
10.17	Agreement with Delaney Equity Group, LLC	10-Q	03/16/16	10.17
10.18	Agreement with Gulf South Holdings, Inc.	8-K	04/20/16	10.1
10.19	Agreement with Jed Miesner	8-K	04/20/16	10.2
10.20	Amendment No. 1 to Agreement with Gulf South Holdings, Inc.	8-K/A	04/29/16	10.1
10.21	Amendment No. 2 to Agreement with Gulf South Holdings, Inc.	8-K/A-2	07/22/16	10.1
10.22	Amended Agreement with Jilpetco, Inc.	8-K/A-5	08/29/16	10.2
14.1	Code of Conduct and Ethics of Gold Crest Mines, Inc. adopted March 3, 2008	8-K	03/03/08	14.1
21.1	Subsidiaries of the Issuer	10-K	11/14/16	21.1
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				X
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				X
99.1	Gold Crest Mines, Inc., 2007 Stock Plan	10-SB12G/A	08/06/07	99
99.2	Audited Financial Statements of Amazing Energy, Inc. for the period ended July 31, 2014 and 2013	8-K	03/18/15	99.1
99.3	Unaudited Financial Statements of Amazing Energy, Inc. for the period ended January 31, 2015	8-K	03/18/15	99.2
99.4	Unaudited Pro Forma Consolidated Financial Statements	8-K	03/18/15	99.3
101.INS	XBRL Instance Document				X
101.SCH	XBRL Taxonomy Extension – Schema				X
101.CAL	XBRL Taxonomy Extension – Calculation				X
101.DEF	XBRL Taxonomy Extension – Definition				X
101.LAB	XBRL Taxonomy Extension – Label				X
101.PRE	XBRL Taxonomy Extension – Presentation				X

-41-