The following updates information as to our financial condition and plan of operation provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The following also analyzes our results of operations for six month periods ended June 30, 2008 and June 30, 2007.

Except as discussed below, a discussion of our past financial results is not pertinent to the business plan of the Company on a going forward basis, due to the change in our business which occurred upon consummation of the merger on March 20, 2007.

Cautionary Statement Concerning Forward-Looking Statements

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Exchange Act"). All statements other than statements of historical facts included in this report regarding our financial position, business strategy, plans and objectives of management for future operations, industry conditions, and indebtedness covenant compliance are forward-looking statements. When used in this report, forward-looking statements are generally accompanied by terms or phrases such as "estimate," "project," "predict," "believe," "expect," "anticipate," "target," "plan," "intend," "seek," "goal," "will," "should," "may" or other words and similar expressions that convey the uncertainty of future events or outcomes. Items contemplating or making assumptions about, actual or potential future sales, market size, collaborations, and trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which our Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our Company's operations, products, services and prices.

We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. You should consider carefully the statements in the section entitled "Item 1A. Risk Factors" and other sections of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, which describe factors that could cause our actual results to differ from those set forth in the forward-looking statements. Our Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Overview and Outlook

We are a growth-oriented independent energy company engaged in the acquisition, exploration, exploitation and development of oil and natural gas properties, and have focused our activities primarily on projects based in the Rocky Mountain Region of the United States, specifically the Williston Basin. We have targeted specific prospects and began drilling for oil in the Williston Basin region in the fourth fiscal quarter of 2007. As of August 5, 2008, we have completed 13 successful discoveries, consisting of eleven targeting the Bakken formation and two targeting a Red River Structure. As of August 5, 2008, we are participating in the drilling of thirteen Bakken wells. We are included in approximately 70 gross Bakken wells expected to be drilled between now and early 2009.

We expect to participate in approximately 60 gross oil wells in 2008 with an average working interest of 8% yielding approximately 5 net wells. Based on the current pace of development we expect to fully develop our Bakken position in 2011. We expect our position to have the potential to yield approximately 46 Million gross barrels of oil. This is based on assumptions of 92 net wells and 500,000 barrels of recoverable oil per well. Operators have stated a range of approximately 250,000 to 900,000 barrels of recoverable oil. Our assumption of 500,000 barrels of recoverable oil per well was derived from reported results from our operating partners and reservoir engineering data from our producing wells. The pace of development and our assumptions are subject to change and it is possible that results may not be as favorable as we expect. However we may also experience substantially higher reserves due to secondary recovery and enhanced completion techniques. Based on currently planned wells, we expect to exit 2008 at a run rate of approximately 1,100 gross barrels of daily oil production. After paying landowner royalties ranging from 12% to 20% this equates to approximately 900 barrels of daily production net to us.

At $110 dollar oil prices, our target exit rate of 900 barrels per day will produce approximately $35 million in annualized cash flows entering 2009. We expect this number to grow substantially through 2009 as we continue to add production. Any fluctuation in the per barrel price of oil, the actual daily production from our wells or the number of wells in production entering 2009 would correspondingly increase or decrease our actual annualized cash flow at any point in time. For instance, in the event that the price of oil decreases by ten percent from $110 per barrel, our annualized cash flows entering 2009 would equal approximately $32.5 million. Conversely, in the event that the price of oil increases by ten percent from $110 per barrel, our annualized cash flows entering 2009 would equal approximately $40 million.

As an exploration company, our business strategy is to identify and exploit resources in and adjacent to existing or indicated producing areas that can be quickly developed and put in production at low cost based on the activity of larger drillers in the area. We also intend to take advantage of our expertise in aggressive land acquisition to develop exploratory projects with attractive growth potential in focus areas and to participate with other companies in those areas to explore for oil and natural gas using state-of-the-art three-dimensional (3-D) seismic technology. We believe our competitive advantage lies in our ability to acquire property in the most exciting new plays in a nimble and efficient fashion. We are focused on low overhead, our expected cash expense burn rate is approximately $2 million for fiscal year 2008. We believe we are in a position to most efficiently exploit and identify high production oil and gas properties. We intend to continue to actively pursue the acquisition of properties that fit our profile.

We currently control the rights to mineral leases on approximately 91,354 net acres of land. Our principal assets are located in the Williston Basin region of the northern United States and Yates County, New York, and include the following primary positions as of June 30, 2008:

? Approximately 21,354 net acres located in Sheridan County, Montana, representing a stacked pay prospect;

? Approximately 25,000 net acres located in Mountrail County North Dakota, within and surrounding to the north, south and west the Parshall Field currently being developed by EOG Resources and others to target the Bakken Shale;

? Approximately 25,000 net acres in and around Marathon Oil production in Dunn County, North Dakota; and

? Approximately 10,000 net acres located in the "Finger Lakes" region of Yates County, New York, in which we are targeting natural gas production from the Trenton/Black River, Marcellus and Queenstown-Medina formations.

We have also completed other miscellaneous acreage acquisitions in North Dakota and Montana.

Results of Operations for the fiscal year ended December 31, 2007 and the six months ended June 30, 2008.

The Company is in the early stage of developing its properties in Montana, North Dakota and New York. During the fiscal year ended December 31, 2007, our operations were limited primarily to technical evaluation of the properties and the design of development plans to exploit the oil and gas resources on those properties, as well as seeking opportunities to acquire additional oil and gas properties. Accordingly, we had minimal production due to our wells commencing production near the end of the fourth quarter of 2007. We completed drilling of our first wells and began selling limited quantities of oil and gas in the fourth quarter of 2007. In the first two quarters of 2008, we increased production and expect to continue to grow production consistently throughout the remainder of 2008.

As of June 30, 2008, we recognized production revenues from a total ten wells, of which five wells are located in Mountrail County, North Dakota, three wells are located in Dunn County, North Dakota and two wells are located in Sheridan County, Montana. Subsequent to quarter end we added production from an additional 3 wells in the Bakken formation. We expect to participate in the drilling of approximately 70 gross oil wells between now and early 2009. Our revenue has increased approximately 165% over the first quarter of 2008.

We did not recognize any oil and gas revenues for the twelve months ended December 31, 2007. We realized our first meaningful revenues from production late in the quarter ended March 31, 2008, as we were able to establish commercial production in connection with new drilling activities commenced in 2007. Revenues from oil and gas sales in the quarter ended June 30, 2008 were $764,528. Our average realized sales price for oil produced during the quarter ended June 30, 2008 was approximately $120 per barrel. We expect that our revenues will continue to increase quarter-over-quarter during 2008 as we continue to drill new wells and establish commercial production from our existing and new wells. In the late second quarter of 2008 we began to realize the full revenue benefit of wells put into production late in the first quarter as well as additional wells drilled or completed in the second quarter. We expect to continue to realize the additional revenue benefit of wells as they continue to be put into production in 2008.

Our operating expenses for the three months ended June 30, 2008 consisted principally of general and administrative costs. General and administrative costs for the three months ended June 30, 2008 were $410,736 compared to $507,883 for the three months ended March 31, 2008 representing a decline of approximately 19% or $97,147 primarily due to the absence of certain one-time charges in conjunction with the hiring of additional staff. Our drilling, acreage and production capital expenditures for the three months ended June 30, 2008 were $4,305,996. We expect these costs to continue to increase as we proceed with our development plans. In the future we expect to incur increased geologic, geophysical, and engineering costs.

Total expenses for the fiscal year ended December 31, 2007 were $4,513,189, for the quarter ended March 31, 2008 were $570,575 and for the three months ended June 30, 2008 were $576,487. We incurred a net loss of $4,305,293 for the fiscal year ended December 31, 2007, a net loss of $187,277 for the quarter ended March 31, 2008, net income of $283,465 for the quarter ended June 30, 2008 and net income of $96,188 for the six months ended June 30, 2008. Approximately $500,000 of the loss experienced during the fiscal year ended December 31, 2007 was a cash expense, and the balance was related to share issuance costs which are expected to decrease substantially in 2008. Approximately $125,546 of the loss experienced during the quarter ended March 31, 2008 consisted of cash expenses, and the balance was related to share issuance costs. We expect the cash general and administrative expenses to run approximately $500,000 per quarter going forward, excluding any one-time charges.

In the quarter ended March 31, 2008, we began selling meaningful amounts of oil from wells that became operational in the fourth quarter of 2007. In the quarter ended June 30, 2008, we continued to realize additional sales of oil from wells that were productive during the prior fiscal quarter and began selling meaningful amounts of oil from additional wells that became operational during the second fiscal quarter. We expect our revenue to continue to increase along with our oil production as we continue to participate in additional wells during the remainder of 2008. There is typically a lag from drilling until revenue recognition of two-to-three months.

Mountrail County, North Dakota

We realized production revenues totaling $412,325 from five wells in Mountrail County, North Dakota during the quarter ended June 30, 2008, of which three wells came into production during the second fiscal quarter of 2008. As of June 30, 2008, we capitalized approximately $2,723,529 in drilling costs for these five wells.

Dunn County, North Dakota

We realized production revenues totaling $108,110 from three wells in Dunn County, North Dakota during the quarter ended June 30, 2008. We began selling oil from our first well in Dunn County during November 2007 and added an additional well in Dunn County during the second quarter of 2008. As of June 30, 2008, we have capitalized approximately $617,305 in drilling costs for these three wells.

Sheridan County, Montana

We realized production revenues totaling $244,093from two well in Sheridan County, Montana during the quarter ended June 20, 2008. One of these wells was productive during the first quarter of 2008, and the other well in Sheridan County became productive during the second quarter of 2008. As of June 30, 2008, we capitalized approximately $632,399 in drilling costs for these two wells.

Second Quarter 2008 Operational Results

Production Volumes

The following table illustrates our revenues from the sale of oil and natural
gas for the quarter ended June 30, 2008 compared to the quarter ended March 31,
2008.

                                       Three         Three
                                       Months       Months
                                       Ended      Ended June
                                     March 31,     30, 2008
                                        2008
Oil revenue:
Oil revenue                           $ 285,692     $ 762,763
Unrealized oil derivative gains       $   1,300     $       0
(losses)
Oil revenue including unrealized      $ 286,992     $ 762,763
oil derivative gains (losses)
Natural gas revenue:
Natural gas revenue                    $     37     $   1,765
Unrealized natural gas derivative      $      0      $      0
gains (losses)
Natural gas revenue including          $     37     $   1,765
unrealized natural gas derivative
gains (losses)
 Oil and natural gas revenue:
Oil and natural gas revenue           $ 285,729     $ 764,528
Unrealized oil and natural gas        $   1,300     $       0
derivative gains (losses)
Oil and natural gas revenue           $ 287,029     $ 764,528
including unrealized derivative
gains (losses)
Total revenue                         $ 287,029     $ 764,528

                                      Three         Three
                                      Months       Months
                                      Ended      Ended June
                                    March 31,     30, 2008
                                       2008
Average oil prices:
Oil price (per Bbl)                    $ 92.10      $ 120.12
Average natural gas prices:
Natural Gas price (per Mcf)            $ 10.96       $ 13.31

Depletion of oil and natural gas properties

Our depletion expense is driven by many factors including certain exploration costs involved in the development of producing reserves, production levels and estimates of proved reserve quantities and future developmental costs at the end of the first two fiscal quarters of 2008.

                                      Three         Three
                                      Months       Months
                                      Ended      Ended June
                                    March 31,     30, 2008
                                       2008
Depletion of oil and natural gas      $ 40,636     $ 106,942
properties

Operation Plan

During the fourth quarter of the fiscal year ended December 31, 2007, we commenced in earnest the development of our oil and gas properties in conjunction with our drilling partners. These activities continued to build in the quarters ended March 31, 2008 and June 30, 2008, and are anticipated to continue to grow throughout the remainder of 2008 and beyond. The Company has several projects that are in various stages of discussions and is continually evaluating oil and gas opportunities in the Continental United States. We will continue to participate on a heads-up basis in the continuing development of our substantial Bakken acreage holdings. We do not typically lease land to operators or dilute working interest in any way. We own our proportionate share of wells and we will continue to develop higher working interest sections going forward. We will continue to acquire acreage in the play as it may become available as well as continually evaluate additional opportunities both in the Bakken and beyond.

Our ability to continue to source and screen potential projects;

Our ability to discover commercial quantities of oil and gas;

The market price for oil and gas; and

Our ability to fully implement our exploration and development program, which is dependent on the availability of capital resources.

There can be no assurance that we will be successful in any of these respects, that the prices of oil and gas prevailing at the time of production will be at a level allowing for profitable production, or that we will be able to obtain additional funding to increase our currently limited capital resources.

Drilling Projects

As of June 30, 2008, we had completed ten successful discoveries, compared to six successful discoveries completed as of March 31, 2008. Subsequent to June 30, 2008, we have completed thirteen successful discoveries and as of August 5, 2008, are participating in the drilling of thirteen additional wells, all of which are expected to commence production in the third calendar quarter of 2008. Our acreage has been included in approximately 70 proposed drilling locations as of June 30, 2008. We expect most, if not all, of these wells and potentially more will be drilled between now and early 2009, although we have no control over the timing of such wells in our position as a non-operator in these particular wells. During the fiscal year 2009, we will drill wells on some of our high working interest locations potentially ranging up to 100% working interest.

Upon full development of our North Dakota acreage position, we anticipate that we will be able to drill up to 93 net wells based on 640-acre spacing. In the event the Bakken field continues to be down spaced to 320-acre units, we could control as many as 186 net Bakken wells. EOG Resources previously announced calculations of 9 million barrels of oil in place per 640-acre section in the Parshall Field, of which they believe they will recover 900,000 barrels with a single lateral well. Based on the numbers referenced by EOG resources we may be exposed to approximately 80 million gross barrels of oil based on 640 acre spacing, excluding the Brigham joint venture acreage. On continued down spacing to 320 acre drilling units, we could be exposed up to a potential 160 million barrels of oil. In addition we believe significant amounts of oil may be recoverable from a second producing reservoir in the Three Forks/Sanish formation, this formation has the potential to increase reserves and productivity significantly. We are currently participating in a well operated by Continental Resources and have several planned that will be targeting this formation. With the addition of the Three Forks/Sanish formation, our potential reserves may increase substantially.

Upon full development of our Montana acreage position, we anticipate that we would be able to drill up to 137 net wells based on 160-acre spacing although the inventory of high-grade prospects is substantially lower than this number currently. Our full Montana acreage position is subject to the Brigham joint venture as long as Brigham continues to drill on it. Should Brigham let 120 days pass without the spud of a new well the joint venture shall terminate.

The following table summarizes our producing wells as of August 5, 2008:

                                                                    Northern Oil
                                                                      and Gas
                                                                      Working
      State/County            Operator             Well Name          Interest
NORTH DAKOTA - MOUNTRAIL BRIGHAM EXPLORATION BERGSTROM TRUST 26-1H   6.25%/24%
                                                                       BIAPO
NORTH DAKOTA - MOUNTRAIL BRIGHAM EXPLORATION HALLINGSTAD 27-1H     8.5%/20% BIAPO
NORTH DAKOTA - MOUNTRAIL BRIGHAM EXPLORATION RICHARDSON 25-1           37.00%

NORTH DAKOTA - MOUNTRAIL BRIGHAM EXPLORATION  RICHARDSON 30-1     12.5%/20% BIAPO
NORTH DAKOTA - MOUNTRAIL BRIGHAM EXPLORATION  JOHNSON 33-1H           16.25%
NORTH DAKOTA - MOUNTRAIL MUREX PETROLEUM      RICK CLAIR 25-36H        6.25%
NORTH DAKOTA - MOUNTRAIL WHITING OIL & GAS    BRAAFLAT 11-11H          1.00%
NORTH DAKOTA - MOUNTRAIL SINCLAIR OIL         NELSON 1-26H             3.00%
NORTH DAKOTA - MOUNTRAIL SLAWSON EXPLORATION  PATHFINDER 1-9H          3.00%
NORTH DAKOTA - DUNN      MARATHON OIL COMPANY REISS 34-20H             1.00%
NORTH DAKOTA - DUNN      MARATHON OIL COMPANY KENT CARLSON 24-36H      6.25%
NORTH DAKOTA - DUNN      MARATHON OIL COMPANY VOIGT 11-15H             1.00%
NORTH DAKOTA - DUNN      BURLINGTON RESOURCES BONNEY 34-3H             3.00%

Brigham Exploration

On April 23, 2007 we entered into a joint venture agreement with Brigham Exploration. Under the terms of the agreement, we contributed 3,000 net acres of our approximate 60,000 net acres located in North Dakota and approximately 21,350 net acres of our Sheridan County, Montana acreage.

Drilling under the Brigham joint venture commenced in the early fourth quarter of 2007. On the Mountrail County, North Dakota acreage, we successfully completed the Bergstrom Family Trust 26, a Bakken well that produced at an early rate of approximately 200 gross barrels of oil per day. We participated for a 6.25% working interest that converts to 24% working interest at payout. We also completed the Hallingstad 27, a Bakken well that produced at an early rate of approximately 500 gross barrels of oil per day. We participated for an 8.4% working interest that converts to 20.5% working interest at payout.

On the Sheridan County, Montana acreage, we successfully completed the Richardson #25, a Red River test well that went on production at a consistent rate of approximately 300 barrels of oil per day. The Company participated for a 10% working interest that converts to 37% working interest at payout, which is expected to occur in the second fiscal quarter of 2008. We did not recognize any revenue from these wells in 2007. We also completed the Richardson #30 in late June 2008, an offset to the productive Richardson #25 Red River Well. The Richardson #30 began production at a rate of approximately 175 barrels of oil per day. The Company participated for a 12.5% working interest that converts to 21.25% working interest at payout as well as retaining a 1% over-riding royalty interest.

Commencing in 2008, Brigham is subject to a 120 day continuous drilling provision requiring Brigham to drill every 120 days to retain future drilling opportunity. Under the joint venture acreage in Mountrail County North Dakota, Brigham expects to operate a fourth Bakken well in the second half of 2008. On the Sheridan county acreage, Brigham expects to operate a third conventional well in the second half of 2008.

Murex Petroleum

In the second quarter of 2007, our acreage was included in the Rick Clair 25-36H, a horizontal Bakken well in Mountrail County North Dakota that produced at an early rate of 1400 gross barrels of oil per day.

Whiting Oil & Gas

In the second quarter of 2007, we participated with Whiting Oil & Gas in the Braaflat 11-11H, a horizontal Bakken well in Mountrail County North Dakota that produced at an early rate of 1600 gross barrels of oil per day. We expect to be included in additional Whiting wells later in 2008 and into 2009.

Sinclair Oil

In the second quarter of 2007, we participated with Sinclair Oil in the Nelson . . .