Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On August 15, 2012, the Nasdaq Stock Market notified us that we did not satisfy Nasdaq's shareholder approval requirement for a transaction that closed in December, 2011 (Listing Rule 5635(a)(2)). In that transaction we issued 1,500,000 shares of our common stock to purchase interests in 2,000 acres in the Chugwater prospect, including two wells drilled in that prospect, in connection with terminating a joint venture with TRW Exploration, LLC. TRW Exploration is majority owned by several of our shareholders. The Nasdaq rule requires shareholder approval for the issuance of shares to purchase assets from any shareholder that owns more than 5% of the listed company's shares or holds voting power greater than 5%.

In order to come into compliance with this Nasdaq rule, we will hold a special meeting of shareholders, expected to be in September, to approve the transaction Based on the support of that transaction by members of our board and the shareholders who own TRW Exploration, we fully expect the transaction to be approved which will bring us into compliance with this Nasdaq listing requirement.

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