- Quarterly Report (10-Q)

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Share Name	Share Symbol	Market	Type
Royalite Petroleum Company Inc (CE)	USOTC:RYPE	OTCMarkets	Common Stock

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended January 31, 2009

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

For the transition period from ________ to ________

COMMISSION FILE NUMBER 000-26729

ROYALITE PETROLEUM COMPANY INC.
(Exact name of registrant as specified in its charter)

NEVADA	88-0427619
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1200 Nueces Street
Austin, Texas	78701
(Address of principal executive offices)	(Zip code)

(512) 478-8900
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. [X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ]	(Do not check if a 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 [X] No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
practicable date: As of March 19, 2009, the Registrant had 100,664,054 shares of common stock
outstanding .

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and nine month periods ended January 31, 2009 are not necessarily indicative of the results that can be expected for the year ending April 30, 2009.

As used in this Quarterly Report, the terms “we,” “us,” “our,” “Royalite,” and the “Company” mean Royalite Petroleum Company Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

FINANCIAL STATEMENTS

January 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

F-1

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)

		JANUARY 31			APRIL 30
		2009			2008
		(Unaudited)

ASSETS
Current
Cash and cash equivalents	$	2,047		$	43,469
Prepaid expenses		51,659			23,959
Assets held for discontinued operations		-			41,879
		53,706			109,307

License Rights (Note 4)		2,449			2,599
Deposits on Unproven Oil and Gas Properties –
Related Party (Note 5)		215,000			12,700,000
Deposits on Unproven Oil and Gas Properties (Note 6)		162,000			-
Unproven Oil and Gas Properties (Note 7)		18,753,562			2,520,413
Deposits		60,000			60,000

	$	19,246,717		$	15,392,319

LIABILITIES
Current
Accounts payable and accrued liabilities	$	1,290,453		$	1,280,122
Leases payable – Related Parties (Note 8)		357,445			-
Leases payable (Note 9)		1,750,028			-
Loans payable – Related Parties (Note 10)		172,150			46,750
Share subscriptions received (Note 11)		-			364,985
Notes payable (Note 12)		20,000			20,000
Liabilities held for discontinued operations		-			82,893
		3,590,076			1,794,750
STOCKHOLDERS’ EQUITY

Capital Stock (Note 13)
Authorized:
500,000,000 common shares, par value $0.001
100,000,000 preferred shares, par value $0.001

Issued:
99,467,270 common shares (April 30, 2008 –
88,207,270)		100,667			88,207

Additional Paid-In Capital		22,564,163			19,076,223
Warrants		429,700			351,100
Accumulated Deficit During Exploration Stage		(7,437,889	)		(5,909,658	)
Accumulated Other Comprehensive Loss		-			(8,303	)
		15,656,641			13,597,569

	$	19,246,717		$	15,392,319

Commitments and Contingencies (Note 14)
Subsequent Event (Note17)

See Accompanying Notes to Financial Statements

F-2

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(Unaudited)

														PERIOD
														FROM
														INCEPTION
														DECEMBER 2,
														2005
		THREE MONTH PERIOD						NINE MONTH PERIOD						TO
		ENDED JANUARY 31						ENDED JANUARY 31						JANUARY 31
		2009			2008			2009			2008			2009


Revenues	$	-		$	-		$	-		$	-		$	-

Operating Expenses
Oil and gas exploration expenses		-			(380	)		174,233			586,010			3,266,085
Selling , general and administrative
expenses		212,200			213,260			1,407,647			618,782			3,301,292
Depreciation and amortization		50			995			150			2,985			7,101
Loss on disposal of assets		-			2,149			-			2149			10,001
		212,250			216,024			1,582,030			1,209,926			6,584,479

Loss from Operations		(212,250	)		(216,024	)		(1,582,030	)		(1,209,926	)		(6,584,179	)

Other Income (Expenses)
Interest expense		(15,417	)		(209	)		(18,451	)		(2,300	)		(22,613	)
Fair value of discount on private
placement		-			-			-			-			(763,800	)
Oil and gas property write offs		-			-			-			(92,000	)		(92,000	)
Gain (Loss) on discontinued
operations		-			(3,365	)		511			(29,139	)		(46,736	)
Gain on disposal of Worldbid
International Inc. and Worldbid
business operating net assets		-			-			71,739			-			71,739
		(15,417	)		(3,574	)		53,799			(126,439	)		(853,410	)

Net Loss	$	(227,667	)	$	(219,598	)	$	(1,528,231	)	$	(1,333,365	)	$	(7,437,889	)

Basic and Diluted Loss per Common
Share	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.03	)

Weighted Average Number of
Common Shares Outstanding		99,685,793			37,107,270			95,020,286			26,987,705

See Accompanying Notes to Financial Statements

F-3

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Stated in U.S. Dollars)
(Unaudited)

														PERIOD
														FROM
														INCEPTION
														DECEMBER 2,
														2005
		THREE MONTH PERIOD						NINE MONTH PERIOD						TO
		ENDED JANUARY 31						ENDED JANUARY 31						JANUARY 31
		2009			2008			2009			2008			2009

Net Loss	$	(227,667	)	$	(219,598	)	$	(1,558,231	)	$	(1,333,365	)	$	(7,437,889	)

Other Comprehensive Income
(Loss)
Foreign currency translation
adjustment		-			1,367			8,303			(6,383	)		-

Comprehensive Loss	$	(227,667	)	$	(218,231	)	$	(1,549,928	)	$	(1,339,748	)	$	(7,437,889	)

See Accompanying Notes to Financial Statements

F-4

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(Unaudited)

								PERIOD FROM
								INCEPTION
								DECEMBER 2,
		NINE MONTH PERIOD						2005
		ENDED JANUARY 31						TO
		2009			2008			JANUARY 31, 2009
Cash Flows From Operating Activities
Net loss	$	(1,528,231	)	$	(1,333,365	)	$	(7,437,889	)

Adjustments to reconcile net loss to Net
Cash Used in Operating Activities
Depreciation and amortization		150			2,985			7,101
Fair value of discount on private placement		-			-			763,800
Stock based compensation		784,000						784,000
Fair value of stock issued pursuant to
investor relations contracts		132,800			-			180,300
Loss on disposal of property and
equipment		-			2,149			10,001
Gain on disposal of Worldbid International
Inc. and Worldbid business operating net
assets		(71,739	)		-			(71,739	)
Write-off of oil and gas property exploration
expenditures		-			599,195			2,250,118
Write off of oil and gas property acquisition
costs		-			92,000			92,000
Changes in Operating Assets and Liabilities
Prepaid expenses		9,500			83,553			(4,959	)
Other assets		-			1,075			-
Deposits		-			(31,500	)		(60,000	)
Assets held for discontinued operations		4,631			156,936			4,941
Accounts payable and accrued liabilities		9,209			(53,770	)		1,235,386
Liabilities held for discontinued operations		11,461			26,881			6,642
Net Cash Used in Operating Activities		(648,219	)		(453,861	)		(2,240,298	)

Cash Flows From Investing Activities
Cash paid on deposit for unproven oil
property – related party (net)		125,000			-			(215,000	)
Cash paid on deposit for unproven oil
property		(162,000	)		-			(162,000	)
Cash paid on unproven oil properties		(1,765,676	)		(686,404	)		(6,536,207	)
Cash acquired on reverse merger		-			-			4,038,375
Proceeds of disposal, net of Cash disposed of
on sale of of Worldbid International Inc. and
Worldbid business net assets		24,058			-			24,058
Acquisition of property and equipment		-			-			(16,551	)
		(1,778,618	)		(686,404	)		(2,867,325	)
Cash Flows From Financing Activities
Payments on notes payable- related party		-			-			(98,294	)
Proceeds from Stock issuances		2,625,000			-			4,959,200
Proceeds from share subscriptions received		(364,985	)		-			-
Proceeds from loans payable - related parties		125,400			20,070			248,764
		2,385,415			20,070			5,109,670
Net Increase (Decrease) in Cash and Cash
Equivalents		(41,422	)		(1,120,195	)		2,047

Cash and Cash Equivalents, beginning of
Period		43,469			1,140,982			-

Cash and Cash Equivalents, end of Period	$	2,047		$	20,787		$	2,047
(Continued)

See Accompanying Notes to Financial Statements

F-5

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(Unaudited)

						PERIOD FROM
						INCEPTION
						DECEMBER 2,
		NINE MONTH PERIOD				2005
		ENDED JANUARY 31				TO
		2009		2008		JANUARY 31, 2009

Supplementary Cash Flow Information

Taxes paid	$	-	$	-	$	-

Interest paid	$	-	$	-	$	2,973

Supplementary disclosure for Non-Cash
Investing and Financing Activities

Stock issued on acquisition of Worldbids’
business	$	-	$	-	$	3,905,530
Stock issued as deposit on Oil and Gas
property - Related Party	$	-	$	-	$	12,000,000
Stock issued for acquisition of Oil and
Gas properties	$	-	$	92,000	$	92,000
Stock issued as finders fees for Oil and
Gas property	$	-	$	-	$	360,000
Stock issued pursuant to investor
relations contracts	$	170,000		-		170,000

See Accompanying Notes to Financial Statements

F-6

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in U.S. Dollars)
(Unaudited)

									ACCUMULATED
					ADDITIONAL				DEFICIT DURING			OTHER		TOTAL
	COMMON STOCK				PAID IN				DEVELOPMENT			COMPREHENSIVE		STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL		WARRANTS		STAGE			LOSS		EQUITY

Balance, December 2, 2005	-	$	-	$	-	$	-	$	-		$	-	$	-

Common shares issued for
cash at $0.001 per share	18,000,000		18,000		-		-		-			-		18,000
Common shares issued for
cash; Reg. S - Private
Placement at $0.10 per share	2,000,000		2,000		198,000		-		-			-		200,000
Common shares issued for
cash; Reg. D - Private
Placement at $0.10 per share	100,000		100		9,900		-		-			-		10,000
Common shares issued for
cash; Reg. S - Private
Placement at $0.30 per share	1,860,667		1,861		556,339		-		-			-		558,200
Common shares issued for
licensing rights	3,000,000		3,000		-		-		-			-		3,000
Net Loss	-		-		-		-		(196,085	)		-		(196,085	)

Balance April 30, 2006	24,960,667	$	24,961	$	764,239	$	-	$	(196,085	)	$	-	$	593,115

(Continued)

See Accompanying Notes to Financial Statements

F-6

ROYALITEPETROLEUM COMPANYINC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in U.S. Dollars)
(Unaudited)

									ACCUMULATED
					ADDITIONAL				DEFICIT DURING			OTHER			TOTAL
	COMMON STOCK				PAID IN				DEVELOPMENT			COMPREHENSIVE			STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL		WARRANTS		STAGE			LOSS			EQUITY

Balance April 30, 2006	24,960,667	$	24,961	$	764,239	$	-	$	(196,085	)	$	-		$	593,115

Common shares issued
pursuant to merger	10,914,603		10,914		3,894,616		-		-			-			3,905,530
Common shares issued for
cash; Reg. S - Private
Placement at $1.50 per share	1,032,000		1,032		1,195,868		351,100		-			-			1,548,000
Fair value of Discount on
Issuance of 1,032,000 shares
at $1.50 per share	-		-		763,800		-		-			-			763,800
Foreign currency adjustment	-		-		-		-		-			(1,785	)		(1,785	)
Net Loss	-		-		-		-		(4,160,057	)		-			(4,160,057	)

Balance April 30, 2007	36,907,270		36,907		6,618,523		351,100		(4,356,142	)		(1,785	)		2,648,603

Common shares issued for Oil
and Gas properties	200,000		200		91,800		-		-			-			92,000
Common shares issued for
deposit on Oil and Gas
property	50,000,000		50,000		11,950,000		-		-			-			12,000,000
Common shares issued as
finders fees for Oil and Gas
properties	1,000,000		1,000		359,000		-		-			-			360,000
Common shares issued
pursuant to investor relations
contracts	100,000		100		56,900		-		-			-			57,000
Foreign currency translation
adjustment	-		-		-		-		-			(6,518	)		(6,518	)
Net Loss	-		-		-		-		(1,553,516	)		-			(1,553,516	)
Balance April 30, 2008	88,207,270	$	88,207	$	19,076,223	$	351,100	$	(5,909,658	)	$	(8,303	)	$	13,597,569

F-7

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(Stated in U.S. Dollars)
(Unaudited)

									ACCUMULATED
					ADDITIONAL				DEFICIT DURING			OTHER			TOTAL
	COMMON STOCK				PAID IN				DEVELOPMENT			COMPREHENSIVE			STOCKHOLDERS’
	SHARES		AMOUNT		CAPITAL		WARRANTS		STAGE			LOSS			EQUITY

Balance April 30, 2008	88,207,270	$	88,207	$	19,076,223	$	351,100	$	(5,909,658	)	$	(8,303	)	$	13,597,569

Common shares issued for
cash; Reg. D - Private
Placement at $0.25 per share	8,660,000		8,660		2,156,340		-		-			-			2,165,000
Common shares issued
pursuant to investor relations
contracts	1,000,000		1,000		169,000		-		-			-			170,000
Units of Common Stock issued
for cash; Reg. D - Private
Placement at $0.10 per unite	1,600,000		1,600		79,800		78,600		-			-			160,000
Common shares issued for
cash; Reg. D - Private
Placement at $0.25 per share	1,200,000		1,200		298,800		-		-			-			300,000
Stock based compensation	-		-		784,000		-		-			-			784,000
Foreign currency adjustment	-		-		-		-		-			(1,122	)		(1,122	)
Foreign currency adjustment
eliminated on disposition of
Worldbid International Inc.	-		-		-		-		-			9,425			9,425
Net Loss	-		-		-		-		(1,528,231	)		-			(1,528,231	)

Balance January 31, 2009	100,667,270	$	100,667	$	22,564,163	$	429,700	$	(7,437,889	)	$	-		$	15,656,641

See Accompanying Notes to Financial Statements

F-8

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

1.	OPERATIONS

	a)	Description of Business

		Royalite Petroleum Company Inc., referred to as the “Company”, is considered an exploration stage company. The Company's primary objective is to identify, acquire and develop oil and gas projects, and has not yet realized any revenues from this primary objective.

		The Company has acquired interests in properties through leases on which it will drill oil or gas wells in efforts to discover and/or to produce oil and gas. The Company has a 100% working interest and a 87.5% net revenue interest in undeveloped properties in Utah and has a working interest from 26.25% to 100% and a net revenue interest from 18.375% to 70% in undeveloped properties in Texas and Louisiana respectively. The Company is exploring various oil and gas properties at this time.

		The Company holds the exclusive rights to use all information relating to minerals and hydrocarbons in the State of Utah derived from a proprietary electromagnetic sensing technology.

	b)	History

		Royalite Petroleum Company Inc. (the “Company”), formerly Worldbid Corporation, was incorporated on August 10, 1998 in the State of Nevada as Tethercam Systems, Inc (Tethercam). On January 15, 1999, Tethercam changed it’s name to Worldbid Corporation (Worldbid).

		Effective February 28, 2007, Worldbid completed the acquisition of Royalite Petroleum Corporation (“RPC”), an exploration stage company since its formation in the State of Nevada on December 2, 2005.

		The acquisition of RPC was completed by way of a "triangular merger" pursuant to the provisions of the Amended and Restated Agreement and Plan of Merger (“First Merger Agreement”) among RPC, Worldbid and Worldbid’s wholly owned subsidiary, Royalite Acquisition Corp. (“Worldbid Sub”). Under the terms of the First Merger Agreement, RPC was merged with and into Worldbid Sub, with Worldbid Sub continuing as the surviving corporation (“First Merger”). Immediately following the completion of the First Merger, Worldbid completed a second merger whereby Worldbid Sub was merged with and into Worldbid, with Worldbid continuing as the surviving corporation (“Second Merger”).

F-6

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

1.	OPERATIONS (Continued)

	b)	History – (Continued)

		Under the terms and conditions of the First Merger Agreement each share of RPC’s issued and outstanding common stock, immediately prior to the completion of the First Merger, was converted into one share of Worldbid’s common stock. As a result, Worldbid issued a total of 24,960,667 shares or approximately 67% of its issued and outstanding common stock to the former shareholders of RPC. Following the transaction, Worldbid had 35,875,270 shares of common stock issued and outstanding.

		As a result of the completion of the First Merger and the Second Merger (together known as the “Royalite Transaction”), Worldbid acquired all the property and assets of RPC, including the rights to oil and gas leases on approximately 69,000 net acres of land along the Utah Hingeline Trend of south-central Utah and a 2.5% royalty interest in all of the oil and gas produced, sold or used off of 285 acres of land, also located along the Utah Hingeline Trend. In addition to acquiring all of RPC’s property and assets, Worldbid assumed all of RPC’s debts and liabilities.

		As part of the Second Merger, Worldbid changed its name to Royalite Petroleum Company Inc. (the “Company”). Effective March 5, 2007, the Company changed it’s trading symbol on the OTC Bulletin Board from “WBDC” to “RYPE.”

		For accounting purposes, the Royalite Transaction is considered to be a capital transaction in substance, rather than a business combination. The Royalite Transaction is treated, in the accompanying financial statements as equivalent to the issuance of shares by RPC (the private company) for the assets of Worldbid (the public company). The accounting for the Royalite Transaction is similar to that resulting from a reverse acquisition. Accordingly, the historical financial information of the accompanying financial statements is that of RPC.

		The 10,914,603 shares of Worldbid at February 28, 2007 are presented in the Company’s Statement of Stockholders’ Equity as if RPC acquired Worldbid.

		On July 7, 2008, Royalite Petroleum Company Inc. (the “Company”) completed the disposition of Worldbid International Inc. (“Worldbid”), its internet business, to Marktech Acquisition Corp. (“Marktech”). The disposition was completed pursuant to the terms and conditions of the Share Purchase Agreement dated June 5, 2008 (the “Share Purchase Agreement”) among the Company, Marktech and Worldbid. The Company disposed of the subsidiary in order to concentrate its efforts on its core oil and gas business. (Note 3)

F-7

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

1.	OPERATIONS (Continued)

	c)	Going Concern

		As of January 31, 2009, the Company incurred cumulative net losses of approximately $7,467,889 from operations and has a negative working capital of $3,566,370. The Company is still in the exploration stage, raising substantial doubt about its ability to continue as a going concern. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.

		The ability of the Company to continue as a going concern is dependent on additional sources of capital and the successful execution of the Company’s strategic plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

2.	SIGNIFICANT ACCOUNTING POLICIES

	a)	Basis of Presentation

		The financial statements include the operations of the Company and its wholly-owned subsidiary, Worldbid International Inc., a Company domiciled in the state of Nevada for the period from its acquisition on February 28, 2007 to the time of disposal on July 7, 2008.

		The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States.

	b)	Use of Estimates

		The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

	c)	Cash and Cash Equivalents

		The Company considers all investments with an original maturity of three months or less to be a cash equivalent.

F-8

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	d)	Oil and Gas Exploration Activity

		The Company follows the full cost method of accounting for oil and gas operations whereby all costs associated with the exploration for and development of oil and gas reserves, whether productive or unproductive, are capitalized.

		Such expenditures include land acquisition costs, drilling, exploratory dry holes, geological and geophysical costs not associated with a specific unevaluated property, completion and costs of well equipment. Internal costs are capitalized only if they can be directly identified with acquisition, exploration, or development activities.

		Expenditures that are considered unlikely to be recovered are written off. On a quarterly basis the Board of Directors assesses whether or not there is an asset impairment. The current oil and gas exploration and development activities are considered to be in the exploration stage.

		The costs of unproved leases, which become productive, are reclassified to proved properties when proved reserves are discovered in the property. To date no properties have been classified as proved properties. Unproved oil and gas interests are carried at original acquisition costs including filing and title fees. Depreciation and depletion of the capitalized costs for producing oil and gas properties will be provided by the unit-of- production method based on proved oil and gas reserves.

		Abandonment of properties are recognized as an expense in the period of abandonment and accounted for as adjustments of capitalized costs.

		Ceiling Test .

		Under the full-cost accounting rules, capitalized costs included in the full-cost pool, net of accumulated depreciation, depletion and amortization (DD&A), cost of unevaluated properties and deferred income taxes, may not exceed the present value of our estimated future net cash flows from proved oil and gas reserves, discounted at 10%, plus the lower of cost or fair value of unproved properties included in the costs being amortized, net of related tax effects. These rules generally require that, in estimating future net cash flow, we assume that future oil and gas production will be sold at the unescalated market price for oil and gas received at the end of each fiscal quarter and that future costs to produce oil and gas will remain constant at the prices in effect at the end of the fiscal quarter.

		We are required to write-down and charge to earnings the amount, if any, by which these costs exceed the discounted future net cash flows, unless prices recover sufficiently before the date of our financial statements. Given the volatility of oil and gas prices, it is likely that our estimates of discounted future net cash flows from proved oil and gas reserves will change in the near term. If oil and gas prices decline significantly, even if only for a short period of time, it is possible that writedowns of oil and gas properties could occur in the future

F-9

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	e)	Impairment of Properties

		Unproved leasehold costs are reviewed periodically and a loss is recognized to the extent, if any, that the cost of the property has been impaired.

	f)	Property and Equipment

		Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 10 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

		The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

	g)	Long-Lived Assets

		Long-lived assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows from the use of these assets. When any such impairment exists, the related assets will be written down to fair value.

	h)	Fair Value of Financial Instruments

		Statement of Financial Accounting Standards (SFAS) No. 107, “Disclosure About Fair Value of Financial Instruments,” requires the Company to disclose, when reasonably attainable, the fair market value of its assets and liabilities which are deemed to be financial instruments. The carrying amounts and estimated fair value of the Company’s financial instruments approximate their fair value due to their short-term nature.

	i)	Foreign Currency

		These financial statements have been presented in U.S. dollars. The functional currency of the operations of the Company’s wholly-owned operating subsidiary, Worldbid International Inc. which undertakes the Worldbid Operations is the Canadian dollar. Assets and liabilities measured in Canadian dollars are translated into United States dollars using exchange rates in effect at the consolidated balance sheets date with revenue and expense transactions translated using average exchange rates prevailing during the period.

F-10

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	i)	Foreign Currency (Continued)

		Exchange gains and losses arising on this translation are excluded from the determination of operating income and reported as foreign currency translation adjustment (which is included in the other comprehensive loss) in stockholders’ equity.

	j)	Revenue Recognition

		i)	Oil and Gas Revenues

			The Company recognizes oil and gas revenues from its interests in producing wells as oil and gas is produced and sold from these wells. The Company has no gas balancing arrangements in place. Since inception no oil and gas revenues have been recorded.

		ii)	Worldbid Operations

			The Company earned revenue by selling subscriptions to its service, advertising on email communications to businesses using the Company’s website services, direct advertising by businesses on its website and from data sales to consumer oriented companies. Revenue is recognized once the service or product is delivered.

			Subscriptions received in advance for access to the Company’s website services were recognized as income over the period of the subscriptions.

	k)	Comprehensive Income (Loss)

		The Company’s accumulated other comprehensive loss consists of the accumulated foreign currency translation adjustments.

	l)	Earnings (Loss) Per Share

		The Company follows SFAS No. 128, “Earnings Per Share” and SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity,” which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

	m)	Research and Development

		All research and development expenditures during the period have been charged to operations.

F-11

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	n)	Income Taxes

		The Company accounts for its income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes,” which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

	o)	Stock-Based Compensation

		The Company accounts for stock based employee and director compensation arrangements in accordance with provisions of Financial Accounting Standard (SFAS) No. 123R, “Share Based Payment”. SFAS No. 123(R) requires companies to measure all employee stock based compensation awards using a fair value method and record such expense in their consolidated financial statements. The Company adopted SFAS No. 123(R) on a prospective basis on December 2, 2005

		Stock based compensation arrangements for non-employees are recorded at fair value as the services are provided and the compensation earned.

	p)	Segmented Information

		The Company discloses segmented information in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which uses a management approach to determine reportable segments. The Company operated its business in the USA and Canada.

	q)	Expenses of Offering

		The Company accounts for specific incremental costs directly to a proposed or actual offering of securities as a direct charge against the gross proceeds of the offering.

	r)	Reclassification

		Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation

F-12

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	s)	Newly Adopted Financial Pronouncements

		In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits an entity to irrevocably elect fair value on a contract-by-contract basis as the initial and subsequent measurement attribute for many financial assets and liabilities and certain other items including insurance contracts. Entities electing the fair value option would be required to recognize changes in fair value in earnings and to expense upfront cost and fees associated with the item for which the fair value option is elected. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS No. 157, Fair Value Measurements. The Company adopted the standard on May 1. 2008.

		In June 2007, the FASB issued EITF Issue No.07-03, “Accounting for Non-Refundable Advance Payments for Goods or Services to Be Used in Future Research and Development Activities” ( "EITF 07-03"). EITF 07-03 provides guidance on whether non- refundable advance payments for goods that will be used or services that will be performed in future research and development activities should be accounted for as research and development costs or deferred and capitalized until the goods have been delivered or the related services have been rendered. EITF 07-03 is effective for fiscal years beginning after December 15, 2007. The Company adopted the standard on May 1, 2008 and does not expect the standard to have a significant impact on the Company's financial position and results of operations.

	t)	New Accounting Pronouncements

		In December 2007, the FASB issued SFAS No. 141 (Revised) “Business Combinations”. SFAS 141 (Revised) establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. The statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective for the fiscal year commencing May 1, 2009. The management is in the process of evaluating the impact SFAS 141 (Revised) will have on the Company’s financial statements upon adoption.

		In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in consolidated Financial Statements - an Amendment of ARB No. 51." This statement requires that noncontrolling or minority interests in subsidiaries be presented in the consolidated statement of financial position within equity, but separate from the parents' equity, and that the amount of the consolidated net income attributable to the parent and to the noncontrolling interest be clearly identified and presented on the face of the consolidated statement of income.

F-13

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	t)	New Accounting Pronouncements (Continued)

		SFAS No. 160 is effective for the fiscal years beginning on or after December 15, 2008. Currently the Company does not anticipate that this statement will have an impact on its financial statements.

		In March 2008, the FASB issued SFAS No.161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No.133”, which requires additional disclosures about the objectives of the derivative instruments and hedging activities, the method of accounting for such instruments under SFAS No.133 and its related interpretations, and a tabular disclosure of the effects of such instruments and related hedged items on our financial position, financial performance, and cash flows. SFAS No.161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, We are currently assessing the potential impact that adoption of SFAS No.161 may have on our financial statements.

		In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (“SFAS No. 162”). SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with U.S. generally accepted accounting principles for nongovernmental entities. SFAS No. 162 is effective 60 days following the SEC's approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company does not expect there to be any significant impact of adopting SFAS 162 on its financial position, cash flows and results of operations.

		In May 2008, the FASB issued SFAS No.163 “Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60”, which requires that an insurance enterprise recognize a claim liability prior to an event of default (insured event) when there is evidence that credit deterioration has occurred in an insured financial obligation. This Statement also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities. This Statement requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163. is effective for financial statements issued for fiscal years beginning after December 15, 2008. Currently the Company does not anticipate that this statement will have an impact on its financial statements.

		In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity’s Own Stock (“EITF 07-5”). EITF 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market- based employee stock option valuation instruments on the evaluation.

F-14

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

2.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	t)	New Accounting Pronouncements (Continued)

		EITF 07-5 is effective for fiscal years beginning after December 15, 2008. The Company is currently assessing the impact, if any, on its consolidated financial position and results of operations.

		In December 2008, the FASB issued FSP FAS140-4 and FIN 46(R)-8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities. This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged. We do not expect the adoption of the FSP will have any impact on our results of operations.

3.	DISPOSAL OF BUSINESS SEGMENT

	On July 7, 2008, the Company completed the disposition of Worldbid International Inc. (“Worldbid”), its internet business, to Marktech Acquisition Corp. (“Marktech”).

	The disposition was completed pursuant to the terms and conditions of the Share Purchase Agreement dated June 5, 2008 (the “Share Purchase Agreement”) among the Company, Marktech and Worldbid. Under the terms of the Share Purchase Agreement, the Company sold all of the shares of Worldbid and all Worldbid related business assets to Marktech in consideration of $50,000 and the assumption of approximately $94,000 in liabilities. The purchase price consisted of $25,000 in cash and a non-interest bearing promissory note in the amount of $25,000 in favor of the Company due on August 6, 2008. As additional consideration, the Company assigned to Marktech its right and interest in the intercompany loan between the Company and Worldbid. In addition, Marktech will indemnify the Company from any liabilities or damages arising out of the liabilities of Worldbid and the liabilities assumed by Marktech. The Company disposed of the subsidiary in order to concentrate its efforts on its core oil and gas business.

	The following table summarizes the consideration received and the book value of assets and liabilities disposed of:

				Worldbid Net
		Worldbid		Business
		International		Assets Held by
		Inc.		Royalite		Total

Cash and cash equivalents	$	1,482	$	24,460	$	25,942
Other amounts receivables		1,001		795		1,796
Amount owing to Royalite		2,654,300		-		2,654,300
Deposits		12,131		20,404		32,535
Equipment		1,382		1,535		2,917
Total assets eliminated on disposal	$	2,670,296	$	47,194	$	2,717,490

F-15

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

3.	DISPOSAL OF BUSINESS SEGMENT (Continued)

				Worldbid Net
		Worldbid		Business
		International		Assets Held by
		Inc.		Royalite		Total

Accounts payable and accrued liabilities	$	69,676	$	10,608	$	80,284
Deferred income		-		14,070		14,070
Total liabilities eliminated on disposal		69,676		24,678		94,354

Accumulated other comprehensive loss
eliminated on disposal		-		-		9,425

Net Assets eliminated on disposal						2,632,561

Consideration received
Cash						25,000
Note receivable – fully settled						25,000
Forgiveness of amount owing to Royalite						2,654,300
						2,704,300

Net Gain on Disposal					$	71,739

4.	LICENSE RIGHTS

	License rights consist of the following:

		JANUARY 31			APRIL 30
		2009			2008

Licensing rights	$	3,000		$	3,000
Less: Accumulated depreciation		(551	)		(401	)
	$	2,449		$	2,599

5.	DEPOSIT ON UNPROVEN OIL AND GAS PROPERTIES – RELATED PARTY

		JANUARY 31		APRIL 30
		2009		2008

May Petroleum Inc. (a)	$	-	$	12,700,000

May Petroleum Inc. (b)		215,000		-

	$	215,000	$	12,700,000

F-16

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

5.	DEPOSIT ON UNPROVEN OIL AND GAS PROPERTIES – RELATED PARTY (Continued)

	a)	On April 2, 2008, the Company issued 50,000,000 common shares and advanced $340,000 to May Petroleum Inc. (“May”) pursuant to an oil and gas property agreement whereby the Company would acquire May Petroleum, Inc’s interest in an oil and gas prospect in Matagorda County, Texas. The fair value of the stock issuance was $12,000,000. As at April 30, 2008 title to the interest in the property had not been transferred to the Company. Transfer of title was completed on June 2, 2008.

		As a result of the share issuance, May Petroleum Inc. became the Company’s majority shareholder, and the President of May Petroleum was appointed as an officer and director of the Company.

		The Company also issued 1,000,000 common shares as finders fees in relation to the above transaction. The fair value of the stock issuance was $360,000.

	b)	During the period ended January 31, 2009, the Company advanced $215,000 to May Petroleum Inc. pursuant to an oil and gas property agreement whereby the Company will acquire a 100% working interest in 895 acres of an oil and gas prospect in Matagorda County, Texas.

6.	DEPOSIT ON UNPROVEN OIL AND GAS PROPERTIES

		JANUARY 31		APRIL 30
		2009		2008

Fort Bend County, Texas. (a)	$	100,000	$	-

Matagorda County, Texas. (b)		62,000		-

	$	162,000	$	-

	a)	On July 2, 2008, the Company advanced $100,000 pursuant to an oil and gas property agreement whereby the Company will acquire a 26.25% working interest in 935 acres of an oil and gas prospect in Fort Bend County, Texas.

	b)	On July 3, 2008 the Company advanced $62,000 pursuant to an oil and gas property agreement whereby the Company will acquire a 100 % working interest in 895 acres of an oil and gas prospect in Matagorda County, Texas.

F-17

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

7.	UNPROVEN OIL AND GAS PROPERTIES

	Unproven oil and gas properties consist of the following:

		JANUARY 31			APRIL 30
		2009			2008

Acquisition costs	$	18,650,800		$	2,564,701
Less: Write off of abandoned property		(92,000	)		(92,000	)
		18,558,800			2472,701

Exploration costs		3,044,075			2,897,025
Less: Write off of cost on abandoned well		(2,849,313	)		(2,849,313	)
		194,762			47,712

	$	18,753,562		$	2,520,413

On March 3, 2006 the Company acquired oil and gas leases from the Bureau of Land Management (BLM) representing a 100% working interest in 6 parcels totaling 10,127 acres situated in the Piute and Sanpete Counties of Utah. The Company has paid the BLM a total of $288,510 for the lease acquisition costs.

On July 25, 2006 the Company acquired an oil and gas lease from a private land owner representing a 100% working interest in approximately 1,326 acres in Piute County, Utah. The lease continues for 5 years with an option to extend the lease for another 5 years at 150% of the original payment. The contract includes royalties of 1/8 ^th of the gross oil production proceeds from any well on the property each year, payable monthly. The Company paid the private land owner $12,030 for the lease acquisition costs.

On August 15, 2006 the Company acquired oil and gas leases from the BLM representing a 100% working interest in 17 parcels totaling 19,913 acres situated in the Piute, Sanpete and Wayne Counties of Utah. The Company paid the BLM a total of $1,063,091 for the lease acquisition costs.

On September 1, 2006 the Company acquired oil and gas leases from the State of Utah representing a 100% working interest in 8 parcels totaling 3,094 acres situated in Piute County, Utah. The Company paid the State of Utah a total of $180,157 for the lease acquisition costs.

On November 21, 2006 the Company acquired oil and gas leases from the BLM representing a 100% working interest in 4 parcels totaling 3,379 acres situated in Piute County, Utah. The Company paid the BLM a total of $161,435 for the lease acquisition costs.

On January 30, 2007 the Company acquired oil and gas leases from the State of Utah representing a 100% working interest in 5 parcels situated in Piute County, Utah. The Company paid the State of Utah a total of $34,432 for the lease acquisition costs.

F-18

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

7.	UNPROVEN OIL AND GAS PROPERTIES (Continued)

	On February 7, 2007 the Company acquired oil and gas leases from the BLM representing a 100% working interest in 5 parcels totaling 9,300 acres situated in Piute County, Utah. The Company paid the BLM a total of $13,952 for the lease acquisition costs.

	On February 19, 2007 the Company acquired an undivided 2.5% mineral royalty interest to all oil and gas produced and sold off land under the existing oil and gas lease agreement dated May 23, 2005 between Crazy R Ranch, Inc and Silver Summit, L.C., and all extensions thereafter. Aforementioned lease from the Crazy R Ranch represents a 100% working interest in 9 parcels totaling 298 acres situated in Sevier County, Utah. The Company paid Crazy R. Ranch $200,000 for the mineral royalty interest.

	On February 20, 2007 the Company acquired oil and gas leases from the BLM representing a 100% working interest in 11 parcels totaling 18,631 acres situated in Piute County, Utah. The Company paid the BLM a total of $301,943 for the lease acquisition costs.

	From October 1, 2006 to April 30, 2007, the Company executed 34 oil and gas leases with private land owners, representing a 100% working interest in approximately 11,836 gross acres situated in the Piute, Garfield and Iron Counties of Utah. The Company paid the private land owners $158,134 for the lease acquisition costs. Lease terms are for 5 years, with an option to extend for an additional 5 years. There are no future payment obligations on the leases.

	On September 28, 2007, the Company renewed oil and gas leases with the BLM representing a 100% working interest in 17 parcels totaling 19,913 acres situated in the Piute, Sanpete and Wayne Counties of Utah. The Company paid the BLM a total of $29,876 for the annual lease costs.

	On October 1, 2007, the Company renewed oil and gas leases with the State of Utah representing a 100% working interest in 8 parcels totaling 2,815 acres situated in Piute County, Utah. The Company paid the State of Utah a total of $4,551 for the annual lease costs.

	On October 1, 2007, Royal Petroleum Company Inc. (the “Company”) entered into a Letter Agreement (the “Letter Agreement”) with Central Utah Lease Acquisition, L.P., a Utah Limited Partnership (“CULA”), whereby CULA granted the Company an option to purchase 62.5% of CULA’s interest in an oil and gas project known as the Keystone Project.

	The Keystone Project is located in Sanpete, Juab, and Severe Counties, Utah and consists of 66,700 net leasehold acres, with a combined net revenue interest of 80%. If the Company exercises the option, of which there is no assurance, the Company will have an opportunity to earn approximately 41,688 net leasehold acres. In consideration for this option, the Company issued to CULA 200,000 shares of common stock with a fair value of $92,000. In order to exercise this option, the Company must provide CULA with a written notice of exercise on or before November 21, 2007.

F-19

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

7.	UNPROVEN OIL AND GAS PROPERTIES (Continued)

	Upon exercise of the option, the parties will enter into a formal agreement for the purchase of 62.5% of CULA’s interest in the Keystone Project with the following principal terms and conditions:

	(a)	To purchase the interest in the Keystone Project, the Company will pay and issue the following consideration to CULA:

		(i)	$1,500,000 in cash on or before November 26, 2007 (the “Keystone Closing Date”);

		(ii)	7,300,000 shares of the Company’s common stock on or before the Keystone Closing Date. The Company will grant CULA piggyback registration rights in respect of the shares issued. If the Company has not filed a registration statement to register the shares on or before May 1, 2008, the Company, at its own expense, will file a registration statement to register the shares;

		(iii)	$2,260,000 in cash on or before December 31, 2007;

		(iv)	$2,500,000 in cash on or before June 15, 2008;

		(v)	$2,500,000 in cash on or before December 15, 2008; and

		(vi)	$2,500,000 in cash on or before June 15, 2009.

	(b)	The Company will also be required to drill two oil and/or gas wells within a specified area of the Keystone Project and to carry CULA as a 25% working interest owner through the completion or plugging of those wells (the “Carried Wells”).

		Upon exercise of the option, the Company and CULA will also enter into an operating agreement to further develop the Keystone Project. Under the terms of the proposed operating agreement, the Company will be the operator and CULA will be a non-operator of the Keystone Project. A condition of the proposed operating agreement is that Clayton Williams Energy Inc. (“CWEI”) must agree to be a party to the operating agreement. CWEI owns an undivided 50% working interest in an area covering approximately 30,000 gross acres located on the southern portion of the Keystone Project.

In the event that CWEI is unwilling or unable to enter into the operating agreement on or before the Keystone Closing Date and both the Company and CULA are prepared to close the transaction, then the parties agreed that the terms of the Letter Agreement shall be extended until CWEI’s signature had been obtained.

The Company failed to meet the conditions for closing, and accordingly the fair value of the 200,000 common shares issued of $92,000 has been written off. During the year ended April 30, 2008 the Company decided to no longer pursue this property.

F-20

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

7.	UNPROVEN OIL AND GAS PROPERTIES (Continued)

	On January 1, 2008, the Company renewed oil and gas leases with the BLM representing a 100% working interest in 4 parcels totaling 3,379 acres situated in Piute County, Utah. The Company paid the BLM a total of $5,070 for the annual lease costs.

	On April 3, 2008, the Company renewed oil and gas leases with the BLM representing a 100% working interest in 5 parcels totaling 9,300 acres situated in Piute County, Utah. The Company paid the BLM a total of $13,952 for the annual lease costs.

	On April 14, 2008, the Company renewed oil and gas leases with the State of Utah representing a 100% working interest in 5 parcels totaling 3,501 acres situated in Piute, Iron and Garfield Counties of Utah. The Company paid the State of Utah a total of $5,568 for the annual lease costs.

	From May 1, 2007 to April 30, 2008, the Company capitalized $47,712 in engineering costs related to regulatory reporting and filing, and the mapping, surveying, permitting and site release of future planned well drilling locations.

	From May 1, 2008 to July 31, 2008, the Company capitalized $16,086,099 in lease acquisition costs to acquire interests in oil and gas properties in Matagorda County, Texas and in Terrebonne Parish, Louisiana.

	From May 1, 2008 to January 31, 2009, the Company capitalized $147,050 in legal fees, consulting fees, engineering fees, lease renewal costs and environmental service costs related to acquiring oil and gas properties in Matagorda County, Texas and in Terrebonne Parish, Louisiana.

8.	LEASES PAYABLE - RELATED PARTY

	During the three month period ended July 31, 2008, the Company advanced $500,000 to May pursuant to an oil and gas property agreement whereby the Company acquired May’s interest in 1,744 acres of an oil and gas prospect in Matagorda County, Texas. Transfer of title was completed on June 2, 2008, and the Company recorded a payable of $500,000 for the remaining balance due to May. On August 8, 2008, the Company paid May $150,000. As at January 31, 2009, the balance remaining was $350,000.

	During the three month period ended July 31, 2008, the Company entered into an Assignment of Oil, Gas and Mineral Leases on 910 acres in Matagorda County, Texas. The Company paid $159,023 to a non-related party, $250,000 to May and recorded a payable of $7,445 due to May.

F-21

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

9.	LEASES PAYABLE

	On May 1, 2008, the Company entered into a Participation Agreement on a lease of 699 acres of oil and gas property located in Terrebonne Parish, Louisiana. The Company paid $163,625 in cash and recorded a payable of $1,716,000.

	On June 2, 2008, the Company entered into an Assignment of Oil, Gas and Mineral Leases on 110 acres in Matagorda County, Texas. The Company paid $22,114 in cash and recorded a payable due of $34,028.

10.	LOANS PAYABLE – RELATED PARTIES

	Loans payable comprise the following:

		JANUARY 31		APRIL 30
		2009		2008

Amount due to a director, is unsecured, payable
on demand. and non interest bearing	$	122,900	$	-
Amount due to a director, is unsecured, payable
on demand and bears interest at 10% per
annum.		29,180		26,680
Amount due to significant shareholder,
unsecured, payable on demand and non
interest bearing		20,070		20,070

	$	172,150	$	46,750

11.	SHARE SUBSCRIPTIONS RECEIVED

	At January 31, 2009, the Company had received share subscriptions amounting to $nil pursuant to private placement offerings. (April 30, 2008 – $364,985, pursuant to a private placement of 8,660,000 common shares at $0.25 per share.).

12.	NOTES PAYABLE

	Notes payable of $20,000 (April 30, 2008 - $20,000) are due upon demand, bear interest at 15% per annum, payable annually, and are secured by a general security agreement over the assets of Royalite Petroleum Company Inc. and by a subordination of intercompany debt between Royalite Petroleum Company Inc and Worldbid International Inc.

F-22

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

13.	CAPITAL STOCK

	a)	Common and Preferred Stock:

		As of January 31, 2009, there were 100,667,270 shares of common stock outstanding and zero shares of preferred stock outstanding. Outstanding shares of common stock consist of the following:

		i)	On February 8, 2006, the Company issued 18,000,000 shares of common stock to five individuals for cash at $0.001 per share.

		ii)	On February 8, 2006, the Company issued 3,000,000 shares of common stock for licensing rights at $0.001 per share.

		iii)	On March 2, 2006, the Company issued 2,000,000 shares of common stock to seven individuals for cash at $0.10 per share.

		iv)	On March 3, 2006, the Company issued 100,000 shares of common stock to an individual for cash at $0.10 per share.

		v)	On April 30, 2006, the Company issued 1,860,667 shares of common stock to 24 individuals for cash at $0.30 per share.

		vi)	On February 28, 2007, the Company issued 10,914,603 shares of common stock pursuant to the completion of the merger with Worldbid.

		vii)	On March 23. 2007, the Company issued 1,032,000 units at a price of $1.50 per unit, each unit consisting of one share of common stock and one half of one share purchase warrant. Each whole warrant entitles the holder to purchase on additional share of common stock at a price of $1.75 per share, for a one year period from the date of issuance of the units. The Company recorded a discount of $763,800 to reflect the difference between the offering price and the market price on the date the offering was entered into.

		xiii	On October 12, 2007, the Company issued 200,000 common shares pursuant to an oil and gas property agreement. The fair value of the issuance was $92,000

		ix)	On November 30, 2007, the Company issued 100,000 common shares pursuant to on investor relations agreement. The fair value of the issuance was $57,000.

		x)	On April 2, 2008, the Company issued 50,000,000 common shares to May Petroleum Inc. (“May”) pursuant to an oil and gas property agreement. The fair value of the issuance was $12,000,000. (Note 6)

		xi)	On April 2, 2008, the Company issued 1,000,000 common shares as commission in connection with the oil and gas property acquired on April 2, 2008 from May Petroleum Inc. The fair value of the issuance was $360,000. (Note 6)

F-23

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

13.	CAPITAL STOCK (Continued)

	a)	Common and Preferred Stock (Continued)

		xii)	On August 6, 2008, the Company completed a private placement of 8,660,000 shares of common stock at a price of $0.25 per share for gross proceeds of $2,165,000.

		xiii)	On September 8, 2008, the Company issued 1,000,000 common shares pursuant to an investor relations contract.

		xiv)	On October 14, 2008, the Company completed a private placement of 1,600,000 units at a price of $0.10 per unit for aggregate proceeds of $160,000. Each unit comprises one common share and one share purchase warrant. Each warrant entitles the holder to acquire one common share at $0.12 until October 13, 2010.

			The fair value of the warrant is $78,600 based on the Black-Scholes pricing model. The fair value of the warrant is estimated on the date of closing using the Black- Scholes option pricing model with the following weighted average assumptions:

		Period Ended
		October 31,
		2008

	Risk free interest rate	2.72%
	Expected life	2 years
	Expected volatility	134%
	Expected dividend yield	-
	Weighted average of fair value of options granted	$0.097

xv)

On January 14, 2009 the Company completed a private placement of 1,200,000 common shares at a preice of $0.25, fof gross proceeds of $300,000.

	b)	Stock Options

		The Company approved the 2008 Stock Option Plan (the “Plan”) for directors, employees and consultants of the Company on October 15, 2008. The Company reserved 12,000,000 shares of common stock of its unissued share capital for the Plan.

		The Plan provides for the administrator to have absolute discretion with regard to the vesting provision of options granted pursuant to the plan.

F-24

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

13.	CAPITAL STOCK (Continued)

	b)	Stock Options (Continued)

		The exercise price of options granted under the Plan will be as follows:

		i)	Directors and employees

			not less than 100% of the full market value per common share at the date of grant, and in the case of incentive stock options granted to a participant who controls 10% or more of the totoal combined voting power of all classes of stock of the Company, not less than 110% of the full market value on the date of the grant.

		ii)	Consultants

			not less than 70% of the fair market value per common share at the date of grant;

Options granted under the Plan that have vested will expire the earlier of:

	a)	ten years from the date of grant;
	b)	the last day of the option term;
	c)	the termination of the officer, employee or consultant upon cause unless the plan administrator determines otherwise;
	d)	30 days after the termination of the officer, employee or consultant other than by cause, death or disability;
	e)	six months year after the date of termination of the officer, employee or consultant due to death or disability.

Options granted under the Plan that have not vested will expire upon the employment termination date.

A summary of changes in stock options for the nine month period ended January 31, 2009, and the year ended April 30, 2008 is as follows:

NINE MONTH

PERIOD ENDED

YEAR ENDED

JANUARY 31, 2009

APRIL 30, 2008

Weighted

Weighted

Number

Average

Number

Average

Exercise

Exercise

Shares

Price

Price

Outstanding, beginning of period

Granted

8,500,000

0.145

Outstanding, end of period

8,500,000

0.145

F-25

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

13.	CAPITAL STOCK (Continued)

	b)	Stock Options (Continued)

		The following is a summary of the status of stock options outstanding and exercisable at January 31, 2009:

		Weighted
		Average
Number		Remaining
Of	Exercise	Contractual
Options	Price	Life

2,000,000	$ 0.16	1.71 years
6,500,000	0.14	1.71 years

	c)	Share Purchase Warrants

		A summary of changes in share purchase warrants for the nine month period ended January 31, 2009, and the year ended April 30, 2008 is as follows:

	NINE MONTH
	PERIOD ENDED			YEAR ENDED
	JANUARY 31, 2009			APRIL 30, 2008
			Weighted				Weighted
	Number		Average	Number			Average
	Of		Exercise	Of			Exercise
	Shares		Price	Shares			Price

Outstanding, beginning of period	-	$	-	2,971,098		$	1.22

Issued	1,600,000		0.12	-			-
Expired	-		-	(2,971,098	)		(1.22	)

Outstanding, end of period	1,600,000	$	0.12	-		$	-

F-26

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

13.	CAPITAL STOCK (Continued)

	c)	Share Purchase Warrants (continued)

		A summary of changes in share purchase warrants for the nine month period ended January 31, 2009, and the year ended April 30, 2008 is as follows:

	NINE MONTH
	PERIOD ENDED			YEAR ENDED
	JANUARY 31, 2009			APRIL 30, 2008
			Weighted				Weighted
	Number		Average	Number			Average
	Of		Exercise	Of			Exercise
	Shares		Price	Shares			Price

Outstanding, beginning of period	-	$	-	2,971,098		$	1.22

Issued	1,600,000		0.12	-			-
Expired	-		-	(2,971,098	)		(1.22	)

Outstanding, end of period	1,600,000	$	0.12	-		$	-

The following is a summary of the status of share purchase warrants outstanding and exercisable at January 31, 2009:

		Weighted
		Average
Number		Remaining
Of	Exercise	Contractual
Options	Price	Life

1,600,000	$ 0.12	1.71 years

	d)	Stock-Based Compensation

		Compensation costs attributable to share options granted to employees, directors or consultants is measured at fair value at the grant date and expensed with a corresponding increase to additional paid in capital over the vesting period. Upon exercise of the stock options, consideration paid by the option holder is recorded as an increase to share capital and additional paid-in capital. Compensation costs attributable to the issuance of share purchase warrants to employees, directors or consultants, is measured at fair value at the date of issuance of the warrant and expensed with a corresponding increase to additional paid in capital at the time of issuance of the warrant. Upon exercise of the warrant, consideration paid by the warrant holder is recorded as an increase to share capital and additional paid-in capital.

F-27

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

13.	CAPITAL STOCK – (Continued)

	d)	Stock-Based Compensation (Continued)

		During the nine month period ended January 31, 2009, 8,500,000 stock options were granted. (Nine month period ended January 31, 2008 – no stock options were granted) The total fair value of the 8,500,000 options granted during the nine month period ended January 31, 2009 was $784,000 based on the Black-Scholes option pricing model. Since the options vested immediately the Company recorded $784,000 in stock-based compensation for the options vesting during the nine month period ended January 31, 2009. (Nine month period ended January 31, 2008 - $nil).

		The weighted average assumptions used in calculating the fair value of stock options granted during the nine month period ended January 31, 2009 using the Black-Scholes option pricing model are as follows:

		PERIOD ENDED
		JANUARY 31,
		2009

	Risk free interest rate	2.72%
	Expected life	2 years
	Expected volatility	134%
	Expected dividend yield	-
	Weighted average of fair value of options granted	$0.09

14.	COMMITMENTS AND CONTINGENCIES

	a)	Commitments

		On April 2, 2008, the Company entered into a management agreement with the Chairman and Chief Executive Officer. Pursuant to the terms of the management agreement, a management fee of $10,000 per month is to be paid based on a commitment to work 90 hours per month on our business development. The term of the management agreement is for a period of two years expiring at the close of business on March 31, 2010, unless otherwise terminated pursuant to the terms of the agreement or extended by the Board.

		On September 8, 2008, the Company entered into a consulting agreement with La Jolla IPO Incorporated. (“LIPO”) whereby LIPO will provide investor relations and equity capital financing services to the Company for a term of six months expiring March 7, 2009. In consideration for the services to be rendered, the Company granted LIPO 1,000,000 common shares (issued) and will also pay finders fees of 7.667% of any completed equity or loan financing generated by LIPO. Furthermore should LIPO’s efforts result in Joint Ventures/Sales or Sales distribution contracts being entered into by the Company, the Company will remunerate LIPO an introduction fee of 2% of the value of any such arrangement.

F-28

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

14.	COMMITMENTS AND CONTINGENCIES (Continued)

	b)	Contingencies

		The Company is a defendant in a suit that seeks the return of certain funds invested in the Company, plus damages and costs. Specifically, the Bank of Montreal (the “Bank”) has claimed for the return of certain monies invested in the Company from funds they claim were misappropriated from the Bank. The Company has filed a statement of defense denying any liability on the basis that no misappropriated funds were received by the Company. Management and legal counsel for the Company are of the opinion that the Bank’s claim is without merit.

		On September 13, 2007, the Company was served with notice of a claim filed against us in the Colorado District Courts by DHS Drilling Company (“DHS”). DHS has claimed that we are indebted to them in the amount of $555,802 on account of materials and services provided by them in connection with the drilling of the Royalite State 16-1 Well.

		On August 31, 2008, we entered into a settlement agreement with DHS. Under the terms of the settlement agreement, we agreed to pay $100,000 to DHS on execution of the settlement agreement and $484,820.11 thereafter. The Company has paid $25,000 of the initial $100,000 under the settlement agreement to DHS. Due to our inability to pay the initial $100,000, DHS obtained a judgment order against us in the amount of $559,830.11 (the balance remaining under the settlement agreement) plus interest at a rate of 10% per annum. As at January 31, 2009, the Company has provided for $574,000 in relation to this claim.

15.	RELATED PARTY TRANSACTIONS

	Related party transactions which have not been disclosed elsewhere in the financial statements include the following:

	a)	Included in accounts payable is $168,147 (April 30, 200 - $111,991) due to directors or Companies controlled by directors of the Company. The amount is unsecured and without specified terms of repayment.

	b)	Included in liabilities held for discontinued operations is $nil (April 30, 2007 - $4,603) due to a director.

	c)	During the nine month periods ended October 31, 2008 and 2007 the Company accrued or was charged the following amounts by directors, and companies with a common director or officer:

F-29

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

15.

RELATED PARTY TRANSACTIONS

		January 31		January 31
		2009		2008

Balance Sheet Items
Unproven Oil and Gas Properties	$	13,612,445	$	-

Income Statement Items
Consulting fees		30,000		25,200
Interest expense		2,001		1,626
Management fees		180,000		90,000
Oil and gas exploration expenses- consulting
fees		1,107		90,000
Stock based compensation		412,000		-
Expenses included in (gain) loss on
discontinued operations (net)		9,661		82,891

	$	634,769	$	289,717

16.	SEGMENTED INFORMATION

	Prior to the disposal of the Worldbid business to business segment of the Company during the nine month period ended January 31, 2009, the Company operated in two geographic and business segments as follows:

	a)	the oil and gas industry (USA) and;
	b)	the online business-to-business industry (Canada).

	Details on a geographic basis of the assets, liabilities and loss for the nine month period ended January 31, 2009 and the year ended April 30, 2008 are as follows:

October 31, 2008		USA		Canada			Total

Assets	$	19,246,717	$	-		$	19,246,717
Liabilities	$	3,620,076	$	-		$	3,620,076
Loss (Income) for the
period	$	1,558,742	$	(511	)	$	1,558,231

April 30, 2008		USA		Canada		Total

Assets	$	15,350,440	$	41,879	$	15,392,319
Liabilities	$	1,711,857	$	82,893	$	1,794,750
Loss for the period	$	1,515,988	$	37,528	$	1,553,516

F-30

ROYALITE PETROLEUM COMPANY INC.
(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2009
(Stated in U.S. Dollars)
(Unaudited)

17.	SUBSEQUENT EVENTS

	Subsequent to January 31, 2009, the following additional events and transactions occurred:

On February 25, 2009, the Company’s board of Directors approved a 1-for-20 reverse split of the Company’s common stock. The Reverse split is subject to shareholder approval and no amounts have been restated in the financial statements for the potential effect of the reverse split.

On February 29, 2009, the Board of Directors approved a private placement offering of 4,000,000 units at a post reverse split price of $0.50 per Unit for gross proceeds of $2,000,000. Each Unit will consist of one share of the Company’s common stock and one share purchase warrant. Each warrant will be exercisable into one common share of the Company for a period of three years. The post split exercise price of the warrants is $1.00. At this time there is no assurance that the private placement offering will be completed.

F-31

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II – Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and Current Reports, we file from time to time with the United States Securities and Exchange Commission (the “SEC”).

INTRODUCTION

We were incorporated under the laws of the State of Nevada on August 10, 1998.

We are engaged in the business of the acquisition and exploration of oil and gas properties and prospects. We hold interests in certain oil and gas properties and prospects that we call the Airport Leases, the West Lake Boudreaux Prospect, the S. Rosenburg Prospect and the Central Utah Hingeline Project, the details of which are set out below under the heading “Oil and Gas Exploration Activities.”

RECENT CORPORATE DEVELOPMENTS

The following corporate developments occurred since the filing of our last Quarterly Report on Form 10-Q with the SEC on December 19, 2008:

1.	On January 14, 2009, we issued 1,200,000 shares at a price of $0.25 per share for gross proceeds of $300,000 pursuant to a private placement approved by our board of directors on August 7, 2008 and amended August 28, 2008. The shares were issued to two accredited investors pursuant to Rule 506 of Regulation D of the Securities Act of 1933 (the “Securities Act”). Upon the issuance of the 1,200,000 shares, we terminated this offering.

2.	On February 24, 2009, Logan B. Anderson resigned as our President, Secretary, Treasurer and as a member of our Board of Directors. Mr. Anderson resigned to pursue other business interests. Mr. Anderson’s resignation was not due to any disagreements relating to our operations, policies or practices.

4.	Also on February 24, 2009, Norris R. Harris, our Chairman, Chief Executive Officer and a member of our Board of Directors, was appointed our President and D. James Fajack, our Chief Financial Officer and a member of our Board of Directors, was appointed our Secretary and Treasurer in place of Mr. Anderson.

5.	On February 25, 2009, our Board of Directors approved a 1-for-20 reverse split of our common stock (the “Reverse Split”). Our Board of Directors believes that tightening the capital structure by completing the Reverse Split will assist us in obtaining the financing required for growth and successful implementation of our business plan.

	Upon completion of the Reverse Split, our authorized common stock will be decreased from 500,000,000 shares of common stock, par value $0.001 per share, to 25,000,000 shares of common stock, par value $0.001 per share, and stockholders will own one share of common stock for every 20 shares of common stock held before the Reverse Split. We anticipate that the Reverse Split will be effected on or about March 31, 2009.

6.	On February 25, 2009, our Board of Directors have approved a private placement offering of up to 4,000,000 units (the “Units”) at a post-reverse split price of $0.50 per Unit for gross proceeds of

$2,000,000 (the "Private Placement Offering"). Each Unit will consist of one share of our common stock and one share purchase warrant, each warrant entitling the subscriber to purchase an additional share of our common stock for a period of three years, subject to call rights exercisable by us, following the date of issuance at a post-reverse split exercise price equal to $1.00 per share. The Private Placement Offering will be made in the United States to persons who are accredited investors as defined in Regulation D of the Securities Act. There is no assurance that the Private Placement Offering or any part of it will be completed.

OIL AND GAS EXPLORATION ACTIVITIES

Airport Leases

On April 2, 2008, we entered into an agreement with May Petroleum, Inc. (“May”), a Texas company controlled by Norris R. Harris, our Chief Executive Officer, President, Chairman and Director, to acquire May’s interest in an oil and gas prospect (the “Prospect”) in Matagorda County, Texas, including obtaining an assignment of a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) to acquire a 70% net revenue interest in a lease covering approximately 1,500 acres (the “Airport Lease”) and obtaining and reviewing significant geophysical, geological, title and engineering data (the “Data”) on the Airport Lease and an area of mutual interest (the “Area of Mutual Interest”) covering 30 square miles surrounding the Airport Lease.

Under the terms of the Agreement, May transferred and assigned to us all its right, title and interest in the Prospect, the Purchase and Sale Agreement and the Data in consideration of the following:

(a)	we issued 50,000,000 shares of our common stock to May;

(b)	we reimbursed May for the $100,000 deposit it paid under the Purchase and Sale Agreement; and

(c)	we paid $900,000 in cash to May.

The Agreement also contemplates that any other property interest acquired in the Area of Mutual Interest shall become part of the Prospect and subject to the Agreement.

We are responsible for making all payments and completing all acts required under the Purchase and Sale Agreement or any other agreements in respect of properties comprising the Prospect.

Under the terms of the Airport Lease, we commenced operations to drill on the Airport Lease on August 1, 2008. In addition, we paid an operation bonus payment of $150,000 to the landowner.

Subsequent to entering into the Agreement, we have acquired additional acreage in and around the Airport Leases. As a result, we have increased our acreage to approximately 2,764 acres.

West Lake Boudreaux Prospect

In 2008, we acquired a 27.5% working interest (19.8% net revenue interest) in oil and gas leases totaling 192.12 net acres and 698.62 gross acres in the Westlake Boudreaux Field located in Terrebonne Parish, Louisiana shallow state waters. An initial will is to be drilled to a depth of 13,900 feet to test the Tex. W-1, Tex. W.B, and Tex W-2 sands which are productive in other wells in the field. The commencement of the initial well is subject to our obtaining substantial financing. Accordingly, we are uncertain as to the date of commencement of the initial well.

S. Rosenburg Prospect

In 2008, we acquired a 26.25% working interest in oil and gas leases totaling 935 acres located in Fort Bend, Texas that we call the “S. Rosenburg Prospect."

Central Utah Hingeline Project

We have leased 67,025 net acres covering 69,759 gross acres along the four main Hingeline faults located within a five county area of Southern Utah. Our exploration and development program on this property has been

suspended pending our ability to obtain additional financing as we intend to focus our resources on the development of the Airport Leases and the West Lake Boudreaux Prospect.

PLAN OF OPERATION

Our plan of operation over the next twelve months is to continue with the exploration and development of our oil and gas operations. We plan to focus our resources on the exploration and development of the Airport Leases and West Lake Boudreaux Prospect.

Airport Leases

We commenced the preliminary work to our drilling operations on the Airport Leases on August 1, 2008. Our drilling program on the Airport Leases is expected to cost between $100,000 to $16,000,000. The recommencement of this drilling program will be dependent upon our ability to obtain substantial financing.

West Lake Boudreaux Prospect

Subject to substantial financing, the operator of the West Lake Boudreaux Prospect plans to drill a well to a depth of 13,900 feet to test the Tex. W-1, Tex. W.B, and Tex W-2 sands which are productive in other wells in the field. The well is projected to cost $6,453,300 to drill and complete with our portion estimated at $1,774,657. The commencement of this drilling program will be dependent upon our ability to obtain substantial financing. Accordingly, we are uncertain as to the date of commencement of the initial well.

We do not currently have, and are not expected to have, sufficient capital resources to meet all of the anticipated costs of our plan of operation for the next twelve months. As such, our ability to complete the plan of operation for our oil and gas operations will be dependent upon our ability to obtain additional financing.

RESULTS OF OPERATIONS

Three Months and Nine Months Summary


		Three Months Ended					Percentage		Nine Months Ended					Percentage
		January 31,					Increase /		January 31,					Increase /
		2009			2008		(Decrease)		2009			2008		(Decrease)
Revenue	$	-		$	-		n/a	$	-		$	-		n/a
Expenses		(212,250	)		(216,024	)	(1.7)%		(1,582,030	)		(1,209,926	)	30.8%
Other		(15,417	)		(3,574	)	331.4%		53,799			(126,439	)	(142.5)%
Expenses
Net Loss	$	(227,667	)	$	(219,598	)	3.7%	$	(1,528,231	)	$	(1,333,365	)	14.6%

Revenues

We have not earned any revenues from our oil and gas activities to date. We do not anticipate earning revenue from our oil and gas exploration activities in the near future.

Expenses

The major components of our expenses for the three and nine months ended January 31, 2009 and 2008 are outlined in the table below:

		Three Months Ended				Percentage		Nine Months Ended			Percentage
		January 31,				Increase /		January 31,			Increase /
		2009		2008		(Decrease)		2009		2008	(Decrease)
Oil and Gas Exploration Expenses	$	-	$	(380	)	(100)%	$	174,233	$	586,010	(70.3)%
Selling, General and Administrative		212,200		213,260		(0.5)%		1,407,647		618,782	127.5%

Expenses
Depreciation and Amortization		50		995	(95.0)%		150		2,985	(95.0)%
Loss on Disposal of Assets		-		2,149	(100)%		-		2,149	(100)%
Total Operating Expenses	$	212,250	$	216,024	(1.7)%	$	1,582,030	$	1,209,926	30.8%

The decrease of our oil and gas exploration expenses for the three and nine months ended January 31, 2009 is due to the fact that we did not have sufficient resources to carry out our exploration and drilling program on our oil and gas properties.

Selling and administrative expenses for the three and nine months ended January 31, 2009 primarily relate to stock based compensation to our directors, officers and consultants, remuneration paid to our officers and directors, and accounting and legal fees in connection with our ongoing filing requirements under the Exchange Act.

Subject to our ability to obtain additional financing, we expect that our total operating expenses will continue to increase in the foreseeable future as we proceed with our oil and gas exploration and development activities on our Airport Leases and West Lake Boudreaux Prospect.

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
							Percentage
		At January 31, 2009			At April 30, 2008		Increase / (Decrease)
Current Assets	$	53,706		$	109,307		(50.9)%
Current Liabilities		(3,590,076	)		(1,794,750	)	100%
Working Capital Surplus (Deficit)	$	(3,536,370	)	$	(1,685,443	)	109.8%

Cash Flows
		Nine Months Ended
		January 31, 2009			January 31, 2008
Net Cash Used in Operating Activities	$	(648,219	)	$	(453,861	)
Net Cash From Investing Activities		(1,778,618	)		(686,404	)
Net Cash Provided By Financing Activities		2,385,415			20,070
Net Increase (Decrease) in Cash During Period	$	(41,422	)	$	(1,120,195	)

Our working capital deficit increased from $1,685,443 at April 30, 2008 to $3,536,370 at January 31, 2009. The increase in our working capital deficit is due to: (i) an increase in accounts payable due to our lack of capital to meet our oil and gas exploration expenses and our ongoing expenditures; and (ii) the recording of a payable of $1,716,000 in connection with our acquisition of the West Lake Boudreaux Prospect.

Financing Requirements

We do not currently have, and are not expected to have, sufficient capital resources to meet the anticipated costs of our proposed drilling program and our general and administrative expenses. To date, we have raised financing through the sale of our common stock and short term loans. During the nine months ended January 31, 2009, we completed the following financings:

(a)	the sale of 8,660,000 shares of our common stock at a price of $0.25 per share for total gross proceeds of $2,165,000;

(b)	the sale of 1,600,000 units at a price of $0.10 per unit for total gross proceeds of $1,600,000;

(c)	the sale of 1,200,000 shares of our common stock at a price of $0.25 per share for total gross proceeds of $300,000; and

(c)	a loan of $150,000 from Norris R. Harris, our Chief Executive Officer and a Director. The loan is non- interest bearing, unsecured and due on demand.

On February 25, 2009, our Board of Directors approved a private placement offering of up to 4,000,000 units (the “Units”) at a post-reverse split price of $0.50 per Unit for gross proceeds of $2,000,000 (the "Private Placement Offering"). Each Unit will consist of one share of our common stock and one share purchase warrant, each warrant entitling the subscriber to purchase an additional share of our common stock for a period of three years, subject to call rights exercisable by us, following the date of issuance at a post-reverse split exercise price equal to $1.00 US per share. The Private Placement Offering will be made in the United States to persons who are accredited investors as defined in Regulation D of the Securities Act. The proceeds of the Private Placement Offering will be used to retire corporate indebtedness, complete exploration work on our oil and gas properties and for general corporate purposes. There is no assurance that the Private Placement Offering or any part of it will be completed

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing for to fund our business.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

We have identified a certain accounting policy, described below, that is most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are disclosed in Note 2 to the interim financial statements included in this Quarterly Report.

Revenue Recognition

(i)	Oil and Gas Revenues – We recognize oil and gas revenues from our interests in producing wells as oil and gas is produced and sold from these wells. We have no gas balancing arrangements in place. Since inception, no oil and gas revenues have been recorded.

(ii)	Worldbid Operations – We earn revenue by selling subscriptions to our service, advertising on email communications to businesses using our website services, direct advertising by businesses on our website and from data sales to consumer oriented companies. Revenue is recognized once the service or product is delivered. Subscriptions received in advance for access to our website services are recognized as income over the period of the subscriptions. On July 7, 2008, we completed the disposition of our Worldbid Operations.

Oil and Gas Exploration Activities

We follow the full cost method of accounting for oil and gas operations, whereby all costs associated with the exploration for, and development of, oil and gas reserves, whether productive or unproductive, are capitalized.

Such expenditures include land acquisition costs, drilling, exploratory dry holes, geological and geophysical costs not associated with a specific unevaluated property, completion and costs of well equipment. Internal costs are capitalized only if they can be directly identified with acquisition, exploration or development activities.

Expenditures that are considered unlikely to be recovered are written off. On a quarterly basis, our Board of Directors assess whether or not there is an asset impairment. The current oil and gas exploration and development activities are considered to be in the exploration stage.

The costs of unproven leases, which become productive, are reclassified to proved properties when proven reserves are discovered in the property. To date, no properties have been classified as proved properties. Unproven oil and gas interests are carried at original acquisition costs, including filing and title fees. Depreciation and depletion of the capitalized costs for producing oil and gas properties will e proved by the unit-of-production method based on proven oil and gas reserves.

Abandonment of properties are recognized as an expense in the period of abandonment and accounted for as adjustments of capitalized costs.

Ceiling Test . Under the full-cost accounting rules, capitalized costs included in the full-cost pool, net of accumulated depreciation, depletion and amortization (DD&A), cost of unevaluated properties and deferred income taxes, may not exceed the present value of our estimated future net cash flows from proved oil and gas reserves, discounted at 10%, plus the lower of cost or fair value of unproved properties included in the costs being amortized, net of related tax effects. These rules generally require that, in estimating future net cash flow, we assume that future oil and gas production will be sold at the unescalated market price for oil and gas received at the end of each fiscal quarter and that future costs to produce oil and gas will remain constant at the prices in effect at the end of the fiscal quarter. We are required to write-down and charge to earnings the amount, if any, by which these costs exceed the discounted future net cash flows, unless prices recover sufficiently before the date of our financial statements. Given the volatility of oil and gas prices, it is likely that our estimates of discounted future net cash flows from proved oil and gas reserves will change in the near term. If oil and gas prices decline significantly, even if only for a short period of time, it is possible that writedowns of oil and gas properties could occur in the future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of January 31, 2009 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fiscal quarter ended January 31, 2009 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

In addition to the legal proceedings previously disclosed in our Quarterly Report for the quarter ended October 31, 2008, the Company is aware of a potential claim by a company investor who invested $100,000 in a private placement. The investor is alleging that an agent of the Company made misrepresentations to induce him to invest in the Company and another company based on misrepresentations. The Company intends to defend the claim if filed and believes the claim is of little or no merit.

ITEM 1A. RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

Risks Relating to the Company

If we do not obtain additional financing, our business will fail.

We did not earn any revenues during the period and have a working capital deficit of $3,536,370 as at January 31, 2009. Accordingly, we will require additional financing in order to complete our plan of operation for our oil and gas activities and satisfy our existing creditors. In addition, we may not be able to make the required rental payments on our existing oil and gas leases when they become due. If we fail to make the required rental payments when they are due, we may lose our rights under those leases.

We have financed our operations to date from sales of equity securities, the issuance of convertible notes and loans advanced by related parties. Even though we have approved a private placement offering of up to 4,000,000 units at a post-reverse split price of $0.50 per Unit, there is no assurance that we will be able to complete this private placement offering or will be able to continue to obtain financing in amounts sufficient to enable us to maintain our business operations. If we are not able to obtain additional financing if and when needed, our business could fail.

If we never generate operating profit, then our business will fail.

We have sustained net losses from operations since our inception. We recorded a net loss of $1,528,231 during the nine months ended January 31, 2009 and we expect to incur net losses for the foreseeable future. We may never generate operating profits or, even if we do become profitable from operations at some point, we may be unable to sustain that profitability. We will not be able to achieve operating profits until we generate substantial revenues from our business operations. Our business model is not proven and there is no assurance that we will be able to generate the revenues. If we do not realize significant revenues from our business operations, then our operating expenses will continue to exceed our revenues and we will not achieve profitability.

If we are unable to hire and retain key personnel, then we may not be able to implement our business plan.

We depend on the services of our senior management and key technical personnel. In particular, our future success will depend on the continued efforts of our executive officers, Norris R. Harris and D. James Fajack. The loss of the services of our executive officers could have an adverse effect on our business, financial condition and results of operations.

The quotation price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor.

Our common shares are quoted on the OTC Bulletin Board under the symbol "RYPE.” Companies quoted on the OTC Bulletin Board have traditionally experienced extreme price and volume fluctuations. In addition, our stock price may be adversely affected by factors that are unrelated or disproportionate to our operating performance. Market fluctuations, as well as general economic, political and market conditions such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. In addition, to date, the trading volume for our shares on the OTC Bulletin Board has been limited. As a result of this potential volatility and potential lack of a trading market, an investor may not be able to sell any of our common stock that they acquire at a price equal or greater than the price paid by the investor.

We may conduct future offerings of our equity securities in the future, in which case investors shareholdings will be diluted.

Since our inception, we have been reliant upon sales of our common stock to fund our operations. We may conduct further equity offerings in the future to finance our current projects or to finance subsequent projects that we decide to undertake. If common stock is issued in return for additional funds, the price per share could be lower than that paid by our current stockholders. We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. If we issue additional stock, shareholders’ percentage interest in us will be diluted.

Because our stock is a penny stock, stockholders will be more limited in their ability to sell their stock.

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or quotation system.

Because our securities constitute "penny stocks" within the meaning of the rules, the rules apply to us and to our securities. The rules may further affect the ability of owners of shares to sell our securities in any market that might develop for them. As long as the quotation price of our common stock is less than $5.00 per share, the common stock will be subject to rule 15g-9 under the Exchange Act. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that:

1.	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
2.	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation to such duties or other requirements of securities laws;
3.	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;
4.	contains a toll-free telephone number for inquiries on disciplinary actions;
5.	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and
6.	contains such other information and is in such form, including language, type, size and format, as the SEC shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, the customer with: (a) bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statements showing the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitably statement. These

disclosure requirements may have the effect of reducing the trading activity in the secondary market for our stock.

Risks Relating to Our Oil and Gas Operations

We have no proven reserves or current production and may never have any.

We do not have any proven reserves or current production of oil or gas. There are no assurances that any wells will be completed or, if completed, that such wells will produce oil or gas in commercially profitable quantities.

If we do not find any oil or gas reserves or if we cannot complete the exploration of oil and gas reserves, either because we do not have the money to do it or because we will not be economically feasible to do it, we may have to cease operations. Oil and gas exploration is a highly speculative endeavor. It involves many risks and is often non-productive. Even if we are able to find oil and gas reserves on our properties our ability to put those reserves into production is subject to further risks including:

1.	costs of bringing the property into production including exploration work, preparation of production feasibility studies, and construction of production facilities, all of which we have not budgeted for;
2.	availability and costs of financing;
3.	ongoing costs of production; and
4.	environmental compliance regulations and restraints.

The marketability of any oil and gas deposits acquired or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as market fluctuations, the lack of drilling equipment near our oil and gas properties, and such other factors as government regulations, including regulations relating to allowable drilling, production, importing and exporting of oil and gas deposits, and environmental protection.

Our oil and gas operations are in the exploration stage with a limited operating history, which may hinder our ability to successfully meet our objectives.

Our oil and gas operations are in the exploration stage with only a limited operating history upon which to base an evaluation of our future prospects. As a result, the revenue and income potential of our oil and gas operations is unproven. In addition, because of our limited operating history, we have limited insight into trends that may emerge and affect our business. We may make errors in predicting and reacting to relevant business trends and will be subject to the risks, uncertainties and difficulties frequently encountered by early-stage companies in evolving markets. We may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause our business, results of operations and financial condition to suffer.

The successful implementation of our business plan is subject to risks inherent in the oil and gas business, which if not adequately managed could result in additional losses.

Our oil and gas operations will be subject to the economic risks typically associated with exploration and development activities, including the necessity of making significant expenditures to locate and acquire properties and to drill exploratory wells. In addition, the availability of drilling rigs and the cost and timing of drilling, completing and, if warranted, operating wells is often uncertain. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause our exploration, development and, if warranted, production activities to be unsuccessful. This could result in a total loss of our investment in a particular well. If exploration efforts are unsuccessful in establishing proved reserves and exploration activities cease, the amounts accumulated as unproved costs will be charged against earnings as impairments.

In addition, in the event that we commence production, of which there are no assurances, market conditions or the unavailability of satisfactory oil and gas transportation arrangements may hinder our access to oil and gas markets and delay production. The availability of a ready market for our prospective oil and gas production depends on a number of factors, including the demand for and supply of oil and gas and the proximity of reserves to pipelines and other facilities. Our ability to market such production depends in substantial part on the availability and capacity of gathering systems, pipelines and processing facilities, in most cases owned and

operated by third parties. A failure to obtain such services on acceptable terms could materially harm our business. We may be required to shut in wells for lack of a market or because of inadequacy or unavailability of pipelines or gathering system capacity. If that occurs, we would be unable to realize revenue from those wells until arrangements are made to deliver such production to market.

Our future performance is dependent upon our ability to identify, acquire and develop oil and gas properties, the failure of which could result in under use of capital and losses.

The future performance of our business will depend upon our ability to identify, acquire and develop oil and gas reserves that are economically recoverable. Success will depend upon the ability to acquire working and revenue interests in properties upon which oil and gas reserves are ultimately discovered in commercial quantities, and the ability to develop prospects that contain proven oil and gas reserves to the point of production. Without successful acquisition and exploration activities, we will not be able to develop oil and gas reserves or generate revenues. There are no assurances oil and gas reserves will be identified or acquired on acceptable terms, or that oil and gas deposits will be discovered in sufficient quantities to enable us to recover our exploration and development costs or sustain our business.

The successful acquisition and development of oil and gas properties requires an assessment of recoverable reserves, future oil and gas prices and operating costs, potential environmental and other liabilities, and other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain. In addition, no assurance can be given that our exploration and development activities will result in the discovery of any reserves. Operations may be curtailed, delayed or canceled as a result of lack of adequate capital and other factors, such as lack of availability of rigs and other equipment, title problems, weather, compliance with governmental regulations or price controls, mechanical difficulties, or unusual or unexpected formations, pressures and or work interruptions. In addition, the costs of exploration and development may materially exceed our initial estimates.

The oil and gas exploration and production industry historically is a cyclical industry and market fluctuations in the prices of oil and gas could adversely affect our business.

Prices for oil and gas tend to fluctuate significantly in response to factors beyond our control. These factors include, but are not limited to:

	(a)	weather conditions in the United States and elsewhere;
	(b)	economic conditions, including demand for petroleum-based products, in the United States and elsewhere;
	(c)	actions by OPEC, the Organization of Petroleum Exporting Countries;
	(d)	political instability in the Middle East and other major oil and gas producing regions;
	(e)	governmental regulations, both domestic and foreign;
	(f)	domestic and foreign tax policy;
	(g)	the pace adopted by foreign governments for the exploration, development, and production of their national reserves;
	(h)	the price of foreign imports of oil and gas;
	(i)	the cost of exploring for, producing and delivering oil and gas;
	(j)	the discovery rate of new oil and gas reserves;
	(k)	the rate of decline of existing and new oil and gas reserves;
	(l)	available pipeline and other oil and gas transportation capacity;
	(m)	the ability of oil and gas companies to raise capital;
	(n)	the overall supply and demand for oil and gas; and
	(o)	the availability of alternate fuel sources.

Changes in commodity prices may significantly affect our capital resources, liquidity and expected operating results. Price changes will directly affect revenues and can indirectly impact expected production by changing the amount of funds available to reinvest in exploration and development activities. Reductions in oil and gas prices not only reduce revenues and profits, but could also reduce the quantities of reserves that are commercially recoverable. Significant declines in prices could result in non-cash charges to earnings due to impairment. We do not currently engage in any hedging program to mitigate our exposure to fluctuations in oil and gas prices. Changes in commodity prices may also significantly affect our ability to estimate the value of producing properties for acquisition and divestiture and often cause disruption in the market for oil and gas

producing properties, as buyers and sellers have difficulty agreeing on the value of the properties. Price volatility also makes it difficult to budget for and project the return on acquisitions and the development and exploitation of projects. Commodity prices are expected to continue to fluctuate significantly in the future.

Our ability to produce oil and gas from our properties may be adversely affected by a number of factors outside of our control.

The business of exploring for and producing oil and gas involves a substantial risk of investment loss. Drilling oil and gas wells involves the risk that the wells may be unproductive or that, although productive, the wells may not produce oil or gas in economic quantities. Other hazards, such as unusual or unexpected geological formations, pressures, fires, blowouts, loss of circulation of drilling fluids or other conditions may substantially delay or prevent completion of any well. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic if water or other deleterious substances are encountered that impair or prevent the production of oil or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. There can be no assurance that oil and gas will be produced from the properties in which we have interests. In addition, the marketability of oil and gas that may be acquired or discovered may be influenced by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas, gathering systems, pipelines and processing equipment, market fluctuations in oil and gas prices, taxes, royalties, land tenure, allowable production and environmental protection.

The unavailability or high cost of drilling rigs, equipment, supplies, personnel and oil field services could adversely affect our ability to execute our exploration and development plans on a timely basis and within our budget.

Shortages or the high cost of drilling rigs, equipment, supplies or personnel could delay or adversely affect our exploration and development operations, which could have a material adverse effect on our business, financial condition and results of operations.

We may be unable to retain our leases and working interests in leases, which would result in significant harm to our business.

Our properties are held under oil and gas leases. If we fail to meet the specific requirements of each lease, that lease may terminate or expire. There are no assurances the obligations required to maintain those leases will be met. Our property interests will terminate unless we fulfill certain obligations under the terms of our leases and other agreements related to such properties, including making any applicable rental payments.

As of our quarter ended January 31, 2009, we had a substantial working capital deficit and there are no assurances that we will be able to meet the rental obligations under our federal and state oil and gas leases. If we are unable to make our rental payments and satisfy any other conditions on a timely basis, we may lose our rights in these properties. The termination of our interests in these properties may harm our business.

Title deficiencies could render our leases worthless.

The existence of a material title deficiency can render a lease worthless and can result in a large expense to our business. It is our practice in acquiring oil and gas leases or undivided interests in oil and gas leases to forgo the expense of retaining lawyers to examine the title to the oil or gas interest to be placed under lease or already placed under lease. Instead, we rely upon the judgment of oil and gas landmen who perform the field work in examining records in the appropriate governmental office before attempting to place under lease specific oil or gas interest. This is customary practice in the oil and gas industry. However, we do not anticipate that we, or the person or company acting as operator of the wells located on the properties that we currently lease or may lease in the future, will obtain counsel to examine title to the lease until the well is about to be drilled. As a result, we may be unaware of deficiencies in the marketability of the title to the lease. Such deficiencies could render the lease worthless.

If we fail to maintain adequate insurance, our business could be materially and adversely affected.

Our operations are subject to risks inherent in the oil and gas industry, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires, pollution, earthquakes and other environmental risks. These

risks could result in substantial losses due to injury and loss of life, severe damage to and destruction of property and equipment, pollution and other environmental damage, and suspension of operations. We could be liable for environmental damages caused by previous property owners. As a result, substantial liabilities to third parties or governmental entities may be incurred, the payment of which could have a material adverse effect on our financial condition and results of operations. Any prospective drilling contractor or operator which we hire will be required to maintain insurance of various types to cover its operations with policy limits and retention liability customary in the industry. Therefore, we do not plan to acquire our own insurance coverage for such prospects. The occurrence of a significant adverse event on such prospects that is not fully covered by insurance could result in the loss of all or part of our investment in a particular prospect which could have a material adverse effect on our financial condition and results of operations.

Complying with environmental and other government regulations could be costly and could negatively impact prospective production.

Our business is governed by numerous laws and regulations at various levels of government. These laws and regulations govern the operation and maintenance of our facilities, the discharge of materials into the environment and other environmental protection issues. Such laws and regulations may, among other potential consequences, require that we acquire permits before commencing drilling and restrict the substances that can be released into the environment with drilling and production activities. Under these laws and regulations, we could be liable for personal injury, clean-up costs and other environmental and property damages, as well as administrative, civil and criminal penalties. Prior to commencement of drilling operations, we may secure limited insurance coverage for sudden and accidental environmental damages as well as environmental damage that occurs over time. However, we do not believe that insurance coverage for the full potential liability of environmental damages is available at a reasonable cost. Accordingly, we could be liable, or could be required to cease production on properties, if environmental damage occurs.

The costs of complying with environmental laws and regulations in the future may harm our business. Furthermore, future changes in environmental laws and regulations could occur, resulting in stricter standards and enforcement, larger fines and liability, and increased capital expenditures and operating costs, any of which could have a material adverse effect on our financial condition or results of operations.

The oil and gas industry is highly competitive, and we may not have sufficient resources to compete effectively.

The oil and gas industry is highly competitive. We compete with oil and natural gas companies and other individual producers and operators, many of which have longer operating histories and substantially greater financial and other resources than we do, as well as companies in other industries supplying energy, fuel and other needs to consumers. Our larger competitors, by reason of their size and relative financial strength, can more easily access capital markets than we can and may enjoy a competitive advantage in the recruitment of qualified personnel. They may be able to absorb the burden of any changes in laws and regulation in the jurisdictions in which we do business and handle longer periods of reduced prices for oil and gas more easily than we can. Our competitors may be able to pay more for oil and gas leases and properties and may be able to define, evaluate, bid for and purchase a greater number of leases and properties than we can. Further, these companies may enjoy technological advantages and may be able to implement new technologies more rapidly than we can. Our ability to acquire additional properties in the future will depend upon our ability to conduct efficient operations, evaluate and select suitable properties, implement advanced technologies and consummate transactions in a highly competitive environment.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Other than as previously disclosed in our Current Reports, we have not completed any unregistered sales of equity securities during the quarter ended January 31, 2009.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to our security holders during our fiscal quarter ended January 31, 2009.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit
Number	Description of Exhibit

2.1	Amended and Restated Agreement and Plan of Merger entered into on February 9, 2007 among the Company, Royalite Acquisition Corp. and Royalite Petroleum Corp. ⁽⁹⁾

2.2	Agreement and Plan of Merger entered into on February 28, 2007 between the Company and Royalite Acquisition Corp. ⁽¹⁰⁾

3.1	Amended and Restated Articles of Incorporation filed January 13, 2006. ⁽⁸⁾

3.2	By-Laws of the Company. ⁽¹⁾

3.3	Articles of Merger between Royalite Petroleum Corp. and Royalite Acquisition Corp. ⁽¹⁰⁾

3.4	Articles of Merger between Royalite Acquisition Corp. and the Company. ⁽¹⁰⁾

4.1	Specimen Stock Certificate. ⁽¹⁾

10.1	Executive Consultant Agreement dated September 1, 2001 between the Company and Logan B. Anderson. ⁽²⁾

10.2	Amendment to Executive Consultant Agreement dated November 1, 2002 between the Company and Logan B. Anderson. ⁽³⁾

10.3	Amendment to Executive Consultant Agreement dated for reference August 29, 2003 between the Company and Logan B. Anderson. ⁽⁴⁾

10.4	Amendment to Executive Consultant Agreement dated for reference April 30, 2005 between the Company and Logan B. Anderson. ⁽⁵⁾

10.5	Agreement and Plan of Merger dated August 23, 2006 between the Company and Royalite Petroleum Corp. ⁽⁶⁾

10.6	Settlement Agreement dated August 31, 2006 between the Company and Howard Thomson. ⁽⁷⁾

10.7	Consulting Agreement dated February 8, 2006 between Royalite Petroleum Corp. and Nitra Corporation. ⁽¹¹⁾

10.8	Consulting Agreement dated August 1, 2007 between the Company and Kapco Consultants Corp. ⁽¹¹⁾

10.9	Letter Agreement dated October 1, 2007 between Central Utah Lease Acquisition, L.P. and the Company. ⁽¹²⁾

10.10	Consulting Agreement dated November 30, 2007 between CRG Partners, Inc. and the Company. ⁽¹³⁾

10.11	Agreement dated effective April 2, 2008 between the Company and May Petroleum, Inc. ⁽¹⁴⁾

10.12	Management Agreement dated April 2, 2008 between the Company and Norris R. Harris. ⁽¹⁴⁾

10.13	Share Purchase Agreement dated for reference June 5, 2008 among the Company, Worldbid International Inc. and Marktech Acquisition Corp. ⁽¹⁵⁾

10.14	Consulting Agreement dated September 8, 2008 between La Jolla IPO Incorporated and the Company. ⁽¹⁶⁾

10.15	2008 Stock Option Plan adopted October 15, 2008. ⁽¹⁷⁾

10.16	Form of Directors/Officers Stock Option Agreement – Incentive Stock Options. ⁽¹⁷⁾

10.17	Form of Directors/Officers Stock Option Agreement – Non-Qualified Stock Options. ⁽¹⁷⁾

14.1	Code of Ethics. ⁽⁴⁾

Exhibit
Number	Description of Exhibit

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

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

Notes
(1)	Filed as an Exhibit to our Registration Statement on Form 10-SB 12G/A filed with the SEC on November 30, 1999.
(2)	Filed as an Exhibit to our Annual Report on Form 10-KSB filed with the SEC on August 13, 2002.
(3)	Filed as an Exhibit to our Quarterly Report on Form 10-QSB filed with the SEC on March 17, 2003.
(4)	Filed as an Exhibit to our Annual Report on Form 10-KSB for the year ended April 30, 2004 filed with the SEC on July 30, 2004.
(5)	Filed as an Exhibit to our Annual Report on Form 10-KSB for the year ended April 30, 2005 filed with the SEC on August 12, 2005.
(6)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on August 29, 2006.
(7)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on September 7, 2006.
(8)	Filed as an Exhibit to our Quarterly Report on Form 10-QSB filed with the SEC on March 22, 2006.
(9)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on February 14, 2007.
(10)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on March 6, 2007.
(11)	Filed as an Exhibit to our Annual Report on Form 10-KSB filed with the SEC on September 11, 2007.
(12)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on October 12, 2007.
(13)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on December 6, 2007.
(14)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on April 4, 2008.
(15)	Filed as an Exhibit to our Current Report on Form 8-K filed with the SEC on June 6, 2008.
(16)	Filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 18, 2008.
(17)	Filed as an exhibit to our Quarterly Report on Form 10-Q filed with the SEC on October 20, 2008.

SIGNATURES

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

			ROYALITE PETROLEUM COMPANY INC.



Date:	March 20, 2009	By:	/s/ Norris R. Harris
			NORRIS R. HARRIS
			Chief Executive Officer
			(Principal Executive Officer)




Date:	March 20, 2009	By:	/s/ D. James Fajack
			D. JAMES FAJACK
			Chief Financial Officer
			(Principal Accounting Officer)

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