<font Size="3">general</font> (10-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

X	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended March 31, 2015

Or

___	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: 000-51425

T-REX OIL, INC.

 (Exact name of registrant as specified in its charter)

Colorado		98-0422451
State or other jurisdiction of incorporation or organization		I.R.S. Employer Identification No.
	520 Zang Street, Suite 250, Broomfield, CO 80021
	(Address of principal executive offices) (Zip Code)
	Registrant's telephone number, including area code:
	[phone]
	Securities registered pursuant to Section 12(b) of the Act:
Title of each class registered		Name of each exchange on which registered
Not Applicable		Not Applicable
	Securities registered pursuant to Section 12(g) of the Act:
	Common Stock, par value $0.001 (Title of class)

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

                                                                                                                                                                Yes |_| No |X|

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

                                                                                                                                                    |_|

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

                                                                                                                                                                Yes |X| No |_|

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)

                                                                                                                                                                Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (ss. 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

                                                                                                                                                    |X|

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 definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check One).

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 |_| No |X|

 

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.                                                                                            Yes |_| No |X|

On June 30, 2015, 7,047,508 shares of common stock were held by non-affiliates and had a value of $22,375,380 based on the average closing bid and ask of $3.175.

There were 15,672,119 shares issued and outstanding of the registrant's Common Stock as of June 30, 2015.

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

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TABLE OF CONTENTS

PART I
ITEM 1		Business	4
ITEM 1 A.		Risk Factors	14
ITEM 1 B.		Unresolved Staff Comments	22
ITEM 2		Properties	22
ITEM 3		Legal Proceedings	26
ITEM 4		Mine and Safety Disclosure	26
PART II
ITEM 5		Market for Registrant's Common Equity, Related Stockholder Matters
		and Issuer Purchases of Equity Securities	27
ITEM 6		Selected Financial Data	28
ITEM 7		Management's Discussion and Analysis of Financial Condition and
		Results of Operations	28
ITEM 7 A.		Quantitative and Qualitative Disclosures About Market Risk	33
ITEM 8		Financial Statements and Supplementary Data	33
ITEM 9		Changes in and Disagreements with Accountants on Accounting and
		Financial Disclosure	34
ITEM 9 A.		Controls and Procedures	34
ITEM 9B		Other Information	35
PART III
ITEM 10		Directors, Executive Officers, and Corporate Governance	35
ITEM 11		Executive Compensation	39
ITEM 12		Security Ownership of Certain Beneficial Owners and Management
		and Related Stockholder Matters	43
ITEM 13		Certain Relationships and Related Transactions, and Director
		Independence	45
ITEM 14		Principal Accounting Fees and Services	46
PART IV
ITEM 15		Exhibits, Financial Statement Schedules	48
SIGNATURES			76

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Note about Forward-Looking Statements

This Form 10-K contains forward-looking statements, such as statements relating to our financial condition, results of operations, plans, objectives, future performance and business operations. These statements relate to expectations concerning matters that are not historical facts. These forward-looking statements reflect our current views and expectations based largely upon the information currently available to us and are subject to inherent risks and uncertainties. Although we believe our expectations are based on reasonable assumptions, they are not guarantees of future performance and there are a number of important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. By making these forward-looking statements, we do not undertake to update them in any manner except as may be required by our disclosure obligations in filings we make with the Securities and Exchange Commission under the Federal securities laws. Our actual results may differ materially from our forward-looking statements.

PART I

ITEM 1.  BUSINESS

General

The following is a summary of some of the information contained in this document.  Unless the context requires otherwise, references in this document to "T-Rex" or the "Company" are to T-Rex Oil, Inc.

BUSINESS STRUCTURE

T-Rex Oil, Inc. was organized under the laws of the State of Nevada as Rancher Energy Corp. ("Rancher.")

On October 8, 2014, as approved by our board of directors and a written consent of our majority shareholder, an amendment to the Articles of Incorporation was filed in order to authorize a reverse split of the common stock, issued and outstanding, on a one (1) new share for three hundred fifty (350) old shares basis. At the same time, the Articles of Incorporation were amended change our authorized capital to 275,000,000 shares of $0.001 par value common stock and 50,000,000 shares of $0.01 par value preferred stock.  The Financial Industry Regulatory Authority ("FINRA") approved the amendment, effective October 29, 2014.  

On October 17, 2014, we merged into our wholly owned subsidiary, T-Rex Oil, Inc., a Colorado corporation and as a result were re-domiciled in the state of Colorado.   

Prior to August 2014, we had minimal operations that were focused mainly on administrative activities, the identification of potential oil and gas prospects, and one prospect participation in Colorado that was rescinded in June 2014, as discussed below.

We are an energy company, focused on the acquisition, exploration, development and production of oil and natural gas.  We have acquired oil and natural gas properties located in the western United States, mainly in the Rocky Mountain region. Our goal is to drill and produce oil and gas cost effectively, by concentrating our efforts in proven oil rich areas where we have in-house geologic and operating experience.

CORPORATE ACTIVITIES

PetroShare Participation Agreement

In September and October 2013, the Company (then Rancher) negotiated and became party to a Participation Agreement for the drilling of two wells in the Niobrara formation in Moffat County in northwestern Colorado with PetroShare Corp. ("PetroShare"), an unaffiliated entity, was the operator of the prospect. Rancher and PetroShare had previously entered into a non-binding letter of intent by which the two parties were negotiating and pursuing a business combination (the "LOI"). Rancher contributed its share to the drilling and completion of the two wells of approximately $1,200,000. Disputes then developed between Rancher

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and PetroShare with respect to the wells and the contemplated business combination. On March 27, 2014, the Board of Rancher approved an arrangement to settle with PetroShare and on May 5, 2014, the parties entered into an agreement to settle their claims which required, among other things, payment of $1,142,237, (such funds were received in full in June 2014), as well as mutual releases that become effective in June 2014. The settlement agreement acknowledges that neither Rancher nor PetroShare admits any liability to the other.

Rancher did not convey any properties or assets to PetroShare, but (upon receipt of the final payment from PetroShare) Rancher acknowledged that the Participation Agreement and Rancher's rights under the related joint operating agreement had been terminated. Inasmuch as Rancher had never received an assignment of any interest in the oil and gas leases, it had not obligation or right to assign any interests to PetroShare or to any other person.

Terex Energy Corp Securities Purchase Agreement

On August 19, 2014, Terex Energy Corp ("Terex") entered into a Securities Purchase Agreement to purchase 371,003 shares (adjusted for reverse split) of our restricted common stock from us. After such purchase, Terex held approximately 52% of the issued and outstanding common stock of the Company, at that time.  As part of the Exchange Agreement, discussed below, with the Terex shareholders, these shares were returned to the Company and cancelled.

Terex Exchange Agreements

On December 22, 2014, we entered into the Exchange Agreements with the Terex shareholders for 100% of the shares of Terex. Pursuant to the Exchange Agreements, we agreed to issue 7,385,700 shares of our restricted common stock for 100% of the issued and outstanding common stock of Terex. The shares are to be exchanged on a one for one basis. As a result, Terex became a wholly-owned subsidiary of the Company.

In addition, 800,000 in warrants and 900,000 in options issued and outstanding at Terex were exchanged for an equal number of warrants and options in T-Rex.

The effective date of the acquisition was December 22, 2014, with T-Rex being the legal acquirer. However, since T-Rex is a public company, which had nominal activity, the acquisition was treated as a recapitalization of Terex. Though T-Rex was the legal acquirer in the acquisition, Terex was the accounting acquirer since its shareholders gained control of T-Rex. Therefore at the date of the acquisition the historical financial statements of Terex became those of T-Rex. As a result, the historical financial statements of Terex supersede any prior financial statements of T-Rex.

Western Interior Oil & Gas Corporation Acquisition

 

On February 24, 2015, we entered into a Share Exchange Agreement with Western Interior Oil & Gas Corporation ("Western Interior") and the shareholders of Western Interior.  Under the Share Exchange Agreement we exchanged shares of our common stock for 83% of the issued and outstanding common stock of Western Interior. The acquisition was closed on March 27, 2014 and effective March 31, 2015.  At the time of closing, we issued 7,465,168 shares of our restricted common stock in exchange for shares of Western Interior.  In addition, we have agreed to appoint two nominees of Western Interior to our Board of Directors at a future date.

On March 31, 2015, we entered into an amendment to the Share Exchange Agreement whereby we assumed certain repurchase agreements between Western Interior and its dissident shareholders and as a result acquired the remaining 17% of Western Interior. As part of these agreements, we assumed certain promissory notes issued to the dissenting shareholders in the total amount of $1,770,047 that are secured by Western Interior's assets. As a result, Western Interior has become a wholly-owned subsidiary of the Company.

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ORGANIZATIONAL STRUCTURE

 

 

Part of our strategy includes the use of partnerships to not only own individual projects, but to handle the drilling, completion, operation and raising of capital for the funding of such prospects.  The Company or one of its subsidiaries will then handle the operation and management of the partnership.  T-Rex Oil LLC #1 is one such partnership that is managed by T-Rex.

 

Terex Energy Corp

Terex was incorporated in the State of Colorado in February 2014. Terex has interests in oil and gas properties. Prior to the share exchange with T-Rex, Terex had acquired interests in oil and gas prospects and properties discussed herein.  Terex is an operator of oil and gas properties owned by the Company and its subsidiaries.

T-Rex Oil LLC, #1

T-Rex Oil LLC, #1 ("T-Rex #1") is a Colorado limited liability company organized in December 2014.  T-Rex is the manager of T-Rex #1 and manages the Sioux County, Nebraska project.  The Company doesn't have an equity interest in T-Rex #1.

Western Interior Oil & Gas Corporation

 

Western Interior was incorporate in the State of Wyoming in August 2005.  Western Interior has producing and developmental oil and gas properties in southwest central Wyoming.  Upon the acquisition of Western Interior, Mr. Jon Nicolaysen, an officer and director of T-Rex was appointed the Chief Executive Officer of Western Interior.

 

CORPORATE STRATEGY

 

Our approach is to acquire Proven Developed Producing properties that are also de-risk.   The ideal candidate will also include Proven Undeveloped well sites, which should supply upside development potential, ("running room.")  Specifically, properties that have the advantage of having established producing oil and/or natural gas wells that have drillable offset locations and have wells that may be shut-in but are candidates for re-working or re-completion, are high priority acquisition targets.

 

Our acquisition strategy also takes older wells that are shut in or have lower production results and applies new and existing technologies to work-over and/or recomplete so as to increase production and ultimate recovery.  Technologies to be deployed include 3-D seismic imaging to target undeveloped areas of the

 

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reservoir that contain remaining primary reserves; horizontal drilling to increase recoveries; as well as secondary and tertiary recovery methods to increase ultimate produced reserves.

 

We intend to achieve success through the following:

 

•Build a Portfolio of Low-Risk, High-Return O&G Assets in the Rocky Mountain Region

•Acquire, Explore & Develop Assets to Reach an Annual Production Rate of 500 to 1,000 BBls per Day in 2015

•Utilize Scalable Financial Model to Drive Top- And Bottom-Line Results

•Leverage Expertise of the Leadership Team to Build a Strong Track Record

 OIL AND GAS PROJECTS

During the fiscal years ended March 31, 2015 and 2014, we focused efforts on the acquisition of properties that met certain criteria for both exploration and development and work-over projects.  With an initial focus on the Rocky Mountain Region, our current projects are found primarily in Wyoming and Nebraska.  Additional information as to our oil and gas projects can be found in Item 2 of this Filing.

Wyoming

As part of the acquisition of Western Interior, we acquired approximately 15,896 gross acres spread across the Big Horn Basin, the Wind River Basin and south central Wyoming.

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Properties held by Western Interior include:

Big Horn Basin Prospect

The Big Horn Basin, located in north-central Wyoming is a geological structural basin of sedimentary rocks dating from the Cambrian to Miocene.  The principal productive reservoir of oil in the Big Horn Basin to date has been the Pennsylvanian Tensleep Formation.  Other producing horizons include the Mississippian Madison Limestone, Permian Phosphoria and the Cretaceous Frontier Sandstone.

Our Big Horn Basin projects currently produce from the Triassic Crow Mountain, Permian Phosphoria, and the Frontier formations.  They provide us with both development and exploration opportunities.

The Big Horn Basin Prospect contains 5 Properties, which have a combination of development and exploration projects. We expect to drill, subject to reasonable financing, between 16 and 36 wells on the properties over the next two years.

Rawhide - This is an opportunity for development of existing production and exploration for deeper reserves.  Cumulative historical production to date is approximately 147.0 MBO.

Meeteetse "Deep" - This is an opportunity to develop a large Phosphoria-Tensleep oil field.  This is the largest project in the Western portfolio.  In mid-2008, the Carter 1 discovery well was re-entered and recompleted in the Phosphoria formation to restore production.  Extensive testing and analysis have established Phosphoria 2P reserves on the 240 acre lease block.

Baird Peak - Baird Peak is a well-defined structure with 200' of closure, with multiple pay objectives. Historically, it has produced 128,000 BO. 

Adam - Adam consists of two adjacent tilted fault blocks along the Southeast plunge of the Enos Creek Anticline. 

Wind River Basin

Located just to the south of the Big Horn Basin, the Wind River Basin is an asymmetric sedimentary basin bounded by the Owl Creek Mountains on the North, Casper Arch on the East and Sweetwater Uplift on the South.  The most prolific oil producing horizons in the Wind River Basin have been the Tensleep, Phosphoria, and Frontier Formations.

The Wind River Basin includes production from the Cretaceous Frontier Formation at shallow depths of 3,800 to 4,500 feet.  This area produces a light-oil - 42 to 45 API gravity.

The Wind River Basin contains 2 projects, a combination of existing development and new exploration targets. The initial plan for these projects is development drilling, where warranted.

South Central Wyoming

The Rattlesnake Creek and Overland Trail prospects are the result of thrust-fault controlled structures.   Overland Trail is situated upon a shallow pop-up structure lying along the Arlington Fault zone with possible recovery from 3 distinct formations: the Cretaceous Muddy Sandstone, the Jurassic Sundance and the Permian Casper, with depths ranging from 1,600 to 3,900 feet.

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The Rattlesnake Creek prospect, sits over a Late-Laramide thrust-fault detachment structure. The resulting linear anticlinal structure has significant opportunity for hydrocarbon entrapment in several intervals.

Management is evaluating existing seismic data, integrating those data into the overall geologic models and developing an appropriate drilling plan for the properties.  At this time, emphasis is on development and new drilling among the most promising high-production, low risk properties in this portfolio.

Our other properties in Wyoming include:

Cole Creek Oil Field, Wyoming

Located is the southwest margin of the Powder River Basin in Natrona and Converse Counties.  The Shannon Sand Formation historically is the main oil producing formation in the field.  The Shannon Sand Formation is found at a depth of 4,500 - 5,500 ft.

The Cole Creek Lease covers approximately 7,000 acres and is located 20 miles to the northeast of Casper, Wyoming.  The lease includes 7 well bores.  Currently, these are not producing and can not be worked on.  We intend to drill 3 development wells in late 2016 or early 2017, depending upon the availability of financing. Contingent on the results of those 3 wells, additional wells may also be drilled.

The land is under a Bureau of Land Management (BLM) Held by Production (HBP) lease. Permits will take up to 1 year for approval, although re-entries and extension permits may take as little as 30 days.

We intend to focus on the re-development of the Shannon formation using new technology and 3-D seismic re-work methods.   We intend to drill edge and infill wells initially, then develop the property for tertiary recovery, using polymer floods, surfactants and possibly CO₂ injection.  

Burke Ranch Project, Natrona County, Wyoming

The Burke Ranch Field of Wyoming, consists of approximately 4,500 acres located in the southwest corner of the Powder River Basin.  The project has a potential for 40+ development and exploratory wells.   Historically, the Dakota Formation has been the primary objective. The Burke Ranch Unit was originally developed on 80 acre spacing. Downsizing the spacing to 40 acres and drilling infill and edge wells offers low risk and high potential production.

There are 5 additional formations, which appear to be productive at Burke Ranch. There are good drilling opportunities in the first bench of the Frontier (Wall Creek), Second Frontier, Niobrara, Mowry, and Tensleep Formations.

The Powder River Basin was originally known for its coal deposits.  The Powder River Basin contains the well-known Salt Creek Oil Field.  Oil and Gas are produced from rocks ranging from Pennsylvanian to Tertiary.  While most of the oil produced in the Powder River Basin comes from the sandstones in thick sections of Cretaceous rocks, shale formations have recently become primary targets locally.  This recent upsurge in production in the Wyoming portion of the basin is largely due to recent technological advancements in horizontal drilling and hydraulic fracturing techniques.

The project has the potential to produce, with conventional drilling, from three formations: the Tensleep, Dakota and the Frontier formations.

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Burke Ranch Field offers a variety of drilling and development opportunities

•         Tensleep Formation - new drilling on seismic anomaly

•         Dakota Formation - additional development of the Dakota Formation to re-work the field to increase existing production

•         Frontier Formation - to recomplete the existing wells to access existing reserves behind pipe.

Most of the Burke Ranch leasehold is BLM and therefore is subject to Federal regulations.   It is expected that it will take up to 12 months for Drilling Permit approvals to be obtained. Some wells in the Dakota formation will be recompletions. As such it is expected that their approval will be obtained in a shorter time frame.

Nebraska

Sioux and Kimball County, Nebraska

The Sioux County Project has potential revenue from two sources.  The first is through production from existing wells, the second is from the water injection/disposal project.

We have development of the project through the T-Rex #1.

Oil Well Development

•         We have a 100% WI and a 75% NRI in the well and key acreage of 240 acres.

•         We have sufficient acreage to drill two new wells in an up-dip direction structurally.

•         The original operator drilled and tested 24-30 BOPH from two different horizons; initial drilling damaged the formation, so production is only a fraction of what it tested at.

•         The well currently produces intermittently and a work over plan is being developed.

Water Injection - Disposal Project

•         Company has a 31.25% WI until payout, at which time the Company would get an additional 25% working interest for a total of 56.25%.

•         Water injection well application for permit was submitted and in early April 2015 it was approved for injection rates of 5,000 barrels of water per day, pending appeal.

•         Water injection well has been drilled and cased with 7 inch pipe.

•         Management believes the well is capable of disposing of up to 11,000 barrels of water per day.

We intend to continue to develop plans for the water disposal facility

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Utah

 

Located adjacent to the Covenant Field in Sevier County, Utah, we have ownership in oil and gas leases which make up the Covenant Mondo Prospect, subject to a participating on a well by well basis.

 

We have a participation agreement in 3,995 gross acres located along the Central Utah overthrust belt, specifically the Jurassic Navajo Sandstone reservoir.  The Navajo Sandstone is 740 to 1700 feet thick and is overlaid by the Jurassic Twin Creek Limestone and underlaid by the Jurassic Kayenta Formation. 

 

During the latter part of 2014, we drilled the first of two wells that resulted in a dry hole.  During the first part of 2015, we drilled a second well which was also a dry hole.

 

Further plans for the acreage are under review.

 

COMPETITION, MARKETS, REGULATION AND TAXATION

 

Competition

 

There are a large number of companies and individuals engaged in the exploration for oil and gas; accordingly, there is a high degree of competition for desirable properties. However, the staff at T-Rex is experienced and knowledgeable in the Rocky Mountains and can evaluate potential acquisitions and opportunities with greater efficiency.

 

Markets

 

The availability of a ready market for newly discovered oil and gas reserves will depend on numerous factors beyond our control, including the proximity and capacity of refineries, pipelines, and the effect of state regulation of production and of federal regulations of products sold in interstate commerce, and recent intrastate sales. The market price of oil and gas is volatile and beyond our control.

 

Global Oil Supply

 

Currently, the produced global oil supply is outpacing oil demand which in part, has resulted in the steeply declining oil prices in late 2014 and early 2015.  These price trends are expected to continue in the near term as foreign producers, continue to increase production in response to declining prices. 

 

Despite this, the industry continues to work on a production decline curve, and the industry continues to focus on trying to replace depleting reserves with more conventional and cost effective production techniques.

 

Effect of Changing Industry Conditions on Drilling Activity

 

Lower oil and gas prices have caused a decline in drilling activity in the U.S. recently. However, such reduced activity will normally result in a decline in drilling, lease acquisition and equipment costs, and an improvement in the terms under which drilling prospects are generally available. We cannot predict what oil and gas prices will be in the future and what effect those prices may have on drilling activity in general, or on our ability to generate economic drilling prospects nor to raise the necessary funds with which to drill them.

 

Effect of Technology

 

Evolving scientific and technological developments in the last five years have not only provided access to previously unreachable and large reserves, but in many cases has made the production of such reserves highly profitable.  In addition these developments have taken previously shut in fields/wells and made them once again economically viable and in some cases, greatly so.

 

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Government Regulations

Governmental Regulation and Environmental Consideration.

Oil and Gas:  The oil and gas business in the United States is subject to regulation by both federal and state authorities, particularly with respect to pricing, allowable rates of production, marketing and environmental matters.

The production of crude oil and gas has, in recent years, been the subject of increasing state and federal controls.  No assurance can be given that newly imposed or changed federal laws will not adversely affect the economic viability of any oil and gas properties we may acquire in the future.  Federal income and "windfall profit" taxes have in the past affected the economic viability of such properties.

The above paragraphs only give a brief overview of potential state and federal regulations.  Because we have only acquired specific properties, and because of the wide range of activities in which we may participate, it is impossible to set forth in detail the potential impact federal and state regulations may have on us.

The Department of Energy

 

The Department of Energy Organization Act (Pub. L. No. 95-91) became effective October 1, 1977.  Under this Act various agencies, including the Federal Energy Administration (FEA) and the Federal Power Commission (FPC), have been consolidated to constitute the cabinet-level Department of Energy (DOE).  The Economic Regulatory Administration (ERA), a semi-independent administration within the DOE, now administers most of the regulatory programs formerly managed by the FEA, including oil pricing and allocation.  The Federal Energy Regulatory Commission (FERC), an independent agency within the DOE, has assumed the FPC's responsibility for natural gas regulation.

 

Crude Oil and Natural Gas Liquids Price and Allocation Regulation

 

Pursuant to Executive Order Number 12287, issued January 28, 1981, President Reagan lifted all existing federal price and allocation controls over the sale and distribution of crude oil and natural gas liquids.  Executive Order Number 12287 was made effective as of January 28, 1981, and consequently, sales of crude oil and natural gas liquids after January 27, 1981 are free from federal regulation.  The price for such sales and the supplier-purchaser relationship will be determined by private contract and prevailing market conditions.  As a result of this action, oil which may be sold by us will be sold at deregulated or free market prices.  At various times, certain groups have advocated the reestablishment of regulations and control on the sale of domestic oil and gas.

 

State Regulations

 

Our production of oil and gas, if any, will be subject to regulation by state regulatory authorities in the states in which we may produce oil and gas.  In general, these regulatory authorities are empowered to make and enforce regulations to prevent waste of oil and gas and to protect correlative rights and opportunities to produce oil and gas as between owners of a common reservoir.  Some regulatory authorities may also regulate the amount of oil and gas produced by assigning allowable rates of production.

 

Environmental Laws.

 

Oil and gas exploration and development are specifically subject to existing federal and state laws and regulations governing environmental quality and pollution control.  Such laws and regulations may substantially increase the costs of exploring for, developing, or producing oil and gas and may prevent or delay the commencement or continuation of a given operation.

 

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All of our operations involving the exploration for or the production of any minerals are subject to existing laws and regulations relating to exploration procedures, safety precautions, employee health and safety, air quality standards, pollution of stream and fresh water sources, odor, noise, dust, and other environmental protection controls adopted by federal, state and local governmental authorities as well as the right of adjoining property owners.  We may be required to prepare and present to federal, state or local authorities data pertaining to the effect or impact that any proposed exploration for or production of minerals may have upon the environment.  All requirements imposed by any such authorities may be costly, time consuming, and may delay commencement or continuation of exploration or production operations.

 

It may be anticipated that future legislation will significantly emphasize the protection of the environment, and that, as a consequence, our activities may be more closely regulated to further the cause of environmental protection.  Such legislation, as well as future interpretation of existing laws, may require substantial increases in equipment and operating costs to us and delays, interruptions, or a termination of operations, the extent to which cannot now be predicted.

 

Title to Properties.

 

We are not the record owner of our interest in our properties and rely instead on contracts with the owner or operator of the property, pursuant to which, among other things, we have the right to have our interest placed of record.  As is customary in the oil and gas industry, a preliminary title examination will be conducted at the time unproved properties or interests are acquired by us.  Prior to commencement of drilling operations on such acreage and prior to the acquisition of proved properties, we will conduct a title examination and attempt extremely significant defects before proceeding with operations or the acquisition of proved properties, as we may deem appropriate.

 

Our properties are subject to royalty, overriding royalty and other interests customary in the industry, liens incident to agreements, current taxes and other burdens, minor encumbrances, easements and restrictions.  Although we are not aware of any material title defects or disputes with respect to its undeveloped acreage, to the extent such defects or disputes exist, we would suffer title failures.

BACKLOG OF ORDERS.

We currently have no orders for sales at this time.

GOVERNMENT CONTRACTS.

We have no government contracts.

COMPANY SPONSORED RESEARCH AND DEVELOPMENT.

We are not conducting any research.

NUMBER OF PERSONS EMPLOYED.

As of March 31, 2015, T-Rex and its subsidiaries had 6 full-time employees.  Donald Walford, Jon Nicolaysen, and Alan Heim, officers and directors of T-Rex, have Employment Agreements with our subsidiary Terex Energy. Martin Gottlob, an officer and director of T-Rex has an Employment Agreement with the Company.  All officers of the Company work 40 hours a week.  All other employees are at will employees. 

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ITEM 1A.  RISK FACTORS

FORWARD LOOKING STATEMENTS

This document includes forward-looking statements, including, without limitation, statements relating to T-Rex's plans, strategies, objectives, expectations, intentions and adequacy of resources.  These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.  These factors include, among others, the following: our ability of to implement our business strategy; ability to obtain additional financing; T-Rex limited operating history; unknown liabilities associated with future acquisitions; ability to manage growth; significant competition; ability to attract and retain talented employees; and future government regulations; and other factors described in this filing or in other of T-Rex's filings with the Securities and Exchange Commission.  T-Rex is under no obligation, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

RISK FACTORS RELATED TO OUR COMPANY

Our business has an operating history of only two years after Bankruptcy emergence and is unproven and therefore risky.

We have only recently begun operations under the business plan discussed herein. Potential investors should be made aware of the risk and difficulties encountered by a new enterprise in the oil and gas industry, especially in view of the intense competition from existing businesses in the industry.

We have a lack of revenue history and have a short history of operations. 

We have only recently begun operations in the oil and gas industry.  During the year ended March 31, 2015, we recognized a net loss of $11,043,541 compared to $13,431 during the year ended March 31, 2014.  Though with our acquisition of Western Interior, during the first quarter of the fiscal year ended March 31, 2016, we have started to recognize revenues from operations, though these are not enough to support operations. 

We are not profitable and the business effort is considered to be in an early stage of operations.  We must be regarded as a new or development venture with all of the unforeseen costs, expenses, problems, risks and difficulties to which such ventures are subject.

We are not diversified and we will be dependent on only one business.

Because of the limited financial resources that we have, it is unlikely that we will be able to diversify our operations.  Our probable inability to diversify our activities into more than one area will subject us to economic fluctuations within the energy industry and therefore increase the risks associated with our operations due to lack of diversification.

We can give no assurance of success or profitability to our investors.

There is no assurance that we will ever operate profitably.  There is no assurance that we will generate revenues or profits, or that the market price of our common stock will be increased thereby.

We may have a shortage of working capital in the future which could jeopardize our ability to carry out our business plan.

Our capital needs consist primarily of expenses related to geological evaluation, general and administrative and potential exploration participation and could exceed $10,000,000 in the next twelve months. Such funds are not currently committed.

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If we find oil and gas reserves to exist on a prospect we will need substantial additional financing to fund the necessary exploration and development work.  Furthermore, if the results of that exploration and development work are successful, we will need substantial additional funds for continued development.  We will not receive proceeds from this offering to conduct such work and, therefore, we will need to obtain the necessary funds either through debt or equity financing, some form of cost-sharing arrangement with others, or the sale of all or part of the property.  There is no assurance that we will be successful in obtaining any financing.  These various financing alternatives may dilute the interest of our shareholders and/or reduce our interest in the properties. 

We will need additional financing for which we have no commitments, and this may jeopardize execution of our business plan.

We have limited funds, and such funds may not be adequate to carry out the business plan in the oil and gas industry.  Our ultimate success depends upon our ability to raise additional capital.  We have not investigated the availability, source, or terms that might govern the acquisition of additional capital and will not do so until it determines a need for additional financing.  If we need additional capital, we have no assurance that funds will be available from any source or, if available, that they can be obtained on terms acceptable to us.  If not available, our operations will be limited to those that can be financed with our modest capital.

We may in the future issue more shares which could cause a loss of control by our present management and current stockholders. 

We may issue further shares as consideration for the cash or assets or services out of our authorized but unissued common stock that would, upon issuance, represent a majority of the voting power and equity of our Company.  The result of such an issuance would be those new stockholders and management would control our Company, and persons unknown could replace our management at this time.  Such an occurrence would result in a greatly reduced percentage of ownership of our Company by our current shareholders, which could present significant risks to investors.

We have warrants and options issued and outstanding which are convertible into our common stock.  A conversion of such equity instruments could have a dilutive effect to existing shareholders.

At March 31, 2015, we have warrants issued and outstanding exercisable into 942,858 shares of our common stock at ranges from $0.10 to $3.50 per share and options issued and outstanding exercisable into 935,000 shares of common stock at $0.10 per share.  They are exercisable in whole or in part. The exercise of the warrants and/or options into shares of our common stock could have a dilutive effect to the holdings of our existing shareholders.

We will depend upon management but we may at times have limited participation of management.

Our directors are also acting as our officers. We will be heavily dependent upon their skills, talents, and abilities, as well as several consultants to us, to implement our  business plan, and may, from time to time, find that the inability of the officers, directors and consultants to devote their full-time attention to our business results in a delay in progress toward implementing our business plan.  Consultants may be employed on a part-time basis under a contract to be determined. 

Our directors and officers are, or may become, in their individual capacities, officers, directors, controlling shareholder and/or partners of other entities engaged in a variety of businesses.  Thus, our officers and directors may have potential conflicts including their time and efforts involved in participation with other business entities.  Each officer and director of our business may be engaged in business activities outside of our business, and the amount of time they devote as Officers and Directors to our business will be up to 40 hours per week.  Because investors will not be able to manage our business, they should critically assess all of the information concerning our officers and directors.

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We do not know of any reason other than outside business interests that would prevent them from devoting full-time to our Company, when the business may demand such full-time participation.

Our officers and directors may have conflicts of interests as to corporate opportunities which we may not be able or allowed to participate in.

Presently there is no requirement contained in our Articles of Incorporation, Bylaws, or minutes which requires officers and directors of our business to disclose to us business opportunities which come to their attention.  Our officers and directors do, however, have a fiduciary duty of loyalty to us to disclose to us any business opportunities which come to their attention, in their capacity as an officer and/or director or otherwise.  Excluded from this duty would be opportunities which the person learns about through his involvement as an officer and director of another company.

We have agreed to indemnification of officers and directors as is provided by Colorado Statute.

Colorado Revised Statutes provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney's fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities our behalf.  We will also bear the expenses of such litigation for any of our directors, officers, employees, or agents, upon such person's promise to repay us therefore if it is ultimately determined that any such person shall not have been entitled to indemnification.  This indemnification policy could result in substantial expenditures by us that we will be unable to recoup.

Our directors' liability to us and shareholders is limited

Colorado Revised Statutes exclude personal liability of our directors and our stockholders for monetary damages for breach of fiduciary duty except in certain specified circumstances.  Accordingly, we will have a much more limited right of action against our directors than otherwise would be the case.  This provision does not affect the liability of any director under federal or applicable state securities laws.

RISK FACTORS RELATING TO OUR BUSINESS

Our business, the oil and gas business has numerous risks which could render us unsuccessful.

 

The search for new oil and gas reserves frequently results in unprofitable efforts, not only from dry holes, but also from wells which, though productive, will not produce oil or gas in sufficient quantities to return a profit on the costs incurred.  There is no assurance we will find or produce oil or gas from any of the wells we have acquired or which may be acquired by us, nor are there any assurances that if we ever obtain any production it will be profitable. 

We have substantial competitors who have an advantage over us in resources and management.

We are and will continue to be an insignificant participant in the oil and gas business.  Most of our competitors have significantly greater financial resources, technical expertise and managerial capabilities than us and, consequently, we will be at a competitive disadvantage in identifying and developing or exploring suitable prospects.   Competitor's resources could overwhelm our restricted efforts to acquire and explore oil and gas prospects and cause failure of our business plan.

We will be subject to all of the market forces in the energy business, many of which could pose a significant risk to our operations.

The marketing of natural gas and oil which may be produced by our prospects will be affected by a number of factors beyond our control.  These factors include the extent of the supply of oil or gas in the market, the availability of competitive fuels, crude oil imports, the world-wide political situation, price regulation, and other

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factors.  Current economic and market conditions have created dramatic fluctuations in oil prices.  Any significant decrease in the market prices of oil and gas could materially affect our profitability of oil and gas activities.

There generally are only a limited number of gas transmission companies with existing pipelines in the vicinity of a gas well or wells.  In the event that producing gas properties are not subject to purchase contracts or that any such contracts terminate and other parties do not purchase our gas production, there is assurance that we will be able to enter into purchase contracts with any transmission companies or other purchasers of natural gas and there can be no assurance regarding the price which such purchasers would be willing to pay for such gas.  There may, on occasion, be an oversupply of gas in the marketplace or in pipelines; the extent and duration may affect prices adversely.  Such oversupply may result in reductions of purchases and prices paid to producers by principal gas pipeline purchasers.  (See "Our Business and Competition, Markets, Regulation and Taxation.")

We believe investors should consider certain negative aspects of our operations.

Dry Holes: We may expend substantial funds acquiring and potentially participating in exploring properties which we later determine not to be productive.  All funds so expended will be a total loss to us.

Technical Assistance:  We will find it necessary to employ technical assistance in the operation of our business.  As of the date of this Prospectus, we have not contracted for any technical assistance.  When we need it such assistance is likely to be available at compensation levels we would be able to pay.

Uncertainty of Title:  We will attempt to acquire leases or interests in leases by option, lease, farmout or by purchase.  The validity of title to oil and gas property depends upon numerous circumstances and factual matters (many of which are not discoverable of record or by other readily available means) and is subject to many uncertainties of existing law and our application. 

Government Regulations:  The area of exploration of natural resources has become significantly regulated by state and federal governmental agencies, and such regulation could have an adverse effect on our operations.  Compliance with statutes and regulations governing the oil and gas industry could significantly increase the capital expenditures necessary to develop our prospects.

Nature of our Business:  Our business is highly speculative, involves the commitment of high-risk capital, and exposes us to potentially substantial losses.  In addition, we will be in direct competition with other organizations which are significantly better financed and staffed than we are.

General Economic and Other Conditions:  Our business may be adversely affected from time to time by such matters as changes in general economic, industrial and international conditions; changes in taxes; oil and gas prices and costs; excess supplies and other factors of a general nature.

Our business is subject to significant weather interruptions.

Our activities may be subject to periodic interruptions due to weather conditions.  Weather-imposed restrictions during certain times of the year on roads accessing properties could adversely affect our ability to benefit from production on such properties or could increase the costs of drilling new wells because of delays.

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Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and present value of our reserves. The Company's current estimates of reserves could change, potentially in material amounts, in the future, in particular due to the recent significant decline in commodity prices.

The process of estimating crude oil and natural gas reserves is complex and inherently imprecise. It requires interpretation of available technical data and many assumptions, including assumptions relating to current and future economic conditions, production rates, drilling and operating expenses, and commodity prices. Any significant inaccuracy in these interpretations or assumptions could materially affect our estimated quantities and present value of our reserves. See Part I, Item 2 for information about our estimated crude oil and natural gas reserves, PV-10, and Standardized Measure of discounted future net cash flows as of May 31, 2015.

In order to prepare reserve estimates, we must project production rates and the amount and timing of development expenditures. Our booked proved undeveloped reserves must be developed within five years from the date of initial booking under SEC reserve rules. Changes in the timing of development plans that impact our ability to develop such reserves in the required time frame could result in fluctuations in reserves between periods as reserves booked in one period may need to be removed in a subsequent period.

We must also analyze available geological, geophysical, production and engineering data in preparing reserve estimates. The extent, quality and reliability of this data can vary with the uncertainty of decline curves and the ability to model heterogeneity of the porosity, permeability and pressure relationships in unconventional resources. The process also requires economic assumptions, based on historical data but projected into the future, about matters such as crude oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

The prices used in calculating our estimated proved reserves are, in accordance with SEC requirements, calculated by determining the unweighted arithmetic average of the first-day-of-the-month commodity prices for the preceding 12 months. Commodity prices declined significantly in the fourth quarter of calendar year 2014 and the first quarter of calendar year 2015 and if such prices do not increase significantly, our future calculations of estimated proved reserves will be based on lower commodity prices which could result in our having to remove non-economic reserves from our proved reserves in future periods.

Actual future production, crude oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable crude oil and natural gas reserves will vary and could vary significantly from our estimates. Any significant variance could materially affect the estimated quantities and present value of our reserves, which in turn could have an adverse effect on the value of our assets. In addition, we may adjust estimates of proved reserves, potentially in material amounts, to reflect production history, results of exploration and development, prevailing crude oil and natural gas prices and other factors, many of which are beyond our control.

 The present value of future net revenues from our proved reserves will not necessarily be the same as the current market value of our estimated crude oil and natural gas reserves and, in particular, may be reduced due to the recent significant decline in commodity prices.

You should not assume the present value of future net revenues from our proved reserves is the current market value of our estimated crude oil and natural gas reserves. In accordance with SEC rules, we base the estimated discounted future net revenues from proved reserves on the 12-month unweighted arithmetic average of the first-day-of-the-month commodity prices for the preceding twelve months. Actual future prices may be materially higher or lower than the SEC pricing used in the calculations. Actual future net revenues from crude oil and natural gas properties will be affected by factors such as:

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-           the actual prices we receive for sales of crude oil and natural gas;

-           the actual cost and timing of development and production expenditures;

-           the timing and amount of actual production; and

-           changes in governmental regulations or taxation.

The timing of both our production and our incurrence of expenses in connection with the development and production of crude oil and natural gas properties will affect the timing and amount of actual future net revenues from proved reserves, and thus their actual present value. In addition, the 10% discount factor we use when calculating discounted future net revenues may not be the most appropriate discount factor based on interest rates in effect from time to time and risks associated with our reserves or the crude oil and natural gas industry in general.

We may be required to write down the carrying values of our crude oil and natural gas properties if crude oil prices remain at their current levels or decline further.

Accounting rules require that we periodically review the carrying values of our crude oil and natural gas properties for possible impairment. Based on specific market factors, prices, and circumstances at the time of prospective impairment reviews, and the continuing evaluation of development plans, production data, economics and other factors, we may be required to write down the carrying values of our crude oil and natural gas properties. A write-down results in a non-cash charge to earnings. We have incurred impairment charges in the past and may incur additional impairment charges in the future, particularly if crude oil prices remain at their currently low levels or decline further, which could have a material adverse effect on our results of operations for the periods in which such charges are taken

We are subject to significant operating hazards and uninsured risk in the energy industry.

Our proposed operations will be subject to all of the operating hazards and risks normally incident to exploring, drilling for and producing oil and gas, such as encountering unusual or unexpected formations and pressures, blowouts, environmental pollution and personal injury.  We will maintain general liability insurance but we have not obtained insurance against such things as blowouts and pollution risks because of the prohibitive expense.  Should we sustain an uninsured loss or liability, or a loss in excess of policy limits, our ability to operate may be materially adversely affected.

We are subject to Federal Income Tax laws and changes therein which could adversely impact us.

Federal income tax laws are of particular significance to the oil and gas industry in which we engage.  Legislation has eroded various benefits of oil and gas producers and subsequent legislation could continue this trend.  Congress is continually considering proposals with respect to Federal income taxation which could have a material adverse effect on our future operations and on our ability to obtain risk capital which our industry has traditionally attracted from taxpayers in high tax brackets.

We are subject to substantial government regulation in the energy industry which could adversely impact us.

The production and sale of oil and gas are subject to regulation by state and federal authorities, the spacing of wells and the prevention of waste.  There are both federal and state laws regarding environmental controls which may necessitate significant capital outlays, resulting in extended delays, materially affect our earnings potential and cause material changes in the in our  proposed business.  We cannot predict what legislation, if any, may be passed by Congress or state legislatures in the future, or the effect of such legislation, if any, on us.  Such regulations may have a significant affect on our operating results. 

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RISK FACTORS RELATED TO OUR STOCK

The regulation of penny stocks by SEC and FINRA may discourage the tradability of our securities.

We are a "penny stock" company.  Our securities are subject to a Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers who sell such securities to persons other than established customers or accredited investors.  For purposes of the rule, the phrase "accredited investors" means, in general terms, institutions with assets in excess of $5,000,000, or individuals having a net worth in excess of $1,000,000, excluding the primary residence, or having an annual income that exceeds $200,000 (or that, when combined with a spouse's income, exceeds $300,000).  For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser's written agreement to the transaction prior to the sale.  Effectively, this discourages broker-dealers from executing trades in penny stocks.  Consequently, the rule will affect the ability of purchasers in this offering to sell their securities in any market that might develop therefore because it imposes additional regulatory burdens on penny stock transactions.

In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks".  Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended.  Because our securities constitute "penny stocks" within the meaning of the rules, the rules would apply to us and to our securities.  The rules will further affect the ability of owners of shares to sell our securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions.

Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse.  Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired consequent investor losses.  Our management is aware of the abuses that have occurred historically in the penny stock market.  Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.

We will pay no foreseeable dividends in the future.

We have not paid dividends on our common stock and do not ever anticipate paying such dividends in the foreseeable future.

Our investors may suffer future dilution due to issuances of shares for various considerations in the future.

There may be substantial dilution to our shareholders purchasing in this Offering as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, or acquisitions.

At March 31, 2015, we have warrants issued and outstanding exercisable into 942,858 shares of our common stock at ranges from $0.10 to $3.50 per share.  In addition, we have options exercisable into 935,000 shares of our common stock at a price of $0.10 per share.  The warrants and options are exercisable in whole or in part.  The exercise of the warrants and/or options into shares of our common stock could have a dilutive effect to the holdings of our existing shareholders.

Rule 144 sales in the future may have a depressive effect on our stock price.

All of the outstanding shares of common stock held by our present officers, directors, and affiliate stockholders are "restricted securities" within the meaning of Rule 144 under the Securities Act of 1933, as amended.  As restricted Shares, these shares may be resold only pursuant to an effective registration statement or under

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the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws.  Rule 144 provides in essence that a person who has held restricted securities for six months, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1.0% of a company's outstanding common stock or the average weekly trading volume during the four calendar weeks prior to the sale.  There is no limit on the amount of restricted securities that may be sold by a nonaffiliate after the owner has held the restricted securities for a period of six month.  A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registration of shares of common stock of present stockholders, may have a depressive effect upon the price of the common stock in any market that may develop.

Our common stock may be volatile, which substantially increases the risk that you may not be able to sell your shares at or above the price that you may pay for the shares.

Because of the limited trading market for our common stock and because of the possible price volatility, you may not be able to sell your shares of common stock when you desire to do so.  The inability to sell your shares in a rapidly declining market may substantially increase your risk of loss because of such illiquidity and because the price for our Securities may suffer greater declines because of our price volatility.

The price of our common stock that will prevail in the market after this offering may be higher or lower than the price you may pay.  Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to the following:

• Variations in our quarterly operating results;
• Loss of a key relationship or failure to complete significant transactions;
• Additions or departures of key personnel; and
• Fluctuations in stock market price and volume.

Additionally, in recent years the stock market in general, and the over-the-counter markets in particular, have experienced extreme price and volume fluctuations.  In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company.  These market and industry factors may materially and adversely affect our stock price, regardless of our operating performance.  In the past, class action litigation often has been brought against companies following periods of volatility in the market price of those companies common stock.  If we become involved in this type of litigation in the future, it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on your investment in our stock.

Any new potential investors will suffer a disproportionate risk and there will be immediate dilution of existing investor's investments.

Our present shareholders have acquired their securities at a cost significantly less than that which the investors purchasing pursuant to shares will pay for their stock holdings or at which future purchasers in the market may pay.  Therefore, any new potential investors will bear most of the risk of loss. 

Our business is highly speculative and the investment is therefore risky.

Due to the speculative nature of our business, it is probable that the investment in shares offered hereby will result in a total loss to the investor.  Investors should be able to financially bear the loss of their entire investment. Investment should, therefore, be limited to that portion of discretionary funds not needed for normal living purposes or for reserves for disability and retirement.

 

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ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2.  PROPERTIES

REAL ESTATE.

None.

PATENTS AND PATENT APPLICATIONS.

None.

OIL AND GAS PROPERTIES.

Our oil and natural gas properties are located in the states of Wyoming, Nebraska and Utah.

Title to Properties

As is customary in the oil and natural gas industry, we generally conduct a preliminary title examination prior to the acquisition of properties or leasehold interests. Prior to commencement of operations on such acreage, a thorough title examination will usually be conducted and any significant defects will be remedied before proceeding with operations. We believe the title to our leasehold properties is good, defensible and customary with practices in the oil and natural gas industry, subject to such exceptions that we believe do not materially detract from the use of such properties. With respect to our properties of which we are not the record owner, we rely instead on contracts with the owner or operator of the property or assignment of leases, pursuant to which, among other things, we generally have the right to have our interest placed on record.

Our properties are generally subject to royalty, overriding royalty and other interests customary in the industry, liens incident to agreements, current taxes and other burdens, minor encumbrances, easements and restrictions. We do not believe any of these burdens will materially interfere with our use of these properties.

Summary of Oil and Natural Gas Reserves

The following disclosures for the fiscal year ended March 31, 2015 includes only those reserves attributable to those located in Fremont, Hot Springs and Park Counties in Wyoming, which are part of the Western Interior acquisition.

Any reserves attributable to our Nebraska, Burke Ranch, Wyoming, Cole Creek, Wyoming and certain undeveloped properties at Western Interior and the Mondo, Utah project were not considered in the reserve report, as all properties are undeveloped at this time.

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Reserves

The following table sets forth our estimated net proved reserves as of March 31, 2015, based on the Reserve Report dated June 3, 2015.  All such reserves are attributable to those located in Fremont, Hot Springs and Park Counties in Wyoming, which are part of the Western Interior acquisition, these include the Baird, Meeteetse, Rawhide and Kirby Draw Southfield projects.

	Oil Reserves (MBbls)
	2015
Estimated Proved Reserves Data:	Gross (100%)	Net
Proved developed proving (PDP)	240.2	89.0
Proved developed non-producing (PDNP)	0.0	0.0
Total Developed	240.2	89.0
Proved undeveloped reserves (PUD)	451.0	372.1
Total Proved Reserves	691.2	461.1
Probable	1,128.5	720.9
Possible	910.2	592.5

Proved developed oil reserves are reserves that can be recovered through existing wells with existing equipment and operating methods.  Proved undeveloped oil reserves are reserves on undrilled acreage are limited to those directly offsetting development spacing and in areas that are reasonably certainty of economic productivity at greater distances. 

Probable oil reserves are those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves are likely as not to be recovered.

Possible oil reserves are those additional reserves that are less certain to be recovered that probable reserves.

Estimates of proved developed and undeveloped reserves are inherently imprecise and are continually subject to revision based on production history, results of additional exploration and development, price and production cost changes and other factors. See "- Qualifications of Technical Persons and Internal Controls Over Reserves Estimation Process."

Qualifications of Technical Persons and Internal Controls Over Reserves Estimation Process

The reserves estimates shown herein have been independently evaluated by Netherland, Sewell & Associates, Inc. (NSAI), a worldwide leader of petroleum property analysis for industry and financial organizations and government agencies.  NSAI was founded in 1961 and performs consulting petroleum engineering services under Texas Board of Professional Engineers Registration No. F-2699.  Within NSAI, the technical persons primarily responsible for preparing the estimates set forth in the NSAI reserves report incorporated herein are Mr. Steven M. Jenkins and Mr. Shane M. Howell.  Mr. Jenkins, a Licensed Professional Engineer in the State of Texas (No. 118072), has been practicing consulting petroleum engineering at NSAI since 2013 and has over 16 years of prior industry experience.  He graduated from Montana Tech of the University of Montana in 1996 with a Bachelor of Science Degree in Geophysical Engineering and from The Pennsylvania State University in 2003 with a Master of Science Degree in Community and Economic Development.  Mr. Howell, a Licensed Professional Geoscientist in the State of Texas, Geology (No. 11276), has been practicing consulting petroleum geoscience at NSAI since 2005 and has over 7 years of prior industry experience.  He graduated from San Diego State University in 1997 with a Bachelor of Science Degree in Geological Sciences and in 1998 with a Master of Science Degree in Geological Sciences.  Both technical principals meet

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or exceed the education, training, and experience requirements set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers; both are proficient in judiciously applying industry standard practices to engineering and geoscience evaluations as well as applying SEC and other industry reserves definitions and guidelines.

Mr. Martin Gottlob, the Company's Vice President of Geology, is primarily responsible for the determination of and the presentation of the reserves presented by the Company. 

The technical persons responsible for preparing the reserves estimates presented herein meet the requirements regarding qualifications, independence, objectivity and confidentiality set forth in the Standards Pertaining to the Estimating and Auditing of Oil and Natural Gas Reserves Information promulgated by the Society of Petroleum Engineers.

Our internal staff of geoscience professionals who work closely with our independent petroleum engineer to ensure the integrity, accuracy and timeliness of data furnished to them in their reserves estimation process.  We review with them our properties and discuss methods and assumptions used in their preparation of our fiscal year-end reserves estimates. While we have no formal committee specifically designated to review reserves reporting and the reserves estimation process, a copy of each of the NSAI reserve report is reviewed with representatives of NSAI and our internal technical staff before we disseminate any of the information. Additionally, our senior management reviews and approves the final reserve report and any significant internally estimated changes to our proved reserves on an annual basis.

Estimates of oil and natural gas reserves are projections based on a process involving an independent third party engineering firm's collection of all required geologic, geophysical, engineering and economic data, and such firm's complete external preparation of all required estimates and are forward-looking in nature. These reports rely upon various assumptions, including assumptions required by the SEC, such as constant oil and natural gas prices, operating expenses and future capital costs. The process also requires assumptions relating to availability of funds and timing of capital expenditures for development of our proved undeveloped reserves. These reports should not be construed as the current market value of our reserves. The process of estimating oil and natural gas reserves is also dependent on geological, engineering and economic data for each reservoir. Because of the uncertainties inherent in the interpretation of this data, we cannot be certain that the reserves will ultimately be realized. Our actual results could differ materially. See "Note 13 - Supplemental Information Relating to Oil and Natural Gas Producing Activities (Unaudited)" to our audited consolidated financial statements for additional information regarding our oil and natural gas reserves.

Under SEC rules, proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations. The term "reasonable certainty" implies a high degree of confidence that the quantities of oil and/or natural gas actually recovered will equal or exceed the estimate. To achieve reasonable certainty, NSAI employs technologies consistent with the standards established by the Society of Petroleum Engineers. The technologies and economic data used in the estimation of our proved reserves include, but are not limited to, well logs, geologic maps and available downhole and production data, seismic data and well test data.

Summary of Oil and Natural Gas Properties and Projects

Production, Price and Cost History

During the fiscal years ended March 31, 2015 and 2014, we did not have any production of or sales of oil or natural gas.

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Developed and Undeveloped Acreage

The following table presents our total gross and net developed and undeveloped acreage by region as of March 31, 2015 and 2014:

	2015				2014
	Developed Acres		Undeveloped Acres		Developed Acres		Undeveloped Acres
	Gross(1)	Net (2)	Gross	Net	Gross	Net	Gross	Net
Wyoming
Big Horn Basin	4,677	3,728	530	180	-	-	-	-
Wind River Basin	303	26	4,390	439	-	-	-	-
South Central	-	-	5,995	4,3450	-	-	-	-
Cole Creek	-	-	4,000	2,039	-	-	-	-
Burke Ranch	-	-	4,837	4,837	-	-	-	-
Nebraska
Sioux County	80	80	160	160	-	-	-	-
Kimball County	40	26	-	-	-	-	-	-
Utah
Covenant Mondo	-	-	3,995	559	-	-	-	-
Total	5,100	3,860	23,907	12,563	-	-	-	-

(1)     "Gross" means the total number of acres in which we have a working interest.

(2)     "Net" means the sum of the fractional working interests that we own in gross acres.

Productive Wells

The following table presents the total gross and net productive wells by area and by oil or natural gas completion as of March 31, 2015 and 2014:

	2015				2014
	Oil Wells		Natural Gas Wells		Oil Wells		Natural Gas Wells
	Gross(1)	Net(2)	Gross	Net	Gross	Net	Gross	Net
Wyoming
Big Horn Basin	6	6	-	-	-	-	-	-
Wind River Basin	5	0.39	-	-	-	-	-	-
South Central	-	-	-	-	-	-	-	-
Cole Creek	-	-	-	-	-	-	-	-
Burke Ranch	4	4	-	-	-	-	-	-
Nebraska			-	-	-	-	-	-
Sioux County	1	1	-	-	-	-	-	-
Kimball County	1	.65	-	-	-	-	-	-
Utah			-	-	-	-	-	-
Covenant Mondo	-	-	-	-	-	-	-	-
Total	17	12.04	-	-	-	-	-	-

(1)     "Gross" means the total number of wells in which we have a working interest.

(2)     "Net" means the sum of the fractional working interest that we own in gross wells.

(3)     The Company has done minimal rework on the 27 oil wells and as it begins a more intensive rework effort it may discover that some of these well may need to be plugged or abandoned.

(4)     Cisco Springs - The Company has done minimal rework on the 7 gas wells and as it begins a more intensive rework effort, it may discover that some of these well may need to be plugged or abandoned.

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Drilling Activity

The Company's operational activities are focused on re-work of existing wells for production purposes.

During the year ended March 31, 2015, the Company recognized $1,360,119 in exploration expenses to drill two wells in the Covenant Mondo project.  Both wells were dry holes.

At March 31, 2015, the Company had no wells being drilled.

ITEM 3.  LEGAL PROCEEDINGS

T-Rex anticipates that it (including current and any future subsidiaries) will from time to time become subject to claims and legal proceedings arising in the ordinary course of business. It is not feasible to predict the outcome of any such proceedings and we cannot assure that their ultimate disposition will not have a materially adverse effect on the Company's business, financial condition, cash flows or results of operations. The Company is not a party to any pending legal proceedings, nor is the Company aware of any civil proceeding or government authority contemplating any legal proceeding as of the date of this filing.

ITEM 4.  MINING AND SAFETY DISCLOSURE.

Not Applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the OTCQB and has been traded under the symbol "RNCH" since October 28, 2009. As a result of our name change in October 2014, our trading symbol was changed to "TRXO" on November 25, 2014.

On October 8, 2014, an amendment to the Articles of Incorporation was filed in order to authorize a reverse split of the common stock, issued and outstanding, on a one (1) new share for three hundred fifty (350) old shares basis, with fractional shares being redeemed in cash. FINRA approved the amendment, effective October 29, 2014.  

For the periods indicated, the following table sets forth the high and low bid prices per share of our common stock as reported by the OTCQB for our fiscal years ending March 31, 2015 and 2014. In considering this information, it is important to note that the historical prices for the fiscal year ended March 31, 2015 and those for the periods prior to October 29, 2014 have been adjusted to reflect the reverse split.

  

These prices represent inter-dealer quotations without retail markup, markdown, or commission and may not necessarily represent actual transactions.

 

		HIGH		LOW
Fiscal Year 2015
Quarter Ended:
June 30, 2014		$ 3.98		$ 1.57
September 30, 2014		$ 5.20		$ 2.13
December 31, 2014		$ 6.40		$ 2.05
March 31, 2015		$ 3.50		$ 1.54
Fiscal Year 2014
Quarter Ended:
June 30, 2013		$ 8.75		$ 3.50
September 30, 2013		$ 5.39		$ 2.975
December 31, 2013		$ 5.75		$ 2.975
March 31, 2014		$ 11.025		$ 5.60

Holders

There are approximately 468 holders of record of T-Rex's common stock as of March 31, 2015.

Dividend Policy

Holders of the Company's common stock are entitled to receive such dividends as may be declared by T-Rex's board of directors.  The Company has not declared or paid any dividends on T-Rex's common shares and it does not plan on declaring any dividends in the near future.  The Company currently intends to use all available funds to finance the operation and expansion of its business.

Recent Sales of Unregistered Securities

During the fiscal year ended March 31, 2014, we did not issue any shares of our common stock.

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During the fiscal year ended March 31, 2015, we made the following sales of our unregistered shares.  The numbers below have been adjusted for the 1 for 350 share reverse split of October 2014.

DATE OF	TITLE OF	NO. OF		CLASS OF
SALE	SECURITIES	SHARES	CONSIDERATION	PURCHASER
October 2014	Common Shares	371,003	$2,195,700	Terex Energy Corporation (1)
October 2014	Common Shares	81,692	Recapitalization	Shareholders
December 2014	Common Shares	7,385,700	Shares of Terex Energy Corporation	Shareholders of Terex Energy Corporation
March 2015	Common Shares	7,465,168	Shares of Western Interior Oil & Gas Corporation		Shareholders of Western Interior Oil & Gas Corporation

(1)     In December 2014, as part of the acquisition of Terex by T-Rex, the 2,195,700 shares issued to and held by Terex were returned to T-Rex and cancelled.

Exemption From Registration Claimed

All of the above sales by the Company of its unregistered securities were made by the Company in reliance upon Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act").  All of the  individuals  and/or  entities  that purchased the unregistered securities were either primarily existing shareholders,  sophisticated shareholders of the acquirees, Terex and Western Interior, consultants or sophisticated investors known  to  the  Company  and  its  management,   through  pre-existing  business relationships.   All purchasers  were  provided  access  to  all  material  information,  which  they requested,  and all  information  necessary to verify such  information and were afforded access to management of the Company in connection with their purchases. All purchasers of the unregistered securities acquired such securities for investment and not with a view toward distribution, acknowledging such intent to the Company.  All certificates or agreements  representing  such securities that were issued contained  restrictive legends,  prohibiting further transfer of the certificates or agreements representing such securities, without such securities either being first  registered  or  otherwise  exempt from  registration  in any further resale or disposition.

Issuer Purchases of Equity Securities

T-Rex did not repurchase any shares of its common stock during the years ended March 31, 2015 and 2014.

ITEM 6.  SELECTED FINANCIAL DATA

Not applicable.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion should be read in conjunction with our unaudited financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission.  Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking  statements are

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necessarily based upon estimates and assumptions that are inherently  subject to significant  business,  economic and competitive uncertainties and  contingencies,  many of which are beyond our control and many of which,  with  respect to future  business  decisions,  are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf.  We disclaim any obligation to update forward-looking statements.