UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a – 16 OR 15d – 16 UNDER THE

THE SECURITIES EXCHANGE ACT OF 1934

For the month of January, 2014

Commission File No. 0-53646

Eagleford Energy Inc.

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40F.

Form 20-F x                    Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ¨                    No x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ¨                    No x

TABLE OF CONTENTS

1.          Eagleford Energy Inc. Unaudited Interim Condensed Consolidated Financial Statements for the Three Months Ended November 30, 2013 as filed on Sedar on January 27, 2014.

2.          Eagleford Energy Inc. Management’s Discussion and Analysis for the Three Months Ended November 30, 2013 as filed on Sedar on January 27, 2014.

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.

ITEM 1

Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013

(Unaudited)

(Expressed in Canadian Dollars)

Notice of No Auditor Review of

Interim Condensed Consolidated Financial Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3) (a), if an auditor has not performed a review of the interim financial statements they must be accompanied by a notice indicating that the interim financial statements have not been reviewed by an auditor. The accompanying unaudited interim consolidated financial statements of Eagleford Energy Inc. (the “Company”) have been prepared by and are the responsibility of the management of the Company. The Company's independent auditor has not performed a review of these unaudited interim consolidated financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants.

Interim Condensed Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

See accompanying notes to the interim condensed consolidated financial statements

Interim Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended November 30,

(Expressed in Canadian Dollars)

*Reflects the March 16, 2012 two-for-one stock split

See accompanying notes to the interim condensed consolidated financial statements

*Reflects the March 16, 2012 two-for-one stock split

See Note 15 for explantion relating to comparitive figures

See accompanying notes to the interim condensed consolidated financial statements

Interim Condensed Consolidated Statements of Cash Flows

For the Three Months Ended November 30,

(Expressed in Canadian Dollars)

Supplemental Cash Flow Information and Non Cash Transactions (Note 13)

See accompanying notes to the interim condensed consolidated financial statements

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

Eagleford Energy Inc. (“Eagleford” or the “Company”) was amalgamated under the Business Corporations Act (Ontario) on November 30, 2009. The principal activities of the Company consist of exploration, development and production of petroleum and natural gas properties. In addition, the Company holds a 0.3% net smelter return royalty on 8 mining claim blocks located in Red Lake, Ontario which is carried on the consolidated statement of financial position at nil.

The company's registered office is 1 King Street West, Suite 1505, Toronto, Ontario, M5H 1A1.

The Company’s common shares trade on the Over-the-Counter Bulletin Board (OTCBB) under the symbol EFRDF.

These consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. The Company plans to obtain additional financing by way of debt or the issuance of common shares or some other means to service its current working capital requirements, any additional or unforeseen obligations or to implement any future opportunities. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due. These consolidated financial statements do not include any adjustments for this uncertainty.

The Company has accumulated significant losses and negative cash flows from operations in recent years which raise doubt as to the validity of the going concern assumption. At November 30, 2013, the Company had a working capital deficiency of $5,154,021 (August 31, 2013: $4,985,312) and an accumulated deficit of $9,324,720 (August 31, 2013: $9,212,561). The Company does not have sufficient funds to meet its liabilities for the ensuing twelve months as they fall due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. The Company's ability to continue operations and fund its liabilities is dependent on its ability to secure additional financing and cash flow. During the year ended August 31, 2013 the Company extinguished $544,239 of debt through the issuance of share capital and raised net proceeds of $405,650 through the issuance of share capital. Management is pursuing such additional sources of financing and cash flow to fund its operations and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the Company's ability to continue as a going concern. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements.

Statement of Compliance

These unaudited interim condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These consolidated financial statements of the Company were approved by the Board of Directors on January 23, 2014.

Basis of Preparation

These unaudited interim condensed consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (the “IASB”) which is incorporated in the Chartered Professional Accountants of Canada (“CPA Canada”) Handbook-Accounting.

The accounting policies applied in these unaudited interim condensed consolidated financial statements are based on IFRS effective for the period ended November 30, 2013, as issued and outstanding as of the date the Board of Directors approved the unaudited interim condensed consolidated financial statements.

Principles of Consolidation

Subsidiaries are all entities (including special purpose entities) controlled by the Company. Control exists when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights that currently are exercisable are taken into account. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The consolidated financial statements include the accounts of Eagleford, the legal parent, together with its wholly-owned subsidiaries, 1354166 Alberta Ltd. an Alberta operating company (“1354166 Alberta”), Dyami Energy LLC a Texas limited liability company (“Dyami Energy”) and Eagleford Energy, Zavala Inc. a Nevada company (“Zavala Inc.”) effective August 29, 2013. All Intercompany balances and transactions have been eliminated on consolidation.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

These unaudited interim condensed consolidated financial statements were prepared using the same accounting policies and methods as those described in our consolidated financial statements for the year ended August 31, 2013. These unaudited interim condensed consolidated financial statements are prepared in compliance with International Accounting Standard 34, Interim Financial Reporting (IAS 34). Accordingly, certain information and disclosure normally included in annual financial statements prepared in accordance with International Reporting Standards have been omitted or condensed. These unaudited interim condensed consolidated financial statements should be read in conjunction with our consolidated financial statements for the year ended August 31, 2013.

IFRS 10, “Consolidated Financial Statements” replaces the consolidation requirements of SIC-12 Consolidation Special Purpose Entities and IAS 27 “Consolidated Separate Financial Statements”. It introduces a new principle-based definition of control, applicable to all investees to determine the scope of consolidation. The standard provides the framework for consolidated financial statements and their preparation based on the principle of control. This new standard is effective for the Company’s Interim and Consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

IFRS 11 “Joint Arrangements” which replaces IAS 31, “Interests in Joint Ventures”. IFRS 11 divides joint arrangements into two types, each having its own accounting model. A “joint operation” continues to be accounted for using proportionate consolidation, whereas a “joint venture” must be accounted for using equity accounting. This differs from IAS 31, where there was the choice to use proportionate consolidation or equity accounting for joint ventures. A “joint operation” is defined as the joint operators having rights to the assets, and obligations for the liabilities, relating to the arrangement. In a “joint venture”, the joint ventures partners have rights to the net assets of the arrangement, typically through their investment in a separate joint venture entity. This new standard is effective for the Company’s Interim and Consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

IFRS 12 “Disclosure of Interests in Other Entities” is a new standard, which combines all of the disclosure requirements for subsidiaries, associates and joint arrangements, as well as unconsolidated structured entities. This new standard is effective for the Company’s Interim and Consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

IFRS 13 “Fair Value Measurement” replaces the fair value guidance contained in individual IFRS with a single source of fair value measurement guidance. The standard also requires disclosures which enable users to assess the methods and inputs used to develop fair value measurements. This new standard is effective for the Company’s Interim and Consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

IAS 1 “Presentation of Financial Statements” was amended by the IASB in order to align the presentation of items in comprehensive income with US GAAP. Items in other comprehensive income will be required to be presented in two categories: items that will be reclassified into profit or loss and those that will not be reclassified. The flexibility to present a statement of comprehensive income remains unchanged. The amendments to IAS 1 are effective for annual periods beginning on or after July 1, 2012. This new standard is effective for the Company’s Interim and Consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

IAS 27 “Separate Financial Statements”. In May 2011, the IASB amended IAS 27, Separate Financial Statements (“IAS 27”). This amendment removes the requirements for consolidated statements from IAS 27, and moves it over to IFRS 10 “Consolidated Financial Statements”. The amendment mandates that when a company prepares separate financial statements, investment in subsidiaries, associates, and jointly controlled entities are to be accounted for using either the cost method or in accordance with IFRS 9 “Financial Instruments”. In addition, this amendment determines the treatment for recognizing dividends, the treatment of certain group reorganizations, and some disclosure requirements. This amendment is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

IAS 28 “Investments in Associates and Joint Ventures”. In May 2011, the IASB amended IAS 28, investments in Associates and Joint Ventures (“IAS 28”). This amendment requires any retained portion of an investment in an associate or joint venture that has not been classified as held for sale to be measured using the equity method until disposal. After disposal, if the retained interest continues to be an associate or joint venture, the amendment requires for it to be continued to be accounted for under the equity method. The amendment also disallows the re measurement of any retained interest in an investment upon the cessation of significant influence or joint control. This amended standard is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2013. Adoption of this standard did not have a significant impact on its consolidated financial statements.

The following are new IFRS pronouncements that have been issued, although not yet effective and have not been early adopted, and may have an impact on the Company in the future as discussed below.

IFRS 7, “Financial Instruments”: Disclosures”, which requires disclosure of both gross and net information about financial instruments eligible for offset in the statement of financial position and financial instruments subject to master netting agreements. Concurrent with the amendments to IFRS 7, the IASB also amended IAS 32, “Financial Instruments: Presentation” to clarify the exiting requirements for offsetting financial instruments in the statement of financial position. The amendments to IAS 32 are effective as of January 1, 2014. The Company does not expect to have a significant impact on its consolidated financial statements.

IAS 32 “Financial Instruments: Presentation”. In December 2011, the IASB issued an amendment to clarify the meaning of the offsetting criterion and the principle behind net settlement, including identifying when some gross settlement systems may be considered equivalent to net settlement. This amendment is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2014. Earlier application is permitted when applied with corresponding amendment to IFRS 7.

IAS 36 “Impairment of Assets”. In May 2013, the IASB issued an amendment to address the disclosure of information about the recoverable amount of the impaired assets if that amount is based on fair value less costs of disposal. This amendment is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2014. The Company is assessing the impact of this amended standard on its consolidated financial statements.

IAS 39 “Financial Instruments: Recognition and Measurement”. In June 2013, the IASB issued a narrow scope amendment to IAS 39. Under the amendment, there would be no need to discontinue hedge accounting if a hedging derivative was novated, provided that certain criteria are met. This amendment is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2014. The Company is assessing the impact of this amended standard on its consolidated financial statements.

IFRAC 21 “levies”. Issued in May 2013, this interpretation provides guidance on when to recognize a liability for a levy imposed by a government, both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain. This is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2014. The Company is assessing the impact of this amended standard on its consolidated financial statements.

IFRS 9 “Financial Instruments”. In October 2010, the IASB issued IFRS 9, Financial Instruments (“IFRS 9”). IFRS 9, which replaces IAS 39, Financial Instruments: Recognition and Measurement, establishes principles for the financial reporting of financial assets and financial liabilities that will present relevant and useful information to users of financial statements for their assessment of the amounts, timing and uncertainty of an entity’s future cash flows. This new standard is effective for the Company’s interim and annual consolidated financial statements commencing September 1, 2015. The Company is assessing the impact of this new standard on its consolidated financial statements.

The Company’s reportable and geographical segments are Canada and the United States. The accounting policies used for the reportable segments are the same as the Company’s accounting policies.

For the purposes of monitoring segment performance and allocating resources between segments, the Company’s executive officer monitors the tangible, intangible and financial assets attributable to each segment.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

All assets are allocated to reportable segments. The following tables show information regarding the Company’s reportable segments.

The Company’s exploration and evaluation assets are located in Texas, USA. As at November 30, 2013 no impairment was recorded (year ended August 31, 2013 the Company record an impairment of $2,690,568 on its Murphy Lease, Zavala County, Texas based on the amount for which management believes the assets could be sold or farmed out in an arms’ length transaction, less estimated costs to sell). Included in the above additions for the three months ended November 30, 2013 the Company capitalized borrowing costs interest of $58,596 to exploration and evaluation assets (year ended August 31, 2013: $240,092).

Matthews Lease, Zavala County, Texas, USA

During the year ended August 31, 2013, the Company entered into an agreement with the lessors of the Matthews Property, OGR Energy Corporation (“OGR Energy”) and Texas Onshore Energy, Inc. (“Texas Onshore”) together holding a 15% working interest in the Matthews Property with back in rights to earn an additional 15% working interest after production achieved $15.0 million of revenue. A new lease was signed with the Company’s subsidiary, Zavala Inc. effective September 1, 2013 (the “New Matthews Lease”).

The New Matthews Lease has a primary term expiring January 31, 2014 (the “Primary Term”) (subject to certain extensions) and can be maintained through the provision of certain royalty payments and the implementation of a continuous drilling program as follows.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

Upon the Company satisfying the New Operation, OGR Corporation and Texas Onshore will assign their working interests to Zavala Inc. and Zavala Inc’s interest will increase to a 100% working interest in the Matthews Property from a 75% working interest before payout and a 61.50% working interest after payout of production revenue of $12.5 million and a 10% working interest before payout and a 7.5% working interest after payout of production revenue of $15 million held by Eagleford with the balance held by OGR Energy and Texas Onshore. The royalties payable under the Matthews Lease are 25% (See Note 16).

Murphy Lease, Zavala County, Texas, USA

Dyami Energy holds a 100% working interest in a mineral lease comprising approximately 2,637 acres of land in Zavala County, Texas (the “Murphy Lease”) subject to a 10% carried interest on the drilling costs from surface to base of the Austin Chalk formation, and a 3% carried interest on the drilling costs from the top of the Eagle Ford shale formation to basement on the first well drilled into a serpentine plug and for the first well drilled into a second serpentine plug, if discovered. Thereafter Dyami Energy’s working interests range from 90% to 97%. The royalties payable under the Murphy Lease are 25%.

Dyami Energy is required to drill a well every six months in order to maintain the Murphy Lease. Three years after the cessation of continuous drilling, all rights below the deepest producing horizon in each unit then being held by production, shall be released and re-assigned to the lessor, unless the drilling of another well has been proposed on said unit, approved in writing by lessor, and timely commenced. Dyami Energy has received an extension of the Murphy Lease until January 31, 2014 to perform its obligations thereunder.

The Company’s decommissioning obligations result from its ownership interests in petroleum and natural gas assets including well sites, gathering systems and processing facilities. The total decommissioning obligation is estimated based on the Company’s net ownership interest in all wells and facilities, estimated costs to reclaim and abandon these wells and facilities, and the estimated timing of the costs to be incurred in future years. The Company has estimated the net present value of decommissioning obligations to be $120,301 at November 30, 2013 (August 31, 2013 $119,742) based on an undiscounted total future liability of $167,210 (August 31, 2013 $166,578). These payments are expected to be incurred between 2015 and 2031. The discount factor, being the risk free rate related to the liability is 3.14% (August 31, 2013: 3.09%). The above amounts have been classified as long term.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

In February 2013, a vendor of Dyami Energy applied a lien on the Murphy #4 well and filed a claim in the District Court of Zavala County, Texas (Case No. 13-02-12941-ZCV) seeking payment of US$169,196 for services. Dyami Energy is disputing the amount on the basis of negligence by the vendor and the Company filed a counter claim. The full amount of the provision has been recorded and any legal costs will be expensed as incurred. The outcome of this claim is uncertain at this time. The amount has been classified as short term, however not discounted as the impact to the consolidated financial statements is considered immaterial.

In May 2012 a vendor of Dyami Energy filed a claim in the District Court of Harris County, Texas seeking payment of US$64,866. Dyami Energy was disputing the amount charged due to faulty equipment. The full amount of the provision which was accrued in the prior year 2012 was reversed in 2013 as the vendor is no longer in good standing as a Texas corporation and the vendor’s attorney filed in the District Court of Harris County, Texas a motion to withdraw as counsel.

In December 2011, a vendor of Dyami Energy filed a claim in the District Court of Harris County, Texas (Case No. 2011-74035/Court: 113) seeking payment of US$62,800. Dyami Energy disputed the claim on the basis of excessive charges. In December 2013 an agreed final judgement in favour of the vendor was entered into court in the amount of $42,803 and post judgement interest at 5% per annum until paid in full.

On March 16, 2012, the Company completed a 2-for-1 stock split, pursuant to which one (1) newly-issued share of the Company’s common stock was issued to each holder of a share of common stock as of the close of business. The forward stock split has been applied retrospectively for all periods presented.

Authorized:

Unlimited number of common shares at no par value

Unlimited non-participating, non-dividend paying, voting redeemable preference shares

Issued:

The following table sets out the changes in common shares during the respective periods:

* Reflects the March 16, 2012 two-for-one stock split

The following table sets out the changes in warrants during the respective periods:

* Reflects the March 16, 2012 two-for-one stock split

(a)        On September 25, 2012 the Company completed private placements for gross proceeds of $441,004 of equity capital from arm’s length private placement funding through the issuance of 2,249,790 units at a price of US$0.20 per unit. Each unit is comprised of one common share and one-half a common share purchase warrant, with each whole warrant entitling the holder to acquire one common share of the Company at US$0.50 for a period of three years from the date of issuance. The amount allocated to derivative warrant liabilities for warrants based on fair value using the Black Scholes model was $163,541 (retranslated as $176,087 at August 31, 2013). In connection with the private placement, the Company paid cash commissions and other expenses of $35,354 and issued an aggregate of 179,983 broker warrants.  Each broker warrant entitles the holder to acquire one common share of the Company at an exercise price of US$0.25 for a period of three years from the date of issuance. The amount allocated to derivative warrant liabilities based on fair value using the Black Scholes model was $44,895 (retranslated as $48,340 at August 31, 2013) with a corresponding decrease in common shares (see Note 11).

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

(b)        On June 1, 2013, the Company issued 23,662,569 common shares as full settlement of shareholders’ loans in the amount of $198,333 and interest due on shareholders’ loans in the amount of $345,906. The amount allocated to common shares based on fair value was $946,503 and $402,264 was recorded as a loss on settlement of debt in the statement of operations and comprehensive loss.

The following table summarizes the outstanding warrants as at November 30, 2013:

* Reflects the March 16, 2012 two-for-one stock split

The following table summarizes the outstanding warrants as at August 31, 2013:

* Reflects the March 16, 2012 two-for-one stock split

The following table summarizes the weighted average shares outstanding:

* Reflects the March 16, 2012 two-for-one stock split

The effects of any potential dilutive instruments on loss per share are anti-dilutive and therefore have been excluded from the calculation of diluted loss per share.

Share Purchase Options

The Company has a stock option plan to provide incentives for directors, officers, employees and consultants of the Company. The maximum number of shares, which may be set aside for issuance under the stock option plan, is 20% of the issued and outstanding common shares of the Company on a rolling basis.

The following table is a summary of the status of the Company’s stock options and changes during the period:

* Reflects the March 16, 2012 two-for-one stock split

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

The following table is a summary of the Company's stock options outstanding and exercisable at November 30, 2013:

* Reflects the March 16, 2012 two-for-one stock split

The following table is a summary of the Company's stock options outstanding and exercisable at August 31, 2013:

* Reflects the March 16, 2012 two-for-one stock split

Contributed Surplus

Contributed surplus transactions for the respective periods are as follows:

The following transactions with individuals related to the Company arose in the normal course of business have been accounted for at the exchange amount being the amount agreed to by the related parties, which approximates the arm’s length equivalent value.

Compensation of Key Management Personnel

The remuneration of directors and other members of key management personnel during the three month periods ended were as follows:

The following balances owing to the President of the Company are included in trade and other payables and are unsecured, non-interest bearing and due on demand:

At November 30, 2013 and August 31, 2013 the amount of directors’ fees included in trade and other payables was $16,100.

At November 30, 2013 and August 31, 2013 the Company had promissory notes payable to the President of $28,845 and US$300,000. For the three months ended November 30, 2013 the Company recorded interest of $8,647 (November 30, 2012: $8,882). At November 30, 2013 included in trade and other payables is interest of $74,735 (August 31, 2013: $65,826). The notes are due on demand and bear interest at 10% per annum. Interest is payable annually on the anniversary date of the notes.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

At November 30, 2013 and August 31, 2013 the Company had a US$960,000, 10% per annum secured promissory note payable to Benchmark Enterprises LLC (“Benchmark”). Benchmark is a shareholder of the Company. For the three months ended November 30, 2013 the Company recorded interest of $25,368 (November 30, 2012: $23,771). At November 30, 2013 included in trade and other payables is interest of $193,704 (August 31, 2013: $169,033) (see Note 10).

At November 30, 2013 included in trade and other payables is $325 due to Gottbetter & Partners LLP for legal fees (August 31, 2013 $3,509). During the year ended August 31, 2013 the Company completed private placements of 2,249,790 units in the capital of the Company for gross proceeds of $441,004 and paid to Gottbetter Capital Markets, LLC, placement agent fees of $35,280 and issued 179,983 common share purchase warrants exercisable at US$0.25 for a period of three years from the date of issue. Gottbetter Capital Group, Inc. is a shareholder of the Company. Adam Gottbetter is the managing and principal partner of Gottbetter & Partners LLP, and the beneficial owner of Gottbetter Capital Group, Inc., and Gottbetter Capital Markets, LLC.

At November 30, 2013 and August 31, 2013, the Company had shareholders’ loans payable of US$1,433,500 and $250,000. For the three months ended November 30, 2013 the Company recorded interest of $44,113 (November 30, 2012: $46,521). At November 30, 2013, included in trade and other payables, is interest of $88,711 (August 31, 2013: $47,037). The notes are payable on demand and bear interest at 10% per annum. Interest is payable annually on the anniversary date of the notes. During the year ended August 31, 2013, the Company issued 23,662,569 common shares as full settlement of shareholders’ loans in the amount of $198,333 and interest due on shareholders’ loans in the amount of $345,906.

At November 30, 2013 and August 31, 2013 the Company had a US$960,000, 10% per annum secured promissory note payable to Benchmark Enterprises LLC. The note and all unpaid and accrued interest was due on or before August 31, 2013, or within 15 days of written demand to the Company, or upon the Company closing a cash financing or series of cash financings in excess of US$2,500,000 in which case fifty cents of every one dollar exceeding US$2,500,000 will be allocated to the secured note until paid in full. As of the date of the unaudited interim condensed consolidated financial statements, the Company had not received written demand for payment. For the three months ended November 30, 2013 the Company recorded interest of $25,368 (November 30, 2012: $23,771). At November 30, 2013 included in trade and other payables is interest of $193,704 (August 31, 2013: $169,033). The note is secured by Zavala Inc.’s interest in the Matthews Lease and Dyami Energy’s interest in the Murphy Lease, Zavala County, Texas (the “Leases”). The carrying value of their interests in the Leases at November 30, 2013 was $2,844,866 (August 31, 2013: $2,829,830). The Company may, in its sole discretion, prepay any portion of the principal amount.

The Company has warrants issued with an exercise price in US dollars which are different from the functional currency of the Company (Canadian Dollars) and accordingly the warrants are treated as a financial liability and the fair value movement during the period is recognized in the profit or loss.

The following tables sets out the changes in derivative warrant liabilities during the respective periods:

* Reflects the March 16, 2012 two-for-one stock split

On September 25, 2012 the Company issued 1,124,895 common share purchase warrants exercisable at US$0.50 and 179,983 common share purchase broker warrants exercisable at US$0.25 expiring September 25, 2015. The fair value measured using the Black Scholes valuation model was $163,541 and $45,895, respectively.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

The following tables set out the number of derivative warrant liabilities outstanding at November 30, 2013:

The following tables set out the number of derivative warrant liabilities outstanding at August 31, 2013:

The fair value of the warrants issued during the year ended August 31, 2013 were estimated using the Black-Scholes pricing model with the following assumptions:

The Company has classified its financial instruments as follows:

The types of risk exposure and the ways in which such exposures are managed are as follows:

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

Credit Risk

Credit risk is primarily related to the Company’s receivables from joint venture partners and the risk of financial loss if a partner or counterparty to a financial instrument fails to meet its contractual obligations. Receivables from joint venture partners are normally collected within one to three months of the joint venture bill being issued to the partner. The Company historically has not experienced any collection issues with its joint venture partners to date. The Company attempts to mitigate the risk from joint venture receivables by obtaining partner approval of significant capital expenditures prior to expenditure. The Company establishes an allowance for doubtful accounts as determined by management based on their assessed collectability; therefore, the carrying amount of trade and other receivables generally represents the maximum credit exposure. The Company believes that its counterparties currently have the financial capacity to settle outstanding obligations in the normal course of business.

Concentration risks exist in cash because significant balances are maintained with one financial institution. The risk is mitigated because the financial institution is an international bank.

The Company’s maximum exposure to credit risk is as follows:

Liquidity Risk

The Company monitors its liquidity position regularly to assess whether it has the funds necessary to fulfill planned exploration commitments on its oil and gas properties or that viable options are available to fund such commitments from new equity issuances or alternative sources such as farm-out agreements. However, as an exploration company at an early stage of development and without significant internally generated cash flow, there are inherent liquidity risks, including the possibility that additional financing may not be available to the Company, or that actual exploration expenditures may exceed those planned. The current uncertainty in global markets could have an impact on the Company’s future ability to access capital on terms that are acceptable to the Company. The Company has so far been able to raise the required financing to meet its obligations however, there can be no assurance that it will continue to do so in the future.

The following table illustrates the contractual maturities of financial liabilities:

Market Risk

Market risk represents the risk of loss that may impact the Company’s financial position, results of operations, or cash flows due to adverse changes in financial market prices, including interest rate risk, foreign currency exchange rate risk, commodity price risk, and other relevant market or price risks. The Company does not use derivative financial instruments or derivative commodity instruments to mitigate this risk.

The oil and gas industry is exposed to a variety of risks including the uncertainty of finding and recovering new economic reserves, the performance of hydrocarbon reservoirs, securing markets for production, commodity prices, interest rate fluctuations, potential damage to or malfunction of equipment and changes to income tax, royalty, environmental or other governmental regulations.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

Market events and conditions in recent years including disruptions in the international credit markets and other financial systems and the deterioration of global economic conditions have caused significant volatility to commodity prices. These conditions caused a loss of confidence in the broader U.S. and global credit and financial markets. Notwithstanding various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader credit markets to further deteriorate and stock markets to decline. These factors have negatively impacted company valuations and may impact the performance of the global economy going forward. Although economic conditions improved towards the later portion of 2009, the recovery has been slow in various jurisdictions including in Europe and the United States and has been impacted by various ongoing factors including sovereign debt levels and high levels of unemployment which continue to impact commodity prices and to result in volatility in the stock market.

The Company mitigates these risks by:

Commodity price risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in commodity prices. Commodity prices for petroleum and natural gas are impacted by world economic events that dictate the levels of supply and demand.

The Company believes that movement in commodity prices that are reasonably possible over the next twelve month period will not have a significant impact on the Company.

Commodity Price Sensitivity

The following table summarizes the sensitivity of the fair value of the Company’s risk management position for the period ended November 30, 2013 and 2012 to fluctuations in natural gas prices, with all other variables held constant. When assessing the potential impact of these price changes, the Company believes that 10 percent volatility is a reasonable measure. Fluctuations in natural gas prices potentially could have resulted in unrealized gains (losses) impacting net income as follows:

The Company is exposed to the fluctuations in foreign exchange rates. The prices received by the Company for the production of natural gas and natural gas liquids are primarily determined in reference to United States dollars but are settled with the Company in Canadian dollars. The Company’s cash flow for commodity sales will therefore be impacted by fluctuations in foreign exchange rates.

The Company operates in Canada and a portion of its expenses are incurred in U.S. dollars. A significant change in the currency exchange rates between the Canadian dollar relative to US dollar could have an effect on the Company’s financial instruments. The Company does not hedge its foreign currency exposure. The following assets and liabilities are denominated in US dollars at November 30, 2013 and 2012:

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

The following table shows the estimated sensitivity of the Company’s total comprehensive loss for the periods set out from a change in the U.S dollar exchange rate in which the Company has exposure with all other variables held constant:

Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. The majority of the Company’s debt is short-term in nature with fixed rates.

Based on management's knowledge and experience of the financial markets, the Company believes that the movements in interest rates that are reasonably possible over the next twelve month period will not have a significant impact on the Company.

The Company’s financial instruments included on the consolidated statement of financial position as at November 30, 2013 and August 31, 2013 are comprised of cash, trade and other receivables, trade and other payables, secured note payable, shareholders’ loans, provisions, and derivative warrant liabilities.

The Company classifies the fair value of financial instruments measured at fair value according to the following hierarchy based on the amount of observable inputs used to value the instrument.

• Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

• Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs, including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the marketplace.

• Level 3 – Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.

Cash, derivative warrant liabilities and marketable securities are stated at fair value (Level 1 measurement). The carrying value of trade and other receivables, trade and other payables, secured note payable, shareholders’ loans and provisions approximate their fair value due to the short-term maturity of these financial instruments (Level 3 measurement).

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

Capital Management

The Company’s objectives when managing capital are to ensure the Company will have sufficient financial capacity, liquidity and flexibility to funds its operations, growth and ongoing exploration and development commitments on its oil and gas interests. The Company is dependent on funding these activities through debt and equity financings. Due to long lead cycles of the Company’s exploration activities, the Company’s capital requirements currently exceed its operational cash flow generated. As such the Company is dependent upon future financings in order to maintain its flexibility and liquidity and may from time to time be required to issue equity, issue debt, adjust capital spending or seek joint venture partners.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of any underlying assets in order to meet current and upcoming obligations. Current plans for the development commitments of the Company’s Texas leases include debt or equity financing or seeking and obtaining a joint venture partner.

The board of directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management and favourable market conditions to sustain future development of the business.

As at November 30, 2013 and August 31, 2013 and the Company considered its capital structure to comprise of shareholders equity and long-term debt.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes in the Company’s capital management during the period ended November 30, 2013.

The Company is not subject to any externally imposed restrictions on its capital requirements.

The following table summarizes the non-cash transactions for the periods set out:

The following table summarizes the changes in non-cash working capital for the periods set out:

The Company has certain commitments on its Leases located in Zavala County, Texas, USA (see Note 6).

The comparative unaudited interim condensed consolidated statement of shareholders’ equity and the comparative unaudited interim condensed consolidated statement of financial position as at and for the three month period ended November 30, 2012 have been revised primarily to reflect revisions made to the assumptions used in the Black Scholes calculation of derivative warrant liabilities. The assumptions are now consistent with the assumptions used in the Black Scholes calculation of derivative warrant liabilities in the audited consolidated financial statements for the year ended August 31, 2013.

Notes to Interim Condensed Consolidated Financial Statements

For the Three Months Ended November 30, 2013 and 2012

(Expressed In Canadian Dollars) (Unaudited)

The effect of the changes is summarized as follows:

Also, certain comparative figures have been reclassified to conform to current period presentation under IFRS.

On December 3, 2013, the Company entered into an agreement with Stratex Oil and Gas Holdings, Inc. (“Stratex”) to develop the Matthews Lease in Zavala County, Texas (the “Joint Development Agreement”). Under the terms of the Joint Development Agreement, Stratex may earn a 66.67% working interest before payout (50% working interest after payout) in the Matthews #1 well by:

Following the completion of the above, Stratex will earn a 50% working interest in the 2,629 acre Matthews Lease excluding 80 acres surrounding the Matthews #3 well.

ITEM 2

Management’s Discussion and Analysis

For the Three Months Ended

November 30, 2013

1 King Street West, Suite 1505, Toronto, ON, Canada Telephone: 416 364 4039, Facsimile: 416 364-8244

OVERVIEW

Eagleford Energy Inc. (“Eagleford” or the “Company”) is amalgamated under the laws of the Province of Ontario. The Company's business focus consists of acquiring, exploring and developing oil and gas interests. The recoverability of the amount shown for these properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete exploration and development, and future profitable production or proceeds from disposition of such property. The Company’s oil and gas interests are located in Alberta, Canada and Zavala County, Texas. In addition the Company holds a 0.3% net smelter return royalty on 8 mining claim blocks located in Red Lake, Ontario which is carried on the consolidated balance sheets at nil. The Company completed a two-for-one stock split, pursuant to which one (1) newly-issued share of the Company’s common stock was issued to each holder of a share of common stock as of the close of business on March 16, 2012. The address of the registered office is 1 King Street West, Suite 1505, Toronto, Ontario, M5H 1A1. Eagleford’s common shares trade on the Over-the-Counter Bulletin Board (OTCBB) under the symbol EFRDF.

The Company’s Unaudited Interim Condensed Consolidated Financial Statements for the period ended November 30, 2013 and 2012 include the accounts of the Company, its wholly owned subsidiaries 1354166 Alberta Ltd. (“1354166 Alberta”), Dyami Energy LLC (“Dyami Energy”) and Eagleford Energy, Zavala Inc. (“Zavala Inc.”).

Our Canadian public filings can be accessed and viewed via the System for Electronic Data Analysis and Retrieval (“SEDAR”) at www.sedar.com. Readers can also access and view our Canadian public insider trading reports via the System for Electronic Disclosure by Insiders at www.sedi.ca. Our U.S. public filings are available at the public reference room of the U.S. Securities and Exchange Commission (“SEC”) located at 100 F Street, N.E., Room 1580, Washington, DC 20549 and at the website maintained by the SEC at www.sec.gov.

The following Management’s Discussion and Analysis of Eagleford should be read in conjunction with the Company’s Unaudited Interim Condensed Consolidated Financial Statements for the three months ended November 30, 2013 and notes thereto.

The Company’s Unaudited Interim Condensed Consolidated Financial Statements for the three months ended November 30, 2013 were prepared using the same accounting policies and methods as those described in our Consolidated Financial Statements for the year ended August 31, 2013. The Unaudited Interim Condensed Consolidated Financial Statements are prepared in compliance with International Accounting Standard 34, Interim Financial Reporting (IAS 34). Accordingly, certain information and disclosure normally included in annual financial statements prepared in accordance with International Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”) have been omitted or condensed. The Unaudited Interim Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements for the year ended August 31, 2013. All amounts herein are presented in Canadian dollars, unless otherwise noted.

This Management’s Discussion and Analysis is dated January 23, 2014 and has been approved by the Board of Directors of the Company.

FORWARD LOOKING STATEMENTS

This Management’s Discussion and Analysis contains certain forward-looking statements, including management’s assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company’s control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company’s actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this Management Discussion and Analysis are made as at the date of this Management Discussion and Analysis and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Non-IFRS Measurements – Certain measures in this Management’s Discussion and Analysis do not have any standardized meaning as prescribed by IFRS including "Operating net back" are considered Non-IFRS measures. Therefore, these measures may not be comparable to similar measures presented by other issuers. These measures are common with the oil and gas industry and have been described and presented in this Management’s Discussion and Analysis in order to provide shareholders and potential investors with additional information regarding the company's liquidity and its ability to generate funds to finance its operations. These terms are commonly used in the oil and gas industry and are therefore presented here to provide balances comparable to other oil and gas production companies.

GLOSSARY OF ABBREVIATIONS

(1)     Boe conversion ratio of 6 Mcf: 1Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Disclosure provided herein in respect of Boes may be misleading, particularly if used in isolation.

The following table sets forth certain standard conversions between Standard Imperial Units and the International System of units (or metric units).

OVERALL PERFORMANCE

Revenue, net of royalties for the three months ended November 30, 2013 increased by 38% to $13,603 compared to $9,898 for the same three month period in 2012. The increase in net revenue for the three month period ended November 30, 2013 was attributed to higher commodity prices received for natural gas and higher production volume from the Company’s Botha, Alberta property. Net loss for the three months ended November 30, 2013 was $112,159 compared to a net loss of $216,931 for the three months ended November 30, 2012. The decrease in net loss during 2013 was primarily related to a decrease of $94,156 in general and administrative expenses to $78,004 compared to $172,160 for the three month period ended November 30, 2012.

For the three months ended November 30, 2012, the Company recorded additions of $61,196 to exploration and evaluation assets.

As part of the Company’s oil and gas development program, management of the Company anticipates further expenditures to expand its existing portfolio of proved reserves. Amounts expended on future exploration and development is dependent on the nature of future opportunities evaluated by the Company. Any expenditure which exceeds available cash will be required to be funded by additional share capital or debt issued by the Company, or by other means. The Company’s long-term profitability will depend upon its ability to successfully implement its business plan.

The Company’s past primary source of liquidity and capital resources has been proceeds from the issuance of share capital, shareholders’ loans and cash flow from oil and gas operations.

RISK AND UNCERTAINTIES

There have been no material changes during the three months ended November 30, 2013 to the risks and uncertainties as identified in the Management Discussion and Analysis for the year ended August 31, 2013.

Contractual maturities:

The following table illustrates the contractual maturities of financial liabilities:

(1)         Translated at current exchange rate.

Capital Management

The Company’s objectives when managing capital are to ensure the Company will have sufficient financial capacity, liquidity and flexibility to funds its operations, growth and ongoing exploration and development commitments on its oil and gas interests. The Company is dependent on funding these activities through debt and equity financings. Due to long lead cycles of the Company’s exploration activities, the Company’s capital requirements currently exceed its operational cash flow generated. As such the Company is dependent upon future financings in order to maintain its flexibility and liquidity and may from time to time be required to issue equity, issue debt, adjust capital spending or seek joint venture partners.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of any underlying assets in order to meet current and upcoming obligations. Current plans for the development commitments of the Company’s Texas leases include debt or equity financing or seeking and obtaining a joint venture partner.

The board of directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management and favourable market conditions to sustain future development of the business.

As at November 30, 2013 and August 31, 2013 and the Company considered its capital structure to comprise of shareholders equity and long-term debt.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

There were no changes in the Company’s capital management during the period ended November 30, 2013.

The Company is not subject to any externally imposed restrictions on its capital requirements.

RESULTS OF OPERATIONS

Production Volume

For the three months ended November 30, 2013 average natural gas sales volumes were up slightly to 54 mcf/d compared to 50 mcf/d for the same period in 2012. Total production volume for the three months ended November 30, 2013 was 4,904 mcf compared to 4,550 mcf for the same three month period in 2012.

Commodity Prices

For the three months ended November 30, 2013 average natural gas prices received per mcf increased by 16% to $3.04 compared to $2.62 for the three months ended November 30, 2012.

The increase in average natural gas prices received was attributed to higher commodity prices for natural gas for the three months ended November 30, 2013.

Natural Gas Sales, Net of Royalties

Natural gas sales for the three months ended November 30, 2013 was up $2,972 to $14,907 compared to $11,935 for the three months ended November 30, 2012.

The increase in sales for the three month period ended November 30, 2013 was attributed to higher commodity prices received for natural gas and higher production volume.

Royalties for the three months ended November 30, 2013 were $1,034 versus $2,037 for the comparable three month period in 2012.

As a result of the above, revenue, net of royalties for the three months ended November 30, 2013 increased by 38% to $13,603 compared to $9,898 for the same three month period in 2012.

Operating Costs

For three months ended November 30, 2013 operating costs were $1,978 down $1,256 compared to operating costs of $3,234 for the three months ended November 30, 2012.

The decrease in operating costs for the three months ended November 30, 2013 was attributed to lower gas lower maintenance charges.

Depletion and Accretion

Depletion and accretion for the three months ended November 30, 2013 decreased by $3,301 to $852 compared to $4,153 for the three months ended November 30, 2012.

The decrease in depletion and accretion for the three months ended November 30, 2013 was primarily attributed to lower carrying costs of the Company’s Botha, Alberta property at Nil compared to $171,634 at November 30, 2012.

General and Administrative Expenses

General and administrative expenses for the three months ended November 30, 2013 were $94,156 lower at $78,004 compared to $172,160 for the three months ended November 30, 2012. The decrease in expenses during 2013 was primarily attributed to a decrease in consulting fees and expenses of $45,826, a decrease in advisory fees of $33,533, a decrease in professionals of $17,838 and a decrease in reserve report fees of $4,060. These decreases were partially offset by an increase in head office costs of $6,000 during the three month period ended November 30, 2013.

Interest Expense

For the three months ended November 30, 2013 the Company incurred interest costs of $19,532 versus interest costs of $20,802 for the three months ended November 30, 2012.

The increase in interest for the three months ended November 30, 2013 was attributed to increases in foreign exchange rates on US dollar loan interest recorded.

Loss on Derivative Warrant Liabilities

For the three months ended November 30, 2013, the Company recorded an unrealized loss on derivative warrant liabilities of $8,617 compared to an unrealized loss of $12,127 for the three months ended November 30, 2012.

The Company has warrants issued with an exercise price in US dollars which is different to the functional currency of the Company (Canadian Dollars) and accordingly the warrants are treated as a derivative financial liability and the fair value movement during the period is recognized in the consolidated statement of operations.

Loss on Foreign Exchange

For the three months ended November 30, 2013 the Company recorded a loss on foreign exchange of $16,779 compared to a loss of $14,353 for the same three month period in 2012.

These foreign exchange losses are attributed to the translation of monetary assets and liabilities not denominated in the functional currency of the Company.

Net Loss

Net loss for the three months ended November 30, 2013 was $112,159 compared to a net loss of $216,931 for the three months ended November 30, 2012. The decrease in net loss during 2013 was primarily related to a decrease of $94,156 in general and administrative expenses to $78,004 compared to $172,160 for the three month period ended November 30, 2012.

Gain on Translation or Foreign Subsidiary

For the three months ended November 30, 2013 the Company incurred a gain on foreign currency translation of $10,120 versus a gain of $30,589 for the same three month period in 2012.

These losses are related to translation differences between Dyami Energy’s and Zavala Inc’s US dollar functional currency converted into Canadian dollars at the period end exchange rates, and the results operations converted at average rates of exchange for the period.

Comprehensive Loss

Comprehensive loss for the three months ended November 30, 2013 was $102,039 compared to a comprehensive loss of $186,342 for the three months ended November 30, 2012.

Loss per Share, Basic and Diluted

Basic and diluted loss per share for the three months ended November 30, 2013 was $0.001 compared to basic and diluted loss per share of $0.002 for the same three month period in 2012.

SUMMARY OF QUARTERLY RESULTS

The following tables reflect the summary of quarterly results for the periods set out.

Revenue, net of royalties for the four quarters fluctuated as a result of changes in production volume and commodity prices. During the quarter ended August 31, 2013, the Company recorded an impairment of exploration and evaluation assets in the amount of $2,690,568, an impairment of property and equipment of $168,954 and a loss on settlement of debt in the amount of $402,264. During the three months ended February 2013, the Company recorded a loss on foreign exchange of $111,369. Other changes in net loss during the quarters were primarily related to increases in general and administrative costs, gain or loss on foreign exchange and the fair value movement of derivative warrant liabilities during the respective periods.

Revenue, net of royalties for the four quarters fluctuated as a result of changes in production volume and commodity prices. The material changes in net loss for the quarters were primarily related to increases in general and administrative costs, gain or loss on foreign exchange and the fair value movement of derivative warrant liabilities during the respective periods. During the three months ended August 31, 2012 the Company recorded compensation expense on re-pricing units of $188,625 and an impairment of property and equipment in the amount of $50,744. During the quarter ended May 31, 2012 the Company recorded $159,850 in stock based compensation expenses and for the quarter ended February 29, 2012 the Company recorded a loss on settlement of debt of $1,448,361.

CAPITAL EXPENDITURES

For the three months ended November 30, 2013, the Company recorded additions to exploration and evaluation assets of $61,196 on its Leases located in Zavala County, Texas (year ended August 31, 2013: $404,818).

The Company expects that its capital expenditures will increase in future reporting periods as the Company incurs costs to explore and develop its oil and gas properties.

FINANCING ACTIVITIES

During the three months ended November 30, 2012 the Company completed financings through the issuance of 2,249,790 units in the capital of the Company for net proceeds of $405,650.

LIQUIDITY AND CAPITAL RESOURCES

Cash as of November 30, 2013 was $76,799 compared to cash of $196,837 at August 31, 2013.

For the three months ended November 30, 2013 the primary use of funds was related to administrative expenses. The Company’s working capital deficiency at November 30, 2013 was $5,154,021 compared to a working capital deficiency of $4,985,312 at August 31, 2013.

Our current assets of $278,722 as at November 30, 2013, ($382,918 as of August 31, 2013) include the following items: cash $76,799 ($196,837 as of August 31, 2013); trade and other receivables $42,938 ($27,786 as of August 31, 2013); and prepaid expenses and deposits of $158,985 ($158,295 as of August 31, 2013).

Our current liabilities of $5,432,743 as of November 30, 2013 ($5,368,230 as of August 31, 2013) include the following items: trade and other payables $1,427,922 ($1,379,581 as of August 31, 2013); shareholders’ loans $2,116,181 ($2,108,205 as of August 31, 2013); secured note payable of $1,017,504 ($1,013,088 as of August 31, 2013); and derivative warrant liabilities of $691,805 ($688,803 as of August 31, 2013); and provisions $179,331 ($178,553 as of August 31, 2013).

At November 30, 2013 the Company had outstanding the following common share purchase warrants: 21,050,948 warrants exercisable at $0.04 per share; 19,150,000 warrants exercisable at $0.05 per share; 8,121,627 warrants exercisable at US$0.50 per share; and 1,025,983 warrants exercisable at US$0.25. If any of these common share purchase warrants are exercised it would generate additional capital for us.

Management of the Company recognizes that cash flow from operations is not sufficient to expand its oil and gas operations and reserves or meet its working capital requirements. The Company has liquidity risk which necessitates the Company to obtain debt financing, enter into joint venture arrangements, or raise equity. There is no assurance the Company will be able to obtain the necessary financing in a timely manner.

The Company’s past primary source of liquidity and capital resources has been proceeds from the issuance of share capital, shareholders’ loans and cash flow from oil and gas operations.

If the Company issued additional common shares from treasury it would cause the current shareholders of the Company dilution.

Outlook and Capital Requirements

A part of our oil and gas development program, we anticipate further expenditures to expand our existing portfolio of proved reserves. Amounts expended on future exploration and development is dependent on the nature of future opportunities evaluated by us. Any expenditure which exceeds available cash will be required to be funded by additional share capital or debt issued by us, or by other means. Our long-term profitability will depend upon our ability to successfully implement our business plan.

PROVISIONS

a)        Decommissioning Obligations

The Company’s decommissioning obligations result from its ownership interests in petroleum and natural gas assets including well sites, gathering systems and processing facilities. The total decommissioning obligation is estimated based on the Company’s net ownership interest in all wells and facilities, estimated costs to reclaim and abandon these wells and facilities, and the estimated timing of the costs to be incurred in future years. The Company has estimated the net present value of decommissioning obligations to be $120,301 at November 30, 2013 (August 31, 2013 $119,742) based on an undiscounted total future liability of $167,210 (August 31, 2013 $166,578). These payments are expected to be incurred between 2015 and 2031. The discount factor, being the risk free rate related to the liability is 3.14% (August 31, 2013: 3.09%). The above amounts have been classified as long term.

b)        Other Provisions

In February 2013, a vendor of Dyami Energy applied a lien on the Murphy #4 well and filed a claim in the District Court of Zavala County, Texas (Case No. 13-02-12941-ZCV) seeking payment of US$169,196 for services. Dyami Energy is disputing the amount on the basis of negligence by the vendor and the Company filed a counter claim. The full amount of the provision has been recorded and any legal costs will be expensed as incurred. The outcome of this claim is uncertain at this time. The amount has been classified as short term, however not discounted as the impact to the consolidated financial statements is considered immaterial.

In May 2012 a vendor of Dyami Energy filed a claim in the District Court of Harris County, Texas seeking payment of US$64,866. Dyami Energy was disputing the amount charged due to faulty equipment. The full amount of the provision which was accrued in the prior year 2012 was reversed in 2013 as the vendor is no longer in good standing as a Texas corporation and the vendor’s attorney filed in the District Court of Harris County, Texas a motion to withdraw as counsel.

In December 2011, a vendor of Dyami Energy filed a claim in the District Court of Harris County, Texas (Case No. 2011-74035/Court: 113) seeking payment of US$62,800. Dyami Energy disputed the claim on the basis of excessive charges. In December 2013 an agreed final judgment in favor of the vendor was entered into court in the amount of $42,803 and post judgment interest at 5% per annum until paid in full.

SECURED NOTE PAYABLE

At November 30, 2013 and August 31, 2013 the Company had a US$960,000, 10% per annum secured promissory note payable to Benchmark Enterprises LLC. The note and all unpaid and accrued interest was due on or before August 31, 2013, or within 15 days of written demand to the Company, or upon the Company closing a cash financing or series of cash financings in excess of US$2,500,000 in which case fifty cents of every one dollar exceeding US$2,500,000 will be allocated to the secured note until paid in full. As of the date of the unaudited interim condensed consolidated financial statements, the Company had not received written demand for payment. For the three months ended November 30, 2013 the Company recorded interest of $25,368 (November 30, 2012: $23,771). At November 30, 2013 included in trade and other payables is interest of $193,704 (August 31, 2013: $169,033). The note is secured by Zavala Inc.’s interest in the Matthews Lease and Dyami Energy’s interest in the Murphy Lease, Zavala County, Texas (the “Leases”). The carrying value of their interests in the Leases at November 30, 2013 was $2,844,866 (August 31, 2013: $2,829,830). The Company may, in its sole discretion, prepay any portion of the principal amount.

DERIVATIVE WARRANT LIABILITIES

The Company has warrants issued with an exercise price in US dollars which are different from the functional currency of the Company (Canadian Dollars) and accordingly the warrants are treated as a financial liability and the fair value movement during the period is recognized in the profit or loss. The Company recorded loss on derivative warrant liabilities of $8,617 during the three months ended November 30, 2013 (November 30, 2012: $12,127)

The following tables set out the number of derivative warrant liabilities outstanding at November 30, 2013:

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

SEGMENTED INFORMATION

The Company’s reportable and geographical segments are Canada and the United States. The accounting policies used for the reportable segments are the same as the Company’s accounting policies.

For the purposes of monitoring segment performance and allocating resources between segments, the Company’s executive officer monitors the tangible, intangible and financial assets attributable to each segment.

All assets are allocated to reportable segments. The following tables show information regarding the Company’s reportable segments.

SEASONALITY AND TREND INFORMATION

The Company’s oil and gas operations is not a seasonal business, but increased consumer demand or changes in supply in certain months of the year can influence the price of produced hydrocarbons, depending on the circumstances. Production from the Company’s oil and gas properties is the primary determinant for the volume of sales during the year.

The level of activity in the oil and gas industry is influenced by seasonal weather patterns. Wet weather and spring thaw may make the ground unstable. Consequently, municipalities and provincial transportation departments enforce road bans that restrict the movement of rigs and other heavy equipment, thereby reducing activity levels. Also, certain oil and gas properties are located in areas that are inaccessible except during the winter months because of swampy terrain and other areas are inaccessible during certain months of year due to deer hunting season. Seasonal factors and unexpected weather patterns may lead to declines in exploration and production activity and corresponding declines in the demand for the goods and services of the Company.

The impact on the oil and gas industry from commodity price volatility is significant. During periods of high prices, producers conduct active exploration programs. Increased commodity prices frequently translate into very busy periods for service suppliers triggering premium costs for their services. Purchasing land and properties similarly increase in price during these periods. During low commodity price periods, acquisition costs drop, as do internally generated funds to spend on exploration and development activities. With decreased demand, the prices charged by the various service suppliers also decline.

World oil and gas prices are quoted in United States dollars and the price received by Canadian producers is therefore effected by the Canadian/U.S. dollar exchange rate, which will fluctuate over time. Material increases in the value of the Canadian dollar may negatively impact production revenues from Canadian producers. Such increases may also negatively impact the future value of such entities' reserves as determined by independent evaluators. In recent years, the Canadian dollar has increased materially in value against the United States dollar.

RELATED PARTY TRANSACTIONS AND BALANCES

The following transactions with individuals related to the Company arose in the normal course of business have been accounted for at the exchange amount being the amount agreed to by the related parties, which approximates the arm’s length equivalent value.

Compensation of Key Management Personnel

The remuneration of directors and other members of key management personnel during the three month periods ended were as follows:

The following balances owing to the President of the Company are included in trade and other payables and are unsecured, non-interest bearing and due on demand:

At November 30, 2013 and August 31, 2013 the amount of directors’ fees included in trade and other payables was $16,100.

At November 30, 2013 and August 31, 2013 the Company had promissory notes payable to the President of $28,845 and US$300,000. For the three months ended November 30, 2013 the Company recorded interest of $8,647 (November 30, 2012: $8,882). At November 30, 2013 included in trade and other payables is interest of $74,735 (August 31, 2013: $65,826). The notes are due on demand and bear interest at 10% per annum. Interest is payable annually on the anniversary date of the notes.

At November 30, 2013 and August 31, 2013 the Company had a US$960,000, 10% per annum secured promissory note payable to Benchmark Enterprises LLC (“Benchmark”). Benchmark is a shareholder of the Company. For the three months ended November 30, 2013 the Company recorded interest of $25,368 (November 30, 2012: $23,771). At November 30, 2013 included in trade and other payables is interest of $193,704 (August 31, 2013: $169,033) (see Secured Note Payable).