8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported):   March 31, 2011

EFL OVERSEAS, INC.

(Name of Small Business Issuer in its charter)

Nevada	000-54328	26-3062721
(State of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

250-777 N. Rainbow Blvd., Las Vegas, NV  89107

 (Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code:  (702) 938-3656

                                                   N/A                                                   

(Former name or former address if changed since last report)

Check appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below)

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

See Item 2.01

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On March 31, 2011, we entered into a Farmout and Participation Agreement (the “Agreement”) with Dyami Energy LLC and Eagleford Energy Inc. (jointly the “Farmor”). The Agreement provided for our acquisition of a net working interest ranging from 21.25% to 42.5%, in a 2,629 acre oil and gas lease known as the Matthews Lease, insofar as that lease covers from the surface to the base of the San Miguel formation (the “Lease”). The Lease is located in Zavala County, Texas, and has no proven reserves or current production. There were no preexisting relationships between the parties to the Agreement.

The Agreement requires us to spend up to $1,050,000 on the exploration and development of oil and/or gas production from the San Miguel formation on the lands covered by Lease. To earn our initial 21.25% working interest (net revenue interest 15.94%), we are obligated to drill and complete a vertical test well to a target depth of 3,500 feet (the Test Well”) in the San Miguel shale formation. We are also obligated to perform an injection operation on the Test Well. If the Test Well is prospective for production in commercial quantities, we are required to equip the Test Well and place it on production in a timely manner. If we determine the Test Well is not prospective for production in commercial quantities, we will be responsible for the abandonment of the Test Well. We estimate our costs related to the Test Well range from $500,000 to $600,000 excluding any abandonment liabilities.

We may increase our working interest in the Lease from 21.25% to 42.5% (net revenue interest from 15.94% to 31.875%) by spending our entire funding commitment of $1,050,000 in the performance of obligations pertaining to the Test Well. To the extent we have not expended our funding commitment on the Test Well, we may increase our working and revenue interests by undertaking additional operations on the Lease.

The working and revenue interests we acquire under the Agreement are also subject to payout provisions. Under those provisions, our net working interest and net revenue interest percentages may decrease by approximately one-fifth after the total net production revenues earned, to our joint interests with the Farmor reach from $12,500,000 to $15,000,000.

As a result of the Agreement, we have initiated oil and gas operations. We are currently negotiating additional working interest acquisitions in Matthews Lease and other oil and gas leases in the Eagle Ford Shale Formation.

On January 17, 2011 we also made a contingent offer to purchase a 22.989% working interest in the Kotaneelee gas field and gas processing plant located in the Yukon Territory in Canada. Although the contingent offer has been accepted, the completion of the transaction is dependent, among other things, upon the execution of a definitive agreement between the parties. We plan to make offers on additional working interest in the Kotaneelee. If we obtain all of the interests on which we are negotiating, early estimates indicate that we will require from $80,000,000 to $120,000,000 to funds our exploration plan.

We are actively seeking additional capital to funds expenditures associated with our operations.  During December 2010 and March 2011, we raised $191,100 and $1,123,200, respectively, in private placements of our equity securities (see Item 3.02). If we are unable to raise the financing we need, our business plan may fail and our stockholders could lose their investment. There can be no assurance that we will be successful in raising the capital we require, or that if the capital is offered, it will be subject to terms we consider acceptable. Investors should be aware that even if we are able to raise the funds we require, there can be no assurance that we will succeed in our acquisition, exploration or production plans and we may never be profitable.

Form 10 Requirements

In satisfaction of disclosure requirements of subpart(f) of this Item 2.01, the following reports filed with U.S. Securities and Exchange Commission on the dates indicated, are incorporated by reference herein:

Documents Incorporated By Reference
Description	Filing Date
Form 10-K for the year ended August 31, 2010	December 13, 2010
Form 10-Q for the quarter ended November 30, 2010	January 14, 2011
Form 8-K current report on Item 5.02	March 15, 2011
Form 8-K current report on Item 5.02	March 18, 2011

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ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.

During December 2010, we sold 86,870 shares of common stock in a private placement of investment units to two (2) accredited investors. The investment units were priced at $2.30 each and consisted of one share of our common stock, and one stock purchase warrant. Each stock purchase warrant entitles the holder to purchase one share of our common stock at a price of $3.50 per share until December 29, 2012. Proceeds from the private placement totaled $199,800 of which $174,800 was paid in cash and $25,000 was a conversion of indebtedness. We paid $8,700 in finder’s fees in connection with the issuance of these shares.

During March 2011, we sold 390,000 shares of common stock in a private placement of investment units to ten (10) accredited investors. The investment units were priced at $3.00 each and consisted of one share of our common stock, and one stock purchase warrant. Each stock purchase warrant entitles the holder to purchase one share of our common stock at a price of $4.50 per share until April 1, 2013. Proceeds from the private placement totaled $1,170,000, all of which was paid in cash. We paid $46,800 in finder’s fees in connection with the issuance of these shares.

We relied upon the exemption provided by Section 4(2) of the Securities Act of 1933 in connection with the sale of these securities. We believe our investors had knowledge and experience in financial and business matters which allowed them to evaluate the merits and risks of an investment in our securities.

ITEM 5.06     CHANGE IN SHELL COMPANY STATUS

See Item 2.01 of this report.

ITEM 9.01     FINANCIAL STATEMENTS AND EXHIBITS.

EXHIBITS

Exhibit  Number	Description of Exhibit
10.1	Farmout and Participation Agreement dated March 31, 2011

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SIGNATURES

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

	EFL OVERSEAS, INC.
Date:   April 6, 2011	By:	/s/ Keith Macdonald
		Keith Macdonald
		President

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EX-10.1

EXHIBIT 10.1

FARMOUT AND PARTICIPATION AGREEMENT

Matthews Lease, Zavala County, Texas

This Agreement (the “Agreement”) is made and entered into this 31st day of March, 2011, by and between each of the following named parties (individually, a “Party”, and collectively, the “Parties”), whose addresses and telephone numbers are set forth with their names, to-wit:

Dyami Energy LLC                                                                    (“Dyami”)

and Eagleford Energy Inc.                                                    (“Eagleford”)

c/o 1 King Street West, Suite 1505

Toronto, Ontario M5H 1A1

Canada                                                                                           (collectively, “Farmor”)

Attention:  James Cassina

Telephone: 416 364-4039

Telecopier: 416 364-8244

and

EFL Overseas, Inc.                                                                    (“EFL”)

333 N Sam Houston Parkway East, Suite 410

Houston, Texas 77060

USA                                                                                                (“Farmee”)

Attention:  Keith Macdonald

Telephone: 403-246-8443

Telecopier: 403-246-8443

RECITALS:

WHEREAS the Parties are negotiating a Farmout and Participation Memorandum of Understanding on the Matthews and Murphy leases subject to the completion of a definitive agreement it was agreed that with the primary term of the Matthews Lease ending on March 31, 2011 in the abundance of caution that a San Miguel vertical well should be spudded on or before March 31, 2011 in the interest of lease preservation;

WHEREAS the Farmee has agreed to fund a drilling and an injection operation and if determined prospective for commercial production the completion and equipping for production. To facilitate the funding of the San Miguel test well the Parties have agreed to enter into a definitive farmout and participation agreement;

WHEREAS this farmout and participation sets forth the agreement of Farmee to expend the sum of up to $1,050,000 for the development of oil and/or gas production from the San Miguel formation on the lands covered by the Matthews Lease in accordance with this Agreement, and Farmor’s commitment to assign to Farmee certain interests upon earning in the Matthews Lease, insofar as it covers from the surface to the base of the San Miguel formation.

NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:

1.   The Matthews Lease.  Farmor is a working interest owner in the Matthews oil and gas lease more particularly described on the attached Schedule A (the “Matthews Lease” or the “Lease”).  Farmor’s ownership interest in the Matthews Lease is described on the attached Schedule B.  The interest of Farmor in the Matthews Lease is subject to the agreements listed on the attached Schedule C.

2.   Agreement to Farmout.  Farmor desires to farmout, and Farmee desires to farm in, certain interests in the Leases on the terms and conditions provided in this Agreement.  The Farmee in consideration of its performance of its obligations as provided in this Agreement may earn a certain percentage of the Farmor’s working interests as set forth in Schedule B.  As Farmee performs its obligations, Dyami will execute and deliver to Farmee an assignment of the interests earned by Farmee on a form that is substantially the same as that which is attached hereto as Schedule D (Form of Assignment).   To earn its working interest in the Lease from the surface to the base of the San Miguel formation on the lands covered by the Matthews Lease Farmee will provide funding for the performance of certain operations to be conducted by Farmor for the exploration and development of the San Miguel formation on the lands covered by the Matthews Lease as set forth in the following sections.

3.   Drilling Program Funding The Farmor shall provide Farmee with an AFE of the estimated drilling costs of the operation (“AFE Amount”) described in Section 5 below. Upon written approval of the AFE and execution of this agreement the Farmee shall deposit the AFE Amount in trust with legal firm Beadle Woods (“Trust Account”).  The actual costs of the operations will be paid from the Trust Account. Upon approval of invoices by the Farmor and Farmee the trust agent will be directed to pay the approved invoice amount to Farmor. In the event that the Farmee elects to complete and equip the Initial Test Well for production the Farmee will upon written approval of the AFE Amount for such operation deposit within 48 hours of such approval the AFE Amount in the Trust Account.   To earn the maximum interestsprovided for in Section 5. Farmee will have to fund a total of $1,050,000 (the “San Miguel Investment Amount”) which will be invested by Farmee in the performance of the San Miguel Drilling Program described below for the development of the San Miguel formation on the lands covered by the Matthews Lease.

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Farmee shall cause the San Miguel Investment Amount, less any amounts previously expended or advanced by Farmee, to be deposited in the Trust Account on or before June 30, 2011 to fund the operation(s) described in 5 b. of this Agreement. In the event that Initial Test well results are unsatisfactory and the Farmee determines that no further operations are warranted in the San Miguel formation such additional funds will not be required.

4.   San Miguel Drilling Program (“Drilling Program”).  The Drilling Program shall consist of Farmor’s conduct of the following operations as Operator for Farmee (see reference to the governing Operating Agreement below).  Although Farmor will implement the operations for Farmee, each operation to be undertaken subsequent to Section 4 will be at the direction and under the supervision of Farmee.

a.   The drilling of one well to a depth of 3,500 feet or the base of the San Miguel “D” formation as determined from petrophysical logs and mud logs (“Contract Depth”) and thereafter the completion of the well  from a member of the San Miguel formation (the “Initial Test Well”).  Farmor shall spud the Initial Test Well on or before March 31, 2011 and shall diligently drill the well to Contract Depth at the sole cost of the Farmee.    An “injection operation” must be performed on the Initial Test Well in compliance with the terms and provisions of the Purchase and Sale Agreement dated February 8, 2010, as amended, between OGR Energy Corporation and Farmor, to which reference is here made for all purposes (the “OGR Agreement”).  If the Initial Test Well is prospective for production in commercial quantities the Farmee shall equip the Initial Test Well and place it on production in a timely manner. If the Farmee determines the well is not prospective for production in commercial quantities and the Farmor elects not to continue operations then the Farmee will be responsible for the abandonment of the Initial Test Well.

b.   To the extent that funds from the AFE Amount(s) remain after the performance of the obligations pertaining to the Initial Test Well, such funds will be applied to the undertaking of subsequent operations on the lands covered by the Matthews Lease which are designed to produce from the San Miguel formation and preserve the term of the Matthews Lease and which are undertaken and performed in a good faith attempt to establish or re-establish production from the well on which the operation is undertaken.  Farmee may elect to re-enter an existing wellbore located on the Lease and attempt to complete the same in a member of the San Miguel formation.

c.   In the event that in the performance of the Drilling Program Farmor proposes an operation, the estimated cost of which will exceed the San Miguel Investment Amount as evidenced by the AFE submitted in connection with the proposal of the operation and approved by the Parties, then any costs and expenses of the proposed operation in excess of the  San Miguel Investment Amount will be borne by the Parties in accordance with their respective working interests in the Matthews Lease, based upon the interests which have by then been earned by Farmee, as provided below.

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5.   Working Interests to be Earned by Farmee.  The interests in the Matthews Lease, insofar as it covers from the surface to the base of the San Miguel formation, to be earned by Farmee  shall be determined as follows:

a.   If the Initial Test Well is drilled and completed as a vertical well, including the performance of an “injection operation” on the well in compliance with the terms and provisions of the OGR Agreement, Farmee will earn an undivided twenty-five percent (25%) of Farmor’s ownership interest in the Matthews Lease from the surface to the base of the San Miguel formation.

b.   Farmee may increase the working interest   from an undivided twenty-five percent (25%) of Farmor’s ownership interest to an undivided fifty percent (50%) of Farmor’s ownership interest in the Matthews Lease by performance of any of the following requirements prior to October 31, 2011 or such other date as may be required to preserve the term of the Matthews Lease;:

i.    The Drilling and completing of a horizontal leg on the Initial Test Well such that the horizontal lateral extends a minimum of 1,000 feet; or

ii.   The Drilling and Completion of an additional San Miguel well, the wellbore of which well may be either vertical or horizontal, OR

iii.   Expending all of the funds from the San Miguel Investment Amount in the performance of obligations pertaining to the Initial Test Well, additional drilling earning requirements or the undertaking of subsequent operations on the lands covered by the Matthews Lease which are designed to produce from the San Miguel formation and which are undertaken and performed in a good faith attempt to establish or re-establish production from the well on which the operation is undertaken.   In the event that OGR does not participate in an operation the costs shall be borne by the Farmee and the Farmee and Farmor shall share on a pro rata basis OGR’s penalty share of revenue until they recover the expenditures on the related operation.

c.   Each assignment earned by Farmee as the result of its performance of the foregoing will be made on a form that is substantially the same as that which is attached to this Agreement as Schedule D, and the assignment will be executed and delivered to Farmee as soon as possible thereafter.  The interests which may be earned by Farmee are set forth on Schedule C.

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6.   Operating Agreement and Operations.  All operations on the Matthews Lease are governed by the Operating Agreement described on Schedule C, a copy of which is attached to this Agreement as Schedule E.  While Farmee is engaged in the Drilling Program in its effort to farm in interests in the Matthews Lease pursuant to the requirements of this Agreement, Farmor shall act as Operator thereof under the terms of the Operating Agreement.  Each operation undertaken pursuant to the Drilling Program shall be treated as a Subsequent Operation under Article VI.B. of the Operating Agreement, but the operations proposed must conform to the requirements of this Agreement.  The Farmor will implement the operations, testing and completion operations to be undertaken herein at the direction and under the supervision of Farmee.

7.   Relationship of Parties and Tax Partnership.  The Parties expressly agree that neither Party shall be responsible for the obligations of the other Party, each Party being severally responsible only for its obligations arising hereunder and liable only for its proportionate share of the costs and expenses incurred hereunder.  This Agreement and the attached Operating Agreement are not intended to create, nor shall such be construed as creating, any mining partnership, commercial partnership or other partnership relation or joint venture among the parties, and the liabilities of each of the parties hereto shall be several and not joint or collective. The Parties elect not to be excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and any provisions of applicable state laws comparable to Subchapter K of Chapter 1 of Subtitle A of the Code and adopt the provisions of the a partnership.

8.   Notices.   Any notice required to be given pursuant to this Agreement shall be in writing and shall be delivered in person, or by private courier service, with written receipt of acceptance returned to the sender, or via registered mail, return receipt requested, postage prepaid, or by telecopier (with confirmation of receipt by telecopier sent within four (4) hours of completion of transmission with the result that if there is no such confirmation of receipt by telecopy, the original notice sent by telecopier shall not be deemed effective notice) to each of the Parties at the address, or at the telecopier number, set forth in the opening paragraph of this Agreement.  The agent for receipt of any notice shall be the individual who has executed this Agreement on behalf of each of the Parties.  The agent and/or address for each of the Parties may be unilaterally altered by either Party upon providing written notice thereof to the other Party.  Notice shall be deemed delivered when received at each of the addresses set forth in the opening paragraph of this Agreement, except with respect to telecopies, which shall be deemed received as provided above in this section.

9.   Miscellaneous.

a.   This document contains the entire understanding of the Parties, and there is no other agreement, either oral or written, between them governing the subject matter hereof.  This Agreement may be amended by the consent of the Parties to a written document setting forth the amendment.  Any amendment must be executed only by duly authorized officers of each of the Parties.  No rights of any of the Parties may be waived without a written waiver signed by the Party sought to be charged with the waiver.

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b.   If any provision of this Agreement or the application thereof is determined to be invalid or unenforceable, the remainder of this Agreement and other applications of the provision shall not be affected thereby, and this Agreement shall be deemed amended to eliminate the invalid or unenforceable provision insofar as it has any impact upon the other provisions of this Agreement.

c.   The failure of any Party to seek redress for any violation, or to insist upon the strict performance, of any provision of this Agreement shall not prevent any Party from seeking redress for any subsequent act, or failure to act, or to insist upon the strict performance of this Agreement.  No single or partial exercise by a Party of any right or remedy hereunder shall preclude other or further exercise thereof or the exercise of any other right or remedy.

d.   This Agreement shall be governed by the laws of the State of Texas, and venue for any litigation arising to resolve disputes arising hereunder shall be referred to and finally resolved by arbitration under the ADR Chambers Arbitration Rules, there shall be one arbitrator, the place of the arbitration shall be Toronto, Ontario.

e.   This Agreement shall be binding upon and shall inure to the benefit of each of the Parties and their respective successors and assigns.

f.   Time is of the essence of this agreement.

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IN WITNESS WHEREOF, this Agreement is executed effective as of the Effective Date as provided above.

FARMOR:
DYAMI ENERGY LLC
By:	/s/ James Cassina
	James Cassina, President

FARMEE:
EFL OVERSEAS, INC.
By:	/s/ Keith Macdonald
	Keith Macdonald, Chairman and Chief Executive Officer

Schedule A – Description of the Matthews Lease

Schedule B – Interests of the Parties in the Lease

Schedule C – Agreements burdening the title of Farmor

Schedule D – Form of Assignment of interests in the Lease

Schedule E – Operating Agreement

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