UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
DC 20549
 
 **FORM
10-QSB**
 
 [X]
    Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934For
      the quarterly period ended:March
      31, 2005[
      ]
    Transition
      Report pursuant to 13 or 15(d) of the Securities Exchange Act of
      1934For
      the transition period ________________ to
______________Commission
      File Number:333-115179
 
 **Barola
Oil & Gas Co. Inc.**
 (Exact
name of small business issuer as specified in its charter)
 
 Nevada
    91-2146131(State
      or other jurisdiction of incorporation or organization)
    (IRS
      Employer Identification No.)
 
 
 852
      West Hastings Street, Vancouver, British Columbia, Canada, V6C
      1C8(Address
      of principal executive offices)
 
 (310)
      795-7384(Issuer’s
      telephone number)_______________________________________________________________(Former
      name, former address and former fiscal year, if changed since last
      report)
 
 
 Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days [ ] Yes
[X] No
 
 State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 7,925,000 common shares as of May 11,
2005
 
 Transitional
Small Business Disclosure Format (check one): Yes [ ] No [X]
  ******
 ***Table of Contents***
 
 
 
 **TABLE OF CONTENTS**
    PagePART
      I - FINANCIAL INFORMATIONItem
      1:
    Financial Statements
    3Item
      2:
    Plan of Operation
    4Item
      3:
    Controls and Procedures
    7PART
      II - OTHER INFORMATIONItem
      1:
    Legal Proceedings
    8Item
      2:
    Unregistered Sales of Equity Securities and Use of
      Proceeds
    8Item
      3:
    Defaults Upon Senior Securities
    8Item
      4:
    Submission of Matters to a Vote of Security
      Holders
    8Item
      5:
    Other Information
    8Item
      6:
    Exhibits
    9
 
 
 
 
 - 2
-
 ***Table of Contents***
 **PART
I - FINANCIAL INFORMATION**
 
 **Item
1.** **** **Financial
Statements**
 
 Our
unaudited financial statements included in this Form 10-QSB are as
follows:
 
 (a)
    Balance
      Sheet as of March 31, 2005;(b)
    Statements
      of Operations for the three and six months ended March 31, 2005 and 2004;
  (c)
    Statements
      of Cash Flow for the six months ended March 31, 2005 and 2004;(d)
    Statement
      of Stockholders’ Deficiency for period from inception, May 29, 2001, to
      March 31, 2005; and
  (e)
    Notes
      to Consolidated Financial Statements.
 
 These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-QSB. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the interim period ended March 31, 2005 are
not necessarily indicative of the results that can be expected for the full
year.
 
 
 
 - 3
-
 ***Table of Contents***
 
 **BAROLA
OIL & GAS CO. INC.**
 **(An
Exploration Stage Company)**
 
 **BALANCE
SHEETS**
 **(Unaudited)**
 **(Stated
in U.S. Dollars)**
 
 
 
 **MARCH
      31**
    SEPTEMBER
      30**2005**
    2004**ASSETS****Current**Cash
    **$**
    **1,185**
    $
    251**LIABILITIES****Current**Accounts
      payable
    **$**
    **6,099**
    $
    6,841Loans
      payable (Note 4)
    
    **15,500**
    
    8,000**21,599**
    
    14,841**SHAREHOLDER’S
      DEFICIENCY****Share
      Capital**Authorized:100,000,000
      common shares, par value with $0.001 per shareIssued:7,925,000
      common shares at March 31, 2005 and September 30, 2004
    
    **7,925**
    
    7,925Additional
      paid-in capital
    
    **21,700**
    
    21,700**Deficit
      Accumulated During The Exploration Stage**
    
    **(50,039)**
    
    (44,215)**(20,414)**
    
    (14,590)**$**
    **1,185**
    $
    251
 
 
  F -
1
 ***Table of Contents***
 
 **BAROLA
OIL & GAS CO. INC.**
 **(An
Exploration Stage Company)**
 
 **STATEMENTS
OF OPERATIONS**
 **(Unaudited)**
 **(Stated
in U.S. Dollars)**
 
 
 
 PERIOD
      FROMINCEPTIONMAY
      29**THREE
      MONTHS ENDED**
    **SIX
      MONTHS ENDED**
    2001
      TO**MARCH
      31**
    **MARCH
      31**
    MARCH
      31**2005**
    2004
    **2005**
    2004
    2005**Expenses**Mineral
      property acquisition cost (Note 2)
    **$**
    **-**
    $
    -
    **$**
    **-**
    $
    -
    $
    6,500Option
      on oil and gas prospect (Note 3)
    
    **-**
    
    -
    
    **-**
    
    -
    
    25,000Administration
      fees
    
    **-**
    
    -
    
    **-**
    
    -
    
    1,800Directors’
      fees
    
    **-**
    
    -
    
    **-**
    
    -
    
    2,500Office
      and sundry
    
    **48**
    
    518
    
    **66**
    
    839
    
    1,881Professional
      fees
    
    **758**
    
    -
    
    **5,758**
    
    -
    
    12,358**Net
      Loss For The Period**
    
    **806**
    
    518
    
    **5,824**
    
    839
    $
    50,039**Basic
      And Diluted Loss Per Share**
    **$**
    **0.01**
    $
    0.01
    **$**
    **0.01**
    $
    0.01**Weighted
      Average Number Of Shares Outstanding**
    
    **7,925,000**
    
    7,925,000
    
    **7,925,000**
    
    7,925,000
 
 
 
 
 F -
2
 ***Table of Contents***
 
 **BAROLA
OIL & GAS CO. INC.**
 **(An
Exploration Stage Company)**
 
 **STATEMENTS
OF CASH FLOWS**
 **(Unaudited)**
 **(Stated
in U.S. Dollars)**
 
 
 PERIOD
      FROMINCEPTIONMAY
      29**SIX
      MONTHS ENDED**
    2001
      TO**MARCH
      31**
    MARCH
      31**2005**
    2004
    2005**Cash
      Flows Used By Operating Activities**Net
      loss for the period
    **$**
    **(5,824)**
    $
    (839)
    $
    (50,039)Adjustment
      for non-cash item:Shares
      issued for directors’ fees
    
    **-**
    
    -
    
    2,500Change
      in non-cash working capital item:Accounts
      payable
    
    **(742)**
    
    303
    
    6,099**(6,566)**
    
    (839)
    
    (41,440)**Cash
      Flows From Financing Activities**Issue
      of share capital
    
    **-**
    
    -
    
    27,125Share
      subscriptions receivable
    
    **-**
    
    -
    
    -Loans
      and advances payable
    
    **7,500**
    
    -
    
    15,500**7,500**
    
    -
    
    42,625**Increase
      (Decrease) In Cash**
    
    **934**
    
    (536)
    
    1,185**Cash,
      Beginning Of Period**
    
    **251**
    
    678
    
    -**Cash,
      End Of Period**
    **$**
    **1,185**
    $
    142
    $
    1,185
 
 
 
 
 F -
3
 ***Table of Contents***
 **BAROLA
OIL & GAS CO. INC.**
 **(An
Exploration Stage Company)**
 
 **STATEMENT
OF STOCKHOLDERS’ DEFICIENCY**
 
 **PERIOD
FROM INCEPTION, MAY 29, 2001, TO MARCH 31, 2005**
 **(Unaudited)**
 **(Stated
in U.S. Dollars)**
 
 
 **DEFICIT****COMMON
      STOCK**
    **ACCUMULATED****NUMBER
      OF**
    
    **ADDITIONAL**
    **DURING
      THE****COMMON**
    **PAR**
    **PAID
      IN**
    **EXPLORATION****SHARES**
    **VALUE**
    **CAPITAL**
    **STAGE**
    **TOTAL**Balance
      September 30, 2001
    -
    $
    -
    $
    -
    $
    -
    $
    -Net
      loss for the year
    -
    
    -
    
    -
    
    (8,157)
    
    (8,157)Balance,
      September 30, 2002
    -
    
    -
    
    -
    
    (8,157)
    
    (8,157)Shares
      issued for cash at $0.001
    2,500,000
    
    2,500
    
    -
    
    -
    
    2,500Shares
      issued for cash at $0.005
    4,925,000
    
    4,925
    
    19,700
    
    -
    
    24,625Shares
      issued for directors’ fees at $0.005
    500,000
    
    500
    
    2,000
    
    -
    
    2,500Net
      loss for the year
    -
    
    -
    
    -
    
    (30,125)
    
    (30,125)Balance,
      September 30, 2003
    7,925,000
    
    7,925
    
    21,700
    
    (38,282)
    
    (8,657)Net
      loss for the year
    -
    
    -
    
    -
    
    (5,933)
    
    (5,933)Balance,
      September 30, 2004
    7,925,000
    
    7,925
    
    21,700
    
    (44,215)
    
    (14,590)Net
      loss for the period
    -
    
    -
    
    -
    
    (5,824)
    
    (5,824)Balance,
      March 31, 2005
    7,925,000
    $
    7,925
    $
    21,700
    $
    (50,039)
    $
    (20,414)
 
 
  F -
4
 ***Table of Contents***
 **BAROLA
OIL & GAS CO. INC.**
 **(An
Exploration Stage Company)**
 
 **NOTES
TO FINANCIAL STATEMENTS**
 
 **MARCH
31, 2005**
 **(Unaudited)**
 **(Stated
in U.S. Dollars)**
 
 
 **1.**
    **BASIS
      OF PRESENTATION**
 
 The
unaudited financial statements as of March 31, 2005 included herein have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with United States of
America generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. It is suggested that these financial
statements be read in conjunction with the September 30, 2004 audited financial
statements and notes thereto.
 
 **2.**
    **MINERAL
      PROPERTY INTEREST**
 
 The
Company has acquired a 100% interest in four unpatented mining claims located in
Ontario, Canada, for cash consideration of $6,500. Since the Company has not
established the commercial feasibility of the mineral claims, the acquisition
costs have been expensed.
 
 **3.**
    **OPTION
      ON OIL AND GAS PROSPECT**
 
 The
Company has made a non-refundable payment of $25,000 to secure an option, until
October 1, 2005, to acquire not less than 5% and not more than 50% of the
optionor’s 5.3% working interest in an oil and gas prospect area located in
Madera County, California. In the event the Company exercises the option, the
purchase price shall be $34,000 per percentage point acquired, that is, a
purchase price ranging from $170,000 to $1,700,000.
 
 **4.**
    **LOANS
      PAYABLE**
 
 The loans
payable are interest free, unsecured, repayable on demand and owing to two
directors.
 
 **5.**
    **LOAN
      FACILITY**
 
 On
December 20, 2002, the Company entered into an unsecured loan facility agreement
to a maximum of $100,000 with a director. The amount drawn down under the loan
facility bears interest at 8% per annum and is repayable 30 days after a demand
for repayment is received from the lender. As at March 31, 2005, no funds have
been advanced to the Company.
 
 
 F -
5
 ***Table of Contents***
  **Item 2. Plan of
Operation**
 
 **Forward-Looking
Statements**
 
 Historical
results and trends should not be taken as indicative of future operations.
Management’s statements contained in this report that are not historical facts
are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Actual results may differ materially from those
included in the forward-looking statements. The Company intends such
forward-looking statements to be covered by the safe-harbor provisions for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995, and is including this statement for purposes of complying with
those safe-harbor provisions. Forward-looking statements, which are based on
certain assumptions and describe future plans, strategies and expectations of
the Company, are generally identifiable by use of the words “believe,”
“expect,” “intend,” “anticipate,” “estimate,” “project,” “prospects,” or similar
expressions. The Company’s ability to predict results or the actual effect of
future plans or strategies is inherently uncertain. Factors which could have a
material adverse affect on the operations and future prospects of the Company on
a consolidated basis include, but are not limited to: unanticipated
problems relating to exploration, hazards such as pollution, or other hazards
which cannot be insured against or predicted, changes
in economic conditions, availability of capital, competition, and generally
accepted accounting principles. These risks and uncertainties should be
considered in evaluating forward-looking statements and undue reliance should
not be placed on such statements. Further information concerning the Company and
its business, including additional factors that could materially affect the
Company’s financial results, is included herein and in the Company’s other
filings with the Securities and Exchange Commission.
 
 **Overview**
 
 We were
incorporated on May 29, 2001 under the laws of the State of Nevada.
 
 On April
1, 2003, we entered into an Option Agreement (“Agreement”) with Production
Specialties Co. Inc. (“Production Specialties”), a California corporation, where
we purchased the option to acquire between a five (5%) percent and fifty (50%)
percent interest in the current ownership by Production Specialties Co. Inc. in
a property lying in and around Madera County, California known as “Triangle T
Ranch.” As a result of this agreement, we purchased the right to acquire an
interest in a portion of this property. Within the Triangle T Ranch Project,
there are currently four gas producing wells. This resource property is utilized
for the business purpose of mining natural gas. Under the terms of the
Agreement, we paid Production Specialties a deposit in the amount of $25,000
which will be applied toward the total purchase price of an interest in the
Triangle T Ranch in the event we exercise our option. The purchase price is
dependent on what percentage in the current ownership we elect to purchase. The
purchase price is set at $34,000 per percentage point purchased. Therefore, the
purchase price will be $170,000 if we exercise our option and purchase the
minimum of 5% and the purchase price will be $1,700,000 if we exercise our
option and purchase the maximum of 50%. Our option on this property is currently
unexercised. In the event that we do not exercise our option, we are not
entitled to recover the $25,000 deposit paid.
 
 The
Agreement provides that if Production Specialties receives a bona fide offer
from a third party to acquire a percentage interest in the Triangle T Ranch at a
purchase price greater than $34,000 per percentage point purchased, they shall
provide us with the opportunity to exercise our option on the same terms offered
by the third party. If we fail to exercise our option within 30 days following
the receipt of notice that a bona fide offer was received from a third party at
a greater price, our Agreement will be null and void.
 
 
 - 4
-
 ***Table of Contents***
 
 Subsequent
to entering into the Agreement, Production Specialties transferred its ownership
interest in the Triangle T Ranch. On or about March 1, 2004, Atlas Energy Corp.
(“Atlas”), a Nevada Corporation, acquired from Production Specialties an
undivided seventy five percent (75%) of its beneficial interest, rights and
obligations in the Triangle T Ranch. Also on the same date, Production
Specialties transferred the remaining twenty five percent (25%) of its interest,
rights and obligations in the Triangle T Ranch to a third party. These parties
acquired their respective interests in the Triangle T Ranch subject to our
option and the terms of the Agreement.
 
 Following
Atlas’ acquisition of its 75% interest in the Triangle T Ranch, we entered into
an agreement to extend the option period and termination date of the Agreement.
We did not extend the option period and termination date of the Agreement with
the party that acquired the 25% interest in the Triangle T Ranch and our option
on this portion of the property expired. As a result, we maintained an option to
acquire between a five (5%) percent and fifty (50%) percent interest only in the
current ownership by Atlas in a property lying in the Triangle T Ranch.
 
 On March
7, 2005, Tryx Ventures Corp. (“Tryx”), a Nevada corporation, acquired from Atlas
all of its beneficial interest, rights and obligations in the Triangle T Ranch.
Subsequent to the reporting period, we entered into an amending agreement to the
option agreement (“Amendment”) with the Tryx to further extend the option period
and termination date of the Agreement. In order to exercise our option, we now
must provide notice to the Tryx of our election to exercise the option together
with the actual interest percentage to be purchased no later than ten business
days following our receipt of written notice that the wells are ready for
drilling or ten business days following the termination date of this Agreement
on April 1, 2007. Tryx acquired its interest in the Triangle T Ranch subject to
our option and in the Amendment reaffirmed that it shall maintain its
obligations under the terms of the Agreement unless otherwise agreed upon by the
parties.
 
 Triangle
T Ranch
 
 The
Triangle T Ranch Project is a grouping of four producing natural gas wells in an
oil and gas field consisting of approximately 14 square miles of lands leased
and shot by a 2 dimensional seismic program in 2001, the entire field being
known as the Merrill Avenue Gas Field. Within the Triangle T Ranch Project,
there are currently four gas producing wells, namely Triangle T 1-28, 1-29, 1-33
and 2-33. In each of Triangle T 1-28 and 2-33, there are two zones: the zone
which is currently producing natural gas and the proved non-producing behind
pipe zone. The term behind pipe refers to additional pay or zones that contain
additional reserves in them and will be opened at a later date. The additional
reserves behind pipe are accessed once the currently producing zone is depleted
of gas or when it becomes unfeasible to extract gas from the currently producing
zone, whichever first occurs. This process is known in the industry as
re-completion. In re-completion, the current producing zones are shut off and
the behind pipe zones are opened. It is in these wells that we have an option to
purchase a portion.
 
 The net
present value for the specified interests in the Triangle T Ranch as of
September 1, 2004 was estimated to be $1,386,800 when undiscounted, $1,066,000
when discounted at five percent, and $856,500 when discounted at ten percent.
Slightly over 40% of these values are derived from the proved non-producing
behind pipe reserves. The gross remaining recoverable natural gas reserves as of
September 1, 2004 were estimated to be 8,462,293 MCF of which approximately
3,467,205 MCF are behind pipe. The estimated net reserves of natural gas were
344,056 MCF of which 149,037 MCF are behind pipe.
 
 The
existing and future wells at the Triangle T Ranch are operated by Lario Oil and
Gas (the “Operator”).  As such, we would not be considered the operator of
these wells if we exercised our
 
 
 - 5
-
 ***Table of Contents***
 
 option.
The Operator markets each non-operator’s share of gas production from the wells
for sale and deducts all royalty burdens and operating expenses prior to the
distribution of revenues. We are not responsible for any expenses incurred by,
or on behalf of the Operator, in respect of the existing wells, production,
marketing, shooting additional 2 or 3 dimensional seismic nor will we be
responsible for any of these item until such time as we exercise our Option to
Purchase an interest. Following exercise of our option, we will be responsible
for our proportionate share of such expenses and will receive our proportionate
share of all income realized from this project.
 
 Plan
of Operation
 
 Our plan
over the next twelve months is to raise funds through the sale of our common
shares that have been registered with the Securities and Exchange Commission.
Thereafter, management intends determine what, if any, percentage of the option
we intend to exercise to acquire an interest in the Triangle T Ranch. This
determination will be based in part on the amount of proceeds raised in our
current equity offering. If management elects to exercise this option, we will
be responsible for our proportionate share of such expenses and will receive our
proportionate share of all revenue generated from this property.
 
 Management
also intends to devote time to identifying potential acquisitions and to
negotiating favorable terms for such acquisition with a view towards generating
revenues for the company. Properties that would interest us are those where we
could participate as a non-operator without being responsible for any of the
actual drilling, extraction, marketing, sales or shipping of the various
resources. Our plan is to acquire various interests in properties that are being
operated by other companies such that we can participate only in the costs of
the production, as opposed to the actual production, in exchange for a share of
revenues generated from such production. At the present time, we have not begun
to research or identify other potential acquisitions, but expect to do so within
the next twelve months.
 
 We
estimate that, at our current level of expenses, we will require approximately
$50,000 to maintain operations without revenues for the next twelve months.
Included in this estimate is a forecast of $20,000 in expenditures in order to
remain in compliance with the Securities Exchange Act of 1934. We are unable to
estimate how much additional financing we would require in the event we elect to
exercise our option on the Triangle T Ranch because the amount of further
financing required will be based upon the percentage of the option we elect to
exercise and the amount of proceeds raised in our current equity offering. We
can provide no assurance that we will receive any further financing if sought.
 
 We do not
anticipate purchasing any significant equipment in the next twelve months. We
only intend to purchase additional property interests over the next twelve
months if we are successful in raising additional financing and identify a
property interest suitable for acquisition on favorable terms.
 
 At the
present time, we have no employees other than our sole officer, Mr. Henry
Starek. We do not anticipate hiring any employees over the next twelve months.
 
 **Assets**
 
 As of
March 31, 2005, our only asset was cash in the amount of $1,185.
 
 **Liabilities
and Stockholders Deficit**
 
 Our total
liabilities as of March 31, 2005 were $21,599. On March 31, 2005 our liabilities
consisted of
 
 - 6
-
 ***Table of Contents***
 
 accounts
payable in the amount of $6,099 and loans payable in the amount of $15,500 to
two of our directors.
 
 As of
March 31, 2005, there was a Stockholders’ deficit of $20,414.
 
 **Liquidity
and Capital Resources**
 
 As of
March 31, 2005, we had current assets of $1,185 and current liabilities in the
amount of $21,599. As a result, on March 31, 2005 we had a working capital
deficit of $20,414. We currently have insufficient capital to exercise our
option and acquire the minimum 5% interest. We will require financing to
exercise our option on the Triangle T Ranch and/or expand our business.
 
 On
December 20, 2002, we entered into a loan facility agreement whereby we are
permitted to borrow from Henry Starek, our President, up to $100,000 at any give
time on seven day’s notice at an interest rate of 8%. The loan facility
agreement does not stipulate any set times or dates for the repayment of
principal or interest. The agreement stipulates that all principle and interest
owing is due and payable on demand upon 30 days written notice from the lender.
Currently, we do not owe any money on this agreement. To date, we have not
accessed any of the funds available under this loan facility agreement.
 
 We are
currently offering 3,000,000 common shares at the price of $0.15 per shares and
theses shares have been registered with the Securities and Exchange Commission.
In the event that we are successful in selling all 3,000,000 shares, we will
receive gross proceeds of $450,000. A selling shareholder offering is being
conducted concurrently with our primary offering. As a result, our ability to
raise the required funds may be impaired because some purchasers contemplating
investment may choose to purchase shares of our common stock from the selling
shareholder rather than in our offering. At the present time, we have not sold
any shares in this offering. If we fail to sell enough shares to enable us to
exercise our option on the Triangle T Ranch, we will require additional funds in
the next twelve months to pursue our plan of operations.
 
 We can
provide no assurance that we will receive any financing. For these reasons, our
auditors have stated in their report that they have substantial doubt about our
ability to continue as a going concern.
 
 **Going
Concern**
 
 Our
independent auditors have stated in their Auditor’s Report for the fiscal year
ended September 30, 2004 that we have incurred a net loss since inception and
our future is dependent upon our ability to obtain financing and achieve
profitable operation from the development of our natural resource interest. As a
result, our auditor’s concluded that there is a substantial doubt about our
ability to continue as a going concern.
 
 **Item 3.    Controls and Procedures**
 
 We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of March 31, 2005. This evaluation was carried out
under the supervision and with the participation of our Chief Executive Officer
and Chief Financial Officer, Mr. Henry Starek. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that, as of March
31, 2005, our disclosure controls and procedures are effective. There have been
no significant changes in our internal controls over financial reporting during
the quarter ended March 31, 2005 that have materially affected or are reasonably
likely to materially affect such controls.
   - 7
-
 ***Table of Contents***
 Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.
 
 Limitations
on the Effectiveness of Internal Controls
 
 Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. An internal control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, by collusion of two
or more people, or by management override of the internal control. The design of
any system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions.
Over time, control may become inadequate because of changes in conditions, or
the degree of compliance with the policies or procedures may deteriorate.
 
 
 
 
 - 8
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 ***Table of Contents***
  **PART
II - OTHER INFORMATION**
 
 
 **Item 1.  Legal
Proceedings**
 
 None.
 
 **Item 2.     Unregistered Sales of Equity
Securities and Use of Proceeds**
 
 On March
24, 2005, the registration statement filed on Form SB-2 (Commission file number
333-115179) was declared effective. This offering has commenced and is ongoing;
however, we did not complete any sales of our securities in the quarter ended
March 31, 2005.
 
 **Item 3.     Defaults upon Senior
Securities**
 
 None.
 
 **Item 4.  Submission of Matters to a
Vote of Security Holders**
 
 No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the reporting period.
 
 **Item 5.   Other
Information**
 
 None.
 
 **Item 6.   Exhibits**
 
 **Exhibit
      Number**
    **Description
      of Exhibit**3.1
    Articles
      of Incorporation13.2
    Bylaws110.1
    Loan
      Facility Agreement - Henry Starek210.2
    Agreement
      of Purchase - Triangle “T” Prospect210.3
    First
      Amendment to Option Agreement310.4
    Second Amendment to Option
    Agreement31.1
    Certification of Chief Executive Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
    Certification of Chief Financial Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
    Certification of Chief Executive Officer pursuant to
      18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
 
 (1)
    Previously
      filed as an exhibit to the Registration Statement on Form SB-2 on May 5,
      2004.
 (2)
    Previously
      filed as an exhibit to the Registration Statement on Form SB-2 on
      September 14, 2004
 (3)
    Previously
      filed as an exhibit to the Registration Statement on Form SB-2 on January
      26, 2005
 
 
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 ***Table of Contents***
 
 
 **SIGNATURES**
 
 In
accordance with the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
 **Barola
      Oil & Gas Co. Inc.**Date:
    May
      13, 2005By:       /s/
      Henry
      Starek
      Henry
      Starek
      Title:**Chief
      Executive Officer, Chief Financial Officer, and
      Director**




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