```

Revenue                                                                    $500
                                                                         -------
Non-cash officer compensation                                           $30,000
Technology license                                                         $500
Interest                                                                   $174
                                                                         -------
Total expenses                                                           30,674

Net loss                                                                (30,174)
                                                                        -------
                                                                        -------

   The accompanying notes are an integral part of these financial statements.

                                Pacific Oil, Inc.
                            Statement of Cash Flows

For the period from Inception on February 12, 2000 through December 31, 2000.

Cash flow operating activities:
Net loss                                                                (30,174)

Plus non-cash charges:                                                   30,500
                                                                        -------
         Cash provided by operations                                        326

Cash Flow from investing activities:                                          0

Cash flow from financing activities:
         Proceeds from sale of stock                                     22,500
         Proceeds from officer note                                       2,500
         Repayment of officer note                                       (2,500)
                                                                        -------
         Total financing activities                                      22,500
                                                                        -------
                                                                         22,826
Change in cash
Cash at beginning of period                                                   0
                                                                        -------

Cash at end of period                                                   $22,826
                                                                        -------
                                                                        -------

Non-cash financing and investing activities:
41,850,000 shares of Common stock issued in asset acquisition
525,000 shares issued for services

   The accompanying notes are an integral part of these financial statements.

                                Pacific Oil, Inc.
                         Notes to Financial Statements

Note 1- Organization and Summary of Significant Accounting Policies

         Organization and Nature of Operations
```

```

         Cash and Cash Equivalents

     The Company  considers  highly liquid  investments with maturities of three
     months or less to be cash equivalents.

         Income Taxes

     The Company uses the liability method of accounting for income taxes as set
     forth in Statement of Financial Accounting Standards No.109, Accounting for
     Income Taxes.  Under the liability  method,  deferred  taxes are determined
     based on the differences between the financial  statements and tax bases of
     assets and liabilities at enacted tax rates in effect in the years in which
     the differences are expected to reverse.

         Compensation of Officers and Employees

     The Company's officers serve without pay. The Company has no employees. The
     estimated fair value of services  provided has been accrued and reported as
     a contribution to capital.

         Stock Based Compensation

     The Company accounts for stock-based employee compensation  arrangements in
     accordance with provisions of Accounting  Principles  Board ("APB") Opinion
     No. 25, "Accounting for Stock Issued to Employees,"  and complies  with the
     disclosure   provisions  of  SFAS  No.  123,  "Accounting  for  Stock-Based
     Compensation."  Under  APB No.  25,  compensation  expense  is based on the
     difference, if any, on the date of the grant, between the fair value of the
     Company's  stock and the  exercise  price.  The Company  accounts for stock
     issued to  non-employees  in accordance with the provisions of SFAS no. 123
     and the Emerging Issues Task Force Consensus in Issue No. 96-18.

        Use of Estimates
```

```

         Fiscal Year End

         The Company's fiscal year ends on December 31.
```

```

               1. On  February  11,  2000  the  Company  sold  to  Kipp  Slicker
               5,000,000 at par value in exchange for $5,000 in the aggregate or
               $0.001 per share;

               2. On February  11,  2000,  the Company  sold  500,000  shares of
               Common  Stock to Bradford  P. White in exchange  for a license of
               web site design technology valued at $500 in the aggregate;

               3. On February  22, 2000 the Company sold to Frederick K. Slicker
               1,000,000 at par value in exchange for $1,000 in the aggregate or
               $0.001 per share;

               4. During the period June 1, 2000 to June 18,  2000,  the Company
               sold 165,000 shares of its common  stock  to investors  in a Rule
               504 SEC Regulation D offering at  $.10 in exchange for $16,500 in
               the aggregate.  The Company ceased the offering on June 18, 2000.

               5. On  June 19, 2000, the  founders of the  Company and Mr. White
               cancelled 3,540,000 of their  shares in the aggregate in order to
               consummate the purchase of the Royalty Interest.

               6. On  June 19, 2000, the  Company  sold 41,850,000 shares of its
               common stock to Denver Oil and Minerals Corporation("Denver Oil")
               in exchange for  the Royalty Interest.

               7. On June  19,  2000,  the  Company  issued  25,000  shares to a
               consultant for services rendered.

         Voting Rights.
```

```

         Divided Rights.

          Holders of record of shares of Common  Stock are  entitled  to receive
          receive dividends when and if  declared by the Board of  Directors. To
          date, Pacific has not paid cash dividends on its Common Stock. Holders
          of Common Stock  are  entitled  to receive  such  dividends  as may be
          declared  and  paid  from  time to time by the  Board of Directors out
          of funds legally  available therefor.  Pacific  intends  to retain any
          earnings for the operations and expansion of its business and does not
          anticipate paying cash dividends in the  foreseeable future.  However,
          the  Board is considering  returning  to shareholders  a substantial
          portion  of  the funds  invested in the capital of the Company, but no
          decision has been made to that effect.  Any future determination as to
          the payment of cash dividends will depend upon future earnings,results
          of operations, capital requirements, Pacific's financial condition and
          such other factors as the Board of Directors may consider.

         Liquidation Rights.
```