UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549


                                   FORM 10-Q

              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended June 30, 2002

                         Commission file number 0-6541

                              DISCOVERY OIL, LTD.
            (Exact name of registrant as specified in its charter)

           DELAWARE                                  83-0207909
(State or other jurisdiction of          (IRS Employer Identification Number)
incorporation or organization)


                           6127 Ramirez Canyon Road
                                  Malibu, CA
                   (Address of principal executive offices)

                                     90265
                                  (Zip Code)

                                (310) 457-1967
             (Registrant's Telephone Number, Including Area Code)


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

           Yes  (X)                              No     ( )


                     APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of  shares outstanding  of each of the issuer's  classes of
common stock as of August 15, 2002:    20,245,923
















<page>

                               TABLE OF CONTENTS



                                    PART I

                                                                PAGE


ITEM 1.Statements of Financial Position as of June 30, 2002
       and December 31, 2001.....................................3

       Statements of Operations For the Three and Six Month
       Periods Ended June 30, 2002 and 2001                      4

       Statements of Cash Flows For the Six Month Periods
       Ended June 30, 2002 and 2001..............................5

       Notes to Financial Statements.............................6

ITEM 2.Management's Discussion and Analysis of Financial
       Condition and Results of Operations.......................7

                                     PART II

ITEM 1.Legal Proceedings.........................................9

ITEM 2.Changes in Securities.....................................9

ITEM 3.Defaults Upon Senior Securities...........................9

ITEM 4.Submission of Matters to a Vote of Security Holders.......9

ITEM 5.Other Information.........................................9

ITEM 6.Exhibits and Reports on Form 8-K..........................9

       Signatures...............................................10























<PAGE>
PART I.


ITEM 1.    FINANCIAL STATEMENTS


                                        STATEMENTS OF FINANCIAL POSITION AS OF
DISCOVERY OIL, LTD.                     JUNE 30, 2002 AND DECEMBER 31, 2001


                                        (UNAUDITED)
                                          JUNE 30,    DECEMBER 31,
                                           2002            2001
                                        ------------  ------------
                                    ASSETS


CURRENT ASSETS:
   Cash                                 $    23,610   $     3,058
   Accounts receivable                        3,635         1,274
                                        ------------  ------------
     Total assets                       $    27,245   $     4,332
                                        ============  ============


                 LIABILITES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Accounts payable                     $    18,024   $    10,819
   Related party payable                                      134
                                        ------------  ------------
       Total current liabilities             18,024        10,953
                                        ------------  ------------

STOCKHOLDERS' EQUITY (DEFICIT):
   Preferred stock; $1.00 par value;
     5,000,000 shares authorized;
     none issued and outstanding                -             -
   Common stock; $0.001 par value;
     200,000,000 shares authorized;
     20,039,971 shares issued
     and outstanding as of
     December 31, 2001 and
     20,245,923 shares issued and
     outstanding as of June 30, 2002        20,247         20,041
   Additional paid-in capital              607,575        563,961
   Accumulated equity (deficit)           (618,601)      (590,623)
                                        ------------  ------------
Total stockholders' equity (deficit)          9,221        (6,621)
                                        ------------  ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)          $   27,245      $   4,332
                                        ============  ============







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

<PAGE>
DISCOVERY OIL, LTD.           STATEMENTS OF OPERATIONS FOR THE THREE AND SIX
(UNAUDITED)                     MONTH PERIODS ENDED JUNE 30, 2002 AND 2001

<table>
<caption>
                                     JUNE 30, 2002             JUNE 30, 2001
                              --------------------------  --------------------------
                                 THREE         SIX           THREE         SIX
                                 MONTHS        MONTHS        MONTHS        MONTHS
                              ------------  ------------  ------------  ------------

                           <c>           <c>           <c>           <c>
REVENUES:
   Sales of oil               $    11,489   $    19,885   $     9,188   $    18,737

OPERATING EXPENSES:
   Direct costs of production       6,090         9,376         3,550         6,826
   General and administrative
     expenses                      34,248        38,487         7,050        19,334
                              ------------  ------------  ------------  ------------
     Total operating expenses      40,338        47,863        10,600        26,160

OTHER EXPENSES:
   Interest expense                   -             -           5,827        10,635
                              ------------  ------------  ------------  ------------
       Total other expenses           -             -           5,827        10,635

NET LOSS                      $    28,849   $    27,978   $     7,239   $    18,058
                              ============  ============  ============  ============

NET LOSS PER SHARE-BASIC      $      Nil    $      Nil    $      Nil    $    Nil
                              ============  ============  ============  ============

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING-BASIC
                               20,334,187    20,290,546     9,313,352     9,313,352
                              ============  ============  ============  ============
</table>

























<PAGE>
DISCOVERY OIL, LTD.               STATEMENTS OF CASH FLOWS FOR THE SIX MONTH
(UNAUDITED)                        PERIODS ENDED JUNE 30, 2002 AND 2001



                                                         SIX MONTHS ENDED
                                                              JUNE 30,
                                                    --------------------------
                                                        2002           2001
                                                    ------------  ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                          $   (27,978)  $   (18,058)
   Adjustments to reconcile net loss to
     net cash used by operating activities:
      Stock issuance costs                               (5,149)          -
   Change in:
     Accounts payable                                     7,205          (334)
     Account receivable                                  (2,361)       (1,249)
     Interest payable                                       -         (31,953)
                                                    ------------  ------------
  Net cash flows used in operating activities           (28,283)      (51,594)
                                                    ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Payments on related party payable                     (134)      (14,992)
     Proceeds from convertible notes payable                -          77,000
     Proceeds from issuance of common stock              48,969          -
                                                    ------------  ------------
  Net cash flows provided by financing activities        48,835       62,008
                                                    ------------  ------------

NET INCREASE IN CASH                                     20,552        10,414

CASH AT BEGINNING OF PERIOD                               3,058           -
                                                    ------------  ------------

CASH AT END OF PERIOD                               $    23,610   $    10,414
                                                    ============  ============

SUPPLEMENTAL DISCLOSURE OF
CASH FLOWS INFORMATION:
   Cash paid during the year for interest                         $   42,588




















<PAGE>
DISCOVERY OIL, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

1.   BASIS OF PRESENTATION:

The financial statements of Discovery Oil,  LTD.  included  herein,  have  been
prepared without audit, pursuant to the rules and regulations of the Securities
and  Exchange  Commission.  Although  certain  information normally included in
financial  statements  prepared  in  accordance  with   accounting   principles
generally  accepted  in  the  United  States  of America has been condensed  or
omitted, Discovery Oil, LTD. believes that the disclosures are adequate to make
the information presented not misleading.  These financial statements should be
read in conjunction with the financial statements  and  notes  thereto  for the
fiscal  year  ended December 31, 2001 included in Discovery Oils, LTD.'s annual
report on Form 10-KSB.

The  financial  statements   included   herein  reflect  all  normal  recurring
adjustments  that,  in the opinion of management,  are  necessary  for  a  fair
presentation.  The results  for  interim periods are not necessarily indicative
of trends or of results to be expected  for  the  full year ending December 31,
2002.

Included  in  the  Company's production expenses as presented  are  all  direct
expenses  of oil production,  including  severance  taxes  and  royalties,  not
included in  production  expenses are depreciation, depletion, and amortization
("DD&A") expenses and corporate  administration  expenses.   All information is
presented on the accrual basis of accounting.

2.   COMMITMENTS AND CONTINGENCIES:

In connection with its 12.5% non-operating working interest in  six  oil wells,
the  Company  entered  into an operating agreement with the majority owner  and
operator of the wells.   The  agreement,  modeled after agreements standard and
customary to the oil industry, commits the  Company  to  pay its share of joint
interest operating costs incurred in the operation, maintenance,  and potential
future  development  of  the  wells.   Oil  prices  are extremely volatile  and
instances may occur where the Company's revenues from  oil  sales are less than
its  corresponding  production  expenses.   In  addition, oil well  repair  and
maintenance  activities  may  interrupt oil sale revenue  and  add  to  overall
operation costs.

Domestic oil operations are also  subject  to  extensive federal regulation and
potential interruption or termination by governmental authorities on account of
environmental and other regulatory considerations.   The  recent  trend towards
stricter  standards  in environmental legislation and regulation may  continue,
and this could increase the overall costs to the Company.

3.   RELATED PARTY TRANSACTIONS

During the second quarter  of  2002,  the  Company  paid  or accrued $23,500 to
Andrew V. Ippolito, the Company's president, a director and  major shareholder,
for  management  services provided by him and to reimburse him for  travel  and
other expenses incurred on the Company's behalf.








<page>
ITEM 2     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATION

GENERAL

Discovery Oil, Ltd.  (the  "Company",  "Registrant",  or  "Discovery Oil"), was
originally  organized  under  the laws of the State of Wyoming  in  1964.   The
Company became a Delaware corporation  through  a  merger  with  a wholly owned
subsidiary  in  1981.   Prior  to  1992, the Company was involved as a  general
partner in several limited partnerships for the purpose of drilling oil and gas
wells in Ohio, Wyoming, Colorado, Kansas, and Texas.  In 1988 the Company filed
a petition in Bankruptcy pursuant to  Chapter  11 of the Bankruptcy code in the
United States Bankruptcy Court.  On July 10, 1996,  the Court entered its order
and Final Decree, confirming the execution of the Company's reorganization plan
and concluding all proceedings and jurisdiction of the bankruptcy.

The  Company has a non-operating working interest in six  producing  oil  wells
having  proved  reserves.   The  working  interest  grants  the Company a 12.5%
working  interest,  or  a  9.32% net revenue interest after underlying  royalty
payments, in the oil produced  and  marketed from each well.  The oil wells are
near the city of Signal Hill, California;  the  Company  maintains an office in
Malibu, California.

The financial statements are presented on the basis that the Company is a going
concern, which contemplates the realization of assets and  the  satisfaction of
liabilities in the normal course of business over a reasonable length  of time.
The  Company  has  incurred  operating  losses  for  several  years  and  has a
stockholders'  deficit.   These  conditions  raise  substantial doubt as to the
Company's  ability  to  continue as a going concern.  The  Company's  financial
statements for the year ended  December 31, 2001, were audited by the Company's
independent certified public accountants,  whose report includes an explanatory
paragraph stating that the financial statements have been prepared assuming the
Company will continue as a going concern and  that  the  Company  has  incurred
operating  losses  since  its inception that raise substantial doubt about  its
ability to continue as a going concern.

This report contains both historical  and prospective statements concerning the
Company and its operations.  Prospective  statements (known as "forward-looking
statements") may or may not prove true with  the  passage  of  time  because of
future risks and uncertainties.  The Company cannot predict what factors  might
cause  actual  results to differ materially from those indicated by prospective
statements.

RESULTS OF OPERATIONS

For the three month  period  ended  June  30,  2002 compared to the three month
period ended June 30, 2001.

During the second quarter of 2002, the Company entered  into  discussions  with
Great  South  Land  Minerals  Limited,  Inc.  ("GSLM"),  an  Australian natural
resource  company, whereby GSLM would become a wholly owned subsidiary  of  the
Company.  The  proposed merger was contingent upon mutual shareholder approval,
due diligence investigations  and  other  conditions.  The  merger proposal was
terminated  by  mutual  consent  of  the  parties  on  June 13, 2002,  with  no
expectation of renewed interest.







<page>
RESULTS OF OPERATIONS (CONTINUED)

For the three months ended June 30, 2002, the Company had a net loss of $28,849
compared to a net loss of $7,239 during the comparable period  in  the previous
year.  The increase in net loss from 2001 to 2002 was primarily due to expenses
associated  with  due  diligence  activities  related  to  a  possible business
combination  with  an  Australian  natural  resources  company, that  were  not
incurred in 2001.

During  the  three  month  period  ended  June 30, 2002, the Company  generated
$11,489 from the sale of 496 barrels (the Company's net revenue interest share)
of oil at an average sales price of approximately  $23  per barrel.  During the
three month period ended June 30, 2001, the Company generated  $9,188  from the
sale  of 415 barrels of oil at an average sales price of approximately $22  per
barrel.   Direct  oil production costs were $6,090 during the second quarter of
2002, or approximately $12 per barrel sold, compared to $3,550 or approximately
$9 per barrel sold during the second quarter of 2001.

General and administrative expenses increased from $7,050 in the second quarter
of 2001 to $34,248  in  the  second  quarter  of 2002.  The increase was due to
increased travel expenses and officer compensation incurred in 2002, no similar
expenses were incurred in the comparable period of 2001.

Interest expense was $5,827 during the second quarter  of  2001;  there  was no
interest  expense  for  the  comparable period of 2002, as all interest bearing
related party advances and convertible  promissory  notes had been converted to
common stock during the second and third quarters of 2001.

For the six month period ended June 30, 2002 compared  to  the six month period
ended June 30, 2001

For the six months ended June 30, 2002, the Company had a net  loss  of $27,978
compared to a net loss of $18,058 during the comparable period in the  previous
year.  The increase in net loss from 2001 to 2002 was primarily due to expenses
associated  with  due  diligence  activities  related  to  a  possible business
combination  with  an  Australian  natural  resources  company, that  were  not
incurred in 2001.

During the six month period ended June 30, 2002, the Company  generated $19,885
from the sale of 988 barrels (the Company's net revenue interest  share) of oil
at  an  average  sales price of approximately $20 per barrel.  During  the  six
month period ended  June  30, 2001, the Company generated $18,737 from the sale
of 843 barrels of oil at an  average  sales price approximately $22 per barrel.
Oil production expenses were $9,376 during  the  first  six  months of 2002, or
approximately  $9 per barrel sold, compared to $6,826 or approximately  $8  per
barrel sold during the first six months of 2001.

General and administrative  expenses  increased  from  $19,334 in the first six
months of 2001 to $38,487 in the first six months of 2002.   The  increase  was
due  to  increased travel expenses and officer compensation incurred during the
second quarter of 2002.

Interest expense  was  $10,635  during the second quarter of 2001; there was no
interest expense for the comparable  period  of  2002,  as all interest bearing
related party advances and convertible promissory notes had  been  converted to
common stock during the second and third quarters of 2001.






<page>
FINANCIAL CONDITION AND LIQUIDITY

During  the  six month period ended June 30, 2002, the Company used $28,283  of
cash in its operating  activities.   During  the  second  quarter  of 2002, the
Company  sold 205,950 shares of its restricted common stock to various  foreign
purchasers  for  $48,969   The  sale  was  exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933 as  amended.  In connection with the
sale, the Company incurred costs of $5,149 payable  to an Australian consulting
firm.   Management  plans  to  fund future short-term operating  needs  through
profits  from  its  oil  producing  properties,  advances  from  related  party
shareholders and additional restricted  common  stock sales, although there can
be no assurances that these resources will be sufficient  to fund the Company's
operations.

The  Company's  management  hopes to negotiate a business combination  with  an
entity  in  the  oil or oil related  industries  which  desires  the  perceived
advantages of an Exchange Act registered corporation.  While management intends
to diligently pursue this strategy, there are no assurances, however, that they
will be successful in their plans.

                                   PART II.


ITEM 1.    LEGAL PROCEEDINGS

           NONE

ITEM 2.    CHANGES IN SECURITIES

           NONE

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

           NONE

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           NONE

ITEM 5.    OTHER INFORMATION

           NONE

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           NONE
















<page>



                                  SIGNATURES




Pursuant to the requirements  of  Section  13  or  15(b)  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.



                              Discovery Oil, LTD
                                 (Registrant)


By: /s/ Andrew V. Ippolito          August 15, 2002
-------------------------------     ---------------
Andrew V. Ippolito                        Date
President and Director