UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549


________________




FORM
10-K




ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934




FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008




Commission File
Number:333-151300


_______________________________




SEARS
OIL AND GAS CORPORATION


(Exact
name of registrant as specified in its charter)




NEVADA
            
            20-3455830(State
      or other jurisdiction of incorporation or organization)
            
            (I.R.S.
      Employer Identification No.)




351-B
Linden Street


Fort
Collins, Colorado 80524


(Address
of principal executive offices, including zip code)




(970)
224-1189


(Registrant's
telephone number, including area code)




Securities
registered pursuant to Section 12(b) of the Act:


Common
Stock, $0.001 par value per share




Title
      of class
            
            Name
      of each exchange on which registeredCommon
      Stock. $0.001 par value per share
            
            None




Securities
registered pursuant to Section 12(g) of the Act:


None




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
405 of the Securities Act.    Yes o  
No x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange
Act.    Yes x   No o





1










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 o




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.    o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See the definitions of "large accelerated filer," "accelerated filer," and
"smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
one):




Large
      accelerated filer o
            
            Accelerated
      filer oNon-accelerated
      filer o
              (Do
      not check if smaller reporting company)
            
            Smaller
      Reporting Company x




Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes   
No 




As
of March 30, 2009, no market price existed for voting and non-voting common
equity held by non-affiliates of the registrant.




As of
March 30, 2009, the Registrant had outstanding 36,800,000 shares of Common Stock
with a par value of $0.001 per share.







DOCUMENTS
INCORPORATED BY REFERENCE




The
following documents (or portions thereof) are incorporated herein by
reference:  registration statement and exhibits thereto filed on Form
S-1 May 30, 2008 are incorporated by reference within Part I and Part II
herein.





2










INDEX


SEARS
OIL AND GAS CORPORATION




PAGE
      NOPART IITEM 1
            BUSINESS
            4ITEM 1A
            RISK
      FACTORS
            12ITEM
      1B
            UNRESOLVED
      STAFF COMMENTS
            14ITEM 2
            PROPERTIES
            14ITEM 3
            LEGAL
      PROCEEDINGS
            14ITEM 4
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
            15PART IIITEM 5
            MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
            15ITEM 6
            SELECTED
      FINANCIAL DATA
            15ITEM 7
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
            15ITEM 7A
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            16ITEM 8
            FINANCIAL
      STATEMENTS AND SUPPLEMENTARY DATA
            16ITEM 9
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
            17ITEM 9A(T)
            CONTROLS
      AND PROCEDURES
            17ITEM 9B
            OTHER
      INFORMATION
            20PART IIIITEM 10
            DIRECTORS
      AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
            20ITEM 11
            EXECUTIVE
      COMPENSATION
            21ITEM 12
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
            22ITEM 13
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
            22ITEM 14
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
            23PART IVITEM 15
            EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
            23SIGNATURES
            25







3










PART
I.




Cautionary
Note




This
Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, which are subject to a number of risks
and uncertainties. All statements that are not historical facts are
forward-looking statements, including statements about our business strategy,
the effect of Generally Accepted Accounting Principles ("GAAP") pronouncements,
uncertainty regarding our future operating results and our profitability,
anticipated sources of funds and all plans, objectives, expectations and
intentions and the statements regarding future potential revenue, gross margins
and our prospects for fiscal 2009. These statements appear in a number of places
and can be identified by the use of forward-looking terminology such as "may,"
"will," "should," "expect," "plan," "anticipate," "believe," "estimate,"
"predict," "future," "intend," or "certain" or the negative of these terms or
other variations or comparable terminology, or by discussions of
strategy.




Actual
results may vary materially from those in such forward-looking statements as a
result of various factors that are identified in "Item 1A.—Risk Factors"
and elsewhere in this document. No assurance can be given that the risk factors
described in this Annual Report on Form 10-K are all of the factors that
could cause actual results to vary materially from the forward-looking
statements.  References in this Annual Report on Form 10-K to
(i) the "Company," the "Registrant," "Sears,” "we," "our," “SRSG,” and "us"
refer to Sears Oil and Gas Corporation.





Investors
and security holders may obtain a free copy of the Annual Report on
Form 10-K and other documents filed by SRSG with the Securities and
Exchange Commission ("SEC") at the SEC's website at http://www.sec.gov. Free
copies of the Annual Report on Form 10-K and other documents filed by SRSG
with the SEC may also be obtained from SRSG by directing a request to Sears Oil
and Gas Corporation, Inc., Attention: William Sears-351-B Linden Street,
Fort Collins, Colorado 80524.




ITEM 1
            BUSINESS.




General





Sears Oil
and Gas Corporation is a Nevada corporation which was incorporated on September
9, 2005, is a developmental stage company with a principal business objective of
taking advantage of the many and varied opportunities currently presented within
the oil and gas field.  SRSG intends to exploit multiple revenue
streams throughout the natural resources industry, including oil, gas and mining
areas SRSG has never declared bankruptcy, it has never been in receivership, and
it has never been involved in any legal action or proceedings. Since becoming
incorporated, SRSG has not made any significant purchase or sale of assets, nor
has it been involved in any mergers, acquisitions or
consolidations.  SRSG has no subsidiaries.  Our fiscal year
end is December 31st.







4





Description
of Business







Investors
must be aware that we are a development stage Company that has generated no
revenues from operations since our inception. We rely upon the sale of our
securities and funds provided by management to cover expenses. In addition, our
independent accountant has issued an opinion indicating that there is
substantial doubt about our ability to continue as a going concern. Additional
capital must be obtained by us to implement our business plan and there is no
assurance that financing to cover the costs of implementation of our business
plan can be obtained. We do not, as of the date of this annual report, have any
commitments from any provider of capital to provide the required
funds.





Tar Sands.Sears
Oil and Gas has a manufacturing contract to use Quaestus Refining LLCs’ license
for a patented technology to recover crude oil from “tar sands”
deposits.  The technology is the first to eliminate environmental
concerns, make oil economically feasible through the recovery of oil locked in
tar sands and facilitate highly profitable commercialization of previously
non-exploitable U.S. and global oil reserves.





We intend
to be the market leader, the most cost-effective, environmentally responsible
producer of crude oil from tar sands and shallow oil deposits – with an
unparalleled global low ‘total’ recovery cost of less than $15.00 per
barrel—before tax credits.





Quaestus
Refining LLC licensed and developed a new technology that uses non-toxic
solvents to cost-effectively and eco-effectively remove oil from tar
sands.  Tar sands (also called ‘oil sands’) are sedimentary rock
formations that contain about 7% - 15% by weight of very viscous or asphalt-like
petroleum oil known as “Bitumen’.   The Company’s process has
been developed and proven with over six months of successful pilot plant
operation.  The unique and patented technology features a continuous
flow process coupled with a gas-liquid interface and incorporating a pressure
differential to extract oil from sand.  The result is 99.9% recovery
of oil resident in the sand with no loss of solvent! The petroleum industry has
not previously succeeded in finding a commercially viable means to recover oil
from tar sands using solvent-based technology.





Quaestus
Refining LLC’s licensed process has a large number of critical and unique
success factors not the least of which include:





·
            Proven
      95% oil recovery efficiency results in a cost of less than $15.00 /
      bbl.





·
            The
      highly scalable process works effortlessly on a wide range of host tar
      sand sediment types.





·
            It
      does not employ valuable or unavailable water and it does not use
      polluting chemical surfactants.





·
            The
      continuously operating system is totally closed loop and is
      eco-responsible!  It has zero solvent loss; produces minimal
      green house gases; and returns the cleaned-up sands to the environment
      leaving the ecosystem in better than original
  condition.





5





Oil
recovered from tar sands could substantially alleviate energy gap problems and
prolong the dates when the U.S. and the world run out of conventional crude
oil.  They will also give technology additional time to come up with
commercially viable alternative solutions in time to prevent major dislocations
in our geopolitical and industrial world economies.  “Proven” global
tar sands reserves total 524 billion barrels of which 83 billion barrels are
located in the U.S.—decreasing U.S. total dependency on foreign
imports.






Oil and Gas.We
plan to supply central administrative, correlated transportation and delivery,
financial management, marketing and sales programs and expertise.  The
Company is entering second stage development and has a synergistic prototype
system designed and has identified initial prospective acquisitions, vendors and
consumers.  The Company is refining the production prototype before
introducing it to the market and contracting with marketing
partners.  Our goal is to create the efficiencies of a vertically
integrated utility whose products and services can be contracted with confidence
by purchasing executives, and is both convenient and profitable for independent
producers to utilize.





Historically
the oil and gas industry consists primarily of the exploration for oil and/or
gas by locating the presence of hydrocarbons in the zones of geological
formations under the surface of the earth by the testing of these zones either
geophysical, and seismically, or by drilling a “hole” and “logging” the hole by
means of an “electric log” which is done by inserting the logging device into
the hole, and recording the “resistivity” and permeability of the rock
formations therein. If the hole is determined to contain oil or gas in
commercial quantities, the “hole” then becomes a “well.” The well is then
completed, and the production of oil or gas is begun. If the hole is determined
not to contain hydrocarbons in commercial quantities, it is then declared a “dry
hole” and is abandoned. As may be presumed, the oil and gas industry has become,
over the years, very competitive and very complicated.  New production
technologies make it possible to recover commercially viable production from
properties previously deemed to be dry.   The product is then
sold to refineries or to end-users and delivered by truck or by
pipeline.





Given the
current geo-political turmoil, the international market in energy in general and
crude oil specifically, marketing our energy products domestically should be
readily excepted; however, we cannot guarantee the market will be interested in
our products and want to purchase and utilize them on a consistent
basis.  If the energy market is not receptive to our products our
business would fail.




Market for Oil and Gas Production.The market for oil and gas production is regulated by both the state and
federal governments. The overall market is mature and with the exception of gas,
all producers in a producing region will receive the same price.




The major
oil companies will purchase all crude oil offered for sale at posted field
prices. There are price adjustments for quality differences from the Benchmark.
Benchmark is Saudi Arabian light crude oil employed as the standard on which
OPEC price changes have been based. Quality variances from Benchmark crude will
results in lower prices being paid for the variant oil. Oil sales are normally
contracted with a purchaser or gatherer as it is known in the industry who will
pick up the oil at the well site.





6





In
some instances there may be deductions for transportation from the well head to
the sales point. At this time the majority of crude oil purchasers do not charge
transportation fees unless the well is outside their service area. The service
area is a geographical area in which the purchaser of crude oil will not charge
a fee for picking upon the oil. The purchaser or oil gatherer as it is called
within the oil industry will usually handle all check disbursements to both the
working interest and royalty owners. We will be a working interest owner. By
being a working interest owner, we are responsible for the payment of our
proportionate share of the operating expenses of the well. Royalty owners and
overriding royalty owners receive a percentage of gross oil production for the
particular lease and are not obligated in any manner whatsoever to pay for the
costs of operating the lease. Therefore, we, in most instances, will be paying
the expenses for the oil and gas revenues paid to the royalty and overriding
royalty interests.






Gas sales
are by contract. The gas purchaser will pay the well operator 100% of the sales
proceeds on or about the 25th of each and every month for the previous month’s
sales. The operator is responsible for all checks and distributions to the
working interest and royalty owners. There is no standard price for gas. Price
will fluctuate with the seasons and the general market conditions. It is our
intention to utilize this market whenever possible in order to maximize
revenues. We do not anticipate any significant change in the manner production
is purchased; however, no assurance can be given at this time that such changes
will not occur.





Competition.The
oil and gas industry is highly competitive. Our competitors and potential
competitors include major oil companies and independent producers of varying
sizes which are engaged in the acquisition of producing properties and the
exploration and development of prospects. Most of our competitors have greater
financial, personnel and other resources than we do and therefore have greater
leverage in acquiring prospects, hiring personnel and marketing oil and
gas.




Research and
Development.We will be conducting research in the form of
drilling on the properties leased and the refinement of our licensed equipment.
Our business plan is focused on a strategy for maximizing the long-term
exploration and development of our properties. To date, we have focused
primarily on acquiring our interest in a single lease as described herein on
which to determine the best practices related to exploiting our
technology.




Government Regulation.The
production and sale of natural resources, and oil and gas in particular, is
subject to regulation by state, federal and local authorities. In most areas
there are statutory provisions regulating the production of oil and natural gas
under which administrative agencies may set allowable rates of production and
promulgate rules in connection with the operation and production of such wells,
ascertain and determine the reasonable market demand of oil and gas, and adjust
allowable rates with respect thereto.




The sale
of liquid hydrocarbons was subject to federal regulation under the Energy Policy
and Conservation Act of 1975 which amended various acts, including the Emergency
Petroleum Allocation Act of 1973.





7










These
regulations and controls included mandatory restrictions upon the prices at
which most domestic and crude oil and various petroleum products could be sold.
All price controls and restrictions on the sale of crude oil at the wellhead
have been withdrawn. It is possible, however, that such controls may be
re-imposed in the future but when, if ever, such re-imposition might occur and
the effect thereof is unknown.




The sale
of certain categories of natural gas in interstate commerce is subject to
regulation under the Natural Gas Act and the Natural Gas Policy Act of 1978
(“NGPA”). Under the NGPA, a comprehensive set of statutory ceiling prices
applies to all first sales of natural gas unless the gas specifically exempt
from regulation (i.e., unless the gas is deregulated). Administration and
enforcement of the NGPA ceiling prices are delegated to the Federal Energy
Regulatory Commission (“FERC”). In June 1986 the FERC issued Order No. 451,
which in general is designed to provide a higher NGPA ceiling price for certain
vintages of old gas. It is possible, though unlikely, that we may in the future
acquire significant amounts of natural gas subject to NGPA price regulations
and/or FERC Order No. 451.




Our
operations are subject to extensive and continually changing regulation because
of legislation affecting the oil and natural gas industry is under constant
review for amendment and expansion. Many departments and agencies, both federal
and state, are authorized by statute to issue and have issued rules and
regulations binding on the oil and natural gas industry and its individual
participants. The failure to comply with such rules and regulations can result
in large penalties. The regulatory burden on this industry increases our cost of
doing business and, therefore, affects our profitability. However, we do not
believe that we are affected in a significantly different way by these
regulations than our competitors are affected.




Transportation and
Production.We can make sales of oil, natural gas and
condensate at market prices which are not subject to price controls at this
time. The price that we receive from the sale of these products is affected by
our ability to transport and the cost of transporting these products to market.
Under applicable laws, FERC regulates:




•
            the
      construction of natural gas pipeline facilities,
  and




•
            the
      rates for transportation of these products in interstate
      commerce.




Our possible future sales
of natural gas are affected by the availability, terms and cost of pipeline
transportation. The price and terms for access to pipeline transportation remain
subject to extensive federal and state regulation. Several major regulatory
changes have been implemented by Congress and FERC from 1985 to the present.
These changes affect the economics of natural gas production, transportation and
sales. In addition, FERC is continually proposing and implementing new rules and
regulations affecting these segments of the natural gas industry that remain
subject to FERC’s jurisdiction. The most notable of these are natural gas
transmission companies.




FERC’s
more recent proposals may affect the availability of interruptible
transportation service on interstate pipelines.





8










These
initiatives may also affect the intrastate transportation of gas in some cases.
The stated purpose of many of these regulatory changes is to promote competition
among the various sectors of the natural gas industry. These initiatives
generally reflect more light-handed regulation of the natural gas
industry.





The
ultimate impact of the complex rules and regulations issued by FERC since 1985
cannot be predicted. In addition, some aspects of these regulatory developments
have not become final but are still pending judicial and FERC final decisions.
We cannot predict what further action FERC will take on these matters. However,
we do not believe that any action taken will affect us much differently than it
will affect other natural gas producers, gatherers and marketers with which we
might compete.




Effective
as of January 1, 1995, FERC implemented regulations establishing an
indexing system for transportation rates for oil. These regulations could
increase the cost of transporting oil to the purchaser. We do not believe that
these regulations will affect us any differently than other oil producers and
marketers with which we compete.




Regulation of Drilling and
Production.Our proposed drilling and production operations
are subject to regulation under a wide range of state and federal statutes,
rules, orders and regulations. Among other matters, these statutes and
regulations govern:




•
            the
      amounts and types of substances and materials that may be released into
      the environment,




•
            the
      discharge and disposition of waste
materials,




•
            the
      reclamation and abandonment of wells and facility sites,
    and




•
            the
      remediation of contaminated sites, and
require:




•
            permits
      for drilling operations,




•
            drilling
      bonds, and




•
            reports
      concerning operations.




Environmental Regulations.Our operations are affected by the various state, local and federal
environmental laws and regulations, including the:




•
            Clean
      Air Act,




•
            Oil
      Pollution Act of 1990,





9










•
            Federal
      Water Pollution Control Act,




•
            Resource
      Conservation and Recovery Act
(“RCRA”),




•
            Toxic
      Substances Control Act, and





•
            Comprehensive
      Environmental Response, Compensation and Liability Act
      (“CERCLA”).




These
laws and regulations govern the discharge of materials into the environment or
the disposal of waste materials, or otherwise relate to the protection of the
environment. In particular, the following activities are subject to stringent
environmental regulations:




•
            drilling,





•
            development
      and production operations,




•
            activities
      in connection with storage and transportation of oil and other liquid
      hydrocarbons, and




•
            use
      of facilities for treating, processing or otherwise handling hydrocarbons
      and wastes.




Violations
are subject to reporting requirements, civil penalties and criminal sanctions.
As with the industry generally, compliance with existing regulations increases
our overall cost of business. The increased costs cannot be easily determined.
Such areas affected include:




•
            unit
      production expenses primarily related to the control and limitation of air
      emissions and the disposal of produced
water,




•
            capital
      costs to drill exploration and development wells resulting from expenses
      primarily related to the management and disposal of drilling fluids and
      other oil and natural gas exploration wastes,
  and




•
            capital
      costs to construct, maintain and upgrade equipment and facilities and
      remediate, plug and abandon inactive well sites and
  pits.




Environmental
regulations historically have been subject to frequent change by regulatory
authorities. Therefore, we are unable to predict the ongoing cost of compliance
with these laws and regulations or the future impact of such regulations on our
operations. However, we do not believe that changes to these regulations will
have a significant negative effect on our operations.




A
discharge of hydrocarbons or hazardous substances into the environment could
subject us to substantial expense, including both the cost to comply with
applicable regulations pertaining to the cleanup of releases of hazardous
substances into the environment and claims by neighboring landowners and other
third parties for personal injury and property damage. We do not maintain
insurance for protection against certain types of environmental
liabilities.





10










The Clean
Air Act requires or will require most industrial operations in the United States
to incur capital expenditures in order to meet air emission control standards
developed by the EPA and state environmental agencies. Although no assurances
can be given, we believe the Clean Air Act requirements will not have a material
adverse effect on our financial condition or results of operations.





RCRA is
the principal federal statute governing the treatment, storage and disposal of
hazardous wastes. RCRA imposes stringent operating requirements, and liability
for failure to meet such requirements, on a person who is either:




•
            a
      “generator” or “transporter” of hazardous waste,
  or




•
            an
      “owner” or “operator” of a hazardous waste treatment, storage or disposal
      facility.




At
present, RCRA includes a statutory exemption that allows oil and natural gas
exploration and production wastes to be classified as non-hazardous waste. As a
result, we will not be subject to many of RCRA’s requirements because our
operations will probably generate minimal quantities of hazardous
wastes.




CERCLA,
also known as “Superfund,” imposes liability, without regard to fault or the
legality of the original act, on certain classes of persons that contributed to
the release of a “hazardous substance” into the environment. These persons
include:




•
            the
      “owner” or “operator” of the site where hazardous substances have been
      released, and




•
            companies
      that disposed or arranged for the disposal of the hazardous substances
      found at the site.




CERCLA
also authorizes the EPA and, in some instances, third parties to act in response
to threats to the public health or the environment and to seek to recover from
the responsible classes of persons the costs they incur. In the course of our
ordinary operations, we could generate waste that may fall within CERCLA’s
definition of a “hazardous substance.” As a result, we may be liable under
CERCLA or under analogous state laws for all or part of the costs required to
clean up sites at which such wastes have been disposed.





Under such law we could
be required to:




•
            remove
      or remediate previously disposed wastes, including wastes disposed of or
      released by prior owners or
operators,




•
            clean
      up contaminated property, including contaminated groundwater,
      or




•
            perform
      remedial plugging operations to prevent future
    contamination.




We could
also be subject to other damage claims by governmental authorities or third
parties related to such contamination.





11





There was
no purchase or sale of any plant and or significant equipment.  We
have no patents, trademarks licenses, or labor contracts.





There is
no market for our common stock. The Company cannot provide any guarantee or
assurance a market will ever develop for the common stock in the
future.  If such a market is not developed shareholders would not be
able to sell their shares.




Other
than William Sears (officer and director) and Max Kern (officer) there are no
other employees.  Currently these individuals are donating their time
to the development of the Company.  There is no employment agreement
by and between us and Mr. Sears or Mr. Kern.




ITEM
      1A
            RISK
      FACTORS




Factors
Affecting Future Operating Results




This
Annual Report on Form 10-K contains forward-looking statements concerning
our future programs, expenses, revenue, liquidity and cash needs as well as our
plans and strategies. These forward-looking statements are based on current
expectations and we assume no obligation to update this information, except as
required by applicable laws and regulations. Numerous factors could cause actual
results to differ significantly from the results described in these
forward-looking statements, including the following risk factors.





Because
our auditors have issued a going concern opinion, there is substantial
uncertainty we will continue activities in which case you could lose your
investment.




Our
auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an ongoing business for the next
twelve months. As such we may have to cease activities and you could lose your
investment.




We
currently do not have adequate funds to cover the costs associated with
maintaining our status as a Reporting Company.





The
Company currently has approximately $592 of cash available.  This
amount will not be enough to pay the legal, accounting, and filing fees that is
required to maintain our status as a reporting company, which is currently
estimated at $25,000 for fiscal year 2009.  If we can no longer be a
reporting company our common stock would no longer be eligible for quotation on
the Over-the-Counter Bulletin Board.  This would result in there being
no public market for an investor to trade our common stock and any investment
made would be lost in its entirety.





We
lack an operating history and have losses which we expect to continue into the
future. As a result, we may have to suspend or cease activities, which would
result in a complete loss of any investment made into the Company.




We were
incorporated on September 9, 2005 and we have not started our proposed business
activities or realized any revenues. We have no operating history upon which an
evaluation of our future success or failure can be made. As of December 31, 2008
our net loss since inception is $101,408.  Based upon current plans,
we expect to incur operating losses in future periods.





12





As
a result, we may not generate revenues in the future. Failure to generate
revenues will cause us to suspend or cease activities.







If
we are able to complete financing through the sale of additional shares of our
common stock in the future, then shareholders will experience
dilution.




The most
likely source of future financing presently available to us is through the sale
of shares of our common stock. Any sale of common stock will result in dilution
of equity ownership to existing shareholders. This means that if we sell shares
of our common stock, more shares will be outstanding and each existing
shareholder will own a smaller percentage of the shares then outstanding. To
raise additional capital we may have to issue additional shares, which may
substantially dilute the interests of existing shareholders. Alternatively, we
may have to borrow large sums, and assume debt obligations that require us to
make substantial interest and capital payments.




Because there is currently no public
trading market for our common stock, you may not be able to resell your
stock.




Our
common stock is not quoted on any public exchange.  If a market does
not develop there would be no central place, such as stock exchange or
electronic trading system to resell your shares.




Because our securities are subject
to penny stock rules, you may have difficulty reselling your
shares.




Our
shares are penny stocks are covered by section 15(g) of the Securities Exchange
Act of 1934 which imposes additional sales practice requirements on
broker/dealers who sell the Company's securities including the delivery of a
standardized disclosure document; disclosure and confirmation of quotation
prices; disclosure of compensation the broker/dealer receives; and, furnishing
monthly account statements. For sales of our securities, the broker/dealer must
make a special suitability determination and receive from its customer a written
agreement prior to making a sale. The imposition of the foregoing additional
sales practices could adversely affect a shareholder's ability to dispose of his
stock and as a result the invest may lose his entire investment made into the
Company.




We
are subject to the requirements of section 404 of the Sarbanes-Oxley Act. If we
are unable to timely comply with section 404 or if the costs related to
compliance are significant, our profitability, stock price and results of
operations and financial condition could be materially adversely
affected.





We are
required to comply with the provisions of Section 404 of the Sarbanes-Oxley Act
of 2002, which require us to maintain an ongoing evaluation and integration of
the internal controls of our business. We were required to document and test our
internal controls and certify that we are responsible for maintaining an
adequate system of internal control procedures for the year ended December 31,
2008.





13










In
subsequent years, our independent registered public accounting firm will be
required to opine on those internal controls and management’s assessment of
those controls. In the process, we may identify areas requiring improvement, and
we may have to design enhanced processes and controls to address issues
identified through this review.





We
evaluated our existing controls for the year ended December 31, 2008. Our Chief
Executive Officer and Chief Financial Officer identified material weaknesses in
our internal control over financial reporting and determined that we did not
maintain effective internal control over financial reporting as of December 31,
2008. The identified material weaknesses did not result in material audit
adjustments to our 2008 financial statements; however, uncured material
weaknesses could negatively impact our financial statements for subsequent
years.







We cannot
be certain that we will be able to successfully complete the procedures,
certification and attestation requirements of Section 404 or that our auditors
will not have to report a material weakness in connection with the presentation
of our financial statements. If we fail to comply with the requirements of
Section 404 or if our auditor’s report such material weakness, the accuracy and
timeliness of the filing of our annual report may be materially adversely
affected and could cause investors to lose confidence in our reported financial
information, which could have a negative effect on the trading price of our
common stock. In addition, a material weakness in the effectiveness of our
internal controls over financial reporting could result in an increased chance
of fraud and the loss of customers, reduce our ability to obtain financing and
require additional expenditures to comply with these requirements, each of which
could have a material adverse effect on our business, results of operations and
financial condition.





Further,
we believe that the out-of-pocket costs, the diversion of management’s attention
from running the day-to-day operations and operational changes caused by the
need to comply with the requirements of Section 404 of the Sarbanes-Oxley Act
could be significant. If the time and costs associated with such compliance
exceed our current expectations, our results of operations could be adversely
affected.




ITEM
      1B
            UNRESOLVED
      STAFF COMMENTS.





None




ITEM 2
            PROPERTIES.




We do not own any property; the
principal offices are located at 351-B Linden Street, Fort Collins, Colorado
80524.





ITEM
      3
              LEGAL
      PROCEEDINGS.




Sears Oil
and Gas is not currently a party to any legal proceedings. Sears Oil and Gas
agent for service of process in Nevada is: Stevenson Management Group, 9750
Please Way Suite 2090, Las Vegas, Nevada 89147.





14










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


None





PART
II




ITEM 5
            MARKET
      FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES.




There is
no market for our common stock.  We cannot provide any assurance a
market will ever develop in the future,





We did
not declare or pay dividends during the Fiscal Year 2008 and do not anticipate
declaring or paying dividends in fiscal year 2009.





We had no
equity compensation plan in 2008.





ITEM 6
            SELECTED FINANCIAL
  DATA.




Summary of Financial
Data




As
      of December 31, 2008Revenues
              
              $
              0Earnings
      (Loss)
              
              $
              (101,408)Total
      Assets
              
              $
              592Liabilities
              
              $
              0Shareholders’
      Equity
              
              $
              592






ITEM 7
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF
OPERATIONS.




The
following discussion is intended to assist in the understanding and assessment
of significant changes and trends related to the results of operations and
financial condition of Sears Oil and Gas Corporation. This discussion and
analysis should be read in conjunction with our financial statements and notes
thereto included elsewhere in this Annual Report on Form 10-K for the
fiscal year ended December 31, 2008.





15










Critical
Accounting Policies




The
preparation of our consolidated financial statements and notes thereto requires
management to make estimates and assumptions that affect the amounts and
disclosures reported within those financial statements. On an ongoing basis,
management evaluates its estimates, including those related to revenue
recognition, contingencies, litigation and income taxes. Management bases its
estimates and judgments on historical experiences and on various other factors
believed to be reasonable under the circumstances. Actual results under
circumstances and conditions different than those assumed could result in
differences from the estimated amounts in the financial statements. There have
been no material changes to these policies during fiscal 2008.  As of
December 31, 2008 the Company has not identified any critical estimates that are
used in the preparation of the financial statements.




Liquidity and Capital Resources.At the end of fiscal year 2008 we had $592 of cash on hand available and
we had no liabilities. We must secure additional funds in order to continue our
business. We will be required to secure a loan to pay expenses relating to
filing this report including legal, accounting and filing fees.  We
believe that we will be able to obtain this loan from a current shareholder of
the Company; however we cannot provide any assurance that we will be able to
raise additional proceeds or secure additional loans in the future to cover our
expenses related to maintaining our reporting company status (estimated at
$25,000 for fiscal year 2009).  Furthermore, there is no guarantee we
will receive the required financing to complete our business strategies; we
cannot provide any assurance that future financing will be available to us on
acceptable terms. If financing is not available on satisfactory terms, we
may be unable to continue, develop or expand our operations.  If
we are unable to accomplish raising adequate funds then any it would be likely
that any investment made into the Company would be lost in its
entirety.





Results of Operations. We
have not begun operations and we have not generated any
revenues.  Since incorporation we have incurred a loss of
$101,408.





Off-Balance Sheet
Arrangements. None




Contractual Obligations.None




ITEM
      7A
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.




We do not
currently hold any market risk sensitive instruments entered into for hedging
transaction risks related to foreign currencies. In addition, we have not
entered into any transactions with derivative financial instruments for trading
purposes.





ITEM
      8
            FINANCIAL STATEMENTS AND
      SUPPLEMENTARY DATA.




Our
financial statements appear beginning on page F-1, immediately following the
signature page of this report.





16










ITEM 9
            CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
      ACCOUNTING AND FINANCIAL
DISCLOSURE.


None






ITEM 9A(T)
            CONTROLS AND
      PROCEDURES.




Disclosure
Controls and Procedures





Management
of Sears Oil and Gas Corporation is responsible for maintaining disclosure
controls and procedures that are designed to ensure that information required to
be disclosed in the reports that the Company files or submits under the
Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission’s rules and forms. In addition, the disclosure controls and
procedures must ensure that such information is accumulated and communicated to
the Company’s management, including its Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
financial and other required disclosures.





At the
end of the period covered by this report, an evaluation of the effectiveness of
our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and
15(d)-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)) was
carried out under the supervision and with the participation of our Principal
Executive Officer, Principal Financial and Accounting Officer, Max Kerns. Based
on his evaluation of our disclosure controls and procedures, he concluded that
during the period covered by this report, such disclosure controls and
procedures were not effective to detect the inappropriate application of US GAAP
standards. This was due to deficiencies that existed in the design or operation
of our internal control over financial reporting that adversely affected our
disclosure controls and that may be considered to be “material
weaknesses.”





SRSG will
continue to create and refine a structure in which critical accounting policies
and estimates are identified, and together with other complex areas, are subject
to multiple reviews by accounting personnel. In addition, SRSG will enhance and
test our year-end financial close process. Additionally, SRSG’s audit committee
will increase its review of our disclosure controls and procedures. Finally, we
plan to designated individuals responsible for identifying reportable
developments. We believe these actions will remediate the material weakness by
focusing additional attention and resources in our internal accounting
functions. However, the material weakness will not be considered remediated
until the applicable remedial controls operate for a sufficient period of time
and management has concluded, through testing, that these controls are operating
effectively.





Management’s
Annual Report on Internal Control over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over our financial reporting.





17










Internal
control over financial reporting is a process designed to provide reasonable
assurance to our management and board of directors regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting
principles.





Our
internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect our transactions; (ii) provide reasonable
assurance that transactions are recorded as necessary for preparation of our
financial statements; (iii) provide reasonable assurance that receipts and
expenditures of company assets are made in accordance with management
authorization; and (iv) provide reasonable assurance that unauthorized
acquisition, use or disposition of company assets that could have a material
effect on our financial statements would be prevented or detected on a timely
basis.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because changes in conditions may occur or the degree of compliance
with the policies or procedures may deteriorate.





Management
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2008. This assessment is based on the criteria for
effective internal control described in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on its assessment, management concluded that our internal control over
financial reporting as of December 31, 2008 was not effective in the
specific areas described in the “Disclosure Controls and Procedures” section
above and as specifically described in the paragraphs below.





As of
December 31, 2008 the Principal Executive Officer/Principal Financial
Officer identified the following specific material weaknesses in the Company’s
internal controls over its financial reporting processes:





•
Policies and Procedures for the Financial Close and Reporting Process —
Currently there are no policies or procedures that clearly define the roles in
the financial close and reporting process. The various roles and
responsibilities related to this process should be defined, documented, updated
and communicated. Failure to have such policies and procedures in place amounts
to a material weakness to the Company’s internal controls over its financial
reporting processes.





•
Representative with Financial Expertise — For the year ending December 31,
2008, the Company did not have a representative with the requisite knowledge and
expertise to review the financial statements and disclosures at a sufficient
level to monitor the financial statements and disclosures of the Company.
Failure to have a representative with such knowledge and expertise amounts to a
material weakness to the Company’s internal controls over its financial
reporting processes.





18










•
Adequacy of Accounting Systems at Meeting Company Needs — The accounting system
in place at the time of the assessment lacks the ability to provide high quality
financial statements from within the system, and there were no procedures in
place or built into the system to ensure that all relevant information is
secure, identified, captured, processed, and reported within the accounting
system.





Failure
to have an adequate accounting system with procedures to ensure the information
is secure and accurately recorded and reported amounts to a material weakness to
the Company’s internal controls over its financial reporting
processes.





•
Segregation of Duties — Management has identified a significant general lack of
definition and segregation of duties throughout the financial reporting
processes. Due to the pervasive nature of this issue, the lack of adequate
definition and segregation of duties amounts to a material weakness to the
Company’s internal controls over its financial reporting processes.




In light
of the foregoing, once we have the adequate funds, management plans to develop
the following additional procedures to help address these material
weaknesses:





• Sears
Oil and Gas Corporation will create and refine a structure in which critical
accounting policies and estimates are identified, and together with other
complex areas, are subject to multiple reviews by accounting personnel. In
addition, we plan to enhance and test our month-end and year-end financial close
process. Additionally, our audit committee will increase its review of our
disclosure controls and procedures. We also intend to develop and implement
policies and procedures for the financial close and reporting process, such as
identifying the roles, responsibilities, methodologies, and review/approval
process. We believe these actions will remediate the material weaknesses by
focusing additional attention and resources in our internal accounting
functions. However, the material weaknesses will not be considered remediated
until the applicable remedial controls operate for a sufficient period of time
and management has concluded, through testing, that these controls are operating
effectively.





This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.





This
report shall not be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, or otherwise subject to the liabilities of that
section, and is not incorporated by reference into any filing of the Company,
whether made before or after the date hereof, regardless of any general
incorporation language in such filing.





Changes
in Internal Controls





There
have been no changes in our internal control over financial reporting that
occurred during our fiscal quarter ended December 31, 2008 that have
materially affected, or are reasonable likely to materially affect, our internal
control over financial reporting.





19










ITEM
      9B
            OTHER
      INFORMATION.


None





PART
III




ITEM 10
            DIRECTORS AND EXECUTIVE
      OFFICERS AND CORPORATE
GOVERNANCE.





Sears Oil
and Gas Corporation’s executive officer and director and his respective age as
of December 31, 2008 are as follows:





Directors:


Name of Director
            AgeWilliam
      Sears
            69




Executive
Officers:


Name of Officer
              Age
              OfficeWilliam
      Sears
              69
              President,
      Chief Executive OfficerMax
      Kerns
              59
              Chief
      Financial Officer, Secretary and
Treasurer


The term
of office for each director is one year, or until the next annual meeting of the
shareholders.





Biographical
Information





Set forth
below is a brief description of the background and business experience of our
executive officer and director for the past five years





William C. Sears – President and
Director – From 1976 to the present, Mr. Sears has been the
President of William C. Sears, Inc., a construction and redevelopment
corporation.  From 1995 to the present, Mr. Sears has been President
of American International Investment & Trading Co., Inc., an Albanian joint
venture in manufacturing and importing.





Max D. Kern – Secretary/Treasurer- From 1977 to the present, Mr. Kern was the store manager of Kaufman’s
Tall & Big Shop where he supervised 10-15 employees with 3.5 million in
annual sales.  In this position, Mr. Kern executed weekly, bi-weekly
and seasonal purchasing, managed accounts payable for two locations, managed
accounts receivable, and facilitated all special order customers, along with
being a leading salesman for the business.





20










Sear Oil
and Gas Corporation’s Officers and sole Director has not been involved, during
the past five years, in any bankruptcy, conviction or criminal proceedings; has
not been subject to any order, judgment, or decree, not subsequently reversed or
suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; and has not been
found by a court of competent jurisdiction, the Commission or the Commodity
Futures trading Commission to have violated a federal or state securities or
commodities law.





Significant Employees.We do
not employ any non-officers who are expected to make a significant contribution
to its business.





Corporate
Governance





Nominating
Committee.  We have not established a Nominating Committee
because of our limited operations; and because we have only one director and
officer, we believe that we are able to effectively manage the issues normally
considered by a Nominating Committee.





Audit
Committee.  We have has not established an Audit Committee
because of our limited operations; and because we have only one director and
officer, we believe that we are able to effectively manage the issues normally
considered by a Audit Committee.




Code of Ethics.We have
adopted a Code of Ethics for our principal executive and financial
officers.  Our Code of Ethics is filed as an Exhibit to our
registration statement filed on May 30, 2008.





ITEM
      11
            EXECUTIVE
      COMPENSATION.




Summary Compensation
Table




Annual
      Compensation
                        
                        Long-Term
      CompensationName
      and
                          Principal
      Position
                        Year
                        Salary
      ($)
                        Bonus
                        Other
      Annual Compensation ($)
                        
                        Restricted
      Stock Awards ($)
                        Securities
      Underlying Options (#)
                        LTIP
      Payouts ($)
                        All
      Other Compensation ($)William
      C. Sears
                        2007
                        -
                        -
                        -
                        
                        -
                        -
                        -
                        -Officer
      and Director
                        2008
                        -
                        -
                        -
                        
                        -
                        -
                        -
                        -Max
      D. Kern
                        2007
                        -
                        -
                        -
                        
                        -
                        -
                        -
                        -Officer
                        2008
                        -
                        -
                        -
                        
                        -
                        -
                        -
                        -








21










There has
been no cash payment paid to the executive officer for services rendered in all
capacities to us for the period ended December 31, 2008. There has been no
compensation awarded to, earned by, or paid to the executive officer by any
person for services rendered in all capacities to us for the fiscal period ended
December 31, 2008.  No compensation is anticipated within the next six
months to any officer or director of the Company.





Stock Option
Grants




We did
not grant any stock options to the executive officer during the most recent
fiscal period ended December 31, 2008.  We have also not granted any
stock options to the executive officer of the Company.




ITEM 12
            SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
      MATTERS.





The
following table provides the names and addresses of each person known to Sears
Oil and Gas Corporation to own more than 5% of the outstanding common stock as
of December 31, 2008, and by the Officers and Directors, individually and as a
group. Except as otherwise indicated, all shares are owned
directly.







Title
      Of Class
              Name,
      Title and Address of Beneficial Owner of Shares
              
              Amount
      of Beneficial Ownership%Common
              William
      C. Sears, President and Director
              
              
              25,221,200
              
              
              
              80.84
              %Common
              Max
      D. Kern , Treasurer/Secretary
              
              
              2,500,000
              
              
              
              8.01
              %All
      Directors and Officers as a group
              
              
              27,721,200
              
              
              
              88.85
              %





The
percent of class is based on 36,200,000 shares of common stock issued and
outstanding as of December 31, 2008




ITEM 13
            CERTAIN RELATIONSHIPS AND
      RELATED TRANSACTIONS, AND DIRECTOR
  INDEPENDENCE.





During
Fiscal Year 2008, there were no material transactions between the Company and
any Officer, Director or related party has not, since the date of incorporation,
had any material interest, direct or indirect, in any transaction with us or in
any presently proposed transaction that has or will materially affect
us:





22





-The
Officers and Director;





-Any
person proposed as a nominee for election as a director;





-Any
person who beneficially owns, directly or indirectly, shares carrying more than
5% of the voting rights attached to the outstanding shares of common
stock;




-Any
relative or spouse of any of the foregoing persons who have the same house as
such person.





Any
future transactions between us and our Officers, Directors, and Affiliates will
be on terms no less favorable to us than can be obtained from unaffiliated third
parties. Such transactions with such persons will be subject to approval of our
Board of Directors.





ITEM 14
            PRINCIPAL ACCOUNTANT FEES
      AND SERVICES.





As of
December 31, 2008 the Company has incurred auditing expenses of approximately
$18,500 which includes bookkeeping and auditing services.  There were
no other audit related services or tax fees incurred.





PART
IV




ITEM 15
            EXHIBITS AND FINANCIAL
      STATEMENT SCHEDULES.





(a)
            The
      following documents have been filed as a part of this Annual Report on
      Form 10-K.





1.
            Financial
      Statements





PageReport
      of Independent Registered Public Accounting Firm
                    F-2Balance
      Sheets
                    F-3Statements
      of Operations
                    F-4Statements
      of Stockholders' Equity
                    F-5Statements
      of Cash Flows
                    F-6Notes
      to Financial Statements
                    F-7





2.
            Financial
      Statement Schedules.


All
schedules are omitted because they are not applicable or not required or because
the required information is included in the Financial Statements or the Notes
thereto.





23










3.
            Exhibits.


The
following exhibits are filed as part of, or incorporated by reference into, this
Annual Report:





EXHIBIT


NUMBER
            DESCRIPTION





3.1
            Articles
      of Incorporation are incorporated herein by reference to Form S-1, filed
      on May 30, 2008.





3.2
                  By-Laws
      are incorporated herein by reference to Form S-1, filed on May 30,
      2008.





31.1
            8650
      SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE
  OFFICER




32.1
            4700
      CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
      SECTION




31.2
            8650
      SECTION 302 CERTIFICATION OF CHIEF FINANCIAL
  OFFICER




32.2
            4700
      CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
      SECTION








24





SIGNATURES






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





SEARS
      OIL AND GAS CORPORATIONBy:
            /s/ William
      SearsWilliam
      SearsPresidentChief
      Executive Officer, DirectorBy:/s/ Max KernChief Financial
      OfficerTreasurer,
      Secretary,Date:
      March 31, 2009





25


MOORE
& ASSOCIATES, CHARTERED
 ACCOUNTANTS AND
ADVISORS
 PCAOB REGISTERED
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors
 Sears
Oil & Gas Corporation
 (A
Development Stage Company)
 
 We have
audited the accompanying balance sheet of Sears Oil & Gas Corporation (A
Development Stage Company) as of December 31, 2008, and the related statements
of operations, stockholders’ equity and cash flows for the year ended December
31, 2008 and since inception on September 9, 2005 through December 31, 2008.
These financial statements are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
financial statements based on our audits.
 
 We
conduct our audits in accordance with standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Sears Oil & Gas Corporation (A
Development Stage Company) as of December 31, 2008, and the related statements
of operations, stockholders’ equity and cash flows for the year ended December
31, 2008 and since inception on September 9, 2005 through December 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has an accumulated deficit of $101,408, which
raises substantial doubt about its ability to continue as a going
concern.  Management’s plans concerning these matters are also
described in Note 3.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 
 
 
 /s/
Moore & Associates, Chartered
 
 Moore
& Associates, Chartered
 Las
Vegas, Nevada
 March 31,
2009
 
 
 6490 West Desert Inn Rd, Las
Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
  F-2





SEARS
      OIL AND GAS CORPORATION(A
      Development Stage Company)Balance
      SheetsASSETSDecember
      31,
                      
                      December
      31,2008
                      
                      2007CURRENT
      ASSETSCash
                      
                      $
                      592
                      
                      
                      $
                      32,223Total
      Current Assets
                      
                      
                      592
                      
                      
                      
                      32,223TOTAL
      ASSETS
                      
                      $
                      592
                      
                      
                      $
                      32,223LIABILITIES AND STOCKHOLDERS'
      EQUITYCURRENT
      LIABILITIESAccounts
      payable
                      
                      $
                      -
                      
                      
                      $
                      -Total
      Current Liabilities
                      
                      
                      -
                      
                      
                      
                      -STOCKHOLDERS'
      EQUITYCommon
      stock, $0.001 par value, 75,000,000shares
      authorized, 36,200,000 and 36,200,000shares
      outstanding, respectively
                      
                      
                      36,200
                      
                      
                      
                      36,200Additional
      paid-in capital
                      
                      
                      65,800
                      
                      
                      
                      65,800Deficit
      accumulated during the development stage
                      
                      
                      (101,408
                      )
                      
                      
                      (69,777
                      )Total
      Stockholders' Equity
                      
                      
                      592
                      
                      
                      
                      32,223TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                      
                      $
                      592
                      
                      
                      $
                      32,223The
      accompanying notes are an integral part of these financial
      statements.





F-3








SEARS
      OIL AND GAS CORPORATION(A
      Development Stage Company)Statements
      of OperationsFrom
      Inceptionon
      September 9,For
      the Year Ended
                                  
                                  
                                  2005
      ThroughDecember
      31,
                                  
                                  
                                  December
      31,2008
                                  
                                  2007
                                  
                                  
                                  2008REVENUES
                                  
                                  
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  -OPERATING
      EXPENSESGeneral
      and administrative
                                  
                                  
                                  
                                  
                                  
                                  31,631
                                  
                                  
                                  
                                  30,048
                                  
                                  
                                  
                                  101,408Total
      Operating Expenses
                                  
                                  
                                  
                                  
                                  
                                  31,631
                                  
                                  
                                  
                                  30,048
                                  
                                  
                                  
                                  101,408LOSS
      FROM OPERATIONS
                                  
                                  
                                  
                                  
                                  
                                  (31,631
                                  )
                                  
                                  
                                  (30,048
                                  )
                                  
                                  
                                  (101,408
                                  )OTHER
      EXPENSESInterest
      expense
                                  
                                  
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -LOSS
      BEFORE INCOME TAXES
                                  
                                  
                                  
                                  
                                  
                                  (31,631
                                  )
                                  
                                  
                                  (30,048
                                  )
                                  
                                  
                                  (101,408
                                  )Income
      Taxes
                                  
                                  
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -NET
      LOSS
                                  
                                  
                                  
                                  
                                  $
                                  (31,631
                                  )
                                  
                                  $
                                  (30,048
                                  )
                                  
                                  $
                                  (101,408
                                  )BASIC
      LOSS PERCOMMON
      SHARE
                                  
                                  
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  0WEIGHTED
      AVERAGENUMBER
      OF COMMONSHARES
      OUTSTANDING
                                  
                                  
                                  36,200,000
                                  
                                  
                                  
                                  33,100,000The
      accompanying notes are an integral part of these financial
      statements





F-4






SEARS
      OIL AND GAS CORPORATION(A
      Development Stage Company)Statements
      of Stockholders' EquityDeficitAccumulatedAdditional
                            
                            
                            During
      the
                            
                            
                            TotalCommon
      Stock
                            
                            
                            Paid-In
                            
                            
                            Development
                            
                            
                            Stockholders'Shares
                            
                            
                            Amount
                            
                            
                            Capital
                            
                            
                            Stage
                            
                            
                            EquityBalance,
      September 9, 2005
                            
                            
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            -Shares
      issued for services
                            
                            
                            30,000,000
                            
                            
                            
                            30,000
                            
                            
                            
                            10,000
                            
                            
                            
                            -
                            
                            
                            
                            40,000Net
      loss since inceptionthrough
      December 31, 2005
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (543
                            )
                            
                            
                            (543
                            )Balance,
      December 31, 2005
                            
                            
                            30,000,000
                            
                            
                            
                            30,000
                            
                            
                            
                            10,000
                            
                            
                            
                            (543
                            )
                            
                            
                            39,457Net
      loss for the yearended
      December 31, 2006
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (39,186
                            )
                            
                            
                            (39,186
                            )Balance,
      December 31, 2006
                            
                            
                            30,000,000
                            
                            
                            
                            30,000
                            
                            
                            
                            10,000
                            
                            
                            
                            (39,729
                            )
                            
                            
                            271Common
      stock issued forcash
      at $0.01 per share
                            
                            
                            1,200,000
                            
                            
                            
                            1,200
                            
                            
                            
                            10,800
                            
                            
                            
                            -
                            
                            
                            
                            12,000Common
      stock issued forservices
      at $0.01 per share
                            
                            
                            5,000,000
                            
                            
                            
                            5,000
                            
                            
                            
                            45,000
                            
                            
                            
                            -
                            
                            
                            
                            50,000Net
      loss for the yearended
      December 31, 2007
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (30,048
                            )
                            
                            
                            (30,048
                            )Balance,
      December 31, 2007
                            
                            
                            36,200,000
                            
                            
                            
                            36,200
                            
                            
                            
                            65,800
                            
                            
                            
                            (69,777
                            )
                            
                            
                            32,223Net
      loss for the year endedDecember
      31, 2008
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (31,631
                            )
                            
                            
                            (31,631
                            )Balance,
      December 31, 2008
                            
                            
                            36,200,000
                            
                            
                            $
                            36,200
                            
                            
                            $
                            65,800
                            
                            
                            $
                            (101,408
                            )
                            
                            $
                            592The
      accompanying notes are an integral part of these financial
      statements.





F-5






SEARS
      OIL AND GAS CORPORATION(A
      Development Stage Company)Statements
      of Cash FlowsFrom
      Inceptionon
      September 9,For
      theYear Ended
                        
                        
                        2005
      ThroughDecember
      31,
                        
                        
                        December
      31,2008
                        
                        
                        2007
                        
                        
                        2008OPERATING
      ACTIVITIESNet
      loss
                        
                        $
                        (31,631
                        )
                        
                        $
                        (30,048
                        )
                        
                        $
                        (101,408
                        )Adjustments
      to Reconcile Net Loss to NetCash
      Used in Operating Activities:Common
      stock issued for services
                        
                        
                        -
                        
                        
                        
                        50,000
                        
                        
                        
                        52,000Changes
      in operating assets and liabilities:Accounts
      payable
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Net
      Cash Used inOperating
      Activities
                        
                        
                        (31,631
                        )
                        
                        
                        19,952
                        
                        
                        
                        (49,408
                        )INVESTING
      ACTIVITIES
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -FINANCING
      ACTIVITIESCommon
      stock issued for cash
                        
                        
                        -
                        
                        
                        
                        12,000
                        
                        
                        
                        50,000Net
      Cash Provided byFinancing
      Activities
                        
                        
                        -
                        
                        
                        
                        12,000
                        
                        
                        
                        50,000NET
      DECREASE IN CASH
                        
                        
                        (31,631
                        )
                        
                        
                        31,952
                        
                        
                        
                        592CASH
      AT BEGINNING OF PERIOD
                        
                        
                        32,223
                        
                        
                        
                        271
                        
                        
                        
                        -CASH
      AT END OF PERIOD
                        
                        $
                        592
                        
                        
                        $
                        32,223
                        
                        
                        $
                        592SUPPLEMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Income
      Taxes
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -The
      accompanying notes are an integral part of these financial
      statements.


F-6





SEARS
OIL AND GAS CORPORATION


Notes to
the Financial Statements


December
31, 2008 and 2007





NOTE 1
-                                                                        ORGANIZATION
AND HISTORY





Sears Oil
and Gas Corporation (the Company) was incorporated on September 9, 2005 in the
State of Nevada. The Company was formed to use a patented technology to produce
crude oil from “tar sands” deposits. The Company will also conduct
administrative, correlated transportation and delivery of product, financial
management, and the marketing and sales programs of the operation. The Company
has not commenced principle operations and is classified as a development stage
company.








NOTE 2
-                                                                        SIGNIFICANT
ACCOUNTING POLICIES





a.  Accounting
Method





The
Company uses the successful efforts method of accounting for oil and gas
producing activities.  Costs to acquire mineral  interests
in oil and gas properties, to drill and equip exploratory wells that
find proved  reserves,  and  to  drill  and  equip  development  wells  are capitalized.  Costs
to drill exploratory wells that do not find proved reserves, geological and
geophysical costs, and costs of carrying and retaining unproved properties
are expensed.





Unproved
oil and gas properties that are individually  significant
are periodically   assessed  for  impairment  of  value,  and  a  loss  is recognized  at
the  time
of  impairment  by  providing  an  impairment allowance.  Other  unproved  properties  are  amortized  based  on
the Company's  experience  of  successful  drilling  and  average  holding period.  Capitalized
costs of producing oil and gas
properties,  after considering   estimated   dismantlement   and  abandonment  costs  and estimated  salvage  values,   are  depreciated  and  depleted  by  the unit-of-production  method.  Support
equipment and other property and equipment are depreciated over their
estimated useful lives.





On
the sale or retirement of a complete unit of a proved property, the cost
and related accumulated depreciation, depletion, and amortization are
eliminated from the property accounts, and the resultant gain or loss is
recognized.  On the retirement or sale of a partial unit
of proved property, the cost is charged to accumulated
depreciation, depletion, and amortization with a resulting gain or loss
recognized in income.





b.  Basic Loss Per
Share


For
      the Year Ended
                      December
      31, 2008Loss
                      (Numerator)
                    Shares
                      (Denominator)
                    Per
      Share
                      Amount$           (31,631)
                    36,200,000
                    $           (0.00)For
      the Year Ended
                      December
      31, 2007Loss
                      (Numerator)
                    Shares
                      (Denominator)
                    Per
      Share
                      Amount$           (30,048)
                    33,100,000
                    $           (0.00)







The
computations of basic loss per share of common stock are based on the weighted
average number of shares outstanding at the date of the financial statements.
There are no common stock equivalents outstanding.  F-7




SEARS
OIL AND GAS CORPORATION


Notes to
the Financial Statements


December
31, 2008 and 2007





NOTE 2
-                                                                        SIGNIFICANT
ACCOUNTING POLICIES (Continued)





c.
            Provision
      for Taxes





Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carry forwards and deferred tax liabilities are recognized for taxable
temporary differences.  Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax
bases.  Deferred tax assets are reduced by a valuation allowance when,
in the opinion of management, it is more likely that not that some portion or
all of the deferred tax assets will not be realized.  Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment.





Net
deferred tax assets consist of the following components as of December 31, 2008
and December 31, 2007:




2008
                        
                        
                        2007Deferred
      tax assetsNOL
      Carryover
                        
                        $
                        19,269
                        
                        
                        $
                        6,933Valuation
      allowance
                        
                        
                        (19,269
                        )
                        
                        
                        (6,933
                        )Net
      deferred tax asset
                        
                        $
                        -
                        
                        
                        $
                        -


The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal income tax rate of 39% to pretax income from
continuing operations for the periods ended December 31, 2008 and December 31,
2007 due to the following:


2008
                        
                        
                        2007Deferred
      tax assetsNOL
      Carryover
                        
                        $
                        19,269
                        
                        
                        $
                        6,933Valuation
      allowance
                        
                        
                        (19,269
                        )
                        
                        
                        (6,933
                        )Net
      deferred tax asset
                        
                        $
                        -
                        
                        
                        $
                        -


At
December 31, 2008, the Company had net operating loss carry forwards of
approximately $49,408 that may be offset against future taxable income through
the year 2028.  No tax benefit has been reported in the December 31,
2008 financial statements since the potential tax benefit is offset by a
valuation allowance of the same amount.





Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carryforwards for Federal income tax reporting purposes are subject to
annual limitations.  Should a change in ownership occur, net operating
loss carry forwards may be limited as to use in the future.





d.  Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.  F-8





SEARS
OIL AND GAS CORPORATION


Notes to
the Financial Statements


December
31, 2008 and 2007





NOTE 2
-                                                                        SIGNIFICANT
ACCOUNTING POLICIES (Continued)





e.  Fair Value of Financial
Instruments





As at
December 31, 2008, the fair value of cash and accounts and advances payable,
including amounts due to and from related parties, approximate carrying values
because of the short-term maturity of these instruments.





f.  Recently Issued
Accounting Pronouncements





In
June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,
(“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in
share-based payment transactions are participating securities prior to vesting,
and therefore need to be included in the computation of earnings per share under
the two-class method as described in FASB Statement of Financial Accounting
Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for
financial statements issued for fiscal years beginning on or after
December 15, 2008 and earlier adoption is prohibited. We are not required
to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have
material effect on our consolidated financial positionand results of
operations if adopted.





In
May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial
Guarantee Insurance Contracts-and interpretation of FASB Statement No.
60”.SFAS
No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of  premium
revenue and claims liabilities. This statement also requires expanded
disclosures about financial guarantee insurance contracts. SFAS No. 163 is
effective for fiscal years beginning on or after December 15, 2008, and interim
periods within those years. SFAS No. 163 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.





In
May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally
Accepted Accounting Principles”.SFAS No. 162 sets forth
the level of authority to a given accounting pronouncement or document by
category. Where there might be conflicting guidance between two categories, the
more authoritative category will prevail. SFAS No. 162 will become effective 60
days after the SEC approves the PCAOB’s amendments to AU Section 411 of the
AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s
financial position, statements of operations, or cash flows at this
time.





In
March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No.
161, Disclosures about
Derivative Instruments and Hedging Activities—an amendment of FASB Statement No.
133.This standard requires companies to provide enhanced
disclosures about (a) how and why an entity uses derivative instruments, (b) how
derivative instruments and related hedged items are accounted for under
Statement 133 and its related interpretations, and (c) how derivative
instruments and related hedged items affect an entity’s financial position,
financial performance, and cash flows. This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. The Company has not yet adopted the
provisions of SFAS No. 161, but does not expect it to have a material impact on
its financial position, results of operations or cash flows.





In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based
Payment.  In particular, the staff indicated in SAB 107 that it
will accept a company's election to use the simplified method, regardless of
whether the company has sufficient information to make more refined estimates of
expected term.  At the time SAB 107 was issued, the staff believed that
more detailed external information about employee exercise behavior (e.g.,
employee exercise patterns by industry and/or other categories of companies)
would, over time, become readily available to.




SEARS
OIL AND GAS CORPORATION


Notes to
the Financial Statements


December
31, 2008 and 2007





NOTE 2
-                                                                    SIGNIFICANT
ACCOUNTING POLICIES (Continued)





f.  Recently Issued
Accounting Pronouncements (Continued)





companies.
Therefore, the staff stated in SAB 107 that it would not expect a company to use
the simplified method for share option grants after December 31, 2007. The staff
understands that such detailed information about employee exercise behavior may
not be widely available by December 31, 2007. Accordingly, the staff will
continue to accept, under certain circumstances, the use of the simplified
method beyond December 31, 2007. The Company currently uses the simplified
method for “plain vanilla” share options and warrants, and will assess the
impact of SAB 110 for fiscal year 2009. It is not believed that this will have
an impact on the Company’s financial position, results of operations or cash
flows.





In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No.
51.  This statement amends ARB 51 to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in
a subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements. Before this
statement was issued, limited guidance existed for reporting noncontrolling
interests. As a result, considerable diversity in practice existed. So-called
minority interests were reported in the consolidated statement of financial
position as liabilities or in the mezzanine section between liabilities and
equity. This statement improves comparability by eliminating that diversity.
This statement is effective for fiscal years, and interim periods within those
fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009,
for entities with calendar year-ends). Earlier adoption is prohibited. The
effective date of this statement is the same as that of the related Statement
141 (revised 2007). The Company will adopt this Statement beginning March 1,
2009. It is not believed that this will have an impact on the Company’s
financial position, results of operations or cash flows.





In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business Combinations.’This
Statement replaces FASB Statement No. 141, Business Combinations, but
retains the fundamental requirements in Statement 141.  This
Statement establishes principles and requirements for how the acquirer: (a)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (b) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (c) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This statement
applies prospectively to business combinations for which the acquisition date is
on or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. An entity may not apply it before that date. The
effective date of this statement is the same as that of the related FASB
Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements.  The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s financial position, results of operations or cash
flows.





In
February 2007, the FASB, issued SFAS No. 159,The Fair Value Option for Financial
Assets and Liabilities—Including an Amendment of FASB Statement No.
115.  This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments
in Debt and Equity Securities applies to all entities with available for
sale or trading securities. Some requirements apply differently to entities that
do not report net income. SFAS No. 159 is effective as of the beginning of an
entities first fiscal year that begins after November 15, 2007. Early adoption
is permitted as of the beginning of the previous fiscal year provided that the
entity makes that choice in the first 120 days of that fiscal year and also
elects to apply the provisions of SFAS No. 157 Fair Value
Measurements.  The Company adopted SFAS No. 159 beginning March 1,
2008. The adoption of this pronouncement did not have an impact on the Company’s
financial position, results of operations or cash flows.





F-10








SEARS
OIL AND GAS CORPORATION


Notes to
the Financial Statements


December
31, 2008 and 2007





NOTE 2
-                                                                    SIGNIFICANT
ACCOUNTING POLICIES (Continued)





f.  Recently Issued
Accounting Pronouncements (Continued)





In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements  This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company adopted this statement March 1, 2008. The adoption of this
pronouncement did not have an impact on the Company’s financial position,
results of operations or cash flows.


\


g.      Long-lived
Assets





The
Company’s long lived assets are recorded at its cost. The Company continually
monitors events and changes in circumstances that could indicate carrying
amounts of long-lived assets may not be recoverable. When such events or changes
in circumstances are present, the Company assesses the recoverability of
long-lived assets by determining whether the carrying value of such assets will
be recovered through undiscounted expected future cash flows. If the total of
the future cash flows is less than the carrying amount of those assets, the
Company recognizes an impairment loss based on the excess of the carrying amount
over the fair value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or the fair value less costs to sell.





h.   Concentration
of Risk





Cash
- The Company at times may maintain a cash balance in excess of insured limits.
At December 31, 2008, the Company has no cash in excess of insured
limits.





i.  Revenue
Recognition





The
Company recognizes oil revenues when pumped and metered by the
customer.





j.
            Accounts
      Receivable





Accounts
receivable are carried at the expected net realizable value. The allowance for
doubtful accounts is based on management's assessment of the collectibility of
specific customer accounts and the aging of the accounts
receivables.  If there were a deterioration of a major customer's
creditworthiness, or actual defaults were higher than historical experience, our
estimates of the recoverability  of the amounts  due to us
could be  overstated,  which  could have a
negative impact on operations.





F-11








SEARS
OIL AND GAS CORPORATION


Notes to
the Financial Statements


December
31, 2008 and 2007





NOTE 2
-                                                                    SIGNIFICANT
ACCOUNTING POLICIES (Continued)





k.
            Cash
      and Cash Equivalents





For
purposes of the Statement of Cash Flows, the Company considers all highly liquid
instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.





l.
            Property
      and Equipment





Property
and equipment are carried at cost, net of accumulated depreciation. Depreciation
is computed straight-line over periods ranging from three to five
years.





NOTE 3
-   GOING CONCERN




The
Company’s financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
which contemplates the realization of assets and liquidation of liabilities in
the normal course of business.  However, the Company does not have
significant cash or other current assets, nor does it have an established source
of revenues sufficient to cover its operating costs and to allow it to continue
as a going concern.  The Company intends to  raise additional capital
when required to produce crude oil from tar sands.  When and if these
activities provide sufficient revenues it would  allow it to continue as a
going concern. In the interim the Company is working toward raising operating
capital through the private placement of its common stock or debt
instruments.




The
ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan described in the preceding paragraph
and eventually attain profitable operations.  The accompanying financial
statements do not include any adjustments that may be necessary if the Company
is unable to continue as a going concern.





NOTE 4
-SIGNIFICANT EVENTS





During the year ended December 31,
2005, the Company sold 30,000,000 shares of its common stock at $0.001 per
share.





During
the year ended December 31, 2007, the Company sold 5,000,000 shares of its
common stock at $0.01 per share and issued another 1,200,000 shares for legal
services valued at $12,000.








F-12