**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

----

**FORM      10-Q**

|                                                    |   |                                                                                                                                  |
|---------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                    |   |                                                                                                                                  |
| (Mark                One)                               |   |                                                                                                                                  |
| þ                                                  |   | Quarterly                report pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934  |
|                                                    |   | **For                the quarterly period ended: September 30, 2008**                                                                 |
| or                                                      |
| **o**                                                   |   | Transition                report pursuant to Section 13 or 15(d) of the Securities Exchange                Act of                1934 |
|                                                    |   | For                the transition period from    to                                                               |
|                                                    |
|  **Commission                file number 0-31423** |

**FRIENDLY      ENERGY EXPLORATION**

|                                                          |   |                                                |
|---------------------------------------------------------------|--------|-----------------------------------------------------|
| **Nevada**                                                    |   | **91-1832462**                                      |
| (State                of incorporation)                       |   | (I.R.S.                employer identification no.) |
|                                                          |
| **502                North Division Street, Carson City, NV** |   | **89703**                                           |
| (Address                of principal executive offices)       |   | (Zip                code)                           |

**702-953-0411**

**x**

|                                   |   |   |                                     |   |
|----------------------------------------|--------|--------|------------------------------------------|--------|
| Large                accelerated filer |  ̈ |   | Accelerated                filer         |  ̈ |
| Non-accelerated                filer   |  ̈ |   | Smaller                Reporting Company | **x**  |

**x**

**x**

----

**PART      I - FINANCIAL INFORMATION**

**ITEM      1. FINANCIAL STATEMENTS**

----

|                                                                |   |                              |       |                             |   |
|---------------------------------------------------------------------|--------|-----------------------------------|------------|----------------------------------|--------|
|                                                                |   | September                30, 2008 |       | December                31, 2007 |   |
|                                                                |   |                              |       | (Restated)                       |   |
|                                                                |   |                              |       |                             |   |
| ASSETS                                                              |   |
|                                                                |   |                              |       |                             |   |
| Current                assets                                       |   |                              |       |                             |   |   |   |
| Cash                and cash equivalents                            |   | $                                 | 83         |                             | $      | 268 |   |
| Advances                                                            |   |                              | -          |                             |   | 360 |   |
| Total                current assets                                 |   |                              | 83         |                             |   | 628 |   |
|                                                                |   |                              |       |                             |   |   |   |
| Other                Assets                                         |   |                              |       |                             |   |   |   |
| Property                and equipment, net                          |   |                              | 1,850      |                             |   | 2,466 |   |
| Investment                                                          |   |                              | 1,000      |                             |   | 1,000 |   |
| Notes                                                               |   |                              | 319,000    |                             |   | 319,000 |   |
| Asher                #1 Oil Well                                    |   |                              | -          |                             |   | 103,077 |   |
| Asher                #2 Project                                     |   |                              | -          |                             |   | 5,008 |   |
| Red                Oak Project                                      |   |                              | 242,000    |                             |   | - |   |
| Talpa                Project                                        |   |                              | 50,000     |                             |   |   |   |
| West                Peach Project                                   |   |                              | 36,970     |                             |   | 52,005 |   |
| Total                Other Assets                                   |   |                              | 650,820    |                             |   | 482,556 |   |
|                                                                |   |                              |       |                             |   |   |   |
| Total                Assets                                         |   | $                                 | 650,903    |                             | $      | 483,184 |   |
|                                                                |   |                              |       |                             |   |   |   |
| LIABILITIES                AND STOCKHOLDERS' DEFICIT                |
|                                                                |   |                              |       |                             |   |   |   |
| LIABILITIES                                                         |   |                              |       |                             |   |   |   |
| Current                liabilities                                  |   |                              |       |                             |   |   |   |
| Accounts                Payable                                     |   | $                                 | 87,791     |                             | $      | 158,419 |   |
| Payroll                Tax Liabilities                              |   |                              | 94,809     |                             |   | 83,085 |   |
| Judgement                payable                                    |   |                              | 211,279    |                             |   | 196,074 |   |
| Deferred                Salaries                                    |   |                              | 528,000    |                             |   | 348,000 |   |
| Interest                Payable                                     |   |                              | 144,697    |                             |   | 143,710 |   |
| Loan                Payable                                         |   |                              | 359,478    |                             |   | 51,569 |   |
| Loans                Payable-Related Parties                        |   |                              | 24,676     |                             |   | 7,086 |   |
| Total                current liabilities                            |   |                              | 1,450,730  |                             |   | 987,943 |   |
|                                                                |   |                              |       |                             |   |   |   |
| Total                liabilities                                    |   |                              | 1,450,730  |                             |   | 987,943 |   |
|                                                                |   |                              |       |                             |   |   |   |
| STOCKHOLDERS'                DEFICIT                                |   |                              |       |                             |   |   |   |
| Common                stock, $0.001 par value; 100,000,000 shares   |   |                              |       |                             |   |   |   |
| authorized,                21,568,790 and 2,782,271 shares,         |   |                              |       |                             |   |   |   |
| respectively,                issued and outstanding                 |   |                              | 21,569     |                             |   | 2,782 |   |
| Preferred                Stock, $0.001 par value, 10,000,000 shares |   |                              |       |                             |   |   |   |
| authorized,                7,667,302 and 9,545,856 shares,          |   |                              | 7,667      |                             |   | 9,546 |   |
| respectively,                issued and outstanding                 |   |                              |       |                             |   |   |   |
| Additional                paid-in capital                           |   |                              | 3,667,693  |                             |   | 3,684,601 |   |
| Accumulated                deficit in the development stage         |   |                              | (4,496,756 | )                                |   | (4,201,688 | ) |
| Total                stockholders' deficit                          |   |                              | (799,827   | )                                |   | (504,759 | ) |
|                                                                |   |                              |            |                             |   |  |   |
| Total                liabilities and stockholders' deficit          |   | $                                 | 650,903    |                             | $      | 483,184 |   |

----

|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |
|-------------------------------------------------------------|--------|-----------------------------------|------------|-----------------------------------|--------|--------------------------------------------|--------|--------------------------------------------|------------|--------------------------------------------|--------|
|                                                        |   | For                the            |       | For                the            |   |                                            |   |                                            |       | From                Inception              |   |
|                                                        |   | Three                Months Ended |       | Three                Months Ended |   | For                  the Nine Months Ended |   | For                  the Nine Months Ended |       | (January                  7, 1993) through |   |
|                                                        |   | September                30, 2008 |       | September                30, 2007 |   | September                30, 2008          |   | September                30, 2007          |       | September                30, 2008          |   |
|                                                        |   |                              |       | (Restated)                        |   | (Restated)                                 |   |                                       |       | (Restated)                                 |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |
| Revenue                                                     |   | $                                 | -          |                              | $      | 3,604                                      |   | $                                          | 5,035      |                                       | $      | 6,714 |   | $ | 30,424 |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| Operating                expenses                           |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| Amortization                Expense                         |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | 30,000 |   |
| Depreciation                                                |   |                              | 206        |                              |   | 206                                        |   |                                       | 617        |                                       |   | 799 |   |   | 43,979 |   |
| Dry                Hole Cost                                |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | 1,348 |   |   | 88,157 |   |
| Intangible                Drilling Costs                    |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | 17,953 |   |   | 333,206 |   |
| Legal                Fees                                   |   |                              | -          |                              |   | -                                          |   |                                       | 850        |                                       |   | 5,907 |   |   | 76,810 |   |
| Officer                Wages                                |   |                              | 60,000     |                              |   | 60,000                                     |   |                                       | 180,000    |                                       |   | 181,000 |   |   | 927,000 |   |
| Oil                Well Operations Cost                     |   |                              | -          |                              |   | 1,312                                      |   |                                       | 3,157      |                                       |   | 4,391 |   |   | 9,740 |   |
| Payroll                Expenses                             |   |                              | 2,544      |                              |   | 3,250                                      |   |                                       | 11,724     |                                       |   | 11,130 |   |   | 270,768 |   |
| Professional                Fees                            |   |                              | 2,851      |                              |   | 1,854                                      |   |                                       | 20,827     |                                       |   | 4,018 |   |   | 708,753 |   |
| Rent                                                        |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | 282,410 |   |
| Stock                Based Compensation                     |   |                              | -          |                              |   | 46,742                                     |   |                                       | -          |                                       |   | 93,484 |   |   | 512,667 |   |
| Telephone                                                   |   |                              | 2,340      |                              |   | 1,652                                      |   |                                       | 2,623      |                                       |   | 5,294 |   |   | 48,628 |   |
| Travel                & Entertainment                   |   |                              | 4,363      |                              |   | 2,887                                      |   |                                       | 5,154      |                                       |   | 5,891 |   |   | 152,442 |   |
| General                and administrative                   |   |                              | 186        |                              |   | 2,946                                      |   |                                       | 30,544     |                                       |   | 4,667 |   |   | 212,969 |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
|  Total                operating expenses               |   |                              | 72,490     |                              |   | 120,849                                    |   |                                       | 255,496    |                                       |   | 335,882 |   |   | 3,697,529 |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
|  Loss                from operations                   |   |                              | (72,490    | )                                 |   | (117,245                                   | )      |                                       | (250,461   | )                                          |   | (329,168 | ) |   | (3,667,104 | ) |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| Other                income (expenses):                     |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| Other                income                                 |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | 120,605 |   |
| Forgiveness                of Debt                          |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | (122,765 | ) |
| Impairment                Loss on Asset                     |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | (442,800 | ) |
| Interest                Expense                             |   |                              | (13,600    | )                                 |   | (20,973                                    | )      |                                       | (44,607    | )                                          |   | (70,565 | ) |   | (274,691 | ) |
| Lawsuit                Judgement                            |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | (110,000 | ) |
|  Total                other income (expenses)          |   |                              | (13,600    | )                                 |   | (20,973                                    | )      |                                       | (44,607    | )                                          |   | (70,565 | ) |   | (829,651 | ) |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
|  Loss                before provision for income taxes |   |                              | (86,090    | )                                 |   | (138,218                                   | )      |                                       | (295,068   | )                                          |   | (399,733 | ) |   | (4,496,756 | ) |
| Provision                for income taxes                   |   |                              | -          |                              |   | -                                          |   |                                       | -          |                                       |   | - |   |   | - |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
|  Net                loss                               |   | $                                 | (86,090    | )                                 | $      | (138,218                                   | )      | $                                          | (295,068   | )                                          | $      | (399,733 | ) | $ | (4,496,756 | ) |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| Basic                and diluted loss per common share      |   | $                                 | (0.00      | )                                 | $      | (0.07                                      | )      | $                                          | (0.02      | )                                          | $      | (0.21 | ) | $ | (4.44 | ) |
|                                                        |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| Basic                and diluted weighted average           |   |                              |       |                              |   |                                       |   |                                       |       |                                       |   |   |   |   |   |   |
| common                shares outstanding                    |   |                              | 21,568,790 |                              |   | 1,890,511                                  |   |                                       | 13,350,113 |                                       |   | 1,890,511 |   |   | 1,011,759 |   |

----

|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                                  |   |                                 |   |                                        |      |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------------------------------|--------|------------|--------|--------|------------|----------------------------------|--------|--------------------------------------|--------|----------------------------------------|-----------|
|                                                                                                                                          |   | Common                Stock      |       | Preferred                Stock |   | Additional |   |        |       | Total                            |   |
|                                                                                                                                          |   | Shares                (Restated) |       | Amount                         |   | Shares     |   | Amount |       | Paid-in                  Capital |   | Accumulated                  Deficit |   | Stockholders'                  Deficit |      |
| Balance                at January 7, 1993 (Date of inception)                                                                                 |   |                             | 0          |                           | $      | 0          |   |   | 0          |                             | $      | 0                                    |   | $                                      | 0         |   | $ | 0 |   | $ | 0 |   |
| Common                shares issued to officers & directors for cash, $0.016 per                share                                     |   |                             | 2,550      |                           |   | 3          |   |   | 0          |                             |   | 0                                    |   |                                   | 997       |   |   | 0 |   |   | 1,000 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (1,000 | ) |   | (1,000 | ) |
| Balance                at December 31, 1993, 1994, and 1995                                                                                   |   |                             | 2,550      |                           |   | 3          |   |   | 0          |                             |   | 0                                    |   |                                   | 997       |   |   | (1,000 | ) |   | 0 |   |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Common                shares cancelled                                                                                                        |   |                             | (2,550     | )                              |   | (3         | )      |   | 0          |                             |   | 0                                    |   |                                   | 3         |   |   | 0 |   |   | 0 |   |
| Common                shares issued for cash, $0.00 per share                                                                                 |   |                             | 100,000    |                           |   | 100        |   |   | 0          |                             |   | 0                                    |   |                                   | (90       | ) |   | 0 |   |   | 10 |   |
| Conversion                to preferred stock                                                                                                  |   |                             | (20,000    | )                              |   | (20        | )      |   | 50,000     |                             |   | 50                                   |   |                                   | (30       | ) |   | 0 |   |   | 0 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (10 | ) |   | (10 | ) |
| Balance                at December 31, 1996                                                                                                   |   |                             | 80,000     |                           |   | 80         |   |   | 50,000     |                             |   | 50                                   |   |                                   | 880       |   |   | (1,010 | ) |   | 0 |   |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Common                shares issued relating to spin-out                                                                                      |   |                             | 609        |                           |   | 1          |   |   | 0          |                             |   | 0                                    |   |                                   | (1        | ) |   | 0 |   |   | 0 |   |
| Common                shares issued for cash, $0.80 per share                                                                                 |   |                             | 1,500      |                           |   | 1          |   |   | 0          |                             |   | 0                                    |   |                                   | 29,999    |   |   | 0 |   |   | 30,000 |   |
| Common                shares issued to officers and directors for cash, $0.685 per                share                                       |   |                             | 1,750      |                           |   | 2          |   |   | 0          |                             |   | 0                                    |   |                                   | 29,998    |   |   | 0 |   |   | 30,000 |   |
| Preferred                shares issued to officers and directors for services, $0.04 per                share                                 |   |                             | 0          |                           |   | 0          |   |   | 750,000    |                             |   | 750                                  |   |                                   | 29,250    |   |   | 0 |   |   | 30,000 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (63,266 | ) |   | (63,266 | ) |
| Balance                at December 31, 1997                                                                                                   |   |                             | 83,859     |                           |   | 84         |   |   | 800,000    |                             |   | 800                                  |   |                                   | 90,126    |   |   | (64,276 | ) |   | 26,734 |   |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Common                shares issued for cash, $1.74 per share                                                                                 |   |                             | 390        |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 17,000    |   |   | 0 |   |   | 17,000 |   |
| Common                shares issued to officers and directors for services,                $0.004                                             |   |                             | 105,000    |                           |   | 105        |   |   | 0          |                             |   | 0                                    |   |                                   | 10,395    |   |   |   |   |   | 10,500 |   |
| Conversion                of preferred stock                                                                                                  |   |                             | 320,000    |                           |   | 320        |   |   | (800,000   | )                                |   | (800                                 | )      |                                   | 480       |   |   | 0 |   |   | 0 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (33,234 | ) |   | (33,234 | ) |
| Balance                at December 31, 1998                                                                                                   |   |                             | 509,249    |                           |   | 509        |   |   | 0          |                             |   | 0                                    |   |                                   | 118,001   |   |   | (97,510 | ) |   | 21,000 |   |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Cancellation                of common stock                                                                                                   |   |                             | (1,850     | )                              |   | (2         | )      |   | 0          |                             |   | 0                                    |   |                                   | 2         |   |   | 0 |   |   | 0 |   |
| Preferred                shares issued for debt settlement, $3.69 per share                                                                   |   |                             | 0          |                           |   | 0          |   |   | 146,883    |                             |   | 147                                  |   |                                   | 541,853   |   |   | 0 |   |   | 542,000 |   |
| Preferred                shares issued for services, $3.69 per share                                                                          |   |                             | 0          |                           |   | 0          |   |   | 5,000      |                             |   | 5                                    |   |                                   | 18,445    |   |   | 0 |   |   | 18,450 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (556,309 | ) |   | (556,309 | ) |
| Balance                at December 31, 1999                                                                                                   |   |                             | 507,399    |                           |   | 507        |   |   | 151,883    |                             |   | 152                                  |   |                                   | 678,301   |   |   | (653,819 | ) |   | 25,141 |   |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Preferred                shares issued for debt settlement, $3.69 per share                                                                   |   |                             | 0          |                           |   | 0          |   |   | 174,798    |                             |   | 175                                  |   |                                   | 644,825   |   |   | 0 |   |   | 645,000 |   |
| Issuance                of stock related to merger with Friendly Energy Services, Inc., $3.69                per                share         |   |                             | 0          |                           |   | 0          |   |   | 120,000    |                             |   | 120                                  |   |                                   | 442,680   |   |   | 0 |   |   | 442,800 |   |
| Preferred                shares issued for services, $3.69 per share                                                                          |   |                             | 0          |                           |   | 0          |   |   | 37,500     |                             |   | 37                                   |   |                                   | 138,338   |   |   | 0 |   |   | 138,375 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (914,511 | ) |   | (914,511 | ) |
| Balance                at December 31, 2000                                                                                                   |   |                             | 507,399    |                           |   | 507        |   |   | 484,181    |                             |   | 484                                  |   |                                   | 1,904,144 |   |   | (1,568,330 | ) |   | 336,805 |   |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (584,851 | ) |   | (584,851 | ) |
| Balance                at December 31, 2001                                                                                                   |   |                             | 507,399    |                           |   | 507        |   |   | 484,181    |                             |   | 484                                  |   |                                   | 1,904,144 |   |   | (2,153,181 | ) |   | (248,046 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Preferred                shares issued for debt settlement, $3.69 per share                                                                   |   |                             | 0          |                           |   | 0          |   |   | 2,973,080  |                             |   | 2,973                                |   |                                   | 145,681   |   |   | 0 |   |   | 148,654 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (12,371 | ) |   | (12,371 | ) |
| Balance                at December 31, 2002                                                                                                   |   |                             | 507,399    |                           |   | 507        |   |   | 3,457,261  |                             |   | 3,457                                |   |                                   | 2,049,825 |   |   | (2,165,552 | ) |   | (111,763 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | -          |                             |   | 0                                    |   |                                   | 0         |   |   | (24,215 | ) |   | (24,215 | ) |
| Balance,                December 31, 2003                                                                                                     |   |                             | 507,399    |                           |   | 507        |   |   | 3,457,261  |                             |   | 3,457                                |   |                                   | 2,049,825 |   |   | (2,189,767 | ) |   | (135,978 | ) |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 0         |   |   | (11,795 | ) |   | (11,795 | ) |
| Balance,                December 31, 2004                                                                                                     |   |                             | 507,399    |                           |   | 507        |   |   | 3,457,261  |                             |   | 3,457                                |   |                                   | 2,049,825 |   |   | (2,201,562 | ) |   | (147,773 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Common                shares issued for cash, $0.025                                                                                          |   |                             | 16,000     |                           |   | 16         |   |   | 0          |                             |   | 0                                    |   |                                   | 9,984     |   |   | 0 |   |   | 10,000 |   |
| Common                shares issued for servicees, $0.05 per share                                                                            |   |                             | 10,000     |                           |   | 10         |   |   | 0          |                             |   | 0                                    |   |                                   | 12,490    |   |   | 0 |   |   | 12,500 |   |
| Common                shares issued to officers and directors for services, $0.04 per                share                                    |   |                             | 20,000     |                           |   | 20         |   |   | 0          |                             |   | 0                                    |   |                                   | 19,980    |   |   | 0 |   |   | 20,000 |   |
| Preferred                shares issued to officers and directors for services, $0.40 per                share                                 |   |                             | 0          |                           |   | 0          |   |   | 450,000    |                             |   | 450                                  |   |                                   | 179,550   |   |   | 0 |   |   | 180,000 |   |
| Conversion                of preferred stock                                                                                                  |   |                             | 789,680    |                           |   | 790        |   |   | (1,974,200 | )                                |   | (1,974                               | )      |                                   | 1,185     |   |   | 0 |   |   | 0 |   |
| Issuance                of stock options to two officers                                                                                      |   |                             | 0          |                           |   | 0          |   |   | 0          |                             |   | 0                                    |   |                                   | 24,929    |   |   | 0 |   |   | 24,929 |   |
| Net                loss                                                                                                                       |   |                             | 0          |                           |   | 0          |   |   | -          |                             |   | 0                                    |   |                                   | 0         |   |   | (691,271 | ) |   | (691,271 | ) |
| Balance,                December 31, 2005                                                                                                     |   |                             | 1,343,079  |                           |   | 1,343      |   |   | 1,933,061  |                             |   | 1,933                                |   |                                   | 2,297,942 |   |   | (2,892,833 | ) |   | (591,615 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Common                shares issued for cash, $0.05                                                                                           |   |                             | 20,000     |                           |   | 20         |   |   | -          |                             |   | -                                    |   |                                   | 24,980    |   |   |   |   |   | 25,000 |   |
| Conversion                of preferred stock                                                                                                  |   |                             | 380,677    |                           |   | 381        |   |   | (951,692   | )                                |   | (952                                 | )      |                                   | 571       |   |   | - |   |   | - |   |
| Issuance                of stock options to 2 officers (2nd half vested)                                                                      |   |                             | -          |                           |   | -          |   |   | -          |                             |   | -                                    |   |                                   | 24,929    |   |   | - |   |   | 24,929 |   |
| Preferred                shares issued for debt settlement, $0.195 per share                                                                  |   |                             | -          |                           |   | -          |   |   | 278,554    |                             |   | 279                                  |   |                                   | 54,039    |   |   | - |   |   | 54,318 |   |
| Net                Loss                                                                                                                       |   |                             | -          |                           |   | -          |   |   | -          |                             |   | -                                    |   |                                   | -         |   |   | (824,586 | ) |   | (824,586 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Balance,                December 31, 2006                                                                                                     |   |                             | 1,743,756  |                           |   | 1,744      |   |   | 1,259,923  |                             |   | 1,260                                |   |                                   | 2,402,461 |   |   | (3,717,419 | ) |   | (1,311,954 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Preferred                shares issued for debt settlement, $0.090 per share                                                                  |   |                             | -          |                           |   | -          |   |   | 5,222,222  |                             |   | 5,222                                |   |                                   | 464,778   |   |   | - |   |   | 470,000 |   |
| Common                shares issued for notes $0.020                                                                                          |   |                             | 732,000    |                           |   | 732        |   |   | -          |                             |   | -                                    |   |                                   | 318,268   |   |   |   |   |   | 319,000 |   |
| Issuance                of stock options to 2 officers (vested)                                                                               |   |                             | -          |                           |   | -          |   |   | -          |                             |   | -                                    |   |                                   | 93,484    |   |   | - |   |   | 93,484 |   |
| Common                shares issued for cash, $0.05                                                                                           |   |                             | 20,000     |                           |   | 20         |   |   | -          |                             |   | -                                    |   |                                   | 24,980    |   |   |   |   |   | 25,000 |   |
| Common                shares issued for cash, $0.025                                                                                          |   |                             | 16,000     |                           |   | 16         |   |   | -          |                             |   | -                                    |   |                                   | 9,964     |   |   |   |   |   | 9,980 |   |
| Preferred                shares issued to officers and directors for services, $0.10 per                share                                 |   |                             | -          |                           |   | -          |   |   | 3,740,000  |                             |   | 3,740                                |   |                                   | 370,260   |   |   | - |   |   | 374,000 |   |
| Conversion                of preferred stock                                                                                                  |   |                             | 270,516    |                           |   | 271        |   |   | (676,289   | )                                |   | (676                                 | )      |                                   | 406       |   |   | - |   |   | - |   |
| Net                Loss                                                                                                                       |   |                             | -          |                           |   | -          |   |   | -          |                             |   | -                                    |   |                                   | -         |   |   | (484,269 | ) |   | (484,269 | ) |
| Balance,                December 31, 2007                                                                                                     |   |                             | 2,782,271  |                           |   | 2,782      |   |   | 9,545,856  |                             |   | 9,546                                |   |                                   | 3,684,601 |   |   | (4,201,688 | ) |   | (504,759 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Common                shares issued relating to reverse stock split (shareholders with                less than                25 old shares) |   |                             | 979        |                           |   | 1          |   |   | -          |                             |   | -                                    |   |                                   | (1        | ) |   | - |   |   | - |   |
| Conversion                of preferred stock                                                                                                  |   |                             | 18,785,540 |                           |   | 18,786     |   |   | (1,878,554 | )                                |   | (1,879                               | )      |                                   | (16,907   | ) |   | - |   |   | - |   |
| Net                Loss for the 9 mo. ended September 30, 2008                                                                                |   |                             | -          |                           |   | -          |   |   | -          |                             |   | -                                    |   |                                   | -         |   |   | (295,068 | ) |   | (295,068 | ) |
|                                                                                                                                          |   |                             |       |                           |   |       |   |   |       |                             |   |                                 |   |                                   |      |   |   |   |   |   |   |   |
| Balance,                September 30, 2008                                                                                                    |   |                             | 21,568,790 |                           |   | 21,569     |   |   | 7,667,302  |                             |   | 7,667                                |   |                                   | 3,667,693 |   |   | (4,496,756 | ) |   | (799,827 | ) |

----

|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |
|-------------------------------------------------------------|--------|-----------------------------------|---------|--------|--------|-----------------------------------|--------|-----------------------------------|--------|-----------------------------------|----------|-----------------------------------|--------|
|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     | From                Inception     |   |
|                                                        |   | For                the            |    |   |   | For                the            |   | For                the            |   | For                the            |     | (January                7,        |   |
|                                                        |   | Three                Months Ended |    |   |   | Three                Months Ended |   | Nine                Months Ended  |   | Nine                Months Ended  |     | 1993)                  through    |   |
|                                                        |   | September                30, 2008 |    |   |   | September                30, 2007 |   | September                30, 2008 |   | September                30, 2007 |     | September                30, 2008 |   |
| Cash                flows from operating activities:        |   |                              |    |   |   | (Restated)                        |   | (Restated)                        |   | (Restated)                        |     | (Restated)                        |   |
| Net                loss                                     |   | $                                 | (86,089 | )      |   |                              |   | (138,218                          | )      |                              | (296,110 | )                                 |   | (399,733 | ) |   | (4,496,756 | ) |
| Adjustments                to reconcile net loss to         |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| net                cash used by operating activities:       |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Depreciation                                                |   |                              | 206     |   |   |                              |   | 206                               |   |                              | 617      |                              |   | 799 |   |   | 43,979 |   |
| Stock                Based Compensation                     |   |                              | -       |   |   |                              |   | 46,472                            |   |                              |     |                              |   | 93,214 |   |   | 512,667 |   |
| Impairment                Loss                              |   |                              | -       |   |   |                              |   | -                                 |   |                              |     |                              |   | - |   |   | 442,800 |   |
| Changes                in operating assets and liabilities: |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Accounts                Payable                             |   |                              | (1,500  | )      |   |                              |   | (2,291                            | )      |                              | (79,936  | )                                 |   | 36,189 |   |   | 77,441 |   |
| Advances                                                    |   |                              | 264     |   |   |                              |   | -                                 |   |                              | 361      |                              |   | - |   |   | - |   |
| Judgement                payable                            |   |                              | 5,195   |   |   |                              |   | 4,703                             |   |                              | 15,205   |                              |   | 13,764 |   |   | 211,279 |   |
| Interest                Payable                             |   |                              | 8,405   |   |   |                              |   | 16,270                            |   |                              | 12,036   |                              |   | 56,801 |   |   | 155,746 |   |
| Notes                                                       |   |                              | -       |   |   |                              |   | (47,000                           | )      |                              |     |                              |   | (339,000 | ) |   | (319,000 | ) |
| Payroll                Liabilities                          |   |                              | 2,544   |   |   |                              |   | 3,251                             |   |                              | 11,724   |                              |   | 11,130 |   |   | 94,809 |   |
| Deferred                Salaries                            |   |                              | 60,000  |   |   |                              |   | 60,000                            |   |                              | 180,000  |                              |   | 156,000 |   |   | 528,000 |   |
| Loans                Payable                                |   |                              | 54,205  |   |   |                              |   | 5,291                             |   |                              | 307,210  |                              |   | (431,842 | ) |   | 358,779 |   |
| Net                cash used by operating activities        |   |                              | 43,230  |   |   |                              |   | (51,317                           | )      |                              | 151,107  |                              |   | (802,679 | ) |   | (2,390,256 | ) |
|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Cash                flows from investing activities:        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Purchase                of property and equipment           |   |                              | -       |   |   |                              |   | -                                 |   |                              |     |                              |   | - |   |   | (45,829 | ) |
| Investment                                                  |   |                              | -       |   |   |                              |   | -                                 |   |                              |     |                              |   | - |   |   | (1,000 | ) |
| Asher                #1 Oil Well                            |   |                              | -       |   |   |                              |   | -                                 |   |                              | 103,077  |                              |   | - |   |   | - |   |
| Asher                #2 Project                             |   |                              | -       |   |   |                              |   | -                                 |   |                              | 5,008    |                              |   | (5,008 | ) |   | - |   |
| Talpa                Project                                |   |                              | (50,000 | )      |   |                              |   | -                                 |   |                              | (50,000  | )                                 |   | - |   |   | (50,000 | ) |
| Red                Oak Project                              |   |                              | -       |   |   |                              |   | -                                 |   |                              | (242,000 | )                                 |   | - |   |   | (242,000 | ) |
| West                Peach Project                           |   |                              | -       |   |   |                              |   | -                                 |   |                              | 15,035   |                              |   | (15,035 | ) |   | (36,970 | ) |
| Net                cash used by investing activities        |   |                              | (50,000 | )      |   |                              |   | -                                 |   |                              | (168,880 | )                                 |   | (20,043 | ) |   | (375,799 | ) |
|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Cash                flows from financing activities:        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Proceeds                from issuance of common stock       |   |                              | -       |   |   |                              |   | 57,250                            |   |                              |     |                              |   | 354,250 |   |   | 477,490 |   |
| Proceeds                from issuance of preferred stock    |   |                              | -       |   |   |                              |   | -                                 |   |                              |     |                              |   | 470,000 |   |   | 2,263,972 |   |
| Proceeds                on borrowings from related parties  |   |                              | 6,539   |   |        |                              |   | (2,408                            | )      |                              | 17,590   |                              |   | 1,277 |   |   | 24,676 |   |
| Net                cash provided by financing activities    |   |                              | 6,539   |   |   |                              |   | 54,842                            |   |                              | 17,590   |                              |   | 825,527 |   |   | 2,766,138 |   |
|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Net                increase in cash                         |   |                              | (231    | )      |   |                              |   | 3,525                             |   |                              | (183     | )                                 |   | 2,805 |   |   | 83 |   |
|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Cash,                beginning of period                    |   |                              | 314     |   |   |                              |   | 28                                |   |                              | 267      |                              |   | 748 |   |   | - |   |
|                                                        |   |                              |    |   |   |                              |   |                              |   |                              |     |                              |   |   |   |   |   |   |
| Cash,                end of period                          |   | $                                 | 83      |   |   |                              | $      | 3,553                             |   | $                                 | 83       |                              | $      | 3,553 |   | $ | 83 |   |

----

----

----

|                                                                |   | Three                  months |    | Three                  Months |   |
|---------------------------------------------------------------------|--------|-------------------------------|---------|-------------------------------|--------|
|                                                                |   | Ended                         |    | Ended                         |   |
|                                                                |   | 2008                          |    | 2007                          |   |
| Furniture                  and fixtures                             |   | $                             | 20,102  |                          | $      | 20,102 |   |
| Computers                  and equipment                            |   |                          | 25,726  |                          |   | 25,727 |   |
|                                                                |   |                          | 45,828  |                          |   | 45,828 |   |
| Less:                  accumulated depreciation                     |   |                          | (43,979 | )                             |   | (43,157 | ) |
| Net                  Furniture, fixtures, computers & equipment |   |                          | 1,850   |                          |   | 2,672 |   |
| LLC                  Investment                                     |   |                          | 1,000   |                          |   | 1,000 |   |
| West                  Peach Exploration Costs                       |   |                          | 36,970  |                          |   | 52,005 |   |
| Asher                  #1 Oil Well                                  |   |                          | 0       |                          |   | 103,077 |   |
| Asher                  #2 Exploration Costs                         |   |                          | 0       |                          |   | 5,008 |   |
| Red                  Oak Exploration Costs                          |   |                          | 242,000 |                          |   | 0 |   |
| Talpa                  Exploration Costs                            |   |                          | 50,000  |                          |   | 0 |   |
| Total                  Fixed Assets                                 |   |                          | 331,819 |                          |   | 163,762 |   |
|                                                                |   |                          |    |                          |   |   |   |

|                                                                                                                                                   |   | September                    30, 2008  |   | September                    30, 2007 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|---------------------------------------|--------|
| Notes                    payable from officers of the                    Company bearing interest at 8% unsecured                    and due on demand |   | $                                           | 24,676 |                                  | $      | 9,696 |   |
|                                                                                                                                                   |   |                                        |   |                                  |   |   |   |

**$**

----

7. LITIGATION

----

**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF      OPERATIONS.**

**       **

**Our      Background**

**Our      Business**

**Our      Oil and Gas Properties **

**Talpa      Project **

**Red      Oak Prospect **

**West      Peach Creek Prospect **

**Asher      Well and Prospect**

**Liquidity      and Capital Resources.**

----

**Results      of Operations**

**Our      Plan of Operation for the Next Twelve Months**

**ITEM      4 . CONTROLS AND PROCEDURES**

**Evaluation      Of Disclosure Controls And Procedures**

**Management's      Report On Internal Control Over Financial Reporting**

----

**PART      II - OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS.** NONE

**       **

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES.**
      NONE

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES. **

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

**ITEM      5. OTHER INFORMATION**

**ITEM      6. EXHIBITS**

**List      of Exhibits**

Exhibit      32.2 - Amended Section 302 Certification of Periodic Report of the Chief      Financial Officer.

**SIGNATURES**

**FRIENDLY      ENERGY EXPLORATION**

----