UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended SEPTEMBER 30, 2008

( )  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 0-31357

                           EPIC ENERGY RESOURCES, INC.

         Colorado                                    94-3363969
--------------------------                 ----------------------------------
State or other jurisdiction                (I.R.S.) Employer Identification No.
    of incorporation

                       1450 Lake Robbins Drive, Suite 160
                             The Woodlands, TX 77380
                     Address of principal executive offices

                                  (281) 419-3742
                          -----------------------------
                          Registrant's telephone number

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15 (d) of the  Securities  Exchange Act of 1934 during the  proceeding  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 [ ]

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"  and  "accelerated  filer"  and
"smaller reporting company" in Rule 12b-2 of the Exchange Act.

      Large accelerated filer [ ]              Accelerated  filer [ ]
      Non-accelerated filer   [ ]              Smaller reporting company  [X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act):
                                          YES [ ] NO [X]

As of November 4, the Company had 43,375,160  issued and  outstanding  shares of
common stock.

<PAGE>
                           EPIC ENERGY RESOURCES INC.


                                Table of Contents


PART I -- FINANCIAL INFORMATION                                            Page

   Item 1. Financial Statements
     Unaudited Consolidated Balance Sheets as of  September 30, 2008 and
     December 31, 2007                                                       2
     Unaudited Consolidated Statements of Operations for the three and
     nine months ended September 30, 2008 and 2007                           3
     Unaudited Consolidated Statements of Cash Flows for the nine months
     ended September 30, 2008 and 2007                                       4
     Notes to Unaudited Consolidated Financial Statements                    5
   Item 2. Management's Discussion and Analysis of Financial Condition
     and Results of Operations 13 Item 4T. Controls and Procedures          16
PART II -- OTHER INFORMATION
   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds      18
   Item 6. Exhibits                                                         18
Signatures                                                                  19
Certification Pursuant to Section 302                                       20
Certification Pursuant to Section 302                                         21
Certification Pursuant to Section 906                                         22
Certification Pursuant to Section 906                                        23



<PAGE>
                            EPIC ENERGY RESOURCES INC
                           CONSOLIDATED BALANCE SHEETS
                        (In thousands, except share data)
                                                         September    December
                                                            30,          31,
                                                           2008          2007
                                                        (unaudited)   (audited)
                                                        ------------  ---------
    ASSETS
    Current Assets
       Cash and cash equivalents                          $ 3,486       $ 3,483
      Restricted cash                                           -         3,400
      Accounts receivable:
       Billed, net of allowance for doubtful
         accounts of $1,297 and $636, respectively         20,340        11,335
       Unbilled                                             2,212         3,447
       Other                                                    -           640
      Prepaid expenses and other current assets               286           309
                                                         --------     ---------
          Total Current Assets                             26,324        22,614
    Proved oil and gas properties, (full cost method),
       net of accumulated depletion and impairments
       of $5,260 and $5,260, respectively                   5,248         5,248
    Other mineral reserves                                    783           783
    Property and equipment, net                             5,782        10,597
    Asset held for sale                                     4,205             -
    Other assets                                               52           209
    Debt issuance costs, net of accumulated
       amortization of $369 and $29, respectively           1,660         1,690
    Goodwill                                               30,982        32,624
    Other Intangible assets, net                            6,005           985
                                                         --------     ---------
    Total Assets                                          $81,041       $74,750
                                                         --------     ---------
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities
      Accounts payable                                    $11,166       $ 4,066
      Bank overdrafts                                           -         3,442
      Accrued liabilities                                   4,404         2,949
      Customer deposits                                     2,846         1,358
      Deferred revenue                                      2,214             -
      Current portion of long term debt                     7,768         3,208
                                                         --------     ---------

          Total Current Liabilities                        28,398        15,023
    Asset retirement obligations                              140           133
    Long-term debt                                         12,973        13,929
                                                         --------     ---------
    Total Liabilities                                      41,511        29,085
                                                         --------     ---------
    Commitments and contingencies
    STOCKHOLDERS' EQUITY
      Common stock, no par value: 100,000,000
        authorized;  43,375,160 and 42,948,921 shares
        issued and outstanding, respectively               41,863        40,699
      Additional paid-in capital                           14,488        13,417
      Accumulated deficit                                 (16,821)       (8,451)
                                                         --------     ---------

    Total Stockholders' Equity                             39,530        45,665
                                                         --------     ---------
    Total Liabilities and Stockholders' Equity            $81,041       $74,750
                                                         --------     ---------

   See accompanying notes to the unaudited consolidated financial statements.


                                       2
<PAGE>

                           EPIC ENERGY RESOURCES INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except share and per share data)
                                   (unaudited)

<TABLE>
<S>                                      <C>          <C>          <C>           <C>
                                        Three months ended        Nine months ended
                                           September 30,            September 30,
                                       ----------------------   -----------------------
                                         2008        2007         2008         2007
                                       ----------  ----------   ----------  -----------
REVENUES
  Consulting fees                       $10,296     $ 1,571      $31,192     $ 1,666
  Reimbursed expenses                    10,985           -       24,164           -
  Oil and gas revenue                         -           -            -          10
                                       --------    --------     --------    --------
     Total Revenues                      21,281       1,571       55,356       1,676

OPERATING EXPENSES
  General and administrative              1,475         479        6,761       1,328
  Professional and subcontracted
     services                             1,449         504        5,430         504
  Compensation and benefits               5,979         259       19,375         259
  Reimbursed expenses                    10,391           -       22,092           -
  Occupancy, communication and
     other                                  340          75        1,001          75
  Lease operating expenses                  102          80          258         203
  Depreciation, amortization and
depletion                                 1,032           -        1,967           -
  Accretion expense                           2           -            7           9
  Impairment of oil and gas
properties                                    -           -            -       1,339
                                       --------    --------     --------    --------
     Total Operating Expenses            20,770       1,397       56,891       3,717

Income (Loss) from Operations               511         174       (1,535)     (2,041)
OTHER INCOME (EXPENSE)
  Interest and other income (expense)    (2,167)          -       (2,109)          7
  Interest expense                       (1,629)       (217)      (4,715)       (298)
                                       --------    --------     --------    --------
      Total Other Expense, net           (3,796)       (217)      (6,824)       (291)
                                       --------    --------     --------    --------
Loss Before Taxes                        (3,285)        (43)      (8,359)     (2,332)
Income tax expense                           11           -           11           -
                                       --------    --------     --------    --------
Net Loss                                $(3,296)    $   (43)     $(8,370)    $(2,332)
                                       --------    --------     --------    --------
LOSS PER COMMON SHARE -
  Basic and Diluted                     $ (0.08)    $ (0.00)     $ (0.19)    $ (0.06)

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - Basic and Diluted      43,041,827  33,901,262   42,993,378  38,946,918

</TABLE>

    See accompanying notes to the unaudited consolidated financial statements


                                       3
<PAGE>
                           EPIC ENERGY RESOURCES INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (unaudited)
                                                           Nine Months Ended
                                                             September 30,
                                                      --------------------------
                                                          2008          2007
                                                      ------------   -----------
    OPERATING ACTIVITIES:
      Net loss                                           $ (8,370)      $(2,332)
      Adjustments to reconcile net loss to net cash
    provided by (used in) operating     activities:
       Depreciation, amortization and depletion             1,967             -
       Loss on sale of property and equipment                 485             -
       Impairment of oil and gas properties                     -         1,339
       Accretion expense                                        7             9
       Amortization of debt discount and debt
    issuance costs                                          2,624             -
       Lease operating expense                                258           203
       Reserve for doubtful accounts                          661             -
       Stock-based compensation expense                       875           276
       Imputed interest on acquisition                          -           115
       Changes in operating assets and liabilities:
        Accounts receivable                                (7,508)           85
        Prepaid expenses and other current assets              28           109
        Other non-current assets                              157          (305)
        Accounts payable                                    7,027          (200)
        Accrued liabilities                                 1,450           367
        Customer deposits                                   1,488             -
        Deferred revenue                                    2,214             -
                                                       ----------     ---------
     Net cash provided by (used in) operating
           activities                                       3,363          (334)
                                                       ----------     ---------
    INVESTING ACTIVITIES:
      Decrease in restricted cash                           2,491             -
      Investment in joint venture                               -           (23)
      Acquisition of property and equipment                (1,352)           (1)
      Acquisition of Carnrite, net of cash received             -            48
      Acquisition of EIS, net of cash received               (232)            -
                                                       ----------     ---------
    Net cash provided by investing activities                 907            24
                                                       ----------     ---------
    FINANCING ACTIVITIES:
      Bank overdrafts                                      (3,442)            -
      Payments on debt                                       (825)         (103)
      Proceeds from debt                                        -             -
      Net proceeds from issuance of common stock                -           524
                                                       ----------     ---------
    Net cash provided by (used in) financing
    activities                                             (4,267)          421
                                                       ----------     ---------
    Net Increase in Cash and Cash Equivalents                   3           111
    Cash and Cash Equivalents, Beginning of period          3,483           590
                                                       ----------     ---------
    Cash and Cash Equivalents, End of period             $  3,486       $   701
                                                       ----------     ---------
    SUPPLEMENTAL CASH FLOW DISCLOSURES:
    Cash paid for Interest                               $  2,115       $     6
    NON-CASH INVESTING AND FINANCING ACTIVITIES:
    Stock issued  for EIS acquisition                    $  1,050       $     -
    Property and equipment acquired for notes payable    $    488       $     -
    Stock issued  for acquisition of Carnrite            $      -       $ 8,305

    See accompanying notes to the unaudited consolidated financial statements


                                       4
<PAGE>
                            EPIC ENERGY RESOURCES INC
              Notes to Unaudited Consolidated Financial Statements


1. Organization, Operations and Basis of Presentation

      Epic Energy Resources, Inc ("Epic") was incorporated in Colorado in 1989.

      Epic was relatively inactive until April 2006, when current management
      gained control and became focused on energy related activities including
      consulting, engineering, and oil and gas production activities. Epic
      consists of its wholly owned subsidiaries The Carnrite Group, LLC
      ("Carnrite"), Pearl Investment Company and its wholly owned subsidiaries
      ("Pearl"), Epic Integrated Solutions, LLC ("EIS") and Epic Exploration &
      Production, LLC ("EE&P"). Epic Energy Resources, Inc and its subsidiaries
      (the "Company") is engaged primarily in providing engineering, consulting,
      construction management, operations, maintenance, and field and project
      management services to the oil, gas and energy industry. Epic also formed
      an operational joint venture with a private investor group to co-invest in
      infrastructure related projects with Epic's clients. It is expected that
      the co-investment projects will primarily be projects in which the Company
      provides engineering, design, construction management and operational
      services related to pipeline, gathering and compression systems, including
      oil and gas processing facilities.

      The accompanying unaudited consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles in
      the United States of America, or GAAP, for interim financial information
      and pursuant to the instructions to Form 10-Q and Article 10 of Regulation
      S-X. Accordingly, they do not include all of the information and
      disclosures required by GAAP for complete financial statements. In the
      opinion of management, all adjustments (consisting of normal recurring
      accruals) considered necessary for a fair presentation have been included.
      Operating results for the nine months ended September 30, 2008, are not
      necessarily indicative of the results that may be expected for the year
      ending December 31, 2008. The balance sheet at December 31, 2007, has been
      derived from the audited financial statements at that date but does not
      include all of the information and disclosures required by GAAP for
      complete financial statements. For further information, refer to the
      financial statements and notes thereto included in the Company's Annual
      Report on Form 10-KSB for the year ended December 31, 2007.

2. Summary of Accounting Policies

      Use of Estimates

      The preparation of financial statements in conformity with US GAAP
      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 periods.
      Actual results could differ from those estimates.


                                       5
<PAGE>

      Receivables from Clients

      Billed receivables from clients are presented at their billed amount less
      an allowance for doubtful accounts. Unbilled receivables represent revenue
      earned in the current period but not billed to the customer until future
      dates, usually within one month. Epic provides an allowance for doubtful
      accounts on receivables based on historical collection experience and a
      specific review of each customer's receivable balance. As of September 30,
      2008 and December 31, 2007, management determined that an allowance for
      doubtful accounts of $1,297,143 and $636,500, respectively, was required
      based on management's assessment of the collectability of these items.

      Property and Equipment

      Property and equipment is stated at cost net of accumulated depreciation.
      Depreciation and amortization is provided utilizing the straight-line
      method over the estimated useful lives for owned assets, ranging from 3 to
      10 years, and the related lease terms for leasehold improvements.

      Goodwill and Other Intangible assets

      Goodwill represents the excess of the cost of an acquired entity over the
      fair value of the net amount assigned to the assets acquired and the
      liabilities assumed. The Company will test both acquired goodwill and
      indefinite-lived intangible assets for impairment on an annual basis or
      when certain triggering events occur as required by Statement of Financial
      Accounting Standards No. 142, Goodwill and Other Intangible Assets. These
      events could include a significant change in the business climate, legal
      factors, a decline in operating performance, competition, sale or
      disposition of a significant portion of the business, or other factors. As
      of September 30, 2008, indefinite-lived intangible asset consists of the
      trade names of Epic's subsidiaries.

      As of September 30, 2008, amortizable intangible assets consist of
      employment contracts, backlog, and customer related intangible assets. The
      employment contracts are being amortized on a straight-line basis over
      their estimated useful life of 30 months, backlog is being amortized on a
      straight-line basis over its estimated useful life of 3 years and the
      customer related intangible assets are being amortized on a straight-line
      basis over their estimated useful life of 6 years.

      Long-Lived Assets

      The Company periodically evaluates the carrying value of long-lived assets
      to be held and used in accordance with Statement of Financial Accounting
      Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
      Assets ("FAS 144"). FAS 144 requires impairment losses to be recorded on
      long-lived assets used in operations when indicators of impairment are
      present and the undiscounted cash flows estimated to be generated by those
      assets are less than the assets' carrying amounts. In that event, a loss
      is recognized based on the amount by which the carrying amount exceeds the


                                       6
<PAGE>

      fair market value of the long-lived assets. Loss on long-lived assets to
      be disposed of is determined in a similar manner, except that fair market
      values are reduced for the cost of disposal. Based on its review, the
      Company believes that, as of September 30, 2008, there were no significant
      impairments of its long-lived assets. At September 30, 2008, the Company
      had $4.2 million of assets held for sale related to the Company's
      airplane.

      Debt Issuance Costs

      Debt issuance costs consist of amounts paid to lenders and third parties
      in connection with obtaining debt financing. These costs are being
      amortized and included in interest expense using the effective interest
      method over the related debt agreements. Deferred financing cost
      amortization expense for the three months and nine months ended September
      30, 2008 was $118,264 and $340,697, respectively.

      Fair Value of Financial Instruments

      In accordance with the reporting requirements of Statement of Financial
      Accounting Standards No. 107, Disclosures About Fair Value of Financial
      Instruments, the Company calculates the fair value of its assets and
      liabilities which qualify as financial instruments under this statement
      and includes this additional information in the notes to the financial
      statements when the fair value is different than the carrying value of
      those financial instruments. The estimated fair value of cash, accounts
      receivable and accounts payable approximate their carrying amounts due to
      the short maturity of these instruments. The carrying value of short and
      long-term debt also approximates fair value since their terms are similar
      to those in the lending market for comparable loans with comparable risks.
      None of these instruments are held for trading purposes.

      Revenue Recognition

      Revenue includes fees primarily generated from engineering and consulting
      services provided. The Company recognizes revenue from these engagements
      when hours are worked, either on a time-and-materials basis or on a
      fixed-fee basis, depending on the terms and conditions defined at the
      inception of an engagement with a client. The terms of the contracts with
      clients are fixed and determinable but may change based upon agreement by
      both parties. Individual consultants' billing rates are principally based
      on a multiple of salary and compensation costs. Revenue recognized in
      excess of billings is included in Unbilled accounts receivable in the
      accompanying Unaudited Consolidated Balance Sheets. Cash collections and
      invoices generated in excess of revenue recognized are included in
      deferred revenue in the accompanying Unaudited Consolidated Balance
      Sheets, until the revenue recognition criteria are met. Client
      reimbursable expenses, including those relating to materials, travel,
      other out-of-pocket expenses and any third-party costs, are recorded gross
      with the exception of certain contractual agreements which provide for an
      agreed upon percentage mark-up on materials purchased on behalf of
      clients. These revenues are included in Reimbursed expense revenue in
      accordance with EITF 99-16; and the costs are included in operating
      expenses as Reimbursed expenses in the accompanying Unaudited Consolidated
      Statements of Operations.


                                       7
<PAGE>

      Earnings per Share

      Earnings per share data for all periods presented have been computed
      pursuant to Statement of Financial Accounting Standards No. 128, Earnings
      Per Share, that requires a presentation of basic earnings per share (basic
      EPS) and diluted earnings per share (diluted EPS). Basic EPS excludes
      dilution and is determined by dividing income available to common
      stockholders by the weighted average number of common shares outstanding
      during the period. Diluted EPS reflects the potential dilution that could
      occur if securities and other contracts to issue common stock were
      exercised or converted into common stock. As of September 30, 2008, the
      Company had outstanding stock options covering an aggregate of 2,019,000
      shares of common stock and outstanding warrants covering an aggregate of
      23,648,631 shares of common stock. Both the outstanding options and
      warrants were excluded from the Company's diluted EPS due to their
      anti-dilutive effect.

      Reclassification

      Certain amounts from prior quarters were reclassified to conform with the
      current quarter's financial statement presentation.

      Recent Accounting Pronouncements

      In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
      Combinations ("FAS 141R"). FAS 141R establishes principles and
      requirements for how an acquirer recognizes and measures in its financial
      statements the identifiable assets acquired, the liabilities assumed by
      any noncontrolling interest in the acquiree and the goodwill acquired. FAS
      141R also establishes disclosure requirements to enable the evaluation of
      the nature and financial effects of the business combination. This
      statement is effective for business combinations for which the acquisition
      date is on or after fiscal years beginning on or after December 15, 2008.

      In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests
      in Consolidated Financial Statements--an amendment of Accounting Research
      Bulletin No. 51 ("FAS 160"). FAS 160 establishes accounting and reporting
      standards for ownership interests in subsidiaries held by parties other
      than the parent, the amount of consolidated net income attributable to the
      parent and to the noncontrolling interest, changes in a parent's ownership
      interest, and the valuation of retained noncontrolling equity investments
      when a subsidiary is deconsolidated. FAS 160 also establishes disclosure
      requirements that clearly identify and distinguish between the interests
      of the parent and the interests of the noncontrolling owners. This
      statement is effective for fiscal years beginning after December 15, 2008.
      The Company has not yet determined the effects of adopting FAS 160 will
      have on the consolidated financial statements.

      In April 2008, the FASB issued Staff Position No. FAS 142-3, Determination
      of Useful Life of Intangible Assets ("FSP FAS 142-3"). FSP FAS 142-3
      amends the factors that should be considered in developing renewal or
      extension assumptions used to determine the useful life of a recognized


                                       8
<PAGE>

      intangible asset under FASB Statement No. 142, "Goodwill and Other
      Intangible Assets." FSP FAS 142-3 also requires expanded disclosures
      related to the determination of intangible asset useful lives. This
      standard applies prospectively to intangible assets acquired and/or
      recognized on or after January 1, 2009. Management believes that the
      adoption of this standard will not have a material effect on the Company's
      financial position, results of operations, or cash flows.

      On January 1, 2008, the Company partially adopted SFAS No. 157, Fair Value
      Measurements ("FAS 157"). FAS 157 defines fair value, establishes a
      framework for measuring fair value and expands disclosures about fair
      value measurements. FAS 157 applies under other accounting pronouncements
      that require or permit fair value measurements. Accordingly, FAS 157 does
      not require any new fair value measurements. However, for some entities,
      the application of FAS 157 will change current practice. FASB Staff
      Positions SFAS 157-2 delays the effective date of FAS 157 from fiscal
      years beginning after November 15, 2007 to fiscal years beginning after
      November 15, 2008 for all nonfinancial assets and nonfinancial
      liabilities, except those that are recognized of disclosed at fair value
      in the financial statements on a recurring basis (at least annually). The
      partial adoption of FAS 157 had no impact on the Company's financial
      position results of operations, or cash flows.

      3.    Business Combinations

      On August 13, 2007, Epic acquired Carnrite for 4,850,844 shares of its
      restricted common stock. Of these 4,850,844 shares, 1,673,034 shares were
      awarded to key employees of Carnrite and will be required to be returned
      to the Company if the employees voluntarily terminate their employment
      prior to March 28, 2009. In accordance with EITF No. 95-8 "Accounting for
      Contingent Consideration Paid to the Shareholders for an Acquired
      Enterprise in a Business Combination" ("EITF 95-8"), the contingent
      consideration is considered additional purchase price consideration.

      During the nine months ended September 30, 2008, the Company finalized the
      purchase price allocation associated with the acquisition of Carnrite. The
      value of the common stock at the acquisition date was $16,007,785 or $3.30
      per share (Epic's stock price on the acquisition date). In addition Epic
      issued 63,556 shares of restricted common stock valued at $209,735, as a
      transaction fee to an individual that assisted with the acquisition. The
      accompanying Unaudited Consolidated Statements of Operations includes the
      operations of Carnrite for the period from July 1, 2007 through September
      30, 2007. As the actual purchase date for Carnrite was August 13, 2007,
      imputed interest of $115,000 was recorded as of September 30, 2007.

      The finalized aggregate purchase price of Carnrite was $16,217,520 and
      consisted of 4,914,400 shares of restricted common stock valued at $3.30
      per share. The following table presents the finalized allocation of the
      purchase price to the assets acquired and the liabilities assumed, based
      on fair values (in thousands):


                                       9
<PAGE>

          Cash                                     $    48
          Receivables from customers                 1,208
          Property and equipment                        26
          Other assets                                   5
          Trade name                                 1,439
          Employment contracts                       1,147
          Backlog                                    2,524
          Customer contracts and relationships         461
          Goodwill                                  10,033
                                                 ---------
              Total assets acquired                 16,891
          Accounts payable                             311
          Line of credit                               362
                                                 ---------
              Total liabilities assumed                673
                                                 ---------
              Net assets acquired                  $16,218
                                                 =========

      On December 5, 2007, Epic acquired Pearl for 1,786,240 shares of its
      common stock and cash of $19,020,000. The effective date of the Pearl
      acquisition was December 1, 2007. During the nine months ended additional
      acquisition costs were incurred for the Pearl acquisition related to tax
      distributions.

      On February 20, 2008, Epic acquired EIS, for 1,000,000 shares of its
      restricted common stock and cash of $600,000. The effective date of the
      acquisition was January 1, 2008. In addition, a note payable for
      $1,400,000 was issued, which will be paid to the prior owners of EIS in
      periodic installments during 2008 and 2009. The Unaudited Consolidated
      Statement of Operations includes the operations of EIS for the period from
      January 1, 2008 through September 30, 2008.

      The aggregate purchase price of EIS was $3,317,000 and consisted of
      1,000,000 shares of restricted common stock valued at $1.05 per share,
      the closing price on the day of acquisition, a note in the amount of
      $1,400,000 to be paid in 18 months, $600,000 of cash and acquisition
      costs of $267,000. The following table presents the allocation of the
      purchase price to the assets acquired and liabilities assumed, based on
      their relative fair values (in thousands):

            Cash                                   $  635
            Receivables from clients                  233
            Property and equipment                    117
            Other assets                                5
            Goodwill and intangible assets          2,405
                                                   ------
               Total assets acquired                3,395
                                                   ------
            Accounts payable                           73
            Accrued liabilities                         5
                                                   ------
               Total liabilities assumed               78
                                                   ------
                  Net assets acquired              $3,317
                                                   ======


                                       10
<PAGE>

      Summarized below are the unaudited pro forma statements of operations of
      the Company for the three and nine months ended September 30, 2007 had the
      acquisitions of Carnrite, Pearl and Epic Integrated taken place as of
      January 1, 2007, expressed in thousands except for share amounts:

                                          Three months       Nine months
                                             ended              ended
                                         September 30,      September 30,
                                              2007              2007
                                        --------------      --------------
           Revenues                         $ 16,840            $43,789
           Operating
           expenses                           15,730             41,611
           Other income
           (expense)                             401               (473)
                                           ---------           --------
                   Net income               $  1,511           $  1,705
                                           =========           ========
                   Net income per share     $   0.04           $   0.04

      The unaudited pro forma information is presented for informational
      purposes only and is not necessarily indicative of the results of
      operations that actually would have been achieved had the acquisitions
      been consummated as of that time, nor is it intended to be a projection of
      future results.

      The acquisitions and related transactions were treated as purchase
      business combinations for accounting purposes, and Carnrite's, Pearl's and
      EIS's assets acquired and liabilities assumed were recorded at their fair
      values. The allocations of the purchase price to Pearl's and EIS's assets
      and liabilities are only preliminary allocations based on estimates of
      fair value and will change when the actual fair values are determined.
      Among the provisions of Statement of Financial Accounting Standards No.
      141, Business Combinations, criteria have been established for determining
      whether intangible assets should be recognized separately from goodwill.
      As of September 30, 2008, the Company has not made that determination
      related to the Pearl and EIS acquisitions. The Company is currently in the
      process of assessing the intangible assets to be recognized separately
      from goodwill related to the Pearl and EIS acquisitions.

      4.    Goodwill and Other Intangible Assets

      The Company's intangible assets consist of the following at September 30,
      2008 (in thousands):


                                       11
<PAGE>


                                   Carrying   Accumulated   Net book
                                    amount    amortization   value
                                  ----------------------------------
            Backlog                $ 2,524     $(303)       $2,221
            Employment contracts     1,147      (181)          966
            Customer
            relationships              461       (23)          438
            Patent                     990       (49)          941
            Trade name               1,439         -         1,439
                                  --------     ------       ------
                  Total            $ 6,561     $(556)       $6,005
                                  ========     ======       ======

      Amortization expense related to the above intangible assets for the three
      months and nine months ended September 30, 2008 was $521,310 and $550,722,
      respectively. The aggregate amortization expense associated with
      intangible assets for the next five years is estimated to be as follows
      (in thousands):

                    2008 (three months            $   521
                    remaining)
                    2009                            2,085
                    2010                              917
                    2011                              149
                    2012                              149
                                                ---------
                    Total                         $ 3,821
                                                =========


      Goodwill represents the excess of the purchase price over the fair value
      of the net tangible assets. The changes in the carrying amount of goodwill
      for the nine months ended September 30, 2008, are as follows (in
      thousands):

         Balance, January 1, 2008                       $32,624
            EIS acquisition                               2,405
            Pearl additional acquisition costs            1,523
            Carnrite purchase price allocation
         adjustments                                     (5,570)
                                                      ---------
         Balance, September 30, 2008                    $30,982
                                                      =========

      5.    Other Mineral Reserves

      The Company's proved oil and gas properties in Kansas contain Helium
      reserves estimated at between 1% and 2% of the proved gas reserves of the
      property. Installation of Nitrogen Rejection Units ("NRU") to remove
      Nitrogen and harvest the Helium from the field has been complete. The
      field began continual production of pipeline quality gas on September 10,
      2008. The average daily net production for the period from September 10
      through September 30 averaged 359 MCF per day or total net production of
      7,536 MCF. Since restarting production the Company is currently
      considering divestment options for this asset.


                                       12
<PAGE>

      6.    Oil and Gas Properties

      In December 2006, the Company acquired a 100% working interest
      (approximately 82% net revenue interest) in 28,600 acres in Rush County,
      Kansas. Located on the acreage were 58 producing gas wells with total
      proved reserves at December 31, 2006 of 3,717 barrels of oil and 2,793,000
      Mcf of gas. The acreage and wells were acquired for $100,000 in cash, a
      $2,500,000 loan from the sellers of the property and 3,200,000 shares of
      Epic's common stock valued at $8,480,000 using the closing price of Epic's
      common stock at the inception of the agreement. The Company based the
      value of the offer on a 2005 engineering reserve report which showed a
      value of $10.5 million.

      The Company owns a 50% working interest (approximate 40% net revenue
      interest) in 6,000 acres in Kay County, Oklahoma. Located on the leased
      acreage were one producing gas well and six shut-in gas wells. The three
      initial test wells were worked over and have been found to be
      uneconomical. Epic will decline participation in future wells associated
      within the 6,000 acres in Kay County, Oklahoma.

      For the nine months ended September 30, 2008 and 2007, the Company
      recorded $0 and $1,338,527 of ceiling test impairments related to these
      properties. The Company recorded no depletion expense on these properties
      for the three and nine months ended September 30, 2008 and 2007, due to
      limited production attributable to a shut in gas plant (see Note 5 above).

      7.    Property and Equipment

      Property and equipment consisted of the following (in thousands):

                                                  September      December
                                                  30, 2008       31, 2007
                                                 ----------     ----------

          Airplane                                 $     -       $ 4,633
          Vehicles                                   2,729         2,222
          Computer equipment                         2,617           859
          Leasehold improvements                       321           316
          Office furniture and equipment               820           577
          Construction in progress                     378         2,102
                                                 ---------       -------
                                                     6,865        10,709
          Less: Accumulated depreciation and
          amortization                              (1,083)         (112)
                                                 ---------       -------
             Total property and equipment, net     $ 5,782       $10,597
                                                 =========       =======

      Depreciation expense for the three months and nine months ended September
      30, 2008 was $510,912 and $1,415,788, respectively.


                                       13
<PAGE>

      During the three months ended September 30, 2008, management of the
      Company decided to sell the airplane. The airplane was used by the Company
      through September 2008. At September 30, 2008, the net book value of the
      airplane is included in Assets held for sale in the accompanying Unaudited
      Consolidated Balance Sheets.

      8.    Long-Term Debt

      The Company has a $2,500,000 note payable secured by the Rush County
      Kansas property. The note is for a term of 42 months and bears annual
      interest of 10%. The monthly principal and interest payment of this note
      is approximately $72,000. Pursuant to the note agreement, if the cash flow
      from the property is less than the monthly principal and interest payment,
      the deficit is added to the principal amount of the note. If the cash flow
      from the property is greater than the monthly principal and interest, the
      additional amount reduces the principal of the note. The property had
      limited production during nine months ended September 30, 2008 and 2007,
      therefore, under these terms, the Company incurred $257,731 and $202,783,
      respectively, in lease operating expenses related to the Rush County
      property. According to the terms of the loan $257,731 has been added to
      the principal balance of the note for the nine months ended September 30,
      2008, due to expenses being greater than revenues generated by the wells.
      At September 30, 2008, the principal balance of the loan was $3,118,393.

      In December 2007, the Company issued $20,250,000 of 10% Secured
      Debentures ("The debentures"). The debentures are due on December 5, 2012,
      with interest payable quarterly on January 1, April 1, July 1 and October
      1. The debentures are secured by liens on all of the Company's assets.
      Beginning December 1, 2008, the Company is required to make quarterly
      principal payments of $1,265,625. Any overdue accrued and unpaid interest
      shall result in a late fee at an interest rate equal to the lesser of 18%
      per annum or the maximum rate permitted by law. Prepayment is not allowed
      without prior written consent of the holders. The purchasers of the
      debentures also received warrants which entitle the holders to purchase up
      to 15,954,545 shares of the Company's common stock at $1.65 per share.
      Under the Black Scholes method using an expected life of five years,
      volatility of 72% and a risk-free interest rate of 3.28%, the Company
      determined these warrants associated had a fair value of $13,085,380 as of
      the date of the transaction. The fair value of the warrants was recorded
      as additional paid in capital with a corresponding amount recorded as a
      debt discount. The debt discount is being amortized to interest expense
      over the life of the debentures, which matures on December 1, 2012. For
      the three and nine months ending September 30, 2008 $874,451 and
      $2,283,022, respectively, of debt discount was amortized to interest
      expense.

      In connection with the acquisition of EIS, the Company issued a
      $1,400,000 note payable which will be paid to the prior owners of EIS in
      periodic installments during 2008 and 2009. At September 30, 2008,
      $1,150,000 of this note is included in the current portion of long term
      debt on the accompanying Unaudited Consolidated Balance Sheets.


                                       14
<PAGE>

      Debt consists of the following (in thousands):

                                                 September     December 31,
                                                  30, 2008         2007
                                                ----------     -----------

          10% secured debentures                  $ 20,250       $ 20,250
          Debt discount                            (10,596)       (12,879)
                                                ----------       --------
          10% secured debentures, net                9,654          7,371
                                                ----------       --------
          Note payable secured by assets             9,687          9,766
          acquired
          Note payable - EIS acquisition             1,400              -
                                                ----------       --------
             Total debt                             20,741         17,137
          Less: current maturities                   7,768          3,208
                                                ----------       --------
             Total long-term debt                 $ 12,973       $ 13,929
                                                ==========       ========

      9.    Stockholders' Equity

      On February 20, 2008, the Company acquired EIS for cash and 1,000,000
      shares of its restricted common stock. The 1,000,000 shares will vest
      annually over a three year period. As of September 30, 2008, 333,333 of
      these shares have been distributed to the prior owner's of EIS. All or a
      portion of the unvested shares issued to each officer will be forfeited
      and returned to the Company if the officer voluntarily terminates his or
      her employment prior to February 20, 2011.

      During the nine months ending September 30, 2008, the Company issued
      92,906 shares of common stock for services. The stock was valued at the
      price on the date of issuance which was approximately $68,000. The stock
      value is included in compensation expense for the nine months ended
      September 30, 2008 in the accompanying Unaudited Consolidated Statement of
      Operations. The shares were included in the calculation of weighted
      average shares outstanding for the nine months ended September 30, 2008.

      During the first quarter of 2008, the Board of Directors updated their
      compensation plan for the calendar year 2008. The plan defines
      compensation for non-employee directors to include an annual cash retainer
      of $21,000 payable quarterly and a grant of 25,000 stock options with an
      exercise price equal to the closing price of the Company's common stock on
      that date. On January 17, 2008, the Company granted 25,000 stock options
      to each member of the Board of Directors (100,000 total options) with an
      exercise price equal to the closing price of the Company's common stock on
      that date. These options vested immediately and have an expiration date of
      January 17, 2018. For the nine months ended September 30, 2008,
      approximately $162,000 was expensed related to these options.

      On February 11, 2008, 200,000 stock options were granted to the Company's
      Chief Financial Officer with an exercise price of $1.03 per share and an
      expiration date of February 11, 2018. The options vest over a three-year
      period from date of grant. Compensation expense related to these options


                                       15
<PAGE>

      of approximately $11,000 and $28,000, respectively was recorded for the
      three and the nine months ended September 30, 2008. Unrecognized
      compensation expense amounting to $104,000 will be recognized over the
      remaining service term.

      During the nine months ending September 30, 2008, 110,500 stock options
      were granted to other key employees of the Company. These options had
      exercise prices ranging from $0.69 to $3.00 per share and all have an
      expiration date of six years from the day they were granted. These options
      vest over a three year period from date of grant. For the three and the
      nine months ended September 30, 2008, approximately $2,200 and $2,700,
      respectively, of compensation expense was recorded related to these
      options. Unrecognized compensation expense amounting to $35,000 will be
      recognized over the remaining service term.

      The fair value of the options above was estimated on the date of grant
      using the Black-Scholes pricing model. The Company used the following
      assumptions in determining fair values of the above options:

                Dividend yield                              0.0%
                Expected volatility               58.5% to 81.5%
                Risk free interest rate           2.88% to 3.55%
                Expected life                       5 to 6 years


      10.   Commitments and Contingencies

      Litigation

      From time to time, the Company may be involved in litigation or
      administrative proceedings relating to claims arising out of our
      operations in the normal course of business. The Company is not aware of
      any pending of threatened legal proceedings that, if determined in a
      manner adverse, could have a material adverse effect on the Company's
      business and operations.


                                       16
<PAGE>

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

      The discussion in this section contains forward-looking statements.
      These statements relate to future events or our future financial
      performance. We have attempted to identify forward-looking statements by
      terminology such as "anticipate," "believe," "can," "continue," "could,"
      "estimate," "expect," "intend," "may," "plan," "potential," "predict,"
      "should," "would" or "will" or the negative of these terms or other
      comparable terminology, but their absence does not mean that a statement
      is not forward looking. These statements are only predictions and involve
      known and unknown risks, uncertainties and other factors, which could
      cause our actual results to differ from those projected in any
      forward-looking statements we make This discussion should be read with our
      financial statements and related notes included elsewhere in this report.

      Overview

      Epic Energy Resources, Inc. ("Epic") was incorporated in 1989. Following
      its formation, Epic was relatively inactive until April 2006 when its
      management changed and it became involved in the oil and gas industry.
      Epic acquired certain producing oil and gas properties in December 2006
      which were shut-in between January 2007 and August 2008. Epic acquired The
      Carnrite Group ("Carnrite") in August 2007 and Pearl Investment Company
      ("Pearl") in December 2007. Epic's revenues from Carnrite and Pearl are
      principally derived from consulting and engineering services to the oil,
      gas and energy industry. Carnrite's management consulting services provide
      content rich advice to keep companies engaged in the oil and gas sector
      competitive in the global market. Pearl provides engineering and
      consulting services focused on the design, build, operations, maintenance,
      and development of upstream oil and gas assets including associated
      gathering, compression and processing facilities.. In February 2008, Epic
      acquired Epic Integrated Services LLC ("EIS"), a provider of personnel
      training, documentation and data management to the oil, gas and energy
      industry. With respect to this discussion, the terms "the Company", "we,"
      "us," and "our" refer to Epic Energy Resources, Inc. and our wholly-owned
      subsidiaries.

      Significant Developments

      During 2007, Epic acquired two significant companies (Carnrite and Pearl)
      that have increased our annualized consulting revenues substantially.
      These companies generated pro forma annual revenues for 2007 of
      approximately $59.3 million. In early 2008, Epic acquired EIS which
      generated 2007 revenues of approximately $2.9 million. As a result, our
      operations are principally related to consulting and engineering services
      to the energy industry. We plan to strategically co-invest with our
      clients or take up to 100% working interest in surface infrastructure
      projects where we are contracted to design, build and operate gathering,
      compression and/or processing facilities.

      During 2007, Epic raised over $28.9 million in debt and equity capital to
      fund our acquisitions and operations. In addition, we issued over 4.7
      million shares of our common stock in conjunction with these acquisitions.


                                       17
<PAGE>

      Critical Accounting Policies

      This discussion and analysis of our financial condition and results of
      operations is based upon our consolidated financial statements. The
      preparation of these financial statements requires us to make estimates
      and assumptions that affect the reported amounts. On an ongoing basis, we
      evaluate our estimates, including those related to bad debts, intangible
      assets, long-lived assets, income taxes, and contingencies and litigation.
      We base our estimates on historical experience and on various other
      assumptions and factors that we believe to be reasonable under the
      circumstances. Based on our ongoing review, we make adjustments we
      consider appropriate under the facts and circumstances. The accompanying
      condensed unaudited consolidated financial statements are prepared using
      the same critical accounting policies discussed in our 2007 Annual Report
      on Form 10-KSB.

      Results of Operations

      Epic had minimal operations until the acquisition of Carnrite in August
      2007 and Pearl in December 2007. Epic's historical operating results and
      period to period comparisons are not significant until 2007. All increases
      in the Company's revenues and expenses between 2008 and 2007 are
      associated with the acquisitions of Carnrite, Pearl and EIS. The results
      of operations for the nine months ended September 30, 2008 include the
      historical results of EIS from January 1, 2008.

      Expenses which are directly  related to oil and gas production
      are charged to lease operating expenses. All other expenses (except
      depletion, accretion and impairment), whether they relate to consulting
      services or oil and gas exploration/development, are recorded as general
      and administrative expenses.

      The Company grew significantly in 2007 through the acquisitions of
      Carnrite and Pearl. In February 2008, Epic acquired EIS and we expect to
      continue an aggressive acquisition plan in the foreseeable future. We plan
      to strategically continue our growth in geographic regions where our
      engineering expertise is our strength, such regions including the Rocky
      Mountains, Texas, Oklahoma and Kansas. As we build our infrastructure, we
      expect to expand our service region throughout the United States and into
      foreign countries that are seeking our expertise.

      As of September 30, 2008, Epic's potential backlog for consulting services
      to be performed in the future was approximately $28.3 million. This
      compares with a combined backlog of approximately $45.8 million as of June
      30, 2008. Our backlog does not include anticipated contracts for 2009
      since our clients are currently preparing their 2009 budgets. This backlog
      amount could change by macro economic market activity and customer demand
      changes.


                                       18
<PAGE>

      Three Months ended  September 30, 2008 compared with Three Months ended
      September 30,2007

      Revenues were approximately $21.3 million for the quarter ended September
      30, 2008 compared to approximately $1.6 million for the quarter ended
      September 30, 2007. The increase of $19.7 million was primarily the result
      of the acquisitions of Pearl and EIS.

      Operating Expenses were approximately $20.8 million for the quarter ended
      September 30, 2008 compared to approximately $1.4 million for the quarter
      ended September 30, 2007 resulting in an increase of approximately of
      $19.4 million. This increase was primarily the result of the acquisitions
      of Pearl and EIS.

      Income from Operations was approximately $0.5 million for the quarter
      ended September 30, 2008 compared to $0.2 million for the quarter ended
      September 30, 2007.

      Other Expense, net was approximately $3.8 million for the quarter ended
      September 30, 2008 compared to approximately $0.2 million for the quarter
      ended September 30, 2007. The increase of $3.6 million was primarily due
      to an accrual for liquidating damages of $2.2 million and $1.6 million
      interest expense and debt discount amortization associated with the
      acquisition of Pearl.

      Net Loss was $3.3 million or $0.08 per share for the quarter ended
      September 30, 2008 compared to $43,333 or $0.00 per share for the quarter
      ended September 30, 2007 resulting in an increased loss of $3.3 million.
      The primary reasons for the net loss for the three months ended September
      30, 2008 was the accrual for liquidating damages of $2.2 million and $1.6
      million of interest expense recognized during that period.

      Nine Months ended  September 30, 2008  compared  with Nine Months ended
      September 30, 2007

      Revenues were approximately $55.4 million for the nine months ended
      September 30, 2008 compared to approximately $1.7 million for the nine
      months ended September 30, 2007. The increase of $53.7 million was
      primarily the result of the acquisitions of Carnrite, Pearl and EIS.

      Operating Expenses were approximately $56.9 million for the nine months
      ended September 30, 2008 compared to approximately $3.7 million for the
      nine months ended September 30, 2007. This increase of $53.2 million was
      primarily the result of the acquisitions of Carnrite, Pearl and EIS.

      Loss from Operations was approximately $1.5 million for the nine months
      ended September 30, 2008 compared to a loss from operations of
      approximately $2.0 million for the nine months ended September 30, 2007.
      The decrease in the loss from operation of $0.5 million was related to the
      impairment of oil and gas properties of $1.3 million recorded in the nine
      months ended September 30, 2007.


                                       19
<PAGE>

      Other Expense, net was approximately $6.8 million for the nine months
      ended September 30, 2008 compared to approximately $0.3 million for the
      nine months ended September 30, 2007. The increase of $6.5 million was
      primarily due to an accrual for liquidating damages of $2.2 million and
      $4.7 million of interest expense and debt discount amortization associated
      with the acquisition of Pearl.

      Net Loss was $8.4 million or $0.19 per share for the nine months ended
      September 30, 2008 compared to $2.3 million or $0.06 per share for the
      nine months ended September 30, 2007 resulting in an increased loss of
      $6.1 million. The primary reasons for the net loss for the nine months
      ended September 30, 2008 was the accrual for liquidating damages of $2.2
      million $4.7 million of interest expense recognized for that period.

      Liquidity and Capital Resources

      Between October 2006 and April 2007 Epic raised $1,414,700, net of
      commissions, from the sale of 1,455,100 shares of its common stock, plus
      491,500 Series A warrants and 963,600 Series B warrants, to private
      investors. The Series A warrants expired on December 31, 2007. Each Series
      B Warrant entitles the holder to purchase one share of Epic's common stock
      at a price of $2.50 per share at any time prior to October 31, 2009.

      On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a
      group of private investors for gross proceeds of $6,609,501, or $1.50 per
      share. The investors also received warrants which entitle the holders to
      purchase up to 4,406,334 shares of the Company's common stock. The
      warrants are exercisable at a price of $1.50 per share and expire on
      December 5, 2012.

      On December 31, 2007 Epic sold an additional 1,023,001 shares of its
      common stock to a group of private investors for gross proceeds of
      $1,534,502 or $1.50 per share. The investors also received warrants which
      entitle the holders to purchase up to 1,023,001 shares of Epic's common
      stock. The warrants are exercisable at a price of $1.50 per share and
      expire on December 5, 2012.

      On December 5, 2007 Epic issued $20,250,000 of secured debentures to
      another group of private investors. The notes bear interest of 10% per
      year. The notes are due and payable on December 5, 2012 and are secured by
      liens on all of the Company's assets. The purchasers of the notes also
      received Series D warrants which entitle the holders to purchase up to
      15,954,545 shares of Epic's common stock. The warrants are exercisable at
      a price of $1.65 per share and expire on December 5, 2012. Interest on the
      debentures is payable quarterly with the first interest payment due on
      January 1, 2008. Beginning December 1, 2008 Epic is required to make
      quarterly payments of $1,265,625 toward the principal of the debentures in
      cash or in kind.

      On February 20, 2008, with an effective date of January 1, 2008, Epic
      acquired Epic Integrated Solutions, LLC ("EIS"), an unaffiliated entity,
      for cash and 1,000,000 shares of its restricted common stock. At closing,
      Epic paid $600,000 and issued a note payable for $1,400,000 which will be
      paid to the prior owners of EIS in periodic installments during 2008 and


                                       20
<PAGE>

      2009. The 1,000,000 shares will vest annually over a three year period. As
      of September 30, 2008, 333,333 of these shares have been distributed to
      the previous owner's of EIS. Also, additional acquisition costs of
      approximately $267,000 were incurred in the second quarter of 2008.

      Operating activities provided cash of $3.4 million for the nine months
      ended September 30, 2008 compared to approximately $0.3 million of cash
      used in operations for the nine months ended September 30, 2007. We had a
      net loss of $8.4 million for the nine months ended September 30, 2008
      which was offset by changes in assets and liabilities of approximately
      $4.9 million. In addition during the nine months ended September 30, 2008,
      we had approximately $2.6 million of amortization of debt discount and
      debt issuance costs, $2.0 million of depreciation, amortization and
      depletion, $0.9 million of non-cash stock based compensation expense, and
      $661,000 expense for bad debts. For the nine months ended September 30,
      2007, we had a net loss of $2.3 million which was offset by $1.3 million
      in impairment of oil and gas properties, changes in assets and liabilities
      of approximately $56,000 and other non-cash items of approximately $0.6
      million.

      For the nine months ended September 30, 2008, we had investing activities
      that provided cash of $0.9 million primarily as a result of the decrease
      in restricted cash of $2.5 million offset by acquisition of property and
      equipment of $1.4 million. For the nine months ended September 30, 2007,
      we had investing activities that provided cash of approximately $24,000
      primarily due to $48,000 net cash received in the Carnrite acquisition off
      set by $23,000 used for investment in a joint venture.

      For the nine months ended September 30, 2008, we used $4.3 million of cash
      flows for financing activities related to a decrease in bank overdrafts of
      $3.4 million and debt payments of $0.8 million. For the nine months ended
      September 30, 2007, we had cash provided by financing activities of
      approximately $0.4 million primarily due to proceeds of $0.5 million from
      the issuance of common stock.

      As of September 30, 2008, we had working capital deficit of $2.0 million
      compared with working capital of $7.6 million at December 31, 2007.

      At September 30, 2008, average collection of accounts receivable was
      approximately 86 days. Excluding one customer the average collection of
      accounts receivable was approximately 69 days. The Company is closely
      monitoring this customer who primarily operates in the Power River Basin,
      as they are having liquidity issues. The Company is communicating with
      this customer on a weekly basis to ensure our receivables are protected.

      As a result of the acquisition of Carnrite, Pearl and EIS, Epic believes
      that cash provided by its operations will satisfy its future capital and
      debt service requirements.


                                       21
<PAGE>

      Contractual Commitments

      There have been no material changes to Epic's contractual commitments
      during the third quarter of 2008. Please see Note 8 and the Company's
      Annual Report on Form 10-KSB for December 31, 2007 for a complete
      discussion of the Company's lease obligations.

      Except for the commitments arising from our operating leases arrangements,
      we have no other off-balance sheet arrangements that are reasonably likely
      to have a material effect on our financial statements.

      Safety

      Working safely is a major objective at Epic. We believe this
      organization-wide objective provides for a safer work environment for
      employees, reduces our costs and enhances our reputation. Furthermore,
      striving to be a world-class leader in safety provides a platform for all
      employees to understand and apply the resolve necessary to be a
      high-performing organization. We measure our progress on safety based on
      Recordable Incidence Rate ("RIR") as defined by OSHA. For the nine month
      period ending September 30, 2008, we continued to increase the number of
      training hours and worked judiciously to reduce the RIR's.

      ITEM 4T. CONTROLS AND PROCEDURES

      Rex Doyle, Epic's Chief Executive Officer and Michael Kinney, Epic's Chief
      Financial Officer, evaluated the effectiveness of Epic's disclosure
      controls and procedures (as defined in Rule 13a-15(e) of the Securities
      Exchange Act of 1934) as of the end of the period covered by this report.
      In designing and evaluating the disclosure controls and procedures,
      management recognizes that any controls and procedures, no matter how well
      designed and operated, can provide only reasonable assurance of achieving
      the desired control objectives. In addition, the design of disclosure
      controls and procedures must reflect the fact that there are resource
      constraints and that management is required to apply its judgment in
      evaluating the benefits of possible controls and procedures relative to
      their costs. Based upon their evaluation, Mesrs. Doyle and Kinney have
      concluded that the Company's internal control over financial reporting was
      effective as of September 30, 2008.

      At December 31, 2007, the Company concluded that there was a material
      weakness in their internal controls. The Company determined that
      disclosure controls and procedures were not effective to ensure that
      information required to be disclosed by Epic in the reports that files or
      submits under the Securities Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the
      Securities and Exchange Commission's rules and forms.

      During the period ended September 30, 2008, there were significant changes
      in our internal control over financial reporting (as defined in Rules
      13a-15(f) and 15d-15(f) under the 1934 Act), which improved our internal
      control over financial reporting. The Company added a Chief Financial
      Officer and Controller during the first quarter of 2008. We have also
      performed the risk assessment, controls documentation, controls analysis


                                       22
<PAGE>

      and controls testing as required by Section 404 of the Sarbanes-Oxley Act
      of 2002. Our testing indicated that our financial reporting controls are
      effective. In addition, we have completed converting our accounting and
      production processes to the Microsoft Dynamics AX enterprise system.


                           PART II - OTHER INFORMATION

      ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

       On February 20, 2008, Epic acquired Epic Integrated Solutions, LLC, an
      unaffiliated entity, for cash of $600,000 and 1,000,000 shares of its
      restricted common stock. Epic relied upon the exemption provided by
      Section 4(2) of the Securities Act of 1933 in connection with the sale of
      these shares.

      ITEM 6.   EXHIBITS

       31.1   Certification of Chief Executive Officer Pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002.

       31.2   Certification of Chief Financial Officer pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002.

       32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C.
              Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley
              Act of 2002.

       32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C.
              Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley
              Act of 2002.



                                       23
<PAGE>



                                   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.


November 7, 2008.                               EPIC ENERGY RESOURCES, INC.
                                                (Company)

                                                /s/ Rex Doyle
                                                ----------------------------
                                                Rex Doyle
                                                Chief Executive Officer


                                                /s/ Michael Kinney
                                                ----------------------------
                                                Michael Kinney
                                                Chief  Financial Officer and
                                                   Principal Accounting Officer