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

                                  FORM 10-QSB/A

                                   (Mark One)

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

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007
                                       OR
( )  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
    of incorporation)                                 Identification No.)

                           10655 Six Pines, Suite 210
                             The Woodlands, TX 77380
                     Address of principal executive offices

                      (281) 419-3742 Registrant's telephone
                           number, including area code

                                       N/A
 Former name, former address and former fiscal year, if changed from last report

Check whether the issuer: (1) filed all reports required to be filed by
Section13 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," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One):

      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 January 31, 2008, the Company had 46,262,681 outstanding shares of no par
value, common stock.

Transitional Small Business Format (check one): YES [ ] NO [X]

<PAGE>







                                EXPLANATORY NOTE

This amendment is being filed for the purpose of correcting certain figures in
the consolidated balance sheets, consolidated statements of operations and
consolidated statements of cash flows that were erroneously reported in the Form
10-QSB for the quarterly period ending September 31, 2007. In addition,
corresponding corrections consistent with the changes in the financial
statements have been made in Management's Discussion and Analysis or Plan of
Operation (Item 2 of Part I).

The errors were a result of clerical errors in preparing the financial
statements and were not detected by the certifying officers. In addition, review
by certifying officers failed to detect the errors. The net effect of the errors
was to reduce net income by $450,930 for the three month and nine month periods
ending September 30, 2007.

<PAGE>


                           EPIC ENERGY RESOURCES INC.
             Form 10-QSB/A for the Quarter Ended September 30, 2007


                                      INDEX

                   PART I.   FINANCIAL INFORMATION


                                                                            Page

Item 1. Financial Statements

Consolidated  Balance Sheets as of September 30, 2007
(unaudited)  and December 31, 2006                                            3

Consolidated Statements of Operations  (unaudited) for the
three and nine months ended September 30, 2007 and 2006                       4

Consolidated Statements of Cash Flows (unaudited) for the
nine months ended September 30, 2007 and 2006                                 5

Notes to Consolidated Financial Statements (unaudited)                        6

Item 2. Management's Discussion and Analysis or Plan of Operations           19

Item 3. Controls and Procedures                                              26


PART II.  OTHER INFORMATION

Item 5.  Unregistered Sales of Equity Securities and
Use of Proceeds                                                              27

Item 6. Exhibits                                                             27

Signatures



<PAGE>





                           EPIC ENERGY RESOURCES INC.





<PAGE>


                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)

                                                 September 30,     December 31,
                                                     2007              2006
                                                   RESTATED
    ASSETS

    CURRENT ASSETS
    Cash and cash equivalents                    $    700,909      $   590,172
    Accounts receivable:
      Billed, net of allowance of $0                  791,953            4,600
    Unbilled, at estimated net realizable value       330,597                -
    Accounts receivable from affiliates                 5,000                -
    Prepaid expenses and other                         16,250          120,219
                                                 -------------     ------------

    TOTAL CURRENT ASSETS                            1,844,709          714,991

    Oil and gas properties (full-cost method),
     net of accumulated depreciation, depletion,
     amortization and impairment
       Proved                                       6,075,984        7,354,511
       Unproved                                             -           60,000
    Other mineral reserves                            783,474          783,474
    Property and equipment, net                        27,473                -
    Investment in joint venture                        22,700                -
    Other assets                                      304,902                -
    Goodwill                                        9,967,252                -
                                                 -------------     ------------
    TOTAL ASSETS                                 $ 19,026,494      $ 8,912,976
                                                 =============     ============

    LIABILITIES AND STOCKHOLDERS' EQUITY

    CURRENT LIABILITIES
    Accounts payable                             $    207,819      $    97,630
    Accrued liabilities                               375,937            7,346
    Current portion of long term debt                 849,505          872,990
    Line of credit                                    362,000                -
                                                 -------------     ------------

    TOTAL CURRENT LIABILITIES                       1,795,261          977,966

    Asset retirement obligations                      151,555          142,343
    Long-term debt                                  1,830,658        1,707,676
                                                 -------------     ------------
    TOTAL LIABILITIES                               3,777,474        2,827,985

    STOCKHOLDERS' EQUITY
     Common stock, no par value: 100,000,000
      authorized:
      36,939,586 and 53,441,601 shares issued
      and outstanding at September 30, 2007 and
      December 31, 2006, respectively              21,318,341        9,822,605
     Additional paid-in capital                       331,412          330,912
     Accumulated deficit                           (6,400,733)      (4,068,526)
                                                 -------------     ------------
    TOTAL STOCKHOLDERS EQUITY                      15,249,020        6,084,991

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 19,026,494      $ 8,912,976
                                                 =============     ============


See accompanying notes to consolidated financial statements.

                                        3


<PAGE>


                           EPIC ENERGY RESOURCES INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<S>                                           <C>                  <C>          <C>                <C>

                                                For the three months             For the nine months
                                                 ended September 30,             ended September 30,
                                              2007                 2006        2007                2006
                                              -------------------------        ------------------------
                                             RESTATED                         RESTATED
REVENUES
 Consulting fees                           $  1,571,081       $       -      $  1,665,923    $        -
 Oil and gas revenue                                  -               -             9,674             -
   TOTAL REVENUES                             1,571,081               -         1,675,597             -

OPERATING EXPENSES
 General and administrative                     478,733         143,655         1,328,275       249,012
 Lease operating expenses                        80,228               -           202,783             -
 Professional and subcontracted services        504,196               -           504,196             -
 Compensation and benefits                      258,740               -           258,740             -
 Occupancy, communication and other              75,394               -            75,394             -
 Accretion expense                                    -               -             9,212             -
 Impairment of oil and gas properties                 -               -         1,338,527             -
OPERATING EXPENSES                            1,397,291         143,655         3,717,127       249,012

INCOME (LOSS) FROM OPERATIONS                   173,790        (143,655)       (2,041,530)     (249,012)

OTHER INCOME (EXPENSE)
 Interest and other income                          157             787             6,867         1,756
 Interest expense                              (217,280)              -          (297,544)            -
OTHER INCOME (EXPENSE)                         (217,123)            787          (290,677)        1,756

NET LOSS                                   $    (43,333)    $  (142,868)    $ (2,332,2 07)  $  (247,256)

LOSS PER COMMON
  SHARE- Basic and Diluted                 $      (0.00)    $     (0.00)    $       (0.06)  $     (0.01)

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - Basic and Diluted            33,901,262      49,260,000        38,946,918    34,109,817
</TABLE>


See accompanying notes to consolidated financial statements.

                                        4


<PAGE>

                           EPIC ENERGY RESOURCES INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)

                                                          Nine Months Ended
                                                            September 30,
                                                        2007             2006
                                                      RESTATED

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                     $   (2,332,207)  $     (247,256)
   Adjustments to reconcile net loss to
    net cash used in operating activities:

   Impairment of oil and gas properties              1,338,527                -
   Accretion expense                                     9,212                -
   Shares issued for compensation                      276,128                -
   Imputed interest on acquisition                     115,000                -
   Amortization of prepaid assets                       99,349                -
   Changes in operating assets and liabilities:
     Accounts receivable                                84,933                -
   Prepaid expenses and other                           30,191                -
   Accounts payable                                   (199,367)          (3,098)
   Accrued liabilities                                 366,950           21,005
                                                ---------------   --------------
      Net cash used in operating activities           (211,284)        (229,349)
                                                ---------------   --------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Investment in joint venture                           (22,700)
 Acquisition of oil and gas properties and
  property and equipment                                (1,031)               -
 Acquisition of Carnrite, net of cash received          48,227                -
 Increase in other assets                             (304,902)
                                                ---------------   --------------
      Net cash used in investing activities           (280,406)               -
                                                ---------------   --------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Payments on debt                                     (114,950)               -
 Proceeds from debt                                    193,777                -
 Proceeds from issuance of common stock                523,600              440
 Capital contributed by stockholders                         -          305,021
                                                ---------------   --------------
      Net cash provided by financing activities        602,427          305,461
                                                ---------------   --------------
NET INCREASE IN CASH AND CASH EQUIVALENTS              110,737           76,112
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         590,172                -
                                                ---------------   --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD        $      700,909    $      76,112
                                                ===============   ==============

SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Interest paid                                 $        5,978    $           -
NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Acquisition of Carnrite with stock            $   10,696,508                -


See accompanying notes to consolidated financial statements.







                                        5



<PAGE>

                           EPIC ENERGY RESOURCES INC.

                   Notes to Consolidated Financial Statements
                                   (unaudited)

1.    Basis of Presentation

The accompanying consolidated financial statements of Epic Energy Resources,
Inc. ("Epic" or "the Company") at September 30, 2007 have been prepared without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in conformity with generally accepted accounting
principles have been omitted or condensed pursuant to such rules and
regulations. These statements should be read in conjunction with Epic's audited
financial statements and notes thereto included in Epic's Form 10-KSB for the
year ended December 31, 2006. In management's opinion, these interim
consolidated financial statements reflect all adjustments necessary for a fair
presentation of the consolidated financial position and results of operations
for each period presented. The accompanying unaudited interim financial
statements for the nine months ended September 30, 2007 are not necessarily
indicative of the results which can be expected for the entire year.

Epic was in the development stage until the acquisition of The Carnrite Group
L.L.C. ("Carnrite") on August 13, 2007. As a result, 2007 is the first year
during which Epic is considered an operating company and no longer in the
development stage.

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.

Cash and cash equivalents

For purposes of the statement of cash flow, cash and cash equivalents include
demand deposits, time deposits and short-term liquid investments such as
certificates of deposit with a maturity of three months or less when purchased.
Epic maintains deposits at one financial institution, the balance of which may
at times exceed amounts covered by insurance provided by the U.S. Federal
Deposit Insurance Corporation ("FDIC"). However, Epic has not experienced any
losses in such accounts and does not believe it is exposed to any significant
credit risks from these excess deposits.

Receivables From Clients

Billed receivables from clients are presented at their billed amount less an
allowance for doubtful accounts. Unbilled receivables are stated at net
realizable value less an allowance for non-billable amounts. Epic provides an
allowance for doubtful accounts on receivables based on historical collection


                                       6
<PAGE>

experience and a specific review of each customer's receivable balance. As of
September 30, 2007, management determined that no allowance for doubtful
accounts was required based on management's assessment of the collect ability of
these items. No accounts were written off during the nine months ended September
30, 2007.

Property and Equipment

Property and equipment consists of office equipment and furniture and are stated
at cost. Depreciation is computed on a straight-line basis over estimated useful
lives ranging from three to five years.

Revenue Recognition

Revenue includes fees primarily generated from consulting services provided. The
Company recognizes revenue from these consulting 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 and
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 recorded as unbilled accounts
receivable. Cash collections and invoices generated in excess of revenue
recognized are recorded as deferred revenue until the revenue recognition
criteria are met. Client reimbursable expenses, including those relating to
travel, other out-of-pocket expenses and any third-party costs, are included in
revenue, and an equivalent amount of reimbursable expenses are included in
professional and subcontracted services as a cost of revenue.

Fair Value of Financial Instruments

In accordance with the reporting requirements of SFAS 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.

Earnings Per Share

The Company applies the provisions of Statement of Financial Accounting
Standards No. 128 "Earnings per Share" which requires the presentation of basic
earnings per share which excludes dilution and is computed by dividing net
income (loss) available to common stockholders by the weighted-average number of
shares of common stock outstanding for the period. The provisions also require
dual presentation of basic and diluted earnings per share on the face of the
statement of operations and requires a reconciliation of the numerators and
denominators of basic and diluted earnings per share. Employee stock options and


                                       7
<PAGE>

stock warrants were not included in the computation of diluted earnings per
share for the quarter and nine months ended September 30, 2007 and the quarter
and nine months ended September 30, 2006 because the effect of their assumed
exercise would have an antidilutive effect on the computation of diluted loss
per share.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board ("FASB") published
Statement of Financial Accounting Standards No.157, "Fair Value Measurements"
(FAS 157). FAS 157 defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles and expands disclosures
about fair value measurements. FAS 157 applies under other accounting
pronouncements that require or permit fair value measurements and accordingly,
does not require any new fair value measurements. FAS 157 is effective for
fiscal years beginning after November 15, 2007. The Company does not believe the
adoption of FAS 157 will have a material impact on its financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109"("FAS 109"), which clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with FAS No.
109,"Accounting for Income Taxes." FIN 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. This
Interpretation also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. This Interpretation was effective for fiscal years beginning after
December 15, 2006 so it was effective for the Company in the first quarter of
fiscal year 2007, which began January 1, 2007. The adoption of FIN 48 did not
have a material impact on its financial statements.

In September 2006, the SEC released Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements When Quantifying
Misstatements in Current Year Financial Statement" ("SAB 108"), which provides
guidance on how companies should quantify financial statement misstatements. SAB
108 requires that the effect of misstatements that were not corrected at the end
of the prior year be considered in quantifying misstatements in the current-year
financial statements. Two techniques were identified as being used by companies
in practice to accumulate and quantify misstatements -- the "rollover" approach
and the "iron curtain" approach. The rollover approach quantifies a misstatement
based on the amount of the misstatement originating in the current-year income
statement. Thus, this approach ignores the effects of correcting the portion of
the current-year balance sheet misstatement that originated in prior years. The
iron curtain approach quantifies a misstatement based on the effects of
correcting the cumulative misstatement existing in the balance sheet at the end
of the current year, irrespective of the misstatement's year(s) of origination.
SAB 108 permits companies to adjust for the cumulative effect of misstatements
relating to prior years in the carrying amount of assets and liabilities as of
the beginning of the current fiscal year, with an offsetting adjustment to the
opening balance of retained earnings in the year of adoption.


                                       8
<PAGE>


In February 2007, the Financial Accounting Standards Board (the "FASB") issued
FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities -- Including an Amendment of FASB Statement No. 115 ("SFAS 159").
This standard permits an entity to choose to measure many financial instruments
and certain other items at fair value. Most of the provisions in SFAS 159 are
elective; however, the amendment to FASB Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities, applies to all entities with
available-for-sale and trading securities. The FASB's stated objective in
issuing this standard is as follows: "to improve financial reporting by
providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without
having to apply complex hedge accounting provisions."

The fair value option established by SFAS 159 permits all entities to choose to
measure eligible items at fair value at specified election dates. A business
entity will report unrealized gains and losses on items for which the fair value
option has been elected in earnings (or another performance indicator if the
business entity does not report earnings) at each subsequent reporting date. The
fair value option: (i) may be applied instrument by instrument, with a few
exceptions, such as investments otherwise accounted for by the equity method;
(ii) is irrevocable (unless a new election date occurs); and (iii) is applied
only to instruments and not to portions of instruments.

SFAS 159 is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the beginning
of the previous fiscal year provided that the entity makes that choice in the
first 120 days of that fiscal year and also elects to apply the provisions of
SFAS 157. Epic is currently assessing the impact of SFAS 159 on its financial
statements.

2.    Business Combination

On August 13, 2007, Epic acquired The Carnrite Group, LLC, an energy consulting
company, for 3,177,810 shares of its restricted common stock valued at
$10,486,773. The value of the shares issued in the acquisition was based upon a
price of $3.30 per share, which was the closing price of Epic's common stock on
August 13, 2007. Up to 1,673,036 additional shares have been awarded to
employees of Carnrite as retention shares. These shares will be required to be
returned to Epic if the employees of Carnrite 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", the contingent consideration is considered
compensation cost for post-combination recognition and not additional purchase
price consideration. In addition, Epic issued 63,556 shares of its restricted
common stock valued at $209,735 as a transaction fee to an individual that
assisted with the acquisition. The consolidated statement of operations includes
the operations of Carnrite for the period from July 1, 2007 through September
30, 2007. Because the actual purchase date for Carnrite was August 13, 2007,
imputed interest in the amount of $115,000 was recorded as of September 30,
2007.

The acquisition and related transactions have been treated as a purchase
business combination for accounting purposes, and Carnrite's assets acquired and
liabilities assumed are recorded at their fair value. The allocations of the


                                       9
<PAGE>

purchase price to Carnrite'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. Statement of Financial Accounting Standards No. 142
"Goodwill and Other Intangible Assets" provides, among other guidelines, that
goodwill and intangible assets with indefinite lives will not be amortized, but
rather are tested for impairment at least on an annual basis.

The following table presents the allocation of the acquisition cost to the
assets acquired and liabilities assumed, based on estimated fair values:

                                                            Amount
                                                            ------

            Cash                                        $    48,227
             Receivables from clients                     1,207,883
             Property and equipment, net                     26,442
             Other assets                                     4,901
             Goodwill                                    10,082,252
                       Total assets acquired             11,369,705
            Accounts payable                               (311,197)
             Line of credit                                (362,000)
                                                      --------------
                  Total liabilities assumed                (673,197)
                                                      --------------
                   Net assets acquired                 $ 10,696,508
                                                      ==============

Carnrite commenced its operations on March 28, 2007. Summarized below is the pro
forma statement of operations for the nine months ended September 30, 2007 had
the acquisition of Carnrite taken place as of January 1, 2007:

                                                       Amount
                                           As Reported        RESTATED
                                           -----------        --------

            Revenues                       $3,560,318      $  2,898,209
            Operating expenses              4,535,806         4,323,538
            Other income (expense)           (292,783)        (292,783)
                                         -------------    -------------
                Net loss                  $(1,268,271)     $(1,718,112)
                                         =============    =============

                Net loss per share        $     (0.03)     $     (0.04)
                                         =============    =============

The 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 acquisition been consummated as of that time, nor is it
intended to be a projection of future results.



                                       10
<PAGE>

3.    Oil and Gas Properties

Epic has a 100% working interest (approximately 82% net revenue interest) in 58
gas wells located on 28,600 acres in Rush County, Kansas. In January 2007 the
gas wells were shut in due to the closure of the plant which was purchasing the
gas produced from Epic's wells. Epic does not know if the plant will reopen and
is currently looking for an alternate buyer for the gas.

Epic has a 50% working interest (approximate 40% net revenue interest) in seven
shut-in gas wells located on 6,000 acres in Kay County, Oklahoma. Epic estimates
that it will cost approximately $7,000 (with Epic being responsible for its 50%
share) to rework each shut-in well and place the well back on production. Two
wells were successfully tested for commercial production following workovers in
2007. Depending on weather conditions, Epic plans to begin reworking the
remaining shut-in wells during the first quarter of 2008.

In July 2007 Epic formed a joint venture, Epic Exploration and Production LLC,
with a private investment firm to acquire energy assets and oil and gas
properties. Epic will manage the operations of the joint venture. The private
investment firm is responsible for providing capital required to acquire the
assets on a project-by-project basis.

Epic will receive 20% of the net income from any asset or oil and gas property
acquired by the joint venture until the private investment firm receives 100% of
the equity contributed by the private investment firm to acquire the asset or
property. Thereafter, the net income from the asset or property will be
allocated equally between Epic and the private investment firm. As of February
29, 2008, the joint venture was negotiating to acquire working interests,
varying from 50% to 100%, in producing oil wells in Fort Bend and Bazoria
counties, Texas.

4. Long-Term Debt

Epic's gas wells in Rush County, Kansas serve as collateral for a loan which had
a principal balance of $2,680,163 as of September 30, 2007. The loan bears
interest at 10% per year and is payable in equal monthly installments of
$72,000. The loan agreement provides that if the monthly net income from the
wells is less than $72,000, the deficit will be added to the principal amount of
the note. If the monthly net income from the wells is greater than $72,000, the
net income is applied to the note principal. Since the Kansas wells are shut in,
it is anticipated that $25,000 will be added to the note principal each month
until the wells return to production.

Long-term debt at September 30, 2007 consists of the following:

                                                           Amount
                                                           ------

           Note payable secured by property acquired   $ 2,680,163
           Line of credit                                  362,000
           Less - current maturities                    (1,211,505)
                                                       ------------
              Total                                    $ 1,830,658
                                                       ============


                                       11
<PAGE>

5.    Stockholder's Equity

Common Stock

In December 2006, an employment agreement was initiated with the new President
of the oil and gas operations that included the future issuance of 200,000
shares of restricted common stock for services to be provided over the next 36
months. The fair market value using the closing price of the Epic's stock on the
measurement date, was $554,000 of which $46,168 and $138,500 has been recorded
as compensation expense for the three and nine months ended September 30, 2007,
respectively. In addition, on March 26, 2007, 20,000 shares of restricted common
stock were issued to a consultant for services rendered. The fair market value
of the services rendered for the common stock was approximately $61,000 using
the closing price of Epic's stock on the March 26, 2007 measurement date and is
included as compensation expense.

On March 12, 2007, Epic's Chief Executive Officer and President surrendered to
the Company a total of 23,200,000 shares of common stock and these shares were
subsequently retired. This action was taken in order to place the Company in a
favorable position to attract the equity and debt financing required to continue
to execute its business plan.

In the first nine months of 2007, Epic issued 101,500 shares of unregistered
restricted common stock for gross proceeds of $558,000 in private placements.
There were $40,400 of finder's fee related to these offerings. Epic sold 279,000
units with each unit consisting of 2 shares of Epic common stock and one Series
A Warrant and one Series B Warrant. Each Series A Warrant entitles the holder to
purchase one share of the Company's common stock at a price of $2.00 per share
at any time prior to October 31, 2007. The expiration period for the purchase of
the Series A Warrants has been extended to December 31, 2007, due to
management's focus on raising capital to complete the acquisition of Pearl
Investment Company (See Note 7). Each Series B Warrant entitles the holder to
purchase one share of the Company's common stock at a price of $2.50 per share
at any time prior to October 31, 2009. Both the shares and the shares associated
with the warrants are restricted for a one year period. The relative fair value
of the Common Stock and the Warrants was as follows:

                                                               Relative
                                               Shares         Fair Value

            Common Stock                       558,000        $  412,262
            Series A Warrants                  279,000            77,386
            Series B Warrants                  279,000            68,352
                                             ----------       -----------
                 Total proceeds                                  558,000
            Placement fees                                       (40,400)
                                                              -----------
                     Net proceeds                             $  517,600
                                                              ===========


Proceeds raised in these private placements were used for due diligence and
acquisition costs associated with the acquisition of the Rush County, Kansas
property, costs associated with investigating nitrogen and helium processing
equipment for the Rush County, Kansas property, legal and administrative costs


                                       12
<PAGE>

associated with setting up the Joint venture in Kay County Oklahoma, initial
well work and field maintenance costs in Kay county Oklahoma, due diligence
costs associated with several ongoing acquisitions, working capital, and general
and administrative costs.

In August 2007, a total of 3,241,366 shares of restricted common stock were
issued in conjunction with the Carnrite acquisition. In September 2007, a total
of 1,673,036 shares of restricted common stock were issued as contingency shares
and in October 2007, a total of 300,000 shares were held in escrow associated
with the acquisition of Pearl Investment Company ("Pearl"). See Note 7.

A total of 43,500 shares were issued to consultants for services rendered with a
value of $127,100 during the nine months ended September 30, 2007.

                                    Warrants

A summary of warrant activity for 2007 is as follows:

<TABLE>
<S>                                       <C>                 <C>            <C>

                                    Number of Warrants     Weighted       Aggregate
                                     Outstanding and    Average Exercise   Intrinsic
                                       Exercisable           Price           Value
                                    ------------------  ----------------  ----------

 Outstanding, December 31, 2006           897,100          $   2.38       $  357,438
    Granted                               558,000              2.25
                                        ---------
 Outstanding, September 30, 2007        1,455,100          $   2.33       $2,181,033
                                        =========
</TABLE>

As of September 30, 2007, the range of warrant prices for shares under warrants
and the weighted average remaining contractual life is as follows:

                                                                Weighted Average
                                                                    Remaining
                                    Exercise      Number of     Contractual Life
                                      Price        Warrants        (in months)
                                    --------      ---------     ----------------

 Series A Warrants                  $  2.00        491,500             3.0
 Series B Warrants                     2.50        963,600            24.5
                                                 ---------
                                                 1,455,100


                                       13
<PAGE>

                                  Stock Options

A summary of stock option activity for 2007 is as follows:

                                      Number of      Weighted      Aggregate
                                       Options        Average      Intrinsic
                                     Outstanding   Exercise Price    Value
                                     -----------   --------------  ---------

Outstanding, December 31, 2006          600,000       $  1.75      $ 618,000
   Granted                                   --            --
                                      ----------

Outstanding, September 30, 2007         600,000       $  1.75     $1,248,000
                                      ==========

As of September 30, 2007, the range of option prices and the weighted average
remaining contractual life is as follows:

            Exercise          Exercisable Remaining    Outstanding Life
              Price               Number of Shares        (in months)
            --------          ---------------------    ----------------

            $ 0.50                  300,000                 15.0
              3.00                  300,000                 15.0

As of September 30, 2007, there was approximately $1.7 million of total
unrecognized compensation cost related to unvested share-based compensation
arrangements that is expected to be recognized over a weighted-average period of
1.7 years.

Restricted stock grants consist of the Company's common stock and generally vest
after three years, with the exception of grants under the Non-employee Director
Stock Option Plan, which vest when granted due to the fact that they are granted
in lieu of cash payments. All restricted stock grants are cliff-vested.
Restricted stock awards are valued at the average market price of the Company's
common stock at the date of grant.

6.    Segment reporting

With the acquisition of Carnrite during the quarter, Epic has two distinct
business segments, (1) engineering consulting and (2) oil and gas production.
These operating segments were determined based on the nature of the products and
services offered. Operating segments are defined as components of an enterprise
about which separate financial information is available that is evaluated
regularly by the chief operating decision-maker in deciding how to allocate
resources and in assessing performance. The Company's chief executive officer
and chief operating officer have been identified as the chief operating decision
makers. The Company's chief operating decision makers direct the allocation of
resources to operating segments based on the profitability and cash flows of
each respective segment. The Company evaluates performance based on several
factors, of which the primary measure is business segment operating income. The
accounting policies are the same as those described in Note 1. The following


                                       14
<PAGE>

information summarizes the operating results of these two segments for the nine
months ended September 30, 2007 (RESTATED):

                                     Engineering    Oil and Gas
                                       Segment        Segment      Consolidated
                                     -----------    -----------    ------------

    Revenues                         $ 1,665,923   $     9,674     $ 1,675,597
    Operating expenses:
     General and administrative          641,676       945,339       1,587,015
     Lease operating expenses                  -       202,783         202,783
     Professional and subcontracted
      services                           504,196             -         504,196
     Occupancy, communication
      and other                           75,394             -          75,394
     Accretion expense                         -         9,212           9,212
     Impairment of oil and gas
      properties                               -     1,338,527       1,338,527
                                     -----------    -----------    ------------
        Total operating expenses       1,221,266     2,495,861       3,717,127
     Income (loss) from operations   $   444,657   $(2,486,187)    $(2,041,530)
                                     ============  ============    ============

         Total assets                $11,956,925  $  7,069,569     $19,026,494
                                     ============ ============     ============

                The following information summarizes the operating results of
                these two segments for the nine months ended September 30, 2007
                (AS REPORTED):

                                     Engineering    Oil and Gas
                                       Segment        Segment      Consolidated
                                     -----------    -----------    ------------

     Revenues                        $ 2,328,032    $    9,674     $ 2,337,706
     Operating expenses:
       General and administrative        641,676       945,339       1,587,015
       Lease operating expenses                -       202,783         202,783
       Professional and subcontracted
        services                         678,411             -         678,411
       Occupancy, communication
        and other                        112,358             -         112,358
       Depreciation, depletion
        and amortization                       -             -               -
       Accretion expense                       -         9,212           9,212
       Impairment of oil and gas
        properties                             -     1,338,527       1,338,527
                                     -----------    -----------    ------------
           Total operating expenses    1,432,445     2,495,861       3,928,306
       Income (loss) from operations $   895,587  $ (2,486,187)   $ (1,590,600)
                                     ============ =============   =============
           Total assets              $12,619,034  $  7,069,569    $ 19,688,603
                                     ============ =============   =============

7.    Subsequent events

In December 2007 Epic acquired Pearl Investment Company (formerly named Pearl
Development Company) for 1,486,240 shares of its common stock and $18,720,000 in
cash. Pearl Investment Company provides consulting services to the oil, gas and
energy industry in the areas of engineering, construction management,
operations, maintenance and oilfield project management.

On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a group of
private investors for gross proceeds of $6,609,500, or $1.50 per share. The
investors also received warrants which entitle the holders to purchase up to
4,406,334 shares of Epic's common stock. The warrants are exercisable at a price


                                       15
<PAGE>

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 also sold notes in the principal amount of $20,250,000
to a second group of private investors. The notes bear interest annually at 10%
per year. The notes are due and payable on December 5, 2012 and are secured by
liens on all of Epic's assets. The purchasers of the notes also received
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 notes 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 amount of the notes.

      The amount raised in the December 2007 was used as follows:

       Amount received from sale of common stock, notes
        and warrants                                              $ 28,394,003

      Less:
          Acquisition of Pearl Investment Company                  (18,720,000)

          Reserve for income taxes of Pearl Investment Company
            for year ended December 31, 2007                        (2,400,000)

          Payment of Pearl Investment Company bank loans            (1,504,884)

          Placement agent fees                                      (1,785,000)

          Legal, accounting and other professional fees               (125,000)
                                                               ---------------

          Remainder to be used as working capital              $     3,859,119
                                                               ===============

8.    Restatement

Subsequent to the November 15, 2007 filing of its original Quarterly Report for
the reporting period ended September 30, 2007, the Company determined that it
needed to restate the financial statements that accompanied that report. The
restatement was required because of an error made in the preparation of the
financials statements whereby two journal entries were not properly reversed in
the correct accounting period. The restatement affected the accounts receivable
and accounts payable lines on the balance sheet and the consulting fees and
operating expenses sections of the statement of operations.


                                       16
<PAGE>

The following tables summarize in a condensed format the financial statements
previously reported and restated as of September 30, 2007.

                                                     September 30, 2007
                                                 --------------------------
                                                 As Reported    As Restated
                                                 -----------    -----------

BALANCE SHEET
ASSETS
CURRENT ASSETS                                    2,506,818       1,844,709
NON CURRENT ASSETS                               17,181,785      17,181,785
                                                 -----------     -----------
      TOTAL ASSETS                               19,688,603      19,026,494
                                                 ===========     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES                               2,006,440       1,795,261
LONG TERM LIABILITIES                             1,982,213       1,982,213
                                                 -----------     -----------
     TOTAL LIABILITIES                            3,988,653       3,777,474

STOCKHOLDERS EQUITY
Common stock                                     21,318,341      21,318,341
Additional paid in capital                          331,412         331,412
Accumulated deficit                              (5,949,803)     (6,400,733)
TOTAL STOCKHOLDERS EQUITY                        15,699,950      15,249,020
                                                 -----------     -----------

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY        19,688,603      19,026,494
                                                 ===========     ===========

<TABLE>
<S>                                          <C>           <C>          <C>           <C>

                                          For the three months        For the nine months
                                           ended September 30,        ended September 30,
                                         As Reported   As Restated  As Reported   As Restated
                                         -----------   -----------  -----------   -----------

STATEMENT OF OPERATIONS
REVENUES                                  2,233,190      1,571,081    2,337,706     1,675,597
OPERATING EXPENSES
                                          1,608,470      1,397,291    3,928,306     3,717,127
                                        ------------   ------------ ------------  ------------
INCOME (LOSS) FROM OPERATIONS               624,720        173,790   (1,590,600)   (2,041,530)
OTHER INCOME (EXPENSE)                     (217,123)      (217,123)    (290,677)     (290,677)
                                        ------------   ------------ ------------  ------------
NET INCOME (LOSS)                           407,597        (43,333)  (1,881,277)   (2,332,207)
                                        ============   ============ ============  ============

INCOME (LOSS) PER COMMON SHARE - BASIC
AND DILUTED                             $      0.01    $     (0.00) $     (0.05)  $     (0.06)

WEIGHTED AVERAGE COMMON SHARES
   OUTSTANDING                           33,901,262     33,901,262   38,946,918    38,946,918

</TABLE>

                                       17
<PAGE>

                                                         For the nine months
                                                          ended September 30,
                                                      As Reported    As Restated
                                                      -----------    -----------

STATEMENT OF CASH FLOWS
Net loss                                              (1,881,277)    (2,332,207)
  Changes in operating assets and liabilities:
      Accounts receivable                               (577,176)        84,933
      Accounts payable                                    11,812       (199,367)
Net cash used in operating activities                   (211,284)      (211,284)
Net cash used in investing activities                   (280,406)      (280,406)
Net cash provided by financing activities                602,427        602,427
Net increase in cash and cash equivalents                110,737        110,737



                                       18
<PAGE>



ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and related notes,
and the other financial information included in this quarterly report. With
respect to this discussion, the terms "Epic," "Company", "we," "us," and "its"
refer to Epic Energy Resources, Inc. and our wholly-owned subsidiaries.

Forward-Looking Statements

The forward-looking statements contained in this discussion involve risks and
uncertainties. Actual results may differ materially from those discussed due to
a number of factors including Epic's limited operating history, risks associated
with oil and gas operations, intense competition and substantial regulation.

Consulting Services

In August 2007 Epic acquired the Carnrite Group LLC for 3,177,812 shares of
common stock. In connection with this acquisition, 1,673,036 additional shares
of common stock were issued to key officers of The Carnrite Group as retention
shares that will vest during the two year period ending March 28, 2009. All or
part of these shares will be returned to Epic if one or more officers of
Carnrite voluntarily terminate their employment prior to March 28, 2009. The
Carnrite Group currently employs five professionals in its offices in Houston,
Texas and serves clients in North America, Europe, the Middle East, Africa and
Asia.

In December 2007 Epic acquired Pearl Investment Company for 1,486,240 shares of
its common stock and cash of $18,720,000. Up to 3,313,760 additional shares may
be issued in the future to key employees and officers of Pearl Investment
Company subject to certain vesting requirements. Pearl Investment Company
currently employs over 200 professionals working from six offices and serves
clients in the greater Rocky Mountain Region and the Middle East.

Through its subsidiaries, the Carnrite Group and Pearl Investment Company, Epic
provides the following consulting services to the oil, gas and energy industry:

o     monitoring performance of wells and reservoirs,
o     techniques to improve well productivity and increase recoverable reserves,
o     drilling and completion of oil and gas wells,
o     reservoir and formation evaluation,
o     integration of data workflows and operational processes,
o     oilfield project management,
o     design of energy and petrochemical projects,
o     construction management,
o     commodity marketing and trading,
o     financial analysis,
o     organizational design.


                                       19
<PAGE>

Backlog represents the revenue Epic expects to realize in the future from
performing consulting work under multi-period contracts. Epic generally includes
total expected revenue in the backlog when a contract is awarded and the scope
of the services are determined. Backlog is not defined by generally accepted
accounting principles and Epic's process for determining backlog may not be
comparable to the methodology used by other companies in determining backlog.
Backlog may not be indicative of future operating results. Not all of Epic's
consulting revenue is recorded in backlog for a variety of reasons, including
the fact that some projects begin and end within a short-term period. Many
contracts do not provided for a fixed amount of work to be performed and are
subject to modification or termination by the customer. The termination or
modification of any one or more sizeable contracts or the addition of other
contracts may have a substantial immediate effect on backlog.

For long-term contracts, the amount included in backlog is limited to twelve
months. If the contract duration is indefinite, projects included in backlog are
limited to the estimated revenue within the following twelve months. Some
contracts provide maximum dollar limits, with authorization to perform work
under the contract being agreed upon on a periodic basis with the customer. In
these arrangements, only the amounts authorized are included in backlog.

As of November 30, 2007, Epic's backlog for consulting services to be provided
in the future was approximately $22.5 million. This compares to a combined
backlog of approximately $16.5 million as of November 30, 2006, all of which was
attributed to Pearl Investment Company since The Carnrite Group was not formed
until March 2007.

Epic may continue to pursue acquisitions in the future. Unsuccessful acquisition
efforts may result in significant additional expenses that would not otherwise
be incurred. Epic may not be able to integrate the operations of any acquired
business without significant difficulties, including unanticipated costs,
difficulty in retaining customers, failure to retain key employees and the
diversion of management attention. In addition, we may not realize the revenues
and cost savings that we expect to achieve or that would justify the acquisition
investment, and we may incur costs in excess of what we anticipate. These
circumstances could adversely affect our results of operations or financial
condition.

The demand for Epic's consulting services will depend on trends in oil and
natural gas prices and will be particularly sensitive to the level of
exploration, development, and production by oil and natural gas companies.
Historically, the prices for oil and gas have been volatile and are likely to
continue to be volatile. Spending on exploration and production activities will
have a significant impact on the level of Epic's consulting businesses.

Oil and Gas Exploration and Development

Epic evaluates undeveloped oil and gas prospects and may participate in drilling
activities on prospects which in the opinion of management are favorable for the
production of oil or gas. If, through its review, a geographical area indicates
geological and economic potential, Epic will attempt to acquire leases or other
interests in the area and assemble a prospect. Epic may then attempt to sell a
portion of its leasehold interests in a prospect to unrelated third parties,
thus sharing the risks and rewards of the exploration and development of the
prospect with the joint owners pursuant to an operating agreement. One or more


                                       20
<PAGE>

wells may be drilled on a prospect, and if the results indicate the presence of
sufficient oil and gas reserves, additional wells may be drilled on the
prospect.

Epic may also acquire producing oil and gas properties which have the potential
to support additional oil and gas wells.

Epic has a 100% working interest (approximately 82% net revenue interest) in 58
gas wells located on 28,600 acres in Rush County, Kansas. In January 2007 the
gas wells were shut in due to the closure of the plant which was purchasing the
gas produced from Epic's wells. Epic does not know if the plant will reopen and
is currently looking for an alternate buyer for the gas.

Epic has a 50% working interest (approximate 40% net revenue interest) in seven
shut-in gas wells located on 6,000 acres in Kay County, Oklahoma. Epic estimates
that it will cost approximately $7,000 (with Epic being responsible for its 50%
share) to rework each shut-in well and place the well back on production. Two
wells were successfully tested for commercial production following workovers in
2007. Epic plans to begin reworking the remaining shut-in wells in 2008.

In July 2007 Epic formed a joint venture, Epic Exploration and Production LLC,
with a private investment firm to acquire energy assets and oil and gas
properties. Epic will manage the operations of the joint venture. The private
investment firm is responsible for providing capital required to acquire the
assets on a project-by-project basis.

Epic will receive 20% of the net income from any asset or oil and gas property
acquired by the joint venture until the private investment firm receives 100% of
the equity contributed by the private investment firm to acquire the asset or
property. Thereafter, the net income from the asset or property will be
allocated equally between Epic and the private investment firm. As of February
29, 2008, the joint venture was negotiating to acquire working interests,
varying from 50% to 100%, in producing oil wells in Fort Bend and Bazoria
counties, Texas.

Epic  expects its wells in Oklahoma  and Kansas  will start  producing  again in
2008.

Results of Operations

During the nine months ended September 30, 2006 Epic was inactive until April
2006. Following a change in management in April 2006, Epic hired full time
management and staff.

During the nine months ended September 30, 2007 Epic had minimal revenues were
from the sale of gas from its wells in Kansas and Oklahoma. In August 2007 Epic
acquired The Carnrite Group, LLC, a company which provides energy consulting
services. The increase in Epic's revenues during the nine months ended September
30, 2007 was the direct result of the consolidation of Carnrite's operations
subsequent to August 13, 2007, the date of the acquisition.



                                       21
<PAGE>

During the nine months ended September 30, 2007 Epic's operating expenses
increased as the result of the acquisition of Carnrite and a write-down of the
Epic's oil and gas properties to their estimate value.

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 September 30, 2009.

During the nine months ended September 30, 2007, Epic's operations used $211,284
in cash. During this period working capital was provided primarily through the
cash flow generated from Carnrite, existing funds and the private placement of
Epic's common stock.

On December 5, 2007 Epic sold 4,406,334 shares of its common stock to a group of
private investors for gross proceeds of $6,609,500, or $1.50 per share. The
investors also received warrants which entitle the holders to purchase up to
4,406,334 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 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 also sold notes in the principal amount of $20,250,000
to a second group of private investors. The notes were sold at their face value
any without discount. The notes bear interest annually at 10% per year. The
notes are due and payable on December 5, 2012 and are secured by liens on all of
Epic's assets. The purchasers of the notes also received 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 notes 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 amount of the notes.

      The amounts raised in the December 2007 financing were used as follows:

       Amount received from sale of common stock, notes
        and warrants                                              $ 28,394,003

      Less:
          Acquisition of Pearl Investment Company                  (18,720,000)

          Reserve for income taxes of Pearl Investment Company
            for year ended December 31, 2007                        (2,400,000)


                                       22
<PAGE>

          Payment of Pearl Investment Company bank loans            (1,504,884)

          Placement agent fees                                      (1,785,000)

          Legal, accounting and other professional fees               (125,000)
                                                                ---------------

          Remainder to be used as working capital               $    3,859,119
                                                                ===============

Epic has filed a registration statement with the Securities and Exchange
Commission in order that the shares of common stock sold in the December 2007
financing as well as the shares which may be issued in payment of the notes or
upon the exercise of the warrants or may be resold in the public market. If
Epic's registration statement is not declared effective by the Securities and
Exchange Commission prior to April 4, 2008, Epic will be required to pay the
investors in the December 2007 financing $567,860 every 30 days until the
registration statement is declared effective.

Epic's sources and (uses) of cash during the nine months ended September 30,
2007 and 2006 were:

                                                             2007        2006
                                                             ----        ----

Cash used by operations                                   $(211,284)  $(229,349)
Investment in Epic Exploration and Development              (22,700)         --
Investment in oil and gas properties                         (1,031)         --
Cash resulting from acquisition of Carnrite                  48,227
Deposit toward acquisition of Pearl Investment Company     (300,000)         --
Borrowings, net of repayments                                78,827          --
Sale of common stock                                        523,600         440
Capital contribution                                             --     305,021
Other                                                        (4,902)         --

Epic's gas wells in Rush County, Kansas serve as collateral for a loan from the
private lender which had a principal balance of $2,877,723 as of January 31,
2008. The loan bears interest at 10% per year and is payable in equal monthly
installments of $72,000. The loan agreement provides that if the monthly net
income from the wells is less than $72,000, the deficit will be added to the
principal amount of the note. If the monthly net income from the wells is
greater than $72,000, the net income is applied to the note principal. Since the
Kansas wells are shut in, it is anticipated that $25,000 will be added to the
note principal each month until the wells return to production.

Epic requires significant working capital to operate its business. Epic must
maintain cash reserves to pay its employees and consultants prior to receiving
payment from its customers. In addition, Epic may be required to pledge
short-term assets to secure letters of credit and to pledge other assets to
collateralize its workers' compensation obligations. These collateral
requirements may increase in future periods, which would decrease amounts


                                       23
<PAGE>

available for working capital. If cash on hand or borrowings from credit lines
cannot satisfy Epic's working capital requirements, Epic could be required to
explore alternative sources of financing including the sale of additional equity
or debt securities, which could result in dilution to existing shareholders.

As a result of the acquisition of The Carnrite Group and the Pearl Investment
Company, Epic believes that cash provided by its operations will satisfy its
future capital requirements, including principal and interest payments required
by the terms of the note secured by Epic's Kansas gas wells and the notes sold
in December 2007.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations
are based on our financial statements, which have been prepared in accordance
with U.S. generally accepted accounting principles. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities and expenses and related disclosure of
contingent assets and liabilities. We review our estimates on an on going basis.
We base our estimates on historical experience and on various other assumptions
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities. Actual results may differ from these estimates under different
assumptions or conditions. We believe the following accounting policies to be
critical to the judgments and estimates used in the preparation of our financial
statements:

Revenue Recognition. Oil and gas production sales and consulting fees are
recognized as revenue in accordance with Securities and Exchange Commission
Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition," when persuasive
evidence of an arrangement exists, fees are fixed or determinable, title has
passed (generally upon transmission of oil and gas production and completion of
engineering consulting services performed), and collection is reasonably
assured. We have no post-delivery obligations nor do our sales contain multiple
elements.

Accounts Receivable. Accounts receivable represent amounts due from customers
for services performed. We extend various terms to our customers, with payment
terms generally 30 days, depending on the customer and country, and we do not
require collateral. We periodically assess the collectibility of our
receivables, as necessary, based on various considerations including customer
credit history, payment patterns, and aging of accounts. Once management
determines an account receivable is not collectible, the account is written off.
We have not experienced collectibility problems to date. If the collection
history or aging of accounts receivable deteriorates, we may have to record a
charge to operations to establish an allowance for doubtful accounts.

Stock-Based Compensation. We adopted FAS 123R on January 1, 2006. We recognize
stock-based compensation cost on a straight-line basis over the requisite
service period.


                                       24
<PAGE>


Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board ("FASB") published
Statement of Financial Accounting Standards No.157, "Fair Value Measurements"
(FAS 157). FAS 157defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles and expands disclosures about
fair value measurements. FAS 157 applies under other accounting pronouncements
that require or permit fair value measurements and accordingly, does not require
any new fair value measurements. FAS 157 is effective for fiscal years beginning
after November 15, 2007. The company does not believe the adoption of FAS 157
will have a material impact on its financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109"("FAS 109"), which clarifies the accounting for uncertainty in income taxes
recognized in an enterprise's financial statements in accordance with FAS No.
109, "Accounting for Income Taxes." FIN 48 prescribes a recognition threshold
and measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return.
This Interpretation also provides guidance on de-recognition, classification,
interest and penalties, accounting in interim periods, disclosure, and
transition. This Interpretation was effective for fiscal years beginning after
December 15, 2006 so it was effective for the Company in the first quarter of
fiscal year 2007, which began January 1, 2007. The adoption of FIN 48 did not
have a material impact on its financial statements.

In September 2006, the SEC released Staff Accounting Bulletin No. 108,
"Considering the Effects of Prior Year Misstatements When Quantifying
Misstatements in Current Year Financial Statement" ("SAB 108"), which provides
guidance on how companies should quantify financial statement misstatements. SAB
108 requires that the effect of misstatements that were not corrected at the end
of the prior year be considered in quantifying misstatements in the current-year
financial statements. Two techniques were identified as being used by companies
in practice to accumulate and quantify misstatements -- the "rollover" approach
and the "iron curtain" approach. The rollover approach quantifies a misstatement
based on the amount of the misstatement originating in the current-year income
statement. Thus, this approach ignores the effects of correcting the portion of
the current-year balance sheet misstatement that originated in prior years. The
iron curtain approach quantifies a misstatement based on the effects of
correcting the cumulative misstatement existing in the balance sheet at the end
of the current year, irrespective of the misstatement's year(s) of origination.
SAB 108 permits companies to adjust for the cumulative effect of misstatements
relating to prior years in the carrying amount of assets and liabilities as of
the beginning of the current fiscal year, with an offsetting adjustment to the
opening balance of retained earnings in the year of adoption.

In February 2007, the Financial Accounting Standards Board (the "FASB") issued
FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities -- Including an Amendment of FASB Statement No. 115 ("SFAS 159").
This standard permits an entity to choose to measure many financial instruments
and certain other items at fair value. Most of the provisions in SFAS 159 are
elective; however, the amendment to FASB Statement No. 115, Accounting for
Certain Investments in Debt and Equity Securities, applies to all entities with


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available-for-sale and trading securities. The FASB's stated objective in
issuing this standard is as follows: "to improve financial reporting by
providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without
having to apply complex hedge accounting provisions."

The fair value option established by SFAS 159 permits all entities to choose to
measure eligible items at fair value at specified election dates. A business
entity will report unrealized gains and losses on items for which the fair value
option has been elected in earnings (or another performance indicator if the
business entity does not report earnings) at each subsequent reporting date. The
fair value option: (i) may be applied instrument by instrument, with a few
exceptions, such as investments otherwise accounted for by the equity method;
(ii) is irrevocable (unless a new election date occurs); and (iii) is applied
only to instruments and not to portions of instruments.

SFAS 159 is effective as of the beginning of an entity's first fiscal year that
begins after November 15, 2007. Early adoption is permitted as of the beginning
of the previous fiscal year provided that the entity makes that choice in the
first 120 days of that fiscal year and also elects to apply the provisions of
SFAS 157. The Company is currently assessing the impact of SFAS 159 on its
financial statements.

ITEM 3.  CONTROLS AND PROCEDURES

Rex P. Doyle, Epic's Chief Executive Officer and, prior to February 11, 2008,
Epic's Principal 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. At the time Mr. Doyle concluded that Epic's disclosure controls and
procedures were effective to ensure that information required to be disclosed by
Epic in reports that it files or submits under the Exchange Act, are recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms.

Subsequent to the filing of its 10-QSB report for the period ended September 30,
2007, it was determined that the adequacy of Epic's disclosure controls and
procedures were deficient with respect to the application of generally accepted
accounting principles ("GAAP") related to the accrual for revenue and expenses.
The error in Epic's reporting of revenue and expense, which was discovered after
the filing of the 10-QSB report for the quarter ended September 30, 2007,
resulted in the restatement of Epic's financial statements for the quarter ended
September 30, 2007.

Management had previously concluded that Epic's disclosure controls and
procedures were effective as of September 30, 2007 and reported that there was
no change in its internal control over financial reporting that occurred during
the quarter ended September 30, 2007 that materially affected, or was reasonably
likely to materially affect, Epic's internal controls over financial reporting.
However, upon discovery of the error in the application of GAAP, management
concluded that a material weakness existed in Epic's internal control over
financial reporting with respect to the application of GAAP to its financial
statements and, as a result, Epic's disclosure controls and procedures were not
effective as of September 30, 2007.


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In response to the identified deficiency, Epic has taken remedial steps to
improve its control processes regarding the application of GAAP and the
preparation and review of its consolidated financial statements. In February
2008 Epic hired a full time Chief Financial Officer and Controller. Epic's Audit
Committee also implemented a review process for its quarterly reports. All of
these changes were designed to enhance Epic's existing disclosure controls and
procedures. Other than the changes discussed above, there have been no changes
made in Epic's internal control over financial reporting that materially
affected, or are reasonably likely to materially affect, Epic's internal control
over financial reporting.

                                     PART II
                                OTHER INFORMATION

ITEM 5. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Note 5 to the financial statements included as part of this report lists the
shares of the Company's common stock sold during the three months ended
September 30, 2007. The Company 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

(a) Exhibits

 Number    Exhibit

   31      Rule 13a-14(a) Certifications

   32      Section 1350 Certifications




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                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized on March 5, 2008.

                                        EPIC ENERGY RESOURCES, INC.



                                        By:   /s/ Rex P. Doyle
                                              ----------------------------
                                              Rex P. Doyle, Principal Executive
                                              Officer



                                        By:  /s/ Michael Kinney
                                             -----------------------------
                                             Michael Kinney, Principal Financial
                                             and Accounting Officer









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