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

                                   FORM 10-QSB

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

                For the quarterly period ended September 30, 2006

|_|  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

                For the transition period from _______ to _______

                            Commission File #0-30503

                          PANGEA PETROLEUM CORPORATION
        (Exact name of small business issuer as specified in its charter)

            COLORADO                                       76-0635938
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

                9801 Westheimer, Suite 302, Houston, Texas 77042
                    (Address of principal executive offices)

                                 (713) 706-6350
                           (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                                                  Yes |_| No |X|

State the number of shares outstanding of each of the issuer's classes of common
stock as of the last practicable date:

271,948,698 Shares of $0.001 par value Common Stock outstanding as of November
10, 2006

Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

<PAGE>

                          PANGEA PETROLEUM CORPORATION
                                   FORM 10-QSB

                                Table of Contents

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

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

Item 3 - Controls and Procedures

PART II - OTHER INFORMATION

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

Item 6 - Exhibits

SIGNATURES


                                        2

<PAGE>

                            FORWARD LOOKING STATEMENT

The following discussion should be read in conjunction with our unaudited
consolidated interim financial statements and related notes thereto included in
this quarterly report and in our audited consolidated financial statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") contained in our Form 10-KSB for the year ended December 31,
2005.

We are including the following cautionary statement in this Form 10-QSB to make
applicable and take advantage of the safe harbor provision of the Private
Securities Litigation Reform Act of 1995 for any forward-looking statements made
by, or on behalf of, the Company. Forward-looking statements include statements
concerning plans, objectives, goals, strategies, expectations, future events or
performance and underlying assumptions and other statements, which are other
than statements of historical facts. The statements contained herein and other
information contained in this report may be based, in part, on management's
estimates, projections, plans and judgments. These forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from historical results or those anticipated. In this
report, the words "anticipates", "believes", "expects", "intends", "future",
"plans", "targets" and similar expressions identify forward-looking statements.
Readers are cautioned not to place undue reliance on the forward-looking
statements contained herein. We undertake no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that may arise
after the date hereof. Our expectations, beliefs and projections are expressed
in good faith and are believed to have a reasonable basis, including without
limitations, management's examination of historical operating trends, data
contained in our records and other data available from third parties, but there
can be no assurance that management's expectations, beliefs or projections will
result or be achieved or accomplished. In addition to other factors and matters
discussed elsewhere herein, the following are important factors that could cause
actual results to differ materially from those discussed in the forward-looking
statements: our dependence on limited cash resources, dependence on certain key
personnel within the Company, and the ability to raise additional capital; our
ability to secure leases for our oil and gas projects; our ability to obtain
acceptable forms and amounts of financing; the demand for, and price level of,
our products and services; competitive factors; the ability to mitigate
concentration of business in a small number of customers; the evolving industry
and technology standards; the ability to protect proprietary technology; the
dependence on key personnel; and the effect of business interruption due to
political unrest; oil and gas prices; and our ability to efficiently manage our
operations. In addition, our ability to generate long-term value for the common
stockholder is dependent upon the acquisition of profitable energy prospects.
There are many companies participating in the oil and gas industry, many with
greater resources. Greater competition for profitable operations can increase
prices and make it more difficult to acquire assets at reasonable multiples of
cash flow. We believe that we will be able to compete in this environment and
will be able to find attractive investments; however, it is not possible to
predict competition or the effect this will have on operations. Operations are
also significantly affected by factors, which are outside our control, including
the prices of oil and natural gas, environmental and governmental regulations.
Accordingly, actual results may differ, possibly materially, from the
predictions contained herein.


                                       3

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                          PANGEA PETROLEUM CORPORATION

                                TABLE OF CONTENTS

                                   ----------

                                                                            Page
                                                                            ----
Unaudited Condensed Financial Statements:

  Unaudited Balance Sheets as of September 30, 2006 and December 31, 2005    F-2

  Unaudited Statements of Operations for the three months and nine months
    ended September 30, 2006 and 2005                                        F-3

  Unaudited Statement of Stockholders' Equity for the nine months ended
    September 30, 2006                                                       F-4

  Unaudited Condensed Statements of Cash Flows for the nine months ended
    September 30, 2006 and 2005                                              F-5

Notes to Unaudited Condensed Financial Statements                            F-6


                                       F-1

<PAGE>

                          PANGEA PETROLEUM CORPORATION

                                 BALANCE SHEETS

                                   (unaudited)

<TABLE>
<CAPTION>
                                                                    September 30,   December 31,
                                                                         2006           2005
                                                                    -------------   ------------
<S>                                                                 <C>             <C>
ASSETS
Current assets:
  Cash                                                              $     71,997    $     56,377
  Accounts receivable                                                      7,573           2,136
  Payroll taxes refundable                                                 9,879           9,879
  Prepaid expenses                                                            --           6,500
                                                                    ------------    ------------
    Total current assets                                                  89,449          74,892
                                                                    ------------    ------------
Property and equipment:
  Oil and gas properties (successful efforts method)                     530,083         242,086
  Other property and equipment                                            18,174          18,174
  Less accumulated depletion, depreciation and amortization              (79,345)        (63,368)
                                                                    ------------    ------------
    Net property and eqruipment                                          468,912         196,892
                                                                    ------------    ------------
      Total assets                                                  $    558,361    $    271,784
                                                                    ============    ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
  Accounts payable and accrued liabilities                          $         --    $     40,309
  Accrued interest payable to related parties                             47,394          91,911
  Notes payable to related parties                                            --         430,053
                                                                    ------------    ------------
    Total current liabilities                                             47,394         562,273
Notes payable to related parties                                         528,041              --
Obligation for dismantlement and disposal activities                       7,943           7,943
                                                                    ------------    ------------
    Total liabilities                                                    583,378         570,216
                                                                    ------------    ------------
Commitments and contingencies                                                 --              --
Stockholders' deficit:
  Preferred stock: $.001 par value; 10,000,000 shares authorized              --              --
    Common stock: $.001 par value; 500,000,000 shares authorized;
    268,275,806 and 222,676,886 shares issued and outstanding at
    September 30, 2006 and December 31, 2005, respectively               268,275         222,677
  Additional paid-in capital                                          17,992,948      17,257,178
  Deferred compensation                                                   (8,498)             --
  Accumulated deficit                                                (18,277,742)    (17,778,287)
                                                                    ------------    ------------
    Total stockholders' deficit                                          (25,017)       (298,432)
                                                                    ------------    ------------
      Total liabilities and stockholders' deficit                   $    558,361    $    271,784
                                                                    ============    ============
</TABLE>

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


                                       F-2

<PAGE>

                          PANGEA PETROLEUM CORPORATION

                            STATEMENTS OF OPERATIONS

                                   (unaudited)

<TABLE>
<CAPTION>
                                                  Three Months Ended             Nine Months Ended
                                                     September 30,                 September 30,
                                              ------------   ------------   ---------------------------
                                                  2006           2005           2006           2005
                                              ------------   ------------   ------------   ------------
<S>                                           <C>            <C>            <C>            <C>
Revenue                                       $     14,978   $      9,819   $     42,307   $     41,658
                                              ------------   ------------   ------------   ------------
Costs and expenses:
  Lease operating expenses                           4,378          4,044         17,743          7,095
  Production taxes                                     747            513          1,420          3,810
  Salaries, wages and other compensation            98,568        100,100        410,369        116,180
  Other selling, general and administrative         23,475         42,785         64,812         87,530
  Depreciation, depletion and amortization           3,594         (3,858)        16,024         22,189
  Dry hole costs                                        --             --             --             --
                                              ------------   ------------   ------------   ------------
    Total costs and expenses                       130,762        143,584        509,368        258,804
                                              ------------   ------------   ------------   ------------
Loss from operations                              (115,784)      (133,765)      (467,061)      (217,146)
                                              ------------   ------------   ------------   ------------
Other income and (expenses):
  Other income                                        -                -          15,000          8,000
  Interest expense                                 (15,971)       (11,827)       (47,394)       (36,429)
                                              ------------   ------------   ------------   ------------
    Total other income and (expenses), net         (15,971)       (11,827)       (32,394)       (28,429)
                                              ------------   ------------   ------------   ------------
      Net loss                                $   (131,755)  $   (145,592)  $   (499,455)  $   (245,575)
                                              ============   ============   ============   ============
Basic and diluted net loss per common share   $      (0.00)  $      (0.00)  $      (0.00)  $      (0.00)
                                              ============   ============   ============   ============
Weighted average common shares                 276,898,021    193,569,248    267,863,234    185,014,801
                                              ============   ============   ============   ============
</TABLE>

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


                                       F-3

<PAGE>

                          PANGEA PETROLEUM CORPORATION

                       STATEMENT OF STOCKHOLDERS' DEFICIT

                  For the nine months ended September 30, 2006

                                   (unaudited)

<TABLE>
<CAPTION>
                                         Common Stock         Additional
                                    ----------------------     Paid-In      Accumulated     Deferred     Stockholders'
                                       Shares      Amount      Capital        Deficit     Compensation      Deficit
                                    -----------   --------   -----------   ------------   ------------   -------------
<S>                                 <C>           <C>        <C>           <C>              <C>            <C>
Balance at December 31, 2005        222,676,886   $222,677   $17,257,178   $(17,778,287)    $    --        $(298,432)
Common Stock issued for cash         13,700,000     13,700       171,300             --          --          185,000
Common stock issued for exercise
  of warrants                         2,296,434      2,296        (2,296)            --          --               --
Common stock issued to compensate
  employees and consultants          21,256,484     21,256       405,112             --      (8,498)         417,870
Common stock issued for
  Asset Purchase Agreement           20,000,000     20,000       150,000             --                      170,000
Cancellation of shares under
Securities Purchase Agreement
Dated December 31, 2001             (11,653,998)   (11,654)       11,654                                          --
Net loss                                     --         --            --       (499,455)         --         (499,455)
                                    -----------   --------   -----------   ------------     -------        ---------
Balance at September 30, 2006       268,275,806   $268,275   $17,992,948   $(18,277,742)    $(8,498)       $ (25,017)
                                    ===========   ========   ===========   ============     =======        =========
</TABLE>

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


                                       F-4

<PAGE>

                          PANGEA PETROLEUM CORPORATION

            UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

              For the nine months ended September 30, 2006 and 2005

                                   (unaudited)

                                                      2006        2005
                                                   ---------   ---------
Cash flows from operating activities:
  Net loss                                         $(499,455)  $(245,575)
  Adjustments to reconcile net loss to net cash
    used in operating activities                     448,072     217,256
                                                   ---------   ---------
      Net cash used in operating activities          (51,383)    (28,319)
                                                   ---------   ---------
Cash flows from investing activities:
  Capital and exploratory expenditures              (117,997)    (22,052)
                                                   ---------   ---------
      Net cash used in investing activities         (117,997)    (22,052)
                                                   ---------   ---------
Cash flows from financing activities:
  Proceeds from the sale of common stock             185,000     100,404
                                                   ---------   ---------
      Net cash provided by financing activities      185,000     100,404
                                                   ---------   ---------
Net increase in cash and cash equivalents             15,620      50,033
Cash and cash equivalents at beginning of period      56,377      54,457
                                                   ---------   ---------
Cash and cash equivalents at end of period         $  71,997   $ 104,490
                                                   =========   =========
Supplemental disclosure
Income taxes paid                                  $      --   $      --
Interest paid                                             --          --
Non-cash investing and financing activities -
      Oil and gas properties purchased for stock   $ 170,000          --

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


                                       F-5

<PAGE>

                          PANGEA PETROLEUM CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

                                   ----------

1.    Summary of Accounting Policies

      The accompanying unaudited interim financial statements of Pangea
      Petroleum Corporation, a Colorado corporation have been prepared in
      accordance with accounting principles generally accepted in the United
      States of America and the rules of the Securities and Exchange Commission
      and should be read in conjunction with the audited financial statements
      and notes thereto contained in the Pangea's latest Annual Report filed
      with the SEC on Form 10-KSB. In the opinion of management, all
      adjustments, consisting of normal recurring adjustments, necessary for a
      fair presentation of financial position and the results of operations for
      the interim periods presented have been reflected herein. The results of
      operations for interim periods are not necessarily indicative of the
      results to be expected for the full year. Notes to the financial
      statements which would substantially duplicate the disclosure contained in
      the audited financial statements for the most recent fiscal year, 2005, as
      reported in Form 10-KSB, have been omitted.

2.    Going Concern Considerations

      Since its inception, Pangea has suffered recurring losses from operations
      and has been dependent on existing stockholders and new investors to
      provide the cash resources to sustain its operations. During the nine
      months ended September 30, 2006 and 2005, Pangea reported net losses of
      $499,455 and $245,575, respectively.

      Pangea has developed a multi-step plan and has taken actions to improve
      its financial position and deal with its liquidity problems. The final
      steps of the plan are still being developed, but may include additional
      private placements of Pangea's common stock, additional oil and gas
      property acquisitions and/or exploration efforts, and efforts to raise
      additional debt financing or equity investments. There can be no assurance
      that any of the plans developed by Pangea will produce cash flows
      sufficient to ensure its long-term viability as a going concern.

      Pangea's long-term viability as a going concern is dependent on certain
      key factors, as follows:

            o     Pangea's ability to obtain adequate sources of outside
                  financing to support near term operations and to allow the
                  Company to continue forward with current strategic plans.

            o     Pangea's ability to locate, prove and produce from
                  economically viable oil and gas reserves.

            o     Pangea's ability to ultimately achieve adequate profitability
                  and cash flows to sustain continuing operations.

3.    Stockholders' Equity

      During the nine months ended September 30, 2006, Pangea engaged in various
      transactions affecting stockholders' equity, as follows:

      o     10,000,000 shares of common stock with 7,000,000 warrants were sold
            for $150,000. The warrants have an exercise price of $.015 and
            expire in five years. The relative fair value of the common stock is
            $88,313 and the relative fair vale of the warrants is $61,687.

      o     3,700,000 shares of common stock with 2,000,000 warrants were sold
            for $35,000. The warrants have an exercise price of $.01 and expire
            in five year. The relative fair value of the common stock is $22,747
            and the relative fair vale of the warrants is $12,253.

      o     2,296,434 shares of common stock was issued to three individuals who
            filed for a cashless exercise of warrants.

      o     21,256,484 shares of common stock was issued to employees and
            consultants and compensation expense of $426,368 and deferred
            compensation expense of $8,498 were recorded based on market value
            on date of issuance.


                                       F-6

<PAGE>

      o     Issued 20,000,000 shares of common stock for the purchase of a
            property - see Note 4.

      o     11,653,998 shares of common stock were cancelled pursuant to the
            terms of the December 31, 2001 Stock Purchase Agreement.

4.    Asset Purchase Agreement

      On January 1, 2006, Pangea purchased working interests in certain oil and
      gas leases in Texas and New York for 20,000,000 shares of common stock
      valued at $170,000 based on market value on the purchase date. Additional
      consideration shall be provided in the form of 5,000,000 warrants to
      purchase common Stock at a price of $.015 per share based on the
      properties attaining certain monthly net revenues.

5.    Related Party Transactions

      Pangea owes various related party notes payable at September 30, 2006
      totaling $528,041 and related accrued interest of $47,394. Pangea replaced
      these notes payable including accrued interest through December 31, 2005
      on January 1, 2006 with new notes at 12% due December 31, 2007.

6.    Outside Director Compensation

      On July 1, 2005, Pangea awarded compensation for outside directors of
      100,000 common shares per quarter and 100,000 common shares per meeting.
      Pangea also awarded compensation for non board member officers who
      participate in the board meetings of 100,000 common shares per meeting.
      During the nine months ended September 30, 2006, Pangea issued 300,000
      shares for such services valued at $5,770.

7.    Subsequent Event

      During October 2006, Pangea issued:

            o     2,252,892 shares of common stock with a fair value of $36,104
                  to two officers for services.

            o     1,200,000 shares of common stock with a fair value $18,000 to
                  a consultant for services.


                                       F-7

<PAGE>

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

GENERAL

Pangea Petroleum Corporation ("Pangea" or "Company"), a Colorado corporation,
was organized on March 11, 1997 as Zip Top, Inc. On December 11, 1998, we
changed our name to Pangea Petroleum Corporation. Our offices are located at
9801 Westheimer, Suite 302, Houston, Texas 77042. Our website is
www.pangeapetroleum.com.

Pangea is a publicly traded company listed on the OTC Electronic Bulletin Board
under the symbol "PAPO". We are an independent energy company focused on the
exploration and development of oil and natural gas reserves, whose core business
is directed to the development of oil and gas prospects in proven onshore
production areas. Pangea is pursuing a development program designed to achieve
profitability by distributing risk across multiple oil and gas projects. Pangea
diversifies its risk by carefully identifying prospects that fit within strict
parameters and by taking a minority working interest in each project. We devote
essentially all of our resources to development of revenue producing activities
by keeping overhead at a minimum level through the retention of carefully
selected consultants, contractors and service companies.

Pangea is working to create shareholder value by using capital and proven
technology to exploit energy prospects that are of minor interest to larger
companies due to their size and location. We invest in projects at different
levels of participation, generally as a minority owner, such that daily
operating responsibility is in the hands of experienced, high quality partners
and contractors. Producing properties may be resold as appropriate to establish
and maintain optimum asset value.

Since our inception, we have recurring losses from operations and have been
dependent on existing stockholders and new investors to provide the cash
resources to sustain its operations. During the nine months ended September 30,
2006, we reported a loss of $499,455 while a loss of $245,575 was reported for
the nine months ended September 30, 2005.

Our long-term viability as a going concern is dependent on certain key factors,
as follows:

      o     Our ability to continue to obtain sources of outside financing to
            allow the Company to continue to make strategic investments in new
            oil and gas well prospects.

      o     Our ability to locate attractive development prospects, and
            coordinate with timely funding that will allow the Company to
            continue to increase oil and gas reserves and production.

      o     Our ability to increase profitability and sustain a cash flow level
            that will ensure support for continuing operations.

RESULTS OF OPERATIONS

During the third quarter of 2006, we reported $14,978 in revenue. This revenue
is from the interest in eight producing wells.

Our prospect in White County, Illinois, which encompasses approximately 880
acres, commenced drilling in April 2006. The primary target was the Warsaw sand
at 4200' which was encountered as expected, completed and placed on production
in early August 2006 at the rate of 25 BOPD. After the first month the well has
pumped at an average rate of 14 BOPD. Pangea has a 2.25% working interest and
1.8% net interest in the project. Additional drilling locations are present on
the acreage and will be evaluated for development as production from the first
well proceeds.

The planned Frio well in Wharton County, Texas was drilled in September 2006 to
a total depth of 5253' to test several amplitude anomalies identified in 3D
seismic survey data. The prospect is in an area with extensive Frio production
and discovered several potential intervals that were tested and judged to be
non-commercial. The well was plugged and abandoned. Pangea had a 3% drilling
interest and a 2.25% working interest in the prospect.


                                       4

<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of the financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with generally accepted accounting principles in the United States. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenue and
expenses, and related disclosure of contingent assets and liabilities. On an
ongoing basis, we evaluate estimates. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. These estimates and assumptions provide a basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions, and these differences may
be material.

We believe the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its consolidated
financial statements.

OIL AND GAS PRODUCING ACTIVITIES

Pangea follows the "successful efforts" method of accounting for its oil and gas
properties. Under this method of accounting, all property acquisition costs
(cost to acquire mineral interests in oil and gas properties) and costs (to
drill and equip) of exploratory and development wells are capitalized when
incurred, pending determination of whether the well has found proved reserves.
If an exploratory well has not found proved reserves in commercial quantities,
the costs associated with the well are charged to expense. The costs of
development wells are capitalized whether productive or nonproductive.
Geological and geophysical costs and the costs of carrying and retaining
undeveloped properties are expensed as incurred. Management estimates the future
liability for plugging and abandonment of the related wells. Accordingly, a net
cost of $7,943 has been recorded for plugging and abandonment.

Unproved oil and gas properties that are individually significant are
periodically assessed for impairment of value, and a loss is recognized at the
time of impairment by providing an impairment allowance. Other unproved
properties are amortized based on the average holding period. Capitalized costs
of producing oil and gas properties after considering estimated dismantlement
and abandonment costs and estimated salvage values are depreciated and depleted
by the unit-of-production method. On the sale or retirement of a complete unit
of a proved property, the cost and related accumulated depreciation, depletion,
and amortization are eliminated from the property accounts, and the resultant
gain or loss is recognized. On the retirement or sale of a partial unit of
proved property, the cost is charged to accumulated depreciation, depletion, and
amortization with a resulting gain or loss recognized in the statement of
operations.

On the sale of an entire interest in an unproved property for cash or cash
equivalent, gain or loss on the sale is recognized, taking into consideration
the amount of any recorded impairment if the property had been assessed
individually. If a partial interest in an unproved property is sold, the amount
received is treated as a reduction of the cost of the interest retained.

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2006 TO THREE MONTHS ENDED
SEPTEMBER 30, 2005.

The net loss of $131,755 for the three months ended September 30, 2006 decreased
by $13,837 from the net loss of $145,592 for the three months ended September
30, 2005. The reduction results from a 50% increase in revenue and a 70%
decrease in administrative expense partially offset by an increase in stock
based compensation. The increase in stock based compensation is the result of
recent changes in SEC rules which require valuation of stock as of the date
issued.

Pangea generated revenue from the participation in ongoing oil and gas wells in
the amount of $14,978 for the three months ended September 30, 2006, compared to
$9,819 in revenue for the three months ended September 30, 2005. This revenue
increase resulted from production during the quarter due to the addition of
three new wells during the first nine months of 2006. Total assets increased to
$558,361 at September 30, 2006 compared to $289,601 at September 30, 2005. This
increase is primarily reflected in oil and gas properties (successful efforts
method), which increased to $530,083 at September 30, 2006 compared to $201,256
at September 30, 2005.

Total liabilities at September 30, 2006 are $583,378 compared to $539,476 at
September 30, 2005. The increase in liabilities is primarily due to an increase
in accrued liabilities related to accrued interest on notes payable.


                                       5

<PAGE>

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2006 TO NINE MONTHS ENDED
SEPTEMBER 30, 2005

The net loss of $499,455 for the nine months ended September 30, 2006 increased
by $253,880 from the net loss of $245,575 for the nine months ended September
30, 2005. The increase results entirely from the increase in stock based
compensation in 2006. The first six months of 2005 reflected the company
management's voluntary suspension of salary payments, which were reinstated
during the third quarter 2005 and have continued monthly since that time.

We generated revenue of $42,307 for the nine months ended September 30, 2006
compared $41,658 in the nine months ended September 30, 2005. This increase in
revenue reflects the participation in ongoing oil and gas wells. Total assets
increased to $558,361 at September 30, 2006 compared to $289,601 at September
30, 2005. This primarily reflects the increased value of oil and gas properties
to $530,083 at September 30, 2006 from $201,256 at September 30, 2005, as well
as an increase in cash to $104,490 at September 30, 2006 compared to $56,377 at
September 30, 2005.

LIQUIDITY AND CAPITAL RESOURCES

Our operating activities used cash in the amount of $51,383 for the quarter
ended September 30, 2006 related primarily to professional fees and expenses on
producing wells. For the nine months ended September 30, 2006, we were not able
to generate positive cash flow from operations. However, we are generating
revenue from eight wells. We utilized cash from financing activities to fund
investing activities in 2006. The net cash from financing activities increased
to $185,000 at September 30, 2006 from $100,404 at September 30, 2005. We intend
to continue investing in additional oil and gas projects but will need
additional working capital to participate fully at the levels we intend. We
expect to raise working capital through private placements, debt financing or
equity investment. There can be no assurance that any of the plans developed
will produce cash flows sufficient to ensure its long-term viability.

RELATED PARTY TRANSACTIONS

Except as described below, none of the following persons has any direct or
indirect material interest in any transaction to which we were or are a party
during the past two years, or in any proposed transaction to which we propose to
be a party:

(A) any of our directors or executive officers;

(B) any nominee for election as one of our directors;

(C) any person who is known by us to beneficially own, directly or indirectly,
shares carrying more than 5% of the voting rights attached to our common stock;
or

(D) any member of the immediate family (including spouse, parents, children,
siblings and in-laws) of any of the foregoing persons named in paragraph (A),
(B) or (C) above.

Pangea has various related party notes payable at September 30, 2006 totaling
$528,041 and related accrued interest of $47,394. On January 1, 2006, we issued
replacement notes payable with a 12% interest rate due December 31, 2007.

OUTLOOK

We have identified additional prospects scheduled for drilling in 2006 in
Henderson County, Texas, and Colorado County, Texas. In addition, we are
monitoring additional activity in Henderson County, Wharton County, Fort Bend
County and De Witt County, Texas and anticipate several prospects to be ready
for drilling in Illinois and New York in 2007. We are also in the process of
evaluating several additional prospects for inclusion in the 2007 program.

Pangea has a 1.5% working interest in Fort Bend County, Texas, which is a 421
acre project currently producing approximately 7,500 barrels of oil per month
from fifteen wells, on five leases, in the Miocene and Frio sands. We are
negotiating with the operator to begin receiving revenue from the project during
the fourth quarter 2006. We purchased the interest in the first quarter 2006 but
have not received revenue while new development on the lease properties was
being funded by the operator.


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<PAGE>

Pangea's 2.5% working interest in Stueben County, New York, which covers
approximately 50,000 acres, has completed shooting twenty-two square miles of
3-D seismic. The data is being processed and drilling prospects are being
examined. Thus far there are two well defined drilling prospects in the Trenton
Black River and two leads identified in the Oriskany and Onandaga Reef sands.
Plans are being made to initiate drilling in 2007.

Pangea has taken an interest in a Geneva Reef project covering approximately
3600 acres in Clay, Effingham, Shelby, Fayette, and Cumberland Counties in
Illinois. Analysis of 2D seismic in the area indicates that there are at least
six geologic features that have the potential to offset successful Geneva Reef
production in the area. The next step is to run 3D seismic in the areas of
interest and confirm the existence of the reef structure. It is anticipated that
at least half of the 2D prospects will have a drillable reef and that the
identified reefs will have approximately 3 wells each. Typical total initial
reef production has been between 500 and 1000 BOPD on the successful 3D finds.
Pangea has a 3.0% working interest and a 2.4% net interest in the project. Bids
for the seismic work will be awarded in the fourth quarter 2006.

Henderson County, Texas is an 11500' test in the Rodessa and Pettit with a
secondary objective in the Upper Travis Peak. The first well has the potential
for an additional well in the fault trap and, if successful, will lead to
drilling in four additional analogous fault blocks on the leased acreage. Pangea
has a 2% working interest and 1.54% net interest in the first well. It is
currently expected that the drilling will proceed near the end of the fourth
quarter of 2006.

Colorado County, Texas is a 4750' test of Frio amplitude anomalies identified in
3D seismic survey data. The prospect is in an area with extensive Frio
production and offsets the company's recent Frio well placed on production
earlier this year. The well also has the potential for Miocene. The primary
objective covers an estimated 400 acres and, if successful, will lead to five to
six additional drilling locations. Pangea has a 2.0% working interest and a 1.5%
net interest in the prospect, which is expected to be drilled in the fourth
quarter of 2006.

De Witt County, Texas is a 4800' test of several stacked Yegua objectives
identified by 3D seismic data. The prospect is on trend with existing Yegua
production and there is considerable shallow Frio and Miocene production that
appears in the area. Two recent 3D wells to the south back up the seismic
analysis on the prospect and if successful, the lease could provide a follow-up
location. Pangea has committed to a 6.67% working interest and a 5% net interest
in the prospect. It is expected that rig availability will allow this well to be
drilled in early 2007.

Pangea is actively reviewing additional prospects in Texas, Louisiana, Illinois
and New York to add new wells to the prospect list. We are continuing our
strategy of evaluating primarily shallow, onshore oil and gas projects that
avoid investing in "wildcat" or exploratory wells. Focus remains on investing in
development well prospects that are supported by seismic data, proven production
from the surrounding area and good information from adjacent wells.
Additionally, Pangea will continue to diversify our risk by taking a minority
working interest in the prospects such that we are not dependent on any one
project or highly impacted by an unsuccessful well. The ability to invest
further will be heavily dependent on securing additional capital from investors
or debt financing. There is no assurance that additional equity or debt
financing will be available on terms acceptable to Management.

ITEM 3. CONTROLS AND PROCEDURES.

Charles B. Pollock, our Chief Executive Officer, and Scott Duncan, our Chief
Financial Officer, have concluded that our disclosure controls and procedures
are not effective. They have evaluated these controls and procedures as of the
end of the period covered by this report on Form 10-QSB. In connection with the
completion of our review of the financial statements of Pangea for the three
months ended September 30, 2006, our auditors identified a number of adjustments
which indicate deficiencies in our internal controls related to equity
transactions, non-cash compensation, and amortization of oil and gas properties.
Pangea will take appropriate steps, including training in these areas, to reduce
the need for such adjustments. Other than changes to our procedures as noted
above, there were no changes in our internal controls that have materially
effected or reasonably likely to materially effect the internal control of our
financial reporting.


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<PAGE>

                           PART II - OTHER INFORMATION

Pursuant to the Instructions on Part II of the Form 10-QSB, Items 1, 3, 4, and 5
are omitted.

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

During our quarter ended September 30, 2006, we completed the following
transactions in reliance upon exemptions from registration under the Securities
Act of 1933, as amended (the "Act") as provided in Section 4(2) thereof. Each
certificate issued for unregistered securities contained a legend stating that
the securities have not been registered under the Act and setting forth the
restrictions on the transferability and the sale of the securities. None of the
transactions involved a public offering. We believe that each person had
knowledge and experience in financial and business matters, which allowed them
to evaluate the merits and risks of our securities. We believe that each person
was knowledgeable about our operations and financial condition.

During the three months ended September 30, 2006, Pangea issued a total of
5,134,694 shares of common stock to employees and consultants and 100,000 shares
for director services and recognized compensation expense of $106,550.

ITEM 6 EXHIBITS.

      Exhibit 31.1 - Certification of Chief Executive Officer of Pangea
Petroleum Corporation required by Rule 13a - 14(1) or Rule 15d - 14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

      Exhibit 31.2 - Certification of Chief Financial Officer of Pangea
Petroleum Corporation required by Rule 13a - 14(1) or Rule 15d - 14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

      Exhibit 32.1 -- Certification of Chief Executive Officer of Pangea
Petroleum Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
and Section 1350 of 18 U.S.C. 63.

      Exhibit 32.2 -- Certification of Chief Financial Officer of Pangea
Petroleum Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
and Section 1350 of 18 U.S.C. 63.


                                       8

<PAGE>

SIGNATURES

      Pursuant to the requirements 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.

PANGEA PETROLEUM CORPORATION


By: /s/ Charles B.  Pollock             Date: November 14, 2006
    ---------------------------------
    Charles B. Pollock,
    Chairman of the Board and
    Chief Executive Officer


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