**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 March 31, 2007**





o**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 o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).




Yes
o
      No x




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




296,981,990
      Shares of $0.001 par value Common Stock outstanding as of May 11,
      2007





Transitional
      Small Business Disclosure Format (check one): Yes o No x









**PANGEA
      PETROLEUM CORPORATION**


**FORM
      10-QSB**


**Table
        of Contents**
  PART
                  I - FINANCIAL INFORMATIONItem
                  1 - Financial Statements
              
              
              4Item
                  2 - Management's Discussion and Analysis or Plan of Operations
              
              
              4Item
                  3 - Controls and Procedures
              
              
              7PART
                  II - OTHER INFORMATIONItem
                  2 -Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              
              7Item
                  6 - Exhibits
              
              
              7SIGNATURES
              
              
              8




2




**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, 2006.





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




**PART
      I - FINANCIAL INFORMATION**




**ITEM
      1. FINANCIAL STATEMENTS**




The
      financial statements of the company are set forth beginning on page
      F-1.





**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.




We
      are
      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 three months ended March 31, 2007, we reported a
      loss
      of $155,095 while a loss of $245,373 was reported for the three months ended
      March 31, 2006.





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


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




**RESULTS
      OF OPERATIONS**





During
      the first quarter of 2007, we reported $19,835 in revenue. This revenue is
      from
      the interest in six producing wells.





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 contractor has begun the running of 3D seismic across the
      prospects in order to confirm the existence of the necessary reef structures.
      The 3D results on the first prospect run indicate that the reef is present
      as
      predicted. The remaining prospects are progressing as weather permits. It is
      anticipated that at least half of the 2D prospects will have a drillable reef
      and that each of the identified reefs will have approximately three well
      locations. 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.





**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. The
      well
      was spudded in March, 2007 and successfully encountered gas reserves in at
      least
      two intervals. Completion of the well and connection to sales is progressing
      and
      should be completed during the second quarter. Pangea has a 2.0% working
      interest and a 1.5% net interest in the prospect.




4





In
      the
      first quarter 2006, Pangea acquired an approximate 1.5% working interest in **Fort
      Bend County, Texas** (which
      includes the Blue Ridge Field) **.** This is
      a 421 acre project currently producing approximately 7,500 barrels of oil per
      month from fifteen wells, in five leases, in the Miocene and Frio sands. The
      project also drilled a new well and placed it on production during the fourth
      quarter 2006. We began receiving revenue from the project during the fourth
      quarter 2006. The purchase of this field was financed and we are responsible
      for
      2.5% of the financing. As of the quarter ended March 31, 2007, the balance
      due
      totaled $26,980. This note has an interest rate of 18% and will be repaid from
      the sale of production until the amount is paid in full.





**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 MARCH 31, 2007 TO THREE MONTHS ENDED MARCH 31, 2006.**




The
      net
      loss of $155,095 for the three months ended March 31, 2007 decreased by $90,278
      from the net loss of $245,373 for the three months ended March 31, 2006. The
      reduction results from a 42% decrease in administrative expense partially offset
      by an increase depletion, depreciation and amortization. The increase in
      depletion, depreciation and amortization is due to an increase in the number
      of
      wells being depleted.




5




Pangea
      generated revenue from the participation in ongoing oil and gas wells in the
      amount of $19,835 for the three months ended March 31, 2007, compared to $13,591
      in revenue for the three months ended March 31, 2006. This revenue
      increase resulted from an increase in production. Total
      assets increased to $277,161 at March 31, 2007 compared to $270,724 at December
      31, 2006. This increase is primarily reflected in an increase in oil and gas
      properties offset by the decrease in cash from $28,241 at March 31, 2007
      compared to $53,690 at December 31, 2006.




Total
      liabilities at March 31, 2007 are $652,471 compared to $609,213 at December
      31,
      2006. The increase in liabilities is primarily due to an increase in accrued
      liabilities related
      to accrued interest on notes payable and increased debt related to the Blue
      Ridge field in Ft. Bend County, Texas.





**LIQUIDITY
      AND CAPITAL RESOURCES**





Our
      operating activities used cash in the amount of $6,368 for the quarter ended
      March 31, 2007 related primarily to professional fees and expenses on producing
      wells. For the three months ended March 31, 2007, we were not able to generate
      positive cash flow from operations. However, we are generating revenue from
      six
      wells. We have been unable to utilize cash from financing activities to fund
      investing activities in 2007. There was net cash used from financing activities
      of $6,981 at March 31, 2007 while there was $185,000 provided by financing
      activities at March 31, 2006. 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.





**OUTLOOK**





We
      have
      identified additional prospects scheduled for drilling in 2007 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’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. Discussions are taking place with an offset operator with regard to
      joint
      drilling on two of the prospects. Plans are being made to initiate drilling
      in
      mid-2007.





**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. We have a 2% working interest
      and
      1.54% net interest in the first well. The drilling on this prospect has
      experienced numerous delays and we will be re-evaluating participation when
      actual word of commencement is received and authorization for expenditure
      funding is requested.





**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. We have 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 the second
      quarter of 2007.





We
      are
      actively reviewing additional prospects in Texas, Louisiana, Mississippi,
      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, we 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.




6





**ITEM
      3. CONTROLS AND PROCEDURES.**





Charles
      B. Pollock, our Chief Executive Officer, and Scott Duncan, our Chief Financial
      Officer and Principal 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 for the three months ended March 31, 2007, 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.  We 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 affected or are reasonably likely to materially affect the
      internal control of our financial reporting.




**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 March 31, 2007, 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 March 31, 2007, we issued 7,422,420 shares of
      restricted common stock to our President Chief Executive Officer and Chief
      Financial Officer. We issued 2,000,000 common shares registered on Form S8
      to consultants and 100,000 restricted common shares to our
      independent director for services. We recognized a compensation expense of
      $114,027.





**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.




7




**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: May 15, 2007*Charles
                B. Pollock,**Chairman
                of the Board and**Chief
                Executive Officer*


8




**PANGEA
      PETROLEUM CORPORATION**





**UNAUDITED
      CONSOLIDATED FINANCIAL STATEMENTS**


**for
      the three months ended March 31, 2007 and 2006**




F-1




**PANGEA
      PETROLEUM CORPORATION**


**TABLE
      OF CONTENTS**


**Page**Unaudited
                  Consolidated Financial Statements:Unaudited
                  Consolidated Balance Sheets as ofMarch
                  31, 2007 and December 31, 2006
              
              
              F-3Unaudited
                  Consolidated Statements of Operationsfor
                  the three months ended March 31, 2007 and 2006
              
              
              F-4Unaudited
                  Consolidated Statements of Stockholders'Equity
                  for the three months ended March 31, 2007
              
              
              F-5Unaudited
                  Consolidated Statements of Cash Flowsfor
                  the three months ended March 31, 2007 and 2006
              
              
              F-6Notes
                  to Unaudited Consolidated Financial Statements
              
              
              F-7
  F-2





**PANGEA
      PETROLEUM CORPORATION**


**CONSOLIDATED
      BALANCE SHEET**


**(Unaudited)**


**March
                  31, 2007**
              
              **December
                  31, 2006****(Unaudited)**
              
              **(Note)****ASSETS**Current
                  assets:Cash
              
              $
              28,241
              
              $
              53,690Accounts
                  Receivable
              
              
              5,196
              
              
              -Payroll
                  taxes refundable
              
              
              -
              
              
              7,131Total
                  current assets
              
              
              33,437
              
              
              60,821Property
                  and equipment:Oil
                  and gas properties (successful efforts methodnet
                  of accumulated depletion of $124,240
              
              
              243,724
              
              
              209,903Total
                  assets
              
              $
              277,161
              
              $
              270,724**LIABILITIES
                  AND STOCKHOLDERS’****DEFICIT**Current
                  liabilitiesAccounts
                  payable
              
              $
              10,518
              
              $
              9,864Accrued
                  interest payable to related parties
              
              
              78,989
              
              
              63,365Notes
                  payable to related parties
              
              
              555,021
              
              
              528,041Total
                  current liabilities 644,528
              
              
              601,270Obligation
                  for dismantlement and disposal activities
              
              
              7,943
              
              
              7,943Total
                  liabilities
              
              
              652,471
              
              
              609,213Commitments
                  and contingencies
              
              
              -Stockholders'
                  deficit:Preferred
                  stock: $.001 par value; 10,000,000 shares authorized
              
              
              -
              
              
              -Common
                    stock: $.001 par value; 500,000,000 shares authorized; 290,780,986
                    and
                    281,258,566 shares issued and outstanding atMarch
                    31, 2007 and December 31, 2006, respectively
              
              
              290,781
              
              
              281,259Additional
                  paid-in capital
              
              
              18,278,222
              
              
              18,173,717Deferred
                  Compensation
              
              
              -
              
              
              (4,247
              )Accumulated
                  deficit
              
              
              (18,944,313
              )
              
              (18,789,218
              )Total
                  stockholders' deficit
              
              
              (375,310
              )
              
              (338,489
              )Total
                  liabilities and stockholders' deficit
              
              $
              277,161
              
              $
              270,724




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




F-3


**PANGEA
      PETROLEUM CORPORATION**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**for
      the three months ended March 31, 2007 and 2006**


**(Unaudited)**


**Three
                  Months Ended****March
                  31,****2007**
              
              **2006**Revenue
                  from operations
              
              $
              19,835
              
              $
              13,591Costs
                  and expenses:Lease
                  operating expenses
              
              
              7,195
              
              
              6,310Production
                  tax
              
              
              1,038
              
              
              360Selling,
                  general and administrative
              
              
              18,978
              
              
              32,725Stock
                  based compensation
              
              
              118,616
              
              
              196,962Depletion
                  and depreciation
              
              
              12,240
              
              
              6,983Total
                  costs and expenses
              
              
              158,067
              
              
              243,340Loss
                  from operations
              
              
              (138,232
              )
              
              (229,749
              )Other
                  (expenses):Interest
                  expense
              
              
              (16,863
              )
              
              (15,624
              )Net
                  loss
              
              $
              (155,095
              )
              $
              (245,373
              )Basic
                  and diluted net loss per common share
              
              $
              (0.00
              )
              $
              (0.00
              )Weighted
                  average common shares
              
              
              277,817,097
              
              
              254,944,549




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




F-4




**PANGEA
      PETROLEUM CORPORATION**


**CONSOLIDATED
      STATEMENT OF STOCKHOLDERS’ DEFICIT**


**for
      the three months ended March 31, 2007**


**(Unaudited)**




**Additional**
              
              
              
              
              
              **Stockholders’****Common
                  Stock**
              
              **Paid-In**
              
              **Accumulated**
              
              **Deferred**
              
              **Equity****Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Compensation**
              
              **(Deficit)**Balance
                  at December 31, 2006
              
              
              281,258,566
              
              $
              281,259
              
              $
              18,173,717
              
              $
              (18,789,218
              )
              $
              (4,247
              )
              $
              (338,489
              )Common
                  stock issued to compensateemployees
                  and consultants
              
              
              9,522,420
              
              
              9,522
              
              
              104,505
              
              
              -
              
              
              4,247
              
              
              118,274Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (155,095
              )
              
              
              
              
              (155,095
              )Balance
                  at March 31, 2007
              
              
              290,780,986
              
              $
              290,781
              
              $
              18,278,222
              
              $
              (18,944,313
              )
              $
              -
              
              $
              375,310





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




F-5




**PANGEA
      PETROLEUM CORPORATION**


**UNAUDITED
      CONSOLIDATED STATEMENT OF CASH FLOWS**


**for
      the three months ended March 31, 2007 and 2006**


**(Unaudited)**


**2007**
              
              **2006**Cash
                  flows from operating activities:Net
                  loss
              
              $
              (155,095
              )
              $
              (245,373
              )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities
              
              
              148,727
              
              
              202,721Net
                  cash used in operating activities
              
              
              (6,368
              )
              
              (42,652
              )Cash
                  flows from investing activities:Capital
                  and exploratory expenditures
              
              
              (12,100
              )
              
              (30,854
              )Cash
                  flows from financing activities:Borrowing
                  on debt
              
              
              (6,981
              )
              
              -Proceeds
                  from the sale of common stock
              
              
              -
              
              
              185,000Net
                  cash provided by (used in) financing activities
              
              
              (6,981
              )
              
              185,000Net
                  increase/(decrease) in cash and cash equivalents
              
              
              (25,449
              )
              
              111,494Cash
                  and cash equivalents at beginning of period
              
              
              53,690
              
              
              56,377Cash
                  and cash equivalents at end of period
              
              $
              28,241
              
              $
              167,871Supplemental
                  DisclosuresCash
                  paid for interest
              
              $
              -
              
              $
              -Cash
                  paid for income taxes
              
              $
              -
              
              $
              -





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




F-6


**PANGEA
      PETROLEUM CORPORATION**


**NOTES
      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**





1. **Basis
      of Presentation**





The
      accompanying unaudited interim consolidated 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 consolidated financial statements which would substantially duplicate the
      disclosure contained in the audited financial statements for the most recent
      fiscal year, December 31, 2006, 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 three months ended March 31,
      2007 and 2006, Pangea reported net losses of $155,095 and $245,373,
      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:





·
            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.





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





·
            Pangea’s
                ability to ultimately achieve adequate profitability and cash flows
                to
                sustain continuing operations.




**3.**  **Stockholders’
      Equity**





During
      the three months ended March 31, 2007, Pangea engaged in various transactions
      affecting stockholders’ equity, as follows:





·
            7,122,420
                shares of restricted common stock and 2,000,000 shares of common
                stock
                registered on Form S8 were issued to employees and consultants. A
                compensation expense of $114,027 was recorded based on market value
                on
                date of issuance. $4,247 was also expensed in connection with a 12
                month
                service agreement for EDGAR services with a third party
                vendor.




·
            100,000
                shares of restricted common stock were issued to an independent director
                valued at $1,360.




F-7





**4.**  **Related
      Party Transactions**


Notes
        payable to related parties consist of the following at December 31,
        2006:


Notes
                  payable to Mary Pollock, daughter of the chief executiveofficer.
                  This note bears interest at rates of 12% per year andis
                  due in a one time payment of principal and interest on
                  December31,
                  2007. These notes are not collateralized.
              
              $
              118,299Notes
                  payable to Charles Pollock, the Chief Executive Officer and asignificant
                  stockholder of the Company. This note bears interestof
                  12% per year, and due in one time payment of principal andinterest
                  on December 31, 2007. These notes are not collateralized.
              
              
              323,315Notes
                  payable to Mark Weller, the Chief Operating Officer and asignificant
                  stockholder of the Company. This note bears interestof
                  12% per year, and due in one time payments of principal
                  andinterest
                  on December 31, 2007. These notes are not collateralized.
              
              
              86,427$
              528,041




Accrued
      interest payable to related parties of $78.989 at March 31, 2007 represents
      interest accrued on the above notes payable to related parties.





5 **.**  **Ft.
      Bend County, Texas Note Payable**





In
      the
      first quarter 2006, Pangea acquired an approximate 1.5% working interest in **Fort
      Bend County, Texas** (which
      also includes the Blue Ridge Field). This is a 421 acre project currently
      producing approximately 7,500 barrels of oil per month from fifteen wells,
      in
      five leases, in the Miocene and Frio sands. The project also drilled a new
      well
      and placed it on production during the fourth quarter 2006. We began receiving
      revenue from the project during the fourth quarter 2006. The purchase of this
      field was financed and we are responsible for 2.5% of the financing. As of
      the
      quarter ended March 31, 2007, the balance due totaled $26,980. This note has
      an
      interest rate of 18% and will be repaid from the sale of production until the
      amount is paid in full.





6.  **Subsequent
      Event**





Subsequent
      to the quarter ended March 31, 2007 we issued the following restricted common
      stock for services:





Date
                Issued
            
            Name
            
            #
                of Restricted Common Shares
            
            Fair
                Market Value4/26/07
            
            
            Mark
                Weller, President
            
            
            1,282,051
            
            $
            11,5384/26/07
            
            
            Charles
                Pollock, CEO
            
            
            1,282,051
            
            $
            11,5384/26/07
            
            
            Scott
                Duncan, CFO
            
            
            120,000
            
            $
            1,0804/26/07
            
            
            Edward
                Skaggs, Director
            
            
            100,000
            
            $
            9005/03/07
            
            
            Mark
                Weller, President
            
            
            1,708,451
            
            $
            11,2765/03/07
            
            
            Charles
                Pollock, CEO
            
            
            1,708,451
            
            $
            11,276





F-8