SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

                            Commission File #0-30503

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

                                    COLORADO
         (State or other jurisdiction of incorporation or organization)

                                   76-0635938
                      (IRS Employer Identification Number)

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

                                 (713) 706-6350
                (Registrant's telephone no., including area code)

Check whether  issuer (1) has filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 |_|

The number of shares  outstanding of the Company's  common stock as of August 2,
2004 is shown below:

Title of Class Number of Shares  Outstanding  Common Stock,  par value $.001 per
share 164,130,193

Documents Incorporated by Reference: None

<PAGE>

                          PANGEA PETROLEUM CORPORATION
                                   FORM 10-QSB

                                Table of Contents

PART  I  -  FINANCIAL  INFORMATION

Item  1  -  Financial  Statements

Item  2  -  Management's  Discussion  or Plan of Operations

Item  3  -  Controls and Procedures

PART II  -  OTHER INFORMATION

Item  2  -  Changes  in  Securities

Item  6  -  Exhibits and Reports  on  Form  8-K

SIGNATURES


                                       2
<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

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


                          PANGEA PETROLEUM CORPORATION
                                   ----------

              UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
        for the three months and six months ended June 30, 2004 and 2003


                                      F-1
<PAGE>

                          PANGEA PETROLEUM CORPORATION
                                TABLE OF CONTENTS
                                   ----------

                                                                            Page

Unaudited Consolidated Condensed Financial Statements:

  Consolidated Condensed Balance Sheets as of June 30, 2004
    and December 31, 2003                                                   F-3

  Unaudited Consolidated Condensed Statements of Operations
    for the three months and six months ended June 30, 2004
    and 2003                                                                F-4

  Unaudited Consolidated Condensed Statements of Stockholders'
    Equity for the six months ended June 30, 2004                           F-5

  Unaudited Consolidated Condensed Statements of Cash Flows
    for the six months ended June 30, 2004 and 2003                         F-6

Notes to Unaudited Consolidated Condensed Financial Statements              F-7



                                      F-2
<PAGE>

                          PANGEA PETROLEUM CORPORATION
                 UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEET
                       June 30, 2004 and December 31, 2003
                                   ----------

<TABLE>
<CAPTION>
                                                                    June 30,       December 31,
                                                                      2004            2003
                                                                   (Unaudited)        (Note)
     ASSETS                                                        ------------    ------------
<S>                                                                <C>             <C>
Current assets:
  Cash                                                             $     39,809    $      1,890
  Accounts receivables                                                   11,675          12,460
                                                                   ------------    ------------
    Total current assets                                                 51,484          14,350
                                                                   ------------    ------------
Property and equipment:
  Oil and gas properties (successful efforts method)                    237,539         198,264
  Other property and equipment                                           18,174          16,689
  Less accumulated depletion, depreciation and amortization             (27,664)        (21,514)
                                                                   ------------    ------------
    Net property and equipment                                          228,049         193,439
                                                                   ------------    ------------
      Total assets                                                 $    279,533    $    207,789
                                                                   ============    ============
LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Accounts payable                                                 $     46,464    $     26,661
  Accrued liabilities                                                    82,210          65,699
  Notes payable to related parties                                      337,684         322,684
  Deferred gain on sale of Mass Energy, Inc.                          1,475,141       1,475,141
                                                                   ------------    ------------
    Total current liabilities                                         1,941,499       1,890,185

Obligation for dismantlement and disposal activities                     10,000          10,000

Notes payable to related parties, net of current portion                 60,000          60,000
                                                                   ------------    ------------
    Total liabilities                                                 2,011,499       1,960,185
                                                                   ------------    ------------
Commitments and contingencies

Stockholders' deficit:
  Preferred stock: $.001 par value; 5,000,000 shares authorized              --              --
  Common stock: $.001 par value; 200,000,000 shares authorized;
    162,910,193 and 117,665,959 shares issued and outstanding at
    June 30, 2004 and December 31, 2003, respectively                   162,910         117,666
  Additional paid-in capital                                         16,548,664      16,116,224
  Unissued common stock: 1,440,500 shares                               192,833         192,833
  Accumulated deficit                                               (18,570,466)    (18,163,474)
                                                                   ------------    ------------
                                                                     (1,666,059)     (1,736,751)
  Subscriptions receivable                                              (15,645)        (15,645)
  Deferred compensation                                                 (50,262)             --
                                                                   ------------    ------------

    Total stockholders' deficit                                      (1,731,966)     (1,752,396)
                                                                   ------------    ------------

      Total liabilities and stockholders' deficit                  $    279,533    $    207,789
                                                                   ============    ============
</TABLE>


Note:  The balance  sheet at December 31, 2003 has been derived from the audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted accounting  principles for complete
financial statements.

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


                                      F-3
<PAGE>

                          PANGEA PETROLEUM CORPORATION
            UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
        for the three months and six months ended June 30, 2004 and 2003
                                   ----------

<TABLE>
<CAPTION>
                                                         Three Months Ended                  Six Months Ended
                                                              June 30,                             June 30,
                                                         ------------------                  ----------------
                                                    2004                2003             2004                2003
                                                -------------      -------------      -------------      -------------
<S>                                             <C>                <C>                <C>                <C>
Revenue                                         $      18,852      $       5,473      $      37,780      $       5,473
                                                -------------      -------------      -------------      -------------
Costs and expenses:
  Lease operating expenses                              1,125                 --              3,356                 --
  Production taxes                                      1,576                 --              2,962                 --
  Selling, general and administrative,
    excluding stock-based compensation                 59,408             31,972             96,909             68,504
  Stock based compensation                            133,879            135,165            219,579            236,727
  Depreciation, depletion and amortization              3,352              1,275              6,150              1,347
  Dry hole costs                                      105,909                 --            105,909                 --
                                                -------------      -------------      -------------      -------------
    Total costs and expenses                          305,249           (168,412)           434,865           (306,578)
                                                -------------      -------------      -------------      -------------
Loss from operations                                  286,397           (162,939)           397,085           (301,105)
                                                -------------      -------------      -------------      -------------

Other income and (expenses):
  Interest income                                       6,104                 --              6,104                 --
  Other income                                          2,500                 --              2,500                 --
  Interest expense                                     (8,589)            (9,131)           (18,511)           (18,521)
                                                -------------      -------------      -------------      -------------
    Total other income and (expenses), net                 15             (9,131)            (9,907)           (18,521)
                                                -------------      -------------      -------------      -------------
        Net loss                                $    (286,382)     $    (172,070)     $    (406,992)     $    (319,626)
                                                =============      =============      =============      =============
Basic and diluted net loss per common share     $       (0.00)     $       (0.00)     $       (0.00)     $       (0.00)
                                                =============      =============      =============      =============
Weighted average common shares                    151,886,501         82,918,198        140,605,776         77,386,831
                                                =============      =============      =============      =============
</TABLE>


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


                                      F-4
<PAGE>

                          PANGEA PETROLEUM CORPORATION
       UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
                    for the three months ended June 30, 2004

<TABLE>
<CAPTION>
                                                                        Additional         Unissued
                                             Common Stock               Paid - In           Common
                                         Shares         Amount           Capital            Stock
                                       -----------     ------------     ------------     ------------
<S>                                  <C>               <C>               <C>             <C>
Balance at December 31, 2003           117,665,959     $    117,666     $ 16,116,224     $    192,833

Common stock issued for cash            24,571,667           24,572          161,428               --

Common stock issued to compensate
  employees and consultants             18,322,564           18,322          206,277               --

Common stock issued for legal
  services                                 350,003              350            2,835               --

Common stock issued for profes-
  sional fees                            2,000,000            2,000           34,000               --

Stock warrants issued for profes-
  sional services                               --               --           27,900               --

Net loss                                        --               --               --               --
                                       -----------     ------------     ------------     ------------
Balance at June 30, 2004               162,910,193     $    162,910     $ 16,548,664     $    192,833
                                       ===========     ============     ============     ============
</TABLE>


<TABLE>
<CAPTION>
                                                                                            Total
                                                         Stock                            Stockholders'
                                     Accumulated      Subscriptions       Deferred           Equity
                                      Deficit          Receivable        Compensation      (Deficit)
                                    ------------      ------------      ------------      ------------
<S>                                  <C>              <C>               <C>               <C>
Balance at December 31, 2003        $(18,163,474)     $    (15,645)     $         --      $ (1,752,396)

Common stock issued for cash                  --                --                --           186,000

Common stock issued to compensate
  employees and consultants                   --                --            (5,000)          219,599

Common stock issued for legal
  services                                    --                --                --             3,185

Common stock issued for profes-
  sional fees                                 --                --           (25,500)           10,500

Stock warrants issued for profes-
  sional services                             --                --           (19,762)            8,138

Net loss                                (406,992)               --                --          (406,992)
                                    ------------      ------------      ------------      ------------
Balance at June 30, 2004            $(18,570,466)     $    (15,645)     $    (50,262)     $ (1,731,966
                                    ============      ============      ============      ============
</TABLE>


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


                                      F-5
<PAGE>

                          PANGEA PETROLEUM CORPORATION
                 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                 for the six months ended June 30, 2004 and 2003
                                   ----------

                                                       2004            2003
                                                     ---------      ---------
Cash flows from operating activities:
  Net loss                                           $(406,992)     $(319,626)
  Adjustments to reconcile net loss to net cash
    used in operating activities                       390,580        300,627
                                                     ---------      ---------

      Net cash used in operating activities            (16,412)       (18,999)
                                                     ---------      ---------

Cash flows from investing activities:
  Capital and exploratory expenditures                (146,669)      (106,645)
                                                     ---------      ---------

      Net cash used in investing activities           (146,669)      (106,645)
                                                     ---------      ---------

Cash flows from financing activities:
  Proceeds from the sale of common stock               186,000         94,800
  Proceeds from subscription receivable                     --          4,919
  Proceeds from notes payable to related parties        15,000         40,000
                                                     ---------      ---------

      Net cash provided by financing activities        201,000        139,719
                                                     ---------      ---------

Net increase in cash and cash equivalents               37,919         14,075

Cash and cash equivalents at beginning of period         1,890         14,627
                                                     ---------      ---------

Cash and cash equivalents at end of period           $  39,809      $  28,702
                                                     =========      =========

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


                                      F-6
<PAGE>

                          PANGEA PETROLEUM CORPORATION
         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   ----------

1.    Organization and Significant Accounting Policies

Organization

      PangeaPetroleum  Corporation  (the "Company"),  is a Colorado  corporation
      engaged  in oil and gas  exploration  and  development.  The  Company  was
      originally  incorporated in 1997 as Zip Top, Inc. and subsequently adopted
      a name change to Pangea  Petroleum  Corporation.  On April 26,  2000,  the
      Company was  recapitalized  when the Company  acquired  the  non-operating
      public  shell,  Segway  II  Corporation.  Segway  II  Corporation  had  no
      significant  assets  or  liabilities  at  the  date  of  acquisition  and,
      accordingly, the transaction was accounted for as a recapitalization.

2.    Accounting Estimates

      The  preparation  of financial  statements in conformity  with  accounting
      principles  generally  accepted in the United  States of America  requires
      management  to make  estimates  and  assumptions  that affect the reported
      amounts of assets and liabilities at the date of the financial  statements
      and the  reported  amounts of revenue and  expenses  during the  reporting
      period. Actual results could differ from those estimates.  These estimates
      mainly involve the useful lives of property and equipment,  the impairment
      of unproved oil and gas  properties,  the valuation of deferred tax assets
      and the realizability of accounts receivable.

3.    Interim Financial Statements

      The accompanying  unaudited  consolidated  financial  statements have been
      prepared in accordance with generally accepted  accounting  principles for
      interim financial information and with the instructions to Form 10-QSB and
      Article 10 of Regulation S-B. Accordingly,  they do not include all of the
      information  and  footnotes  required  by  generally  accepted  accounting
      principles  for  complete   financial   statements.   In  the  opinion  of
      management,  all  adjustments  (consisting of normal  recurring  accruals)
      considered necessary for a fair presentation have been included. Operating
      results for the three month and six month  periods ended June 30, 2004 and
      2003 are not  necessarily  indicative  of the results that may be expected
      for the respective full years.

      A summary  of the  Company's  significant  accounting  policies  and other
      information  necessary to understand these consolidated  interim financial
      statements  is presented in the  Company's  audited  financial  statements
      included in Form 10-KSB for the years  ended  December  31, 2003 and 2002.
      Accordingly,  the Company's audited financial statements should be read in
      connection with these financial statements.

4.    Going Concern Considerations

      Since its  inception,  the  Company  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 years ended  December  31, 2003 and 2002,  the  Company  reported  net
      losses of $669,654 and $1,275,753,  respectively,  and negative cash flows
      from  operations  of $51,733  and  $223,963  respectively.  Such  negative
      financial  results have continued in the three months and six months ended
      June 30, 2004.

      Continuing  negative  operating results produced a working capital deficit
      of $1,890,015  as of June 30, 2004.  The negative  operating  results were
      largely caused by the Company's former subsidiary,  Mass Energy, Inc. Mass
      Energy,  Inc.  became  severely  delinquent on certain  accounts  payable.
      Various vendors have initiated legal actions against Mass Energy,  Inc. to
      force payment of past due accounts,  but Mass Energy,  Inc. lacks the cash
      resources to make such  payments.  One suit has been filed against  Pangea
      Petroleum  Corporation alleging that it is responsible for the debt of its
      former subsidiary, Mass Energy, Inc. The suit was dropped and dismissed in
      the 2nd quarter, none the less. the Company's recurring negative financial
      results raise substantial doubt about the Company's ability to continue as
      a going concern.


                                      F-7
<PAGE>

                          PANGEA PETROLEUM CORPORATION
         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

4.    Going Concern Considerations, continued

      In 2002,  the  Company  developed  a plan and took  actions to improve its
      financial position and deal with its liquidity problems. In the first step
      of  the  plan,  the  Company   negotiated  a  settlement   agreement  (the
      "Settlement Agreement") between the Company and certain parties related to
      the  Company.  Under the terms of the  Settlement  Agreement  the  Company
      received a cash payment of $75,000 and  marketable  equity  securities  of
      $153,000  and  fully  satisfied  $296,010  of  liabilities  and  claims in
      exchange for various assets with a carrying value of $171,642.  Due to the
      related party nature of the Settlement  Agreement,  the Company recognized
      no gain,  but  recognized  a increase  to  additional  paid-in  capital of
      $352,368.  (See Note 5) In the second  step of the plan the  Company  sold
      Mass Energy,  Inc. in a transaction that management  believes will improve
      both the Company's overall financial position and its chances of acquiring
      economically  viable oil & gas  properties  or  engaging  in  transactions
      necessary for the future viability of the Company.  The final steps of the
      plan  are  still  being  developed,  but may  include  additional  private
      placements of the Company'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 the Company will produce cash flows  sufficient
      to ensure its long-term viability as a going concern.

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

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

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

5.    Acquisition and Subsequent Disposition of Mass Energy, Inc.

      On October 5, 2000,  the Company  acquired  Mass Energy,  Inc., a Houston,
      Texas based oil and gas exploration  company,  in a transaction  accounted
      for  as a  purchase.  The  purchase  price  was  2,000,000  shares  of the
      Company's  restricted  common  stock  issued  in  exchange  for all of the
      outstanding  common stock of Mass Energy,  Inc.  The  $4,521,856  purchase
      price was allocated to the assets acquired and  liabilities  assumed based
      on their estimated fair values at the date of acquisition.

      Almost immediately,  the Mass Energy, Inc.  acquisition  produced negative
      financial  results.  A series  of  costly  dry-hole  projects  caused  the
      financial  position of Mass Energy,  Inc., and accordingly,  the Company's
      consolidated financial position, to deteriorate.  Over the next two years,
      trade payables and other liabilities increased  dramatically.  Mass Energy
      Inc.'s  unpaid  liabilities  resulted in legal  actions by a number of its
      vendors and certain of the legal actions seek relief from Pangea Petroleum
      Corporation.

      Accordingly,  on October 7, 2002, the Company initiated a transaction (the
      "Transaction") under which it sold 100 percent of the common stock of Mass
      Energy,   Inc.  to  Thomas  Banks,   Ltd.,  an  unrelated  Cayman  Islands
      corporation,  in exchange  for $500 and the  assignment  of certain  fully
      reserved notes receivable on the books of Mass Energy, Inc. At the date of
      the sale, all of Mass Energy,  Inc.'s assets had been written off or fully
      reserved based on impairment  analysis performed by the Company.  The $500
      in cash from Thomas Banks,  Ltd. has not been collected and has been fully
      reserved.

      The Transaction resulted in Thomas Banks, Ltd's assumption of Mass Energy,
      Inc.'s  liabilities   totaling   $1,475,141.   The  Company  has  deferred
      recognition of any gain from the Transaction  because legal counsel cannot
      currently  determine if legal actions against Mass Energy, Inc and related
      imputed liability or alter-ego claims against Pangea  Petroleum,  Inc., as
      former owner of Mass Energy,  Inc could eventually result in the Company's
      liability for the claims.


                                      F-8
<PAGE>

                          PANGEA PETROLEUM CORPORATION
         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

                                   ----------

6.    Income Taxes

      The Company has incurred  losses since its inception and,  therefore,  has
      not been subject to federal income taxes. As of June 30, 2004, the Company
      had net operating  loss ("NOL")  carryforwards  for income tax purposes of
      approximately  $12,657,000 which expire in various tax years through 2024.
      Under the provisions of Section 382 of the Internal  Revenue Code, the net
      operating loss carryforwards  attributable to Mass Energy,  Inc. and other
      losses  incurred  prior to the  ownership  change in the  Company  when it
      recapitalized in 2000 will severely limit the Company's ability to utilize
      its NOL  carryforward  to reduce  future  taxable  income and  related tax
      liabilities.  Additionally,  because United States tax laws limit the time
      during  which NOL  carryforwards  may be applied  against  future  taxable
      income, the Company will be unable to take full advantage of a substantial
      portion of its NOL for  federal  income tax  purposes  should the  Company
      generate taxable income.

      The  difference  between  the  income  tax  benefit  in  the  accompanying
      statement  of  operations  and the amount  that  would  result if the U.S.
      federal  statutory  rate of 34% were applied to pre-tax loss for the three
      months ended June 30, 2004 and 2003 relates  primarily to increases in the
      valuation  allowances  for  deferred tax assets  related to net  operating
      losses.

7.    Stockholders' Equity

      During the six months ended June 30, 2003, the Company  engaged in various
      transactions affecting stockholders' equity, as follows:

      o     The Company issued  21,446,667 shares under a combination of private
            placements  of its common stock and issuances in respect to exercise
            of stock options to raise $161,000

      o     The Company issued  3,125,000  shares upon exercise of stock options
            for proceeds of $25,000.

      o     The Company issued options to acquire shares of the Company's common
            stock to individuals under private placement agreements. The options
            are exercisable after a vesting period at prices ranging from $0.012
            to $0.02 per share.

      The Company issued options to acquire shares of the Company's common stock
      for professional  fees. The options are exercisable at prices ranging from
      $0.01 to $0.02 per share, expiring at various dates through March 9, 2007.

8.    Related Party Transactions

      During the three months ended June 30, 2004, the Company issued  4,720,000
      shares of common stock and  recognized  consulting  fees of $46,300  under
      consulting  agreements  with  stockholders to provide  record-keeping  and
      other administrative services

      In addition to the transactions and balances  described above, the Company
      has various related party notes payable at June 30, 2004 of $337,684.

9.    Non-Cash Investing and Financing Activities

      During the six months ended June 30, 2004 and 2003, the Company engaged in
      various non-cash financing and investing activities as follows:

                                                            2004           2003

Related party note payable converted to equity             $    --       $26,500


                                      F-9
<PAGE>

ITEM 2. MANAGEMENTS  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS
OF OPERATIONS

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,
2003. Certain  statements in the following MD&A are forward looking  statements.
Words such as "expects", "anticipates",  "estimates" and similar expressions are
intended  to  identify   forward  looking   statements.   See  "Forward  Looking
Information" below.

GENERAL

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

Pangea is a publicly traded company listed on the OTC Electronic  Bulletin Board
under the symbol "PAPO". The Company is an independent energy company focused on
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.  The
Company  devotes  essentially  all of it  resources  to  development  of revenue
producing  activities  by keeping its  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.  The Company  invests 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 its inception,  the Company 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 June 30,
2004 and 2003,  the  Company  reported  net  losses  of  $286,382  and  $172,070
respectively.

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

      -     The  Company's  ability  to  continue  to obtain  sources of outside
            financing to support near term  operations  and to allow the Company
            to continue to make  strategic  investments  in new oil and gas well
            prospects.

      -     The Company's  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.

      -     The Company's  ability to increase  profitability and sustain a cash
            flow level that will ensure support for continuing operations.


                                       3
<PAGE>

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's  discussion and analysis of its financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared in accordance  with  generally  accepted  accounting  principles in the
United  States.  The  preparation  of these  financial  statements  requires the
Company 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,  the  Company  evaluates  its
estimates.  The Company  bases its  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.

The Company believes 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

The Company  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 that the
salvage value of lease and well equipment will  approximately  offset the future
liability for plugging and  abandonment  of the related wells.  Accordingly,  no
accrual for such costs has been recorded.

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  Company's  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.

Oil and Gas Revenues

Oil and gas revenues are recorded under the sales method. The Company recognizes
oil and gas revenues as  production  occurs.  As a result,  the Company  accrues
revenue relating to production for which the Company has not received payment.

RESULTS OF OPERATIONS

During the second quarter of 2004, the Company reported $18,852 in revenue. This
income is from the two producing  wells in Liberty and Panola  counties.  Pangea
also has two wells that are  suspended,  one of which had further  action in the
2nd quarter with the drilling of a follow-up  well.  The Company has invested in
three new prospects, two of which began drilling in the 2nd quarter.

Pangea's two  suspended  wells are still  awaiting  further  work. At one of the
suspended  wells in Lee  County,  where  oil  reserves  were  found,  there  was
additional  unsuccessful activity on a second well, but the initial well remains
suspended.  The other  suspended well in Austin County is still being  evaluated
for further work.

The two suspended wells are as follows:


                                       4
<PAGE>

Lee County,  Texas, a Lower Wilcox prospect  identified in a 2D seismic analysis
that shows a closure between two existing Lower Wilcox  producing  fields in the
area, was drilled and tested in August 2003. Pangea has a 17.5% working interest
(13.125% net interest). The well encountered 40' of overall sand with 16'-18' of
oil sand on top and water in the bottom 22'. The well was tested in early August
2003  and  showed  signs  of oil at a low  rate  of  production.  The  well  was
subsequently stimulated with an acid treatment which greatly increased the water
production  rate,  making  the well  uneconomical  to  produce.  Pangea  and its
partners  have  reviewed the  reservoir  data and  determined  that there may be
locations that are up structure from the first well, further from the underlying
water.  New seismic data acquired in May 2004  indicated  that the structure did
rise to the west. The key reflector was on the base of the target zone. Based on
the new data,  a  follow-up  well was  drilled  in early July 2004 at a location
1200' west of the original  well.  Logs on the new well confirmed the structural
rise on the base of the target zone; however,  the seismic did not show that the
top of the zone had been truncated. The result was a non-productive well and the
second well was plugged and  abandoned.  Based on this  result,  we will plan to
re-enter the first well, and make one additional attempt to produce the reserves
encountered. This work should proceed late in the third quarter 2004

Austin  County,  Texas,  a 2600'  Frio zone  test  that was based on 3D  seismic
analysis,  was drilled in July 2003.  The Company has a 15.3%  working  interest
(11.48% net  interest).  Unfortunately,  the target  production  zone  contained
residual gas and water,  and produced only water on the test.  The well has been
shut in and is being  evaluated for potential  shallower  productive  intervals.
Further work on the well should be proposed late in the third quarter 2004.

Two new wells were initiated in June 2004.

Kingfisher  County,  Oklahoma,  a 7400' test well to the base of the Mississippi
Lime  formation,  in  which  Pangea  acquired  a 10%  working  interest  (8% net
interest) in a farmout of a 16,580 acre unit. The  Mississippi  Lime in the unit
area is a 530' thick  fractured  limestone  that is calculated to have recovered
only 1 to 2% of the original oil in place during the original development in the
1960's.  The  original  wells  penetrated  an  average  of less than 100' of the
formation  and  averaged   40,000-50,000  barrels  of  total  production  before
declining  and being  recompleted  in a shallower  formation in the 1970's.  The
initial  new well was on a 320 acre block in the  northwest  corner of the unit.
The well was drilled applying current air drilling and fracturing  technology to
attempt to  investigate  a much greater  volume of the  formation.  The well was
spudded  in June 2004 and  began air  drilling  in early  July.  At 70' into the
Mississippi Lime the well encountered a water filled fracture. After drilling an
additional 30' it was determined  that an overlying  formation was the source of
the  water.  Drilling  was ceased and the well was  abandoned.  It appears  that
1970's era well  abandonments  were the likely water source and that there is no
effective way to predict  similar  problems  throughout the entire  acreage.  No
additional work on the prospect is expected at this time.

Colorado  County,  Texas was a 7100' test  through  nine  Yegua  sand  intervals
identified  in 3D seismic.  The  prospect  is up  structure  to a producer  that
watered out in the Yegua 7 sand. In addition,  Frio and Miocene sand  production
is present in the immediate area and had the potential be encountered  above the
Yegua in this location. Pangea has a 10% working interest (7.5% net interest) in
a prospect  well.  Drilling on the well commenced in June 2004 and was completed
in early July. Unfortunately, the top of the structure contained a high level of
silt in the Yegua sands and,  although oil and gas were  present,  they were all
tight and non-commercial.  In addition, no reserves were encountered in the Frio
and Miocene sands. The well was plugged and abandoned.

COMPARISON  OF THREE  MONTHS  ENDED JUNE 30, 2003 TO THREE MONTHS ENDED JUNE 30,
2004.

The net loss of $286,382 for the three  months ended June 30, 2004  increased by
$114,312 from the net loss of $172,070 for the three months ended June 30, 2003.
The increase is directly attributable to an increase in dry hole costs in 2004.

The Company  generated  revenue  from the  participation  in ongoing oil and gas
wells in the  amount  of  $18,852  for the three  months  ended  June 30,  2004,
compared to $5,473 in revenue in the three  months  ended June 30,  2003.  Total
assets  increased to $279,533 at June 30, 2004  compared to $207,789 at December
30, 2003 which is primarily  reflected in an increase in cash which increased to
$39,809 at June 30, 2004 compared to $1,890 at December 30, 2003 and oil and gas
properties  (successful  efforts method) which increased to $237,539 at June 30,
2004 compared to $198,264 at December 30, 2003.

Total  liabilities  at June 30, 2004 are  $2,011,499  compared to  $1,960,185 at
December 30, 2003,  which is an increase in total  liabilities  of $51,314.  The
increase  in  liabilities  is  primarily  due to an increase of $15,000 in notes
payable to related  parties (from $337,684 at June 30, 2004 compared to $322,684
at  December  30,  2003),  interest on notes  payable to related  parties and an
increase in accounts payable. At June 30, 2004, the liabilities reflected on the
balance  sheet are trade  accounts  payable,  accrued  liabilities  to officers,
directors  and a  shareholder  of the Company and a deferred gain on the sale of
Mass Energy.


                                       5
<PAGE>

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2003 TO SIX MONTHS ENDED JUNE 30, 2004.

The net loss of $406,992  for the six months  ended June 30, 2004  increased  by
$87,366  from the net loss of $319,626  for the six months  ended June 30, 2003.
The increase is directly attributable to an increase in dry hole costs in 2004.

The Company  generated revenue of $37,780 for the six months ended June 30, 2004
compared  $5,473 in the six  months  ended  June 30,  2003.  This  reflects  the
participation  in ongoing oil and gas wells.  Total assets increased to $279,533
at June 30, 2004  compared to  $142,072  for the six months  ended June 30, 2003
which is primarily  reflected in an increase in cash which  increased to $39,809
at June 30, 2004 compared to $5,200 at June 30, 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company's  operating  activities used cash in the amount of $146,669 for the
quarter  ended June 30, 2004 to invest in four  prospects and to pay expenses on
producing wells. The Company is currently  generating revenue from two wells but
the  Company has not been able to generate  positive  cash flow from  operations
using cash in the amount of $16,412 for the  quarter  ended June 30,  2004.  The
Company utilized cash from financing  activities to fund these investments.  The
net cash from financing  activities  increased in 2004 to $201,000 from $139,719
in 2003.  The Company  intends to continue  investing in additional  oil and gas
projects but will need additional private  placements,  debt financing or equity
investment in order to participate  fully and at the levels the Company intends.
There can be no  assurance  that any of the plans  developed by the Company will
produce cash flows sufficient to ensure its long-term viability.

2004 OUTLOOK

The Company has  identified one  additional  prospect  scheduled for drilling in
2004 in  Liberty  County  Texas,  and is in the  process of  evaluating  several
additional prospects for 2004.

Liberty County,  Texas is a 9000' test of the Lower Wilcox,  based on 3D seismic
data and  multiple  surrounding  wells.  The fault  trap  identified  has a down
structure  producing  well that would not have produced the bulk of the reserves
potentially  available.  In  addition,  several  wells in the  surrounding  area
support the presence of a large fault block that is substantially  untested. The
well should  encounter  several zones that are  currently  producing in adjacent
fault  blocks,  which  will be  secondary  objectives.  Pangea  has a 5% working
interest  (3.75% net  revenue  interest)  in a prospect  well.  It is  currently
anticipated  that the well will be drilled in August  2004.  Pangea is  actively
reviewing additional prospects in Texas,  Louisiana,  Kansas and Oklahoma to add
new wells to the  prospect  list.  The  Company is  continuing  its  strategy of
evaluating primarily shallow, onshore oil and gas projects, that avoid investing
in "wildcat" or exploratory  wells,  and focus 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 diversity its risk by taking a minority working interest in the
prospects,  such that the Company is 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.  There is no
assurance  that  additional  equity or debt financing will be available on terms
acceptable to Management.

FORWARD-LOOKING  INFORMATION-GENERAL

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.  The Company undertakes no obligation to publicly revise these
forward-looking  statements to reflect  events or  circumstances  that may arise
after the date  hereof.  Additionally,  these  statements  are based on  certain
assumptions  that may prove to be  erroneous  and are  subject to certain  risks
including,  but not  limited  to,  the  Company's  dependence  on  limited  cash
resources,  its dependence on certain key personnel within the Company,  and its
ability to raise additional capital. The Company's 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 resources greater than the Company.  Greater competition for
profitable  operations can increase prices and make it more difficult to acquire
assets at reasonable  multiples of cash flow. The Company  believes that it 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 the Company's  operations.  The Company's  operations are also
significantly affected by factors, which are outside the control of the Company,
including  the prices of oil and natural  gas,  environmental  and  governmental
regulations.  Accordingly,  actual results may differ, possibly materially, from
the predictions contained herein.


                                       6
<PAGE>

ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

Charles  B.  Pollock,  our  Chief  Executive  Officer,  has  concluded  that our
disclosure  controls  and  procedures  are  appropriate  and  effective.  He has
evaluated  these  controls  and  procedures  as of a date  within 90 days of the
filing date of this report on Form 10-QSB.  There were no significant changes in
our internal controls or in other factors that could significantly  affect these
controls  subsequent to the date of their  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Scott Duncan,  our Chief  Financial  Officer,  has concluded that our disclosure
controls and procedures are  appropriate  and effective.  He has evaluated these
controls and  procedures  as of a date within 90 days of the filing date of this
report  on Form  10-QSB.  There  were no  significant  changes  in our  internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent to the date of their  evaluation,  including any  corrective  actions
with regard to significant deficiencies and material weaknesses.

                           PART II - OTHER INFORMATION

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

ITEM 1. LEGAL PROCEDINGS

Pangea resolved the two outstanding legal issues during the second quarter.

First,  Halliburton Energy Services, Inc. dismissed their lawsuit against Pangea
Petroleum  Corporation  and an order to that  effect  was  entered by the court.
Halliburton  sued the  Company  under an alter ego  claim for debts of  Pangea's
former  subsidiary,  Mass  Energy,  on June 11,  2002 (Cause  Number  2002-1945,
District Court, Harris County, Texas, 129th Judicial District). Based on lack of
activity by Halliburton  and a strong argument  against the suit by Pangea,  the
Company  filed a motion for Summary  Judgment  of the suit in Pangea's  favor in
April 2004. Shortly thereafter, Halliburton requested dismissal of their lawsuit
against the Company and an order to that effect was entered by the court in June
2004. This action does not preclude  Halliburton  from pursuing a future action,
however, the Company and their attorney's feel a new suit is unlikely

Secondly,  the Company was awarded  $158,000.00 in its arbitration claim against
Clay  Exploration,  Inc. and Joseph W. Shunta  pertaining  to a well interest in
Duval County, Texas. Counterclaims made by Clay Exploration and Shunta, in Cause
Number  2002-18505,   District  Court,  Harris  County,  Texas,  157th  Judicial
District, were denied in full by the Arbitrator,  with the exception that Pangea
conceded,  and Clay  Exploration was awarded,  certain expenses in the amount of
$5,566.54 pertaining to a separate well in Jim Wells County, Texas. The deadline
to appeal or set aside the award  passed on August 5, 2004.  Pangea is assessing
options for enforcing collection including recovering interest,  which continues
to accrue according to the terms of the award.

ITEM 2. CHANGES IN SECURITIES

The following  information sets forth certain information for all securities the
Company  issued from March 31,  2004  through  June 30,  2004,  in  transactions
without  registration  under the Act. There were no underwriters in any of these
transactions,  nor were any sales commissions paid thereon.  The securities were
issued pursuant to Section 4(2) of the Act.

A total of 1,666,667  shares were issued for private  placements to one investor
for a total of $20,000.


                                       7
<PAGE>

Item 6 - Exhibits and Reports on Form 8-K

(A)          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.

(B) Reports on Form 8-K

      None

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: August 13,2004
            -------------------------------------
            Charles  B.  Pollock,
            Chairman of the Board and
            Chief Executive Officer


                                       8