UNITED STATES
                        SECURITY AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB
        FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(D)
                   OF THE SECURITIES AND EXCHANGE ACT OF 1934

[X]   ANNUAL  REPORT  PURSUANT TO SECTION 12 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT  OF  1934
                       For the year ended December 31, 2001

[ ]   TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15 (d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 (NO  FEE  REQUIRED)
                   For the transition period _______to_______

                         Commission File Number:  0-6541

                               DISCOVERY OIL, LTD.
             (Exact name of registrant as specified in its charter)

                 DELAWARE                                  83-0207909
(State of Incorporation or Organization)           (IRS  Employer  ID  Number)

                   6127 RAMIREZ CANYON ROAD, MALIBU, CA  90265
                    (Address of Principal Executive Offices)

                                 (310) 457-1967
                         (Registrant's Telephone Number)

             Securities Registered Under Section 12 (b) of the Act:
                                      NONE
                                 (Title of Class)

             Securities Registered Under Section 12 (g) of the Act:
                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of Class)

     Indicate  by  check  mark  whether the Registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  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.      (X)YES          ( ) NO

     Indicate  by  check  mark if disclosure of delinquent filers in response to
Item  405  of Regulation S-K is not contained herein, and will not be contained,
to  the  best  of  Registrant's  knowledge,  in  definitive proxy or information
statements  incorporated  by reference in Part III or any amendment to this Form
10-KSB.  [X]

     As  of  April 5, 2002, the Registrant had 20,039,971 shares of common stock
outstanding  with  a  par  value  of  $0.001.  The aggregate market value of the
Registrant's  common  stock  held  by  non-affiliates  as  of  April 5, 2002 was
$1,680,493.  The  Registrant's  revenues  for  the  most recent fiscal year were
$37,442.

     The  Company  qualifies  under  Regulation SB as a "small business issuer",
(i.e. less than $25,000,000 in revenues; a U.S. company other than an investment
company)  and  has  met the small business issuer requirements at the end of the
past  two  consecutive  fiscal  years. The Company is entering the Regulation SB
disclosure  system  by filing its annual report with the Commission on this Form
10-KSB.
<page>


                                TABLE OF CONTENTS

                                      PAGE
                                     PART I

Item  1.     Description  of  Business                                       1

Item  2.     Description  of  Properties                                     2

Item  3.     Legal  Proceedings                                              7

Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders     7

                                     PART II

Item  5.     Market  for  Registrant's  Common  Equity  and  Related
             Stockholder Matters                                             7

Item  6.     Management's  Discussion  and  Analysis  of Financial
             Condition and Results  of  Operations                           8

Item  7.     Financial  Statements                                           9

Item  8.     Changes  in  and  Disagreements  with  Accountants              22

                                    PART III

Item  9.     Directors  and  Executive  Officers  of  the  Registrant        22

Item  10.    Executive  Compensation                                         22

Item  11.    Security Ownership of Certain Beneficial Owners and Management  22

Item  12.    Certain  Relationships  and  Related  Transactions              23

Item  13.    Exhibits  and  Reports  on  Form  8-K                           23

Signatures                                                                   24






















<page>

                                     PART I

EXPLANATORY  NOTE:  As  used in this report; the terms "we", "us", and "our" are
sometimes used to refer to Discovery Oil, Ltd. and, as the context requires, its
management.

ITEM  1.  DESCRIPTION  OF  BUSINESS

SAFE  HARBOR  STATEMENT

This Form 10-KSB contains forward-looking statements. Forward-looking statements
include  statements  concerning  plans,  objectives,  goals,  strategies, future
events,  or  performances and underlying assumptions that are not statements  of
historical  facts.  This  document  and  any  other  written  or oral statements
made  by  us  or  on  our  behalf  may include forward-looking statements, which
reflect  our  current  views  with  respect  to   future  events  and  financial
performance.   The   words   "believe",   "expect",   "anticipate",   "intends",
"estimates",   "forecast",   "project",   and   similar   expressions   identify
forward-looking  statements.

The  forward-looking  statements  in  this   document  are  based  upon  various
assumptions;  many of which are based on management's discussion and analysis or
plan of operations and elsewhere in this report.  Although we believe that these
assumptions  were  reasonable  when made, other statements are not guarantees of
future  performance  and are subject to certain risks and uncertainties, some of
which are beyond our control and are difficult to predict.  Actual results could
differ  materially  from those expressed in forward-looking statements.  Readers
are  cautioned  not  to  place undue reliance on any forward-looking statements,
which  reflect  management's  view  only  as  of  the  date  of  this  report.

GENERAL

Discovery  Oil,  Ltd.  (the  "Company",  "Registrant",  or "Discovery Oil"), was
originally  organized  under  the  laws  of  the  State of Wyoming in 1964.  The
Company  became  a  Delaware  corporation  through  a merger with a wholly owned
subsidiary  in  1981.  Prior  to  1992,  the  Company  was involved as a general
partner  in several limited partnerships for the purpose of drilling oil and gas
wells  in Ohio, Wyoming, Colorado, Kansas, and Texas.  In 1988 the company filed
a  petition  in  Bankruptcy  pursuant  to Chapter 11 of the Bankruptcy code in a
United  States  Bankruptcy Court.  On July 10, 1996, the Court entered its order
and  Final Decree, confirming the execution of the Company's reorganization plan
and  concluding  all  proceedings  and  jurisdiction  of  the  bankruptcy.

The  Company  has  a  non-operating  working interest in six producing oil wells
having proved reserves.  The working interest grants the Company a 12.5% working
interest,  or a 9.32% net revenue interest after underlying royalty payments, in
the oil produced and marketed from each well. The oil wells are near the city of
Signal  Hill, California; the Company maintains an office in Malibu, California.

EMPLOYEES

The  Company has no paid employees.  Neither of the Company's executive officers
are employed by the Company.  Management services are provided on an "as needed"
basis  without  compensation.  The  Company has no oral or written contracts for
services  with  any  member  of  management.






<page>
RISK  FACTORS

The  Company's  business  is  subject  to  numerous  risk factors, including the
following:

Independent  Certified  Public  Accountants'  Opinion  -  Going  Concern
------------------------------------------------------------------------

The  Company's  financial  statements for the year ended December 31, 2001, were
audited  by the Company's independent certified public accountants, whose report
includes  an  explanatory  paragraph  stating that the financial statements have
been prepared assuming the Company will continue as a going concern and that the
Company has incurred operating losses since its inception that raise substantial
doubt  about  its  ability  to  continue  as  a  going  concern.

The  Company  must  expand  its  operations
-------------------------------------------

The Company's long-term success is ultimately dependent on its ability to expand
its  revenue base through the acquisition of producing properties or negotiating
a  business combination with a profitable business entity. There is no assurance
that  the  Company  will  be  successful  in its plans to expand its operations.

Limited  financial  resources
-----------------------------

The  Company  has  limited  financial  resources  and,  if  the  business is not
profitable,  may  not  be able to raise sufficient funds to sustain, continue or
expand  its  business.  The  Company  currently  has limited revenues and relies
principally  on  the  issuance  of  common  stock  to raise funds to finance the
business  of  the  Company.  There  is  no assurance that market conditions will
continue  to  permit  the  Company  to  raise  funds  if  required.

Prices  of  oil  and  natural  gas  fluctuate  widely based on market conditions
--------------------------------------------------------------------------------

The  Company's  revenues, operating results, cash flow and future rate of growth
are  very  dependent  upon prevailing prices for oil and gas.  Historically, oil
and  gas prices and markets have been volatile and not predictable, and they are
likely  to  continue  to  be volatile in the future.  Prices for oil and gas are
subject  to  wide  fluctuations  in  response to relatively minor changes in the
supply  of  and  demand  for  oil  and  gas, market uncertainty and a variety of
additional  factors  that  are  beyond  our  control,  including:

-     political  conditions  in  oil  producing  and  exporting  countries;
-     the  supply  and  price  of  foreign  oil  and  gas;
-     the  level  of  consumer  product  demand;
-     the  price  and  availability  of  alternative  fuels;  and
-     the  effect  of  federal  and  state  regulation  on  production  and
       transportation

The  Company  must  replace  the  reserves  it  produces
--------------------------------------------------------

A  substantial  portion  of  the Company's oil and gas properties contain proved
developed  reserves.  Successful  development  and  production of those reserves
cannot be assured.  There is no assurance that the Company's present oil and gas
wells  will  continue  to produce at current or anticipated rates of production,
that  development  drilling  will  be successful, that production of oil and gas
will  commence  when  expected, that there will be favorable markets for oil and
gas  which  may  be  produced in the future or that production rates achieved in
early  periods  can  be  maintained.
<page>

The  Company  faces  intense  competition
-----------------------------------------

The  oil  and  natural gas industry is highly competitive.  The Company competes
with  others  for  property  acquisitions and for opportunities to explore or to
develop  and produce  oil and natural gas.  The Company faces strong competition
from  many  companies  and individuals with greater capital, financial resources
and  larger  technical  staffs.

Company  reserves  are  uncertain
---------------------------------

Estimating  Company  proved  reserves  involves  many  uncertainties,  including
factors  beyond  the  Company's  control.  There  are  uncertainties inherent in
estimating  quantities  of  proved  oil and natural gas reserves since petroleum
engineering  is  not an exact science. Estimates of commercially recoverable oil
and  gas  reserves  and  of the future net cash flows from them are based upon a
number  of  variable  factors  and  assumptions  including:

-     historical  production  from  the properties compared with      production
      from  other  producing  properties;
-     the  effects  of  regulation  by  governmental  agencies;
-     future  oil  and  gas  prices;  and
-     future  operating  costs,  severance  and excise taxes, abandonment costs,
      development  costs  and  workover  and  remedial  costs.

Governmental  regulation,  environmental risks and taxes could adversely  affect
--------------------------------------------------------------------------------
the  Company's  operations
--------------------------

The  Company's  oil  and  natural  gas  operations  are subject to regulation by
federal  and  state  governments,  including  environmental  laws.  To date, the
Company  has  not  had  to  expend  significant  resources  in  order to satisfy
environmental  laws  and  regulations  presently in effect.  However, compliance
costs  under  any new laws and regulations that might be enacted could adversely
affect  the  Company's  business  and increase the costs of planning, designing,
drilling,  installing, operating and abandoning the Company's oil and gas wells.
Additional  matters  that  are,  or  have  been  from  time  to time, subject to
governmental  regulation  include  land  tenure,  royalties,  production  rates,
spacing, completion procedures, water injections, utilization, the maximum price
at  which  products  could  be sold, energy taxes and the discharge of materials
into  the  environment.

Environmental  risks
--------------------

The  Company  is  subject  to laws and regulations that control the discharge of
materials  into  the  environment,  require  removal  and  cleanup  in   certain
circumstances,  require  the  proper handling and disposal of waste materials or
otherwise  relate  to the protection of the environment. In operating and owning
petroleum  interests,  the  Company  may  be liable for damages and the costs of
removing  hydrocarbon  spills for which it is held responsible. Laws relating to
the  protection  of  the  environment  have  in  many  jurisdictions become more
stringent  in  recent  years  and  may,  in certain circumstances, impose strict
liability,  rendering the Company liable for environmental damage without regard
to negligence or fault on the part of the Company. Such laws and regulations may
expose  the  Company  to  liability for the conduct of, or conditions caused by,
others  or  for  acts of the Company that were in compliance with all applicable
laws at the time such acts were performed. The application of these requirements

<page>
or  the adoption of new requirements could have a material adverse effect on the
business of the Company. The Company believes that it has conducted its business
in  substantial  compliance  with  all  applicable  environmental  laws  and
regulations.

ITEM  2.  DESCRIPTION  OF  PROPERTIES

Oil  and  gas  interests
------------------------

In  April of 1984, the Company purchased a non-operating working interest in six
producing  oil  wells  near  the  city  of  Signal Hill, California. The working
interest  grants  the  Company  a 12.5% working interest, or a 9.32% net revenue
interest after underlying royalty payments, in the oil and gas produced and sold
from  each  well.

Geologic  definition  or  description  of  properties
-----------------------------------------------------

The  Company's  working  interest  is  in  six producing oil wells having proved
reserves contained on approximately 21 acres located in the Long Beach Oil Field
near  the  city  of  Signal  Hill,  California.  The  wells are "stripper wells"
(producing  less  than  15  barrels  per  day), and derive their production from
Pliocene  and  Miocene  sands.

Drilling  activities
--------------------

The  Company  does  not  participate  in  any  drilling  activities  or  farmout
agreements.  Under  a  farmout  agreement, outside parties undertake exploration
activities  using  prospects owned by the Company. This would enable the Company
to  participate  in  exploration  prospects without incurring additional capital
costs,  although  with  a  substantially  reduced  ownership  interest  in  each
prospect.  During  the year ended December 31, 2001, no wells were drilled under
farmout  agreements.

Oil  and  gas  production,  prices  and  costs
----------------------------------------------

As  of December 31, 2001, the Company had a 12.5% non-operating working interest
in  six  wells  that  produce  oil,  only.

For  information  concerning the Company's oil and gas production, estimated oil
and  gas  reserves, and estimated future cash inflows relating to proved oil and
gas  reserves,  see Notes 2 and 9 to the financial statements included in Item 7
of this report. The reserve estimates for the reporting year were prepared by an
Independent  Exploration  Company,  the  operator  of the wells and the majority
owner  of the wells. Estimates, provided by Independent Exploration Company, are
based  on  historic  production  data and the analyses of their technical staff.

The  Company  did  not  file  any oil and gas reserve estimates with any federal
authority  or  agency  during  its  fiscal  year  ended  December  31,  2001.

Customers
---------

During  fiscal  year 2001, the Company had one major customer.  The Company does
not  believe  that  it  is  dependent on a single customer.  The Company has the
option  to  change  customers  if  conditions  so  warrant.



<page>
ITEM  3.  LEGAL  PROCEEDINGS

  None.

ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

A  special  shareholders' meeting was held on August 10, 2001.  At the meeting a
majority  of  the  common  shares  (11,877,625  out  of  the  total  issued  and
outstanding  of  19,312,702) were present to vote at the meeting and unanimously
passed  three  proposals:

-     Proposal  1:   To  increase  the  total   authorized  common   stock  from
twenty-five  million  shares  to two hundred million shares, and to decrease the
par  value of the common stock from $0.01 to $0.001 per share by an amendment to
the  Articles  of  Incorporation.

-     Proposal  2.  To  further amend the Articles of Incorporation to eliminate
the  provision  authorizing  preferred  shares.

-     Proposal  3:  To  authorize  the  Board  of Directors to insure additional
shares  of  common  stock  pursuant  to  Rule 506 and Section 4(2) to accredited
investors  to  raise  funds  in  the  amount  of  $100,000  as  needed.

                                     PART II

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The  following table sets forth the range of high and low bid prices as reported
by  the  Over-the-Counter Bulletin Board (OTCBB) for the periods indicated.  The
quotations  reflect  inter-dealer  prices  without  retail mark-up, markdown, or
commission,  and  may  not necessarily represent actual transactions.  Currently
the  stock  is  traded  on  the  OTCBB  under  the  symbol  "DSCY".

YEAR  ENDED  DECEMBER  31,  2000
--------------------------------
                               HIGH            LOW
                            ----------     ----------
Quarter  ended  3-31-00     No  trades     No  trades
Quarter  ended  6-30-00     No  trades     No  trades
Quarter  ended  9-30-00     No  trades     No  trades
Quarter  ended 12-31-00     No  trades     No  trades

YEAR  ENDED  DECEMBER  31,  2001
--------------------------------
                               HIGH            LOW
                            ----------     ----------
Quarter  ended  3-31-01     No  trades     No  trades
Quarter  ended  6-30-01     No  trades     No  trades
Quarter  ended  9-30-01      $  0.42        $  0.01
Quarter  ended 12-31-01      $  0.35        $  0.11

Holders.     The  number of stockholders  of  record on April 5, 2002 was 5,860.

Dividends.   No dividends have been paid or declared during the last five years;
and the registrant  does not anticipate paying dividends on its common stock  in
the  foreseeable  future.






<page>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

Management's  discussion and analysis is intended to be read in conjunction with
the  Company's  audited  financial  statements  and notes thereto. The following
statements  may  be  forward-looking  in  nature  and  actual results may differ
materially.

RESULTS  OF  OPERATIONS

For  the  year  ended December 31, 2001, compared to the year ended December 31,
2000

The Company reported a net loss of $60,762 for the year ended December 31, 2001,
compared to a net loss of $15,496 reported for the year ended December 31, 2000.
The  increase in the net loss during 2001 was primarily due to increased general
and  administrative  expenses  and  lower  prices  received  from  oil  sales.

Oil sales for the year ended December 31, 2001, were $37,442, and were generated
from  sales  of  1,907  barrels  of  oil at an average sales price of $19.63 per
barrel.  During  2000,  the Company had sales of $42,427 generated from sales of
1,714  barrels  of  oil  at  an  average  sale  price  of  $24.75  per  barrel.

Direct  oil  production  expenses  during the year ended December 31, 2001, were
$14,883,  compared  to  $18,717  for  the  year  ended  December  31,  2000.

General  and  administrative  expenses  of  $69,000  were  incurred during 2001,
compared  to  $19,709  during the year ended December 31, 2000.  The increase in
general  and  administrative  expenses  during  2001  related primarily to costs
incurred  in  connection  with  the Company's audit of its financial statements,
filings  with  the  Securities  and  Exchange Commission, and listing its common
stock  on  the  Over-the-Counter  Bulletin  Board.

Interest  expense decreased from $19,497 during the year ended December 31, 2000
to  $14,321  for  the  year  ended  December 31, 2001. The decrease was due to a
corresponding  decrease  in  a  related  party  payable  during  2001.

FINANCIAL  CONDITION  AND  LIQUIDITY

Total assets at December 31, 2001, were $4,332, stockholders' deficit was $6,621
and  the  accumulated  deficit  was  $590,623.  Net  cash used by operations was
$58,949  during  the  year  ended  December  31,  2001,  and $77,000 of cash was
provided  by  convertible  promissory  notes  sold  during  2001.

The  Company's  liabilities decreased substantially from $441,361 as of December
31,  2000,  to  $10,953  as  of  December  31, 2001, due to the conversions of a
related  party  payable,  convertible  promissory  notes and accrued interest to
common  stock.  As  of  December  31,  2001  the  company had a negative working
capital  of  $6,621.  The  Company's  working interest in its oil properties has
been  depleted  to  zero.

The  Company  plans  to  fund  its  operations  during fiscal year 2002, through
advances  from  related  parties  and  net  revenues  from oil sales. Management
believes  that  additional  funding  may  also be available through sales of the
Company's  common  stock, although there can be no assurance the Company will be
successful  in  selling  its  common  stock.






<page>
ITEM  7.  FINANCIAL  STATEMENTS

REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS

Board  of  Directors
Discovery  Oil,  LTD.

We  have  audited  the  accompanying  balance sheet of Discovery Oil, LTD. ("the
Company")  as  of  December  31, 2001, and the related statements of operations,
stockholders'  deficit,  and cash flows for the year then ended. These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.  The  financial statements of Discovery Oil, LTD. as of December 31,
2000, were audited by other auditors whose report dated March 5, 2001, expressed
an  unqualified  opinion  on  those  statements.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audit  provides  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of Discovery Oil, LTD. as of
December  31, 2001, and the results of its operations and its cash flows for the
year then ended, in conformity with auditing standards generally accepted in the
United  States  of  America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 1 to the
financial  statements,  the  Company's  operating losses raise substantial doubt
about  its  ability to continue as a going concern.  The financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

DeCoria,  Maichel  &  Teague  P.S.

/s/  DeCoria,  Maichel  &  Teague  P.S.

Spokane,  Washington
March  22,  2002

















<page>
                               DISCOVERY OIL, LTD.
                                TABLE OF CONTENTS



                                                                          Page

Balance  Sheets,  December  31,  2001  and  2000                           F-3

Statements  of Operations for the years ended December 31, 2001 and 2000   F-4

Statements  of  Changes  in  Stockholders'  Deficit
for  the  years  ended  December  31,  2001  and  2000                     F-5

Statements  of Cash Flows for the years ended December 31, 2001 and 2000   F-6

Notes  to  Financial  Statements                                      F-7-F-16














































DISCOVERY  OIL,  LTD.
BALANCE  SHEETS
December  31,  2001  and  2000





                                                   2001            2000
                                              --------------  --------------
ASSETS
Current  assets:
     Cash                                     $       3,058   $           0
     Accounts  receivable                             1,274
                                              --------------  --------------
          Total  assets                       $       4,332   $           0
                                              ==============  ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current  liabilities:
     Accounts  payable                        $      10,819
     Related  party  payable                            134   $     172,457
     Interest  payable  to  related  party                          268,904
                                              --------------  --------------
          Total  liabilities                         10,953         441,361
                                              --------------  --------------

Commitments  and  Contingencies

Stockholders' deficit:
  Common  stock, $0.001 and $0.01 par value;
    200,000,000 and 25,000,000 shares
    authorized; 20,039,971 and 9,313,352
    shares issued and outstanding                    20,041          93,134
Common  stock  discount                                              (4,634)
Additional  paid-in  capital                        563,961
          Accumulated  deficit                     (590,623)       (529,861)
                                              --------------  --------------
          Total  stockholders'  deficit              (6,621)       (441,361)
                                              --------------  --------------

 Total liabilities and stockholders' deficit  $       4,332   $           0
                                              ==============  ==============

















    The accompanying notes are an integral part of the financial statements.
<page>
DISCOVERY  OIL,  LTD.
STATEMENTS  OF  OPERATIONS
For  the  years  ended  December  31,  2001  and  2000


                                                   2001            2000
                                              --------------  --------------

Revenues:
     Sales  of  oil                                  37,442          42,427
                                              --------------  --------------

Operating  expenses:
  Direct  costs  of  production                      14,883          18,717
  General and administrative expenses                69,000          19,709
                                              --------------  --------------
                                                     83,883          38,426
                                              --------------  --------------

Other  expenses:
  Interest  expense                                  14,321          19,497
                                              --------------  --------------
                                                     14,321          19,497
                                              --------------  --------------

Net  loss                                     $     (60,762)  $     (15,496)
                                              ==============  ==============

Net  loss  per  share-basic                   $         Nil   $         Nil
                                              ==============  ==============

Weighted-average shares outstanding-basic        13,525,298       9,313,352
                                              ==============  ==============




























    The accompanying notes are an integral part of the financial statements.
<page>
DISCOVERY  OIL,  LTD.
STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  DEFICIT
For  the  years  ended  December  31,  2001  and  2000



<table>
                      COMMON  STOCK       ADDITIONAL  DISCOUNT ON
                  ----------------------  PAID-IN     COMMON      ACCUMULATED
                  SHARES       AMOUNT     CAPITAL     STOCK       DEFICIT     TOTALS
                  ----------  ----------  ----------  ----------  ----------  ----------

               <c>         <c>         <c>         <c>         <c>         <c>
Balance,
 Dec. 31, 1999    9,313,352   $   93,134  $      -    $   (4,634) $ (514,365) $ (425,865)

Net  loss                                                            (15,496)    (15,496)
                  ----------  ----------  ----------  ----------  ----------  ----------
Balance,
 Dec. 31, 2000     9,313,352      93,134         -        (4,634)   (529,861)  (441,361)

Issuance of
 common stock for
 related party
 payable and
 accrued interest  8,979,350      89,793      305,310                           395,103

Issuance of
 common stock
 for consulting
 services          1,020,000      10,200       10,200                            20,400

Issuance of
 common stock
 for convertible
 promissory notes
 and accrued
  interest           727,269       7,273       72,726                            79,999

Adjustment to
 common stock
 par value                      (180,359)     175,725      4,634                    -

Net  loss                                                            (60,762)    (60,762)
                  ----------  ----------  ----------  ----------  ----------  ----------
Balance,
 Dec. 31, 2001    20,039,971  $   20,041  $  563,961  $      -    $ (590,623) $   (6,621)
                  ==========  ==========  ==========  ==========  ==========  ==========
</table>













    The accompanying notes are an integral part of the financial statements.
<page>
DISCOVERY  OIL,  LTD.
STATEMENTS  OF  CASH  FLOWS
For  the  years  ended  December  31,  2001  and  2000


                                                   2001            2000
                                              --------------  --------------
Cash  flows  from  operating  activities:
  Net  loss                                   $     (60,762)  $     (15,496)
  Adjustments to reconcile net loss to
    net cash used by operating activities:
    Common stock issued for consulting
      services          20,400
  Change  in:
    Accounts receivable                              (1,274)
    Accounts payable                                 10,819
    Interest payable to related party               (28,266)          19,497
    Related  party  payable                             134
                                              --------------  --------------
Net cash provided (used) by operating
  activities                                        (58,949)          4,001
                                              --------------  --------------

Cash  flows  from  financing  activities:
  Proceeds  from  related  party  payable             2,007
  Proceeds from convertible promissory notes         77,000
  Payments  on  related  party  payable             (17,000)         (4,898)
                                              --------------  --------------
Net cash provided (used) by financing
  activities                                         62,007          (4,898)
                                              --------------  --------------

Net  change  in  cash                                 3,058            (897)

Cash,  beginning  of  year                                0             897
                                              --------------  --------------

Cash,  end  of  year                          $       3,058   $           0
                                              ==============  ==============


Supplemental  cash  flows  disclosure:
  Cash paid for related party interest        $     42,588
                                              =============

Non-cash  financing  activities:
  Conversion  of  related  party  payable,
    convertible  promissory  notes  and
    accrued  interest  into  common  stock    $    475,102
                                              =============











    The accompanying notes are an integral part of the financial statements.
<page>
DISCOVERY  OIL,  LTD.
NOTES  TO  FINANCIAL  STATEMENTS, CONTINUED

1.     DESCRIPTION  OF  BUSINESS

Discovery  Oil, Ltd. ("the Company"), originally organized under the laws of the
State  of Wyoming in 1964, became a Delaware corporation through a merger with a
wholly  owned  subsidiary in 1981.  Prior to 1992, the Company was involved as a
general  partner in several limited partnerships for the purpose of drilling oil
and  gas  wells  in  Ohio,  Wyoming,  Colorado, Kansas, and Texas.  In 1988, the
Company  filed a Petition in Bankruptcy pursuant to Chapter 11 of the Bankruptcy
Code  in  a United States Bankruptcy Court.  On July 10, 1996, the Court entered
its  Order  and  Final  Decree,  confirming  the  execution  of  the   Company's
reorganization  plan  and  concluding  all  proceedings  and jurisdiction of the
bankruptcy.  Currently,  the  Company has a 12.5% non-operating working interest
in  six  small oil wells near the city of Signal Hill, California, and maintains
an  office  in  Malibu,  California.

The  financial statements are presented on the basis that the Company is a going
concern,  which  contemplates  the realization of assets and the satisfaction of
liabilities  in  the normal course of business over a reasonable length of time.
The  Company  has  incurred  operating  losses  for  several  years  and  has  a
stockholders'  deficit.  These  conditions  raise  substantial  doubt  as to the
Company's  ability  to  continue  as  a  going  concern.

Management's  plans  for  the  continuation  of  the  Company as a going concern
include  financing  the  Company's operations through related party advances and
locating  an  entity  that  wishes  to engage in a business combination with the
Company.  There  are  no assurances, however, with respect to the future success
of  these  plans. The financial statements do not contain any adjustments, which
might  be  necessary,  if  the Company is unable to continue as a going concern.

Unless  otherwise  indicated,  amounts  provided in these notes to the financial
statements  pertain  to  continuing  operations.

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Basis  of  presentation

Included  in  the  Company's  production  expenses  as  presented are all direct
expenses  of  oil  production,  including  severance  taxes  and  royalties; not
included  in  production  expenses  are depreciation, depletion and amortization
("DD&A")  expenses  and  corporate  administration  expenses.

Cash  and  cash  equivalents

For  the  purpose  of  the  balance  sheet  and the statement of cash flows, the
Company  considers  all  highly  liquid  investments purchased, with an original
maturity  of  three  months  or  less,  to  be  cash  equivalents.

Use  of  estimates

The  preparation  of  the  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 amounts reported in
the  financial  statements  and accompanying notes.  Actual results could differ
from  those  estimates.





<page>
DISCOVERY  OIL,  LTD.
NOTES  TO  FINANCIAL  STATEMENTS, CONTINUED

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

Income  taxes

Income taxes are recognized in accordance with Statement of Financial Accounting
Standards  No.  109,  "Accounting for Income Taxes," whereby deferred income tax
liabilities  or  assets  at  the end of each period are determined using the tax
rate  expected  to be in effect when the taxes are actually paid or recovered. A
valuation  allowance is recognized on deferred tax assets when it is more likely
than  not  that  some  or all of these deferred tax assets will not be realized.

Net  loss  per  share

Statement  of  Financial  Accounting  Standards  No.  128, "Earnings per Share,"
requires  dual  presentation of basic earnings per share ("EPS") and diluted EPS
on  the  face  of  all  income statements, for all entities with complex capital
structures.  Basic  EPS  is computed as net loss divided by the weighted average
number  of  common  shares outstanding for the period.  Diluted EPS reflects the
potential  dilution  that  could occur from common shares issuable through stock
options,  warrants,  and other convertible securities.  At December 31, 2001 and
2000,  the  Company  had  no  outstanding  stock  options,  warrants,  or  other
convertible  securities,  accordingly,  only  basic  EPS  is  presented.

Fair  values  of  financial  instruments

The  carrying   amounts  of  financial  instruments   including  cash,  accounts
receivable,  and accounts payable, approximated their fair values as of December
31,  2001  and  2000.  The  carrying values of related party payable and accrued
interest  payable  approximated  their   fair  values  based  upon  management's
assessment  of the fair values of comparable instruments as of December 31, 2001
and  2000.

Segment  information

During the years ended December 31, 2001 and 2000, all of the Company's revenues
came  from  sales  of  oil  to  a  single  customer.

Reclassifications

Certain  reclassifications  of  prior year balances have been made to conform to
the  current year presentation.  These reclassifications have no affect on total
assets  or  stockholders'  deficit  as  reported.

Oil  properties

The  Company's oil properties consist of a non-operating working interest in six
producing  oil  wells  having  proved  reserves. The working interest grants the
Company  a  12.5%  working  interest,  or  a  9.32%  net  revenue interest after
underlying  royalty  payments,  in the oil produced and marketed from each well.
Unless  otherwise indicated, quantitative information contained herein regarding
the Company's oil properties and the production therefrom relates to the working
interest.  All  of  the  Company's  oil  properties  are  in  the United States.







<page>
DISCOVERY  OIL,  LTD.
NOTES  TO  FINANCIAL  STATEMENTS, CONTINUED

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

Oil  properties, Continued

The  Company follows the successful efforts method of accounting for its oil and
gas operations.  Under this method of accounting, all property acquisition costs
and  costs  of  exploratory and development wells are capitalized when incurred,
pending  determination  of whether an individual well has found proved reserves.
If  it is determined that an exploratory well has not found proved reserves, the
costs  of  drilling  the  well are expensed.  The costs of development wells are
capitalized  whether  productive  or  nonproductive.   The   Company   amortizes
capitalized  costs  on  the  units-of-production  method based on production and
total  estimated  proved  reserves.

New  accounting  pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141, "Business Combinations," and No. 142,
"Goodwill  and  Other  Intangible  Assets," collectively, the Statements.  These
Statements drastically change the accounting for business combinations, goodwill
and  intangible  assets.  Companies are required to adopt Statement 142 in their
fiscal year beginning after December 15, 2001.  The Company anticipates that the
adoption  of  these  Statements will not have a material affect on its financial
statements.

In  June  2001,  the  FASB  issued  Statement  No.  143,  "Accounting  for Asset
Retirement  Obligations,"  which provides accounting requirements for retirement
obligations associated with tangible long-lived assets.  The Company anticipates
that  the  adoption  of  this  statement  will not have a material affect on its
financial  statements.

In  August  2001,  the  FASB  issued  Statement  No.  144,  "Accounting  for the
Impairment  or  Disposal  of  Long-Lived  Assets,"  which  will be effective for
financial  statements  issued for fiscal years beginning after December 15, 2001
and  interim  periods  within  those  fiscal  years.  SFAS No. 144 requires that
long-lived  assets  to  be  disposed  of by sale be measured at the lower of the
carrying  amount or fair value less cost to sell, whether reported in continuing
operations  or  in  discontinued  operations.  The  Company anticipates that the
adoption  of  this  statement  will  not have a material affect on its financial
statements.

3.     INCOME  TAXES

The  Company  recorded  no income tax provision for the years ended December 31,
2001 and 2000, as during those years net losses were incurred.  During 2001, the
Company's  prior  years'  tax-basis  net  operating losses substantially expired
pursuant  to  the  provisions of Internal Revenue Code Section 382, and upon the
Company's  issuance  of  additional  shares  of  its  common stock (See Note 7).
Accordingly,  any  deferred tax asset associated with prior years' net operating
losses  is  not  recognized  in  the  Company's  financial  statements.









<page>
DISCOVERY  OIL,  LTD.
NOTES  TO  FINANCIAL  STATEMENTS, CONTINUED

4.     CONVERTIBLE  PROMISSORY  NOTES

During  2001,  the  Company  sold $77,000 of its convertible promissory notes to
certain  accredited  individual  investors.  The principal balances of the notes
were due one year from the date of issue and included accrued interest at 9% per
annum.  The  holders  of  the  notes  had  rights  to  convert  the  notes  into
unregistered  shares of the Company's common stock at a rate of $0.11 per share.
In August of 2001, all of the note holders exercised their conversion rights and
converted  $79,999 of convertible promissory note principal and accrued interest
into  727,269  shares  of  the  Company's  unregistered  common  stock.

5.     RELATED  PARTY  PAYABLE

In  August  of  1987, the Company's board of directors entered into an agreement
with  Andrew  V.  Ippolito,  president  and  a  director, whereby Mr. Ippolito's
advances,  accommodations and expenses paid on the Company's behalf would accrue
interest  equal  to the prime rate plus two percent in effect at the time of the
advances.  At  December  31,  2000,  the  related  party payable was composed as
follows:

     YEAR           RATE            AMOUNT
     ----         -------          ---------
     1987          10.21%          $  16,224
     1988          11.32%            146,233
     1989          12.87%             10,000
                                   ---------
                                   $ 172,457
                                   =========

Accrued interest on  Mr. Ippolito's payable was $268,904, at December 31, 2000.

In  July  of  2001,  Mr. Ippolito agreed to convert the principal balance of the
payable  due him along with a portion of the accrued interest, into unregistered
shares of the Company's common stock at a rate of $0.02 per share.  Accordingly,
the  Company  issued  8,979,350  shares  of its unregistered common stock to Mr.
Ippolito  in  exchange for the extinguishment of the account payable and accrued
interest  due him.  In connection with the transaction, Mr. Ippolito also agreed
to  forgive  the remaining balance of unconverted accrued interest.  The Company
recorded  the  conversion  and  the  forgiveness  of unconverted interest in its
common  stock  and  paid-in  capital  accounts  according  to  the provisions of
Accounting  Principles  Board  No.  26  and  its  guidance  on  extinguishment
transactions  between  related  parties.

The  schedule  below  summarizes  the  activity in the related party payable and
accrued  interest  accounts  during  2001:
                                RELATED PARTY
                                PAYABLE         ACCRUED INTEREST     TOTAL
                                -------------   ----------------   ------------
Balance, December 31, 2000      $    172,457    $       268,904    $   441,361
                                -------------   ----------------   ------------
Advances  and  accruals                2,141             11,323         13,464
Payments                             (17,000)           (42,588)       (59,588)
Conversion to common stock          (157,464)           (22,123)      (179,581)
Forgiveness  of accrued interest         -             (215,516)      (215,516)
                                -------------   ----------------   ------------
Total                               (172,323)          (268,904)       441,221
                                -------------   ----------------   ------------
Balance,  December  31,  2001   $        134    $             0    $       134
                                =============   ================   ============
<page>
DISCOVERY  OIL,  LTD.
NOTES  TO  FINANCIAL  STATEMENTS, CONTINUED

6.     COMMITMENTS  AND  CONTINGENCIES

In  connection with the purchase of the its 12.5% non-operating working interest
in  six  oil  wells,  the  Company  entered into an operating agreement with the
majority  owner  and  operator  of  the  wells.  The  agreement,  modeled  after
agreements  standard  and  customary to the oil industry, commits the Company to
pay  its  share  of  joint  interest  operating costs incurred in the operation,
maintenance  and  potential  future  development  of  the  wells. Oil prices are
extremely volatile and instances may occur where the Company's revenues from oil
sales  are  less  than  its corresponding production expenses.  In addition, oil
well repair and maintenance activities may interrupt oil sale revenue and add to
overall  operation  costs.

Domestic  oil  operations  are  also subject to extensive federal regulation and
potential  interruption or termination by governmental authorities on account of
environmental  and  other  regulatory  considerations.  The recent trend towards
stricter standards in environmental legislation and regulation may continue, and
this  could  increase  the  overall  costs  to  the  Company.

7.     STOCKHOLDERS'  DEFICIT

Common  stock

The Company has one class of issued and outstanding common stock. Prior to 2001,
the  par  value  of  the  common  stock  was  $0.01,  and 25 million shares were
authorized  for  issue.  Pursuant  to a majority shareholder action at a special
meeting  of  shareholders  held  in August of 2001, the Company's Certificate of
Incorporation  was  amended  to  increase  the  number of shares of common stock
authorized  for  issue  to  200 million shares, to decrease the par value of the
Company's  common  stock  to  $0.001  per  share, and to eliminate the provision
authorizing  preferred  stock  of  the  Company.

Preferred  stock

At  December  31,  2000, the Company was authorized to issue 5,000,000 shares of
preferred  stock  with  a  par  value of $1.00 per share, none of which had been
issued.  The  provision  authorizing  preferred  stock was eliminated through an
amendment to the Company's Certificate of Incorporation during 2001 (see "Common
Stock").

Common  stock  discount

In  prior  years, the Company issued common stock at per-share amounts less than
the  common stock's par value. As a result, at December 31, 2000, a common stock
discount of $4,643 was recorded in the Company's stockholders' deficit accounts.
The  common stock discount was extinguished during 2001 when the Company reduced
the  par value of its common stock and converted certain debts into common stock
equity.

Common  stock  issued  for  consulting  services

During  2001,  the  Company  issued  an  aggregate  of 1,020,000 shares to three
consultants  that had provided accounting and financial services to the Company.
In  connection  with  the  issuance, the Company recorded an expense of $20,400,
approximating  the  value  of  the  services  rendered.




<page>
DISCOVERY  OIL,  LTD.
NOTES  TO  FINANCIAL  STATEMENTS, CONTINUED

7.     STOCKHOLDERS'  DEFICIT,  CONTINUED:

Common  stock  issued  for  related  party  payable

In  July  of  2001,  Andrew V. Ippolito, the Company's president and a director,
converted $157,464 due him together with accrued interest totaling $22,123, into
8,979,350  shares of the Company's unregistered common stock.  The related party
payable  and  accrued  interest  were converted at $0.02 per share (See Note 5).

Convertible  promissory  notes  converted  to  common  stock

In  August  of  2001,  the  holders  of outstanding convertible promissory notes
converted  principal  and accrued interest of $79,999 into 727,269 shares of the
Company's  unregistered  common  stock  at  $0.11  per  share  (See  Note  4).

8.     RELATED  PARTY  TRANSACTIONS

The  Company occupies office space provided by Andrew V. Ippolito, the Company's
president  and  a  director.  The Company pays no rent for the space it occupies
and  the  value  of the space is not considered material for financial reporting
purposes.  The  Company  reimburses  Mr.  Ippolito for various out-of-pocket and
general  and  administrative  expenses  inccured by him on the Company's behalf.
During  2001, the Company's reimbursements to Mr. Ippolito totaled approximately
$11,000.



































<page>
DISCOVERY  OIL,  LTD.
SUPPLEMENTAL  INFORMATION
For  the  years  ended  December  31,  2001  and  2000  (Unaudited)

The  following  notes  include  unaudited  supplemental financial information as
currently  required  by  the  Securities and Exchange Commission ("SEC") and the
Financial  Accounting  Standards  Board.

9.     ESTIMATED  QUANTITIES  OF  OIL  AND  GAS  RESERVES  (UNAUDITED)

Proved  reserves  are the estimated quantities of crude oil, which upon analysis
of  geological  and  engineering  data  appear  with  reasonable certainty to be
recoverable  in  future  years from known reservoirs under existing economic and
operating conditions. Proved developed reserves are proved reserves which can be
expected  to  be  recovered  through  existing wells with existing equipment and
under  existing  operating  conditions.

The  estimation  of  reserves  requires  substantial  judgment  on  the  part of
petroleum  engineers  and  may  result in imprecise determinations, particularly
with  respect to new discoveries. Accordingly, it is expected that the estimates
of reserves will change as future production and development information becomes
available  and  that  revisions  in  these  estimates  could  be  significant.

The Company's proved reserves are contained on approximately 21 acres located in
the  Long  Beach  Oil  Fields  near  the  city  of  Signal  Hill,  California.

Following  is  a  reconciliation  of  the  Company's estimated net quantities of
proved  oil  reserves,  based  upon  net  oil  production  after royalties to be
generated  from  the  Company's  working  interest and as estimated by petroleum
consultants.

     Barrels  of  Oil
     ----------------

     Proved  reserves,  December  31,  1999                         33,052
     Oil production for the period ended December 31, 2000          (1,714)
                                                                  ---------
     Proved  reserves,  December  31,  2000                         31,338
                                                                  ---------
     Oil production for the year ended December 31, 2001            (1,907)
                                                                  ---------
     Proved  reserves,  December  31,  2001                         29,431
                                                                  =========

The  Company's  current  properties have no remaining natural gas reserves.

















<page>
DISCOVERY  OIL,  LTD.
SUPPLEMENTAL  INFORMATION,  CONTINUED:
For  the  years  ended  December  31,  2001  and  2000  (Unaudited)

10.     STANDARDIZED  MEASURE  OF  DISCOUNTED  FUTURE NET CASH FLOWS (UNAUDITED)

Statement  of  Financial Accounting Standards No. 69, "Disclosures about Oil and
Gas  Producing  Activities,"  prescribes guidelines for computing a standardized
measure of future net cash flow and changes therein relating to estimated proved
reserves. The Company has followed these guidelines, which are briefly discussed
in  the  following  paragraphs.

Future  cash  inflows and future production and development costs are determined
by  applying year-end oil prices and costs to the estimated quantities of oil to
be  produced. Estimated future income taxes are computed using current statutory
income  tax  rates  including  consideration for estimated future depletion. The
resulting future net cash flows are reduced to present value amounts by applying
a  10%  annual  discount  factor.

The assumptions used to compute the standardized measure are those prescribed by
the  Financial  Accounting  Standards  Board  and,  as  such, do not necessarily
reflect  the  Company's expectations of actual revenues to be derived from those
reserves  nor  their  present  worth.  The  limitations  inherent in the reserve
quantity  estimation process, as discussed previously, are equally applicable to
the  standardized  measure  computations since these estimates are the basis for
the  valuation  process.

The following summary sets forth the Company's future net cash flows relating to
proved  oil  and  gas  reserves  based on the standardized measure prescribed in
Statement  of  Financial  Accounting  Standards  No.  69:

                                                    2001               2000
                                              --------------    ---------------
     Future  cash  inflows                    $     389,822     $     470,072
     Future  production  costs                     (374,919)          (393,070)
     Future  income  tax  provision                  (5,067)          (26,185)
                                              --------------    ---------------
     Future  net  cash  flows                         9,836             50,817
     Effect  of  10%  discount  factor                 (927)           (21,456)
                                              --------------    ---------------
     Standardized  measure  of  discounted
          future  net  cash  flows            $       8,909     $       29,361
                                              ==============    ===============

Oil prices used in calculating the standardized measure of discounted future net
cash  flows  were $13.25 per barrel and $15.00 per barrel, for December 31, 2001
and  2000,  respectively.

The  principal  sources  of  changes  in  the standardized measure of discounted
future  net  cash  flows  are  as  follows for the year ended December 31, 2001:

     2001

     Standardized  measure, beginning of year            $     29,361
     Sales of oil produced, net of production costs            (3,876)
     Change  in  prices                                       (17,061)
     Accretion  of  discount  and  other                          485
                                                         -------------
     Standardized  measure,  end  of  year               $      8,909
                                                         =============


<page>
ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
FINANCIAL  DISCLOSURE

Effective  January  3,  2002, DeCoria, Maichel & Teague P.S. replaced Williams &
Webster, P.S. as the Company's independent public accountants.  During the years
ended  December  31,  2000  and  2001,  Williams  &  Webster  P.S. report on the
financial  statements  of the Company contained no adverse opinion or disclaimer
of  opinion, nor were they qualified or modified as to uncertainty, audit scope,
or accounting principles, except for a paragraph wherein Williams & Webster P.S.
expressed  substantial  doubt about the Company's ability to continue as a going
concern.  During  such  periods  there  were  no  disagreements  with Williams &
Webster  P.S.  on  any  matter  of accounting principles or practices, financial
statement disclosure, or auditing scope, or procedure, which, if not resolved to
the  satisfaction  of such firm, would have caused them to make reference to the
subject  matter  of  such   disagreement  in  their  report  on  such  financial
statements.

                                    PART III

ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

Name of Executive Officers and          Principal Occupation, Five-Year
Directors and Positions Held      Age   Business  History  and Directorships
-------------------------------  -----  --------------------------------------

Andrew  V.  Ippolito,                   Currently and for the past 25 years,
  President                         68  Mr. Ippolito functioned as a business
  and Chairman of the Board of          executive, diplomat, Honorary Consul
  Directors                             General of Liberia and General Secretary
                                        of the Los Angeles Consular Corps,
                                        representing more than 86 countries and
                                        providing access to international
                                        finance and trade markets.  Current
                                        President and Chairman of the Board of
                                        Discovery Oil, LTD and co-founder of
                                        Sunshine Management  International,
                                        serving as management and financial
                                        consultant to several foreign nations
                                        and corporations.


M. Jeanett Ippolito, Secretary
  and a Director                    58    Mrs. Ippolito has been a real estate
                                          broker for over 20 years.

The  bylaws  of  the  Company  provided  that the Directors serve until the next
annual  meeting  of  shareholders or until their respective successors have been
duly  elected and qualified.  The bylaws also provide that the officers serve at
the  discretion  of  the  Board  of  Directors

ITEM  10.  EXECUTIVE  COMPENSATION

No  officer  receives  any  compensation  for  services rendered to the Company.
Directors  receive  no  annual compensation nor attendance fees for servicing in
such  capacity.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

Andrew  V. Ippolito, president and a director and his wife M. Jeanett, secretary
and  a  director, collectively owned 2,037,625 shares of the Registrant's common
stock  representing  60%  of  the  total outstanding shares as of April 5, 2002.

<page>
ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

See  notes  5, 7, and 8 to the financial statements for the years ended December
31,  2001  and  2000.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

REPORTS  OF  FORM  8-K

During  the  fourth  quarter  of  2001,  no  reports  were  filed  on  form 8-K.

EXHIBITS

NO.              DESCRIPTION                               DATE

99.1*            Notice of Order Confirming Plan and
                 Discharge                                 May 13, 1988

99.2*            Order of Final Decree (Bankruptcy)        July 15, 1996

99.3*            Declaration  of  Andrew  V.  Ippolito     June 26, 1996

3(i)**           Certificate of Second Amendment of
                 Certificate  of  Incorporation            September  7,  2001

*   As previously filed with the Registrant's annual report on Form 10-K for the
year  ended December  31,  2000.

**As  filed  herewith.

































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                                   SIGNATURES

Pursuant  to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.

          DISCOVERY  OIL,  LTD

     By:     /s/  Andrew  V.  Ippolito
             -------------------------
          Andrew  V.  Ippolito
          President
          Date:  April  12,  2002

     By:     /s/  M.  Jeanett  Ippolito
             --------------------------
          M.  Jeanett  Ippolito
          Secretary
          Date:  April  12,  2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed below by the following persons on behalf of the registrant and
in  the  capacities  and  on  the  dates  indicated.

By:/s/  Andrew  V.  Ippolito
   -------------------------
Andrew  V.  Ippolito
President  and  Director
Date:  April  12,  2002

By:/s/  M.  Jeanett  Ippolito
   --------------------------
M.  Jeanett  Ippolito
Secretary  and  Director
Date:  April  12,  2002
























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