UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x           REPORT
UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the
quarterly period ended September 30,
2010




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


For the
transition period from _____________________ to ______________





File No.
333-127813





Majestic
Oil & Gas, Inc.


(Name of
small business issuer in our charter)





Nevada
              4600
              20-1673271(State
      or other jurisdiction of
                incorporation
      or organization)
              (Primary
      Standard Industrial
                Classification
      Code
                Number)
              (I.R.S.
      Employer
                Identification
      Number)





P.O
      Box 488 Cut Bank, Montana
              59427(Address
      of principal executive
                offices)
              (Zip
      Code)





Registrant’s
telephone 406-873-5580





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.


Yes x No
 ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer
             ̈
            Accelerated
      filer
             ̈Non-accelerated
      filer
             ̈
            Smaller
      Reporting Company
            x





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


Yes  ̈ No
x





As of
November 11, 2010, there were 9,118,000 shares issued and outstanding of the
registrant’s common stock.







INDEX




PART
      I — FINANCIAL INFORMATION
                3Item
      1. Financial Statements
                3Item
      2. Management’s Discussion and Analysis or Plan of
    Operation
                11Item
      3. Quantitative and Qualitative Disclosure about Market
    Risk
                20Item
      4. Controls and Procedures
                20PART
      II — OTHER INFORMATION
                20Item
      1. Legal Proceedings
                20Item
      1A. Risk Factors
                20Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                21Item
      3. Defaults Upon Senior Securities
                21Item
      4. (Removed and Reserved)
                21Item
      5. Other Information
                21Item
      6. Exhibits
                21


2




PART
I — FINANCIAL INFORMATION




Item
1. Financial Statements


3





MAJESTIC
OIL & GAS, INC. (A Development Stage Company)


CONDENSED
CONSOLIDATED BALANCE SHEETS





September 302010
                              
                              
                              December 31UNAUDITED
                              
                              
                              2009ASSETSCash
      and cash equivalents
                              
                              $
                              34,921
                              
                              
                              $
                              110,701Trade
      receivables
                              
                              
                              14,985
                              
                              
                              
                              5,823Total
      Current Assets
                              
                              
                              49,905
                              
                              
                              
                              116,524OIL
      AND GAS PROPERTIESOil
      and gas properties, using the full cost method of
    accounting:Properties
      being amortized
                              
                              
                              455,894
                              
                              
                              
                              455,894Properties
      not subject to amortization
                              
                              
                              213,852
                              
                              
                              
                              202,531Less
      accumulated depletion, amortization and impairment
                              
                              
                              (183,100
                              )
                              
                              
                              (164,000
                              )Net
      Oil and Gas Properties
                              
                              
                              486,646
                              
                              
                              
                              494,425OTHER
      ASSETSWebsite
      development costs (less accumulated amortization)
                              
                              
                              -
                              
                              
                              
                              400Total
      Other Assets
                              
                              
                              -
                              
                              
                              
                              400Total
      Assets
                              
                              $
                              536,551
                              
                              
                              $
                              611,349LIABILITIES
      AND STOCKHOLDERS' EQUITYLIABILITIESAccounts
      payable and accrued liabilities
                              
                              $
                              4,140
                              
                              
                              $
                              5,028Production
      taxes and royalties payable
                              
                              
                              5,804
                              
                              
                              
                              1,379Well
      settlement payable
                              
                              
                              22,959
                              
                              
                              
                              22,959Total
      Current Liabilities
                              
                              
                              32,903
                              
                              
                              
                              29,366Asset
      retirement obligation
                              
                              
                              8,879
                              
                              
                              
                              8,879Total
      Liabilities
                              
                              
                              41,782
                              
                              
                              
                              38,245STOCKHOLDERS'
      EQUITYCommon
      stock, no par value-Authorized
      Shares - 100,000,000Issued
      & Outstanding: 9,118,000 shares at September 30, 2010;8,918,000
      at December 31, 2009
                              
                              
                              1,314,500
                              
                              
                              
                              1,272,500Additional
      paid in capital
                              
                              
                              19,295
                              
                              
                              
                              19,295(Deficit)
      accumulated during the development stage
                              
                              
                              (839,026
                              )
                              
                              
                              (718,691
                              )Total
      Stockholders' Equity
                              
                              
                              494,769
                              
                              
                              
                              573,104Total
      Liabilities & Stockholders' Equity
                              
                              $
                              536,551
                              
                              
                              $
                              611,349


4





MAJESTIC
OIL & GAS, INC. (A Development Stage Company)


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS





InceptionThree Months
                      
                      
                      Three Months
                      
                      
                      Nine Months
                      
                      
                      Nine Months
                      
                      
                      (April 16, 2002)Ended
                      
                      
                      Ended
                      
                      
                      Ended
                      
                      
                      Ended
                      
                      
                      throughSeptember 30,
                      
                      
                      September 30,
                      
                      
                      September 30,
                      
                      
                      September 30,
                      
                      
                      September 30,2010
                      
                      
                      2009
                      
                      
                      2010
                      
                      
                      2009
                      
                      
                      2010UNAUDITED
                      
                      
                      UNAUDITED
                      
                      
                      UNAUDITED
                      
                      
                      UNAUDITED
                      
                      
                      UNAUDITEDREVENUE
                      
                      $
                      12,445
                      
                      
                      $
                      7,046
                      
                      
                      $
                      26,225
                      
                      
                      $
                      25,294
                      
                      
                      $
                      481,902PRODUCTION
      (LIFTING) COSTS
                      
                      
                      9,315
                      
                      
                      
                      3,660
                      
                      
                      
                      20,194
                      
                      
                      
                      13,189
                      
                      
                      
                      160,157EXPLORATION
      EXPENSES
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      3,862DEPLETION,
      DEPRECIATION AND AMORTIZATION
                      
                      
                      6,900
                      
                      
                      
                      8,410
                      
                      
                      
                      19,500
                      
                      
                      
                      31,130
                      
                      
                      
                      185,600INCOME
      FROM OIL & GAS PRODUCING ACTIVITIES
                      
                      
                      (3,770
                      )
                      
                      
                      (5,024
                      )
                      
                      
                      (13,469
                      )
                      
                      
                      (19,025
                      )
                      
                      
                      132,283SELLING,
      GENERAL & ADMINISTRATIVE EXPENSES
                      
                      
                      14,358
                      
                      
                      
                      9,303
                      
                      
                      
                      106,865
                      
                      
                      
                      47,532
                      
                      
                      
                      971,308NET
      (LOSS)
                      
                      $
                      (18,129
                      )
                      
                      $
                      (14,327
                      )
                      
                      $
                      (120,335
                      )
                      
                      $
                      (66,557
                      )
                      
                      $
                      (839,026
                      )EARNINGS
      PER SHARENet
      Income, basic and diluted
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.00
                      )
                      
                      $
                      (0.01
                      )
                      
                      $
                      (0.01
                      )Weighted
      average number of shares outstanding
                      
                      
                      9,118,000
                      
                      
                      
                      7,808,000
                      
                      
                      
                      9,118,000
                      
                      
                      
                      7,808,000Diluted
      potential shares - stock warrants
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Adjusted
      weighted average shares
                      
                      
                      9,118,000
                      
                      
                      
                      7,808,000
                      
                      
                      
                      9,118,000
                      
                      
                      
                      7,808,000


5





MAJESTIC
OIL & GAS, INC. (A Development Stage Company)


CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY





(Deficit)AccumulatedAdditional
                  
                  
                  Stock
                  
                  
                  DuringCommon Stock
                  
                  
                  Paid In
                  
                  
                  Subscription
                  
                  
                  DevelopmentShares
                  
                  
                  Amount
                  
                  
                  Capital
                  
                  
                  Receivable
                  
                  
                  Stage
                  
                  
                  TotalBEGINNING
      BALANCE, INCEPTION (APRIL 16, 2002) TO DECEMBER 31, 2004
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Common
      stock issued
                  
                  
                  6,240,000
                  
                  
                  
                  624,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  624,000Net
      (loss)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (346,422
                  )
                  
                  
                  (346,422
                  )BALANCE,
      DECEMBER 31, 2004
                  
                  
                  6,240,000
                  
                  
                  
                  624,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (346,422
                  )
                  
                  
                  277,578Common
      stock issued
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  66,381
                  
                  
                  
                  66,381BALANCE,
      DECEMBER 31, 2005
                  
                  
                  6,240,000
                  
                  
                  
                  624,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (280,041
                  )
                  
                  
                  343,959Common
      stock issued
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Net
      (loss)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (20,068
                  )
                  
                  
                  (20,068
                  )BALANCE,
      DECEMBER 31, 2006
                  
                  
                  6,240,000
                  
                  
                  
                  624,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (300,109
                  )
                  
                  
                  323,891Common
      stock issued for services
                  
                  
                  330,000
                  
                  
                  
                  147,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  147,000Common
      stock warrants exercised
                  
                  
                  938,000
                  
                  
                  
                  234,500
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  234,500Common
      stock options issued
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  19,295
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  19,295Net
      (loss)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (255,025
                  )
                  
                  
                  (255,025
                  )BALANCE,
      DECEMBER 31, 2007
                  
                  
                  7,508,000
                  
                  
                  
                  1,005,500
                  
                  
                  
                  19,295
                  
                  
                  
                  -
                  
                  
                  
                  (555,134
                  )
                  
                  
                  469,661Common
      stock issued
                  
                  
                  300,000
                  
                  
                  
                  150,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  150,000Net
      (loss)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (68,680
                  )
                  
                  
                  (68,680
                  )BALANCE,
      DECEMBER 31, 2008
                  
                  
                  7,808,000
                  
                  
                  
                  1,155,500
                  
                  
                  
                  19,295
                  
                  
                  
                  -
                  
                  
                  
                  (623,814
                  )
                  
                  
                  550,981Common
      stock issued for services
                  
                  
                  100,000
                  
                  
                  
                  16,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  16,000Common
      stock issued
                  
                  
                  1,010,000
                  
                  
                  
                  101,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  101,000Net
      (loss)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (94,877
                  )
                  
                  
                  (94,877
                  )BALANCE,
      DECEMBER 31, 2009
                  
                  
                  8,918,000
                  
                  
                  
                  1,272,500
                  
                  
                  
                  19,295
                  
                  
                  
                  -
                  
                  
                  
                  (718,691
                  )
                  
                  
                  573,104Common
      stock issued for services
                  
                  
                  200,000
                  
                  
                  
                  42,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  42,000Net
      (loss) for the nine months ended September 30, 2010
      (UNAUDITED)
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (120,335
                  )
                  
                  
                  (120,335
                  )BALANCE,
      SEPTEMBER 30, 2010
                  
                  
                  9,118,000
                  
                  
                  $
                  1,314,500
                  
                  
                  $
                  19,295
                  
                  
                  $
                  -
                  
                  
                  $
                  (839,026
                  )
                  
                  $
                  494,770


6





MAJESTIC OIL & GAS, INC. (A Development Stage
Company)


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS





InceptionNine Months
                
                
                Nine Months
                
                
                (April 16, 2002)Ended
                
                
                Ended
                
                
                ThroughSeptember 30, 2010
                
                
                September 30, 2009
                
                
                September 30, 2010UNAUDITED
                
                
                UNAUDITED
                
                
                UNAUDITEDOPERATING
      ACTIVITIESNet
      (loss)
                
                $
                (120,335
                )
                
                $
                (66,557
                )
                
                $
                (839,026
                )Changes
      and credits to net (loss) not affecting cashDepletion
      and amortization
                
                
                19,500
                
                
                
                31,130
                
                
                
                185,600Organizational
      expenses paid with stock
                
                
                42,000
                
                
                
                -
                
                
                
                342,000Legal
      fees paid with stock
                
                
                -
                
                
                
                -
                
                
                
                188,000Stock
      compensation expense
                
                
                -
                
                
                
                -
                
                
                
                21,295Changes
      in assets and liabilitiesTrade
      receivables
                
                
                (9,162
                )
                
                
                17,024
                
                
                
                (14,985
                )Deposits
                
                
                -
                
                
                
                -
                
                
                
                -Production
      taxes and royalties payable
                
                
                4,425
                
                
                
                (2,821
                )
                
                
                5,804Accounts
      payable
                
                
                (887
                )
                
                
                1
                
                
                
                27,099NET
      CASH FROM (USED FOR) OPERATING ACTIVITIES
                
                
                (64,459
                )
                
                
                (21,223
                )
                
                
                (84,211
                )INVESTING
      ACTIVITIESWebsite
      development
                
                
                -
                
                
                
                -
                
                
                
                (2,500
                )Additions
      to oil and gas properties
                
                
                (11,321
                )
                
                
                (7,018
                )
                
                
                (500,867
                )NET
      CASH (USED FOR) INVESTING ACTIVITIES
                
                
                (11,321
                )
                
                
                (7,018
                )
                
                
                (503,367
                )FINANCING
      ACTIVITIESProceeds
      from sale of common stock
                
                
                -
                
                
                
                -
                
                
                
                251,000Proceeds
      from exercise of warrants
                
                
                -
                
                
                
                -
                
                
                
                371,500NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                
                
                -
                
                
                
                -
                
                
                
                622,500NET
      CHANGE IN CASH AND CASH EQUIVALENTS
                
                
                (75,780
                )
                
                
                (28,241
                )
                
                
                34,921CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
                
                
                110,701
                
                
                
                79,790
                
                
                
                -CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
                
                $
                34,921
                
                
                $
                51,549
                
                
                $
                34,921


7





MAJESTIC
OIL & GAS, INC. (A Development Stage Company)


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Note 1 -
Business Activity and Basis of Presentation





Principal
Business Activity


Majestic
Oil & Gas, Inc. (Company) is a development stage enterprise and its
operations consist of oil and natural gas development and production in the
Rocky Mountain region. The financial statements and notes to the financial
statements are the representation of the Company's management, who is
responsible for their integrity and objectivity. The accounting policies of the
Company are in accordance with generally accepted accounting principles and
conform to the standards applicable to development stage
enterprises.





Basis
of Presentation




The
accompanying interim financial statements of the Company are unaudited. In the
opinion of management, the interim data includes all adjustments, consisting
only of normal recurring adjustments necessary for a fair presentation of the
results for the interim period. The results of operations for the nine months
ended September 30, 2010 are not necessarily indicative of the operating results
for the entire year. These interim financial statements contain certain
reclassification of prior period amounts to be consistent with the current
period presentation with no effect on net income or loss.





We have
prepared the financial statements included herein pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. We believe the disclosures made
are adequate to make the information not misleading and recommend that these
condensed financial statements be read in conjunction with the financial
statements and notes included in our Form 10-KSB for the year ended December 31,
2009.





Note 2 -
Basis of Accounting





The
accompanying financial statements have been prepared using accounting principles
applicable to a going concern, which contemplates the realization of assets and
extinguishment of liabilities in the normal course of business. As shown in the
accompanying condensed balance sheet the Company has an accumulated deficit of
($839,026) through September 30, 2010. This and other factors may indicate that
the Company may be unable to continue in existence. The Company's financial
statements do not include any adjustments related to the realization of the
carrying value of assets or the amounts and classification of liabilities that
might be considered necessary should the Company be unable to continue in
existence. The Company's ability to establish itself as a going concern is
dependent upon its ability to obtain additional financing in order to fund
exploration and development activities of oil and gas interests and, ultimately,
to achieve profitable operations. Management believes that it can be successful
in obtaining either debt or equity financing that will enable the Company to
continue in existence and establish itself as a going concern.





These
interim financial statements are prepared using the significant accounting
policies disclosed in the Company's December 31, 2009 annual audited financial
statements, except that certain significant accounting policies were adopted
during the nine months ended September 30, 2010:





Adopted
prior to the nine months ended September 30, 2010 -


Oil
and Gas Interests





The
Company utilizes the full cost method of accounting for oil and gas activities.
Under this method, subject to a limitation based on estimated value, all costs
associated with property acquisition, exploration and development, including
costs of unsuccessful exploration, are capitalized within a cost center. No gain
or loss is recognized upon the sale or abandonment of undeveloped or producing
oil and gas interests unless the sale represents a significant portion of oil
and gas interests and the gain significantly alters the relationship between
capitalized costs and proved oil and gas reserves of the cost center.
Depreciation, depletion and amortization of oil and gas interests is computed on
the units of production method based on proved reserves, or upon reasonable
estimates where proved reserves have not yet been established due to the recent
commencement of production. Amortizable costs include estimates of future
development costs of proved undeveloped reserves.


8





MAJESTIC
OIL & GAS, INC. (A Development Stage Company)


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Capitalized
costs of oil and gas interests may not exceed an amount equal to the present
value, discounted at 10%, of the estimated future net cash flows from proved
reserves plus the cost, or estimated fair market value if lower, of unproved
interests. Should capitalized costs exceed this ceiling, an impairment is
recognized. The present value of estimated future net cash flows is computed by
applying year end prices of oil and gas to estimated future production of proved
oil and gas reserves as of year end, less estimated future expenditures to be
incurred in developing and producing the proved reserves and assuming
continuation of existing economic conditions.





Revenue
Recognition


The
Company recognizes oil and gas revenues from its interests in producing wells as
oil and gas is produced and sold from the wells and when ultimate collection is
reasonably assured.





Website
Development Costs


The
Company has capitalized the costs associated with development of its website,
and is amortizing the cost over a three year period.





Stock
Based Compensation


The
Company accounts for stock based compensation in accordance with current
accounting standards which specify the revised accounting alternative
requirements for pre-2006 stock based compensation grants existing at
January 1, 2006 and the required accounting for new grants starting
January 1, 2006. The Company had no stock based compensation grants made
before year 2007.





Accordingly,
the provisions pertaining to pre-2006 grants do not apply. The Company values
its stock options awarded on or after January 1, 2006 at the fair value at
grant date using the Black-Scholes option pricing model. Compensation expense
for stock options is recorded over the vesting period on a straight line basis.
Compensation paid in vested stock is valued at the fair value at the applicable
measurement date and charged to expense at that date.





Income
Taxes





Effective
January 1, 2007, the Company adopted the provisions current accounting standards
related to accounting for uncertainty in income taxes. These standards provide
detailed guidance for the financial statement recognition, measurement and
disclosure of uncertain tax positions recognized in the financial statements.
Tax positions must meet a “more-likely-than-not” recognition threshold at the
effective date to be recognized upon the adoption of  the standards and in
subsequent periods. Upon the adoption of the standards, the Company had no
unrecognized tax benefits. During 2009 and during the first nine months of 2010,
the Company recognized no adjustments for uncertain tax benefits.





Deferred
income tax assets, if any, are adjusted by a valuation allowance, if necessary,
to recognize future tax benefits only to the extent, based on available
evidence, it is more likely than not such benefits will be realized. The Company
would recognize interest and penalties, if any, related to uncertain tax
positions in general and administrative expenses. No interest and penalties
related to uncertain tax positions were accrued at September 30, 2010. The
Company expects no material changes to unrecognized tax positions within the
next twelve months.





Earnings
per Share of Common Stock





Basic
earnings per share is determined in accordance with current accounting standards
using net income divided by the weighted average shares outstanding during the
period.  Diluted earnings per share is computed by dividing net income by
the weighted average shares outstanding, assuming all dilutive potential common
shares were issued.  The effect of outstanding common stock warrants was
anti-dilutive for the nine months ended September 30, 2010 and
2009.





Fair
Value Measurement





Effective
January 1, 2008, the Company adopted accounting standards related to measurement
of fair value in its financial statements. These standards provide a framework
for measuring fair value under generally accepted accounting principles. 
 These standards would apply to all financial instruments that are being
measured and reported on a fair value basis. Currently, the Company has no
financial instruments to which this statement would apply.


9





MAJESTIC
OIL & GAS, INC. (A Development Stage Company)


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





Recent
Accounting Pronouncements





In June
2009, accounting standards were issued related to the FASB's codification of accounting
standards and the hierarchy of generally accepted accounting principles.
The objective of these standards was to become the source of authoritative U.S.
generally accepted accounting principles to be applied by nongovernmental
entities. The standards became effective for financial statement issued for
interim and annual periods ending after September 15, 2009. Management has
adopted these standards.





In May
2009, accounting standards were issued related to events occuring subsequent to
the balance sheet date, but prior to issuance of the financial statements. The
objective of these standards is to establish general standards of accounting for
and disclosure of events that occur after the balance sheet date but before the
financial statements are issued or available to be issued. Management has
adopted these standards.





In
December 2008 the SEC unanimously approved amendments to revise its oil and gas
reserves estimation and disclosure requirements. The amendments, among other
things, allows the use of new technologies to determine proved reserves; permits
the optional disclosure of probable and possible reserves; modifies the prices
used to estimate reserves for SEC disclosure purposes to a 12-month average
instead of a period end price; and requires that if a third party is primarily
responsible for preparing or auditing reserve estimates, the Company make
disclosures relating to the independence and qualifications of the third party,
including filing as an exhibit any report received from the third party. The
revised rules are effective January 1, 2010.





Note 3 -
Organization and Development of the Company





The
Company was formed on April 16, 2002 as a corporation. The Company is considered
a development stage enterprise. The accompanying interim financial statements
reflect limited oil and gas development and production activities and they are
not necessarily indicative of what the financial statements will reflect once
the intended operations of the Company are fully underway.





Note 4 -
Asset Retirement Obligations





The
Company follows current accounting standards in accounting for its asset
retirement obligations. These standards address financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. These accounting standards
require recognition of the present value of obligations associated with the
retirement of tangible long-lived assets in the period in which it is incurred.
As of September 30, 2010, the estimated future cost to plug and abandon the
Company's gas wells was estimated to be $8,879. The estimated liability is based
on historical experience in plugging and abandoning wells, estimated cost to
plug and abandon wells in the future and federal and state regulatory
requirements.





Note 5 -
Related Party Transactions





Altamont
Oil & Gas, Inc. (Altamont), an entity related through common ownership and
management, is the operator of the wells in which the Company owns its working
interests. As the operator of the wells, Altamont is responsible for remitting
production taxes to the taxing authorities and royalty payments to the royalty
interest owners. As of September 30, 2010, the Company had an outstanding
receivable from Altamont of $14,985 for oil and gas sales, and a payable to
Altamont of $3,127 for production taxes and royalties. The Company also received
an Authorization for Expenditure (AFE) for its share of costs associated with
the Jody Fields #4-1 well, which remains under development as of September 30,
2010. The Company paid $5,547 to Altamont for development costs, and has a
payable to Altamont of $22,959 for its remaining share of the AFE.





Note 6 -
Farm Out Agreement





During
2007, the Company entered into a Farm-out Agreement with Altamont Oil & Gas,
Inc and Numbers, Inc., an entity related through common ownership and
management, to conduct a 10-well natural gas development program.  This
development program is still pending and will involve the drilling of 5 wells in
the Lake Frances Gas Field and 5 wells in the Williams Gas Field, located in
Pondera County, Montana.   The Lake Frances Field is located south of
Valier, Montana just offsetting the Lake Frances reservoir.  The Williams
Field is located 7 miles east of the town of Valier, Montana.


10




Item
2. Management’s Discussion and Analysis or Plan of Operation.





FORWARD LOOKING
STATEMENTS





The
following discussion and analysis is provided to increase the understanding of,
and should be read in conjunction with, the Financial Statements of the Company
and Notes thereto included elsewhere in this Report. Historical results and
percentage relationships among any amounts in these financial statements are not
necessarily indicative of trends in operating results for any future period. The
statements, which are not historical facts contained in this Report, including
this Plan of Operations, and Notes to the Financial Statements, constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are based on currently available
operating, financial and competitive information, and are subject to various
risks and uncertainties. Future events and the Company's actual results August
differ materially from the results reflected in these forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, dependence on existing and future key strategic and strategic
end-user customers, limited ability to establish new strategic relationships,
ability to sustain and manage growth, variability of operating results, the
Company's expansion and development of new service lines, marketing and other
business development initiatives, the commencement of new engagements,
competition in the industry, general economic conditions, dependence on key
personnel, the ability to attract, hire and retain personnel who possess the
technical skills and experience necessary to meet the service requirements of
its clients, the potential liability with respect to actions taken by its
existing and past employees, risks associated with international sales, and
other risks described herein and in the Company's other SEC
filings.





The
following discussion of our financial condition and results of operations should
be read in conjunction with the Financial Statements and Notes to the Condensed
Consolidated Financial Statements appearing elsewhere in this
report.





OVERVIEW





Majestic
Oil & Gas, Inc. is engaged in the exploration, development, acquisition and
operation of oil and natural gas properties. Because oil and natural gas
exploration and development requires significant capital and because our assets
and resources are limited, we participate in the gas industry through the
purchase of interests in either producing wells or oil and natural gas
exploration, development and production projects.





Majestic
Oil & Gas, Inc. is a development stage company, and as such it is difficult
for us to forecast our revenues or earnings accurately. We believe that
period-to-period comparisons of our operating results may not be meaningful and
should not be relied upon as an indication of future performance as we have and
will have no backlog of orders. Our operating results in one or more future
quarters may fall below investor expectations which, assuming our common stock
trades on a recognized market, would almost certainly cause the future trading
price of our common stock to decline. You should read the following discussion
together with the condensed consolidated financial statements and their
accompanying notes, included elsewhere in the report.





Majestic
Oil & Gas, Inc. participated in drilling programs in the Lake Frances Field
during 2007 and 2008.  Four successful gas wells have been drilled to-date;
the B Ag #25-1, Vandenbos #19-1, Boucher #18-1 and Stoltz #18-1.  Majestic
Oil & Gas, Inc. holds a 25% Working Interest in these four wells and the
Company expects to see an increase in production volumes, as a result of these
wells. In addition, Majestic Oil & Gas, Inc. participated in the drilling of
the Vandenbos #19-2 and the Jody Fields #4-1. The Vandenbos #19-2 well was
subsequently plugged and abandoned, as was the Jody Fields #4-1 well, which was
a wildcat oil well.


11





Majestic
Oil & Gas, Inc. entered into a farm-out agreement with Mountain View Energy,
Inc. on September 1, 2009, outlining parameters for Mountain View Energy, Inc.
to drill a test well in the NWSE-Section 33-T27N-R4W, Teton County, MT at its
sole cost, risk and expense.    In doing so, Mountain View Energy,
Inc., would acquire 75% of the Working Interest, while Majestic Oil & Gas,
Inc. would retain a 25% Working Interest in any well drilled in the 40-acre
tract.





Accordingly,
on September 9, 2009, drilling commenced drilling on the Donovan #33-3 well
located in the West Pondera Field, SWNWSE – Section 33-T27N-R4W, Teton County,
Montana.  The well was successfully drilled and completed with an initial
production of 15 barrels of oil per day with no water.   The producing
interval is the Madison/Sun River Dolomite with 20 feet of pay from 2,125’ to
2,145’.





Due to
the success of the Donovan #33-3, a second oil well was drilled in the West
Pondera Field.  The Donovan #33-2 is located in the SENWSE - Section
33-T27N-R4W, Teton County, Montana.  This oil well was successfully drilled
and completed with initial production of 2 to 4 barrels of oil per
day.





Majestic
Oil & Gas, Inc. entered into a farm-out agreement with Altamont Oil &
Gas, Inc., and subsequently with Hartford Energy, Inc., to conduct the re-entry
of the Fields #14-34.  As per the farm-out agreement with Hartford Energy,
Inc., the Company retained a 25% Working Interest in this well.  The Fields
#14-34 is located in the Loneman Coulee Field, Pondera County, Montana and was
completed as a Madison/Sun River oil well with initial production of 5 barrels
of oil per day.





Based
upon our Management's experience in the oil and natural gas industry and on
recent events, including increasing global demand for energy and energy
disruptions caused by natural disasters, we believe the trend in oil and gas
prices will remain relatively stable or decrease slightly, but over the
long-term are more likely to increase. We expect to generate positive net income
from operations in the future, although our revenue and expenses will increase
as we expand our drilling and ownership activities. However, the current
economic crisis could have a negative impact on the Company’s revenues due to
the recent decrease in oil and natural gas prices.   During the course
of 2009, Majestic Oil & Gas, Inc. saw a significant decrease in the price
received per MCF at a high of $3.09 and a low of $1.19, as detailed under
“Results of Operation.”  To-date in 2010, the Company received a high of
$2.80 per MCF and a low of $1.60 per MCF.  The current trend shows a
continued decline in pricing.  The price we receive for our production
directly affects the amount of revenues we generate, which in turn affects the
Company’s liquidity and overall financial position.


12




RESULTS OF
OPERATIONS





Three Months Ended September
30, 2010 vs.Three Months Ended September 30, 2009:





Three Months
                  Ended
                  September 30, 2010
                
                
                Three Months
                  Ended
                  September 30, 2009Revenue
                
                $
                12,445
                
                
                $
                7,046Expenses
                
                $
                30,574
                
                
                $
                21,373Net
      Income (Loss)
                
                $
                (18,129)
                
                
                $
                (14,327)





Revenues
for the three-month period ended September 30, 2010 were $12,445 compared to
$7,046 for the period ended September 30, 2009. The increase in revenues is a
result of oil sales from the Donovan Lease in which Majestic Oil & Gas, Inc
owns a 25% Working Interest, as detailed in the table to follow.





Ludwig State 36-1
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF
                
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF2010
                
                
                2009July
                
                
                168.51
                
                
                
                2.05
                
                
                
                211.41
                
                
                
                1.39August
                
                
                167.06
                
                
                
                2.00
                
                
                
                201.92
                
                
                
                1.40September
                
                
                161.29
                
                
                
                1.60
                
                
                
                190.58
                
                
                
                1.19




Boucher 27-1
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF
                
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF2010
                
                
                2009July
                
                
                44.34
                
                
                
                2.05
                
                
                
                49.50
                
                
                
                1.39August
                
                
                44.14
                
                
                
                2.00
                
                
                
                47.85
                
                
                
                1.40September
                
                
                43.31
                
                
                
                1.60
                
                
                
                44.76
                
                
                
                1.19





B. Ag #25-1
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF
                
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF2010
                
                
                2009July
                
                
                33.60
                
                
                
                2.05
                
                
                
                38.80
                
                
                
                1.39August
                
                
                31.60
                
                
                
                2.00
                
                
                
                35.20
                
                
                
                1.40September
                
                
                30.80
                
                
                
                1.60
                
                
                
                33.60
                
                
                
                1.19





Vandenbos #19-1
                        
                        Share of
                          Production
                          Volumes
                        
                        
                        Price
                          Per
                          MCF
                        
                        
                        Share of
                          Production
                          Volumes
                        
                        
                        
                        Price
                          Per
                          MCF2010
                        
                        
                        2009July
                        
                        
                        265.44
                        
                        
                        
                        2.05
                        
                        
                        
                        449.21
                        
                        
                        
                        1.39August
                        
                        
                        263.38
                        
                        
                        
                        2.00
                        
                        
                        
                        434.36
                        
                        
                        
                        1.40September
                        
                        
                        256.99
                        
                        
                        
                        1.60
                        
                        
                        
                        388.58
                        
                        
                        
                        1.19





Boucher #18-1
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      Price
                        Per
                        MCF
                      
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      
                      Price
                        Per
                        MCF2010
                      
                      
                      2009July
                      
                      
                      140.75
                      
                      
                      
                      2.05
                      
                      
                      
                      187.69
                      
                      
                      
                      1.39August
                      
                      
                      138.50
                      
                      
                      
                      2.00
                      
                      
                      
                      194.49
                      
                      
                      
                      1.40September
                      
                      
                      164.75
                      
                      
                      
                      1.60
                      
                      
                      
                      189.75
                      
                      
                      
                      1.19




13





Stoltz #18-1
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      Price
                        Per
                        MCF
                      
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      
                      Price
                        Per
                        MCF2010
                      
                      
                      2009July
                      
                      
                      5.28
                      
                      
                      
                      2.05
                      
                      
                      
                      12.80
                      
                      
                      
                      1.39August
                      
                      
                      4.27
                      
                      
                      
                      2.00
                      
                      
                      
                      5.28
                      
                      
                      
                      1.40September
                      
                      
                      0.20
                      
                      
                      
                      1.60
                      
                      
                      
                      0.41
                      
                      
                      
                      1.19





Donovan Lease
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      Price
                        Per
                        BBL
                      
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      
                      Price
                        Per
                        BBLJuly
                      
                      
                      89.18
                      
                      
                      
                      64.54
                      
                      
                      
                      0
                      
                      
                      
                      0August
                      
                      
                      44.86
                      
                      
                      
                      65.14
                      
                      
                      
                      0
                      
                      
                      
                      0September
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      0
                      
                      
                      
                      0





Majestic
Oil & Gas Operations, Inc’s Net Share of the production volumes from the
Ludwig State #36-1, Boucher #27-1, B. Ag #25-1, Vandenbos #19-1, Boucher #18-1
and Stoltz #18-1 wells for three month period ended September 30, 2010 were
1,964 MCF compared to 2,716 MCF for three month period ended September 30, 2009.
The production decrease is a result of natural decline in production over
time.  The Company’s Net Share of production volumes from the Donovan Lease
were 134 BBL for the three month period ending September 30,
2010.





Our total
expenses increased by $9,200 from the $21,373 reported for the three months
ended September 30, 2009 compared to the $30,573 reported for the three months
ended September 30, 2010. Of those expenses, there was an increase in the
Selling, General & Administrative Expenses of $5,055 from the $14,358
reported for the three month period ended September 30, 2010 compared to the
$9,303 reported for the same three month period in 2009. The primary reason for
the increase was an increase in engineering and professional fees incurred,
which are comprised mainly of legal, accounting, and auditing fees and increased
production costs due to the Company’s share of the costs associated with the new
Donovan wells.  As mentioned above, revenues for the three month
period increased as a result oil sales from the Donovan Lease.





The
Company showed a Net Loss of ($18,129) for the three months ended September 30,
2010. This compares to the Net Loss of ($14,327) for the three months ended
September 30, 2009. The variance between these three month periods is directly
related to the decrease in gas revenues and volumes during the Third Quarter
2010 and increase in selling, general, & administrative expense as discussed
above. While it is the Company’s hope that production volumes increase as a
result of its planned development and drilling program, the Company’s revenues
are subject to the volatility of natural gas prices, which continue to fluctuate
dramatically.





The
Company also plans to continue its pursuit of oil prospects in the Lake Frances
Area, which if successful, could contribute to an increase in future
revenues.  The price of crude oil also continues to fluctuate but not
to the same extreme as the price of natural gas.  In spite of the
fluctuations in the price of oil and natural gas, Management is still confident
that we will build the Company through continued drilling of oil and natural gas
prospects.





Drilling
Activity





The
following table sets forth the results of our drilling activities during the
three months ended September 30, 2010 and 2009:


14





Drilling ActivityGross Wells
                
                
                Net WellsThree Months ended
                  September 30,
                
                Total
                
                
                Producing
                
                
                Dry
                
                
                Total
                
                
                Producing
                
                
                Dry2010
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                02009
                
                
                2
                
                
                
                2
                
                
                
                0
                
                
                
                0.5
                
                
                
                0.5
                
                
                
                0





Net
Production, Average Sales Price and Average Production Costs
(Lifting)




The table
below sets forth the net quantities of oil and gas production (net of all
royalties, overriding royalties and production due to others) attributable to
the Company for the three month periods ended September 30, 2010 and 2009, and
the average sales price, and average production costs (including depreciation,
depletion and amortization, lease operating costs and all associated taxes) on a
per unit of production basis:





Three Months ended September 30,
                
                2010
                
                
                2009Net
      ProductionOil
      (Bbls)
                
                
                134.04
                
                
                40.06Gas
      (Mcf)
                
                
                1,964.21
                
                
                2,716.17Average
      Sales PricesOil
      (per Bbl)
                
                $
                64.84
                
                
                53.08Gas
      (per Mcf)
                
                $
                1.88
                
                $
                1.33Average
      Production Cost Per MCF
                
                $
                5.86
                
                $
                4.08





Nine Months Ended September
30, 2010 vs. Nine Months Ended September 30, 2009:





Nine Months
                  Ended
                  September 30, 2010
                
                
                Nine Months
                  Ended
                  September 30, 2009Revenue
                
                $
                26,225
                
                
                $
                25,294Expenses
                
                $
                146,560
                
                
                $
                91,851Net
      Income (Loss)
                
                $
                (120,335)
                
                
                $
                (66,557)





Revenues
for the nine-month period ended September 30, 2010 were $26,225 compared to
$25,294 for the period ended September 30, 2009. There was a small increase in
revenues between these two periods as a result of steady gas production and a
slightly higher price received per MCF.





Ludwig State 36-1
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF
                
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF2010
                
                
                2009January
                
                
                175.93
                
                
                
                2.35
                
                
                
                231.21
                
                
                
                3.09February
                
                
                192.02
                
                
                
                2.26
                
                
                
                211.20
                
                
                
                2.34March
                
                
                175.93
                
                
                
                2.80
                
                
                
                218.83
                
                
                
                1.80April
                
                
                168.92
                
                
                
                2.01
                
                
                
                194.49
                
                
                
                1.56May
                
                
                150.56
                
                
                
                1.81
                
                
                
                207.28
                
                
                
                1.41June
                
                
                169.13
                
                
                
                1.94
                
                
                
                198.83
                
                
                
                1.59July
                
                
                168.51
                
                
                
                2.05
                
                
                
                211.41
                
                
                
                1.39August
                
                
                167.06
                
                
                
                2.00
                
                
                
                201.92
                
                
                
                1.40September
                
                
                161.29
                
                
                
                1.60
                
                
                
                190.58
                
                
                
                1.19




15





Boucher 27-1
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF
                
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF2010
                
                
                2009January
                
                
                47.64
                
                
                
                2.35
                
                
                
                110.14
                
                
                
                3.09February
                
                
                47.64
                
                
                
                2.26
                
                
                
                71.16
                
                
                
                2.34March
                
                
                43.11
                
                
                
                2.80
                
                
                
                56.72
                
                
                
                1.80April
                
                
                43.31
                
                
                
                2.01
                
                
                
                44.76
                
                
                
                1.56May
                
                
                40.01
                
                
                
                1.81
                
                
                
                47.23
                
                
                
                1.41June
                
                
                38.57
                
                
                
                1.94
                
                
                
                47.64
                
                
                
                1.59July
                
                
                44.34
                
                
                
                2.05
                
                
                
                49.50
                
                
                
                1.39August
                
                
                44.14
                
                
                
                2.00
                
                
                
                47.85
                
                
                
                1.40September
                
                
                43.31
                
                
                
                1.60
                
                
                
                44.76
                
                
                
                1.19





B. Ag #25-1
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF
                
                
                Share of
                  Production
                  Volumes
                
                
                Price
                  Per
                  MCF2010
                
                
                2009January
                
                
                33.80
                
                
                
                2.35
                
                
                
                38.80
                
                
                
                3.09February
                
                
                31.00
                
                
                
                2.26
                
                
                
                33.80
                
                
                
                2.34March
                
                
                32.80
                
                
                
                2.80
                
                
                
                36.80
                
                
                
                1.80April
                
                
                32.40
                
                
                
                2.01
                
                
                
                35.60
                
                
                
                1.56May
                
                
                27.80
                
                
                
                1.81
                
                
                
                37.80
                
                
                
                1.41June
                
                
                34.60
                
                
                
                1.94
                
                
                
                38.60
                
                
                
                1.59July
                
                
                33.60
                
                
                
                2.05
                
                
                
                38.80
                
                
                
                1.39August
                
                
                31.60
                
                
                
                2.00
                
                
                
                35.20
                
                
                
                1.40September
                
                
                30.80
                
                
                
                1.60
                
                
                
                33.60
                
                
                
                1.19





Vandenbos #19-1
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      Price
                        Per
                        MCF
                      
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      
                      Price
                        Per
                        MCF2010
                      
                      
                      2009January
                      
                      
                      361.56
                      
                      
                      
                      2.35
                      
                      
                      
                      708.06
                      
                      
                      
                      3.09February
                      
                      
                      352.48
                      
                      
                      
                      2.26
                      
                      
                      
                      632.57
                      
                      
                      
                      2.34March
                      
                      
                      305.66
                      
                      
                      
                      2.80
                      
                      
                      
                      683.72
                      
                      
                      
                      1.80April
                      
                      
                      298.24
                      
                      
                      
                      2.01
                      
                      
                      
                      551.10
                      
                      
                      
                      1.56May
                      
                      
                      247.91
                      
                      
                      
                      1.81
                      
                      
                      
                      494.59
                      
                      
                      
                      1.41June
                      
                      
                      278.03
                      
                      
                      
                      1.94
                      
                      
                      
                      451.69
                      
                      
                      
                      1.59July
                      
                      
                      265.44
                      
                      
                      
                      2.05
                      
                      
                      
                      449.21
                      
                      
                      
                      1.39August
                      
                      
                      263.38
                      
                      
                      
                      2.00
                      
                      
                      
                      434.36
                      
                      
                      
                      1.40September
                      
                      
                      256.99
                      
                      
                      
                      1.60
                      
                      
                      
                      388.58
                      
                      
                      
                      1.19




16




Boucher #18-1
              
              Share of
                Production
                Volumes
              
              
              Price
                Per
                MCF
              
              
              Share of
                Production
                Volumes
              
              
              
              Price
                Per
                MCF2010
              
              
              2009January
              
              
              211.00
              
              
              
              2.35
              
              
              
              413.33
              
              
              
              3.09February
              
              
              212.25
              
              
              
              2.26
              
              
              
              356.40
              
              
              
              2.34March
              
              
              168.00
              
              
              
              2.80
              
              
              
              365.48
              
              
              
              1.80April
              
              
              149.75
              
              
              
              2.01
              
              
              
              299.89
              
              
              
              1.56May
              
              
              130.25
              
              
              
              1.81
              
              
              
              237.81
              
              
              
              1.41June
              
              
              147.75
              
              
              
              1.94
              
              
              
              196.76
              
              
              
              1.59July
              
              
              140.75
              
              
              
              2.05
              
              
              
              187.69
              
              
              
              1.39August
              
              
              138.50
              
              
              
              2.00
              
              
              
              194.49
              
              
              
              1.40September
              
              
              164.75
              
              
              
              1.60
              
              
              
              189.75
              
              
              
              1.19




Stoltz #18-1
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      Price
                        Per
                        MCF
                      
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      
                      Price
                        Per
                        MCF2010
                      
                      
                      2009January
                      
                      
                      0.20
                      
                      
                      
                      2.35
                      
                      
                      
                      27.83
                      
                      
                      
                      3.09February
                      
                      
                      0.41
                      
                      
                      
                      2.26
                      
                      
                      
                      19.50
                      
                      
                      
                      2.34March
                      
                      
                      0.61
                      
                      
                      
                      2.80
                      
                      
                      
                      13.41
                      
                      
                      
                      1.80April
                      
                      
                      0.41
                      
                      
                      
                      2.01
                      
                      
                      
                      8.13
                      
                      
                      
                      1.56May
                      
                      
                      2.64
                      
                      
                      
                      1.81
                      
                      
                      
                      10.77
                      
                      
                      
                      1.41June
                      
                      
                      5.48
                      
                      
                      
                      1.94
                      
                      
                      
                      15.03
                      
                      
                      
                      1.59July
                      
                      
                      5.28
                      
                      
                      
                      2.05
                      
                      
                      
                      12.80
                      
                      
                      
                      1.39August
                      
                      
                      4.27
                      
                      
                      
                      2.00
                      
                      
                      
                      5.28
                      
                      
                      
                      1.40September
                      
                      
                      0.20
                      
                      
                      
                      1.60
                      
                      
                      
                      0.41
                      
                      
                      
                      1.19





Donovan #33-3
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      Price
                        Per
                        BBL
                      
                      
                      Share of
                        Production
                        Volumes
                      
                      
                      
                      Price
                        Per
                        BBL2010
                      
                      
                      2009JanuaryFebruary
                      
                      
                      39.38
                      
                      
                      
                      64.98
                      
                      
                      
                      0
                      
                      
                      
                      0March
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0April
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0May
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0June
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0July
                      
                      
                      89.18
                      
                      
                      
                      64.54
                      
                      
                      
                      0
                      
                      
                      
                      0August
                      
                      
                      44.86
                      
                      
                      
                      65.14
                      
                      
                      
                      0
                      
                      
                      
                      0September
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0
                      
                      
                      
                      0





Majestic
Oil & Gas Operations, Inc’s Net Share of the production volumes from the
Ludwig State #36-1, Boucher #27-1, B. Ag #25-1, Vandenbos #19-1, Boucher #18-1
and Stoltz #18-1 wells for the nine month period ended September 30, 2010 were
6,322 MCF compared to 10,063 MCF for the nine month period ended September 30,
2009. The production decrease is a result of natural decline in production over
time.  The Company’s Net Share of production volumes from the Donovan
Lease were 173.42 BBL for the nine month period ending September 30,
2010.


17


Our total
expenses increased by $54,709 from the $91,851 reported for the nine months
ended September 30, 2009 compared to the $146,560 reported for the nine months
ended September 30, 2010. Of those expenses, Production (Lifting) Costs
increased by $7,005 from $13,189 for the nine months ended September 30, 2009 to
$20,194 for the nine months ended September 30, 2010. This increase is directly
attributable to the Company’s share of the costs associated with the new Donovan
wells.  There was an increase in the Selling, General &
Administrative Expenses of $59,333 from the $47,532 reported for the nine month
period ended September 30, 2009 compared to the $106,865 reported for the same
nine month period in 2010. The primary reason for the increase was an increase
of approximately $44,300 in engineering, professional, and consulting fees
incurred, which are comprised mainly of legal, accounting, and auditing
fees.  Professional fees included the issuance of $42,000 in Company
stock for services provided.  In addition, the Company saw a $4,060 in
Public Relations costs associated with the design and maintenance of the
Company’s new website. Depletion, Depreciation and Amortization decreased
by $11,630 from $31,130 reported for the nine month period ended September 30,
2009 compared to the $19,500 reported for the same nine month period in
2010.  This decrease is directly attributable to the decrease in
production volumes between the two periods.   As mentioned above,
gas revenues for the nine month period decreased as a result of lower production
volumes offset by a slightly higher price per MCF and oil sales during the
period.





The
Company showed a Net Loss of ($120,335) for the nine months ended September 30,
2010. This compares to the Net Loss of ($66,557) for the nine months ended
September 30, 2009. The variance between these nine month periods is directly
related to the decrease in revenues and volumes during the first three quarters
of 2010 and increase in selling, general, & administrative expense as
discussed above. While it is the Company’s hope that production volumes increase
as a result of its planned development and drilling program, the Company’s
revenues are subject to the volatility of oil and natural gas prices, which
continue to fluctuate dramatically.





The
Company also plans to continue its pursuit of oil prospects in the Lake Frances
Area, which if successful, could contribute to an increase in future
revenues.  The price of crude oil also continues to fluctuate but not
to the same extreme as the price of natural gas.  In spite of the
fluctuations in the price of oil and natural gas, Management is still confident
that we will build the Company through continued drilling of oil and natural gas
prospects.





Drilling
Activity





The
following table sets forth the results of our drilling activities during the
nine months ended September 30, 2010 and 2009:





Drilling ActivityGross Wells
                
                
                Net WellsNine Months ended
                  September 30,
                
                Total
                
                
                Producing
                
                
                Dry
                
                
                Total
                
                
                Producing
                
                
                Dry2010
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                0
                
                
                
                02009
                
                
                2
                
                
                
                2
                
                
                
                0
                
                
                
                0.5
                
                
                
                0.5
                
                
                
                0





Net
Production, Average Sales Price and Average Production Costs
(Lifting)




The table
below sets forth the net quantities of oil and gas production (net of all
royalties, overriding royalties and production due to others) attributable to
the Company for the three and nine month periods ended September 30, 2010 and
2009, and the average sales price, and average production costs (including
depreciation, depletion and amortization, lease operating costs and all
associated taxes) on a per unit of production basis:


18





Nine Months ended September 30,
                      
                      2010
                      
                      
                      2009Net
      ProductionOil
      (Bbls)
                      
                      
                      173.42
                      
                      
                      
                      40.06Gas
      (Mcf)
                      
                      
                      6,322.21
                      
                      
                      
                      10,063.08Average
      Sales PricesOil
      (per Bbl)
                      
                      $
                      64.89
                      
                      
                      $
                      53.08Gas
      (per Mcf)
                      
                      $
                      2.09
                      
                      
                      $
                      1.75Average
      Production Cost Per MCF
                      
                      $
                      5.39
                      
                      
                      $
                      4.30





LIQUIDITY AND RESOURCE
CAPITAL





We are
still a development stage company. From our inception to September 30, 2010, we
incurred an accumulated deficit of ($839,026). This deficit is primarily the
result of approximately $300,000 in expenses associated with stock issuances
during fiscal Year Ended December 31, 2002, and $342,000 in legal, accounting
and filing fees incurred since inception associated with being a publicly traded
company. As of September 30, 2010, we had $34,921 of current cash available. Our
cash resources of $34,921 are not sufficient to satisfy our cash requirements
over the next 12 months.





We need
an additional minimum of $1,000,000 to finance our planned expansion in the next
12 months, which funds will be used for drilling of development oil and natural
gas wells in the Lake Frances and Williams Fields.  We hope to be able
to raise additional funds from an offering of our stock in the
future.   However, these offerings may not occur, or if they
occur, may not raise the required funding. We may also consider securing debt
financing. We may not raise other equity or debt financing sufficient to fund
these plans. If we don't raise or generate these funds, the implementation of
our business plan will be delayed or eliminated.





Our
ability to continue as a going concern is dependent on our ability to raise
funds to implement our planned development; however we August not be able to
raise sufficient funds to do so. Our independent auditors have indicated that
there is substantial doubt about our ability to continue as a going concern over
the next twelve months. Our poor financial condition could inhibit our ability
to achieve our business plan.





COMMITMENTS AND
CONTINGENCIES





On July
1, 2004, the Company entered into an operating agreement with Altamont Oil &
Gas, Inc., through which Altamont Oil & Gas, Inc. will operate the wells in
which we have acquired a working interest. Our share of monthly operating costs
will be deducted from our monthly share of production revenue.





Beginning
in 2007, the Company has acquired leases covering approximately 3,963 net acres
of undeveloped land for the purpose of future oil and gas development. This
acreage is located in Pondera County, Montana in the vicinity of the Williams
and Lake Frances Gas Fields. These leases remain in good standing with the term
of the leases being for periods of 3 or 5 years. Management considers the value
of the properties to be as much or more than for what they were
acquired.





Majestic
Oil & Gas, Inc. entered into a farm-out agreement with Mountain View Energy,
Inc. on September 1, 2009, outlining parameters for Mountain View Energy, Inc.
to drill a test well in the NWSE-Section 33-T27N-R4W, Teton County, MT at its
sole cost, risk and expense.    In doing so, Mountain View
Energy, Inc. would acquire 75% of the Working Interest, while Majestic Oil &
Gas, Inc. would retain a 25% Working Interest in any well drilled in the 40-acre
tract.


19


On June
17, 2010, the Company entered into a lease purchase agreement to acquire leases
covering approximately 11,106 net acres of undeveloped land for the purpose of
future oil and gas development.  These acreages are located in Montana
and North Dakota.  The purchase is expected to close on August 30,
2010.




Item
3. Quantitative and Qualitative Disclosure about Market Risk





Not
applicable




Item
4. Controls and Procedures.





The
Company has established disclosure controls and procedures to ensure that
information required to be disclosed in this quarterly report on Form 10-Q was
properly recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms.  The Company’s controls
and procedures are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Act is
accumulated and communicated to the Company’s management, including its
principal executive and principal financial officers to allow timely decisions
regarding required disclosure.





We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) at September 30, 2010 based on the evaluation of these
controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15
under the Exchange Act.  This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer/Chief
Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief
Financial Officer concluded that, at and as of September 30, 2010, our
disclosure controls and procedures are effective.





Changes in Internal Control
over Financial Reporting





There
have been no changes in the Company's internal control over financial reporting
that occurred during the Company's last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.




PART
II — OTHER INFORMATION




Item
1. Legal Proceedings.





None.




Item
1A. Risk Factors





Not
applicable.


20




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





(a)           Unregistered Sales of Equity
Securities.





None.




Item
3. Defaults Upon Senior Securities.





None.




Item
4. (Removed and Reserved).




Item
5. Other Information.





Not
applicable.




Item
6. Exhibits.





(a)
            Exhibits.




Exhibit
              
              Item31.1
              
              Certification
      of Principal Executive and Principal Financial Officer pursuant to Section
      302(a) of the Sarbanes-Oxley Act of 200232.1*
              
              Certification
      of Principal Executive and Principal Financial Officer pursuant to Section
      302(a) of the Sarbanes-Oxley Act of
2002




* This
exhibit shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made
before or after the date hereof and irrespective of any general incorporation
language in any filings.





SIGNATURES




In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.




MAJESTIC
      OIL & GAS, INC.Date:
      November 16, 2010
              By:
              /s/ Patrick
  Montalban(Authorized
      Officer/principal Executive
                Officer,
      Principal Financial
                Officer/principal
      Financial Officer}




21





EXHIBIT
INDEX




Exhibit
              
              Item31.1
              
              Certification
      of Principal Executive and Principal Financial Officer pursuant to Section
      302(a) of the Sarbanes-Oxley Act of 200232.1*
              
              Certification
      of Principal Executive and Principal Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002




* This
exhibit shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made
before or after the date hereof and irrespective of any general


22