U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB  x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended March 31, 2005  o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  Commission File # 333-118155  WESTERN EXPLORATION, INC. (Exact name of registrant as specified in its charter)  Delaware (State or other jurisdiction of incorporation or organization)  87-0700927 (IRS Employer Identification Number)  8400 East Crescent Pkwy #600, Greenwood village, Colorado
90111(Address of principal executive offices )
(Zip Code)  (720) 528-4326 (Registrants telephone no., including area code)  (Former name, address and fiscal year, if changed since last report)  Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. YesxNoo  Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the distribution of securities under a plan confirmed by a court. YesxNoo  State the number of shares outstanding of each of the issuers classes of common equity, as of May 11, 2005: 24,621,000 shares of common stock.        WESTERN EXPLORATION, INC.

FINANCIAL STATEMENTS



INDEX



PART I-- FINANCIAL INFORMATION



Item 1. Financial Statements

Item 2. Managements Discussion and Analysis of Financial Condition

Item 3. Control and Procedures

PART II-- OTHER INFORMATION



Item 1. Legal Proceedings

Item 2. Changes in Securities

Item 3. Defaults Upon Senior Securities

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

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

SIGNATURE



Item 1.
Financial Information

BASIS OF PRESENTATION



The accompanying reviewed financial statements are presented in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal occurring accruals) considered necessary in order to make the financial statements not misleading, have been included. Operating results for the three months ended March 31, 2005 are not necessarily indicative of results that may be expected for the year ending December 31, 2005. The financial statements are presented on the accrual basis.











WESTERN EXPLORATION, INC.

(an exploration stage company)



FINANCIAL STATEMENTS

(unaudited)



As Of March 31, 2005









BALANCE SHEET
F-1

STATEMENT OF OPERATIONS
F-2

STATEMENT OF STOCKHOLDERS EQUITY
F-3

STATEMENT OF CASH FLOWS
F-4

FINANCIAL STATEMENT FOOTNOTES
F-5



































WESTERN EXPLORATION, INC.

(an exploration stage company)

BALANCE SHEET

As of March 31, 2005 and December 31, 2004

ASSETS



CURRENT ASSETS




03/31/2005

12/31/2004Cash




$ 310

$ 333Total Current Assets


310

333TOTAL ASSETS


$ 310

$ 333LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable



$ -

$ -Accrued expenses



10,100

8,750Purchase agreement payable


5,030

5,030Total Current Liabilities

15,130

13,780LONG-TERM LIABILITIESNone




-

-TOTAL LIABILITIES


15,130

13,780STOCKHOLDERS EQUITYCommon Stock, $.001 par valueAuthorized: 100,000,000Issued: 24,621,000 and 20,400,000, respectively

24,621

24,621Additional paid in capital


55,129

55,129Preferred stock, $.001 par valueAuthorized: 10,000,000 Issued: none

-

-Accumulated deficit during exploration stage

(94,570)

(93,197)Total Stockholders Equity

(14,820)

(13,447)TOTAL LIABILITIES AND EQUITY

$ 310

$ 333

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

F-1





WESTERN EXPLORATION, INC.

(an exploration stage company)

STATEMENT OF OPERATIONS

For the three months ending March 31, 2005 and 2004,

from inception (July 22, 2003) through March 31, 2005



3 MONTHS

3 MONTHSENDING

ENDING

FROM3/31/2005

3/31/2004

INCEPTIONREVENUE




$ -

$ -

$ -COST OF SERVICES



-

-

-GROSS PROFIT OR (LOSS)



-

-

-GENERAL AND ADMINISTRATIVE EXPENSES

1,373

-

62,570GENERAL EXPLORATION



-

32,000

32,000OPERATING INCOME



$ (1,373)

$ (32,000)

$ (94,570)Earnings (loss) per share



$ (0.00)

$ (0.00)Weighted average number of common shares

24,621,000

24,204,167



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

F-2











WESTERN EXPLORATION, INC.

(an exploration stage company)

STATEMENT OF STOCKHOLDERS EQUITY

As of March 31, 2005



ADDITIONALCOMMON
PAR
PAID IN

ACCUM.

TOTALSTOCK
VALUE
CAPITAL

DEFICIT

EQUITYCommon stock issued as officercompensation on company formation
18,000,000
$ 18,000
$ -

$ -

$ 18,000July 22, 2003 at $0.001 per shareCommon stock issued for cash

2,400,000
2,400
9,600



12,000October 30, 2003 at $0.005per share on private placementNet income (loss)






(31,192)

(31,192)Balance, December 31, 2003

20,400,000
$ 20,400
$ 9,600

$ (31,192)

$ (1,192)Common stock issued as

4,000,000
4,000
16,000



20,000officer compensationJanuary 15, 2004 at $0.005Common stock issued for cash

150,000
150
11,850



12,000January 21, 2004 at $0.08per share on private placementCommon stock issued for cash

12,000
12
2,988



3,000May 14, 2004 at $0.25per share on private placementCommon stock issued for cash

59,000
59
14,691



14,750June 18, 2004 at $0.25per share on private placementNet income (loss)






(62,005)

(62,005)Balance, December 31, 2004

24,621,000
$ 24,621
$ 55,129

$ (93,197)

$ (13,447)Net income (loss)






(1,373)

(1,373)Balance, March 31, 2005

24,621,000
$ 24,621
$ 55,129

$ (94,570)

$ (14,820)The accompanying notes are an integral part of these financial statements.

F-3







WESTERN EXPLORATION, INC.

(an exploration stage company)

STATEMENTS OF CASH FLOWS

For the three months ending March 31, 2005 and 2004,

from inception (July 22, 2003) through March 31, 2005




3 MONTHS
        
        3 MONTHSENDING
        
        ENDING
        
        FROMCASH FLOWS FROM OPERATING ACTIVITIES
        
        3/31/2005
        
        3/31/2004
        
        INCEPTIONNet income (loss)
        
        
        
        $ (1,373)
        
        $ (32,000)
        
        $ (94,570)Adjustments to reconcile net income to net cashprovided by (used in) operating activities:Stock issued as compensation
        
        
        -
        
        20,000
        
        38,000(Increase) Decrease in accounts receivable
        
        -
        
        -
        
        -Increase (Decrease) in accounts payable
        
        -
        
        -
        
        -Increase (Decrease) in accrued expenses
        
        1,350
        
        1,500
        
        10,100Increase (Decrease) in purchase agreement payable
        -
        
        -
        
        5,030Total adjustments to net income
        
        1,350
        
        21,500
        
        53,130Net cash provided by (used in) operating activities
        (23)
        
        (10,500)
        
        (41,440)CASH FLOWS FROM INVESTING ACTIVITIESNone
        
        
        
        
        -
        
        -
        
        -Net cash flows provided by (used in) investing activities
        -
        
        -
        
        -CASH FLOWS FROM FINANCING ACTIVITIESProceeds from stock issuance
        
        
        -
        
        12,000
        
        41,750Net cash provided by (used in) financing activities
        -
        
        12,000
        
        41,750CASH RECONCILIATIONNet increase (decrease) in cash
        
        
        (23)
        
        1,500
        
        310Cash - beginning balance
        
        
        333
        
        -
        
        -BALANCE DECEMBER 31, 2005 AND 2004
        
        
        $ 310
        
        $ 1,500
        
        $ 310

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

F-4



















NOTE 1 -OPERATIONS AND BASIS OF PRESENTATION



Western Exploration, Inc. (the Company), an exploration stage company, was incorporated on July 22, 2003 in the State of Delaware and is headquartered in Greenwood Village, Colorado. The Company is an exploration stage mining and mineral company. On October 30, 2003 the Company became actively engaged in acquiring mineral properties, raising capital, and preparing properties for production. The Company did not have any significant mining operations or activities from inception; accordingly, the Company is deemed to be in the exploration stage.



On January 30, 2004, the Company acquired mineral claims located in Southwestern British Columbia, Canada. The property consists thirty six mineral claims representing. The Company has not commenced economic production and is therefore still considered to be in the exploration stage.



The Companys financial statements have been presented on the basis that it is a

going concern, which contemplates the realization of the mineral properties and

other assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses of from inception. The Company has not realized economic production from its mineral properties. These factors raise substantial doubt about the Companys ability to continue as a going concern. Management continues to actively seek additional sources of capital to fund current and future operations. There is no assurance that the Company will be successful in continuing to raise additional capital, establishing probable or proven reserves, or determining if the mineral properties can be mined economically. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.



NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Revenue and Cost Recognition



The Company uses the accrual basis of accounting for financial statement reporting. Revenues and expenses are recognized in accordance with Generally Accepted Accounting Principles for the industry. Certain period expenses are recorded when obligations are incurred.



Use of Estimates



The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those results.





F-5







Income Taxes



The Company accounts for income taxes using the liability method which requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.



The Companys management determines if a valuation allowance is necessary to reduce any tax benefits when the available benefits are more likely than not to expire before they can be used.



Stock Based Compensation



In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, (SFAS 123), which is effective for periods beginning after December 15, 1995. SFAS 123 requires that companies either recognize compensation expense for grants of stock, stock options, and other equity instruments based on fair value or provide pro-forma disclosure of the effect on net income and earnings per share in the Notes to the Financial Statements. The Company has adopted SFAS 123 in accounting for stock-based compensation.



Foreign Currency Translation and Transactions



The Companys functional currency is the US dollar. No material translations or transactions have occurred. Upon the occurrence of such material transactions or the need for translation adjustments, the Company will adopt Financial Accounting Standard No. 52 and other methods in conformity with Generally Accepted Accounting Principles.



Earnings Per Share



In February 1997, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 128 (SFAS 128), Earnings Per Share. SFAS 128 replaces the presentation of primary earnings per share with a presentation of basic earnings per share based upon the weighted average number of common shares for the period.



Leases



The Company accounts for leases in accordance with Generally Accepted Accounting Principles which require operating leases to be expensed and capital leases to be capitalized and amortized over the lease term. Leased mining properties under capital leases are expensed until such time that an engineering study has been completed showing proven mining reserves.



F-6









NOTE 3 -AFFILIATES AND RELATED PARTIES



Significant relationships with (1) companies affiliated through common ownership and/or management, and (2) other related parties are as follows:



The Company, from time to time, uses funds provided as a loan by shareholders.



NOTE 4 -INCOME TAXES



The Company has available net operating loss carryforwards for financial statement and federal income tax purposes. These loss carryforwards expire if not used within 20 year from the year generated. The Companys management has decided a valuation allowance is necessary to reduce any tax benefits because the available benefits are more likely than not to expire before they can be used.



NOTE 5 -LONG-TERM DEBT



The Company has no long-term debt.



NOTE 6 -SHAREHOLDERS EQUITY



Preferred Stock



The Company has authorized ten million (10,000,000) shares of preferred stock with a par value of $.001, none of which have been issued.



Common Stock



The Company has authorized one hundred million (100,000,000) shares of common Stock with a par value of $.001.



Sale Restrictions on Common Stock



A total of 24,621,000 shares of common stock are outstanding at June 30, 2004. And 20,400,000 at December 31, 2003. Sales of these shares of stock are restricted under Rule 144 of the Securities Act of 1933. Our common stock will be available for resale to the public after one year and can be sold in accordance with the volume and trading limitations of Rule 144 of the Act.



Common Stock Subscribed and Issued for Cash



On June 18, 2004, the Company completed an offering exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 to raise$14,750 in the issuance of 59,000 shares of common stock for the purpose of the acquisition and exploration of mining properties. The Companys management considers this offering to be exempt under the Securities Act of 1933.



On May14, 2004 the Company completed an offering exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 to raise$3,000 in the issuance of 12,000 shares of common stock for the purpose of the acquisition and exploration of mining properties. The Companys management considers this offering to be exempt under the Securities Act of 1933.



F-7







On January 21, 2004 the Company completed an offering exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 to raise$12,000 in the issuance of 150,000 shares of common stock for the purpose of the acquisition and exploration of mining properties. The Companys management considers this offering to be exempt under the Securities Act of 1933.



On January 15, 2004, the Company issued 4,000,000 common shares of stock in the form of compensation to a director of the company for services. The shares were issued at a value of $0.005 per share for a total value of $20,000.



On October 30, 2003, the Company completed an offering exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 to raise$12,000 in the issuance of 2,400,000 shares of common stock for the purpose of the acquisition and exploration of mining properties. The Companys management considers this offering to be exempt under the Securities Act of 1933.



On July 22, 2003, the Company issued 18,000,000 common shares of stock in the form of officer compensation on the Company formation. The shares were issued at par value for a total value of $18,000.



Common Stock Recorded as Employee Compensation



The Company does not have an employee stock compensation package set up at this time. The stock compensation that has been granted falls under Rule 144. Compliance with Rule 144 is discussed in the following paragraph.



In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a companys common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed the greater of:



1.
1% of the number of shares of the companys common stock then outstanding.

2.
The average weekly trading volume of the companys common stock during thefour calendar weeks preceding the filing of a notice on form 144 withrespect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about the company.



NOTE 7 -ACQUISITIONS



On January 30, 2004, the Company entered into an agreement with Mr. Brock McMichael for the purchase of a mining property (the Claim) near Chilliwack Located in Southwestern British Columbia, Canada. The Claim has thirty six (36) mineral claim units. The total purchase price of the claim is $32,000 due per terms of the contract with advance royalties of $25,000 to be paid annually commencing 36 months from the date of signature of the agreement. The property is subject to a 2 1/2% Net Smelter Royalty (NSR) and a 7 1/2% Gross Rock Royalty (GRR). 1 1/2% of the NSR can be acquired for $1.0 million within 12 months from the commencement of commercial production. Mr. McMichael is required to keep the claims in good standing for up to 24 months from the date of claims recordings and provide geological consulting services for the claims. If the Company fails to make the advance royalty payments on the 36 month
anniversary of the signature of the agreement, then the Company agrees to transfer ownership of the Claims to Mr. McMichael within no less than a 10 day period.



F-8







NOTE 8 -COMMITMENTS AND CONTINGENCIES



The Companys Claim will revert back to the seller within no less than a 10 day period if the Company fails to pay the property payment by August 15, 2005 and/or if the Company fails to make the $25,000 annual advance royalty payments per the sales contract commencing 36 months from the date of the contract.



Management is not aware of any contingent matters that could have a material adverse effect on the Companys financial condition, results of operations, or liquidity.



NOTE 9 -LITIGATION, CLAIMS AND ASSESSMENTS



From time to time in the normal course of business the Company will be involved in litigation. The Companys management has determined any asserted or unasserted claims to be immaterial to the financial statements.



NOTE 10 GOING CONCERN



The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in the notes to the financial statements, the Company has experienced losses from inception. The Companys financial position and operating results raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.









F-9













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

Plan of Operation



The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with our financial statements and notes thereto appearing in this prospectus.



The accompanying financial statements have been prepared assuming that the company will continue as a going concern. As discussed in the notes to the financial statements, the Company has experienced losses from inception. The Companys financial position and operating results raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.



Organization



We were organized as a Delaware Corporation on July 22, 2003 for the purpose of developing a potentially large limestone occurrence in the British Columbia area of Canada.



Overview



In October 2003, we commenced a study of potential business opportunities in British Columbia. We engaged G.E. Nicholson P.Geo. of Nicholson & Associates solely to assist us in locating and reviewing potential mining projects in the British Columbia area. Mr. Nicholson did not provide any reports on any properties that we reviewed. After we had reviewed and rejected a number of potential property candidates, we acquired a large undeveloped occurrence of limestone located adjacent to the Lower Mainland region of South Western British Columbia (BC). The Mount McGuire limestone occurrence is located 17 km south east of the community of Chilliwack which lies in the eastern Fraser Valley. Our President, Peter Banysch has been working with Victor Bowman since January when Mr. Bowman joined our Board of Directors to develop a business concept to extract the limestone and market it to local communities.



We reviewed the available information on the following items:



(a) Project and Market:

o
Research material assembled by Nicholson & Associates on exploration projects the South West region of British Columbia.o
B.C. limestone market o Fraser Valley limestone marketo
Transportation facilities in the Fraser Valley

(b)
Projected growth in the Fraser Valley of the Lower Mainland region of British Columbia.(c)
Potential development scenario for the Mount McGuire limestone material.(d)
Phased exploration plan and budget to prove the necessary tonnage and grade of the limestone material.(e)
Visit to the Mount McGuire property with consulting geologist, Mr. Laurence Stephenson P.Geo.







Based on its due diligence, management determined that the Mount McGuire limestone occurrence could potentially be very large and the limestone occurrence could contain 500,000 to 1,000,000 tonnes of high grade limestone. This tonnage range will be the Initial Quarry. The tonnage figures were estimated in gross terms based on a physical visual evidence of the limestone occurrence and we can not determine at this time if this amount is accurate. We also can not determine if we will be able to profitably produce and market this tonnage. The local Fraser Valley is predicted to have a steady population growth rate over the next 17 years and could use annually 50,000 to 100,000 tonnes of high grade limestone in the construction, cement and agriculture industries.



Exploration stage expenses from inception through March 31, 2005 were $32,000 for general exploration costs related to the mineral rights of the exploration property and $62,570 of general and administrative costs for a total expense of $94,570 as captioned in the financial statements statement of operations. Included in the exploration expense was $12,000 of cash paid on the initial payment for the property and no money was spent on further evaluation of the property. These fees were in furtherance of Phase I to purchase and evaluate a property. Fees were incurred in the start-up costs of our company as well as the fees to prepare our audited financial statements and this registration statement. These fees were included in the general and administrative expense as discussed earlier in this paragraph.



Critical Accounting Policies



Western Explorations financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (GAAP). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions
or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.



Our significant accounting policies are summarized in Note 1 of our financial statements. While all these significant accounting policies impact its financial condition and results of operations, Western Explorations views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on Western Explorations consolidated financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.



Item 3.
Controls and Procedures

(a)
Evaluation of disclosure controls and procedures.

Our Chief Executive Officer and Chief Financial Officer (collectively the Certifying Officers) maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be disclosed, is accumulated and communicated to management timely. Under the supervision and with the participation of management, the Certifying Officers evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(c)] under the Exchange Act) within 90 days prior to the filing date of this report. Based upon that evaluation, the Certifying Officers concluded that our disclosure controls and procedures are effective in timely alerting them to material information relative to our company required to be disclosed in our periodic filings with the SEC.



(b)
Changes in internal controls.

Our Certifying Officer has indicated that there were no significant changes in our internal controls or other factors that could significantly affect such controls subsequent to the date of his evaluation, and there were no such control actions with regard to significant deficiencies and material weaknesses.









PART II - OTHER INFORMATION



Item 1.
Legal Proceedings.

The Company is currently not a party to any pending legal proceedings and no
such action by, or to the best of its knowledge, against the Company has been threatened.





Item 2.
Changes in Securities.

None






Item 3.
Defaults Upon Senior Securities.

None




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

No matter was submitted during the quarter ending March 31, 2005, covered by
this report to a vote of the Companys shareholders, through the
solicitation of proxies or otherwise.



Item 5.
Other Information.

None




Item 6.
Exhibits and Reports of Form 8-K.

(a)
Exhibits

31.1 Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002

32.1 Certification pursuant to Section 906 of Sarbanes Oxley Act of 2002



(b)
Reports of Form 8-K

None



SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.



WESTERN EXPLORATION, INC.

By: /s/ Peter BanyschPeter Banysch,
President, Chief Executive Officer,
Chief Financial Officer, Secretary & Director

Date: May 11, 2005