UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                 For the quarterly period ended March 31, 2008

|_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

        For the transition period ended _____________ to ______________

                       Commission File Number: 000-30009


                            PETROL OIL AND GAS, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Nevada                                              90-0066187
 ------------------------------                               -----------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          11020 King Street, Suite 375
                             Overland Park, Kansas                  66210
                     --------------------------------------       --------
                    (Address of principal executive offices)     (Zip Code)

                                 (913) 323-4925
               --------------------------------------------------
              (Registrant's telephone number, including area code)

               ---------------------------------------------------
              (former name, former address and former fiscal year,
                         if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the last 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, or a non-accelerated filer. See the definitions of
"large accelerated filer," "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer___   Accelerated filer___   Non-accelerated filer_X_
                                                   (Do not check if a smaller
                                                      reporting company)

Smaller Reporting Company___

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
                                                          Yes |_|    No |X|

The number of shares of Common Stock, $0.001 par value, outstanding on May 12,
2008 was 29,090,926.

<PAGE>
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<CAPTION>
                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.
                                   Petrol Oil and Gas, Inc.
                             Condensed Consolidated Balance Sheet


                                                                   March 31,     December 31,
                                                                     2008           2007
                                                                 ------------    ------------
                                                                  Unaudited        Audited
<S>                                                             <C>             <C>
Assets
Current assets:
      Cash                                                      $    628,069    $    506,711
      Accounts receivable                                            371,519         529,554

      Derivative asset                                                  --            77,800
      Prepaid expenses                                                42,495          42,495
                                                                ------------    ------------
                Total current assets                               1,042,083       1,156,560
                                                                ------------    ------------

Fixed assets:
      Pipeline                                                     1,522,423       1,522,423
      Equipment and vehicles                                         403,801         388,762
                                                                ------------    ------------
                                                                   1,926,224       1,911,185
                Less accumulated depreciation                        528,376         487,954
                                                                ------------    ------------
                                     Net fixed
                                     assets                        1,397,848       1,423,231
                                                                ------------    ------------

Other assets:
      Oil and gas properties using full cost accounting:
                Properties not subject to
                amortization                                         313,829         313,829
                Properties subject to
                amortization                                       8,456,542       8,605,842
      Deposits                                                         3,000           3,000
                                                                ------------    ------------
                                     Total other                   8,773,371       8,922,671
                                     assets
                                                                ------------    ------------

                                                                $ 11,213,302    $ 11,502,462
                                                                ============    ============

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
      Accounts payable                                          $    134,374    $     37,366
      Accrued liabilities                                          1,164,224         649,031

      Short term derivative liability                              1,296,360            --
      Current portion of long term debt                           26,669,614      26,639,094
                                                                ------------    ------------
                                     Total                        29,264,572      27,325,491
                                     liabilities
                                                                ------------    ------------

Asset retirement obligation                                          521,859         511,000
                                                                ------------    ------------

Commitments and contingencies

      Stockholders' Equity (Deficit):
      Preferred stock, $0.001 par value,
      10,000,000 shares authorized, no
                shares issued and outstanding                           --              --
      Common stock, $0.001 par value,
      100,000,000 shares authorized
                29,090,926 shares issued and
                outstanding                                           29,090          29,090
      Additional paid-in capital                                  27,220,866      27,220,866
      Other comprehensive income (loss)                           (1,296,360)         77,800
      Accumulated (deficit)                                      (44,526,725)    (43,661,785)
                                                                ------------    ------------
                                                                 (18,573,129)    (16,334,029)
                                                                ------------    ------------

                                                                $ 11,213,302    $ 11,502,462
                                                                ============    ============

See notes to condensed consolidated financial statements.

                                              2
</TABLE>

<PAGE>


                            Petrol Oil and Gas, Inc.
                 Condensed Consolidated Statement of Operations
                                   (Unaudited)



                                                      For the Quarter Ended
                                                             March 31,
                                                   ------------    ------------
                                                           2008            2007
                                                   ------------    ------------


Revenue
     Oil and gas activities                        $  1,092,784    $  1,611,408
                                                   ------------    ------------

Expenses:

     Direct costs                                       468,342         754,038

     Pipeline costs                                      21,196         265,328

     General and administrative                         311,552         250,868

     Professional and consulting fees                   165,508         387,731

     Depreciation, depletion and amortization           200,163         652,397
                                                   ------------    ------------
                   Total expenses                     1,166,761       2,310,362
                                                   ------------    ------------


Net operating (loss)                                    (73,977)       (698,954)
                                                   ------------    ------------

Other income (expense):

     Interest income                                        779            --

     Loss on disposal of assets                         (26,775)           --
     Interest expense                                  (764,966)     (1,088,253)
                                                   ------------    ------------
                                                       (790,962)     (1,088,253)

Net (loss)                                         $   (864,939)   $ (1,787,207)
                                                   ============    ============


Weighted average number of
     common shares outstanding - basic and fully
     diluted                                         29,090,926      29,090,926
                                                   ============    ============


Net (loss) per share - basic and fully diluted     $      (0.03)   $      (0.06)
                                                   ============    ============


            See notes to condensed consolidated financial statements.

                                       3
<PAGE>


                            Petrol Oil and Gas, Inc.
                 Condensed Consolidated Statement of Cash Flows
                                   (Unaudited)

                                                       For the Quarter Ended
                                                             March 31,
                                                    -----------     -----------
                                                        2008            2007
                                                    -----------     -----------

Cash flows from operating activities

Net (loss)                                          $  (864,939)    $(1,787,207)

Depreciation, depletion and amortization                200,164         539,792

Loss on disposal of assets                               26,775         293,332

Accretion of asset retirement obligation                 10,859          20,170

Shares issued for interest                                 --           115,746
Adjustments to reconcile net (loss) to cash
     used in operating activities:

       Accounts receivable                              158,035         (98,663)

       Prepaid and other assets                            --            17,036

       Accounts payable                                  97,008        (268,195)

       Accrued liabilities                              515,192          66,104
                                                    -----------     -----------
Net cash provided by (used in) operating
activities                                              143,094      (1,101,885)
                                                    -----------     -----------

Cash flows from investing activities

     Purchase of fixed assets                           (52,254)           --

     Additions to other assets                             --           (20,136)
     Additions to oil and gas properties and
     deposits                                              --          (239,313)
                                                    -----------     -----------
Net cash provided from (used in) investing
activities                                              (52,254)       (259,449)
                                                    -----------     -----------

Cash flows from financing activities

     Proceeds from loans payable                         36,557            --

     Payments on notes payable                           (6,039)       (575,661)
                                                    -----------     -----------
Net cash provided from (used in) financing
activities                                               30,518        (575,661)
                                                    -----------     -----------


Net increase (decrease) in cash                         121,358      (1,936,995)

Cash - beginning                                        506,711       5,917,958
                                                    -----------     -----------

Cash - ending                                       $   628,069     $ 3,980,963
                                                    ===========     ===========

Supplemental disclosures:

     Interest paid                                  $   254,107     $   825,909
                                                    ===========     ===========
     Income taxes paid
                                                           --              --
                                                    ===========     ===========


            See notes to condensed consolidated financial statements.

                                       4

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<CAPTION>


                            Petrol Oil and Gas, Inc.
                     Notes to Condensed Financial Statements

Note 1 - Basis of Presentation

The unaudited condensed financial statements have been prepared in accordance
with United States generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and reflect all
adjustments which, in the opinion of management, are necessary for a fair
presentation. All such adjustments are of a normal recurring nature. The results
of operations for the interim period are not necessarily indicative of the
results to be expected for a full year. Certain amounts in the prior year
statements have been reclassified to conform to the current year presentations.
These statements should be read in conjunction with the financial statements and
footnotes thereto included in the Form 10-K for the year ended December 31,
2007.

Note 2 - Going Concern
The accompanying condensed consolidated financial statements have been prepared
assuming that we will continue as a going concern. Our ability to continue as a
going concern is dependent upon attaining profitable operations based on the
development of products that can be sold. We intend to use borrowings and
security sales to mitigate the affects of our cash position, however, no
assurance can be given that debt or equity financing, if and when required, will
be available. The financial statements do not include any adjustments relating
to the recoverability and classification of recorded assets and classification
of liabilities that might be necessary should we be unable to continue in
existence.

Note 3 - Stock Transactions

During the three months ended March 31, 2008 there was no activity in our stock.
A summary of stock options and warrants is as follows:

                                                      Options                              Warrants
<S>                                                     <C>              <C>                <C>                <C>
Outstanding 01/01/08                                     760,000          $2.12              8,233,333          $2.28
Granted                                                        -              -                      -              -
Cancelled                                               (50,000)           3.25                      -              -
Exercised                                                      -              -                      -              -
                                                  ---------------                      ---------------
Outstanding 3/31/08                                      710,000          $2.04              8,233,333          $2.28
                                                  ===============                      ===============



Note 3 - Asset Retirement Obligation

Our asset retirement obligations relate to the abandonment of oil and gas wells.
The amounts recognized are based on numerous estimates and assumptions,
including future retirement costs, inflation rates and credit adjusted risk-free
interest rates. The following shows the changes in asset retirement obligations
for the financial statements presented.

                                                             March 31, 2008
                                                            ----------------
Asset retirement obligation, beginning of year                     $ 511,000
Liabilities incurred during the year                                    --
Liabilities settled during the year                                     --
Accretion of expense                                                  10,859
                                                             ---------------
Asset retirement obligations, end of year                          $ 521,859
                                                            ================

                                       5
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<PAGE>


Note 4 - Debt

Debt consists of the following:

                                           March 31, 2008
                                           ==============
Total notes payable                        $   26,669,614

Our long-term debt has been classified as current as they were in default at
March 31, 2008. See Note 6 for subsequent events.

Note 5 - Fixed Price Sales Contracts

We have entered into various contracts with our customers to sell gas and oil at
a fixed price. At March 31, 2008 we had contracts covering approximately 45,000
mmbtu per month for the period of April 2008 to March 2009 at an average price
of $7.10 per mmbtu.

Note 6 - Subsequent Events

On April 30, 2008, Petrol Oil and Gas, Inc., Neodesha Pipeline, Inc. and Coal
Creek Pipeline, Inc. (collectively, "Petrol") entered into a Foreclosure-Related
Agreement (the "Agreement") with LV Administrative Services, Inc. ("LV"),
administrative and collateral agent for Laurus Master Fund, Ltd. ("Laurus"),
Valens Offshore SPV I, Ltd. ("Valens Offshore"), Valens U.S. SPV I, LLC ("Valens
US"), Calliope Capital Corporation ("Calliope") and Pallas Production Corp.
("Pallas", and together with, Laurus, Valens Offshore, Valens US and Calliope,
the "Holders").

Petrol is in default of certain obligations to its Holders under its Secured
Convertible Term Note, dated October 28, 2004, in the principle amount of
$8,000,000; its Secured Term Note, dated October 31, 2005, in the principle
amount of $10,000,000; its Secured Term Note, dated March 31, 2006, in the
principle amount of $5,000,000; and its Secured Term Note, dated May 26, 2006,
in the principle amount of $10,000,000 (collectively, the "Notes," and all other
obligations of Petrol together with the Notes, the "Outstanding Obligations"),
and has received from LV and the Holders a default and acceleration notice with
respect to the Outstanding Obligations. The aggregate amount due and owing to
the Holders as of April 30, 2008 is approximately $35.7 million.

The Outstanding Obligations are secured by various mortgages and other fixed and
mixed assets and real and personal property pursuant to security and other
agreements covering assets or other rights to which Petrol has rights (all such
assets, rights and collateral, collectively, the "Collateral"), a portion of
which are assets and rights referred to as the "Petrol-Neodesha Project,"
located in Neosho and Wilson Counties, Kansas, consisting of, among other
Collateral, mortgages, and real, personal property and fixed and mixed assets
used in connection with the Petrol-Neodesha Project (the "Neodesha Collateral").

The Agreement allows the Holders to foreclose on the Neodesha Collateral and
governs the terms and conditions of the foreclosure. The Agreement provides that
Petrol will not contest the sale of the Neodesha Collateral, which will be
conducted as a public foreclosure sale in accordance with Kansas law. Petrol has
agreed to reasonably assist LV and the Holders in the completion of the
foreclosure sale. After the sale of the Neodesha Collateral becomes final, LV
and the Holders will release Petrol of all remaining amounts owed or claims they
may have, and the Holders will reassign to Petrol their overriding royalty
interests in the mineral leases located at Petrol's Coal Creek Project.

As part of the Agreement, Petrol will cancel all outstanding warrants for
purchases of securities issued to Holders in connection with the Outstanding
Obligations and replace them with warrants to purchase 1,000,000 shares of
common stock at an initial exercise price of $0.20 per share.

                                       6

<PAGE>


                           FORWARD-LOOKING STATEMENTS

         This document contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements other
than statements of historical fact are "forward-looking statements" for purposes
of federal and state securities laws, including, but not limited to, any
projections of earnings, revenue or other financial items; any statements of the
plans, strategies and objections of management for future operations; any
statements concerning proposed new services or developments; any statements
regarding future economic conditions or performance; any statements of belief;
and any statements of assumptions underlying any of the foregoing.

         Forward-looking statements may include the words "may," "could," "will
be," "estimate," "intend," "plan," "continue," "believe," "expect,"
"anticipate," "goal" or "forecast" or other similar words. These forward-looking
statements present our estimates and assumptions only as of the date of this
report. Except as otherwise required by applicable securities laws, we do not
intend, and undertake no obligation, to update any forward-looking statement.

         Although we believe that the expectations reflected in our
forward-looking statements are reasonable, actual results could differ
materially from those projected or assumed in any of our forward-looking
statements. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to change and inherent risks and
uncertainties. The factors impacting these risks and uncertainties include, but
are not limited to:

     o    attainment of profitable operations based on the development of oil
          and gas products that can be sold, and the continued availability of
          debt or equity financing. The Company's ability to continue to operate
          is contingent on refinancing or restructuring indebtedness. See
          "Liquidity and Capital Resources".

     o    increased competitive pressures from existing competitors and new
          entrants;

     o    increases in interest rates or our cost of borrowing or a default
          under any material debt agreements;

     o    deterioration in general or regional economic conditions;

     o    adverse state or federal legislation or regulation that increases the
          costs of compliance, or adverse findings by a regulator with respect
          to existing operations;

     o    hedging risks;

     o    ability to attract and retain key personnel;

     o    inability to achieve future sales levels or other operating results;

     o    fluctuations of oil and gas prices;

     o    the unavailability of funds for capital expenditures; and

     o    operational inefficiencies in distribution or other systems.

         For a detailed description of these and other factors that could cause
actual results to differ materially from those expressed in any forward-looking
statement, please see the "Risk Factors" section of our Annual Report on Form
10-K for the year ended December 31, 2007, and to the extent applicable, our
Quarterly Reports on Form 10-Q.

         References to "Petrol", "the Company", "we," "us," and "our" refer to
Petrol Oil and Gas, Inc.

                                       7

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<CAPTION>


Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations.

OVERVIEW AND OUTLOOK

Results of Operations for the Three Months Ended March 31, 2008 and 2007.

         The following table summarizes selected items from the statement of
operations for the three months ended March 31, 2008 compared to the three
months ended March 31, 2007.


                                                Three Months Ended March 31,
                                             -----------------------------------      Increase          Percentage
                                                  2008                2007           (Decrease)           Change
                                             ----------------    ---------------    --------------    --------------
<S>                                               <C>                <C>                <C>                 <C>
Revenue                                           $1,092,784         $1,611,408         (518,624)           (32.2)%

Expenses:
   Direct costs                                      468,342            754,038         (285,696)           (37.9)%
   Pipeline costs                                     21,196            265,328         (244,132)           (92,0)%
   General and administrative                         311,55            250,868            60,684             24.2%
   Professional and consulting fees                  165,508            387,731         (222,223)           (57.3)%
   Depreciation, depletion and amortization          200,163            652,397         (452,234)           (69.3)%
                                             ----------------    ---------------    --------------    --------------
     Total expenses                                1,166,761          2,310,362       (1,143,601)           (49.5)%
                                             ----------------    ---------------    --------------    --------------
Net operating (loss)                                (73,977)          (698,954)           624,977           (89.4)%
                                             ----------------    ---------------    --------------    --------------

Other income (expense):
   Interest income                                       779                 --               779               N/A
   Loss on disposal of assets                       (26,775)                 --          (26,775)               N/A
   Interest expense                                (764,966)        (1,088,253)         (323,287)           (29.7)%
                                             ----------------    ---------------    --------------    --------------
     Total other income (expense)                  (790,962)        (1,088,253)         (297,291)           (27.3)%

Net income (loss)                                  (864,939)        (1,787,207)           922,268             51.6%
                                             ================    ===============    ==============    ==============

         Revenues. Revenues for the three months ended March 31, 2008 were
$1,092,784 compared to revenues of $1,611,408 in the three months ended March
31, 2007. This resulted in a decrease of $518,624 or 32.2%, from the same period
one year ago. The decrease in revenues primarily resulted from of the expiration
of a favorable gas hedge, declining production and the sale of a substantial
portion of our oil production.

         Direct Costs. Direct costs are the costs associated with operating
producing wells, and transporting the oil and natural gas to the market for
sale. Direct costs for the three months ended March 31, 2008 were $468,342, an
decrease of $285,696, or 37.9%, from $754,038 for the three months ended March
31, 2007. This decrease reflects expenses incurred in the first quarter of 2007
related to the Company's failed efforts to dewater and obtain commercial
production from wells drilled beginning during the last half of 2006 with
respect to its Burlington and Waverly properties in the Coal Creek Project. The
Company ceased dewatering efforts in Coal Creek near the end of the Company's
second quarter 2007. We have also reduced our costs related to work-overs,
repairs and modification to the Neodesha wells and pipeline system that we had
previously experienced during the same period in the previous year. We do not
anticipate maintenance and work-over costs to that extent in the future and our
current direct operating costs are more indicative of our overall production
costs.

                                       8
</TABLE>

<PAGE>


         Pipeline Costs. Pipeline costs for the three months ended March 31,
2008 were $21,196, a decrease of $244,132, or 92.0%, from $265,328 for the three
months ended March 31, 2007. The decrease in pipeline costs was primarily the
result of our cessation of the operation of the Company's pipeline system
supporting its Waverly properties in the Coal Creek Project and reduced
operating of its Burlington properties, also in the Coal Creek Project during
the second quarter 2007 and changes to our compression system, resulting in
reduced compressor rentals, together will reduce overall expenses.

         General and Administrative Expenses. General and administrative
expenses for the three months ended March 31, 2008 were $311,552, an increase of
$60,684, or 24.2%, from $250,868 for the three months ended March 31, 2007. The
increase in general and administrative expenses is attributable to less
production activity, where costs would be costs allocated.

         Professional and Consulting Fees. Professional and consulting fees for
the three months ended March 31, 2008 was $165,508, a decrease of $222,223, or
57.3%, from $387,731 for the three months ended March 31, 2007. The decrease in
professional and consulting fees was a result of an overall reduction in the use
of consultants and levels of accounting and legal services as well as general
cost cutting.

         Depreciation, Depletion, and Amortization Expense. Depreciation,
depletion, and amortization expense for the three months ended March 31, 2008
was $200,163, a decrease of $452,234, or 69.3%, from $652,397 for the three
months ended March 31, 2007. The decrease in depreciation, depletion and
amortization reflects a significantly lower level of applicable assets in the
first quarter 2008 as compared to the first quarter of 2007 due to the charge
for impairment of oil and gas properties and pipelines and the sale of oil
properties.

         Net Operating Loss. The net operating loss for the three months ended
March 31, 2008 was $73,977, versus a net operating loss of $698,954 for the
three months ended March 31, 2007.

         Other Income (Expense). Interest expense for the three months ended
March 31, 2008 was $764,966 a decrease of $323,287 from the three months ended
March 31, 2007 from $1,088,253. The decrease in interest expense is the result
of the accretion of warrants in 2007 and no remaining accretion in 2008. In the
three months ended March 31, 2008, we incurred a loss on the disposal of fixed
assets of $26,775.

Liquidity and Capital Resources

         During the six months ended March 31, 2008 our cash position decreased
by $4,071,502. During that period, our operating activities utilized $2,417,475
of cash mainly from operating expenses we incurred, and we made payments on
notes payable of $1,375,555. The following table summarizes total assets,
accumulated deficit, stockholders' equity and working capital at March 31, 2008
compared to December 31, 2007.

                                       9

<PAGE>
<TABLE>
<CAPTION>


                                                              Increase    /   (Decrease)
                              March 31,      December 31,   -----------------------------
                                2008            2007             $                %
                            ------------    ------------    ------------     ------------

<S>                         <C>            <C>              <C>                    <C>

Current assets              $  1,042,083    $  1,156,560    $   (114,477)            (9.9)%
                            ============    ============    ============     ============

Current liabilities           29,264,572      27,325,491       1,939,081              7.1%
                            ============    ============    ============     ============

Working capital (deficit)   $(28,222,489)   $(26,168,931)   $ (2,053,558)             7.8%
                            ============    ============    ============     ============

         Financing. On October 28, 2004, we entered into agreements with Laurus
Master Fund, Ltd., a Cayman Islands corporation. Under the terms of the Laurus
Funds agreements we issued a Secured Convertible Term Note (the "Note") in the
aggregate principal amount of $8,000,000 and a five-year warrant (the "Warrant")
to purchase 3,520,000 shares of our common stock at $2.00 per share and
1,813,333 shares of our common stock at $3.00 per share. On June 2, 2006, Laurus
transferred the 5,333,333 warrants to Pallas Production Corp. ("Pallas"). The
Note is convertible into shares of our common stock at a fixed conversion price
of $1.50 per share. The Note has a three-year term and bears an interest rate
equivalent to the "prime rate" published by the Wall Street Journal from time to
time plus 3%, subject to a floor of 7.5% per annum.

         On January 28, 2005, we amended the Laurus Note and the Registration
Rights Agreement. Laurus agreed to move five months of principal payments
(January through May of 2005) to be paid on the Maturity Date (October 28,
2007). Additionally, Laurus agreed to extend certain filing and effectiveness
dates under the registration rights agreement. In consideration for the
amendment, we issued an additional common stock purchase warrant to Laurus to
purchase up to 1,000,000 shares of our common stock at $2.50 per share for the
first 666,667 shares and $3.00 per share for the remaining 333,333 shares. On
June 20, 2006, Laurus transferred the 1,000,000 warrants to Pallas. Further,
pursuant to the amendment agreement executed on April 28, 2004, we have agreed
to file semi-annual registration statements to register shares of our common
stock issued to Laurus for the conversion of interest under the Note.

         As of December 31, 2006, Laurus has converted $2,283,823 of principal
payments into 1,522,550 shares of our common stock and $779,352 of accrued
interest into 519,568 shares of our common stock (2,042,118 shares in total).
The conversion of principal and accrued interest allowed us additional cash to
use in our operations.

         On October 31, 2005, we entered into another financing agreement with
Laurus, under which $10,000,000 was funded into an escrow account and was
disbursed to us in November 2005 after finalization of certain closing
requirements. We issued a three-year Secured Term Note in the aggregate
principal amount of $10,000,000 and a five-year warrant to purchase 1,000,000
shares of our common stock at $2.00 per share. The note bears an interest rate
equivalent to the "prime rate" published by the Wall Street Journal from time to
time plus 3.25%, subject to a floor of 10% and a ceiling of 14% per annum. In
addition, Laurus, in their sole discretion, may purchase additional notes from
us in an aggregate principal amount of up to $40,000,000 pursuant to
substantially similar terms of the initial note dated October 31, 2005.

         On March 31, 2006, we entered into agreements with Laurus to draw down
an additional $5,000,000 under the credit facility provided by Laurus in October
2005. Under the terms of the Laurus agreements we issued a Secured Term Note in
the aggregate principal amount of $5,000,000 and a five-year warrant to purchase
200,000 shares of our common stock at $1.80 per share. On June 20, 2006, Laurus
transferred the 200,000 warrants to Pallas. The Note has a three-year term and
bears an interest rate equivalent to the "prime rate" published by the Wall
Street Journal from time to time plus 3.25%, subject to a floor of 10% and a
ceiling of 14% per annum. Concurrently with the agreements listed above, we
amended and restated our previous $10,000,000 Secured Term Note dated October
31, 2005 with Laurus.

                                       10
</TABLE>

<PAGE>


          On April 7, 2006, the funds were released from Escrow. Net proceeds to
Petrol from the financing, after payment of fees and expenses to Laurus and its
affiliates, were $4,806,688. The proceeds are being utilized by Petrol for
drilling activities on our Coal Creek Project.

         On May 31, 2006, we entered into agreements with Laurus to draw down an
additional $10,000,000 under the credit facility provided by Laurus in October
2005. Under the terms of the Laurus agreements we issued a Secured Term Note in
the aggregate principal amount of $10,000,000 and a five-year warrant to
purchase 400,000 shares of our common stock at $1.65 per share. The Note has a
three-year term and bears an interest rate equivalent to the "prime rate"
published by the Wall Street Journal from time to time plus 3.25%, subject to a
floor of 10% and a ceiling of 14% per annum. Concurrently with the execution of
the new Laurus Funds agreements, Petrol amended and restated its previous
$10,000,000 Secured Term Note dated October 31, 2005 and the $5,000,000 Secured
Term Note dated March 31, 2006 with Laurus Funds.

         On June 2, 2006, the funds were released from Escrow. Net proceeds to
Petrol from the financing, after payment of fees and expenses to Laurus Funds
and its affiliates, were $9,629,679. The proceeds will be utilized by Petrol for
drilling activities on Petrol's Coal Creek Project.

         At December 31, 2007, the Company had long term debt (including the
current portion of long term debt) of approximately $26.7 million. Approximately
$15 million of this debt was utilized to develop the Coal Creek Project, which
has contributed no significant revenue to the Company. As a result, the
Company's cash position has seriously declined. On October 28, 2007, the Company
was required to make a principal payment of approximately $1.1 million on a
portion of its long term debt. The Company did not have adequate cash to make
such principal payment and is currently in default under the terms of the note
for this long term debt.

         On April 9, 2008, the Company's debt was declared in default and
accelerated by Laurus.

         On April 30, 2008, the Company entered into a Foreclosure-Related
Agreement (the "Foreclosure Agreement") with Laurus. The aggregate amount due
and owing to Laurus as of April 30, 2008 was approximately $35.7 million.

         The outstanding obligations are secured by various mortgages and other
fixed and mixed assets and real and personal property pursuant to security and
other agreements covering assets or other rights to which the Company has rights
(all such assets, rights and collateral, collectively, the "Collateral"), a
portion of which are assets and rights referred to as the "Petrol-Neodesha
Project," located in Neosho and Wilson Counties, Kansas, consisting of, among
other Collateral, mortgages, and real, personal property and fixed and mixed
assets used in connection with the Petrol-Neodesha Project (the "Neodesha
Collateral").

         The Agreement allows Laurus to foreclose on the Neodesha Collateral and
governs the terms and conditions of the foreclosure. The Agreement provides that
the Company will not contest the sale of the Neodesha Collateral, which will be
conducted as a public foreclosure sale in accordance with Kansas law. The
Company has agreed to reasonably assist Laurus in the completion of the
foreclosure sale. After the sale of the Neodesha Collateral becomes final,
Laurus will release Petrol of all remaining amounts owed or claims they may
have, and Laurus will reassign to Petrol their overriding royalty interests in
the mineral leases located at the Company 's Coal Creek Project.

                                       11

<PAGE>


         As part of the Agreement, the Company will cancel all outstanding
warrants for purchases of securities issued to Laurus in connection with the
Outstanding Obligations and replace them with warrants to purchase 1,000,000
shares of common stock at an initial exercise price of $0.20 per share.

         The foreclosure by Laurus described above will leave the Company with
far fewer assets than it currently has. There can be no assurance that the
Company will be able to continue operations and satisfy its obligations in the
future.

         Cash Flows. Since inception, we have financed cash flow requirements
through debt financing, the issuance of common stock and revenues generated from
the sale of oil and gas. As we expand operational activities, we may experience
net negative cash flows from operations, pending receipt of sales or development
fees, and may be required to obtain additional financing to fund operations
through common stock offerings and debt borrowings to the extent necessary to
provide working capital.


Derivatives

         To reduce our exposure to unfavorable changes in natural gas prices, we
have entered into an agreement to utilize energy swaps in order to have a
fixed-price contract. This contract allows us to be able to predict with greater
certainty the effective natural gas prices to be received for hedged production
and benefit operating cash flows and earnings when market prices are less than
the fixed prices provided under the contracts. However, we will not benefit from
market prices that are higher than the fixed prices in our contracts for hedged
production. If we are unable to provide the quantity that we have contracted for
we will have to go to the open market to purchase the required amounts that we
have contracted to provide.

          We entered into a "Fixed Price Contract" to sell 1,000.0 DTH per day
of our natural gas productions at a fixed price of $7.32 per DTH. The contract
period began April 1, 2007 and expired on March 31, 2008.

Critical Accounting Policies and Estimates

         Our accounting estimates include bad debts on our receivables, amount
of depletion of our oil and gas properties subject to amortization, the asset
retirement obligation and the value of the options and warrants that we issue.
Our trade receivables have been fully collectible since inception and we only
have sales to a small base of customers. We believe that all of our receivables
are collectible. The depletion of our oil and gas properties is based in part on
the evaluation of our reserves and an estimate of our reserves. We obtain an
evaluation of the proved reserves from a professional engineering company and on
a quarterly basis we review the estimates and determine if any adjustments are
needed. If the actual reserves are less than the estimated reserves, we would
not fully deplete our costs. The asset retirement obligation relates to the plug
and abandonment costs when our wells are no longer useful. We determine the
value of the liability by obtaining quotes for this service and estimate the
increase we will face in the future. We then discount the future value based on
an intrinsic interest rate that is appropriate for Petrol. If costs rise more
than what we have expected, there could be additional charges in the future
however we monitor the costs of the abandoned wells and we will adjust this
liability if necessary. The value we assign to the options and warrants that we
issue is based on the fair market value as calculated by the Black-Scholes
pricing model. To perform a calculation of the value of our options and
warrants, we determine the volatility of our stock. We believe our estimate of
volatility is reasonable and we review the assumptions used to determine this
whenever we have an equity instrument that needs a fair market value. Although
the offset to the valuation is in paid in capital, were we to have an incorrect
material volatility assumption, our expenses could be understated or overstated.
The preparation of our financial statements requires us to make assumptions and

                                       12

<PAGE>


estimates that affect the reported amounts of assets, liabilities, revenues and
expenses, as well as the disclosure of contingent assets and liabilities. We
base our assumptions and estimates on historical experience and other sources
that we believe to be reasonable at the time. Actual results may vary from our
estimates due to changes in circumstances, weather, politics, global economics,
mechanical problems, general business conditions and other factors.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

         Not applicable.

Item 4T. Controls and Procedures.

         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)) as of March 31, 2008. This evaluation was carried
out under the supervision and with the participation of our sole executive
officer, Chief Executive Officer, Loren Moll and with the assistance of our
company accountant. Based upon that evaluation, they concluded that, as of March
31, 2008, our disclosure controls and procedures have not been identified and we
have not yet tested their effectiveness. Because of this lack of identification
and testing, we cannot assure the effectiveness of the controls and procedures.
There have been no significant changes in our internal controls over financial
reporting for the quarter ended March 31, 2008 that have materially affected or
are reasonably likely to materially affect such controls.

         Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed in our
reports filed or submitted under the Exchange Act are recorded, processed,
summarized and reported, within the time periods specified in the SEC's rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

         The Company has established disclosure controls and procedures to
ensure that information disclosed in this MD&A and the related financial
statements was properly recorded, processed, summarized and reported to the
Company`s Board of Directors. A control system, no matter how well conceived or
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met.

         There has been no change in the Company's disclosure controls the
quarter ended March 31, 2008 that has materially affected or is likely to
materially affect its control over financial reporting.

Management's Report on Internal Control over Financial Reporting
----------------------------------------------------------------

         The CEO of the Company acknowledges that he is responsible for
designing internal controls over financial reporting or causing them to be
designed under their supervision in order to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with Rule 240.13a-15(f)
or Rule 240.15d-15(f). This report shall not be deemed to be filed for purposes
of Section 18 of the Exchange Act or otherwise subject to the liabilities of
that section.

                                       13

<PAGE>


         Management and the Board of Directors work to mitigate the risk of a
material misstatement in financial reporting, however, there can be no assurance
that this risk can be reduced to less than a remote likelihood of a material
misstatement.

         Management has not yet identified the critical disclosure controls and
procedures associated with the Company's internal control over financial
reporting for the quarter ended March 31, 2008 and has not yet tested the
effectiveness of these disclosure controls and procedures and, therefore, cannot
yet deem these controls to be effective. Therefore, the Company has determined
that a material weakness exists related to the lack of identification and
testing of disclosure controls and procedures associated with the Company's
internal control over financial reporting for the quarter ended March 31, 2008.
This material weakness could materially affect the Company's control over
financial reporting.

Limitations on the Effectiveness of Internal Controls
-----------------------------------------------------

Our management does not expect that our disclosure controls and procedures or
our internal control over financial reporting will necessarily prevent all fraud
and material error.

Weaver & Martin LLC, the Company's independent registered public accounting
firm, was not required to and has not issued a report concerning the
effectiveness of the Company's internal control over financial reporting as of
March 31, 2008.


                           PART II--OTHER INFORMATION

Item 1.   Legal Proceedings.

         Petrol is and may become involved in various routine legal proceedings
incidental to its business. However, to Petrol's knowledge as of the date of
this report, there are no material pending legal proceedings to which Petrol is
a party or to which any of its property is subject.

Item 1A. Risk Factors.

         There have been no material changes from the risk factors disclosed in
the "Risk Factors" section of our Annual Report on Form 10-K for the year ended
December 31, 2007.


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

         None.

Item 3.   Defaults Upon Senior Securities.

         On April 30, 2008, Petrol entered into a Foreclosure-Related Agreement
(the "Agreement") with LV Administrative Services, Inc. ("LV"), administrative
and collateral agent for Laurus Master Fund, Ltd. ("Laurus"), Valens Offshore
SPV I, Ltd. ("Valens Offshore"), Valens U.S. SPV I, LLC ("Valens US"), Calliope
Capital Corporation ("Calliope") and Pallas Production Corp. ("Pallas", and
together with, Laurus, Valens Offshore, Valens US and Calliope, the "Holders").

         Petrol is in default of certain obligations to its Holders under its
Secured Convertible Term Note, dated October 28, 2004, in the principle amount
of $8,000,000; its Secured Term Note, dated October 31, 2005, in the principle
amount of $10,000,000; its Secured Term Note, dated March 31, 2006, in the

                                       14

<PAGE>


principle amount of $5,000,000; and its Secured Term Note, dated May 26, 2006,
in the principle amount of $10,000,000 (collectively, the "Notes," and all other
obligations of Petrol together with the Notes, the "Outstanding Obligations"),
and has received from LV and the Holders a default and acceleration notice with
respect to the Outstanding Obligations. The aggregate amount due and owing to
the Holders as of April 30, 2008 is approximately $35.7 million.

         The Outstanding Obligations are secured by various mortgages and other
fixed and mixed assets and real and personal property pursuant to security and
other agreements covering assets or other rights to which Petrol has rights (all
such assets, rights and collateral, collectively, the "Collateral"), a portion
of which are assets and rights referred to as the "Petrol-Neodesha Project,"
located in Neosho and Wilson Counties, Kansas, consisting of, among other
Collateral, mortgages, and real, personal property and fixed and mixed assets
used in connection with the Petrol-Neodesha Project (the "Neodesha Collateral").

         The Agreement allows the Holders to foreclose on the Neodesha
Collateral and governs the terms and conditions of the foreclosure. The
Agreement provides that Petrol will not contest the sale of the Neodesha
Collateral, which will be conducted as a public foreclosure sale in accordance
with Kansas law. Petrol has agreed to reasonably assist LV and the Holders in
the completion of the foreclosure sale. After the sale of the Neodesha
Collateral becomes final, LV and the Holders will release Petrol of all
remaining amounts owed or claims they may have, and the Holders will reassign to
Petrol their overriding royalty interests in the mineral leases located at
Petrol's Coal Creek Project.

         As part of the Agreement, Petrol will cancel all outstanding warrants
for purchases of securities issued to Holders in connection with the Outstanding
Obligations and replace them with warrants to purchase 1,000,000 shares of
common stock at an initial exercise price of $0.20 per share.


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

         None.

Item 5.   Other Information.

         None.

Item 6.   Exhibits.

         The information required by this Item 6 is set forth in the Index to
Exhibits accompanying this Quarterly Report on Form 10-Q.

                                       15

<PAGE>



                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                            PETROL OIL AND GAS, INC.


                                            By:  /s/  Loren Moll
                                               --------------------------------
                                                      Loren Moll,
                                                      Chief Executive Officer
                                                      (On behalf of the
                                                      registrant and as
                                                      principal accounting
                                                      officer)

Date:  May 19, 2008

                                       16

<PAGE>


                                INDEX TO EXHIBITS

Exhibit
Number         Exhibits
-------        ----------------------------------------------------------------

31.1           Certification of the Company's Chief Executive Officer and
               principal accounting officer Pursuant to Section 302 of
               Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 7241).

32.1           Certification of the Company's Chief Executive Officer and
               principal accounting officer Pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

                                       17