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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-QSB



xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE
SECURITIES EXCHANGE ACT OF 1934



For the Quarterly Period Ended March 31, 2004



 ̈TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the Transition Period From  to



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Commission File Number 000-30087



AMG OIL LTD.

(Exact name of registrant as specified in its charter)



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



1407-1050 Burrard Street,Vancouver, B.C.      V6Z 2S3

(Address of principal executive
offices)                (Zip Code)



Registrants telephone number, including area code:    (604) 682-6496



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x     No ̈



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court.

Yes  ̈     No ̈

APPLICABLE ONLY TO CORPORATE ISSUERS



State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date: Common, $.00001 par value per share: 16,600,000 outstanding as of   May 12, 2003.

Transitional Small Business Disclosure Format (check one):

Yes  ̈     Nox



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|AMG OIL LTD.(A Development Stage Enterprise)Consolidated Interim Balance Sheets
|-------------------------------------------------------------------------------
|                                                                               

| | March 31,             | March 31,             | September 30,
| | --------------------- | --------------------- | -------------
| | 2004                  | 2003                  | 2003         
| | (Unaudited - Prepared | (Unaudited - Prepared | (Audited)    
| | by Management)        | by Management)        |              

|Assets                                           |               |              |            
|------------------------------------------------ | ------------- | ------------ | -----------
|Current                                          |               |              |            
|Cash                                             | $   32,743    | $   74,788   | $    56,740
|Accounts receivable                              | -             | 58           | -          
|Prepaid expenses                                 | 2,500         | -            | -          
|                                                 |               |              |            
|                                                 |               |              |            
|                                                 | 35,243        | 74,846       | 56,740     
|                                                 |               |              |            
|Loan receivable                                  | 30,000        | 30,000       | 30,000     
|Investments                                      | 10,993        | 10,993       | 10,993     
|Property and equipment                           | 1,932         | 2,600        | 2,214      
|Oil and gas interest                             | -             | 1            | -          
|                                                 |               |              |            
|                                                 |               |              |            
|Total Assets                                     | $  78,168     | $  118,440   | $    99,947
|                                                 |               |              |            
|                                                 |               |              |            
|Liabilities                                      |               |              |            
|Current                                          |               |              |            
|Accounts payable and accrued liabilities         | $           - | $        871 | $     6,947
|Due to related parties                           | 1,902         | 21,714       | -          
|                                                 |               |              |            
|                                                 |               |              |            
|Total Liabilities                                | 1,902         | 22,585       | 6,947      
|                                                 |               |              |            
|                                                 |               |              |            
|Commitments and Contingencies                    |               |              |            
|                                                 |               |              |            
|Stockholders' Equity                             |               |              |            
|Common stock, $0.00001 par value                 |               |              |            
|100,000,000 shares authorized                    |               |              |            
|Issued and outstanding at March 31,              |               |              |            
|2004: 16,600,000 shares                          |               |              |            
|2003: 16,600,000 shares                          | 166           | 166          | 166        
|Additional paid-in capital                       | 2,835,709     | 2,835,709    | 2,835,709  
|Deficit accumulated during the development stage | (2,759,609)   | (2,740,020)  | (2,742,875)
|                                                 |               |              |            
|                                                 |               |              |            
|Total Stockholders' Equity                       | 76,266        | 95,855       | 93,000     
|                                                 |               |              |            
|                                                 |               |              |            
|Total Liabilities and Stockholders' Equity       | $   78,168    | $   118,440  | $    99,947
|                                                 |               |              |            

|AMG OIL LTD.
(A Development Stage Enterprise)
Consolidated Interim Statements of Operations
(Unaudited - Prepared by Management)
|--------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                

|                                    |                |                  |                |                 | Cumulative        
|----------------------------------- | -------------- | ---------------- | -------------- | --------------- | ------------------
|                                    |                |                  |                |                 | from Inception    
|                                    | Three Months   | Three Months     | Six Months     | Six Months      | on February 20,   
|                                    | Ended          | Ended            | Ended          | Ended           | 1997 to           
|                                    | March 31,      | March 31,        | March 31,      | March 31,       | March 31,         
|                                    | 2004           | 2003             | 2004           | 2003            | 2004              
|                                    |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|Expenses                            |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|General and administrative          | $     6,197    | $     19,894     | $    16,972    | $      47,993   | $       780,651   
|Loss on sale of investments         | -              | -                | -              | -               | 16,135            
|Write-down of investments           | -              | -                | -              | -               | 234,780           
|                                    |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|                                    | (6,197)        | (19,894)         | (16,972)       | (47,993)        | (1,031,566)       
|                                    |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|Other Income                        |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|Interest income                     | 107            | 371              | 238            | 941             | 59,367            
|                                    |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|Loss before discontinued operations | (6,090)        | (19,523)         | (16,734)       | (47,052)        | (972,199)         
|                                    |                |                  |                |                 |                   
|Loss from discontinued operations   | -              | (291,906)        | -              | (291,906)       | (1,787,410)       
|                                    |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|Net loss for the period             | $     (6,090)  | $   (311,429)    | $   (16,734)   | $  (338,958)    | $  (2,759,609)    
|                                    |                |                  |                |                 |                   
|                                    |                |                  |                |                 |                   
|Basic and diluted loss per share    | $       (0.00) | $         (0.00) | $       (0.02) | $        (0.02) | $           (0.14)
|                                    |                |                  |                |                 |                   

|                                                                                                                                
|--------------------------------------------------------------------------------------------------------------------------------
|AMG OIL LTD.
(A Development Stage Enterprise)
Consolidated Interim Statements of Cash Flows
(Unaudited - Prepared by Management)
|                                                                                                                                

|                                                    |              |               |              |               | Cumulative     
|--------------------------------------------------- | ------------ | ------------- | ------------ | ------------- | ---------------
|                                                    |              |               |              |               | from Inception 
|                                                    | Three Months | Three Months  | Six Months   | Six Months    | on February 20,
|                                                    | Ended        | Ended         | Ended        | Ended         | 1997 to        
|                                                    | March 31,    | March 31,     | March 31,    | March 31,     | March 31,      
|                                                    | 2004         | 2003          | 2004         | 2003          | 2004           
|                                                    |              |               |              |               |                
|Operating Activities                                |              |               |              |               |                
|Net loss for the period                             | $   (6,090)  | $   (311,429) | $   (16,734) | $   (338,958) | $   (2,759,609)
|Adjustments to reconcile net loss to                |              |               |              |               |                
|cash applied to operating activities:               |              |               |              |               |                
|Depreciation                                        | 141          | 193           | 282          | 386           | 3,957          
|Compensation expense from stock options             | -            | 4,574         | -            | 9,608         | 184,875        
|Gain on forgiveness of debt from related compnay    |              | -             | -            | -             | 22,234         
|Loss on sale of investments                         | -            | -             | -            | -             | 16,135         
|Write-down of investments                           | -            | -             | -            | -             | 234,780        
|Write-down of oil and gas interest                  | -            | 286,330       | -            | 286,330       | 1,832,520      
|Gain on sale of oil and gas interest                | -            | -             | -            | -             | (6,939)        
|Changes in non-cash working capital:                |              |               |              |               |                
|Accounts receivable                                 | -            | 105           | -            | 105           | -              
|Accounts payable and accrued Liabilities            | (11,000)     | (5,067)       | (6,947)      | (4,292)       | -              
|Due to related parties                              | (50)         | 7,296         | 1,902        | 7,296         | (20,332)       
|Prepaid expenses                                    | -            | (414)         | (2,500)      | -             | (2,500)        
|                                                    |              |               |              |               |                
|                                                    |              |               |              |               |                
|Net cash used in operating activities               | (16,999)     | (18,412)      | (23,997)     | (39,525)      | (494,879)      
|                                                    |              |               |              |               |                
|Financing Activities                                |              |               |              |               |                
|Common shares issued for cash                       | -            | -             | -            | -             | 2,681,000      
|Common shares re-purchased with cash                | -            | (30,000)      | -            | (30,000)      | (30,000)       
|                                                    |              |               |              |               |                
|                                                    |              |               |              |               |                
|Net cash provided by (used in) financing activities | -            | (30,000)      | -            | (30,000)      | 2,651,000      
|                                                    |              |               |              |               |                
|Investing Activities                                |              |               |              |               |                
|Loan receivable                                     | -            | (30,000)      | -            | (30,000)      | (30,000)       
|Purchase of investments                             | -            | -             | -            | -             | (324,856)      
|Proceeds from sale of investments                   | -            | -             | -            | -             | 72,948         
|Oil and gas exploration expenditures                | -            | -             | -            | -             | (1,835,581)    
|Purchase of property and equipment                  | -            | -             | -            | -             | (5,889)        
|                                                    |              |               |              |               |                
|                                                    |              |               |              |               |                
|Net cash used in investing activities               | -            | (30,000)      | -            | (30,000)      | (2,123,378)    
|                                                    |              |               |              |               |                
|Net increase (decrease) in cash during the period   | (16,999)     | (78,412)      | (23,997)     | (99,525)      | 32,743         
|Cash position - Beginning of Period                 | 49,742       | 153,200       | 56,740       | 174,313       | -              
|                                                    |              |               |              |               |                
|Cash position - End of period                       | $   32,743   | $   74,788    | $  32,743    | $  74,788     | $       32,743 
|                                                    |              |               |              |               |                

See accompanying notes to the consolidated financial statements

|                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------
|AMG OIL LTD.(A Development Stage Enterprise)Consolidated Interim Statements of Changes in Stockholders Equity(Unaudited - Prepared by Management)
|                                                                                                                                                 

|For the Six Months Ended March 31, 2004
|---------------------------------------
|                                       

|                           |              |         |               | Deficit         |           
|-------------------------- | ------------ | ------- | ------------- | --------------- | ----------
|                           |              |         |               | Accumulated     |           
|                           |              |         | Additional    | During the      | Total     
|                           | Common Stock | Paid-in | Development   | Stockholders'  
|                           |              |         |               |                
|                           | Shares       | Amount  | Capital       | Stage           | Equity    
|                           |              |         |               |                 |           
|                           |              |         |               |                 |           
|Balance at September 30,   |              |         |               |                 |           
|2003                       | 16,600,000   | $   166 | $   2,835,709 | $   (2,742,875) | $   93,000
|                           |              |         |               |                 |           
|Net loss during the period |              |         |               | (16,734)        | (16,734)  
|                           |              |         |               |                 |           
|                           |              |         |               |                 |           
|Balance at March 31,       |              |         |               |                 |           
|2004                       | 16,600,000   | $   166 | $   2,835,709 | $  (2,759,609)  | $   76,266
|                           |              |         |               |                 |           



|                                                                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------
|AMG OIL LTD.(A Development Stage Enterprise)Consolidated Interim Statements of Changes in Stockholders Equity(Unaudited - Prepared by Management)
|                                                                                                                                                 

|For the Six Months Ended March 31, 2004 and 2003 | 
|------------------------------------------------ | 
|                                                 | 

NOTE 1 - NATURE OF OPERATIONS AND CONTINGENCIES

The Company was incorporated under the laws of the State of Nevada as Trans New Zealand Oil Company on February 20, 1997.  The Company's name was subsequently changed to AMG Oil Ltd. on July 27, 1998.  The current business of the Company is the acquisition of suitable international oil and gas properties.

The Company is a development stage enterprise and is required to identify that these consolidated financial statements are those of a development stage enterprise in accordance with paragraph 12 of Statement of Financial Accounting Standards No. 7 and is focusing on acquiring suitable international oil and gas properties.

The Company does not generate sufficient cash flow from operations to fund its activities and has therefore relied principally upon the issuance of securities for financing. The Company intends to continue relying upon these measures to finance its acquisition activities to the extent such measures are available and obtainable under terms acceptable to the Company.  These conditions raise substantial doubt regarding the Company's ability to continue as a going concern.

Refer to Note 4 and 9

NOTE 2 - ACCOUNTING PRINCIPLES AND USE OF ESTIMATES

The accompanying unaudited interim financial statements of AMG Oil Ltd. have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-QSB as prescribed by the Securities and Exchange Commission. This form 10-QSB should be read in conjunction with the Company's September 30, 2003 Form 10-KSB. All material adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods have been reflected. The results of the six months ended March 31, 2004 are not necessarily indicative of the results to be expected for the full year.



NOTE 3 - INVESTMENTS

Investments are comprised of 2,205 common shares (2003: 2,205 shares) of Trans-Orient Petroleum Ltd. ("Trans-Orient") acquired at a cost of $235,773 (2003: $235,773) and having a fair value of $993 (2003: $993) and 600,000 common shares (2003: 600,000) of Gondwana Energy, Ltd. ("Gondwana") acquired at a deemed cost of $10,000 and having a fair value of $10,000 (2003: $10,000).

Refer to Note 5

NOTE 4 - LOAN RECEIVABLE

On March 7, 2003, the Company entered into a $30,000 loan agreement with The Innes Group, Inc. ("Innes"), a private California based company. The loan receivable was to be used as an initial payment against the acquisition price of Touchpoint Metrics, an asset owned solely by Innes, if an asset-purchase agreement could be completed by the mutually extended completion date of August 6, 2004.

In the event that an asset purchase agreement was not negotiated by August 6, 2004, the loan was to be converted to a promissory note bearing interest at a rate of 5% per year starting August 6, 2004, payable monthly over three years until the principal is paid in full.

To secure the full and timely payment of the loan obligations under the promissory note, Innes has granted to the Company, a security interest in the Touchpoint Metrics assets.

Refer to Note 9

NOTE 5 - RELATED PARTY TRANSACTIONS

Certain transactions of the Company involve publicly traded companies having directors, officers and/or principal shareholders in common with the Company.  These companies are Austral Pacific Energy Ltd. ("Austral") (formerly "Indo-Pacific Energy Ltd."), Trans-Orient Petroleum Ltd. ("Trans-Orient"), and Gondwana Energy, Ltd. ("Gondwana").

a)    Investments

Investments consist of 2,205 common shares of Trans-Orient and 600,000 common shares of Gondwana.

Refer to Note 3

b)    Consulting Agreements

During the six months ended March 31, 2004, the Company paid $Nil (2003: $477) in consulting fees to directors of the Company.

c)                                         Due to Related Parties

At March 31, 2004 the Company owed $1,902 (2003: $21,714) to certain companies having directors, officers and/or principal shareholders in common with the Company. This amount is non-interest bearing and has no fixed terms of repayment.



d)                                         Other

During the six months ended March 31, 2004, the Company incurred $9,706 (2003: $15,201) of mainly general and administrative costs through DLJ Management Corp., ("DLJ"), a wholly owned subsidiary of Trans-Orient. This amount represents costs incurred by DLJ on behalf of the Company.  Of the $9,706 incurred to date, $1,902 is owed to DLJ at March 31, 2004.

NOTE 6 - COMMON STOCK

a)    Authorized and Issued Share Capital

The authorized share capital of the Company is 100,000,000 shares of common stock with a par value of $0.00001 per share.  At March 31, 2004, there were 16,600,000 shares (September 30, 2003: 16,600,000 shares) issued and outstanding.

On December 10, 2003, the Board of Directors approved a share consolidation of the Company's outstanding common stock on the basis of one new share for forty old shares. The consolidation has not been initiated.

b)    Stock Options

There have been no changes in the Company's stock options for the periods ended March 31, 2004 and 2003. There are 232,500 shares that can be acquired at a weighted average price of $1.53 per share.

The following stock options are outstanding at March 31, 2004:

|Number    |  | Price     |  | Expiry          
|--------- |  | --------- |  | ----------------
|Of Shares |  | per Share |  | Date            
|          |  |           |  |                 
|          |  |           |  |                 
|217,500   |  | $1.50     |  | June 20, 2005   
|15,000    |  | $2.00     |  | October 31, 2005
|          |  |           |  |                 
|          |  |           |  |                 
|232,500   |  |           |  |                 
|          |  |           |  |                 

The following is a summary of the Company's net loss and basic and diluted loss per share as reported and pro forma as if the fair value based method of accounting defined in SFAS 123 had been applied for the periods ending March 31, 2004 and 2003:

|As at March 31,                     | 2004       |            | 2003
|----------------------------------- | ---------- | ---------- | ----
|                                    |            |            |     
|                                    | As         | Pro        |     
|                                    | Reported   | Forma      |     
|                                    |            |            |     
|                                    |            |            |     
|Loss before discontinued operations | $ (16,734) | $ (16,734) |     
|                                    |            |            |     
|Loss from discontinued operations   | -          | -          |     
|                                    |            |            |     
|                                    |            |            |     
|Net loss                            | $ (16,734) | $ (16,734) |     
|                                    |            |            |     
|                                    |            |            |     
|Basic and diluted loss per share:   |            |            |     
|Continuing operations               | $ (0.00)   | $ (0.00)   |     
|Discontinued operations             | (0.00)     | (0.00)     |     
|                                    |            |            |     
|                                    | $ (0.00)   | $ (0.00)   |     
|                                    |            |            |     

NOTE 7 - INCOME TAXES

There are no income taxes payable by the Company. At March 31, 2004 the Company has tax pools to offset future taxable income derived in the United States. The benefits of these tax pools have been offset by a valuation allowance of the same amount.

NOTE 8 - COMPARATIVE FIGURES

Certain comparative figures have been restated to conform to the presentation of the current period.

NOTE 9 - SUBSEQUENT EVENTS

Loan Receivable

On April 21, 2004 the Company gave notice to The Innes Group, Inc. that the Company does not wish to proceed with the acquisition of Touchpoint Metrics and therefore does not want to convert the US$30,000 advance into equity in the assets referred to in the Loan Agreement dated March 7, 2003 and as extended thereafter. The advance will convert to a promissory note on August 6, 2004.

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

Forward-Looking Statements

This Form 10-QSB includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this Form 10-QSB, other than statements of historical facts, that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including operating costs, future capital expenditures (including the amount and nature thereof), and other such matters are forward-looking statements. Although we believe the expectations expressed in such forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.  Because our stock is a penny stock, each time we refer to the Litigation Reform Act, the safe harbor does not apply.

Factors that could cause actual results to differ materially from those in forward-looking statements include: the change of business focus; inability to complete an acquisition of suitable oil and gas properties; continued availability of capital and financing; general economic, market or business conditions; acquisition opportunities or lack of opportunities; changes in laws or regulations; risk factors listed from time to time in our reports filed with the Securities and Exchange Commission; and other factors.

Our Company was incorporated on February 20, 1997 under the name Trans New Zealand Oil Company by filing our Articles of Incorporation with the Secretary of State in Nevada. We changed our name to AMG Oil Ltd. on July 27, 1998. We are a Vancouver, British Columbia, Canada based company focused on acquiring suitable international oil and gas properties, specifically in New Zealand.

The Company does not receive any revenue from its operations and is in a start-up phase and has no significant assets, tangible or intangible, other than the opportunity to acquire potentially suitable international oil and gas properties for exploration. The Company has no history of earnings and there is no assurance that the business of the Company will be profitable. As at the Company's six-month period ended March 31, 2004, the Company has an accumulated deficit of $2,759,609 and the Company is expected to continue incurring operating losses and accumulating deficits in future periods.   The Company has no significant future obligations or expected changes with respect to any of its assets, with the exception of the loan receivable of $30,000 converting to a promissory note bearing interest at a rate of 5% payable monthly over three years.

Currently our only significant assets are cash and our loan receivable that was entered into by the Company in March of 2003 with the intention of the Company being to acquire Touchpoint Metrics. On April 21, 2004 the Company gave notice to The Innes Group, Inc. that the Company does not wish to proceed with the acquisition of Touchpoint Metrics and therefore does not want to convert the US$30,000 advance into equity in the assets referred to in the Loan Agreement dated March 7, 2003 and as extended thereafter. The advance will convert to a promissory note on August 6, 2004.

We currently have ongoing obligations with respect to our corporate operations and we expect to need to place additional equity securities with investors, in order to raise the capital required for our ongoing activities until such time that we can generate revenues from operations.

There can be no assurance that we will earn revenue, operate profitably or provide a return on investment to our security holders. We now propose to derive all of our revenue from the intended acquisition of suitable international oil and gas properties.



Employees and Consultants

The Registrant has no employees, with the exception of our Corporate Officer, Mr. Michael Hart, and has not retained the services of any consultants.

The Registrant receives corporate services from DLJ Management Corp., a subsidiary of Trans-Orient Petroleum Corp, based on an oral agreement. The services consist of shareholder relations and communications, administrative and accounting support. DLJ Management Corp. provides their services on an hourly basis.

DLJ Management Corp. bills monthly for its services on a cost recovery basis, billing the Registrant and other associated companies for costs already incurred with no mark-up or other such charges, for items such as labor and rent, office costs, and employee benefits.

Office and Properties

The Registrant's administrative offices are located at 1407-1050 Burrard Street, Vancouver, British Columbia, Canada, V6Z 2S3 and our telephone number is (604) 682-6496. The Registrant utilizes the office space, on a rent-free basis, per a verbal agreement, from affiliated companies Trans-Orient Petroleum Ltd. and TAG Oil Ltd.

We currently have no revenue producing assets and at present. Our sole assets at March 31, 2004 were cash, Investments in related parties and our loan receivable.

Results of Operations

During the first six months of the current fiscal year, our activities consisted of electing to not proceed with the acquisition of Touchpoint Metrics and re-focusing our objectives to acquire suitable international oil and gas exploration properties.

We did not generate any revenues from operations during the six months ended March 31, 2004, or during the comparable period. Our sole revenue during the period was $238 in interest income earned on surplus cash balances, compared to $941 for the six months ended March 31, 2003.

Our total general and administrative expenses for the six months ended March 31, 2004 were $16,972 compared to $47,993 for the comparable period last year. For the current period ended March 31, 2004 there were Nil expenses related to amortization of deferred compensation related to our stock option plan versus $9,608 in the comparable period. Salaries were $6,786 compared to $9,487 for the six months ended March 31, 2003 and professional fees were $5,199, versus $14,963 last year. The balance of our general and administrative costs for the six months ended March 31, 2004 consisted of office expenses of $734, telephone expenses of $1,065, filing fees of $1,880, and other miscellaneous expenses such as shareholder relations, travel and related costs and amortization of capital assets totaling $1,308.

As a result of these transactions noted above, we incurred a loss of $16,734 or $0.00 per share for the six months ended March 31, 2004, compared to a loss of $338,958, inclusive of a $286,330 write-down of an oil and gas interest, or $0.02 per share for the same period last year.

Liquidity and Capital Resources

During the six months ended March 31, 2004 we did not have any financing or investing activities. For the comparable period last year the Company's financing activities consisted of re-purchasing, for cancellation and return to treasury, 3,000,000 common shares of the Company at a price of $0.01 per share, resulting in a change in the Company's outstanding shares issued from 19,600,000 to 16,600,000. The Company's sole investing activity for the period ended March 31, 2003 consisted of a $30,000 loan to The Innes Group, Inc.



At March 31, 2004 our current assets totaled $35,243 compared to $56,740 at the beginning of the fiscal year, or $74,846 for the comparable period at March 31, 2003. Our current assets consisted of $32,743 in cash and $2,500 in prepaid expenses. Our current liabilities at March 31, 2004 were $1,902, which was due to a related party for administrative costs. Cash on hand is currently our only source of liquidity. We do not have any lending arrangements in place with banking or financial institutions and we do not anticipate that we will be able to secure these funding arrangements in the near future.



We believe our existing cash balances are sufficient to carry our normal operations for the next twelve months, unless an acquisition of an oil and gas exploration property is undertaken during this period. To the extent that we require additional funds to support our operations or the expansion of our business, we may sell additional equity or issue debt. Any sale of additional equity securities will result in dilution to our stockholders. There can be no assurance that additional financing, if required, will be available to our company or on acceptable terms.

Recent accounting pronouncements

There have been no recent accounting pronouncement since the filing of the Company's FORM 10-KSB, filed on December 29, 2003. The most recent pronouncements are, however, disclosed below:

In October 2002, FASB issued Statements of Financial Accounting Standards No. 147, "Accounting of Certain Financial Institutions - an amendment of FASB Statements No. 72 and 44 and FASB Interpretation No. 9" ("SFAS 147"). SFAS 147 requires the application of the purchase method of accounting to all acquisitions of financial institutions, except transactions between two or more mutual enterprises.  SFAS 147 is effective for acquisitions for which the date of acquisition is on or after October 1, 2002 and will not effect the Company.

In November 2002, the FASB issued FASB Interpretation No (FIN) 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees of Indebtedness of Others." FIN 45 requires that upon issuance of a guarantee, the guarantor must recognize the liability for the fair value of the obligation it assumes under that guarantee. The provisions for initial recognition and measurement are effective on a prospective basis for guarantees that are issued or modified after December 31,2002, irrespective of a guarantor's year-end. The disclosure requirements of FIN 45 are effective for interim and annual periods ending December 15, 2002, and are applicable to product warranty liability and other guarantees. The adoption of FIN 45 did not have an effect on the Company.

In December 2002, FASB issued Statements of Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an amendment of FASB Statement No. 123" ("SFAS 148").  SFAS 148 amends FASB Statement No. 123 to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation.  In addition, SFAS 148 amends the disclosure requirements of FASB Statement No. 123 to require prominent disclosures in both annual

and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results.  SFAS 148 is effective for fiscal years beginning after December 15, 2002.

In January 2003, the FASB issued FASB interpretation No. (FIN) 46, "Consolidation of Variable Interest Entities." FIN 46 establishes accounting guidance for consolidation of a variable interest entity (VIE), formerly referred to as special purpose entities. FIN 46 applies to any business enterprise, both public and private, that has a controlling interest, contractual relationship or other business relationship with a VIE. FIN 46 provides guidance for determining when an entity (the Primary Beneficiary) should consolidate a VIE that functions to support the activities of the Primary Beneficiary. The Company has no contractual relationship or other business relationship with a VIE and therefore the adoption of this policy did not have an impact on the Company.

In April 2003, the FASB issued SFAS No. 149 "Amendment of Statement 133 on Derivative Instruments and Hedging Activities" ("SFAS 149"). This statement amends SFAS 133 by requiring that contracts with comparable characteristics be accounted for similarly and clarifies when a derivative contains a financing component that warrants special reporting in the statement of cash flows. SFAS 149 is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003 and must be applied prospectively.

In May 2003, the FASB issued SFAS No. 150 "Accounting For Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS 150"). This statement established standards for how an issuer classifies and measures in its statement of financial position certain financial instruments with characteristics of both liabilities and equity. SFAS 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003 and must be applied prospectively by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the Statement and still existing at the beginning of the interim period of adoption.

Item 3.  Controls and Procedures.

Michael Hart, our Principal Financial Officer and our Principal Executive Officer has established and is currently maintaining disclosure controls and procedures for us.  The disclosure controls and procedures have been designed to ensure that material information relating to us is made known to them as soon as it is known by others within our organization.

Our Principal Executive Officer who is also our Principal Financial Officer conducts an update and a review and evaluation of the effectiveness of our disclosure controls and procedures and has  concluded, based on his evaluation within 90 days of the filing of this Report, that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in our reports filed under the Securities Exchange Act of 1934.

There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the previously mentioned evaluation.

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|Item 1. Legal ProceedingsNone.Item 2. Changes in Securities and Use of ProceedsNoneItem 3. Defaults Upon Senior SecuritiesNoneItem 4. Submissions of Matters to a Vote of Security HoldersNoneItem 5. Other InformationNone
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|(a) Exhibits                                      |                                                                                                                        |        
|------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -------
|Exhibit No.                                       | Exhibit Description                                                                                                    | Page No
|31.1                                              | Section 302 Certification                                                                                              |        
|32.1                                              | Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |        
|                                                 
|(b) Reports on Form 8-K filed during the quarter.
|None                                              |                                                                                                                        |        



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 on this 14th day of May, 2004.

| | AMG OIL LTD.(Registrant)
| | ------------------------
| | BY:                     

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