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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2008

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-52300

SUN CAL ENERGY, INC.(Name
of small business issuer in its charter)

|Nevada                                           | 81-0659377                          
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|Suite 700, 205 - 5th Avenue, SW                  |                                     
|Calgary, AB Canada                               | T2P 2V7                             
|(Address of principal executive offices)         | (Zip Code)                          

Issuer's telephone number 403-538-4772

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Shares, par value $0.001(Title of
class)

Check whether the Issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [x] No[ ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. Yes [x] No[ ]

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

State issuer's revenues for its most recent fiscal year:
$139,441

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within 60 days. (See definition of affiliate in
Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

42,223,066 common shares @ $0.18 (1) = $7,600,152

(1)Average of bid and ask closing prices on September
15, 2008.

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 82,796,666 shares
of common stock as at September 15, 2008.

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TABLE OF CONTENTS

|ITEM 1:                                                               | DESCRIPTION OF BUSINESS                                                                    | 4 
|--------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | --
|FORWARD LOOKING STATEMENTS                                            | 4                                                                                         
|OVERVIEW                                                              | 4                                                                                         
|RISK FACTORS                                                          | 8                                                                                         
|RISKS RELATED TO OUR BUSINESS                                         | 8                                                                                         
|RISKS ASSOCIATED WITH OUR COMPANY                                     | 10                                                                                        
|RISKS ASSOCIATED WITH OUR COMMON STOCK                                | 11                                                                                        
|ITEM 2:                                                               | DESCRIPTION OF PROPERTY                                                                    | 12
|EXECUTIVE OFFICES                                                     | 12                                                                                        
|ITEM 3:                                                               | LEGAL PROCEEDINGS                                                                          | 13
|ITEM 4:                                                               | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                        | 13
|ITEM 5:                                                               | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                   | 14
|MARKET INFORMATION                                                    | 14                                                                                        
|ITEM 6:                                                               | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                  | 15
|ITEM 7:                                                               | FINANCIAL STATEMENTS                                                                       | 19
|ITEM 8:                                                               | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE | 21
|ITEM 8A:                                                              | CONTROLS AND PROCEDURES                                                                    | 21
|ITEM 9:                                                               | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS                               | 22
|DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS | 22                                                                                        
|ITEM 10:                                                              | EXECUTIVE COMPENSATION                                                                     | 24
|EXECUTIVE COMPENSATION                                                | 24                                                                                        
|ITEM 12:                                                              | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                             | 26
|ITEM 13:                                                              | EXHIBITS AND REPORTS                                                                       | 28
|ITEM 14:                                                              | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                     | 29
|AUDIT FEES                                                            | 29                                                                                        
|AUDIT RELATED FEES                                                    | 29                                                                                        
|TAX FEES                                                              | 29                                                                                        
|ALL OTHER FEES                                                        | 29                                                                                        
|AUDIT COMMITTEE REQUIREMENTS                                          | 29                                                                                        
|SIGNATURES                                                            | 30                                                                                        

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

FORWARD LOOKING STATEMENTS

This report contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors, that may
cause our or our industrys actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this annual
report.

In this annual report, unless otherwise specified, all
references to common shares refer to the common shares in our capital stock
and the terms we, us, our and Sun Cal means Sun Cal Energy, Inc. and our
wholly-owned subsidiaries, Sun Cal Energy Corp., a Nevada corporation and Sun
Cal Energy Canada Corp., a British Columbia corporation.

Overview

We were incorporated under the laws of the State of Nevada on
July 20, 2004 under the name Host Ventures, Inc. On November 6, 2006, we changed
our name to Sun Cal Energy, Inc. through a merger with our wholly owned
subsidiary, which was incorporated solely for the purpose of the name change.

On November 6, 2006, we completed a merger with our subsidiary,
Sun Cal Energy, Inc. As a result, we changed our name from "Host Ventures Inc."
to "Sun Cal Energy, Inc." We changed the name of our company to better reflect
the possible new direction and business of our company. In addition, effective
November 6, 2006 we effected a 10 for one forward stock split of our authorized,
issued and outstanding common stock. As a result, our authorized capital
increased from 75,000,000 shares of common stock with a par value of $0.001 to
750,000,000 shares of common stock with a par value of $0.001.

During our quarter ended December 31, 2006, we abandoned our mineral property, the Scaddign West Claim.  Because of limited disturbance during our exploration of the property, we were able to abandon the property with minimal reclamation obligations. In connection with the acquisition of our subsidiaries in late 2006, we have changed our business plan to focus on the acquisition and exploration of oil and gas properties.

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On January 31, 2007, we entered into a share exchange agreement
with all of our shareholders of Sun Cal Energy Corp., a privately-owned Nevada
company, whereby we agreed to acquire all the issued and outstanding common
stock of Sun Cal Energy Corp. Under this share exchange agreement, we agreed to
issue one share of our common stock for each issued and outstanding share of
common stock of Sun Cal Energy Corp. As at January 31, 2007, there were
26,925,000 shares of common stock of Sun Cal Energy Corp. issued and
outstanding. On March 12, 2007 we completed the transaction contemplated under
the share exchange agreement between our company and the shareholders of Sun Cal
Energy Corp. whereby we acquired all the issued and outstanding common stock of
Sun Cal Energy Corp., which then became our wholly owned subsidiary.

Sun Cal Energy Corp. was a privately-owned Nevada corporation
engaged in oil and gas exploration. Since we acquired all of the issued and
outstanding common stock of Sun Cal Energy Corp., we have also indirectly
acquired 100% of the issued and outstanding common stock of Sun Cal Energy
Canada Corp., a wholly owned subsidiary of Sun Cal Energy Corp. Sun Cal Energy
Canada Corp. was incorporated in the Province of British Columbia on June 5,
2006. In October 2006, Sun Cal Energy Corp. entered into an agreement with
TriMar Energy Partners, Inc. to acquire an one and one half percent (1.5%) of
8/8ths overriding royalty interest in an oil and gas lease known as the Hobart
Lease and an agreement with Western Energy Capital, LLC. to acquire an undivided
45% interest in certain oil and gas leases known as the Lokern Leases.

Our Current Business

We are in the business of oil and gas exploration. In October 2006, Sun Cal Energy Corp. entered into two agreements: an agreement with TriMar Energy Partners, Inc. to acquire an one and one half percent (1.5%) of 8/8ths overriding royalty interest in an oil and gas lease known as the Hobart Lease and an agreement with Western Energy Capital, LLC. to acquire an undivided 45% interest in certain oil and gas leases known as the Lokern Leases. To date significantly all of our revenues have been derived from our holding of a 1.5% of 8/8th overriding royalty interest in an oil and gas lease from the City of Hobart, as the lessor, covering a total of 1,211.44 acres in the city of Hobart, Washita County, Oklahoma, and we have losses since our inception. We currently rely upon the sale of our securities to fund operations.

The Hobart Lease

The Hobart Lease is an oil and gas lease obtained by TriMar
Energy Partners, Inc., as the lessee, from the City of Hobart, as the lessor,
dated April 1, 2004, and as recorded on Book 983, official records, Washita
County, Oklahoma, covering a total of 1,211.44 acres in the city of Hobart,
Washita County, Oklahoma. We paid a total of $525,000 and 1,500,000 shares of
common stock to TriMar Energy Partners, Inc. and its designates to earn the one
and one half percent (1.5%) of 8/8ths overriding royalty interest in the Hobart
Lease.

On April 27, 2007, the operator on the Hobart Lease, Marathon
Oil, spudded and began drilling a deep development gas well on our Hobart Lease
interest in Washita county, Oklahoma. The well, the Sturgeon.1-11, was set to
test through the Springer formation and was targeting multiple pay zones. Up to
April 27, 2007, the Sturgeon 1-11 had successfully reached a depth of 17,400
feet with a total authorized depth of 20,000 feet. By May 30, 2007, well data
collection and evaluation were completed on the Sturgeon 1-11 well, which was
deemed commercially viable. The well reached a final depth of 19,990 feet on May
15, 2007 after slightly more than 3 months of drilling. To help evaluate the
amount of pay encountered in the well, an open hole logging suite consisting of
density, neutron, HRI induction, sonic, and gamma tools was run to a depth of
19,980 feet. The operator on the Hobart Lease, Marathon Oil, then ran production
casing to a depth of 19,978 feet. The Sturgeon 1-11 well began production in
June of 2007 and has produced a total of 470,409 mcf of natural gas up to June
of 2008.

On July 11, 2007, a second permit was filed and drilling and
testing of a second deep development well on the Hobart Prospect in Washita,
County, Oklahoma. On September 6, 2007, the second deep development gas well,
Cunningham 1-2, was spudded and drilling activities begun. The target depth was
the Springer Morrow, which has proved to be productive in Oklahoma and Texas.
The Cunningham 1-2 well began production in June of 2007 and has produced a
total of 1,285,074 mcf of natural gas up to June of 2008.

On August 28, 2007, Range Production company filed for a third
well to be drilled on our Hobart Prospect in Oklahoma. Filed before the
Corporation Commission of the State of Oklahoma, Range Production Company was
seeking to establish a 640-acre drilling and spacing unit and pooling orders for
a third scheduled well in Section 14,

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Township 8 North, Range 18 West in Washita County, Oklahoma.
With a target depth of 19,800 feet, the estimated completion costs for this well
are estimated at $12,245,000.

The Lokern Leases

The Lokern Leases are a collection of 34 oil and gas
exploration leases entered into by Western Energy Capital, LLC. with various
private parties between November 2005 to May 2006. These leases are located in
Kern County, California. We paid an aggregate of $125,000 and 1,300,000 shares
of our common stock to Western Energy Capital, LLC and its designates to acquire
an undivided 45% of all rights, title and interests in the Lokern Leases.
Pursuant to this agreement, Western Energy Capital, LLC agrees that all leases
made part of the agreement will be executed and assigned to our company in a
timely manner and Western Energy Capital, LLC will issue our company a standard
joint operating agreement. All leases and assignments taken by Western Energy
Capital, LLC for our company shall call for Western Energy Capital, LLC to
deliver a 75% Net Revenue Interest to our company.

On June 15, 2007, we acquired additional 2-D seismic data
relating our Lokern Leases in California. Acquisition of the data will allow for
additional geophysical correlation and interpretation of our Lokern Leases and
allow our company to firm up well locations for drilling in 2007. The additional
seismic data will also provide insight into the reserve estimates of the
prospect. Regional 2-D seismic data is a key tool for oil and gas exploration
due to its affordability and wide area of coverage compared to 3-D data. The
acquisition of this data set is in line with our exploration program and
initiatives, and will allow greater marketability of our prospect to large
exploration and production companies.

Sun Cal Energy has the exclusive oil and gas rights for the
Lokern Prospect which comprises approximately 400 acres of prime land in the oil
and gas rich Kern County region, the most prolific area in the San Joaquin
Valley in Southern California. Our company owns a 45% Working Interest and a 75%
Net Revenue Interest in the prospect. On October 18, 2007, we assigned back to a
designate of Western Energy Capital, LLC a 5% overriding royalty interest net to
our 45% Working Interest for a net 2.25% overriding royalty interest in the
Lokern Prospect. We are still working with Western Energy Capital, LLC to
assigned the working interests in these leases to our company and Western Energy
Capital, LLC will issue our company a standard joint operating agreement.

The Britlind Prospect Leases

On April 19, 2007, we entered into an agreement with Western Energy Capital, LLC (“Western”) to acquire a partial interest in the “Britlind” Prospect and leases situated in the prolific Breton Sound area, offshore Louisiana.  Western has originally entered into an agreement with BTE Energy, LLC (“BTE”) whereby Western acquired a contractual interest in the Britlind Prospect from BTE, including all rights and privileges to approximately 9,440 acres of State of Louisiana leases, ownership interest in approximately 25 square miles of 3D seismic data, and interests in certain hardware and software in conjunction with the interpretation and display of the 3D seismic data.  In April and May of 2007, we paid an aggregate of $640,000 to Western Energy Capital, LLC pursuant to the agreement for a 5% working interest in the Britlind Prospect lease interests, seismic data, hardware and software and ongoing rights to an area of mutual interest.  We also issued 400,000 shares of our common stock to Western Energy Capital, LLC or its designates.  It was also acknowledged that the Britlind Prospect leases were originally acquired under the name of McGuinty Durham and Associates and assignment of leasehold out of McGuinty Durham and Associates will be made in due course.  At such time Western Energy Captial will take appropriate actions to assign the interest to our company.  Also pursuant to this agreement, we agreed to pay our proportionate share of all expenses, including geological, rentals and additional leases, etc. from May 11, 2007 and on.

In June of 2008, we received a well proposal from TDE Property
Holdings LP to drill the SL 18994, Well No. 1 in Breton Sound Block 2, Eloi Bay
Field, St. Bernard Parrish, Louisiana. The costs for drilling and testing the
well was estimated to be $2,219,000. After careful consideration, our company
decided to elect not to participate for the 5% working interest share of the
well, at an estimate net cost of $110,950.

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Overriding Royalty Interest in Ceturion
Property

On October 1, 2007, we acquired a 5% Overriding Royalty
Interest in the Centurion Property from King Royalty Corporation pursuant to an
offering of royalty interests by King Royalty Corporation. The Centurion
Property combines more than 17,000 acres of producing oil and gas assets across
Texas, Oklahoma, Alabama, Louisiana and Mississippi. There are 153 producing
wells on the asset with more than 50 additional proven/undeveloped drilling
sites. Current production is comprised of 90% natural gas and 10% oil. Well
operators include companies such as Exxon, Kerr-KcGee, Hunt Oil, Quicksilver and
Vintex. As an interest holder we are entitled to share in revenues generated
from oil and/or gas production from wells located on the Centurion Property.
Approximately 90 days after the operators of the wells on the properties sell
oil and gas production to local purchasers, we are entitle to receive payment of
revenues generated by those wells attributable to our interest. However, we have
no control over when we receive our payment of revenues, as each operator has
its own internal policies and procedures regarding the transfer of ownership. As
an interest holder we have no responsibility for operating expenses incurred in
connection with the operation of wells on the properties. Lastly, we do not have
responsibility for liabilities to third parties resulting from operations on the
properties, which is the responsibility of the operators of the properties and
the owners of working interests.

The Jonah Prospects

On August 15, 2007, we entered into an agreement with Desert
Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases in the
Jonah Field region of Wyoming. This is the fourth core exploration and
development region for our company. Our Jonah Prospects are identified as South
Jonah, which consists of 2,477.68 acres and West Jonah, consisting of 3,546.89
acres. We completed our acquisition on September 5, 2007 by paying to Desert
Mining, Inc. an aggregate of $821,798.45.

With current well spacing regulations, we believe we can drill
up to 37 wells on this acreage. The Jonah Field and the Pinedale Anticline are
acknowledged as the premier gas fields in the Rocky Mountains. These fields are
located in Wyoming's Greater Green River Basin. On December 27, 2007, we engaged
Schlumberger to conduct a reserve analysis and target drilling program on our
Jonah Prospect On April 7, 2008, we announced that we acquired a minority joint
venture interest in three-well prospect in the West Gomez Field within Peco
County, Texas.

Since we are an exploration stage company, there is no
assurance that commercially viable resources or reserves exist on any of our
properties, and a great deal of further exploration will be required before a
final evaluation as to the economic and legal feasibility for our future
exploration is determined. To date, except for the Sturgeon 1-11 and Cunningham
1-2 wells of which we own a 1.5% overriding royalty interest, we have not
discovered an economically viable resource or reserve on any of our properties,
and there is no assurance that we will discover one.

Government and Industry Regulation

The exploration and development of oil and gas properties is
subject to various United States federal, state and local governmental
regulations. Our company may from time to time, be required to obtain licenses
and permits from various governmental authorities in regards to the exploration
of our property interests.

If we proceed with the development of our future properties, we
anticipate that we will be subject to increased governmental regulation. Matters
subject to regulation include discharge permits for drilling operations,
drilling and abandonment bonds, reports concerning operations, the spacing of
wells, and pooling of properties and taxation. From time to time, regulatory
agencies have imposed price controls and limitations on production by
restricting the rate of flow of oil and gas wells below actual production
capacity in order to conserve supplies of oil and gas. The production, handling,
storage, transportation and disposal of oil and gas, by-products thereof, and
other substances and materials produced or used in connection with oil and gas
operations are also subject to regulation under federal, state, provincial and
local laws and regulations relating primarily to the protection of human health
and the environment. As we have not proceeded to the development of our future
properties, we have not incurred any expenditures related to complying with such
laws, or for remediation of existing environmental contamination. The
requirements imposed by such laws and regulations are frequently changed and
subject to interpretation, and we are unable to predict the ultimate cost of
compliance with these requirements or their effect on our operations.

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Employees

We have no employees as of the date of this annual report other
than our Chief Executive Officer, Lewis Dillman, and our sole director and Chief
Financial Officer, George Drazenovic, who provide us with their services through
consulting agreements.

Research and Development Expenditures

We have not incurred any other research or development
expenditures since our incorporation.

Subsidiaries

Our wholly-owned subsidiaries are Sun Cal Energy Corp., a
Nevada corporation and Sun Cal Energy Canada Corp., a British Columbia
corporation.

Patents and Trademarks

We do not own, either legally or beneficially, any patents or
trademarks.

RISK FACTORS

Shares of our common stock are speculative, especially since we
are in the exploration-stage of our new business. We operate in a volatile
sector of business that involves numerous risks and uncertainties. The risks and
uncertainties described below are not the only ones we face. Other risks and
uncertainties, including those that we do not currently consider material, may
impair our business. If any of the risks discussed below actually occur, our
business, financial condition, operating results or cash flows could be
materially adversely affected. This could cause the trading price of our
securities to decline, and you may lose all or part of your investment.
Prospective investors should consider carefully the risk factors set out below.

Risks Related To Our Business

As our properties are in the exploration stage there can be
no assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to
a number of risk factors. While the rewards to an investor can be substantial if
an economically viable discovery is made, few of the properties that are
explored are ultimately developed into producing oil and/or gas wells. Our
properties are in the exploration stage only and are without proven reserves of
oil and gas. There can be no assurance that we will establish commercial
discoveries on any of our properties.

The potential profitability of oil and gas ventures depends
upon factors beyond the control of our company

The potential profitability of oil and gas properties is
dependent upon many factors beyond our control. For instance, world prices and
markets for oil and gas are unpredictable, highly volatile, potentially subject
to governmental fixing, pegging, controls, or any combination of these and other
factors, and respond to changes in domestic, international, political, social,
and economic environments. Additionally, due to world-wide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations.
A productive well may become uneconomic in the event water or other deleterious
substances are encountered which impair or prevent the production of oil and/or
gas from the well. In addition, production from any well may be unmarketable if
it is impregnated with water or other deleterious substances. The marketability
of oil and gas which may be acquired or discovered will be affected by numerous
factors beyond our control. These factors include the proximity and capacity of
oil and gas pipelines and processing equipment, market fluctuations of prices,
taxes, royalties, land tenure, allowable production and

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environmental protection. The extent of these factors cannot be
accurately predicted but the combination of these factors may result in our
company not receiving an adequate return on invested capital.

Competition in the oil and gas industry is highly
competitive and there is no assurance that we will be successful in acquiring
interests in oil and gas properties.

The oil and gas industry is intensely competitive. We compete
with numerous individuals and companies, including many major oil and gas
companies, which have substantially greater technical, financial and operational
resources and staffs. Accordingly, there is a high degree of competition for
desirable oil and gas properties for drilling operations and necessary drilling
equipment, as well as for access to funds. There can be no assurance that the
necessary funds can be raised or that any projected work will be completed.

The marketability of natural resources will be affected by
numerous factors beyond our control which may result in us not receiving an
adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or
discovered by us will be affected by numerous factors beyond our control. These
factors include market fluctuations in oil and gas pricing and demand, the
proximity and capacity of natural resource markets and processing equipment,
governmental regulations, land tenure, land use, regulation concerning the
importing and exporting of oil and gas and environmental protection regulations.
The exact effect of these factors cannot be accurately predicted, but the
combination of these factors may result in us not receiving an adequate return
on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive
regulation which may cause substantial delays or require capital outlays in
excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment. Oil and gas operations are also subject to federal and local laws
and regulations which seek to maintain health and safety standards by regulating
the design and use of drilling methods and equipment. Various permits from
government bodies are required for drilling operations to be conducted; no
assurance can be given that such permits will be received. No assurance can be
given that environmental standards imposed by federal or local authorities will
not be changed or that any such changes would not have material adverse effects
on our activities. Moreover, compliance with such laws may cause substantial
delays or require capital outlays in excess of those anticipated, thus causing
an adverse effect on us. Additionally, we may be subject to liability for
pollution or other environmental damages which it may elect not to insure
against due to prohibitive premium costs and other reasons.

Exploration and production activities are subject to certain
environmental regulations which may prevent or delay the commencement or
continuance of our operations.

In general, our exploration and production activities are
subject to certain federal and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuance of a given operation. Compliance with these laws and regulations has
not had a material effect on our operations or financial condition to date.
Specifically, we are subject to legislation regarding emissions into the
environment, water discharges and storage and disposition of hazardous wastes.
In addition, legislation has been enacted which requires well and facility sites
to be abandoned and reclaimed to the satisfaction of state authorities. However,
such laws and regulations are frequently changed and we are unable to predict
the ultimate cost of compliance. Generally, environmental requirements do not
appear to affect us any differently or to any greater or lesser extent than
other companies in the industry. We believe that our operations comply, in all
material respects, with all applicable environmental regulations.

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- 10 -

Because some of our property interests are still registered
under the names of other entities, our title to these property interests may be
serious affected if formal assignments of these property interest to under our
name are not registered in due course.

Some of our property interests, such as our working interest in
the Lokern lease and the Britlind Prospect leases were originally acquired under
the name of third parties. Assignment of leasehold out of the third parties are
to be made in due course. However, if formal assignments of these property
interests are not registered under our name in due course, we face seriously
risks to our title to these property interests and may even lose our title to
these property interests.

Risks Associated With Our Company

Our future is dependent upon our ability to obtain
financing. If we do not obtain such financing, we may have to cease our
exploration activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will
generate positive cash flow in the future. We will require additional financing
in order to proceed beyond the first few months of our exploration program. We
will also require additional financing for the fees we must pay to maintain our
status in relation to the rights to our properties and to pay the fees and
expenses necessary to become and operate as a public company. We will also need
more funds if the costs of the exploration of our oil and gas properties are
greater than we have anticipated. We will also require additional financing to
sustain our business operations if we are not successful in earning revenues. We
currently do not have any arrangements for further financing and we may not be
able to obtain financing on commercially reasonable terms or terms that are
acceptable to us when it is required. Our future is dependent upon our ability
to obtain financing. If we do not obtain such financing, our business could fail
and investors could lose their entire investment.

Because we may never earn revenues from our operations, our
business may fail and then investors may lose all of their investment in our
company.

We have only recently accrued revenues and have experienced losses since inception. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history and is in the exploration stage. The success of our company is significantly dependent on the uncertain events of the discovery and exploitation of oil and gas reserves on our properties or selling the rights to exploit those oil and gas reserves. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our oil and gas properties in the future, we will not be able to
earn profits or continue operations. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and we can
provide no assurance that we will generate any revenues or ever achieve
profitability. If we are unsuccessful in addressing these risks, our business
will fail and investors may lose all of their investment in our company.

We have no employees other than our Chief Executive Officer,
Lewis Dillman, and our sole director and Chief Financial Officer, George
Drazenovic.

Our Chief Executive Officer, Lewis Dillman, and our Chief
Financial Officer and director, George Drazenovic, will be the only persons
responsible for our managerial responsibilities. As such, they will have
ultimate authority with respect to our business decisions, our disclosure and
our implementation of accounting controls and procedures. If Messrs. Dillman and
Drazenovic are unable to properly institution such procedures and comply with
reporting obligation requirements, our operations may be adversely impacted.

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- 11 -

Our By-laws contain provisions indemnifying our officers and
directors against all costs, charges and expenses incurred by them

Our By-laws contain provisions with respect to the
indemnification of our officers and directors against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him, including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is made a party by reason of his being or having been one
of our directors or officers.

Investors' interests in our company will be diluted and
investors may suffer dilution in their net book value per share if we issue
additional shares or raise funds through the sale of equity securities

Our constating documents authorize the issuance of 750,000,000
shares of common stock with a par value of $0.001. In the event that we are
required to issue any additional shares or enter into private placements to
raise financing through the sale of equity securities, investors' interests in
our company will be diluted and investors may suffer dilution in their net book
value per share depending on the price at which such securities are sold. If we
issue any such additional shares, such issuances also will cause a reduction in
the proportionate ownership and voting power of all other shareholders. Further,
any such issuance may result in a change in our control.

Our By-laws do not contain anti-takeover provisions which
could result in a change of our management and directors if there is a take-over
of our company

We do not currently have a shareholder rights plan or any
anti-takeover provisions in our By-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company, which may result in a
change in our management and directors.

As a result of our sole director and officer being resident
of other countries other than the United States, investors may find it difficult
to enforce, within the United States, any judgments obtained against our company
or our director and officer

We do not currently maintain a permanent place of business
within the United States. In addition, our current sole director and officer is
a national and resident of a country other than the United States, and all or a
substantial portion of such person's assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against our company or our director and
officer, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.

Risks Associated With Our Common Stock

We do not intend to pay dividends on any investment in the
shares of stock of our company.

We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stocks price. This may never happen and investors
may lose all of their investment in our company.

Our stock is a penny stock. Trading of our stock may be
restricted by the SEC's penny stock regulations which may limit a stockholder's
ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with

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- 12 -

assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standard risk disclosure document in a form prepared by the SEC which provides
information about penny stocks and the nature and level of risks in the penny
stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer
and its salesperson in the transaction and monthly account statements showing
the market value of each penny stock held in the customer's account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customer's confirmation. In addition, the penny stock rules require
that prior to a transaction in a penny stock not otherwise exempt from these
rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a
stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the
Financial Industry Regulatory Authority (FINRA) has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

Trading in our common stock on the OTC Bulletin Board is
limited and sporadic making it difficult for our shareholders to sell their
shares or liquidate their investments.

Shares of our common stock are currently quoted on the OTC
Bulletin Board. The trading price of our common stock has been subject to wide
fluctuations. Trading prices of our common stock may fluctuate in response to a
number of factors, many of which will be beyond our control. The stock market
has generally experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of companies
with no current business operation. There can be no assurance that trading
prices and price earnings ratios previously experienced by our common stock will
be matched or maintained. These broad market and industry factors may adversely
affect the market price of our common stock, regardless of our operating
performance.

In the past, following periods of volatility in the market
price of a company's securities, securities class-action litigation has often
been instituted. Such litigation, if instituted, could result in substantial
costs for us and a diversion of management's attention and resources.

ITEM 2. DESCRIPTION OF PROPERTY

Executive Offices

Our registered statutory office is located at Empire Stock
Transfer Inc., 2470 Saint Rose Pkwy, Suite 304, Henderson, NV 89074.

Our business office is located at, Suite 700, 205 - 5th Avenue,
S.W., Calgary, Alberta T2P 2V7 Canada.

In October 2006, Sun Cal Energy Corp. entered into two
agreements: an agreement with TriMar Energy Partners, Inc. to acquire an one and
one half percent (1.5%) of 8/8ths overriding royalty interest in an oil and gas
lease known

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- 13 -

as the Hobart Lease and an agreement with Western Energy
Capital, LLC. to acquire an undivided 45% interest in certain oil and gas leases
known as the Lokern Leases.

The Hobart Lease is an oil and gas lease obtained by TriMar
Energy Partners, Inc., as the lessee, from the City of Hobart, as the lessor,
dated April 1, 2004, and as recorded on Book 983, official records, Washita
County, Oklahoma, covering a total of 1,211.44 acres in the city of Hobart,
Washita County, Oklahoma.

The Lokern Leases are a collection of 34 oil and gas
exploration leases entered into by Western Energy Capital, LLC. with various
private parties between November 2005 to May 2006. These leases are located in
Kern County, California.

On April 19, 2007, we entered into an agreement with Western
Energy Capital, LLC (Western) to acquire a partial interest in the Britlind
Prospect and leases situated in the prolific Breton Sound area, offshore
Louisiana. In April and May of 2007, we paid an aggregate of $640,000 to Western
Energy Capital, LLC pursuant to the agreement for a 5% working interest in the
Britlind Prospect lease interests, seismic data, hardware and software and
ongoing rights to an area of mutual interest.

On October 1, 2007, we acquired a 5% Overriding Royalty
Interest in the Centurion Property from King Royalty Corporation pursuant to an
offering of royalty interests by King Royalty Corporation. The Centurion
Property combines more than 17,000 acres of producing oil and gas assets across
Texas, Oklahoma, Alabama, Louisiana and Mississippi. There are 153 producing
wells on the asset with more than 50 additional proven/undeveloped drilling
sites.

On August 15, 2007, we entered into an agreement with Desert
Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases in the
Jonah Field region of Wyoming. Our Jonah Prospects are identified as South
Jonah, which consists of 2,477.68 acres and West Jonah, consisting of 3,546.89
acres.

ITEM 3. LEGAL PROCEEDINGS

There are no legal proceedings pending or threatened against
us.

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

No matters were submitted to a vote of security holders that
have not been previously disclosed.

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- 14 -

PART II

ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Market Information

Our shares of common stock are quoted for trading on the OTC
Bulletin Board under the symbol SCEY.OB.

The following table sets forth the average high and the low bid
quotations quarterly for our shares of common stock during the last two fiscal
years ended June 30, 2007 and 2008. The closing bid on September 15, 2008 is
also shown. These quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not represent actual transactions.

Period
    
    High
    
    
    Low
    
    
    Close20084th Quarter April 1, 2008  June 30,
      2008
    $
    0.43
    
    $
    0.39
    
    $
    0.413rd Quarter January 1, 2008  June 30, 2008
    $
    0.64
    
    $
    0.55
    
    $
    0.602nd Quarter October 1, 2007 
      December 31, 2007
    $
    0.71
    
    $
    0.63
    
    $
    0.671st Quarter July 1, 2007  September 30, 2007
    $
    2.27
    
    $
    2.09
    
    $
    2.1720074th Quarter April 1, 2007  June 30, 2007
    $
    2.60
    
    $
    2.40
    
    $
    2.513rd Quarter January 1, 2007  June
      30, 2007
    $
    1.69
    
    $
    1.60
    
    $
    1.642nd Quarter October 1, 2006  December 31, 2006
    $
    0.20
    
    $
    0.20
    
    $
    0.201st Quarter July 1, 2006  September
      30, 2006
    $
    0.00
    
    $
    0.00
    
    $
    0.00


On September 15, 2008, the closing bid price for the common
stock was $0.18.

There are approximately 47 holders of record of our common
stock as at September 15, 2008.

Dividends

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

1. We would not be able to pay our
debts as they become due in the usual course of business; or

2. Our total assets would be less than
the sum of our total liabilities plus the amount that would be needed to satisfy
the rights of Shareholders who have preferential rights superior to those
receiving the distribution.

We have not declared any dividends, and we do not plan to
declare any dividends in the foreseeable future.

Recent Sales of Unregistered Securities

On April 16, 2007, we closed a private placement consisting of
200,000 units of our securities (the Units) at a price of US $1.00 per Unit
for aggregate proceeds of $200,000. Each Unit consists of one common share and
one share purchase warrant (a Warrant), each Warrant shall be exercisable into
one common share (a Warrant Share) at a price of US $1.50 per Warrant Share
until April 16, 2010. We issued the Units to a non-U.S. person (as that term is
defined in Regulation S of the Securities Act of 1933) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act of
1933.

On May 1, 2007, we closed a private placement consisting of
700,000 units of our securities (the Units) at a price of US $1.00 per Unit
for aggregate proceeds of $700,000. Each Unit consists of one common share and
one share purchase warrant (a Warrant), each Warrant shall be exercisable into
one common share (a Warrant Share) at a price of US $1.50 per Warrant Share
until April 16, 2010. We issued the Units to a non-U.S. person (as that term is

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- 15 -

defined in Regulation S of the Securities Act of 1933) in an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act of 1933.

On June 14, 2007, we closed a private placement consisting of
150,000 units of our securities (the Units) at a price of US $2.00 per Unit
for aggregate proceeds of $300,000. Each Unit consists of one common share and
one share purchase warrant (a Warrant), each Warrant shall be exercisable into
one common share (a Warrant Share) at a price of US $2.50 per Warrant Share
until May 1, 2010. We issued the Units to a non-U.S. person (as that term is
defined in Regulation S of the Securities Act of 1933) in an offshore
transaction relying on Regulation S and/or Section 4(2) of the Securities Act of
1933.

On June 29, 2007, we closed a private placement consisting of
80,000 units of our securities (the Units) at a price of US $2.50 per Unit for
aggregate proceeds of $200,000. Each Unit consists of one common share and one
share purchase warrant (a Warrant), each Warrant shall be exercisable into one
common share (a Warrant Share) at a price of US $3.00 per Warrant Share until
June 29, 2010. We issued the Units to a non-U.S. person (as that term is defined
in Regulation S of the Securities Act of 1933) in an offshore transaction
relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On July 27, 2007, we issued 100,000 units of our securities
(the Units) at a price of US $2.50 per Unit for proceeds of $250,000. Each
Unit consists of one common share and one share purchase warrant (a Warrant),
each Warrant shall be exercisable into one common share (a Warrant Share) at a
price of US $3.00 per Warrant Share until July 27, 2010. We issued the Units to
a non-U.S. person (as that term is defined in Regulation S of the Securities Act
of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2)
of the Securities Act of 1933.

On August 29, 2007, we issued 500,000 units of our securities
(the Units) at a price of US $1.20 per Unit for proceeds of $600,000. Each
Unit consists of one common share and one share purchase warrant (a Warrant).
, each Warrant shall be exercisable into one common share (a Warrant Share) at
a price of US $1.60 per Warrant Share until August 29, 2010. We issued the Units
to a non-U.S. person (as that term is defined in Regulation S of the Securities
Act of 1933) in an offshore transaction relying on Regulation S and/or Section
4(2) of the Securities Act of 1933.

On September 24, 2007, we issued 833,333 units of its
securities (the Units) at a price of US $1.20 per Unit for proceeds of
$1,000,000. Each Unit consists of one common share and one share purchase
warrant (a Warrant)., each Warrant shall be exercisable into one common share
(a Warrant Share) at a price of US $1.60 per Warrant Share until September 24,
2010. We issued the Units to a non-U.S. person (as that term is defined in
Regulation S of the Securities Act of 1933) in an offshore transaction relying
on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On May 24, 2008, we issued 333,333 units of its securities (the
Units) at a price of US $0.30 per Unit for proceeds of $100,000. Each Unit
consists of one common share and one share purchase warrant (a Warrant)., each
Warrant shall be exercisable into one common share (a Warrant Share) at a
price of US $0.50 per Warrant Share until May 24, 2011. We issued the Units to a
non-U.S. person (as that term is defined in Regulation S of the Securities Act
of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2)
of the Securities Act of 1933.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

The following discussion should be read in conjunction with our
financial statements and the related notes included herein. The following
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those discussed in
the forward looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below and elsewhere
in this current report, particularly in the section entitled Risk Factors in
this annual report.

Our financial statements are stated in United States Dollars
and are prepared in accordance with United States Generally Accepted Accounting
Principles.

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- 16 -

Plan of Operation

We have accrued a small amount of revenues and have experienced
losses since inception. Our plan of operations for the next 12 months involves
the exploration of oil and gas properties held by our company and our
subsidiary, Sun Cal Energy Corp.

As provided under the agreement with Western Energy Capital,
LLC on the Lokern Leases, we will be a joint working interest owner together
with Western Energy Capital, LLC for the Lokern Leases, and will be required to
pay our proportionate share of all land, title, lease bonuses and drilling
costs. In addition to the exploration activities on the oil and gas properties
under the two agreements held by Sun Cal Energy Corp., we will be required to
pay our proportionate share of all land, title, lease bonuses and drilling costs
for other properties in which we hold a working interest such as the Britlind
Prospect Leases and the Jonah Prospects. Furthermore, we will continue to seek
opportunities to acquire other oil and gas properties of merit. As we are still
in exploration stage, we anticipate that we will incur increased operating
expenses while realizing little or no revenues. We anticipate that we will
expend approximately $360,000 in the next 12 months for our operating expenses.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our oil and gas properties in the future, we will not be able to
earn profits or continue operations. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and we can
provide no assurance that we will generate any revenues or ever achieve
profitability.

We will also need more funds if the costs of the exploration of
our oil and gas properties are greater than we have anticipated. We will also
require additional financing to sustain our business operations if we are not
successful in earning revenues. We currently do not have any arrangements for
further financing and we may not be able to obtain financing on commercially
reasonable terms or terms that are acceptable to us when it is required. We
anticipate spending approximately $4,000 in ongoing general and administrative
expenses per month for the next 12 months, for a total anticipated expenditure
of $48,000 over the next 12 months. The general and administrative expenses for
the year will consist primarily of professional fees for the audit and legal
work relating to our regulatory filings throughout the year, as well as transfer
agent fees, annual mineral claim fees and general office expenses.

During the next twelve month period, we anticipate that we will generate little or no revenues. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or through shareholder or related party loans. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration programs. In the absence of such financing, we will not be able to continue exploration of our properties and our business plan will fail. Even if we are successful in obtaining equity financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our properties. If we do not continue to obtain additional financing, we will be forced to abandon our properties and our plan of operations

Results of Operations

Year Ended June 30,%Increase /2007
    
    
    2008
    
    
    (Decrease)Revenue
    
    Nil
    
    
    139,441
    
    
    100%Operating Expenses
    
    654,480
    
    
    1,443,480
    
    
    (120.5%
    )Interest & Dividend Income
    
    -
    
    
    1,891
    
    
    100%Loss on disposition of asset
    
    (581
    )
    
    -
    
    
    (100%
    )Net Loss
    
    655,061
    
    
    1,302,148
    
    
    98.78%


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- 17 -

Revenue

We are an exploration stage company that from inception to June 30, 2008 has only accrued revenues in the amount of $139,441. Our revenues during the year ended June 30, 2008 were derived primarily from royalty payments from properties in which we have an interest.  Certain of our royalty payments owed to us by Marathon Oil pursuant to certain agreements, have been held back by Marathon Oil because it has received correspondence from third parties asserting an interest over 0.4% of our overriding royalty interest.  We are confident that we will be able to resolve this issue soon and the withheld payment will be paid to us in the near future.

Expenses

Our operating expenses for the year ended June 30, 2008 and
2007 are outlined in the table below:

Ended June 30,%Increase /2007
    
    
    2008
    
    
    (Decrease)Abandoned Exploration Costs
    $
    5,500
    
    $
    -
    
    
    (100%
    )Oil and gas expenses
    
    -
    
    
    20,916
    
    
    100%General and Administrative Expenses
    
    648,980
    
    
    1,422,564
    
    
    119.20%Total Operating Expenses
    $
    654,480
    
    $
    1,443,480
    
    
    120.55%


Liquidity and Financial Condition

Working Capital

June 30, 2007
    
    
    June 30, 2008Current Assets
    $
    590,747
    
    $
    256Current Liabilities
    
    31,916
    
    
    61,360Working Capital
    $
    558,831
    
    $
    (61,104
    )








Future Financings

We anticipate continuing to rely on equity sales of our common
  shares in order to continue to fund our business operations. Issuances of additional
  shares will result in dilution to our existing shareholders. There is no assurance
  that we will achieve any of additional sales of our equity securities or arrange
  for debt or other financing to fund our exploration and development activities.

Since we are an exploration stage company, there is no
assurance that commercially viable resources or reserves exist on any of our
properties, and a great deal of further exploration will be required before a
final evaluation as to the economic and legal feasibility for our future
exploration is determined. To date, we have not discovered an economically
viable resource or reserve on any of our properties, and there is no assurance
that we will discover one.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Presented below is a description of the accounting policies that are most critical to an understanding of our  financial statements.

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- 18 -

Revenue recognition

Revenue is recognized in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104.  As such, revenue is recognized when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable and collectability is probable.  Sales are recorded net of sales discounts.

Stock Based Compensation

The Company accounts for stock-based compensation under SFAS No. 123R, "Share- based Payment” " and SFAS No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure--An amendment to SFAS No. 123." These standards define a fair value based method of accounting for stock-based compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based employee compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount an employee must pay to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which we expect to receive the benefit, which is generally the vesting period.

Issuance of Stock for Non-Cash Consideration

All issuances of the Company’s stock for non-cash consideration have been assigned a per share amount equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration received pertains to services rendered by consultants and others and has been valued at the market value of the shares on the dates issued.

Net Loss per Share

The provisions of SFAS No. 128, “Earnings Per Share” (“EPS”) have been adopted.  SFAS No. 128 provides for the calculation of basic and diluted earnings per share.   Basic EPS includes no dilution and is computed by dividing income or loss available to common shareholders by the weighted average number of common shares outstanding for the period.  Diluted EPS reflects the potential dilution of securities that could share in the earnings or losses of the entity, arising from the exercise of options and warrants and the conversion of convertible debt.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable, and notes payable.  Pursuant to SFAS No. 107, “Disclosures About Fair Value of Financial Instruments,” Management is required to estimate the fair value of all financial instruments at the balance sheet date.   The carrying values of our financial instruments in the financial statements are considered in order to approximate their fair values due to the short -term nature of the instruments.



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- 19 -

ITEM 7. FINANCIAL STATEMENTS

|Report of Independent
      Registered Public Accounting Firm
|-------------------------------------------------------------
|Financial Statements                                         
|Consolidated Balance Sheets                                  
|Consolidated Statements of Operations                        
|Consolidated Statements of Stockholders Equity              
|Consolidated Statements of Cash Flows                        
|Notes to Consolidated Financial Statements                   

---

Sun Cal Energy, Inc. 
  (Formerly Host Ventures, Inc.
  )(An Exploratory Stage Company)Consolidated Financial
    Statements



|Report of Independent
      Registered Public Accounting Firm | F-1
|------------------------------------------------------------- | ---
|                                                              |    
|Financial Statements                                          |    
|                                                              |    
|Consolidated Balance Sheets                                   | F-2
|                                                              |    
|Consolidated Statements of Operations                         | F-3
|                                                              |    
|Consolidated Statements of Stockholders Equity               | F-4
|                                                              |    
|Consolidated Statements of Cash Flows                         | F-5
|                                                              |    
|Notes to Consolidated Financial Statements                    | F-6

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders 
  Sun Cal Energy, Inc.

We have audited the accompanying consolidated balance sheets of
  Sun Cal Energy, Inc. (the Company) as of June 30, 2007 and 2008, and the
  related consolidated statements of operations, stockholders equity and cash
  flows for the two years then ended and for the period from inception (July 20,
  2004) through June 30, 2008. These financial statements are the responsibility
  of the Companys management. Our responsibility is to express an opinion on
  these financial statements based on our audit.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The Company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audit included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Companys internal control
  over financial reporting. Accordingly, we express no such opinion. An audit also
  includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements, assessing the accounting principles
  used and significant estimates made by management, as well as evaluating the
  overall financial statement presentation. We believe that our audit provides a
  reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of Sun
  Cal Energy, Inc. as of June 30, 2007 and 2008, and the results of its operations
  and its cash flows for the two years then ended and for the period from
  inception (July 20, 2004) through June 30, 2008 in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements have been prepared
  assuming that the Company will continue as a going concern. As discussed in Note
  1 to the financial statements, the Company has incurred recurring losses and has
  yet to be successful in establishing profitable operations. These factors, among
  others, raise substantial doubt about its ability to continue as a going
  concern. Managements plans regarding those matters are also described in Note
  1. The financial statements do not include any adjustments that might result
  from the outcome of this uncertainty.

/s/ Jonathon P. Reuben CPA

JONATHON P. REUBEN, CPA 
  AN ACCOUNTANCY CORPORATION

Torrance, California 
  September 23, 2008

---

Sun Cal Energy, Inc.(An Exploratory Stage
    Company)Consolidated Balance Sheets

|                                                              |   | June 30,  |  
|------------------------------------------------------------- | - | --------- | -
|                                                              |   | 2007      |  
|                                                              |   |           |  
|ASSETS                                                        |   |           |  
|                                                              |   |           |  
|Current assets                                                |   |           |  
|Cash and cash
      equivalents                               | $ | 590,747   |  
|Accounts
      receivable                                     |   | -         |  
|Prepaid expenses                                              |   | 4,550     |  
|                                                              |   | 595,297   |  
|                                                              |   |           |  
|Property and equipment                                        |   |           |  
|Oil and gas
      properties, full cost method of accounting  |   | 5,557,673 |  
|                                                              |   |           |  
|Intangible assets                                             |   | 11,913    |  
|                                                              |   |           |  
|Total assets                                                  | $ | 6,164,883 |  
|                                                              |   |           |  
|                                                              |   |           |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                          |   |           |  
|                                                              |   |           |  
|Current liabilities                                           |   |           |  
|Accounts payable
      and accrued expenses                   | $ | 31,916    |  
|Payable
      to related party                                |   | -         |  
|                                                              |   |           |  
|Total liabilities                                             |   | 31,916    |  
|                                                              |   |           |  
|Stockholders' equity                                          |   |           |  
|Common stock:                                                 |   |           |  
|Authorized: 750,000,000 with $0.001 par value                 |   |           |  
|Issued and outstanding: 80,730,000 shares as of June 30, 2007 |   |           |  
|and 82,796,666 shares as of June 30, 2008                     |   | 80,730    |  
|Additional
      paid-in capital                              |   | 6,756,270 |  
|Deficit
      accumulated during the exploratory stage        |   | (704,033  | )
|                                                              |   | 6,132,967 |  
|                                                              |   |           |  
|Total liabilities
      and stockholders' equity              | $ | 6,164,883 |  

|See accompanying notes. | F-2
|----------------------- | ---

---

Sun Cal Energy, Inc.(An Exploratory Stage
    Company)Consolidated Statements of Operations

|                                           |   |                    |   |   |             |   |   | From          |  
|------------------------------------------ | - | ------------------ | - | - | ----------- | - | - | ------------- | -
|                                           |   |                    |   |   |             |   |   | July 20, 2004 |  
|                                           |   | For the Year ended |   |   | (Inception) |  
|                                           |   | June
      30,     |   |   | through     |  
|                                           |   | 2007               |   |   | 2008        |   |   | June 30, 2008 |  
|                                           |   |                    |   |   |             |   |   |               |  
|                                           |   |                    |   |   |             |   |   |               |  
|Income earned during the exploratory stage | $ | -                  |   | $ | 139,441     |   | $ | 139,441       |  
|                                           |   |                    |   |   |             |   |   |               |  
|Operating expenses                         |   |                    |   |   |             |   |   |               |  
|Abandoned exploration costs                |   | 5,500              |   |   | -           |   |   | 12,500        |  
|Oil and gas expenses                       |   | -                  |   |   | 20,916      |   |   | 20,916        |  
|General and administrative expenses        |   | 648,980            |   |   | 1,422,564   |   |   | 2,113,516     |  
|                                           |   | 654,480            |   |   | 1,443,480   |   |   | 2,146,932     |  
|                                           |   |                    |   |   |             |   |   |               |  
|Net loss from operations                   |   | (654,480           | ) |   | (1,304,039  | ) |   | (2,007,491    | )
|                                           |   |                    |   |   |             |   |   |               |  
|Other income (expense)                     |   |                    |   |   |             |   |   |               |  
|Interest income                            |   | -                  |   |   | 1,891       |   |   | 1,891         |  
|Loss on disposition
      of asset         |   | (581               | ) |   | -           |   |   | (581          | )
|                                           |   |                    |   |   |             |   |   |               |  
|Net loss                                   | $ | (655,061           | ) | $ | (1,302,148  | ) | $ | (2,006,181    | )
|                                           |   |                    |   |   |             |   |   |               |  
|Net loss per share - basic and diluted     | $ | (0.01              | ) | $ | (0.02       | ) |   |               |  
|                                           |   |                    |   |   |             |   |   |               |  
|Weighted average common shares             |   |                    |   |   |             |   |   |               |  
|outstanding - basic and diluted            |   | 73,574,986         |   |   | 82,112,058  |   |   |               |  

|See accompanying notes. | F-3
|----------------------- | ---

---

Sun CalEnergy,Inc.(FormerlyHostVenturesInc) 
    (AnExploratoryStageCompany)StatementsofConsolidatedStockholders'Equity

|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   | Deficit     |   |   |            |  
|----------------------------------------------------------- | -------- |  | - | --------- |  | ------------------ |  | - | ------- |  | - | ----------- | - | - | ----------- | - | - | ---------- | -
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   | Accumulated |   |   |            |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   | Additional  |   |   | During the  |   |   |            |  
|                                                            |          |  |   | Price per |  | Common
      stock |  |   | Paid-in |  |   | Exploratory |   |   |             |  
|                                                            | Date     |  |   | share     |  | Shares             |  |   | Amount  |  |   | Capital     |   |   | Stage       |   |   | Total      |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Balance, July 20, 2004                                      |          |  |   |           |  | -                  |  | $ | -       |  | $ | -           |   | $ | -           |   | $ | -          |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Shares issued to founders                                   | 12/15/04 |  | $ | 0.001     |  | 20,000,000         |  |   | 20,000  |  |   | (18,000     | ) |   | -           |   |   | 2,000      |  
|Shares issued for cash                                      | 2/28/05  |  | $ | 0.001     |  | 28,250,000         |  |   | 28,250  |  |   | -           |   |   | -           |   |   | 28,250     |  
|Shares issued for cash                                      | 3/31/05  |  | $ | 0.005     |  | 3,000,000          |  |   | 3,000   |  |   | 12,000      |   |   | -           |   |   | 15,000     |  
|Contributed services and rent                               | Various  |  |   |           |  | -                  |  |   | -       |  |   | 7,500       |   |   | -           |   |   | 7,500      |  
|Net loss                                                    |          |  |   |           |  | -                  |  |   | -       |  |   | -           |   |   | (18,005     | ) |   | (18,005    | )
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Balance, June 30, 2005                                      |          |  |   |           |  | 51,250,000         |  |   | 51,250  |  |   | 1,500       |   |   | (18,005     | ) |   | 34,745     |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Contributed services and rent                               | Various  |  |   |           |  | -                  |  |   | -       |  |   | 9,000       |   |   | -           |   |   | 9,000      |  
|Net loss                                                    |          |  |   |           |  | -                  |  |   | -       |  |   | -           |   |   | (30,967     | ) |   | (30,967    | )
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Balance, June 30, 2006                                      |          |  |   |           |  | 51,250,000         |  |   | 51,250  |  |   | 10,500      |   |   | (48,972     | ) |   | 12,778     |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Shares issued for cash                                      | 8/3/06   |  | $ | 0.001     |  | 23,000,000         |  |   | 23,000  |  |   | -           |   |   | -           |   |   | 23,000     |  
|Contributed services and rent                               | 9/30/06  |  |   |           |  |                    |  |   |         |  |   | 2,250       |   |   | -           |   |   | 2,250      |  
|Shares issued for cash                                      | 10/1/06  |  | $ | 1.000     |  | 375,000            |  |   | 375     |  |   | 374,625     |   |   | -           |   |   | 375,000    |  
|Shares issued for cash                                      | 10/17/06 |  | $ | 1.000     |  | 250,000            |  |   | 250     |  |   | 249,750     |   |   | -           |   |   | 250,000    |  
|Shares issued as partial consideration
      in acquisition | 10/21/06 |  |   |           |  | 2,800,000          |  |   | 2,800   |  |   | 2,797,200   |   |   | -           |   |   | 2,800,000  |  
|of oil and gas leases                                       |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Shares issued for cash                                      | 12/1/06  |  | $ | 1.000     |  | 500,000            |  |   | 500     |  |   | 499,500     |   |   | -           |   |   | 500,000    |  
|Shares issued as partial consideration in acquisition       |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|of oil and gas leases                                       | 1/1/07   |  |   |           |  | 1,000,000          |  |   | 1,000   |  |   | 999,000     |   |   | -           |   |   | 1,000,000  |  
|Shares issued for cash                                      | 4/1/07   |  | $ | 1.000     |  | 200,000            |  |   | 200     |  |   | 199,800     |   |   | -           |   |   | 200,000    |  
|Shares issued as partial consideration
      in acquisition |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|of oil and gas leases                                       | 4/19/07  |  | $ | 1.000     |  | 400,000            |  |   | 400     |  |   | 399,600     |   |   | -           |   |   | 400,000    |  
|Shares issued for cash                                      | 5/1/07   |  | $ | 1.000     |  | 700,000            |  |   | 700     |  |   | 699,300     |   |   | -           |   |   | 700,000    |  
|Shares issued for services                                  | 5/1/07   |  | $ | 1.000     |  | 25,000             |  |   | 25      |  |   | 24,975      |   |   | -           |   |   | 25,000     |  
|Shares issued for cash                                      | 6/14/07  |  | $ | 2.000     |  | 150,000            |  |   | 150     |  |   | 299,850     |   |   | -           |   |   | 300,000    |  
|Shares issued for cash                                      | 6/29/07  |  | $ | 3.000     |  | 80,000             |  |   | 80      |  |   | 199,920     |   |   | -           |   |   | 200,000    |  
|Net loss                                                    |          |  |   |           |  | -                  |  |   | -       |  |   | -           |   |   | (655,061    | ) |   | (655,061   | )
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Balance, June 30, 2007                                      |          |  |   |           |  | 80,730,000.00      |  |   | 80,730  |  |   | 6,756,270   |   |   | (704,033    | ) |   | 6,132,967  |  
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Shares issued for cash                                      | 7/27/07  |  | $ | 2.500     |  | 100,000.00         |  |   | 100     |  |   | 249,900     |   |   | -           |   |   | 250,000    |  
|Shares issued for cash                                      | 8/29/07  |  | $ | 1.200     |  | 500,000.00         |  |   | 500     |  |   | 599,500     |   |   | -           |   |   | 600,000    |  
|Shares issued for cash                                      | 9/24/07  |  | $ | 1.200     |  | 833,333.00         |  |   | 833     |  |   | 999,167     |   |   | -           |   |   | 1,000,000  |  
|Shares issued for services                                  | 10/8/07  |  | $ | 1.070     |  | 100,000.00         |  |   | 100     |  |   | 106,900     |   |   | -           |   |   | 107,000    |  
|Shares issued for services                                  | 10/8/07  |  | $ | 1.070     |  | 100,000.00         |  |   | 100     |  |   | 106,900     |   |   | -           |   |   | 107,000    |  
|Shares issued for services                                  | 10/26/07 |  | $ | 1.070     |  | 100,000.00         |  |   | 100     |  |   | 106,900     |   |   | -           |   |   | 107,000    |  
|Shares issued for cash                                      | 5/24/08  |  | $ | 0.300     |  | 333,333.00         |  |   | 333     |  |   | 99,667      |   |   | -           |   |   | 100,000    |  
|Net loss                                                    |          |  |   |           |  | -                  |  |   | -       |  |   | -           |   |   | (1,302,148  | ) |   | (1,302,148 | )
|                                                            |          |  |   |           |  |                    |  |   |         |  |   |             |   |   |             |   |   |            |  
|Balance, June 30, 2008                                      |          |  |   |           |  | 82,796,666.00      |  | $ | 82,796  |  | $ | 9,025,204   |   | $ | (2,006,181  | ) | $ | 7,101,819  |  

|See accompanying notes. | F-4
|----------------------- | ---

---

Sun Cal Energy, Inc.(An Exploratory Stage
    Company)Consolidated Statements of Cash Flows

|                                                           |   |                    |   |   |             |   |   | From          |  
|---------------------------------------------------------- | - | ------------------ | - | - | ----------- | - | - | ------------- | -
|                                                           |   |                    |   |   |             |   |   | July 20, 2004 |  
|                                                           |   | For the Year ended |   |   | (Inception) |  
|                                                           |   | June
      30,     |   |   | through     |  
|                                                           |   | 2007               |   |   | 2008        |   |   | June 30, 2008 |  
|                                                           |   |                    |   |   |             |   |   |               |  
|Cash flows from operating activities:                      |   |                    |   |   |             |   |   |               |  
|Net loss                                                   | $ | (655,061           | ) | $ | (1,302,148  | ) | $ | (2,006,181    | )
|Adjustment
      to reconcile net loss to net cash         |   |                    |   |   |             |   |   |               |  
|used
      in operating activities:                        |   |                    |   |   |             |   |   |               |  
|Loss on disposition of asset                               |   | 581                |   |   | -           |   |   | 581           |  
|Non cash consulting services                               |   | 25,000             |   |   | 321,000     |   |   | 346,000       |  
|Contributed rent and services                              |   | 2,250              |   |   | -           |   |   | 18,750        |  
|Depletion                                                  |   | -                  |   |   | 20,911      |   |   | 20,911        |  
|Depreciation                                               |   | 158                |   |   | -           |   |   | 369           |  
|Amortization                                               |   | 1,436              |   |   | 4,450       |   |   | 5,886         |  
|Changes
      in assets:                                   |   |                    |   |   |             |   |   |               |  
|(Increase)
      in accounts receivable                    |   | -                  |   |   | (122,610    | ) |   | (122,610      | )
|(Increase) decrease in prepaid expenses                    |   | (4,550             | ) |   | 4,550       |   |   | -             |  
|Changes in liabilities:                                    |   |                    |   |   |             |   |   |               |  
|Increase (decrease) in accounts payable                    |   | 31,916             |   |   | 19,444      |   |   | 51,360        |  
|Net cash used in operating activities                      |   | (598,270           | ) |   | (1,054,403  | ) |   | (1,684,934    | )
|                                                           |   |                    |   |   |             |   |   |               |  
|Cash flows from investing activities:                      |   |                    |   |   |             |   |   |               |  
|Acquisition
      of oil and gas properties                |   | (1,357,673         | ) |   | (1,496,088  | ) |   | (2,853,761    | )
|Acquisition of computer
      equipment                    |   | -                  |   |   | -           |   |   | (950          | )
|Website
      design costs                                 |   | (13,349            | ) |   | -           |   |   | (13,349       | )
|Net cash used in investing activities                      |   | (1,371,022         | ) |   | (1,496,088  | ) |   | (2,868,060    | )
|                                                           |   |                    |   |   |             |   |   |               |  
|Cash flows from financing activities:                      |   |                    |   |   |             |   |   |               |  
|Proceeds from issuance of common stock                     |   | 2,548,000          |   |   | 1,950,000   |   |   | 4,543,250     |  
|Loans
      received from related party                    |   | 32,200             |   |   | 10,000      |   |   | 42,200        |  
|Loans repaid to related party                              |   | (32,200            | ) |   | -           |   |   | (32,200       | )
|Net cash provided by financing activities                  |   | 2,548,000          |   |   | 1,960,000   |   |   | 4,553,250     |  
|                                                           |   |                    |   |   |             |   |   |               |  
|Net increase (decrease)
      in cash and cash equivalents |   | 578,708            |   |   | (590,491    | ) |   | 256           |  
|                                                           |   |                    |   |   |             |   |   |               |  
|Cash and cash equivalents, beginning of period             |   | 12,039             |   |   | 590,747     |   |   | -             |  
|                                                           |   |                    |   |   |             |   |   |               |  
|Cash and cash equivalents, end of period                   | $ | 590,747            |   | $ | 256         |   | $ | 256           |  
|                                                           |   |                    |   |   |             |   |   |               |  
|Supplemental disclosures of cash flow information:         |   |                    |   |   |             |   |   |               |  
|                                                           |   |                    |   |   |             |   |   |               |  
|Interest
      paid                                        | $ | -                  |   | $ | -           |   |   |               |  
|Income taxes paid                                          | $ | -                  |   | $ | -           |   |   |               |  

Supplemental disclosures of non-cash investing and financing
  activities:

In October 2007, the Company issued a
  total of 300,000 shares of its common stock to three members of its advisory
  board which were valued at $321,000. The $321,000 was charged to operations and
  included in consulting fees.

During the year ended June 30, 2007,
  the Company issued 3,800,000 shares of its common stock in connection with the
  purchase of its oil and gas properties. These shares were valued at $1 per
  share.

|See accompanying notes. | F-5
|----------------------- | ---

---

Sun Cal Energy, Inc.(An Exploratory Stage
    Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

Organization

Sun Cal Energy, Inc. (the Company), was incorporated in the
  State of Nevada on July 20, 2004 under the name Host Ventures, Inc. On November
  6, 2006, the Company changed its name to Sun Cal Energy, Inc. The Company is in
  the exploratory stage, as defined in Statement of Financial Accounting Standards
  (SFAS) No. 7,  Accounting and Reporting by Development Stage Enterprises,
  with its principal activity being the exploration and development of oil and gas
  properties.

Effective March 12, 2007, the Company acquired all of the
  outstanding shares of Sun Cal Energy Corporation (SCEC) in exchange for
  issuing 26,925,000 of its common stock. SCEC was incorporated in the state of
  Nevada on June 2, 2006. As of the date of the acquisition, both companies were
  under common control, and therefore for financial reporting purposes, the
  acquisition is treated as if it occurred on July 1, 2006. Assets acquired from
  SCEC were recorded at their historical cost bases on July 1, 2006 and the
  financial statements included herein combine the activities of both companies
  since July 1, 2006.

Basis of Presentation

The accompanying financial statements include the accounts and
  transactions of the Company and its wholly owned subsidiary, Sun Cal Energy
  Corporation, and have been prepared in conformity with accounting principles
  generally accepted in the United States of America, which contemplate
  continuation of the Company as a going concern. The Company has no established
  source of material revenue, has incurred a net loss for the year ended June 30,
  2008 of $1,366,148 and has an accumulated deficit since its inception of
  $2,070,181. These conditions raise substantial doubt as to the Company's ability
  to continue as a going concern. These financial statements do not include any
  adjustments that might result from the outcome of this uncertainty. These
  financial statements do not include any adjustments relating to the
  recoverability and classification of recorded asset amounts, or amounts and
  classification of liabilities that might be necessary should the Company be
  unable to continue as a going concern.

Management recognizes that the Company must generate additional
  resources to enable it to continue operations. Management intends to raise
  additional funds through debt and/or equity financing or through other means
  that it deems necessary. However, no assurance can be given that the Company
  will be successful in raising additional capital. Further, even if the company
  raises additional capital, there can be no assurance that the Company will
  achieve profitability or positive cash flow. If management is unable to raise
  additional capital and expected significant revenues do not result in positive
  cash flow, the Company will not be able to meet its obligations and may have to
  cease operations.

F-6

---

Stock Split

Effective November 6, 2006, the Company authorized a 10-for-1
  stock split. All references in the accompanying financial statements to the
  number of shares outstanding and per-share amounts have been restated to reflect
  the indicated stock split.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying financial statements include the accounts and
  transactions of Sun Cal Energy, Inc. and its subsidiary. Intercompany
  transactions and balances have been eliminated in consolidation.

Stock Based Compensation

The Company accounts for stock-based compensation under SFAS
  No. 123R, "Share- based Payment and SFAS No. 148, "Accounting for Stock-Based
  Compensation--Transition and Disclosure--An amendment to SFAS No. 123." These
  standards define a fair value based method of accounting for stock-based
  compensation. In accordance with SFAS Nos. 123R and 148, the cost of
  stock-based employee compensation is measured at the grant date based on the
  value of the award and is recognized over the vesting period. The value of the
  stock-based award is determined using the Black-Scholes option-pricing model,
  whereby compensation cost is the excess of the fair value of the award as
  determined by the pricing model at the grant date or other measurement date over
  the amount an employee must pay to acquire the stock. The resulting amount is
  charged to expense on the straight-line basis over the period in which the
  Company expects to receive the benefit, which is generally the vesting period.
  During the year ended June 30, 2008, the Company recognized no compensation
  expense under SFAS No. 123R as no stock based compensation were issued to
  employees during the period.

Issuance of Stock for Non-Cash Consideration

All issuances of the Company's stock for non-cash consideration
  have been assigned a per share amount equaling either the market value of the
  shares issued or the value of consideration received, whichever is more readily
  determinable. The majority of the non-cash consideration received pertains to
  services rendered by consultants and others and has been valued at the market
  value of the shares on the dates issued. During the year ended June 30, 2007,
  the Company recognized $25,000 in non-cash compensation from the issuance of
  25,000 shares of its common stock to a consultant. During the year ended June
  30, 2008, the Company recognized $321,000 in non-cash compensation from the
  issuance of 300,000 shares of its common stock in total to three consultants.

The Company's accounting policy for equity instruments issued
  to consultants and vendors in exchange for goods and services follows the
  provisions of EITF 96-18, Accounting for Equity Instruments That are Issued to
  Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
  Services and EITF 00-18, Accounting Recognition for Certain Transactions
  Involving Equity Instruments Granted to Other Than Employees. The measurement
  date for the fair value of the equity instruments issued is determined at the
  earlier of (i) the date at which a commitment for performance by the consultant
  or vendor is reached or (ii) the date at which the consultant or vendor's
  performance is complete. In the case of equity instruments issued to

F-7

---

consultants, the fair value of the equity instrument is
  recognized over the term of the consulting agreement. In accordance with EITF
  00-18, an asset acquired in exchange for the issuance of fully vested,
  nonforfeitable equity instruments should not be presented or classified as an
  offset to equity on the grantor's balance sheet once the equity instrument is
  granted for accounting purposes. Accordingly, the Company records the fair value
  of the fully vested non-forfeitable common stock issued for future consulting
  services as prepaid services in its consolidated balance sheet.

Use of Estimates

The preparation of financial statements in conformity with
  accounting principles generally accepted in the United States of America
  requires management to make estimates and assumptions that affect the reported
  amounts of assets and liabilities and disclosures of contingent assets and
  liabilities at the date of the financial statements and the reported amounts of
  revenue and expenses during the reporting periods. Actual results could differ
  from these estimates.

Fair Value of Financial Instruments

The Companys financial instruments consist of cash and cash
  equivalents, accounts payable, accrued expenses and notes payable, Pursuant to
  SFAS No. 107, Disclosures About Fair Value of Financial Instruments,
  the Company is required to estimate the fair value of all financial instruments
  at the balance sheet date. The Company considers the carrying values of its
  financial instruments in the financial statements to approximate their fair
  values.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company
  defines cash equivalents as all highly liquid debt instruments purchased with a
  maturity of three months or less, plus all certificates of deposit.

Property and Equipment

Property and equipment are stated at cost less accumulated
  depreciation and amortization. Depreciation and amortization are calculated
  using the straight-line method over the estimated useful lives of the related
  assets. When property and equipment are retired or otherwise disposed of, the
  related cost and accumulated depreciation are removed from the respective
  accounts, and any gain or loss is included in operations. Expenditures for
  maintenance and repairs are charged to operations as incurred; additions,
  renewals and betterments are capitalized.

Long- Lived Assets

The Company accounts for its long-lived assets in accordance
  with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
  Assets." SFAS No. 144 requires that long-lived assets be reviewed for impairment
  whenever events or changes in circumstances indicate that the historical cost
  carrying value of an asset may no longer be appropriate. The Company assesses
  recoverability of the carrying value of an asset by estimating the future net
  cash flows expected to result from the asset, including eventual disposition. If
  the future net cash flows are less than the carrying value of the asset, an
  impairment loss is recorded equal to the difference between the asset's carrying
  value and fair value or disposable value. As of June 30, 2008, the Company did
  not deem any of its long-term assets to be impaired.

F-8

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Concentration of Credit Risk

Financial instruments, which potentially subject the Company to
  concentrations of credit risk, consist of cash. Currently, the Company maintains
  its cash in bank accounts which are not insured.

Revenue recognition

The Company recognizes revenue in accordance with Staff
  Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial
  Statements, as revised by SAB No. 104. As such, the Company recognizes revenue
  when persuasive evidence of an arrangement exists, title transfer has occurred,
  the price is fixed or readily determinable and collectibility is probable. Sales
  are recorded net of sales discounts. For the year ended June 30, 2007, the
  Company did not generate any revenue. For the year ended June 30, 2008, the
  Company generated $139,441 from its ownership of overriding royalties which it
  owns in the Centurion and Hobart Properties as discussed in Note 3.

Oil and Gas Properties

The Company follows the full cost method of accounting for
  crude oil and natural gas properties. Under this method, all direct costs and
  certain indirect costs associated with acquisition of properties and successful
  as well as unsuccessful exploration and development activities are capitalized.
  Depreciation, depletion, and amortization of capitalized crude oil and natural
  gas properties and estimated future development costs, excluding unproved
  properties, are based on the unit-of-production method based on proved
  reserves.

Website development costs

Under FASB Emerging Issues Task Force Statement 00-2,
  Accounting for Web Site Development Costs ("EITF 00-2"), costs and expenses
  incurred during the planning and operating stages of the Company's web site
  development are expensed as incurred. Under EITF 00-2, costs incurred in the web
  site application and infrastructure development stages are capitalized by the
  Company and amortized to expense over the web site's estimated useful life or
  period of benefit. As of June 30, 2007 and 2008, the Company had net capitalized
  costs of $11,913 and $7,463, respectively, related to its web site development,
  The development costs are being depreciated on a straight-line basis over an
  estimated useful life of 3 years.

Website cost and accumulated depreciation as of June 30, 2007,
  and 2008 are as follows:

June 30,2007
      
      
      2008Website development
      $
      13,349
      
      $
      13,349Accumulated amortization
      
      (1,436
      )
      
      (5,886
      )$
      11,913
      
      $
      7,463


Amortization expense for the years ended June 30, 2007 and 2008
  amounted to $1,436 and $4,450, respectively.

F-9

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A schedule of amortization expense for the two years ending
  June 30, 2010 is a follows:

March 31, 2009
      
      4,450March 31, 2010
      
      3,013$
      7,463


Income Taxes

The Company accounts for income taxes under the provisions of
  SFAS No. 109, Accounting for Income Taxes. Under SFAS No. 109, deferred tax
  assets and liabilities are recognized for future tax benefits or consequences
  attributable to temporary differences between the financial statement carrying
  amounts of existing assets and liabilities and their respective tax bases.
  Deferred tax assets and liabilities are measured using enacted tax rates
  expected to apply to taxable income in the years in which those temporary
  differences are expected to be recovered or settled. A valuation allowance is
  provided for significant deferred tax assets when it is more likely than not
  that the asset will not be realized through future operations.

The Company has total net operating tax loss carry forwards at
  June 30, 2008 of approximately $2,071,000 for federal income tax purposes. These
  net operating losses have generated a deferred tax asset of approximately
  $704,000 on which a valuation allowance equaling the total tax benefit has been
  provided due to the uncertain nature of it being realized. Net operating loss
  carryforwards expire in various years through June 30, 2028 for federal tax
  purposes.

Loss Per Share

The Company reports earnings (loss) per share in accordance
  with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is
  computed by dividing income (loss) available to common shareholders by the
  weighted average number of common shares available. Diluted earnings (loss) per
  share is computed similar to basic earnings (loss) per share except that the
  denominator is increased to include the number of additional common shares that
  would have been outstanding if the potential common shares had been issued and
  if the additional common shares were dilutive. Diluted earnings (loss) per share
  as not been presented since the effect of the assumed conversion of warrants to
  purchase common shares would have an anti-dilutive effect. The only potential
  common shares were warrants totaling 2,255,000, and 4,021,666, as of June 30,
  2007 and 2008, respectively, that have been excluded from the computation of
  diluted net loss per share because the effect would have been anti-dilutive. If
  such shares were included in diluted EPS, they would have resulted in
  weighted-average common shares of 76,496,137 and 86,536,001 for the years ended
  June 30, 2007 and 2008, respectively.

Recent Accounting Pronouncements

FAS 157, Fair Value Measurements. In September, 2007, the FASB
  issued Statement of Financial Accounting Standards No. 157, Fair Value
  Measurements ("SFAS 157"). SFAS 157 defines fair value, establishes a framework
  and gives guidance regarding the methods used for measuring fair value, and
  expands disclosures about fair value measurements. SFAS 157 is effective for
  financial statements issued for fiscal years beginning after November 15, 2008,
  and interim periods within those fiscal years. We are currently assessing the
  impact that SFAS 157 will have on our results of operations and financial
  position.

SFAS 159, "The Fair Value Option for Financial Assets and
  Financial LiabilitiesIncluding an Amendment of FASB Statement No. 115." In
  November 2007, the FASB issued Statement of

F-10

---

Financial Accounting Standards No. 159, The Fair Value Option
  for Financial Assets and Financial LiabilitiesIncluding an Amendment of FASB
  Statement No. 115 ("SFAS 159"). SFAS 159 is effective for fiscal years beginning
  after November 15, 2007. SFAS 159 permits an entity to choose to measure many
  financial instruments and certain other items at fair value at specified
  election dates. Subsequent unrealized gains and losses on items for which the
  fair value option has been elected will be reported in earnings. We do not
  believe that the adoption of SFAS 159 will have a material impact on our
  consolidated financial statements.

SFAS 141, "Business Combinations." In November 2007, the FASB
  issued SFAS No. 141 (revised 2007), Business Combination (FAS 141(R)) and SFAS
  No. 160, Noncontrolling Interests in Consolidated Financial Statements, an
  amendment of ARB No. 51 (FAS 160). FAS 141(R) will change how business
  acquisitions are accounted for and will impact financial statements both on the
  acquisition date and in subsequent periods. FAS 160 will change the accounting
  and reporting for minority interests, which will be recharacterized as
  noncontrolling interests and classified as a component of equity. FAS 141(R) and
  FAS 160 are effective for both public and private companies for fiscal years
  beginning on or after December 15, 2008 (fiscal 2010 for the Company). FAS
  141(R) will be applied prospectively. FAS 160 requires retroactive adoption of
  the presentation and disclosure requirements for existing minority interests.
  All other requirements of FAS 160 will be applied prospectively. Early adoption
  is prohibited for both standards. We do not believe that the adoption of SFAS
  141® or FAS 160 will have a material impact on our consolidated financial
  statements.

SFAS No. 161 - In March 2008, the FASB issued Statement No.
  161, Disclosures about Derivative Instruments and Hedging Activitiesan
  amendment of FASB Statement No. 133. This Statement changes the disclosure
  requirements for derivative instruments and hedging activities. Entities are
  required to provide enhanced disclosures about (a) how and why an entity uses
  derivative instruments, (b) how derivative instruments and related hedged items
  are accounted for under Statement 133 and its related interpretations, and (c)
  how derivative instruments and related hedged items affect an entitys financial
  position, financial performance, and cash flows.

This Statement is intended to enhance the current disclosure
  framework in Statement 133. The Statement requires that objectives for using
  derivative instruments be disclosed in terms of underlying risk and accounting
  designation. This disclosure better conveys the purpose of derivative use in
  terms of the risks that the entity is intending to manage. Disclosing the fair
  values of derivative instruments and their gains and losses in a tabular format
  should provide a more complete picture of the location in an entitys financial
  statements of both the derivative positions existing at period end and the
  effect of using derivatives during the reporting period. Disclosing information
  about credit-risk-related contingent features should provide information on the
  potential effect on an entitys liquidity from using derivatives. Finally, this
  Statement requires cross-referencing within the footnotes, which should help
  users of financial statements locate important information about derivative
  instruments.

This Statement is effective for financial statements issued for
  fiscal years and interim periods beginning after November 15, 2008, with early
  application encouraged. This Statement encourages, but does not require,
  comparative disclosures for earlier periods at initial adoption.

The Company is currently evaluating SFAS 161 and has not yet
  determined its potential impact on its future results of operations or financial
  position.

F-11

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NOTE 3  OIL AND GAS PROPERTIES

On October 18, 2006, the Company entered into an agreement to
  purchase 1.5% of an overriding royalty in the City of Hobart lease located in
  Oklahoma for $525,000 and 1,500,000 shares of its common stock. Under the terms
  of the agreement, $375,000 was paid and 1,500,000 shares of the Companys common
  stock were issued in October 2006, and the remaining $150,000 was paid in
  January 2007. The Seller has agreed to drill a second well on the leased
  property in consideration for an additional 1,000,000 shares of the Companys
  common stock. The Company valued the 1,500,000 shares at $1.00 per share based
  upon the share price being offered in its private offerings.

On October 4, 2006, the Company entered into an agreement to
  purchase a 45% undivided interest in 45 separate leases known as the Lokern in
  addition to any leases taken in the prospect area. The Lokern leases are located
  in California. The Company purchased its interest for $125,000 and 1,300,000
  shares of common stock. The $125,000 was paid and 1,300,000 shares were issued
  in October 2006. Under the terms of the purchase, the Company will receive 75%
  of the net revenue produced by wells located on the leased properties. In
  addition, the Company is responsible for its allocated share of all costs
  associated with the leased properties including, but not limited to land, title,
  lease bonuses, and drilling. The Company valued the 1,300,000 shares at $1.00
  per share based upon the share price being offered in its private offerings.

On April 19, 2007, the Company entered into an agreement to
  acquire a 5% working interest in certain leases and to receive certain rights
  and privileges to approximately 9,440 acres of State of Louisiana leases. Along
  with the leases and 3d seismic data relating to the Prospect, the acquisition
  included ongoing rights to a larger Area of Mutual Interest. Under the terms of
  the purchase, the Company will receive 3.5% of the net revenue produced by wells
  located on the leased properties. In addition, the Company is responsible for
  its allocated share of all costs associated with the leased properties
  including, but not limited to land, title, lease bonuses, and drilling. The
  purchase price of these leases is $640,000 in cash and 400,000 shares of the
  Companys common stock. The Company valued the 400,000 shares at $1.00 per share
  based upon the share price being offered in its private offerings.

On August 15, 2007, the Company entered into an agreement with
  Desert Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases
  in the Jonah Field region of Wyoming. The Jonah Prospects are identified as
  South Jonah, which consists of 2,477.68 acres and West Jonah, consisting of
  3,546.89 acres. The acquisition was completed on September 5, 2007 by paying to
  Desert Mining, Inc. an aggregate of $821,799.

On October 1, 2007, the Company entered into an agreement to
  purchase a 5% overriding royalty interest on certain leases to be acquired by
  seller located in the States of Alabama, Louisiana, Mississippi, Oklahoma, and
  Texas, known as the Centurion Properties. The purchase price of the royalty
  interest is $275,000. If the seller does not acquire the royalty interest on the
  properties defined in the agreement, the Company has the right to have the funds
  paid refunded or to have the funds applied to other offering of the seller.

On October 24, 2007, the Company signed a Letter of Intent to
  acquire a 100% working interest in 8,695 acres of leases in the Cherokee and
  Forest City Basins of Kansas. The Letter of Intent was set to expire on October
  31, 2007 but the Company is currently negotiating an extension of the Letter of
  Intent with the counter party. The purchase price paid by the Company would
  include (a) an upfront payment of $500,000; (b) the issuance of 6,916,667 shares
  of common

F-12

---

stock to the seller; (c) the granting of a 5% overriding
  royalty to the seller on the Kansas assets; and (d) the assumption of $1,200,000
  of the sellers existing debt on the properties. Further, the Company would
  agree to initiate plans to provide $2,000,000 in work over costs to develop the
  properties within 6 months of the closing date. The Company is currently working
  to close on mezzanine financing for $2,000,000 within 60 days of the closing
  date of the purchase. If the Company does not initiate plans to provide
  $2,000,000 in work over costs within the 6 months of the closing date, the
  seller will retain a 12.5% overriding royalty on the Kansas assets until the
  $2,000,000 work over begins.

On March 21, 2008, the Company acquired a 2% joint venture
  interest in the 83 & 84 Project JV located in West Texas.

As of June 30, 2008, the Company has not commenced the
  development of any its oil and gas leased properties. However, during the year
  ended June 30, 2008, the Company generated $139,441 from its ownership of
  overriding royalties which it owns in the Centurion and Hobart Properties. The
  Companys allocated share of production sold during the year ended June 30, 2007
  amounted to 46 barrels of oil and 20,878 MCF of gas.

Depletion expense for the year ended June 30, 2008 amounted to
  $20,916.

NOTE 4  EQUITY

Common Stock

The Company is authorized to issue 750,000,000 shares of common
  stock. Each shareholder of common is entitled to one vote. As indicated, the
  accompanying financial statements include the combined activity of Sun Cal
  Energy Inc. (the Company) and its wholly owned subsidiary, Sun Cal Energy
  Corporation (SCEC) from the inception of both companies. Common stock
  activities for both companies since inception, taking into account the Companys
  10-for-1 stock split of November 6, 2006, are as follows:

On December 15, 2004, the Company issued 20,000,000 (2,000,000
  pre-split) shares of its common stock to its founders for $2,000.

In January and February 2005, the Company issued 28,250,000
  (2,825,000 pre-split) shares of its common stock for $28,250.

In March 2005, the Company issued 3,000,000 (300,000 pre-split)
  shares of its common stock for $15, 000.

In August 2006, SCEC issued 23,000,000 shares of its common
  stock to its founder for $23,000.

In October 2006, SCEC issued 625,000 shares of its common stock
  for $625,000.

In October 2006, SCEC issued 2,800,000 shares of its common
  stock as part consideration in its purchase of certain oil and gas leases. The
  2,800,000 shares were valued at $2,800,000. See Note 3.

In December 2006, SCEC issued 500,000 shares of its common
  stock for $500,000.

F-13

---

In January 2007, the Company issued 1,000,000 shares of its
  common stock as part consideration in its purchase of certain oil and gas
  leases. The 1,000,000 shares were valued at $1,000,000. See Note 3.

In March 2007, the Company acquired all of the 26,925,000
  common shares of SCEC then issued and outstanding in consideration for issuing
  to the shareholders of SCEC 26,925,000 common shares of its common stock.

In April 2007, the Company issued 200,000 shares of its common
  stock for $200,000.

In April 2007, the Company issued 400,000 shares of its common
  stock as part consideration in its purchase of certain oil and gas leases. The
  400,000 shares were valued at $400,000. See Note 3.

In May 2007, the Company issued 700,000 shares of its common
  stock for $700,000.

In May 2007, the Company issued 20,000 shares of its common
  stock for services rendered by its President valued at $25,000.

In June 2007, the Company issued 150,000 shares of its common
  stock for $300,000.

In June 2007, the Company issued 80,000 shares of its common
  stock for $200,000.

In July 2007, the Company issued 100,000 shares of its
  common stock for $250,000.

In August 2007, the Company issued 500,000 shares of
  its common stock for $600,000.

In September 2007, the Company issued 833,333 shares of its
  common stock for $1,000,000.

In October 2007, the Company issued to three consultants
  300,000 shares of its common stock each for services valued at $321,000.

In May 2008, the Company issued 333,333 shares of its common
  stock for $100,000.

Warrants

The following is a summary of the
  outstanding warrants:

F-14

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| |                             |  |           |  |   | Weighted | 
| | --------------------------- |  | --------- |  | - | -------- | 
| |                             |  |           |  |   | Average  | 
| |                             |  | Number of |  |   | Exercise | 
| |                             |  | warrants  |  |   | Price    | 
| |                             |  |           |  |   |          | 
| | Outstanding  June 30, 2006 |  | -         |  | $ | -        | 
| |                             |  |           |  |   |          | 
| | Granted                     |  | 2,255,000 |  | $ | 1.62     | 
| | Exercised                   |  | --        |  |   | --       | 
| | Forfeited                   |  | --        |  |   | --       | 

| | Outstanding  June 30, 2007 |  | 2,255,000 |  | $ | 1.62 | 
| | --------------------------- |  | --------- |  | - | ---- | 
| |                             |  |           |  |   |      | 
| | Granted                     |  | 1,766,666 |  | $ | 1.47 | 
| | Exercised                   |  | --        |  |   | --   | 
| | Forfeited                   |  | --        |  |   | --   | 
| |                             |  |           |  |   |      | 
| | Outstanding  June 30, 2008 |  | 4,021,666 |  | $ | 1.55 | 

The expiration dates of the warrants range from two to three
  years after date of grant with exercise prices ranging from $1.50 to $3.00 per
  share.

NOTE 5  RELATED PARTY TRANSATIONS

In April 2008, the Company received $10,000 from the Companys
  President. The loan is unsecured, non-interest bearing, and due on demand.

F-15

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- 20 -

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

Managements Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer, principal financial
officer and principal accounting officer) to allow for timely decisions regarding required disclosure.

As of June 30, 2008, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of Lewis Dillman, our Chief Executive Officer (also our principal executive officer), and George
Drazenovic, our Chief Financial Officer (also our principal financial officer and principal accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive
Officer (also our principal executive officer) and Chief Financial Officer (also our principal financial officer and principal accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period
covered by this annual report.

There have been no significant changes in our internal controls over financial reporting that occurred during the year ended June 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal controls over
financial reporting.

Managements Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act, as amended).  In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded
against loss from unauthorized use or disposition, and that transactions are executed in accordance with managements authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of June 30, 2008. In making this assessment, our management used the criteria set forth by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.  Our management has concluded that, as of June 30, 2008, our internal control over financial reporting is effective in
providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with US generally accepted accounting principles. Our management reviewed the results of
their assessment with the Audit Committee of our Board of Directors.

This annual report does not include an attestation report of our companys registered public accounting firm regarding internal control over financial reporting.  Managements report was not subject to attestation by our companys
registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only managements report in this annual report.

---

- 21 -

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS

Directors and Executive Officers, Promoters and Control
Persons

The following individuals serve as the directors and executive
officers of our company. All directors of our company hold office until the next
annual meeting of our shareholders or until their successors have been elected
and qualified. The executive officers of our company are appointed by our board
of directors and hold office until their death, resignation or removal from
office.

Name
    Position Held with our
      Company
    Age
    Date First Elected or
      AppointedGeorge Drazenovic
    Secretary, Treasurer and Director
    37
    November 7, 2006Lewis Dillman
    President and CEO
    51
    May 1, 2007


Business Experience

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the person's principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

Lewis Dillman

Mr. Dillman is a seasoned management executive with more than
15 years of experience in the public and private resource industry. He has
served as President and founding director of several publicly-traded resource
companies. He has also assisted several venture oil startups on numerous
resource projects, including United Rayore Gas, a Canadian listed company that
drilled and/or participated in more than 80 horizontal wells throughout Alberta
and Saskatchewan.

Lewis Dillman holds a Masters degree in International Affairs
from Columbia University in New York with a specialization in international
banking and finance. He is a director of Zappa Resources and Abington Ventures
Inc., both listed on the TSX Venture Exchange and actively engaged in oil and
gas production and exploration activities throughout North America. Mr. Dillman
is ideally suited to lead Sun Cal Energys acquisition and development of oil
and gas properties in Americas most productive hydrocarbon producing areas.

George Drazenovic

Mr. Drazenovic is a certified general accountant and certified
financial analyst. He also holds a Master of Business Administration from the
University of Notre Dame. Currently, Mr. Drazenovic is the CFO and a director of
Oramed Pharmaceuticals Inc. From August 2001 to January 2005, Mr. Drazenovic was
the Financial Manager, Engineering Services for BC Hydro. From January 1995 to
May 2000, Mr. Drazenovic was the Manager  Accounting for Queensboro
Investments. Mr. Drazenovic is currently also a director of Oramed
Pharmaceuticals Inc., a company whose common stock is quoted on the OTC Bulletin
Board.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons have been involved in any of the following events during the past five
years:

| | 1. | any bankruptcy petition filed by or against any business
      of which such person was a general partner or executive officer either at
      the time of the bankruptcy or within two years prior to that
  time;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                    
| | 2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding                                                                                                         

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- 22 -

| |    | traffic violations and other minor offences);                                                                                                                                                                                                                                                                                  
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                
| | 3. | being subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| |    |                                                                                                                                                                                                                                                                                                                                
| | 4. | being found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, and the judgment has not been reversed, suspended, or
      vacated.             

Committees of the Board

All proceedings of our board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the corporate laws of the state of Nevada and the
bylaws of our company, as valid and effective as if they had been passed at a
meeting of the directors duly called and held.

Our company currently does not have nominating, compensation or
audit committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the sole director.

Our company does not have any defined policy or procedure
requirements for shareholders to submit recommendations or nominations for
directors. The sole director believes that, given the early stage of our
development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our
company does not currently have any specific or minimum criteria for the
election of nominees to the sole director and we do not have any specific
process or procedure for evaluating such nominees. The sole director assesses
all candidates, whether submitted by management or shareholders, and makes
recommendations for election or appointment.

A shareholder who wishes to communicate with our board of
directors may do so by directing a written request addressed to our Chief
Executive Officer, at the address appearing on the first page of this current
report.

Audit Committee Financial Expert

Our board of directors has determined that we do not have a
board member that qualifies as an audit committee financial expert as defined
in Item 401(e) of Regulation S-B, nor do we have a board member that qualifies
as independent as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A
under the Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(14) of NASDAQ Marketplace Rules.

We believe that our board of directors is capable of analyzing
and evaluating our financial statements and understanding internal controls and
procedures for financial reporting. The sole director of our company does not
believe that it is necessary to have an audit committee because our company
believes that the functions of an audit committee can be adequately performed by
our board of directors. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors and persons who own more
than 10% of a registered class of our equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership of
our shares of common stock and other equity securities, on Forms 3, 4 and 5,

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respectively. Executive officers, directors and greater than
10% shareholders are required by the Securities and Exchange Commission
regulations to furnish us with copies of all Section 16(a) reports they
file.

Based solely on our review of the copies of such forms received
by our company, or written representations from certain reporting persons that
no Form 5s were required for those persons, we believe that, during the fiscal
year ended June 30, 2008, all filing requirements applicable to our officers,
directors and greater than 10% beneficial owners as well as our officers,
directors and greater than 10% beneficial owners of our subsidiaries were
complied with, with the exception of the following:

Name
    Number of Late
      Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to File
      Required FormsGeorge Drazenovic
    21
    2
    NoneLewis Dillman
    12
    1
    None


> 1 Mr. Drazenovic was late filing two Form 4s.2 Mr. Dillman was late filing a Form 3.

ITEM 10: EXECUTIVE COMPENSATION

Executive Compensation

The particulars of compensation paid to the following
persons:

| | (a) | our principal executive officer;                                                                                                                                                                                                   
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                    
| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the year
      ended June 30, 2007; and                                                                      
| |     |                                                                                                                                                                                                                                    
| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the year ended June
      30, 2008,

who we will collectively refer to as our named executive
officers, of our company for the years ended June 30, 2008 and 2007, are set out
in the following summary compensation table, except that no disclosure is
provided for any named executive officer, other than our principal executive
officers, whose total compensation does not exceed $100,000 for the respective
fiscal year: The table below summarizes all compensation awarded to, earned by,
or paid to our executive officers by any person for all services rendered in all
capacities to us for the fiscal year ended June 30, 2008.

SUMMARY
      COMPENSATION TABLEName and Principal
      Position
      Year
      Salary
      ($)
      Bonus
      ($)
      Stock
      Awards ($)
      Option
      Awards ($)
      Non-Equity
      Incentive Plan Compensation ($)
      Change in Pension
      Value and Nonqualified Deferred
      Compensation Earnings ($)
      All Other
      Compensation ($)
      Total
      ($)Lewis Dillman(1)President and Chief
      Executive Officer
      2008
      2007
      95,000 
      28,000
      Nil N/A
      025,000
      Nil N/A
      Nil N/A
      Nil N/A
      Nil N/A
      95,000
      53,000George Drazenovic(2)Secretary and
      Treasurer
      2008 2007
      141,000 
      90,000
      Nil N/A
      Nil N/A
      Nil N/A
      Nil N/A
      Nil N/A
      Nil N/A
      141,000
      90,000William Stewart(3)Former President,
      2008
      Nil
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/AChief Executive 
        Officer and Chief 
        Financial Officer
      2007
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A
      N/A (1)
      Mr. Dillman became our President and Chief Executive
          Officer on May 1, 2007.(2)
      Mr. Drazenovic became our President, Chief Executive
          Officer, Secretary and Treasurer on November 6, 2006.(3)
      Mr. Stewart resigned as a director and officer on
          November 7, 2006.


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Employment Contracts and Termination of Employment
Arrangements

On March 1, 2007, we entered into a consultant agreement with
Lewis Dillman, our Chief Executive Officer, for him to render his executive
services to our company as our Chief Executive Officer. This agreement was later
superceded by a further consultant agreement dated May 1, 2007. Under this
agreement, we were to pay Mr. Dillman compensation of $7,000 per month and to
grant him 250,000 shares of our common stock as a signing bonus. However, Mr.
Dillman declined to accept the 250,000 shares of our common stock as a signing
bonus and we have deleted the provision of signing bonus in this consultant
agreement.

Stock Option Plan

Currently, our company does not have a stock option plan in
favor of any director, officer, consultant or employee of our company.

Stock Options/SAR Grants

Our company did not grant any options or stock appreciation
rights during our fiscal year ended June 30, 2008.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values

There were no options exercised during our fiscal year ended
June 30, 2008 by any officer or director of our company.

Directors Compensation

We reimburse our directors for expenses incurred in connection
with attending board meetings but did not pay director's fees or other cash
compensation for services rendered as a director during our fiscal year ended
June 30, 2008.

We have no present formal plan for compensating our directors
for their service in their capacity as directors. Directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. The sole
director may award special remuneration to any director undertaking any special
services on behalf of our company other than services ordinarily required of a
director. Members of special or standing committees may be allowed like
reimbursement and compensation for attending committee meetings.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of the directors or executive officers of our company or
any associate or affiliate of our company during the last two fiscal years, is
or has been indebted to our company by way of guarantee, support agreement,
letter of credit or other similar agreement or understanding currently
outstanding.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.

Principal Stockholders

The following table sets forth, as of September 15, 2008,
certain information with respect to the beneficial ownership of our common stock
by each stockholder known by us to be the beneficial owner of more than 5% of
our common stock, as well as by each of our current directors and executive
officers as a group. Each person has sole

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- 25 -

voting and investment power with respect to the shares of
common stock, except as otherwise indicated. Beneficial ownership consists of a
direct interest in the shares of common stock, except as otherwise
indicated.

Name and Address of Beneficial
      Owner
    Title of Class
    Amount and Nature of
      Beneficial Ownership(1)
    Percentage of
      Class(1)George Drazenovic, Secretary, Treasurer
      and Director Principal Financial Officer, Suite 700, 205 - 5th
      Avenue, SW Calgary, AB Canada
    Common Stock
    40,548,600
    48.97%Lewis Dillman President and Chief
      Executive Officer Suite 700, 205 - 5th Avenue, SW Calgary, AB
      Canada
    Common Stock
    25,000
    0.03%Directors and Executive Officers as a
      Group (1 person)
    Common Stock
    40,573,600
    49.00%


|(1) | Based on 82,796,666 shares of common stock issued and
      outstanding as of September 15, 2008. Except as otherwise indicated, we
      believe that the beneficial owner of the common stock listed above, based
      on information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws
      where applicable. Beneficial ownership is determined in accordance with
      the rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities. Shares of common
      stock subject to options or warrants currently exercisable, or exercisable
      within 60 days, are deemed outstanding for purposes of computing the
      percentage ownership of the person holding such option or warrants, but
      are not deemed outstanding for purposes of computing the percentage
      ownership of any other person.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

Other than as listed below, none of the following parties has,
since our date of incorporation, had any material interest, direct or indirect,
in any transaction with us or in any presently proposed transaction that has or
will materially affect us:

- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying
  more than 10% of the voting rights attached to our outstanding shares of
  common stock;
- Any member of the immediate family of any of the foregoing persons.

On March 12, 2007 we completed the transaction contemplated
under a share exchange agreement between our company and the shareholders of Sun
Cal Energy Corp. The former shareholders of Sun Cal Energy Corp. received
26,925,000 shares of our companys common stock, representing approximately
34.44% of the issued and outstanding shares of our company after closing of the
share exchange agreement. Our CFO and director, George Drazenovic, was a
shareholder of Sun Cal Energy Corp.

Corporate Governance

Board of Directors Independence

We currently act with one director and two executive officers.
As George Drazenovic is our sole director and holds approximately 48.97% of our
common stock as of September 15, 2008, Mr. Drazenovic is not independent as
defined in Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.

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- 26 -

We do not have a standing audit, compensation or nominating
committee, but our entire board of directors acts in such capacities. We believe
that the sole member of our board of directors is capable of analyzing and
evaluating our financial statements and understanding internal controls and
procedures for financial reporting. The sole director of our company does not
believe that it is necessary to have a standing audit, compensation or
nominating committee because we believe that the functions of such committees
can be adequately performed by the sole director, solely consisting of George
Drazenovic. In addition, we believe that retaining one or more directors who
would qualify as independent in accordance with Item 7(d)(3)(iv) of Schedule 14A
under the Exchange Act would be overly costly and burdensome and is not
warranted in our circumstances given the early stages of our development and the
fact the we have not generated any revenues from operations to date.

Code of Ethics

Effective September 10, 2007, our company's board of directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, our company's president (being our principal executive officer) and our
company's secretary (being our principal financial and accounting officer and
controller), as well as persons performing similar functions. As adopted, our
Code of Business Conduct and Ethics sets forth written standards that are
designed to deter wrongdoing and to promote:

(1) honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships;

(2) full, fair, accurate, timely, and
understandable disclosure in reports and documents that we file with, or submit
to, the Securities and Exchange Commission and in other public communications
made by us;

(3) compliance with applicable
governmental laws, rules and regulations;

(4) the prompt internal reporting of
violations of the Code of Business Conduct and Ethics to an appropriate person
or persons identified in the Code of Business Conduct and Ethics; and

(5) accountability for adherence to the
Code of Business Conduct and Ethics.

Our Code of Business Conduct and Ethics requires, among other
things, that all of our company's personnel shall be accorded full access to our
president and secretary with respect to any matter which may arise relating to
the Code of Business Conduct and Ethics. Further, all of our company's personnel
are to be accorded full access to our company's board of directors if any such
matter involves an alleged breach of the Code of Business Conduct and Ethics by
our president or secretary.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our company's president or
secretary. If the incident involves an alleged breach of the Code of Business
Conduct and Ethics by the president or secretary, the incident must be reported
to any member of our board of directors. Any failure to report such
inappropriate or irregular conduct of others is to be treated as a severe
disciplinary matter. It is against our company policy to retaliate against any
individual who reports in good faith the violation or potential violation of our
company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics is filed as Exhibit
14.1 to our annual report on Form 10-KSB filed on October 15, 2007. We will
provide a copy of the Code of Business Conduct and Ethics to any person without
charge, upon request. Requests can be sent to: Sun Cal Energy, Inc. at 700-205 
5th Avenue SW, Calgary AB T2P 2V7.

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- 27 -

ITEM 13. EXHIBITS AND REPORTS

|Number | Description                                                                                                                                                                                                                                                                 
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                             
|3.1    | Articles of (Incorporation
        incorporated by reference to our registration statement on form SB-2 filed
        on July 11, 2005)                                                                                                                                     
|       |                                                                                                                                                                                                                                                                             
|3.2    | Bylaws (incorporated
        by reference to our registration statement on form SB-2 filed on July
        11, 2005)                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                             
|3.3    | Articles of Merger
        (incorporated by reference to our current report on Form 8-K filed on
        November 7, 2006)                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                             
|3.4    | Certificate of
        Change (incorporated by reference to our current report on Form 8-K filed
        on November 7, 2006)                                                                                                                                               
|       |                                                                                                                                                                                                                                                                             
|3.2    | Bylaws (incorporated
        by reference to our registration statement on form SB-2 filed on July
        11, 2005)                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                             
|10.1   | Mineral property
        purchase agreement dated April 26, 2005 (incorporated by reference to
        our registration statement on form SB-2 filed on July 11, 2005)                                                                                                      
|       |                                                                                                                                                                                                                                                                             
|10.2   | Share Exchange
        Agreement dated January 31, 2007 (incorporated by reference to our current
        report on Form 8-K filed on March 22, 2007)                                                                                                                       
|       |                                                                                                                                                                                                                                                                             
|10.3   | Letter Agreement
        dated October 4, 2006 with Western Energy Capital, LLC for the acquisition
        of 45% working interest in the Lokern leases (incorporated by reference
        to our current report on Form 8-K filed on March 22, 2007)                      
|       |                                                                                                                                                                                                                                                                             
|10.3   | Letter Agreement
        dated October 18, 2006 with TriMar Energy Partners, Inc. for the acquisition
        of 1.5% of 8/8th Overriding Royalty Interest in the Hobart Lease (incorporated
        by reference to our current report on Form 8-K filed on March 22, 2007)
|       |                                                                                                                                                                                                                                                                             
|10.4   | Consulting Agreement
        dated May 1, 2007 (incorporated by reference to our current report on
        Form 8-K filed on May 7, 2007)                                                                                                                                   
|       |                                                                                                                                                                                                                                                                             
|10.5   | Letter Agreement
        dated April 19, 2007 with Western Energy Capital, LLC for the acquisition
        of 5% working interest in the Britlind Prospect Leases
        (incorporated by reference to our annual report on Form 10-KSB filed on
    October 15, 2007)     
|       |                                                                                                                                                                                                                                                                             
|10.6   | Purchase and
        Sale Agreement between our company and King Royalty Corporation for the
        acquisition of 5% interest in the Centurion property
        (incorporated by reference to our annual report on Form 10-KSB filed on
    October 15, 2007)             
|       |                                                                                                                                                                                                                                                                             
|10.7   | Purchase and
        Sale Agreement between our company and Desert Mining, Inc. for the acquisition
        of interests in the Jonah property
        (incorporated by reference to our annual report on Form 10-KSB filed on
    October 15, 2007)                        
|       |                                                                                                                                                                                                                                                                             
|14.1   | Code of Ethics
        (incorporated by reference to our annual report on Form 10-KSB filed on
        October 15, 2007)                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                             
|21.1   | Sun Cal Energy,
        Corp. a Nevada company, 100% wholly-owned subsidiary                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                             
|31.1*  | CEO
        Certification pursuant to Rule 13a-14(a) under the Securities Exchange
        Act of 1934                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                             
|31.2*  | CFO
        Certification pursuant to Rule 13a-14(a) under the Securities Exchange
        Act of 1934                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                             
|32.1*  | CEO
        Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                  
|       |                                                                                                                                                                                                                                                                             
|32.2*  | CEO
        Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                  

*attached herewith

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- 28 -

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees billed for professional services rendered by our principal accountant for the audit of our annual financial statements for the fiscal years ended June 30, 2008 and 2007 were $14,904 and $17,500 respectively.

Audit Related Fees

We incurred no fees for the fiscal years ended June 30, 2008 and 2007 for assurance and related services by our principal accountant that were reasonably related to the performance of the audit or review of our financial statements, and not reported under Audit Fees above.

Tax Fees

We incurred no fees for the fiscal years ended June 30, 2008 and 2007 for preparation of tax returns and for tax related advice.

All Other Fees

We incurred no other fees during the fiscal years ended June
30, 2008 and 2007 and since inception for products and services rendered by our
principal accountants other than those stated in this and other publicly posted
reports (see www.sec.gov).

Audit Committee Requirements

Section 10A(i) of the Exchange Act prohibits our auditors from
performing audit services for us, as well as any services not considered to be
"audit services", unless such services are pre-approved by the audit committee
of the sole director, or unless the services meet certain de minimis standards.
Because we are still in the development stage and have not yet completed our
business plans and/or generated any revenues, we have not yet appointed an audit
committee. Our Board of Directors ensure that:

All audit services that the auditor may provide to us or any
subsidiary (including, without limitation, providing comfort letters in
connection with securities underwritings or statutory audits) as required by
s.10A(i)(1)(A) of the Exchange Act (as amended by the Sarbanes-Oxley Act of
2002) are preapproved by the Board. All non-audit services (other than certain de minimis services
described in s.10A(i)(1)(B) of the Exchange Act (as amended by the
Sarbanes-Oxley Act of 2002)) that the auditors propose to provide to us or any
of our subsidiaries are preapproved by the Board. All audit fees were approved by the sole director.

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- 29 -

SIGNATURES

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

SUN CAL ENERGY, INC.

By: /s/ Lewis Dillman Lewis Dillman 
  President
and Chief Executive Officer 
(Principal Executive Officer)
Date: September 29, 2008.

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

By: /s/ George DrazenovicGeorge Drazenovic
Secretary, Treasurer and Director 
(Principal Financial Officer)Date:
September 29, 2008.

By: /s/ Lewis Dillman 
  Lewis Dillman 
  President and Chief Executive Officer
(Principal Executive Officer) 
Date: September 29, 2008.

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