----

| UNITED      STATES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| SECURITIES      AND EXCHANGE COMMISSION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| Washington,      D.C. 20549                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ————————                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| FORM      10-Q                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| ————————                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|        (Mark      One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| ýQUARTERLY REPORT      UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| For      the quarterly period ended March 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| oTRANSITION REPORT      UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Commission      file number    000-52770                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| PACIFIC      ASIA PETROLEUM, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| (Exact      name of issuer as specified in its charter)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ————————                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Delaware                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 30-0349798 |
| (State      or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | (IRS      Employer Identification No.) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 250      East Hartsdale Ave.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Hartsdale,      New York 10530                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (Address      of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (914)      472-6070                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (Issuer’      s telephone number)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| ————————                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| Indicate      by check mark whether the registrant (1) has filed all reports      required to be filed by Section 13 or 15(d) of the Exchange Act of 1934      during the preceding 12 months (or for such shorter period that the      registrant was required to file such reports), and (2) has been      subject to such filing requirements for the past 90 days. Yes ý                      No      o |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Indicate      by check mark whether the registrant is a large accelerated filer, an      accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and      large accelerated filer” in Rule 12b-2 of the      Exchange Act. (Check one):Large accelerated      filer o   Accelerated      filer o        Non-accelerated filer ý         Smaller reporting company  ̈                                                        |
|       Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Exchange Act).  Yes o                      No      ý      The      Issuer had 40,006,983 shares of its common stock outstanding as of      May 13, 2008.                                                                      |

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| PACIFIC ASIA PETROLEUM,      INC. |
|-----------------------------------|
| FORM      10-Q                    |
| Table      of Contents            |
|                              | Page |

| CAUTIONARY STATEMENT |  1                                                                                                                                                                                                  |
|----------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                 |                                                                                                                                                                                                     |   |
| PART      I          | FINANCIAL INFORMATION                                                                                                                                                                                    | 2 |
| Item 1.              | Financial Statements                                                                                                                                                                                     | 2 |
|                 | Condensed Consolidated Balance Sheets as of March 31, 2008      (unaudited) and December 31, 2007                                                                                                        | 2 |
|                 | Condensed Consolidated Statements of Income and Comprehensive      Income (unaudited) for the Three Months Ended March 31, 2008 and 2007 and      from August 25, 2005 (Inception) through March 31,2008 | 3 |
|                 | Condensed Consolidated Statement of Stockholders' Equity      (Deficiency) (unaudited) for the period from August 25, 2005 (Inception)      through March 31, 2008                                       | 4 |
|                 | Condensed Consolidated Statements of Cash      Flows  (unaudited) for the Three Months Ended March 31, 2008 and      2007 and from August 25, 2005 (Inception) through March 31,      2008     | 5 |
|                 | Notes to Condensed Consolidated Financial Statements      (unaudited)                                                                                                                                    | 6 |
| Item 2.              | Management’s Discussion and Analysis of Financial Condition      and Results of Operations                                                                                                         | 8 |
| Item 3.              | Quantitative and Qualitative Disclosures About Market      Risk                                                                                                                                          | 13 |
| Item 4.              | Controls and Procedures                                                                                                                                                                                  | 13 |
|                 |                                                                                                                                                                                                     |   |
| PART      II         | OTHER INFORMATION                                                                                                                                                                                        | 14 |
| Item 1.              | Legal Proceedings                                                                                                                                                                                        | 14 |
| Item 1A.             | Risk Factors                                                                                                                                                                                             | 14 |
| Item 2.              | Unregistered Sales of Equity Securities and Use of      Proceeds                                                                                                                                         | 14 |
| Item 3.              | Defaults Upon Senior Securities                                                                                                                                                                          | 15 |
| Item 4.              | Submission of Matters to a Vote of Security      Holders                                                                                                                                                 | 15 |
| Item 5.              | Other Information                                                                                                                                                                                        | 15 |
| Item 6.              | Exhibits                                                                                                                                                                                                 | 15 |
|                 |                                                                                                                                                                                                     |   |
| SIGNATURES           |                                                                                                                                                                                                     | 16 |
|                 |                                                                                                                                                                                                     |   |
|                 |                                                                                                                                                                                                     |   |
|                 |                                                                                                                                                                                                     |   |

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Table of Contents

CAUTIONARY STATEMENT

|   | · | Lack      of operating history, operating revenue or earnings    history. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | Dependence      on key personnel. |
|--------|--------|-----------------------------------|

|   | · | Fluctuation      in quarterly operating results and seasonality in certain of our      markets. |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | Possible      significant influence over corporate affairs by significant      shareholders. |
|--------|--------|----------------------------------------------------------------------------------------------|

|   | · | Our      ability to enter into definitive agreements to formalize foreign energy      ventures and secure necessary exploitation  rights. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our      ability to raise capital to fund ouroperations. |
|--------|--------|----------------------------------------------------------|

|   | · | Our      ability to successfully integrate and operate acquired or newly formed      entities and multiple foreign energy ventures and      subsidiaries. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      competition from large petroleum and other energy    interests. |
|--------|--------|--------------------------------------------------------------------------|

|   | · | Changes      in laws and regulations that affect our operations and the energy industry      in general. |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | Risks      and uncertainties associated with exploration, development and production      of oil and gas, drilling and productionrisks. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Expropriation      and other risks associated with foreign  operations. |
|--------|--------|-------------------------------------------------------------------------|

|   | · | Risks      associated with anticipated and ongoing third party pipeline construction      and transportation of oil and gas. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | The      lack of availability of oil and gas field goods and    services. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | Environmental      risks, economic conditions, and other risk factors detailed      herein. |
|--------|--------|---------------------------------------------------------------------------------------------|

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Table of Contents

|                                                                                 |
|--------------------------------------------------------------------------------------|
| PART IFINANCIAL      INFORMATION                                                     |
| Item      1.  Financial Statements                                         |
| Pacific      Asia Petroleum, Inc. and Subsidiaries(A      Development Stage Company) |
| Condensed      Consolidated Balance Sheets                                           |

|                                                                                                                                                            |   | As      of     March 31, 2008 |   |   |   | As      of December 31,2007 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|--------|--------|-----------------------------|--------|
|                                                                                                                                                            |   | (Unaudited)                                            |   |   |   |                        |   |
| Assets                                                                                                                                                          |   |                                                   |   |   |   |                        |   |
| Current      assets                                                                                                                                             |   |                                                   |   |   |   |                        |   |
| Cash      and cash equivalents                                                                                                                                  | $      | 12,454,878                                             |   |   | $      | 2,208,969                   |   |
| Short-term      investments                                                                                                                                     |   | 306,246                                                |   |   |   | 11,200,000                  |   |
| Income      tax refunds receivable                                                                                                                              |   | 28,241                                                 |   |   |   | -                           |   |
| Prepaid      expenses                                                                                                                                           |   | 24,852                                                 |   |   |   | 46,247                      |   |
| Deposits                                                                                                                                                        |   | 23,606                                                 |   |   |   | 22,954                      |   |
| Advances                                                                                                                                                        |   | 12,987                                                 |   |   |   | 2,758                       |   |
|       Total      current assets                                                                                                   |   | 12,850,810                                             |   |   |   | 13,480,928                  |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| Non-current      assets                                                                                                                                         |   |                                                   |   |   |   |                        |   |
| Property,      plant and equipment - at cost (net of reserves for depreciation and      amortization: March 31, 2008- $30,625; December 31, 2007-      $20,779) |   | 296,008                                                |   |   |   | 285,027                     |   |
| Intangible      assets                                                                                                                                          |   | 384                                                    |   |   |   | 384                         |   |
| Long-term      advances                                                                                                                                         |   | 584,208                                                |   |   |   | 534,530                     |   |
| Deferred      charges                                                                                                                                           |   | 3,156,058                                              |   |   |   | 3,156,058                   |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| Total      Assets                                                                                                                                               | $      | 16,887,468                                             |   |   | $      | 17,456,927                  |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| Liabilities and      Stockholders' Equity                                                                                                                       |   |                                                   |   |   |   |                        |   |
| Current      liabilities                                                                                                                                        |   |                                                   |   |   |   |                        |   |
| Accounts  payable                                                                                                                                     | $      | 18,910                                                 |   |   | $      | 2,739                       |   |
| Income      taxes payable                                                                                                                                       |   | 6,450                                                  |   |   |   | 38,791                      |   |
| Accrued      and other liabilities                                                                                                                              |   | 158,774                                                |   |   |   | 122,704                     |   |
| Total current      liabilities                                                                                                                                  |   | 184,134                                                |   |   |   | 164,234                     |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| Minority      interest in subsidiaries                                                                                                                          |   | 393,613                                                |   |   |   | 395,094                     |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| Stockholders'      equity                                                                                                                                       |   |                                                   |   |   |   |                        |   |
| Common      stock:                                                                                                                                              |   |                                                   |   |   |   |                        |   |
| Authorized      - 300,000,000 shares at $.001 par value; Issued and outstanding -      40,006,983 as of March 31, 2008; 39,931,109 as of December 31,      2007 |   | 40,007                                                 |   |   |   | 39,931                      |   |
| Preferred      stock:                                                                                                                                           |   |                                                   |   |   |   |                        |   |
| Authorized      - 50,000,000 shares at $.001 par value;  Issued - 23,708,952 as      of March 31, 2008 and December 31, 2007                          |   |                                                   |   |   |   |                        |   |
| Outstanding      - none as of March 31, 2008 and December 31, 2007                                                                                              |   | -                                                      |   |   |   | -                           |   |
| Paid-in      capital                                                                                                                                            |   | 20,544,974                                             |   |   |   | 20,251,022                  |   |
| Other      comprehensive income - currency translation adjustment                                                                                               |   | 196,163                                                |   |   |   | 128,061                     |   |
| Deficit      accumulated during the development stage                                                                                                           |   | (4,471,423                                             | )      |   |   | (3,521,415                  | )      |
| Total      stockholders' equity                                                                                                                                 |   | 16,309,721                                             |   |   |   | 16,897,599                  |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| Total      Liabilities and Stockholders' Equity                                                                                                                 | $      | 16,887,468                                             |   |   | $      | 17,456,927                  |   |
|                                                                                                                                                            |   |                                                   |   |   |   |                        |   |
| The      accompanying notes to unaudited condensed consolidated financial      statements are an integral part of this  statement.                              |

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Table of Contents

|                                                                                 |
|--------------------------------------------------------------------------------------|
| Pacific Asia Petroleum, Inc. and Subsidiaries(A      Development Stage Company)      |
| Condensed      Consolidated Statements of Income and Comprehensive Income(Unaudited) |

|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------|---------------------------|------------|--------|--------|------------------------|------------|--------|--------|--------|---------------------------|--------|--------|--------|--------|--------|
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   | For      the period       |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   | from  inception |   |   |   |   |   |
|                                                                                                                                   | For      the three months |       |   |   | (August      25, 2005) |       |   |   |   |                      |
|                                                                                                                                   | ended      March 31,      |       |   |   | through                |       |   |   |   |                      |
|                                                                                                                                   |                      | 2008       |   |   |                   | 2007       |   |   |   | 3/31/2008                 |   |   |   |   |   |
| Operating      Expenses                                                                                                                |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Depreciation                                                                                                                           | $                         | 9,355      |   |   | $                      | 1,725      |   |   | $      | 29,945                    |   |   |   |   |   |
| All      other operating expenses                                                                                                      |                      | 1,076,625  |   |   |                   | 784,019    |   |   |   | 5,276,639                 |   |   |   |   |   |
|     Total      operating expenses                                                                                  |                      | 1,085,980  |   |   |                   | 785,744    |   |   |   | 5,306,584                 |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Operating      Loss                                                                                                                    |                      | (1,085,980 | )      |   |                   | (785,744   | )      |   |   | (5,306,584                | )      |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Other Income      (Expense)                                                                                                            |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Interest      income                                                                                                                   |                      | 125,805    |   |   |                   | 36,885     |   |   |   | 843,300                   |   |   |   |   |   |
| Other      income                                                                                                                      |                      | -          |   |   |                   | -          |   |   |   | 12,937                    |   |   |   |   |   |
| Other      expense                                                                                                                     |                      | -          |   |   |                   | -          |   |   |   | (714                      | )      |   |   |   |   |
|     Total      other income                                                                                        |                      | 125,805    |   |   |                   | 36,885     |   |   |   | 855,523                   |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Net      loss before minority interest                                                                                                 |                      | (960,175   | )      |   |                   | (748,859   | )      |   |   | (4,451,061                | )      |   |   |   |   |
| Minority      interest                                                                                                                 |                      | 3,587      |   |   |                   | 618        |   |   |   | 11,884                    |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Net      loss before income tax expense                                                                                                |                      | (956,588   | )      |   |                   | (748,241   | )      |   |   | (4,439,177                | )      |   |   |   |   |
| Income      tax expense                                                                                                                |                      | 6,580      |   |   |                   | -          |   |   |   | (32,246                   | )      |   |   |   |   |
| Net      Loss                                                                                                                          |                      | (950,008   | )      |   |                   | (748,241   | )      |   |   | (4,471,423                | )      |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Other      Comprehensive Income (Loss), Net of Tax:                                                                                    |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Foreign      currency translation adjustment                                                                                           |                      | 68,102     |   |   |                   | 4,232      |   |   |   | 196,163                   |   |   |   |   |   |
| Comprehensive      Income (Loss)                                                                                                       | $                         | (881,906   | )      |   | $                      | (744,009   | )      |   | $      | (4,275,260                | )      |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Net      Loss Per Share of Common Stock:                                                                                               |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Net      Loss -Basic and Diluted                                                                                                       | $                         | (0.02      | )      |   | $                      | (0.05      | )      |   |   |                      |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| Weighted      average number of  shares outstanding                                                                          |                      | 39,951,954 |   |   |                   | 15,728,393 |   |   |   |                      |   |   |   |   |   |
|                                                                                                                                   |                      |       |   |   |                   |       |   |   |   |                      |   |   |   |   |   |
| The      accompanying notes to the unaudited condensed consolidated financial      statements are an integral part of this  statement. |

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Table of Contents

|   |
|--------|
|   | Pacific Asia Petroleum, Inc. and Subsidiaries(A      Development Stage Company) |
|   | Condensed      Consolidated Statement of Stockholders' Equity  (Deficiency) |
|   | For      the period from inception (August 25, 2005) to March 31,    2008 |
|   | (Unaudited) |

|                                                                                         |   | No.      of |   |   |   |   |   |          |   |   |           |   |   |      |   |   |       |   |   |          |   |   |            |   |   |          |   |
|----------------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------|--------|--------|---------------|--------|--------|----------------|--------|--------|-----------|--------|--------|------------|--------|--------|---------------|--------|--------|-----------------|--------|--------|---------------|--------|
|                                                                                         |   | Common      |   |   |   |   |   |          |   |   | No.      of    |   |   |      |   |   |       |   |   | Other         |   |   | Deficit         |   |   |          |   |
|                                                                                         |   | Shares      |   |   |   |   |   |          |   |   | Preferred      |   |   |      |   |   |       |   |   | Comprehensive |   |   | Accumulated     |   |   | Total         |   |
|                                                                                         |   | $.001       |   |   |   |   |   |          |   |   | Shares         |   |   |      |   |   |       |   |   | Income      - |   |   | During      the |   |   | Stockholders' |   |
|                                                                                         |   | par         |   |   | Common |   |   | Subscriptions |   |   | $.001          |   |   | Preferred |   |   | Paid-in    |   |   | Currency      |   |   | Development     |   |   | Equity        |   |
|                                                                                         |   | value       |   |   | Stock  |   |   | Receivable    |   |   | par      value |   |   | Stock     |   |   | Capital    |   |   | Translation   |   |   | Stage           |   |   | (Deficiency)  |   |
| Balance      - August 25, 2005                                                               |   | -           |   | $      | -      |   | $      | -             |   |   | -              |   | $      | -         |   | $      | -          |   | $      | -             |   | $      | -               |   | $      | -             |   |
| Issued      for cash                                                                         |   | 1,852,320   |   |   | 1,852  |   |   | -             |   |   | -              |   |   | -         |   |   | 10,148     |   |   | -             |   |   | -               |   |   | 12,000        |   |
| Subscriptions                                                                                |   | 3,451,680   |   |   | 3,452  |   |   | (28,000       | )      |   | -              |   |   | -         |   |   | 24,548     |   |   | -             |   |   | -               |   |   | -             |   |
| Net      loss                                                                                |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | -             |   |   | (51,344         | )      |   | (51,344       | )      |
| Balance-      December 31, 2005                                                              |   | 5,304,000   |   |   | 5,304  |   |   | (28,000       | )      |   | -              |   |   | -         |   |   | 34,696     |   |   | -             |   |   | (51,344         | )      |   | (39,344       | )      |
| Subscriptions      paid                                                                      |   | -           |   |   | -      |   |   | 28,000        |   |   | -              |   |   | -         |   |   | -          |   |   | -             |   |   | -               |   |   | 28,000        |   |
| Issued      for fees and services                                                            |   | -           |   |   | -      |   |   | -             |   |   | 1,829,421      |   |   | 1,829     |   |   | 195,776    |   |   | -             |   |   | -               |   |   | 197,605       |   |
| Issued      for cash                                                                         |   | -           |   |   | -      |   |   | -             |   |   | 8,161,802      |   |   | 8,162     |   |   | 4,215,262  |   |   | -             |   |   | -               |   |   | 4,223,424     |   |
| Amortization      of options fair value                                                      |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | 29,065     |   |   | -             |   |   | -               |   |   | 29,065        |   |
| Currency      translation                                                                    |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | 19,228        |   |   | -               |   |   | 19,228        |   |
| Net      loss                                                                                |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | -             |   |   | (1,086,387      | )      |   | (1,086,387    | )      |
| Balance-      December 31, 2006                                                              |   | 5,304,000   |   |   | 5,304  |   |   | -             |   |   | 9,991,223      |   |   | 9,991     |   |   | 4,474,799  |   |   | 19,228        |   |   | (1,137,731      | )      |   | 3,371,591     |   |
| Issued      for services - pre-merger                                                        |   | 600,032     |   |   | 600    |   |   | -             |   |   | 117,729        |   |   | 118       |   |   | 334,594    |   |   | -             |   |   | -               |   |   | 335,312       |   |
| Shares      retained by Pacific Asia Petroleum original stockholders in merger -      5/7/07 |   | 468,125     |   |   | 468    |   |   | -             |   |   | -              |   |   | -         |   |   | 83,323     |   |   | -             |   |   | -               |   |   | 83,791        |   |
| Shares      issued to ADS members in merger - 5/7/07                                         |   | 9,850,000   |   |   | 9,850  |   |   | -             |   |   | 13,600,000     |   |   | 13,600    |   |   | 15,453,957 |   |   | -             |   |   | -               |   |   | 15,477,407    |   |
| Post-merger      acquisition costs and adjustments                                           |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | (291,093   | )      |   | -             |   |   | -               |   |   | (291,093      | )      |
| Automatic      conversion of Preferred Shares - 6/5/07                                       |   | 23,708,952  |   |   | 23,709 |   |   | -             |   |   | (23,708,952    | )      |   | (23,709   | )      |   | -          |   |   | -             |   |   | -               |   |   | -             |   |
| Issued      for services compensation cost of stock options and restricted      stock        |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | 195,442    |   |   | -             |   |   | -               |   |   | 195,442       |   |
| Currency      translation                                                                    |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | 108,833       |   |   | -               |   |   | 108.833       |   |
| Net      loss                                                                                |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | -             |   |   | (2,383,684      | )      |   | (2,383,684    | )      |
| Balance–      December 31, 2007                                                        |   | 39,931,109  |   |   | 39,931 |   |   | -             |   |   | -              |   |   | -         |   |   | 20,251,022 |   |   | 128,061       |   |   | (3,521,415      | )      |   | 16,897,599    |   |
| Issued      on exercise of warrants                                                          |   | 75,874      |   |   | 76     |   |   | -             |   |   | -              |   |   | -         |   |   | (80        | )      |   | -             |   |   | -               |   |   | (4            | )      |
| Compensation      cost of stock options and restricted stock                                 |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | 294,032    |   |   | -             |   |   | -               |   |   | 294,032       |   |
| Currency      translation                                                                    |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | 68,102        |   |   | -               |   |   | 68,102        |   |
| Net      loss                                                                                |   | -           |   |   | -      |   |   | -             |   |   | -              |   |   | -         |   |   | -          |   |   | -             |   |   | (950,008        | )      |   | (950,008      | )      |
| Balance–      March 31, 2008                                                           |   | 40,006,983  |   | $      | 40,007 |   | $      | -             |   |   | -              |   | $      | -         |   | $      | 20,544,974 |   | $      | 196,163       |   | $      | (4,471,423      | )      | $      | 16,309,721    |   |
|                                                                                         |   |        |   |   |   |   |   |          |   |   |           |   |   |      |   |   |       |   |   |          |   |   |            |   |   |          |   |

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|                                                                                                                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Pacific Asia Petroleum, Inc. and Subsidiaries(A      Development Stage Company)Condensed      Consolidated Statements of Cash FlowsFor      the three months ended March 31, 2008 and 2007,and      for the period from inception (August 25, 2005) to March 31,      2008(Unaudited) |

|                                                                      |   |              |   |   |   |              |   |   |   | For      the period from |   |   |   |   |   |
|---------------------------------------------------------------------------|--------|-------------------|--------|--------|--------|-------------------|--------|--------|--------|--------------------------|--------|--------|--------|--------|--------|
|                                                                      |   | Three      months |   |   |   | Three      months |   |   |   | inception                |   |   |   |   |   |
|                                                                      |   | ended             |   |   |   | ended             |   |   |   | (August      25, 2005)   |   |   |   |   |   |
|                                                                      |   | March      31,    |   |   |   | March      31,    |   |   |   | through                  |   |   |   |   |   |
|                                                                      |   | 2008              |   |   |   | 2007              |   |   |   | March      31, 2008      |   |   |   |   |   |
| Cash flows from      operating activities                                 |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Net      loss                                                             | $      | (950,008          | )      |   | $      | (748,241          | )      |   | $      | (4,471,423               | )      |   |   |   |   |
| Adjustments      to reconcile net loss to cash                            |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| used      in operating activities:                                        |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Interest income on long-term      advances                                |   | (27,215           | )      |   |   | (20,168           | )      |   |   | (127,762                 | )      |   |   |   |   |
| Currency transaction      loss                                            |   | 28,534            |   |   |   | (7,170            | )      |   |   | 71,978                   |   |   |   |   |   |
| Stock-related      compensation                                           |   | 294,031           |   |   |   | 369,839           |   |   |   | 1,051,455                |   |   |   |   |   |
| Minority interest in net      loss                                        |   | (3,587            | )      |   |   | (618              | )      |   |   | (11,884                  | )      |   |   |   |   |
| Depreciation and amortization      expense                                |   | 9,355             |   |   |   | 1,725             |   |   |   | 29,945                   |   |   |   |   |   |
| Changes in current assets and      current liabilities:                   |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| (Increase) in accrued interest      and other receivables                 |   | (34,487           | )      |   |   | -                 |   |   |   | (34,487                  | )      |   |   |   |   |
| (Increase) in      advances                                               |   | (10,229           | )      |   |   | -                 |   |   |   | (12,987                  | )      |   |   |   |   |
| (Increase) in      deposits                                               |   | (652              | )      |   |   | 5,067             |   |   |   | (23,606                  | )      |   |   |   |   |
| (Increase) decrease in prepaid      expenses                              |   | 21,395            |   |   |   | 21,206            |   |   |   | (24,852                  | )      |   |   |   |   |
| Increase (decrease) in accounts      payable                              |   | 16,171            |   |   |   | (21,280           | )      |   |   | 3,759                    |   |   |   |   |   |
| Increase (decrease) in income tax      and accruedliabilities             |   | 8,266             |   |   |   | (38,285           | )      |   |   | 16,456                   |   |   |   |   |   |
| Net      cash used in operating activities                                |   |  (648,426    | )      |   |   | (437,925          | )      |   |   | (3,533,408               | )      |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Cash flows from      investing activities                                 |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Net      sales (purchases) of available for sale short-term    securities |   | 10,900,000        |   |   |   | 650,000           |   |   |   | (300,000                 | )      |   |   |   |   |
| Increase      in deferred charges                                         |   | -                 |   |   |   | -                 |   |   |   | (3,156,058               | )      |   |   |   |   |
| Additions      to property, plant and equipment                           |   | (14,485           | )      |   |   | (13,787           | )      |   |   | (298,470                 | )      |   |   |   |   |
| Net      cash provided by (used in) investing activities                  |   | 10,885,515        |   |   |   | 636,213           |   |   |   | (3,754,528               | )      |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Cash flows from      financing activities                                 |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Payment      of notes payable                                             |   | -                 |   |   |   | -                 |   |   |   | (5,000                   | )      |   |   |   |   |
| Increase      in minority interest investment                             |   | -                 |   |   |   | 40,020            |   |   |   | 399,430                  |   |   |   |   |   |
| Increase      in long-term advances to minority shareholder               |   | -                 |   |   |   | -                 |   |   |   | (400,507                 | )      |   |   |   |   |
| Decrease      in subscriptions receivable                                 |   | -                 |   |   |   | -                 |   |   |   | 28,000                   |   |   |   |   |   |
| Issuance      of common stock net of issuance costs                       |   | -                 |   |   |   | (87,695           | )      |   |   | 19,673,605               |   |   |   |   |   |
| Net      cash provided by (used in) financing activities                  |   | -                 |   |   |   | (47,675           | )      |   |   | 19,695,528               |   |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Effect      of exchange rate changes on cash                              |   | 8,820             |   |   |   | (21,010           | )      |   |   | 47,286                   |   |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Net      increase in cash and cash equivalents                            |   | 10,245,909        |   |   |   | 129,603           |   |   |   | 12,454,878               |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                     |   | 2,208,969         |   |   |   | 1,867,374         |   |   |   | -                        |   |   |   |   |   |
| Cash      and cash equivalents at end of period                           | $      | 12,454,878        |   |   | $      | 1,996,977         |   |   | $      | 12,454,878               |   |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Supplemental      disclosures of cash flow information                    |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Interest      paid                                                        | $      | -                 |   |   | $      | -                 |   |   | $      | -                        |   |   |   |   |   |
| Income      taxes paid                                                    | $      | 28,241            |   |   | $      | -                 |   |   | $      | 28,276                   |   |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Supplemental schedule      of non-cash investing and financing activities |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |
| Common      and preferred stock issued for services and fees              | $      | -                 |   |   | $      | 344,312           |   |   | $      | 532,917                  |   |   |   |   |   |
| Stock      issuance costs paid as warrants issued                         | $      | -                 |   |   | $      | 4,558             |   |   | $      | 929,477                  |   |   |   |   |   |
| Increase      in property, plant and equipment accrued in liabilities     | $      | -                 |   |   | $      | 4,420             |   |   | $      | -                        |   |   |   |   |   |
| Increase      in stock issuance costs accrued in liabilities              | $      | -                 |   |   | $      | 10,000            |   |   | $      | -                        |   |   |   |   |   |
| Warrants      exercised for common stock                                  | $      | (4                | )      |   | $      | 65,797            |   |   | $      | 65,793                   |   |   |   |   |   |
|                                                                      |   |              |   |   |   |              |   |   |   |                     |   |   |   |   |   |

| The      accompanying notes to unaudited condensed consolidated financial      statements are an integral part of this  statement. |
|------------------------------------------------------------------------------------------------------------------------------------|

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|   |
|--------|
|   | Pacific Asia Petroleum, Inc. and Subsidiaries(A      Development Stage Company) |
|   | Notes      to Condensed Consolidated Financial StatementsMarch      31, 2008(Unaudited) |

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|        Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF      FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  |
|---------------------------------------------------------------------------------------------------------------------------|--|

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|   | • | Focusing      on projects that play to the expertise of our management    team; |
|--------|---------|---------------------------------------------------------------------------------|

|   | • | Leveraging      our productive asset base and capabilities to develop    value; |
|--------|---------|---------------------------------------------------------------------------------|

|   | • | Actively      managing our assets and ongoing operations while attempting to limit      capital exposure; |
|--------|---------|-----------------------------------------------------------------------------------------------------------|

|   | • | Enlisting      external resources and talent as necessary to operate/manage our      properties during peak operations;and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------|

|   | • | Implementing      an exit strategy with respect to each project with a view to maximizing      asset values and returns. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------|

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| Expenses |                              |   |                              |   |
|----------|-----------------------------------|--------|-----------------------------------|--------|
|     |                              |   | Three months ended March      31, |
|     |                              |   | 2008                              |   | 2007 |
|     | Description                       |   |                              |   |   |
|     | Salaries                          | $      | 231,064                           | $      | 65,000 |
|     | Consulting      fees              |   | 126,383                           |   | 545,849 |
|     | Stock-based      compensation     |   | 294,032                           |   | 25,527 |
|     | Legal      and professional fees  |   | 158,948                           |   | 7,111 |
|     | Travel                            |   | 46,346                            |   | 48,676 |
|     | Auditing                          |   | 58,200                            |   | 7,673 |
|     | All      other operating expenses |   | 171,007                           |   | 85,908 |
|     | Total Operating      Expenses     | $      | 1,085,980                         | $      | 785,744 |

|   | · | Salaries: In the three      months ended March 31, 2008, salaries totaled      $231,064.   In the three months ended March 31, 2007,      salaries totaled $65,000.   This increase reflects the      change in the status of an officer of the Company from a consultant to the      Company in the 2007 period to an employee of the Company in the 2008      period. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Consulting      fees:  In the three months ended March 31, 2008, the      consulting fees payable  in cash totaled $126,383. There was no      equity compensation paid to consultants in this period. In the three      months ended March 31, 2007, the consulting fees payable in cash were      $210,537.  Consulting fees paid as equity compensation in this      period were $335,312. The decrease in consulting fees in 2008 was      principally due to non-recurring amounts in 2007 relative to merger      negotiation assistance and contractual obligations on assistance in      raising of equity funds prior to theMergers. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Stock-based      compensation:  In the three months ended March 31, 2008,      expense was $294,032 for stock options and restricted stock      compensation.   In the three months ended March 31, 2007,      expense was $25,527.  The increase in 2008 was due to more      option awards existing in 2008 and restricted stock awards not in      existence in the 2007 period. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Legal and professional      fees:  In the three months ended March 31, 2008, these      fees totaled $158,948. In the three months ended March 31, 2007, these      fees totaled $7,111.   The increase in these fees was due      to the increase in the Company’s activities, the legal requirements to      prepare SEC filings, and assistance in compliance with Sarbanes-Oxley Act      requirements. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Travel:  In      the three months ended March 31, 2008, travel expense totaled      $46,346.   In the three months ended March 31, 2007, travel      expense totaled $48,676. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Auditing:  In      the three months ended March 31, 2008, audit and review fees totaled      $58,200.  In the three months ended March 31, 2007, these fees      totaled $7,673.   The increase resulted from increased      auditor involvement required as a result of the change to a public company      through the Mergers that occurred in May2007. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Item 3

Item 4

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PART II 

Item 1

Item 1A

Item 2

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Item 3

Item 4

Item 5

Item 6

|  ExhibitNumber |   Description                                                                                    |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1                | Certification of the Registrant’s Principal Executive      Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section      302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                    |
| 31.2                | Certification of the Registrant’s Principal Financial      Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section      302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                    |
| 32.1                | Certification of the Registrant’s Principal Executive      Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906      of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                         |
| 32.2                | Certification of the Registrant’s Principal Financial      Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906      of the Sarbanes-Oxley Act of2002.                                                                                                                                                                                                                                                                                                                                                          |

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|   | SIGNATURES |
|--------|------------|

| Dated:  May      13, 2008  | Pacific      Asia Petroleum, Inc.  |
|-------------------------------------------|-----------------------------------------|
|                                      | By:                                     | /s/ Frank C.      Ingriselli                            Frank      C. IngriselliPresident      and Chief Executive Officer |

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