UNITED STATES



SECURITIES AND EXCHANGE COMMISSION



Washington, D.C. 20549





FORM 10-QSB



Quarterly Report Pursuant to Section 13 or 15(d) of the Securities

and Exchange Act of 1934.



For the quarterly period ended June 30, 2004



Commission File Number: 0-32507





Energy Producers, Inc.

(Exact name of registrant as specified in its charter.)





|NEVADA(State or other jurisdiction of
incorporation or organization) | 8-0345961(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------- | ---------------------------------------------







6564 Smoke Tree Lane

Town of Paradise Valley, Arizona             85253

(Address of principal executive offices)     (Zip Code)



Registrant's telephone number, including area code: (480) 948-6581





7944 E. Beck Lane, Suite 140, Scottsdale, AZ  85260,  (480) 778-0488

(Former address and phone number if changed since last report)



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



YES [X]          NO [  ]



Indicate the number of shares outstanding of each of the issuers classes of common stock as of the latest practical date:

43,376,668 Shares of common stock issued and outstanding.



---

ENERGY PRODUCERS, INC

(formerly Sterling Market Positions, Inc.)

10-QSB

June 30, 2004



Table of Contents



PART 1: FINANCIAL INFORMATION



Item 1. Financial Statements - Unaudited



Consolidated Balance Sheets  Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3



Consolidated Statement of Operations-Six and Three months . . . . . . . . . . . . . . . . .

4



Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5



Consolidated Statement of Changes in Shareholders' Equity . . . . . . . . . . . . . . . . . .

6



Notes to the Unaudited Consolidated Financial Statements . . . . . . . . . . . . . . . . . . .

7



Item 2. Management's Discussion and Analysis

or Plan of Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13



Item 3. Controls and Procedures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15



PART II: OTHER INFORMATION



Item 1 - Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16



Item 2 - Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16



Item 3 - Defaults upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17



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

17



Item 5 - Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17



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

18



Certifications



Signature  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18



2

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PART I. FINANCIAL INFORMATION



Item 1.  Financial Statements



Energy Producers, Inc.

Unaudited Consolidated Balance Sheets

As of June 30, 2004 and December 31, 2003





|ASSETS                                                            |                                        |            |          |            |             | 30-Jun-04  |             | 31-Dec-03 
|----------------------------------------------------------------- | -------------------------------------- | ---------- | -------- | ---------- | ----------- | ---------- | ----------- | ----------
|                                                                  |                                        |            |          |            |             |            |             |           
|Current assets:                                                   |                                        |            |          |            |             |            |            
|Cash & interest bearing deposits                                  |                                        |            |          | $306,687   |             | $45,155   
|Accounts receivable                                               |                                        |            |          |            | 401,069     |            | 21,933     
|Total current assets                                              |                                        |            |          |            | 707,756     |            | 67,088     
|                                                                  |                                        |            |          |            |             |            |             |           
|Other assets:                                                     |                                        |            |          |            |             |            |             |           
|Property & equipment- net                                         |                                        |            |          | 1,352,966  |             | 1,523,812 
|Receivables from shareholders                                     |                                        |            |          | 29,152     |             | 167,890   
|                                                                  | Total assets                           |            |          |            |             | $2,089,874 |             | $1,758,790
|                                                                  |                                        |            |          |            |             |            |             |           
|LIABILITIES AND SHAREHOLDERS' EQUITY                              |                                        |            |          |            |            
|                                                                  |                                        |            |          |            |             |            |             |           
|Current liabilities:                                              |                                        |            |          |            |             |            |            
|Accounts payable & accrued expenses                               |                                        |            | $692,764 |            | $462,334   
|Advances and notes payable- shareholders                          |                                        |            | 749,922  |            | 638,679    
|Accrued interest payable                                          |                                        |            |          | 249,107    |             | 166,513   
|Deferred revenues                                                 |                                        |            |          |            | 0           |            | 123,649    
|Loans payable to banks                                            |                                        |            | 0        |            | 4,936      
|Notes payable                                                     |                                        |            |          |            | 3,000       |            | 3,000      
|Capital lease payable- current portion                            |                                        |            | 0        |            | 3,989      
|                                                                  | Total current liabilities              |            |          |            | 1,694,793   |            | 1,403,100  
|                                                                  |                                        |            |          |            |             |            |             |           
|Capital lease payable- non current portion                        |                                        |            | 0        |            | 9,273      
|Convertible debentures payable-net                                |                                        | 151,581    |          | 0         
|                                                                  | Total liabilities                      |            |          |            |             | 1,846,374  |             | 1,412,373 
|                                                                  |                                        |            |          |            |             |            |             |           
|Net liability of discontinued operation                           |                                        |            | 29,096   |            | 29,096     
|                                                                  |                                        |            |          |            |             |            |             |           
|Shareholders' equity:                                             |                                        |            |          |            |             |            |            
|Preferred stock, 50,000,000 shares authorized at par value $.001, |                                        |           
|                                                                  | no stated dividend, none outstanding   |            |          | $0         |             | $0        
|Common stock- $.001 par value, authorized 200,000,000 shares,     |                                        |            |         
|issued and outstanding, 43,376,668 at June 30, 2004 and           |                                        |            |         
|                                                                  | 36,088,968 shares at December 31, 2003 |            | 43,377   |            | 36,089     
|Additional paid in capital                                        |                                        |            |          | 4,302,665  |             | 2,983,534 
|Accumulated deficit                                               |                                        |            |          |            | (4,177,199) |            | (2,700,992)
|Accumulated other comprehensive loss                              | 45,561                                 |            | (1,310) 
|                                                                  | Total shareholders' equity             |            |          |            | 214,404     |            | 317,321    
|                                                                  |                                        |            |          |            |             |            |             |           
|Total Liabilities & Shareholders' Equity                          |                                        | $2,089,874 |          | $1,758,790
|                                                                  |                                        |            |          |            |             |            |             |           
|See the notes to the financial statements.                       



3

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Energy Producers, Inc.

Unaudited Consolidated Statements of Operations

For the Six and Three Months Ended June 30, 2004 and June 30, 2003









|                                                |                                         |             |          |            |              | 6 Months   |           | 6 Months   |            | 3 Months  |          | 3 Months 
|----------------------------------------------- | --------------------------------------- | ----------- | -------- | ---------- | ------------ | ---------- | --------- | ---------- | ---------- | --------- | -------- | ---------
|                                                |                                         |             |          |            |              | 30-Jun-04  |           | 30-Jun-03  |            | 30-Jun-04 |          | 30-Jun-03
|Revenues:                                       |                                         |             |          |            |              |            |           |            |            |           |         
|                                                | Gross revenues                          |             |          |            | $320,714     |            | $159,202  |            | $320,506   |           | $71,201 
|                                                | Less cost of sales                      |             |          |            | (62,699)     |            | (42,896)  |            | (15,033)   |           | (18,504)
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|                                                | Net gross profit on sales               |             |          | 258,015    |              | 116,306    |           | 305,473    |            | 52,697   
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|General and administrative expenses:            |                                         |             |          |            |              |            |           |           
|                                                | General administration                  |             |          | 1,546,764  |              | 245,358    |           | 1,075,261  |            | 126,145  
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|                                                | Total general & administrative expenses | 1,546,764   |          | 245,358    |              | 1,075,261  |           | 126,145   
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Net loss from operations                        |                                         | (1,288,749) |          | (129,052)  |              | (769,788)  |           | (73,448)  
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Other revenues and expenses:                    |                                         |             |          |            |              |            |           |            |           
|                                                | Other income                            |             |          |            | 34,903       |            | 147,975   |            | 34,903     |           | 147,975 
|                                                | Interest expense                        |             |          |            | (222,361)    |            | (78,811)  |            | (206,785)  |           | (44,978)
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Net loss before provision for income taxes      | (1,476,207)                             |             | (59,888) |            | (941,670)    |            | 29,549   
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Provision for income taxes                      |                                         |             | 0        |            | 0            |            | 0         |            | 0         
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Net loss from continuing operations             | (1,476,207)                             |             | (59,888) |            | (941,670)    |            | 29,549   
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Discontinued operations (net of tax)            | 0                                       |             | 0        |            | 0            |            |          
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Net loss                                        |                                         |             |          |            | ($1,476,207) |            | ($59,888) |            | ($941,670) |           | $29,549 
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Basic & fully diluted net loss per common share |                                         |             |          |            |             
|Loss from continuing operations                 |                                         | ($0.04)     |          | ($0.00)    |              | ($0.02)    |           | $0.00     
|Loss from discontinued operations               |                                         | $0.00       |          | $0.00      |              | $0.00      |           | $0.00     
|Loss per share                                  |                                         |             |          | ($0.04)    |              | ($0.00)    |           | ($0.02)    |            | $0.00    
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|Weighted average of common shares outstanding: 
|Basic & fully diluted                           |                                         | 39,018,718  |          | 13,827,812 |              | 42,185,790 |           | 13,827,812
|                                                |                                         |             |          |            |              |            |           |            |            |           |          |          
|See the notes to the financial statements.     





4

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Energy Producers, Inc.

Unaudited Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2004 and June 30, 2003











|                                                    |                                       |          |           |          |           | 30-Jun-04 |         | 30-Jun-03
|--------------------------------------------------- | ------------------------------------- | -------- | --------- | -------- | --------- | --------- | ------- | ---------
|Operating Activities:                               |                                       |          |           |          |           |          
|Net loss from continuing operations                 | ($1,476,207)                          |          | ($59,888)
|Adjustments to reconcile net income items           |                                       |          |          
|not requiring the use of cash:                      |                                       |          |           |          |          
|                                                    | Depreciation & amortization           |          |           | 189,604  |           | 2,147    
|                                                    | Consulting expense                    |          |           |          | 644,150   |           | 0      
|                                                    | Interest expense                      |          |           |          | 222,361   |           | 78,811 
|Changes in other operating assets and liabilities : |                                       |          |          
|                                                    | Accounts receivable                   |          |           |          | (379,136) |           | (6,373)
|                                                    | Accounts payable and accrued expenses |          | 471,384   |          | (16,105) 
|                                                    | Deferred revenues                     |          |           |          | (123,649) |           | 0      
|Net cash used by operations                         | (451,493)                             |          | (1,408)  
|                                                    |                                       |          |           |          |           |           |         |          
|Investing Activities:                               |                                       |          |           |          |           |          
|Purchase of property & equipment                    |                                       | (18,758) |           | 0       
|Net cash used by investing activities               | (18,758)                              |          | 0        
|                                                    |                                       |          |           |          |           |           |         |          
|Financing Activities:                               |                                       |          |           |          |           |          
|                                                    | Payment of notes payable              |          |           | (18,198) |           | (129,501)
|                                                    | Issuance of common stock              |          |           | 0        |           | 53,000   
|                                                    | Issuance of convertible debentures    |          | 500,000   |          | 0        
|                                                    | Loans received from shareholders      |          | 249,981   |          | 86,184   
|Net cash provided by financing activities           |                                       | 731,783  |           | 9,683   
|                                                    |                                       |          |           |          |           |           |         |          
|Net increase in cash during the period              |                                       | 261,532  |           | 8,275   
|                                                    |                                       |          |           |          |           |           |         |          
|Cash balance at beginning of the fiscal year        | 45,155                                |          | 19,143   
|                                                    |                                       |          |           |          |           |           |         |          
|Cash balance at end of the period                   |                                       |          | $306,687  |          | $27,418  
|                                                    |                                       |          |           |          |           |           |         |          
|Supplemental disclosures of cash flow information:  |                                       |         
|Interest paid during the period                     |                                       |          | $2,100    |          | $10,530  
|Income taxes paid during the period                 |                                       | $0       |           | $0      
|                                                    |                                       |          |           |          |           |           |         |          
|See the notes to the financial statements.         











5

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Energy Producers, Inc.

Unaudited Consolidated Statement of Changes in Shareholders Equity

For the Six Months Ended June 30, 2004











|                                           |         |               |  |           |  |            |  |              |  | Accumulated   |  |            
|------------------------------------------ | ------- | ------------- |  | --------- |  | ---------- |  | ------------ |  | ------------- |  | -----------
|                                           |         |               |  |           |  |            |  |              |  | Other         |  |            
|                                           |         | Common        |  | Common    |  | Paid in    |  | Accumulated  |  | Comprehensive |  |            
|                                           |         | Shares        |  | Par Value |  | Capital    |  | Deficit      |  | Loss          |  | Total      
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Balance at 1/1/04                          |         | 36,088,968    |  | $36,089   |  | $2,983,534 |  | ($2,700,992) |  | ($1,310)      |  | $317,321   
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Stock issued to consultants                |         | 5,687,700     |  | 5,688     |  | 881,948    |  |              |  |               |  | 887,636    
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Conversion of convertible debt             |         | 1,600,000     |  | 1,600     |  | 14,400     |  |              |  |               |  | 16,000     
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Beneficial conversion feature              |         |               |  |           |  | 422,783    |  |              |  |               |  | 422,783    
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Foreign currency                           |         |               |  |           |  |            |  |              |  |               |  |            
|translation adjustment                     |         |               |  |           |  |            |  | 46,871       |  | 46,871       
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Net loss for the period                    |         |               |  |           |  |            |  | (1,476,207)  |  |               |  | (1,476,207)
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Balance at 6/30/04                         |         | 43,376,668    |  | $43,377   |  | $4,302,665 |  | ($4,177,199) |  | $45,561       |  | $214,404   
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|                                           |         | Comprehensive |  |           |  |            |  |              |  |               |  |            
|                                           |         | Loss          |  |           |  |            |  |              |  |               |  |            
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Foreign currency                           |         |               |  |           |  |            |  |              |  |               |  |            
|translation adjustment                     | $46,871 |               |  |           |  |            |  |              |  |               | 
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Net loss for the period                    |         | (1,476,207)   |  |           |  |            |  |              |  |               |  |            
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|Comprehensive loss for the period          |         | ($1,429,336)  |  |           |  |            |  |              |  |               |  |            
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|                                           |         |               |  |           |  |            |  |              |  |               |  |            
|See the notes to the financial statements.
|                                           |         |               |  |           |  |            |  |              |  |               |  |            









6

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Energy Producers, Inc.

Notes to the Unaudited Financial Statements

For the Six Months Ended June 30, 2004 and June 30, 2003



1.

Organization of the Company and Significant Accounting Principles



The Company was incorporated in the State of Nevada October 1995 as Sterling Market Positions, Inc. Effective June 24, 1999 the Company changed its name to Energy Producers, Inc.



In August 1999 the Company acquired by Energy Producers Group Inc. and its wholly owned subsidiary, Producers Supply, Inc.(PSI), an oil and gas service company located in Stephens, Arizona.  PSI was discontinued by management in fiscal year 2003.



Since August 1999, the Company has focused its activities on oil and gas exploration and development and production and acquisition of existing production facilities with proven reserves.  In November 2003, the Company sold its interest in its oil wells it had acquired since August 1999.



In November 2003, the Company acquired all of the issued and outstanding shares of International Group Holdings Inc. (IGHI) by issuing 17,015,156 shares of common stock.  IGHI became a wholly owned subsidiary of the Company.  IGHI is the owner of International Yacht Sales Group Ltd. (IYSG), a UK based on-line broker of luxury yachts, and other entities.  IYSG began its operations in April 2003.  In January 2004, the Company sold IGHI and its subsidiaries to another company.  However, the Company retained 100% of IYSG and received 10% of the issued and outstanding shares of the purchasing company in the transaction.



Consolidation-the accompanying consolidated financial statements include the accounts of the company and its wholly owned subsidiaries.  All significant inter-company balances have been eliminated.



Use of Estimates- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make reasonable estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses at the date of the financial statements and for the period they include.  Actual results may differ from these estimates.



Revenue Recognition-Brokeragerevenues from on-line retail yacht sales are recognized upon the completion of the transaction.



Cash and interest bearing deposits- For the purpose of calculating changes in cash flows, cash includes all cash balances and highly liquid short-term investments with an original maturity of three months or less.



Accounts receivable- The Company provides, through charges to income, a charge for bad debt expense, which is based upon management's evaluation of numerous factors.  These factors include economic conditions, a predictive analysis of the outcome of the current portfolio and prior credit loss experience, and the degree to which the receivable is secured by liens on assets.



7

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Property & Equipment-Office and computer equipment are stated at cost. Depreciation expense is computed using the straight-line method over the estimated useful life of the asset. The following is a summary of the estimated useful lives used in computing depreciation expense:



Office equipment

3 years

Computer hardware

3 years

Software

3 years





Expenditures for major repairs and renewals that extend the useful life of the asset are capitalized.  Minor repair expenditures are charged to expense as incurred.



Long Lived Assets- The Company reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.



Income taxes-The Company accounts for income taxes in accordance with the Statement of Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income Taxes".  SFAS No. 109 requires an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income tax assets and liabilities are computed annually for differences between financial statement and income tax bases of assets and liabilities that will result in taxable income or deductible expenses in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amount expected to be realized.  Income tax expense is the tax payable or refundable for the period adjusted for the change during the period in deferred tax assets and liabilities.



Comprehensive Income - Effective July 1, 1998, the Company adopted SFAS No. 130, Reporting Comprehensive Income.  SFAS No. 130 requires that, as part of a full set of financial statements, entities must present comprehensive income, which is the sum of net income and other comprehensive income.  Other comprehensive income represents total non-stockholder changes in equity.  The Company has included its presentation of comprehensive income in the accompanying consolidated statements of stockholders equity.

Foreign Currency Translation -Balance sheet accounts of the Companys foreign operations are translated at the exchange rate in effect at year-end and income statement accounts are translated at the average exchange rate prevailing during the year.  Gains and losses arising from the translation of foreign subsidiary financial statements are included in other comprehensive income.

Discontinued Operations- The business operations of the PSI were discontinued through a formal plan of disposal by management in December 2003. The business activity of the subsidiary is summarized in the balance sheet as net liability from discontinued operations and in the statement of operations as loss from discontinued operations.



2. Going Concern Considerations



The accompanying financial statements have been presented in accordance with generally accepted accounting principals, which assume the continuity of the Company as a going concern.  However, during the twelve months ending December 31, 2003 and in the prior fiscal year, the Company has experienced, and continues to experience, certain going concern issues related to profitability.



8

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Managements plans with regard to this matter are as follows:



- Raise capital to develop new contracts and sales for the marine retail segment.

- Acquire proved developed oil and gas reserves with revenues at best negotiated discount to market.

- Obtain a credit facility based in part on the value of business operations.



3. Net Loss per Share



The Company applies SFAS No. 128, Earnings per Share. In accordance with SFAS No. 128, basic net loss per share has been computed based on the weighted average of common shares outstanding during the year. Diluted net loss per share gives the effect of outstanding common stock warrants convertible into common stock. The treasury stock method is used to calculate the dilutive effect of stock options outstanding.



Warrants to purchase 4,200,000 shares of common stock were outstanding at June 30, 2004.  In addition, the Company issued convertible debt in April 2004.  The Company received proceeds $500,000 and issued unsecured convertible debt at 1% due in April 2009.  The debt is convertible into 16,000,000 shares of common stock.  The common stock equivalents of the warrants outstanding and the convertible debt are not included in the computation of loss per share because their effect would be antidilutive.



Net loss per common share has been computed as follows:



|                                      |  |              |         | 30-Jun-04  |         | 30-Jun-03
|------------------------------------- |  | ------------ | ------- | ---------- | ------- | ---------
|                                      |  |              |         |            |         |          
|Net loss from continuing operations   |  | ($1,476,207) |         | ($59,888) 
|                                      |  |              |         |            |         |          
|Net loss from discontinued operations |  | $0           |         | $0        
|                                      |  |              |         |            |         |          
|Total shares outstanding              |  | 43,376,668   |         | 13,827,812
|                                      |  |              |         |            |         |          
|Weighted average                      |  | 39,018,718   |         | 13,827,812
|                                      |  |              |         |            |         |          
|Loss from continuing operations       |  | ($0.04)      |         | ($0.00)   
|Loss from discontinued operations     |  | 0.00         |         | 0.00      
|Loss per share                        |  |              | ($0.04) |            | ($0.00)
|                                      |  |              |         |            |         |          



Options outstanding at June 30, 2004 are as follows.



|                               |           |           |  |       |  |           |  | Wgtd Avg       |  | Wgtd Years 
|------------------------------ | --------- | --------- |  | ----- |  | --------- |  | -------------- |  | -----------
|                               |           |           |  |       |  | Amount    |  | Exercise
Price |  | to
Maturity
|                               |           |           |  |       |  |           |  |                |  |            
|Outstanding at January 1, 2004 | 4,600,000 |           |  |       | 
|                               |           |           |  |       |  |           |  |                |  |            
|Issued                         |           |           |  |       |  | 0         |  |                |  |            
|Expired                        |           |           |  |       |  | (400,000) |  |                |  |            
|                               |           |           |  |       |  |           |  |                |  |            
|Outstanding at June 30, 2004   |           | 4,200,000 |  | $0.96 |  | 3.14     



9

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4. Common Stock Transactions



During the six months ended March 31, 2004, the Company issued 5,687,700 shares of common stock to pay $238,589 of accrued consulting fees and current consulting fees of $644,150.



In April and May 2004, holders of the convertible debt elected to convert $16,000 of the debt to 1,600,000 shares of common stock.



5. Property and Equipment



A summary of property and equipment at June 30, 2004 is as follows.



|Web site and software        |  |  |  | $1,540,000
|---------------------------- |  |  |  | ----------
|Office equipment & furniture |  |  |  | 24,833    
|Accumulated depreciation     |  |  |  | (211,867) 
|                             |  |  |  |           
|Net property & equipment     |  |  |  | $1,352,966
|                             |  |  |  |           

6.  Litigation



The Company is involved in a collection matter in Federal Court in the Western District of the State of Texas, Midland-Odessa Division, Case # M0-04-CV-026. The case is titled Baseline Capital, Inc., a Texas Corporation vs. Energy Producers, Inc., A Nevada Corporation. The amount claimed is $150,000.00. The Company reported it had been granted and extension to file and answer and entered into settlement negotiations with the Plaintiff, however at June 30, 04 the Company was unsuccessful and believes this is due to and that there are factors of significant interference by third parties. The Company is informed and believes that the property was sold to an entity that appears to be controlled by the same individual that defaulted on all of its obligations in the original purchase agreement on the oil property in Young County Texas with the Company; breached a three (3) million dollar stock purchase funding agreement, and circumvented the Company in vast material respects.  The default in the 3 million dollar funding caused the Company to lose the property. The Company is intending to take appropriate actions to re dress the wrongs.



7.  Convertible Debt



In April 2004, the Company received proceeds $500,000 and issued unsecured convertible debt at 1% due in April 2009.  The debt is convertible into 16,000,000 shares of common stock.  As a result of the transaction, the Company allocated $422,783 of the proceeds received to additional paid in capital as a beneficial conversion feature.  The beneficial conversion feature is being amortized to interest expense using the effective interest method over the life of the debt.



10

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The balance of the convertible debt on the balance sheet is as follows:



|Proceeds received             |  |  |           | $500,000
|----------------------------- |  |  | --------- | --------
|                              |  |  |           |         
|Beneficial conversion feature |  |  | (422,783)
|                              |  |  |           |         
|Converted debt to shares      |  |  |           | (16,000)
|                              |  |  |           |         
|Allocated to interest expense |  |  | 90,364   
|                              |  |  |           |         
|Net payable                   |  |  |           |         



8. Debt



|The following is a listing of notes payable at June 30, 2004                                |  |         
|------------------------------------------------------------------------------------------- |  | --------
|                                                                                            |  |         
|Unsecured note issued to an unaffiliated individual in March 2002                           |  |         
|at 10% due in March 2003.  The note is currently in default                                 |  | $3,000  
|                                                                                            |  |         
|Total note payable                                                                          |  | $3,000  
|                                                                                            |  |         
|The following is a listing of notes payable and advances from
shareholders at June 30, 2004 |  |         
|                                                                                            |  |         
|Unsecured notes due to a shareholder due on demand interest rates                           |  |         
|ranging from 12% to 18%                                                                     |  | $145,025
|                                                                                            |  |         
|Unsecured notes due to a shareholder due on demand interest at 12%                          |  | 29,500  
|                                                                                            |  |         
|Unsecured note due to a shareholder due on demand interest at 12%                           |  | 4,000   
|                                                                                            |  |         
|Unsecured note due to a shareholder due on demand interest at 18%                           |  | 10,000  
|                                                                                            |  |         
|Unsecured note payable due on demand at interest of 9.50% due to                            |  |         
|a shareholder and officer of the Company                                                    |  | 245,000 
|                                                                                            |  |         
|Unsecured note payable due on demand at interest of 10% due to                              |  |         
|a shareholder of the Company                                                                |  | 17,000  
|                                                                                            |  |         
|Unsecured advances to shareholders and officers of the                                      |  |         
|Company with interest imputed at 10%                                                        |  | 299,397 
|                                                                                            |  |         
|                                                                                            |  |         
|Total advances and note payable to shareholders                                             |  | $749,922



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9. Income Tax Provision



|Provision for income taxes is comprised of the following:                                                |  |  |              |            
|-------------------------------------------------------------------------------------------------------- |  |  | ------------ | -----------
|                                                                                                         |  |  |              |            
|Net loss before provision for income taxes                                                               |  |  | ($1,476,207) |            
|                                                                                                         |  |  |              |            
|Current tax expense:                                                                                     |  |  |              |            
|Federal                                                                                                  |  |  |              |            
|State                                                                                                    |  |  |              |            
|Total                                                                                                    |  |  |              |            
|                                                                                                         |  |  |              |            
|Less deferred tax benefit:                                                                               |  |  |              |            
|Timing differences                                                                                       |  |  |              |            
|Allowance for recoverability                                                                             |  |  |              | 1,342,647  
|Provision for income taxes                                                                               |  |  |              | $0         
|                                                                                                         |  |  |              |            
|A reconciliation of provision for income taxes at the statutory rate to provision                        |  | 
|for income taxes at the Company's effective tax rate is as follows:                                      |  |  |             
|                                                                                                         |  |  |              |            
|Statutory U.S. federal rate                                                                              |  |  |              | 34%        
|Statutory state and local income tax                                                                     |  |  | 10%          |            
|Less allowance for tax recoverability                                                                    |  |  | -44%         |            
|Effective rate                                                                                           |  |  |              |            
|                                                                                                         |  |  |              |            
|Deferred income taxes are comprised of the following:                                                    |  |  |              |            
|                                                                                                         |  |  |              |            
|Timing differences                                                                                       |  |  |              |            
|Allowance for recoverability                                                                             |  |  |              | (1,342,647)
|Deferred tax benefit                                                                                     |  |  |              |            
|                                                                                                         |  |  |              |            
|Note:  The deferred tax benefits arising from the timing differences begin to expire in fiscal year 2010
|and may not be recoverable upon the purchase of the Company under current IRS statutes.                 



12

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



The Company was incorporated in the State of Nevada October 1995 as Sterling Market Positions, Inc. Effective June 24, 1999 the Company changed its name to Energy Producers, Inc.



In August 1999 the Company acquired by Energy Producers Group Inc. and its wholly owned subsidiary, Producers Supply, Inc.(PSI), an oil and gas service company located in Stephens, Arizona.  PSI was discontinued by management in fiscal year 2003.



Since August 1999, the Company has focused its activities on oil and gas exploration and development and production and acquisition of existing production facilities with proven reserves.  In November 2003, the Company sold its interest in its oil wells it had acquired since August 1999.



In November 2003, the Company acquired all of the issued and outstanding shares of International Group Holdings Inc. (IGHI) by issuing 17,015,156 shares of common stock.  IGHI became a wholly owned subsidiary of the Company.  IGHI is the owner of International Yacht Sales Group Ltd. (IYSG), a UK based on-line broker of luxury yachts, and other entities.  IYSG began its operations in April 2003.  In January 2004, the Company sold IGHI and its subsidiaries to another company.  However, the Company retained 100% of IYSG and received 10% of the issued and outstanding shares of the purchasing company in the transaction.



General Statement: Factors that may affect future results



With the exception of historical information, the matters discussed in Management's Discussion and Analysis of Financial Condition and Results of Operations contain forward looking statements under the 1995 Private Securities Litigation Reform Act that involve various risks and uncertainties.  Typically, these statements are indicated by words such as "anticipates", "expects", "believes", "plans", "could", and similar words and phrases.  Factors that could cause the company's actual results to differ materially from management's projections, forecasts, estimates and expectations include but are not limited to the following:



* Inability of the company to secure additional financing



* Unexpected economic changes in the United States



* The imposition of new restrictions or regulations by government agencies that affect the Company's business activities.



To the extent possible, the following discussion will highlight the activities of the Companys business activities for the quarters ended March 31, 2003 and March 31, 2004.



I. Results of Operations



Comparison of operating results (Six Months)



The Company had revenues of $320,714 for the six month period in 2004 as compared to $159,202 for the same period in 2003.  Management continues to expect sales revenues to grow as the service offered by the Company obtains greater awareness among the electronic commerce community.  The gross margin on sales increased slightly to 80% in 2004.  Management expects gross profits to remain stable at 80% for the coming year.  Net revenues for the period were $258,015 as compared to $116,306 for the same period in 2003.



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General and administrative expense for the period increased significantly to $1,546,764 compared to $245,358 for the same period in 2003.  Most of the increase was due to professional and consulting fees associated with the Companys on-going litigation and for consulting fees associated with the Companys endeavors to secure financing and investigation of acquiring profitable businesses.  During the six months ended March 31, 2004, the Company issued 5,687,700 shares of common stock to pay $238,589 of accrued consulting fees and current consulting fees of $644,150.  Consulting and professional fees increased approximately $1,100,000 in 2004 over 2003.



After deducting general and administrative costs, the Company experienced a loss from operations of $1,288,749 for the first six months of fiscal 2004 compared to an operating loss of $129,052 for the same period last year.



Interest expense increased in 2004 to $222,361 compared to $78,811 for the same period last year.  Most of the increase in interest is due to the issuance of the debentures in April 2004.  In April 2004, the Company received proceeds $500,000 and issued unsecured convertible debt at 1% due in April 2009.  The debt is convertible into 16,000,000 shares of common stock.  As a result of the transaction, the Company allocated $422,783 of the proceeds received to additional paid in capital as a beneficial conversion feature.  The beneficial conversion feature is being amortized to interest expense using the effective interest method over the life of the debt. During the six months ended June 30, 2004, the Company amortized $90,364 of the beneficial conversion feature to interest expense.  In addition, other unsecured loans, mostly from shareholders, at interest rates ranging from 12% to 18%, have increased over last year by approximately $300,000.



Net loss for the first sixth months of June 2004 was $1,476,207, or $0.04 per share compared to a loss of $59,888, or $0.00 per share for the same period last year.



Comparison of operating results (Three Months)



The Company had revenues of $320,506 for the three month period in 2004 as compared to $71,201 for the same period in 2003.  Management continues to expect sales revenues to grow as the service offered by the Company obtains greater awareness among the electronic commerce community.  Net revenues for the period were $305,473 as compared to $52,697 for the same period in 2003.



General and administrative expense for the quarter increased significantly to $1,075,261 compared to $126,145 for the same period in 2003.  Most of the increase was due to professional and consulting fees associated with the Companys on-going litigation and for consulting fees associated with the Companys endeavors to secure financing and investigation of acquiring profitable businesses.



After deducting general and administrative costs, the Company experienced a loss from operations of $769,788 for the quarter compared to an operating loss of $73,448 for the same period last year.



Interest expense increased in the second quarter 2004 to $206,785 compared to $44,978 for the same period last year.  Most of the increase in interest is due to the issuance of the debentures in April 2004.  In April 2004, the Company received proceeds $500,000 and issued unsecured convertible debt at 1% due in April 2009.  The debt is convertible into 16,000,000 shares of common stock.  As a result of the transaction, the Company allocated $422,783 of the proceeds received to additional paid in capital as a beneficial conversion feature.  The beneficial conversion feature is being amortized to interest expense using the effective interest method over the life of the debt. During the six months ended June 30, 2004, the Company amortized $90,364 of the beneficial conversion feature to interest expense.  In addition, other unsecured loans, mostly from shareholders, at interest rates ranging from 12% to 18%, have increased over last year by approximately $300,000.



14

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Net loss for the second quarter 2004 was $941,670, or $0.02 per share compared to a gain of $29,549, or $0.00 per share for the same period last year.



Discussion of Financial Condition: Liquidity and Capital Resources



At June 30, 2004 cash on hand was $306,687 as compared with $45,155 at December 31, 2003.  During the period the Company received $500,000 by issuing convertible debentures.  The Company used the proceeds to pay $18,198 of outstanding debt, $18,758 to purchase equipment, and $202,512 (net of $249,981 of services received from the shareholders) for operations.



The Company does not expect any material capital expenditures for the balance of fiscal 2004.



At June 30, 2004, the Company had working capital deficit of $987,037 compared to a working capital deficit of $1,336,012 at December 31, 2003. Working capital increased mainly as a result of issuing long term convertible debt for cash of $500,000.



Total assets at June 30, 2004 were $2,089,874 as compared to $1,758.790 at December 31, 2003.



The Company's total stockholders' equity decreased $102,917 from December 31, 2003 to $214,404 at June 30, 2004.  Stockholders equity decreased by $1,049,607 from operating losses for the six months ended June 30, 2004. In addition, the Company issued 5,703,700 shares of common stock valued at $461,036 to consultants for services rendered.  Holders of the convertible debt converted $16,000 of that debt to common shares during the second quarter of 2004.  The Company issued $500,000 of convertible debt in April 2004 and allocated $422,783 of the proceeds to stockholders equity because the debt contained a common stock conversion feature beneficial to the holders of the debt.  Finally, the Company recognized a gain of $46,871 from translating its British based assets to US dollars at June 30, 2004.



Item 3.  CONTROLS AND PROCEDURES



Our Chief Executive Officer and Chief Financial Officer have evaluated as of the last day of the period covered by this report, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 15d-15 under the Securities Exchange Act of 1934).  This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial officer. Based on this evaluation, these officers have concluded that the design and operation of our disclosure controls and procedures are effective.



Disclosure  controls and procedures are our controls and other  procedures  that are  designed to ensure that  information  required to be disclosed by us in the reports that we file or submit  under the  Exchange Act is recorded,  processed, summarized  and reported,  within the time periods  specified in the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls  and  procedures  designed  to ensure that  information  required to be disclosed  by us in the reports that  we file under the Exchange Act is accumulated and communicated to our management,  including  principal  executive officer and principal financial  officer, as appropriate,  to allow timely decisions regarding required disclosure.



There were no changes in the Company's internal control over financial reporting (as defined in Rule 13a-15 under the Securities Act of 1934) during the quarter ended June 30, 2004 that has  materially  affected, or is reasonably  likely to materially affect, the Company's internal control over financial reporting.



15

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PART II. OTHER INFORMATION



Item 1 - LEGAL PROCEEDINGS



The Company is involved in a collection matter in Federal Court in the Western District of the State of Texas, Midland-Odessa Division, Case # M0-04-CV-026. The case is titled Baseline Capital, Inc., a Texas Corporation vs. Energy Producers, Inc., A Nevada Corporation. The amount claimed is $150,000.00. The Company reported it had been granted and extension to file and answer and entered into settlement negotiations with the Plaintiff, however at June 30, 2004 the Company was unsuccessful and believes this is due to and that there are factors of significant interference by third parties. The Company is informed and believes that the property was sold to an entity that appears to be controlled by the same individual that defaulted on all of its obligations in the original purchase agreement on the oil property in Young County Texas with the Company; breached a three (3) million dollar stock purchase funding agreement, and circumvented the Company in vast material respects.  The default in the 3 million dollar funding caused the Company to lose the property. The Company is intending to take appropriate actions to re dress the wrongs.



Item 2 - CHANGES IN SECURITIES



In Q2, 2004, the Board of Directors and or Compensation and Stock Option Committee of the Company approved the following issuances or subscriptions of restricted stock to the following persons. The shares were issued pursuant to a private placement and carried a rule 144 legend. The shares were issued pursuant to an exemption from registration as provided in Section 4(2) of the Securities Act of 1933.



Share

Type of

Fair Market Value

Name

Date

Amount

Consideration

of Consideration



CC Consulting

9899 Santa Monica Blvd. (1)

6/01/04

500,000

Business

$   35,000

Beverly Hills, CA 90212

Advisory



Dennis R. Alexander  (2)

4/01/04

2,000,000

Bonus Award

$ 320,000

6564 Smoke Tree Lane

Town of Paradise Valley

Arizona 85253



Gregg Fryett (3)

4/01/04

1,000,000

Bonus Award

$ 160,000

50 Reddenhill Rd.

Torquay TQ13RR

UK



Tony Broughton (4)

6/09/04

195,000

Business

$  17,550

25 Valley View

Consultant

Poole Dorset

BHR SEP UK



16

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Anzelina Lechner (5)

6/09/04

20,000

Business

$   1,800

VYTuRIO 7-37

Consultant

Lithuania Lietouh

Klaideda 95188



Blue Bottle (6)

6/09/04

35,000

Business

$  3,150

6th Floor Max City Bldg.

Consultant

621 Remy Ollier St.

Port Lewis

Mauritiuw





(*) $645,550 of the financing proceeds in the immediately preceding table were used primarily for business consulting and advisory services, and bonus awards.



(1) CC Consulting in not an affiliate, officer or director of the Company

(2) Dennis R. Alexander is President and Director of the Company in Q2 04.

(3) Gregg Fryett is CEO of the Company in Q2 04.

(4) Tony Broughton is not an affiliate, officer or director of the Company.

(5) Anzelina Lechner is not an affiliate, officer or director of the Company.

(6) Blue Bottle is not an affiliate, officer or director of the Company.



Item 3 - DEFAULTS UPON SENIOR SECURITIES



None.



Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



Please see our 14C Definitive Information Statement Re: Annual Meeting filed with the commission on June 9, 2004, containing information on shareholder consents obtained in lieu of meeting April 27, 2004 listed in the Definitive Information Statement.



Please see our 8K Current Report items 1,2,5, and 7 filed with the commission on July 16, 2004, containing information on shareholder majority consents obtained in lieu of meeting June 17, 2004 listed in item 5 of the report.



Item 5 - OTHER INFORMATION:



We are in negotiation with various potential merger partners to expand the asset base of the corporation. If a merger transaction is closed, the Registrant will report the event on a Form 8-K.



Please see our 8K Current Report items 1, 2, 5, and 7 filed with the commission on July 16, 2004.



17

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Item 6 - EXHIBITS AND REPORTS ON FORM 8-K



(a)      Exhibits



Exhibit No.    Description



3.6

Articles of Amendment to the Registrants Articles of Incorporation



31.1           CEO Certification Pursuant to Section 302



31.2           CFO Certification Pursuant to Section 302



32.1           CEO Certification Pursuant to Section 906



32.2           CFO Certification Pursuant to Section 906



(b)

Reports on Form 8-K





Current  Report on Form 8-K filed April 7, 2004 discussing instructions from NASDAQ regarding the Registrant's ("EGPI") share exchange with International Group Holdings, Inc. (IGHI).





Current  Report (Amendment No. 5) on Form 8-K/A  which provided the financial statements of International Yacht Sales Group, Ltd. and pro forma financial statements of Energy Producers, Inc. required by Item 7.





SIGNATURE



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



ENERGY PRODUCERS, INC.





/s/ Gregg Fryett

By:     Gregg Fryett

Title:  CEO



Date:  August 9th, 2004



18

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