SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002.

                         Commission File Number 0-30472

                               PIONEER OIL AND GAS
           (Name of small business issuer as specified in its charter)

               Utah                                          87-0365907
   (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                        Identification Number)

                     1206 West South Jordan Parkway, Unit B
                          South Jordan, Utah 84095-5512
                    (Address of principal executive offices)

                                 (801) 566-3000
                (Issuer's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities  registered  pursuant to Section 12(g) of the Act:  Common Stock (Par
Value $.001 Per Share)

Indicate by check mark whether the issuer (1) has filed all reports  required to
be filed by  Section 13 or 15(d) of the  Exchange  Act during the past 12 months
(or for such  shorter  period  that the  registrant  was  required  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.  Yes X No____  Check if there is no  disclosure  of  delinquent  filers in
response to Item 405 of Regulation SB contained in this form, and no disclosures
will be contained,  to the best of  registrant's  knowledge,  in any  definitive
proxy or  information  statement  incorporated  by reference in Part III of this
Form 10-KSB or any amendments to this Form 10 KSB [ ]

Indicate by check mark  whether the issuer has filed all  documents  and reports
required  to be filed by Section 12, 13 or 15(d) of the  Exchange  Act after the
distribution of securities under a plan confirmed by a court. Yes X No__


The issuer's revenues for its most recent fiscal year were $909,321.

The  aggregate  market value on September  30th,  2002, of common shares held by
non-affiliates was approximately  $1,285,764 based on the average of the closing
bid and asked prices of the  registrant's  common shares on such date, as quoted
by the National Quotation Bureau.

As of September  30th,  2002, the issuer had 7,961,618  shares of its $0.001 par
value common stock issued and outstanding.

Transitional Small Business Issuer Disclosure Format    Yes ____   No X

<PAGE>


SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995

Except for the historical information contained herein, the matters discussed in
this 10KSB are forward-looking statements which involve risks and uncertainties,
including but not limited to economic,  competitive,  political,  regulatory and
governmental factors affecting the company's revenues,  operations,  markets and
prices,  properties and other factors discussed in the Company's various filings
with the Securities and Exchange Commission.

                                     PART I

ITEM 1 - BUSINESS

HISTORY AND OVERVIEW

Pioneer Oil and Gas (the  "Company") was organized on October 16, 1980 under the
laws of the State of Utah. The Company's  principal place of business is located
at 1206 West  South  Jordan  Parkway,  Unit B, South  Jordan,  Utah  84095.  The
Company's  telephone  number is  (801)566-3000  and the  Company's fax number is
(801)446-5500.  The Company has primarily  been engaged in the  acquisition  and
exploration of oil and gas properties in Utah, Wyoming, Colorado and Nevada.

The Company  filed a Chapter 11  bankruptcy  petition  on February  19, 1997 and
filed an Amended  Plan of  Reorganization  (the  "Plan") on June 11,  1998.  The
United States  Bankruptcy Court for the District of Utah,  Central Division (the
"Court")  entered an order  approving the Plan on August 5, 1998. The Order that
granted the final decree was entered into on November 6, 1998. Twenty days after
the Order was mailed on November 26, 1998, the Company emerged from bankruptcy.

Prior to the Plan's  implementation,  the Company in June of 1998  effected a 10
for 1 reverse stock split of the Company's common shares to allow the Company to
raise  capital  from the sale of new shares to existing  shareholders.  The Plan
implemented  by the Company and approved by the Court  combined the sale of some
of the  Company's  assets  along with the sale of its common  shares to existing
shareholders.  The  capital  raised  by the  Company  was used to pay  unsecured
creditors  100%  of the  first  $500  of any  unsecured  creditor's  claim  plus
approximately 5.0% of the claim above $500.00.  The Company's  principal secured
creditor  Zions  Bank (the  "Bank")  agreed to the Plan  based on the Bank being
repaid the full  amount owed by the  Company to the Bank by  December  1999.  In
September of 1999 the Company  completed  the sale of several of its oil and gas
assets and  retired all the debt owed the Bank.  Since  September  of 1999,  the
Company has used its $750,000  credit line with Zions Bank as needed to fund day
to day operations.

<PAGE>

RECENT DEVELOPMENTS:

Since September 1999, the Company has been focusing on developing  prospects for
the  exploration  of oil and gas and  continuing  the  operations of its current
producing oil and gas  properties.  During the last fiscal year ended  September
30,  2002,  the Company  acquired  approximately  37,000  acres in Duchesne  and
Wasatch  Counties,  Utah for its  overpressured  gas  prospect.  The  Company is
currently  marketing the prospect to outside industry  partners for development.
The prospect could contain significant  natural gas reserves,  as much as 12 TCF
(trillion cubic feet). However, this prospect contains significant risk and even
if the  gas is  present  it may  not  be  commercially  extractable.  Commercial
viability depends on many factors including the porosity and permeability of the
reservoir rock (if present) as well as drilling and completion costs.

The Company is also  attempting to sell an oil and gas prospect in the Northwest
Sheldon Dome Field in Fremont County,  Wyoming,  a coal bed methane  prospect in
Carbon County,  Wyoming, a coal bed methane prospect in Carbon County, Utah, the
Yankee Mine West Prospect in White Pine County Nevada and an oil prospect in Nye
County,  Nevada.  During the last year the Company has  increased  the amount of
undeveloped  oil and gas leases it holds from  72,012  gross acres on 9/30/01 to
100,815 gross acres on 9/30/02. (See "Wells and Acreage").

During the fiscal year the Company also spent  approximately  $100,000 improving
the Climax 7-2 well by repairing casing leaks in the well.

The  Company has also been  involved in a 3D seismic  project in Texas that will
cause the  Company  to expend  funds  during  the  current  year in  prospective
drilling on prospects identified on 3D seismic. The Company owns a 1.65% working
interest  in the 3D  seismic  venture in Texas and  already  has  commenced  the
drilling of the first well on the 3D seismic venture.  The Company operates in a
highly  competitive  industry  wherein many companies are competing for the same
finite resources as the Company.

THE BUSINESS

The Company has focused  its  efforts  over the years in  acquiring  oil and gas
properties from other companies,  selling  producing wells and acquiring new oil
and gas leases for the purpose of  exploring  for oil and gas.  Leases have also
been  acquired  over the years for the purpose of reselling  them at a profit to
other oil and gas companies.

Most of the  Company's  present  production  from  oil and  gas  properties  was
acquired  from large oil  companies  selling  properties  they  considered to be
marginal  producers.  The Company has found that it can operate these properties
at a profit.  Presently,  the Company  operates 9 producing oil and gas wells in
Utah and Wyoming.

The Company also owns an interest in several  non-operated oil and gas wells and
overriding royalty interests in oil and gas wells located in Utah, Colorado, and
Wyoming. An overriding royalty interest,  is an interest in a well that receives
a  percentage  of the  production  from  a well  without  paying  any  operation
expenses.

<PAGE>

The Company over the last 3 years has focused most of its exploration efforts in
the Rocky Mountain area, and in acquiring  leasehold positions in trend areas of
existing  production.  Prior  to  leasing  an area a  geological  review  of the
prospective  area is made by the Company's  staff to determine the potential for
oil and gas. If an area is  determined  to have promise the Company will attempt
to acquire oil and gas leases over the  prospective  area. The Company will then
acquire  geophysical  data  (generally  seismic  and  gravity  data) to  further
evaluate the area.  After the  evaluation of the  geophysical  data, if the area
appears to contain  significant  accumulations  of oil and gas in the  Company's
opinion  for the area,  the Company  will  market a drilling  program to outside
investors  covering  the  Company's  leases or sell the leases  with the Company
retaining an overriding royalty interest.  Significant  accumulations  cannot be
quantified because it depends on many factors such as how much it costs to drill
and complete wells in a certain area, how close the wells are to pipelines, what
the price of oil or gas is, how accessible the area is, whether the project is a
developmental or wildcat project,  what the cost of oil and gas leases are in an
area,  the type of return  investors  are seeking at that time in the  different
exploration   areas,   and  many  other   geological,   geophysical   and  other
considerations.

When the  Company  markets a drilling  program it sells a portion of its oil and
gas leases over the  prospect  area along with  obtaining a drilling  commitment
from the parties  purchasing  the leases to drill a well on the prospect area. A
drilling  program will  generally  allow the Company to recoup its investment in
the area with the Company also retaining an ongoing  interest in new wells to be
drilled in the area.

The Company markets its drilling programs to other industry  partners.  Drilling
programs have been marketed by placing ads in industry journals, attending trade
shows and by traveling to the offices of prospective  partners. In the past, the
Company has sold drilling programs to major oil companies and large independents
and occasionally to individuals.

COMPETITION

The oil and gas business is highly  competitive.  The Company  competes  against
numerous  other  companies,  both  major and  independents,  many  with  greater
financial  resources and larger staffs than those  available to the Company.  In
the area that the Company  competes there are over 100  competitors  with no one
competitor dominating the area. The Company believes it can successfully compete
against other  companies by focusing its efforts in the Rocky  Mountain area and
by  pursuing  oil and gas  prospects  that it develops  internally  with its own
staff. The Company has also been able to successfully compete in the past for
leases in areas that it has accumulated geological and geophysical data.

MARKETABILITY

The  products  sold by the Company,  natural gas and crude oil, are  commodities
desired by many companies and the Company is frequently  contacted regarding the
sale of its  products.  The Company  sells all of its oil on 30 day contracts to
companies willing to pay the highest price. Although, at anytime the Company may
be selling 10% or more of its crude oil to one  purchaser,  such a purchaser  is
not  material  to the Company  since if that  purchaser  fails to  purchase  the
Company's  oil for any reason the Company  can  readily  sell the oil to another
party at a price close to what was paid by the former purchaser.

<PAGE>

Presently,  the marketability of the Company's crude oil has not posed a problem
for the  Company.  Crude oil can be easily  sold  wherever it is produced in the
states that the Company operates subject to the  transportation  cost. The crude
oil produced by the Company is  transported  either by trucking or pipeline.  On
the other hand,  natural gas can be more difficult to sell since  transportation
requires a pipeline.  In the areas that the Company is  presently  pursuing  new
drilling  activity for natural gas,  other  companies  have been delayed up to a
year because of the unavailability of a pipeline. No assurance can be given that
natural gas wells  drilled by the  Company  will be placed on line within a year
after the well is drilled and completed.

BUSINESS RISKS

Oil and gas exploration and drilling involves a high degree of risk. Oil and gas
prices are subject to  fluctuations  and, as a consequence,  no assurance can be
given that oil and gas prices will decrease, increase or remain stable. There is
no assurance that wells drilled on behalf of the Company will obtain  production
or that even if production is obtained,  such production will allow the recovery
of all or any part of the investment made by the Company in a well.

There are other risks inherent in the oil and gas industry that are  encountered
in drilling,  completing,  and producing oil and gas wells.  These risks include
unusual or unexpected  formations,  pressures or other conditions,  blowouts and
environmental  pollution.  The  Company  may incur  losses due to  environmental
hazards  against which it cannot insure or which it elects not to insure against
because  of high  premium  costs or  other  reasons.  Consequently,  substantial
uninsured  liabilities  to third  parties may arise,  the payment of which could
result in significant losses to the Company.

The Company carries  comprehensive general liability in the amount of $5,000,000
with a financially  sound and reputable  insurance company and covers such risks
that are usually carried by companies  engaged in the same or a similar business
and similarly  situated.  However,  the Company  usually does not insure against
environmental  hazards such as blow out of wells or  environmental  hazards in a
prior chain of title.  The cost of such insurance in many cases is  prohibitive.
These  types of risks are  extraordinary  events and are not  generally  covered
under a normal liability insurance policy for an oil and gas company.

Governmental regulation is a significant business risk of an oil and gas company
because the industry becomes more regulated with time. The Company is subject to
federal,  state and local  laws,  regulations  and  ordinances  relating  to the
production and sale of oil and gas. Some of the laws that the Company is subject
to include the Clean Air Act, the Clean Water Act, and  Endangered  Species Act.
For example,  coal bed methane  wells are being highly  regulated  for disposing
produced  fresh water on the surface.  The EPA is requiring that the fresh water
meet more  stringent  standards  than before,  which  ultimately may require the
water be injected  underground.  Reinjecting the water will increase the cost of
production and in some cases make the drilling of wells uneconomical.

Environmental   regulations  and  taxes  imposed  by  state   governments  in  a
jurisdiction  wherein  producing  oil and gas  properties  are located  impose a
significant burden on the cost of production.  Severance and ad valorem taxes in
Wyoming can amount to approximately 14% of the Company's gross production and if
the property is located on a  Reservation  the total tax burden by  governmental
entities  can  amount  to as much as 22% of the gross  production.  Governmental
regulation may also delay drilling in areas that have endangered species. Delays
in  drilling  in the past have not imposed a  significant  cost to the  Company;
however,  no  assurance  can be given that in the future the delays  will not be
more expensive.

<PAGE>

In the oil and gas industry  there is always a possibility  that there will be a
shortage of drilling rigs,  casing pipe or other  material not being  available,
when needed for drilling,  completing or operating  wells.  To date, the Company
has not encountered any significant difficulties in the areas it has operated or
intends to operate in the future,  however,  no assurance can be given that this
condition will remain unchanged.

OBLIGATIONS AND CONTINGENCIES

The Company is liable for future  restoration and abandonment  costs  associated
with its oil and gas properties. These costs include future site restoration and
plugging costs of wells.  The cost of future  abandonment of producing wells has
not been  determined.  Management  believes  that  these  costs  will not have a
material adverse effect upon its financial position or results of operations.

OTHER

The Company had a total of four full-time employees as of September 30, 2002.

All of the  company's  revenues  during the last fiscal year were  derived  from
domestic sources.

ITEM 2 - DESCRIPTION OF PROPERTY

The Company owns an interest in 9 currently  producing oil and gas wells located
in Utah and Wyoming.

The Company  attempts to maintain  all of its  operating  wells in good  working
condition.  Wells  operated by the Company  are  generally  overseen by contract
pumpers  familiar  with the oil and gas  business  in the area  that the well is
located.

The operated wells are secured by the Company's  line of credit.  Other than the
line of credit by Zions Bank the  operated oil and gas wells of the Company have
no other liens or encumbrances.

The Company owns a small  interest in more than 200 other oil and gas wells that
it does not operate. The Company owns its interest in these properties either as
a working  interest  owner or as an overriding  royalty  interest  owner.  These
interests  vary from the  Company  owning an  interest  of less than a half of a
percent to as high as eight and a third percent.  The  non-operating  properties
are located  primarily  in Colorado and Wyoming.  The  non-operating  properties
account  for less  than 30% of the  Company's  total oil and gas  revenues.  The
Company  also owns  various  non-producing  oil and gas leases that it is either
attempting to sell to industry partners or develop itself.

<PAGE>

EXPLORATION AND PRODUCTION

During the fiscal years ending  September  30, 2002,  and September 30, 2001 the
Company had not  participated as a working interest owner in the drilling of any
wells.  However, the Company is now participating as a working interest owner in
the 3D  seismic  venture in Texas.  The  Company  has also had wells  drilled on
properties  in the last two fiscal years in which the Company owns an overriding
royalty interest.

The Company also plans on  participating in the drilling of other wells if it is
able to successfully market its overpressured gas project. Currently the Company
is  marketing  the  project to  several  companies  involved  in the oil and gas
industry.

PROVED RESERVES

The  following  table  sets forth the  estimated  proved  developed  oil and gas
reserves,  net to Company's interest,  of oil and gas properties as of September
30, 2002. The reserve information is based on the independent appraisal prepared
by  Fall  Line  Energy  Inc.  of  Littleton,  Colorado,  and was  calculated  in
accordance  with the  rules  and  regulations  of the  Securities  and  Exchange
Commission.  The oil price used was based on product pricing as of September 30,
2002,  the last  business day of the fiscal year.  The volume  weighted  average
wellhead  price was  determined to be  $24.76/Bbl  and  $1.10/MCF.  The wellhead
prices reflect the recent extreme price  differential  that exists between Rocky
Mountain gas and most other markets. For comparison purposes,  the average NYMEX
Henry Hub price for the same time period was $4.09/MMBTU,  the average price for
the Questar Rocky  Mountain Index was  $1.09/MMBTU,  and the average WTI Cushing
price was  $30.45/Bbl.  All  product  pricing  was held flat for the life of the
project.

                 Present Value of Estimated Future Net Revenues

Estimated Proved Reserves           Oil             Gas           Discounted at

                                                                  10% (1)
--------------------------------------------------------------------------------
                                  (MBbl)           (MMCF)                   (M$)
Proved Developed
             Operated
 Canyon State 2-36                 5.556           11.840             $   56.301
--------------------------------------------------------------------------------
 Climax 7-2                       83.021            0.000                662.996
--------------------------------------------------------------------------------
 Pilot A-1                         0.00            47.158                  5.106
--------------------------------------------------------------------------------
 Sheldon Tribal Lease (includes
-------------------------------
 31-1, 21-1, 42-1 wells)          10.989            0.000                 70.742
--------------------------------------------------------------------------------
 South Pine Ridge 7-6              0.220           52.859                 22.643
--------------------------------------------------------------------------------
 Willow Creek 29-13               11.138           20.490                124.868
--------------------------------------------------------------------------------

Non-Operated
 Mamm Creek                        0.032           29.262                 26.334
--------------------------------------------------------------------------------
 Climax Minnelusa Unit             1.813            0.000                  4.077
--------------------------------------------------------------------------------
 Hunter Mesa Unit                  3.438          530.688                323.912
--------------------------------------------------------------------------------
 Grassy Mesa Unit                  0.386           82.436                 61.677
--------------------------------------------------------------------------------
 Murdock 41-10                     1.979            0.000                 11.852
--------------------------------------------------------------------------------
Totals                           118.572          774.733             $1,370.508
--------------------------------------------------------------------------------

<PAGE>

(1)  The  oil  reserves  assigned  to  the  properties  in the  evaluation  were
determined by analyzing current test data,  extrapolating  historical production
data, and comparing  field data with the production  history of similar wells in
the  area.  The  current  volatility  of  oil  prices  provides  an  element  of
uncertainty to any  estimates.  If prices should vary  significantly  from those
projected in the appraisal, the resulting values would change substantially.

The reserve estimates  contained in the engineering report are based on accepted
engineering and evaluation principles. The present value of estimated future net
revenues,  discounted  at 10%, does not  necessarily  represent an estimate of a
fair market value for the evaluated properties.

The  reserve  estimates  contained  herein are the same as those  required to be
filed with any governmental agency.

There are numerous uncertainties inherent in estimating quantities of proved oil
reserves.  The  estimates  in the  appraisal  are based on  various  assumptions
relating  to rates of  future  production,  timing  and  amount  of  development
expenditures,  oil prices,  and the results of planned  development work. Actual
future  production  rates and  volumes,  revenues,  taxes,  operating  expenses,
development  expenditures,  and quantities of recoverable  oil reserves may vary
substantially  from those assumed in the estimates.  Any  significant  change in
these  assumptions,   including  changes  that  result  from  variances  between
projected and actual  results,  could  materially  and  adversely  affect future
reserve  estimates.  In  addition,  such  reserves may be subject to downward or
upward revision based upon production  history,  results of future  development,
prevailing oil prices, and other factors.

The  actual  amount  of  the  Company's  proved  reserves  is  dependent  on the
prevailing  price for oil,  which is beyond the Company's  control or influence.
World oil prices declined significantly during 1997 and 1998 from previous years
and increased  significantly during 1999 and 2000. In 2001 and 2002 prices again
have been extremely volatile with natural gas prices declining  significantly at
the Company's  fiscal year end.  There can be no assurance  that oil prices will
decline or increase  in the future.  Oil and gas prices have been and are likely
to continue to be volatile and subject to wide  fluctuations  in response to any
of the following  factors:  relatively minor changes in the supply of and demand
for oil and gas; market uncertainty;  political  conditions in international oil
producing regions; the extent of domestic production and importation of oil; the
level of consumer demand;  weather conditions;  the competitive  position of oil
and  gas  as  a  source  of  energy  as  compared  with  coal,  nuclear  energy,
hydroelectric  power,  and  other  energy  sources;  the  refining  capacity  of
prospective  oil purchasers;  the effect of federal and state  regulation on the
production,  transportation  and sale of oil and gas; and other factors,  all of
which are beyond the control or influence of the Company.

<PAGE>

WELLS AND ACREAGE

In the oil and gas industry and as used herein, the word "gross" well or acre is
a well or acre in which a working  interest is owned;  the number of gross wells
is the total number of wells in which a working  interest is owned. A "net" well
or acre  is  deemed  to  exist  when  the sum of  fractional  ownership  working
interests  in gross wells or acres  equals one. The number of net wells or acres
is the sum of the fractional working interests owned in gross wells or acres.

As of September  30, 2002,  the Company owned 5.87 net  productive  wells and 13
gross productive wells.

Set forth below is information  respecting the developed and undeveloped acreage
owned by the Company in Utah,  Colorado,  Nevada and Wyoming as of September 30,
2002.

             Developed Acreage              Undeveloped Acreage
             -----------------              ----------------------
             Gross       Net                Gross          Net
             ------     -------             --------      --------
             2,600      1,600               98,215        66,161

Annual rentals on all  undeveloped  leases for the fiscal year ending  September
30, 2003 are expected to be approximately $75,000.

PRODUCTION AND SALE OF OIL AND GAS

The following table summarizes certain information relating to the Company's net
oil and gas produced and from the Company's properties,  after royalties, during
the periods indicated.

                                                 Year Ended September 30,
                                                 ------------------------
                                                     2001       2002
                                                  -------    -------
Average net daily production of oil (Bbl)              38         42
Average net daily production of gas (MCF)             277        277
Average sales price of oil ($ per Bbl)             $23.29     $18.65
Average sales price of gas ($ per MCF)              $4.21      $2.01
Average lifting cost per bbl oil equiv.             $7.34      $6.91

<PAGE>

DELIVERY COMMITMENTS

The Company  sells its oil to the company  willing to pay the highest  price for
its crude  oil.  In the area that the  Company  sells its oil there are  several
different  companies  offering to purchase the Company's  oil. The Company sells
all of its crude oil on 30-day  contracts that can be terminated at anytime upon
30-day  notice by either party.  The Company has also entered into  contracts to
sell its natural gas on monthly  spot prices.  The  contracts do not require the
Company to produce or sell any quantity of gas. The contracts  only provide that
the price will be paid up to a certain  amount of gas  produced  from the wells,
which is more than the wells are currently producing. Therefore, the Company has
no  commitments  that  obligate  the Company to produce any set amount of oil or
gas.

The Company does not own the office space in which its business is located.  The
Company has moved to a new office  condominium  owned by the Company's  Board of
Directors. The Company pays less for rent than it did at its former location. To
provide more  operating  capital for the Company the Company has chosen to lease
the office space from the Company's  Board of Directors  who have  purchased the
office  condominium  themselves.  The  new  office  space  is  leased  on  terms
reasonable for the same kind of office space in the area that it is located. The
office space is 1,950 square feet with an unfinished  basement of  approximately
975 square feet. The Company's  address is 1206 West South Jordan Parkway,  Unit
B, South Jordan,  Utah 84095.  The Company's  telephone number is (801) 566-3000
and the fax number is (801) 446-5500.

ITEM 3 - LEGAL PROCEEDINGS

The  Company  may become or is subject to  investigations,  claims,  or lawsuits
ensuing  out  of the  conduct  of  its  business,  including  those  related  to
environmental  safety and health,  commercial  transactions  etc. The Company is
currently not aware of any such items,  which it believes  could have a material
adverse affect on its financial position.


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

On July 9, 2002,  the  Company  held its Annual  Meeting  of  Shareholders  (the
"Meeting"). The following matters were voted upon at the Meeting:

1. The  election  of the  Board  of  Directors  of the  Company  until  the next
shareholder meeting.

The table below sets forth the name of each nominee for Director  along with the
number of shares voting for each nominee:

                                    For the Election
                                    of the Board          Against     Abstained

   Don J. Colton                     6,855,974            49,053         100
   Gregg B. Colton                   6,855,974            49,053         100
   John O. Anderson                  6,855,974            49,053         100

<PAGE>

2. To ratify the  appointment of Jones Simkins LLP as  independent  auditors for
Pioneer Oil and Gas for the next fiscal year ending September 30, 2003.

                           For appointment of
                           Jones Simkins LLP        Against          Abstained

 Number of Shares             6,986,974              8,503              100

All matters that were brought before the shareholders at the annual meeting were
approved.

                                     PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE AND DIVIDENDS OF COMPANY

The Company is listed on the over-the-counter  market on the NASDAQ OTC Bulletin
Board. The range of high and low bid information for the shares of the Company's
stock for the last two complete  fiscal  years,  as reported by the OTC Bulletin
Board National  Quotation Bureau, is set forth below. Such quotations  represent
prices between  dealers,  do not include retail markup,  markdown or commission,
and do not represent actual transactions.

Year Ended September 30, 2002                   High               Low

First Quarter                                  $.17               $.10
Second Quarter                                  .19                .10
Third Quarter                                   .30                .11
Fourth Quarter                                  .26                .15


Year Ended September 30, 2001                   High               Low

First Quarter                                  $.18               $.062
Second Quarter                                  .18                .11
Third Quarter                                   .20                .11
Fourth Quarter                                  .20                .105

As of September 30, 2002 the Company had issued and outstanding 7,961,618 common
shares held by approximately 1,128 holders of record.

There have been no cash  dividends  declared by the Company since its inception.
Further, there are no restrictions that would limit the Company's ability to pay
dividends on its common equity or that would be likely to do so in the future.

<PAGE>

The Company has no plans to register any of its securities  under the Securities
Act for sale by  security  holders.  There is no public  offering  of equity and
there is no proposed public offering of equity.

RECENT SALES OF UNREGISTERED SECURITIES

In June of 1998, the Company  effected a reverse stock split of 10 common shares
of the  Company  for one share.  After the  reverse  stock split the Company had
issued and outstanding 4,289,431 common shares. The Company issued an additional
3,845,587 common shares after the reverse stock split for purposes of paying the
Company's  obligation  under the Company's  Employee Stock  Ownership  Plan, for
providing  working  capital  and paying the  creditors  and  expenses  under the
Company's plan of reorganization in bankruptcy. During the last year the Company
announced plans to repurchase and retire up to 2,000,000 common shares of stock.
During fiscal 2001,  148,400 common shares of stock were repurchased and retired
and 25,000 in 2002.  Presently,  the Company has 7,961,618  common shares issued
and outstanding.

The Company has an Employee Stock Ownership Plan, in which the Company  invested
prior to September 30, 2002, 10% of the compensation for full-time employees for
salary and bonuses in common stock of the Company. After September 30, 2002, the
Company  has  adopted  the  policy  of  investing  15% of the  compensation  for
full-time  employees for salary and bonuses in common stock of the Company.  All
full-time  employees of the Company  participate in the Employee Stock Ownership
Plan on the same terms and  conditions  as  management.  Shares in the Company's
Employee Stock Ownership Plan ("ESOP") before November 1999 were issued from the
Company to the Plan every six months to cover the  Company's  obligation  to the
ESOP.  From  January  1997 to  September  1998,  the Company  issued to the ESOP
248,244 common shares calculated on a post reverse stock split basis.

In November of 1998, the ESOP in conjunction with the offer made to shareholders
of the Company  purchased  1,500,000 common shares of the Company's common stock
at a price of $.20 per share in the form of a stock subscription receivable. The
stock  subscription  receivable owed by the ESOP to the Company is reduced every
six months by the amount of the obligation  owed by the Company towards the ESOP
for that period. The stock  subscription  receivable bears interest at a rate of
six percent per annum.

For the  Company to emerge  from its Chapter 11  bankruptcy  it required  enough
capital to pay its creditors under the reorganization plan and needed sufficient
capital to  operate.  From July 1998 to February  of 1999,  the  Company  issued
2,246,426 common shares to shareholders of the Company for a total consideration
of $415,308. From the $415,308 raised by the Company, approximately $300,000 was
used for paying bankruptcy expenses and for paying the creditors of the Company.
The remaining  $115,308 of the $415,308 raised was used for operating capital of
the Company.

Sales of the Company's  securities to the shareholders under the Bankruptcy Plan
and to the ESOP plan were exempt from  registration  under the Securities Act of
1933 pursuant to Section 4(2) of the Act.

<PAGE>

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

RESULTS OF OPRERATIONS -2002 Compared to 2001

Total revenue for fiscal year 2002 was $909,321 as compared to total revenue for
fiscal year 2001 of $1,310,317. The decrease in revenue was due to a decrease in
natural gas and crude oil prices from fiscal 2002 as compared to fiscal 2001 and
the lack of any project  and lease sale  income.  As  mentioned  previously  the
Company is marketing  several projects  including its high potential Uinta Basin
project but none of these  projects  had sold prior to year-end.  Subsequent  to
year end the Company sold its Washakie Basin project for $120,000. Total oil and
gas sales  (including  royalty  revenue)  decreased from $1,159,441 to $908,821.
Average  gas  prices  decreased  52  percent  from $4.21 MCF (2001) to $2.01 MCF
(2002) while average daily gas production remained constant.  Average oil prices
decreased  20  percent  from  $23.29  per barrel in 2001 to $18.65 per barrel in
2002, while average daily oil production increased 11 percent over 2001.

Project and lease sales income  decreased from $150,376 to $0 as the Company did
not sell any projects during fiscal 2002.

Costs of operations decreased from $645,545 to $425,743.  This item includes all
well  operating  expenses and any amounts paid to employees  and other  interest
owners for their interest in producing  properties.  Decreased  disbursements to
interest owners due to lower product prices  accounted for most of the decrease.
However,  the company decreased average lifting costs from $7.34 per BOE (barrel
of oil equivalent) to $6.91 per BOE.

General  and  administrative  costs  increased  from  $294,188 in fiscal 2001 to
$341,089 in fiscal 2002 due to increased insurance costs, increased travel costs
(primarily  associated with marketing our Uinta Prospect) and bank fees incurred
in renegotiating our line of credit.

During fiscal 2002,  the Company  repurchased  and retired  25,000 shares of its
common stock at an average  purchase price of $.105 per share. The repurchase of
the stock reduced stockholders' equity by $2,620.

The Company's total  stockholders'  equity  decreased from $985,952 to $831,103.
This decrease in shareholder's equity during fiscal 2002 was the result of a net
loss of  $163,810,  a decrease  in the ESOP  stock  subscription  receivable  of
$11,581  (positive  impact) and  repurchase of common stock of $2,620  (negative
impact).

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Historically the Company has funded operations  primarily from earnings and bank
borrowing.  As of  September  30,  2002 the  Company  had cash of $90,458 and an
unused  line of  credit  with  Zions  Bank for  $95,842.  This line of credit is
collateralized by all of the companies operated oil and gas properties. The line
of credit bears  interest at prime rate plus 1.0%. The line of credit with Zions
Bank matured on December 31, 2001, and was renewed for a two-year  period ending
December 31, 2003. As of September  30, 2001 and as of September  30, 2002,  the
amount on the credit line was $95,000 and $654,158 respectively.

During  fiscal 2002 cash used in operating  activities  was $197,092  while cash
provided by financing activities was $556,538.  There was a net increase in cash
of $86,895 as cash  increased  from  $3,563 to $90,458.  Cash used in  investing
activities increased from $244,645 in 2001 to $272,551 in 2002.

OIL AND GAS PROPERTIES

The  Company as of the date of this  filing is the owner of several  oil and gas
properties  located  throughout the Rocky Mountain Region.  The Company operates
four properties in Utah, three in Wyoming and one in Colorado.  The standardized
measure of discounted  future net cash flows of all the Company's  properties as
of September 30, 2002 was $1,370,508.

INCOME TAXES

The  Company's   present  net  operating  loss   carryforward  of  approximately
$2,300,000  arises  primarily from operations for the year ended September 30th,
1997.  Carryforwards  of net operating  losses for years prior to the year ended
September  30th, 1997 were completely used for tax purposes to offset net income
for the year  ended  September  30th,  1999.  The  present  net  operating  loss
carryforward of the Company will begin to expire in the year 2012.

The Company  does not  anticipate  that it will have taxable  income  during the
carryforward period because of the applicable net operating loss.

<PAGE>

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

This  report on Form 10-KSB  includes  "forward-looking  statements"  within the
meaning  of  Section  27A of  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act"),  and Section 21E of the Securities  Exchange Act of 1934, as
amended (the "Exchange Act"). All statements other than statements of historical
facts included in this report, including,  without limitation,  statements under
"Description  of  Business",   "Description   of  Property'  and   "Management's
Discussion and Analysis or Plan of Operation"  regarding the Company's financial
position,  reserve quantities and net present values,  business strategy,  plans
and  objectives of management of the Company for future  operations  and capital
expenditures, are forward-looking statements and the assumptions upon which such
forward- looking statements are based are believed to be reasonable. The Company
can give no assurance that such  expectations  and assumptions  will prove to be
correct.  Reserve  estimates of oil and gas properties  are generally  different
from the  quantities  of oil and natural gas that are  ultimately  recovered  or
found. This is particularly true for estimates applied to exploratory prospects.
Additionally,  any statements contained in this report regarding forward-looking
statements  are subject to various known and unknown  risks,  uncertainties  and
contingencies,  many of which are beyond the control of the Company. Such things
may cause actual  results,  performance,  achievements or expectations to differ
materially  from  the   anticipated   results,   performance,   achievements  or
expectations.  Factors that may affect such forward-looking  statements include,
but are not limited to: the Company's ability to generate  additional capital to
complete any planned drilling and exploration activities;  risks inherent in oil
and gas acquisitions,  exploration,  drilling, development and production; price
volatility of oil and gas;  competition;  shortages of  equipment,  services and
supplies;  government regulation;  environmental matters; financial condition of
the other companies participating in the exploration, development and production
of oil and gas programs;  and other matters  beyond the Company's  control.  All
written  and oral  forward-looking  statements  attributable  to the  Company or
persons acting on its behalf subsequent to the date of this report are expressly
qualified in their entirety by this disclosure.

ITEM 7 - FINANACIAL STATEMENTS


<PAGE>




                               PIONEER OIL AND GAS

                              FINANCIAL STATEMENTS

                           September 30, 2002 and 2001







<PAGE>









                               PIONEER OIL AND GAS

                              FINANCIAL STATEMENTS

                           September 30, 2002 and 2001



                                      INDEX
                                                                   Page


Independent Auditors' Report                                       F-2

Statements of Operations                                           F-3

Balance Sheets                                                     F-4

Statements of Stockholders' Equity                                 F-5

Statements of Cash Flows                                           F-6

Notes to Financial Statements                                      F-7

Supplementary Schedules on Oil and Gas Operations                  F-18





                                     F-1















<PAGE>





                          INDEPENDENT AUDITORS' REPORT





To the Board of Directors and
Stockholders of Pioneer Oil and Gas


We have  audited the  accompanying  balance  sheets of Pioneer Oil and Gas as of
September 30, 2002 and 2001, and the related statements of income, stockholders'
equity, and cash flows for the years then ended. These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of Pioneer Oil and Gas as of
September  30,  2002 and 2001,  and the results of its  operations  and its cash
flows  for the  years  then  ended  in  conformity  with  accounting  principles
generally accepted in the United States of America.




JONES SIMKINS LLP
Logan, Utah
November 15, 2002
                                     F-2

<PAGE>
<TABLE>
<CAPTION>

                                                PIONEER OIL AND GAS
                                               STATEMENTS OF OPERATIONS
                                       Years Ended September 30, 2002 and 2001


                                                                                          2002              2001
                                                                                     ----------------  ----------------
Revenue:
<S>                                                                                          <C>               <C>
     Oil and gas sales                                                             $         656,344           935,879
     Royalty revenue                                                                         252,477           223,562
     Operational reimbursements                                                                  500               500
     Project and lease sales income                                                                -           150,376
                                                                                     ----------------  ----------------

                                                                                             909,321         1,310,317
                                                                                     ----------------  ----------------

Costs and expenses:
     Cost of operations                                                                      425,743           645,545
     General and administrative expenses                                                     341,089           294,188
     Exploration costs                                                                       183,393           189,278
     Lease rentals                                                                            38,420             9,608
     Depreciation, depletion and amortization                                                 88,989           141,647
                                                                                     ----------------  ----------------

                                                                                           1,077,634         1,280,266
                                                                                     ----------------  ----------------

                    Income (loss) from operations                                           (168,313)           30,051
                                                                                     ----------------  ----------------

Other income (expense):
     Loss on assets sold or abandoned                                                              -              (714)
     Interest income                                                                          16,933            19,347
     Interest expense                                                                        (25,847)           (3,694)
     Other                                                                                    13,417             7,052
                                                                                     ----------------  ----------------

                                                                                               4,503            21,991
                                                                                     ----------------  ----------------

                    Income (loss) before provision
                    for income taxes                                                        (163,810)           52,042

Provision for income taxes                                                                         -                 -
                                                                                     ----------------  ----------------

                    Net income (loss)                                              $        (163,810)           52,042
                                                                                     ================  ================

                    Net income (loss) per common share-
                    basic and diluted                                              $            (.02)              .01
                                                                                     ================  ================

                    Weighted average common shares-
                    basic and diluted                                                      7,964,000         8,078,000
                                                                                     ================  ================
See accompanying notes to financial statements

                                     F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                 PIONEER OIL AND GAS
                                                    BALANCE SHEETS
                                              September 30, 2002 and 2001


                                                                                         2002               2001
                                                                                   -----------------   ----------------
                                 Assets
<S>                                                                                        <C>                <C>
Current assets:
     Cash                                                                        $            90,458              3,563
     Accounts receivable                                                                     121,173            107,391
     Resale leases, at lower of cost or market                                               527,808            399,028
                                                                                   -----------------   ----------------

                   Total current assets                                                      739,439            509,982

Property and equipment, net                                                                  903,201            719,639
Other assets                                                                                   2,000              2,000
                                                                                   -----------------   ----------------

                                                                                 $         1,644,640          1,231,621
                                                                                   =================   ================

                  Liabilities and Stockholders' Equity

Current liabilities:
     Accounts payable                                                            $          128,427            121,796
     Accrued expenses                                                                        30,952             28,873
                                                                                   -----------------   ----------------

                    Total current liabilities                                               159,379            150,669
                                                                                   -----------------   ----------------

     Note payable                                                                           654,158             95,000
                                                                                   -----------------   ----------------

Commitments and contingencies                                                                     -                  -

Stockholders' equity:
     Common stock, par value $.001 per share,
        50,000,000 shares authorized;7,961,618 and 7,986,618
        shares issued and outstanding, respectively                                           7,961              7,986
     Additional paid-in capital                                                           2,495,292          2,497,887
     Stock subscription receivable                                                         (258,219)          (269,800)
     Accumulated deficit                                                                 (1,413,931)        (1,250,121)
                                                                                   -----------------   ----------------

                    Total stockholders' equity                                              831,103            985,952
                                                                                   -----------------   ----------------

                                                                                 $        1,644,640          1,231,621
                                                                                   =================   ================
See accompanying notes to financial statements
                                     F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                                                    PIONEER OIL AND GAS
                                            STATEMENTS OF STOCKHOLDERS' EQUITY
                                          Years Ended September 30, 2002 and 2001


                                                            Additional         Stock
                                     Common Stock            Paid-in        Subscription      Accumulated
                               --------------------------
                                  Shares        Amount       Capital         Receivable         Deficit           Total
                               ----------------------------------------------------------------------------------------

<S>                                <C>             <C>        <C>             <C>              <C>              <C>
Balance at
October 1, 2000                    8,135,018   $   8,134   $  2,521,069     $ (280,996)    $   (1,302,163)   $  946,044

Payments on stock

subscription receivable                    -  -           -                     11,196       -                   11,196

Purchase and retirement

of common stock                     (148,400)       (148)       (23,182)    -                 -                 (23,330)


Net income                                 -  -           -               -                         52,042       52,042
                               -------------- ----------- --------------- ----------------- ----------------- --------------

Balance at
September 30, 2001                 7,986,618       7,986      2,497,887       (269,800)        (1,250,121)      985,952

Payments on stock

subscription receivable                    -  -           -                     11,581       -                   11,581

Purchase and retirement

of common stock                      (25,000)        (25)        (2,595)   -                 -                   (2,620)


Net loss                                   -  -           -               -                      (163,810)     (163,810)
                               ----------------------------------------------------------------------------------------

Balance at
September 30, 2002                 7,961,618   $   7,961   $  2,495,292     $ (258,219)    $   (1,413,931)   $  831,103
                               ========================================================================================



See accompanying notes to financial statements

                                     F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                PIONEER OIL AND GAS
                                             STATEMENTS OF CASH FLOWS
                                      Years Ended September 30, 2002 and 2001


                                                                                      2002              2001
                                                                               ----------------------------------
<S>                                                                                  <C>                   <C>
Cash flows from operating activities:
     Net income (loss)                                                          $    (163,810)             52,042
     Adjustments to reconcile net income (loss) to net cash
        used in operating activities:

               Loss on assets sold or abandoned                                             -                 714
               Depreciation, depletion and amortization                                88,989             141,647
               Employee benefit plan expense                                           27,597              27,886
               Interest income                                                        (16,016)            (16,690)
               (Increase) decrease in:
                    Accounts receivable                                               (13,782)             23,007
                    Resale leases                                                    (128,780)           (302,103)
               Increase (decrease) in:
                    Accounts payable                                                    6,631              (3,966)
                    Accrued expenses                                                    2,079               7,320
                                                                               ----------------------------------


                         Net cash used in operating activities                       (197,092)            (70,143)
                                                                               ----------------------------------

Cash flows from investing activities:
     Acquisition of property and equipment                                           (272,551)           (244,645)
                                                                               ----------------------------------


                         Net cash used in investing activities                       (272,551)           (244,645)
                                                                               ----------------------------------

Cash flow from financing activities:
     Increase in note payable                                                         559,158              95,000
     Purchase of common stock                                                          (2,620)            (23,330)
                                                                               ----------------------------------


                         Net cash provided by financing activities                    556,538              71,670
                                                                               ----------------------------------

                         Net increase (decrease) in cash                               86,895            (243,118)

Cash, beginning of year                                                                 3,563             246,681
                                                                               ----------------------------------

Cash, end of year                                                               $      90,458               3,563
                                                                               ==================================

See accompanying notes to financial statements

                                     F-6
</TABLE>

<PAGE>













                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001



Note 1 - Organization and Summary of Significant Accounting Policies

Organization

The Company is incorporated under the laws of the state of Utah and is primarily
engaged in the business of acquiring,  developing, producing and selling oil and
gas properties to companies located in the continental United States.

Cash and Cash Equivalents

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid  investments  with  a  maturity  of  three  months  or  less  to be  cash
equivalents.

Concentration of Credit Risk

The Company  maintains its cash in bank deposit  accounts,  which, at times, may
exceed federally  insured limits.  The Company has not experienced any losses in
such accounts.  The Company believes it is not exposed to any significant credit
risk on cash and cash equivalents.

Resale Leases

The Company  capitalizes  the costs of acquiring oil and gas leaseholds held for
resale,  including lease bonuses and any advance rentals required at the time of
assignment of the lease to the Company.  Advance  rentals paid after  assignment
are charged to expense as carrying  costs in the period  incurred.  Costs of oil
and gas leases  held for  resale  are valued at lower of cost or net  realizable
value and  included in current  assets since they are expected to be sold within
one year,  although the holding period of individual  leases may be in excess of
one  year.  The cost of oil and gas  leases  sold is  determined  on a  specific
identification basis.

Oil and Gas Producing Activities

The Company utilizes the successful efforts method of accounting for its oil and
gas  producing  activities.   Under  this  method,  all  costs  associated  with
productive  exploratory wells and productive or nonproductive  development wells
are capitalized while the costs of nonproductive exploratory wells are expensed.

                                     F-7
<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001



Note 1 - Organization and Summary of Significant Accounting Policies (continued)
--------------------------------------------------------------------

Oil and Gas Producing Activities (continued)

If an exploratory well finds oil and gas reserves, but a determination that such
reserves  can be  classified  as  proved is not made  after  one year  following
completion  of  drilling,  the costs of  drilling  are  charged  to  operations.
Indirect exploratory expenditures,  including geophysical costs and annual lease
rentals are  expensed as  incurred.  Unproved  oil and gas  properties  that are
individually significant are periodically assessed for impairment of value and a
loss is  recognized  at the  time  of  impairment  by  providing  an  impairment
allowance.  Other  unproved  properties  are  amortized  based on the  Company's
experience of successful drillings and average holding period. Capitalized costs
of producing oil and gas properties after  considering  estimated  dismantlement
and abandonment costs and estimated salvage values, are depreciated and depleted
by the  units-of-production  method.  Support  equipment and other  property and
equipment are depreciated over their estimated useful lives.

On the sale or retirement of a complete unit of a proved property,  the cost and
related accumulated depreciation, depletion and amortization are eliminated from
the property  accounts,  and the resultant  gain or loss is  recognized.  On the
retirement or sale of a partial unit of proved property,  the cost is charged to
accumulated  depreciation,  depletion and amortization  with a resulting gain or
loss recognized in income.

On the sale of an  entire  interest  in an  unproved  property  for cash or cash
equivalent,  gain or loss on the sale is recognized,  taking into  consideration
the  amount  of any  recorded  impairment  if the  property  has  been  assessed
individually.  If a partial interest in an unproved property is sold, the amount
received is treated as a reduction of the cost of the interest retained.

Property and Equipment

Property  and  equipment  are  stated  at cost  less  accumulated  depreciation.
Depreciation  is provided  using the  straight-line  method  over the  estimated
useful  lives of the  assets.  Expenditures  for  maintenance  and  repairs  are
expensed when incurred and  betterments are  capitalized.  When assets are sold,
retired  or  otherwise   disposed  of  the  applicable   costs  and  accumulated
depreciation,  depletion and amortization are removed from the accounts, and the
resulting gain or loss is reflected in operations.

                                     F-8
<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001



Note 1 - Organization and Summary of Significant Accounting Policies

Income Taxes

Deferred income taxes arise from temporary differences resulting from income and
expense items  reported for financial  accounting  and tax purposes in different
periods.  Deferred taxes are  classified as current or noncurrent,  depending on
the classification of the assets and liabilities to which they relate.  Deferred
taxes  arising from  temporary  differences  that are not related to an asset or
liability are  classified  as current or noncurrent  depending on the periods in
which the temporary  differences are expected to reverse.  Temporary differences
result  primarily from a net operating loss  carryforward,  intangible  drilling
costs and depletion.

Earnings Per Share

The  computation  of basic  earnings  per common  share is based on the weighted
average number of shares outstanding during each year.

The  computation  of diluted  earnings per common share is based on the weighted
average  number of shares  outstanding  during  the year plus the  common  stock
equivalents  which would arise from the  exercise of stock  options and warrants
outstanding  using the treasury  stock  method and the average  market price per
share during the year.  Common stock equivalents are not included in the diluted
earnings per share calculation when their effect is antidilutive.

Revenue Recognition

Revenue is recognized from oil sales at such time as the oil is delivered to the
buyer.  Revenue is  recognized  from gas sales when the gas passes  through  the
pipeline  at the  well  head.  Revenue  from  overriding  royalty  interests  is
recognized when earned.

The Company does not have any gas balancing arrangements.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make  estimates and  assumptions
primarily related to oil and gas property  reserves and prices,  that affect the
reported  amounts of assets and liabilities and disclosure of contingent  assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses  during the  reporting  period.  Actual  results  could
differ from those estimates.

                                     F-9
<PAGE>
<TABLE>
<CAPTION>

                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001


Note 2 - Property and Equipment

Property and equipment consists of the following:

                                                                                                September 30,
                                                                                        2002              2001
                                                                                        ----              ----
<S>                                                                                  <C>               <C>
         Oil and gas properties (successful efforts method)                     $    2,242,439         1,973,225
         Office furniture and equipment                                                129,453           126,116
                                                                                    ----------        ----------

                                                                                     2,371,892         2,099,341

         Less accumulated depreciation, depletion and
           amortization                                                             (1,468,691)       (1,379,702)
                                                                                    ----------        ----------

                                                                                $      903,201           719,639
                                                                                    ==========        ===========
</TABLE>

Note 3 - Note Payable

The Company has a bank  revolving  line-of-credit  agreement,  which  allows the
Company to borrow a maximum amount of $750,000. This agreement bears interest at
the bank's prime rate plus 1 percent and is secured by accounts  receivable  and
producing properties. The line-of-credit matures on December 31, 2003 and had an
outstanding  balance at  September  30, 2002 and 2001 of $654,158  and  $95,000,
respectively.


Note 4 - Stock Subscription Receivable

The stock subscription  receivable consists of a six percent receivable due from
the Company's  ESOP. The receivable is reduced every six months by the amount of
the  obligation  owed by the Company to the ESOP,  less  interest (see Note 10).
During the years  ended  September  30, 2002 and 2001,  the  Company  recognized
$16,016 and $16,690 of interest income related to this note.


                                     F-10
<PAGE>
<TABLE>
<CAPTION>

                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001


Note 5 - Income Taxes

The provision for income taxes differs from the amount computed at federal
statutory rates as follows:

                                                                                             September 30,
                                                                                        2002              2001
                                                                                        ----              ----
<S>                                                                                   <C>               <C>
         Income tax provision (benefit) at statutory rate                       $      (50,000)           18,000
         Change in valuation allowance                                                  50,000           (18,000)
                                                                                      --------          --------

                                                                                $       -                 -
                                                                                   ===========       ===========


         Deferred tax assets (liabilities) are comprised of the following:
                                                                                             September 30,
                                                                                        2002              2001
                                                                                        ----              ----

         Intangible drilling costs and depletion                                $     (190,000)         (178,000)
         Net operating loss carryforward                                               856,000           794,000
         AMT credit carryforward                                                         5,000             5,000
                                                                                      --------          --------

                                                                                       671,000           621,000

         Valuation allowance                                                          (671,000)         (621,000)
                                                                                      --------          --------

                                                                                $      -                 -
                                                                                   ===========       ===========

</TABLE>

A valuation  allowance has been recorded for the full amount of the deferred tax
asset because it is more likely than not that the deferred tax asset will not be
realized.

As of September 30, 2002,  the Company had net operating loss  carryforwards  of
approximately  $2,300,000.  These  carryforwards  begin to  expire  in 2012.  If
substantial  changes in the Company's  ownership  should occur there would be an
annual  limitation  of the amount of NOL  carryforward  which could be utilized.
Also, the ultimate  realization of this carryforward is due, in part, on the tax
law in effect at the time and future events that cannot be determined.

                                     F-11

<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001



Note 6 - Sales to Major Customers

The Company had sales to major  customers  during the years ended  September 30,
2002 and 2001, which exceeded ten percent of total sales as follows:

                                                    September 30,
                                               2002              2001
                                               ----              ----

         Company A                       $  306,000           389,000
         Company B                           88,000           177,000
         Company C                             -              119,000
         Company D                           90,000           117,000
         Company E                          140,000             -


Note 7 - Related Party Transactions

The Company  acts as the operator  for several oil and gas  properties  in which
employees,  officers and other related and  unrelated  parties have a working or
royalty  interest.  At  September  30,  2002 and 2001 there was $0 and  $36,953,
respectively   included  in  accounts   receivable   and  $12,236  and  $16,726,
respectively,  included in accounts  payable  due from/to  related  parties as a
result of these  activities.  The Company also is the general manager in certain
limited  partnerships and the operator for certain joint ventures formed for the
purpose of oil and gas exploration and development.

The Company  leases its office space from certain  officers of the Company.  The
lease requires monthly rental payments of $2,500 plus all expenses pertaining to
the office space and expires in September  2005.  Future  minimum lease payments
for the next three years are $30,000 each year. Rent expense for the years ended
September 30, 2002 and 2001 was approximately $30,000 each year.

The Company has a stock subscription receivable from the ESOP (See Note 4).

                                     F-12

<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001



Note 8 - Supplemental Disclosures of Cash Flow Information

Operations   reflect   actual   amounts  paid  for  interest  and  income  taxes
approximately as follows:

                                          September 30,
                                     2002             2001
                                     ----             ----

         Interest              $   26,000             4,000
         Income taxes                 -                 -


Note 9 - Fair Value of Financial Instruments

The Company's financial instruments consist of cash, receivables, payables and a
note payable. The carrying amount of cash, receivables and payables approximates
fair value because of the short-term  nature of these items. The carrying amount
of the note  payable  approximates  fair  value as the note  bears  interest  at
floating market interest rates.


Note 10 - Stock Options and Warrants

Employee Stock Ownership Plan

The Company has adopted a  noncontributory  employee stock ownership plan (ESOP)
covering all full-time employees who have met certain service  requirements.  It
provides for discretionary  contributions by the Company as determined  annually
by the Board of Directors, up to the maximum amount permitted under the Internal
Revenue Code. The plan has received IRS approval under Section 401(A) and 501(A)
of the Internal  Revenue Code.  Pension  expense  charged to operations  for the
years ended  September  30, 2002 and 2001 was $27,597 and $27,886  respectively.
All  outstanding  shares  held by the ESOP are  included in the  calculation  of
earnings per share.

                                     F-13
<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001


Note 10 - Stock Options and Warrants (continued)

Employee Stock Ownership Plan (continued)

The Company has granted  stock  options and warrants to the members of the Board
of Directors and the officers and employees of the Company to purchase shares of
the Company's  common stock.  The exercise  price of the options and warrants is
equal to or in  excess  of the  fair  market  value of the  stock on the date of
grant.  A schedule of the options and warrants at September 30, 2002 and 2001 is
as follows:
                                                                    Exercise
                                               Number of            Price Per
                                                Options               Share

 Outstanding at October 1, 2000                 420,000            $  .30
 Granted                                        420,000               .20
 Canceled                                      (420,000)              .30
                                               --------

 Outstanding at September 30, 2002 and 2001     420,000            $  .20
                                                =======               ===


Stock Based Compensation

Statement of Financial Accounting Standards No.123,  "Accounting for Stock-Based
Compensation" (SFAS 123) gives entities the choice between adopting a fair value
method  or  continuing  to use  the  intrinsic  value  method  under  Accounting
Principles Board (APB) Opinion No. 25 with footnote disclosures of the pro forma
effect if the fair value method had been adopted.  The Company has opted for the
latter approach.  Had compensation  expense for the Company's stock options been
determined  based  on the fair  value  at the  grant  date  consistent  with the
provisions  of SFAS No. 123, the Company's  results of  operations  for the year
ended September 30, 2001 would have been as follows:

 Net income - as reported                  $  52,042
 Net loss - pro forma                        (10,945)
 Earnings per share - as reported          $     .01
 Earnings per share - pro forma            $       -

                                     F-14
<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001



Note 10 - Stock Options and Warrants (continued)

Stock Based Compensation (continued)

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following assumptions and September
30, 2001:

 Expected dividend yield                $      -
 Expected stock price volatility            233%
 Risk-free interest rate                      5%
 Expected life of options               10 years


The following table summarizes  information  about stock options  outstanding at
September 30, 2002.

<TABLE>
<CAPTION>


                              Outstanding                                               Exercisable
--------------------------------------------------------------------------   ----------------------------------
     Exercise           Number          Weighted           Weighted             Number       Weighted Average
                                         Average
                                        Remaining
                                       Contractual         Average
                                          Life             Exercise                              Exercise
      Price          Outstanding         (Years)            Price            Exercisable           Price
<S>     <C>            <C>                 <C>                <C>              <C>                    <C>

      $ .20            420,000             8.9            $   .20              420,000            $   .20
        ====           =======             =====              ======           =======                ===

</TABLE>

                                     F-15




<PAGE>


                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001

Note 11 - Commitments and Contingencies

Limited Partnerships

The Company has an immaterial interest in a limited partnership drilling program
and  acts as the  general  partner.  As the  general  partner,  the  Company  is
contingently   liable  for  any  obligations  of  the  partnership  and  may  be
contingently  liable  for  claims  generally  incidental  to the  conduct of its
business as general  partner.  As of September 30, 2002, the Company was unaware
of any such obligations or claims arising from this partnership.

Employment Agreements

The Company  has entered  into  severance  pay  agreements  with  employees  and
officers of the Company who also serve as board members.  Under the terms of the
agreements,  a board member who is terminated shall receive  severance pay equal
to the amount such board  member  received in salary and bonus for the two years
prior to termination.

Litigation

The  Company  may  become or is subject to  investigations,  claims or  lawsuits
ensuing  out  of the  conduct  of  its  business,  including  those  related  to
environmental safety and health,  commercial  transactions,  etc. The Company is
currently  not aware of any such item  which it  believes  could have a material
adverse affect on its financial position.


Note 12 - Recent Accounting Pronouncements

In August 2001, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No.  144,  Accounting  for the  Impairment  or
Disposal of Long-Lived Assets (SFAS 144). The new guidance resolves  significant
implementation  issues  related to FASB  Statement No. 121,  Accounting  for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed of.
SFAS 144 is effective for fiscal years  beginning  after  December 15, 2001. The
adoption of this  statement  is not  expected  to have a material  effect on the
Company's financial position or results of operations.

In June 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial   Accounting  Standards  No.  143,  Accounting  for  Asset  Retirement
Obligations  (SFAS  143).  This  Statement  requires  that the  fair  value of a
liability  for an asset  retirement  obligation  be  recognized in the period in
which it is incurred  if a  reasonable  estimate of fair value can be made.  The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset.  Management does not expect the adoption of SFAS 143 to
have a significant  impact on the financial position or results of operations of
the Company.

                                     F-16

<PAGE>

                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2002 and 2001

Note 12 - Recent Accounting Pronouncements (continued)

In July 2001,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No. 141,  Business  Combinations  and No. 142,
Goodwill  and  Other   Intangible   Assets.   The   statements   eliminate   the
pooling-of-interests  method of accounting for business combinations and require
that goodwill and certain  intangible  assets not be amortized.  Instead,  these
assets  will be  reviewed  for  impairment  annually  with  any  related  losses
recognized in earnings when  incurred.  The adoption of these  statements is not
expected  to have a  material  effect on the  Company's  financial  position  or
results of operations.


                                     F-17

<PAGE>


                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2002 and 2001



The  information  on the  Company's  oil and gas  operations  as  shown  in this
schedule  is  based  on the  successful  efforts  method  of  accounting  and is
presented in conformity  with the  disclosure  requirements  of the Statement of
Financial  Accounting  Standards No. 69 "Disclosures about Oil and Gas Producing
Activities."


         Capitalized Costs Relating to Oil and Gas Producing Activities
<TABLE>
<CAPTION>
                                                                                      September 30,

                                                                                 2002              2001
                                                                                 ----              ----

<S>                                                                           <C>                <C>
Proved oil and gas properties and related equipment                    $      2,012,912          1,854,830
Unproved oil and gas properties                                                 229,527           118,395
                                                                              ---------       ------------

         Subtotal                                                             2,242,439          1,973,225

Accumulated depreciation, depletion and amortization
 and valuation allowances                                                    (1,347,265)        (1,262,669)
                                                                             ----------         ----------

                                                                       $        895,174            710,556
                                                                           ============       ============

</TABLE>


Costs  Incurred  in  Oil  and  Gas  Acquisition,   Exploration  and  Development
Activities

                                                September 30,
                                                ------------
                                          2002                2001
                                       ---------           ---------

Acquisition of properties:
        Proved                    $        -                 24,435
        Unproved                  $        -                118,395
Exploration costs                 $        -                   -
Development costs                 $     269,214              96,946





                                     F-18

<PAGE>
<TABLE>
<CAPTION>


                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2002 and 2001



                 Results of Operations for Producing Activities

                                                                                       Years Ended
                                  September 30,
                                                                                2002               2001
                                                                             ---------           ---------
<S>                                                                          <C>                 <C>
Oil and gas - sales                                                    $       908,821           1,159,441
Production costs net of reimbursements                                        (463,663)           (654,653)
Exploration costs                                                             (183,393)           (189,278)
Depreciation, depletion and amortization
   and valuation provisions                                                    (84,596)           (135,622)
                                                                               -------             -------

Net income before income taxes                                                 177,169             179,888

Income tax provision                                                           (60,000)            (68,000)
                                                                            ----------             -------

Results of operations from producing activities
 (excluding corporate overhead and interest costs)                     $       117,169             111,888
                                                                               =======             =======
</TABLE>

                                     F-19

<PAGE>


                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2002 and 2001


                    Reserve Quantity Information (Unaudited)

The estimated  quantities of proved oil and gas reserves  disclosed in the table
below are based upon on appraisal  of the proved  developed  properties  by Fall
Line Energy, Inc. Such estimates are inherently  imprecise and may be subject to
substantial revisions.

All quantities shown in the table are proved developed  reserves and are located
within the United States.
<TABLE>
<CAPTION>
                                                                               Years Ended September  30,
                                                                            2002                     2001
                                                                          --------                 ---------
<S>                                                                   <C>         <C>         <C>          <C>
                                                                         Oil          Gas        Oil          Gas
                                                                       (bbls)       (mcf)      (bbls)       (mcf)
Proved developed and undeveloped reserves:
  Beginning of year                                                   128,589     580,543     151,808      533,724
  Revision in previous estimates                                        4,992     286,106      (8,633)     112,285
  Discoveries and extension                                              -           -          -          -
  Purchase in place                                                      -           -          -           -
  Production                                                          (15,009)    (91,916)    (14,586)     (65,466)
  Sales in place                                                        -          -            -           -
                                                                      ----------  -------     -------      -------

  End of year                                                         118,572     774,733     128,589      580,543
                                                                      =======     =======     =======      =======

Proved developed reserves:
  Beginning of year                                                   128,589     580,543     151,808      533,724
  End of year                                                         118,572     774,733     128,589      580,543

</TABLE>
                                     F-20
<PAGE>


                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2002 and 2001



Standardized  Measure of  Discounted  Future Net Cash Flows and Changes  Therein
Relating to Proved Oil and Gas reserves (Unaudited)

                                                     Years Ended
                                                     September 30,
                                                     -------------
                                                 2002             2001
                                               ---------        --------

Future cash inflows                         $  3,950,000       4,682,000
Future production and development costs       (1,676,000)     (1,853,000)
Future income tax expenses                      (773,000)       (961,000)
                                               ---------       ---------

                                               1,501,000       1,868,000

10% annual discount for estimated               (624,000)       (747,000)
timing of cash flows                           ---------       ---------

Standardized measure of discounted          $    877,000       1,121,000
future net cash flows                          =========       =========


The preceding  table sets forth the estimated  future net cash flows and related
present  value,  discounted  at a 10% annual  rate,  from the  Company's  proved
reserves of oil,  condense and gas. The estimated future net revenue is computed
by applying the year end prices of oil and gas (including price changes that are
fixed and determinable) and current costs of development production to estimated
future production  assuming  continuation of existing economic  conditions.  The
values expressed are estimates only, without actual long-term production to base
the  production  flows,  and may not  reflect  realizable  values or fair market
values of the oil and gas ultimately extracted and recovered.  The ultimate year
of realization is also subject to  accessibility  of petroleum  reserves and the
ability of the Company to market the products.

                                     F-21
<PAGE>


                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2002 and 2001



                     Changes in the Standardized Measure of
                    Discounted Future Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                                                                       Years Ended
                                                                                       September 30,
                                                                                   2002          2001
                                                                                  ------        -------
<S>                                                                              <C>             <C>
Balance, beginning of year                                                  $    1,121,000       1,611,000
Sales of oil and gas produced net of production costs                             (204,000)       (246,000)
Net changes in prices and production costs                                        (338,000)        764,000
Extensions and discoveries, less related costs                                        -             -
Purchase and sales of minerals in place                                               -             -
Revisions of estimated development costs                                              -             -
Revisions of previous quantity estimate                                            374,000         163,000
Accretion of discount                                                              112,000         161,000
Net changes in income taxes                                                       (188,000)        196,000
                                                                                  --------        --------

Balance, end of year                                                        $      877,000       1,121,000
                                                                                   =======       =========
</TABLE>





                                     F-22


<PAGE>

ITEM 8 -  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANACIAL DISCLOSURE

On November 13, 2000, the Company  terminated its relationship with Tanner + Co.
("Tanner"),  the principal accountant  previously engaged to audit the Company's
financial  statements.  Effective November 13, 2000, the Company retained Jones,
Simkins LLP  ("Jones")  as the  principal  accountants  to replace  Tanner.  The
Company's board of directors  approved the change of accountants  from Tanner to
Jones.

The audit reports of Tanner on the Company's financial statements for the fiscal
year ending September 30, 1999 did not contain any adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to uncertainty,  audit scope,
or accounting principles.

In connection  with the audits of the fiscal year ending  September 30, 2000 and
the  subsequent   interim  period  through   November  13,  2000,  the  date  of
termination,  the  Company  had no  disagreements  with  Tanner on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope or procedures.  Had there been any disagreements that were not resolved to
their  satisfaction,  such  disagreements  would  have  caused  Tanner  to  make
reference  in  connection  with  their  opinion  to the  subject  matter  of the
disagreement.  In addition, during that time there were no reportable events (as
defined in Item 304(a)(1)(iv) of Regulation S-B).

During the fiscal year ending  September 30, 2000 and the interim period through
November 13, 2000, the date of termination,  and prior to such appointment,  the
Company  did not consult  with Jones  regarding  the  application  of  generally
accepted  accounting  principles to a specific  transaction,  either proposed or
completed,  or the type of audit opinion that might be rendered on the Company's
financial statements. Since there were no disagreements or reportable events (as
defined in Item 304(a)(2) of Regulation  S-B), the Company did not consult Jones
in respect to these matters during that time.

The Company  provided Tanner with a copy of its Form 8-K prior to filing it with
the SEC. The Company  requested that Tanner furnish the Company with a letter to
the SEC stating whether Tanner agreed with the above statements.  A copy of that
letter dated  November 14, 2000 is filed as Exhibit 1 to the Company's  Form 8-K
filed with the SEC on November 16, 2000.

<PAGE>

                                    PART III

ITEM  9  -  DIRECTORS,   EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

DIRECTORS AND EXECUTIVE OFFICERS

The directors,  executive officers and significant  employees of the company are
as follows:
                                    POSITION
    NAME                      AGE               WITH COMPANY
    ----                      ---               ------------

 Don J. Colton                 56            President/Treasurer & Director
 Gregg B. Colton               49            Vice President/Secretary & Director
 John O. Anderson              60            Office Manager/Director
 Michael L. Pinnell            58            Exploration Manager

Note:  Don J. Colton and Gregg B. Colton are  brothers  and John O.  Anderson is
their uncle.

Don J. Colton serves as the Company's  President,  Treasurer and Chairman of its
Board of Directors. Since the Company's inception in October 1980 Mr. Colton has
served as the  Company's  President  and has been involved in all aspects of the
business  including  exploration,   acquisition  and  development  of  producing
properties.  From 1979 to 1981,  Mr.  Colton was Chief  Financial  Officer and a
member of the Board of Directors of Drilling  Research  Laboratory  in Salt Lake
City, Utah. The Drilling Research Laboratory is a subsidiary of Terra Tech, Inc.
and prior to his involvement with the Drilling Research  Laboratory;  Mr. Colton
was Manager of Special  Projects  for Terra Tech.  Mr.  Colton  received a BS in
Physics  from  Brigham  Young  University  in  1970  and a  Master  of  Business
Administration from the University of Utah in 1974.

Gregg B. Colton  serves as the  Company's  Vice  President,  Secretary,  General
Counsel and a member of the Board of  Directors.  Mr.  Colton has been  employed
with the Company  since it actually  commenced  business in 1981.  Mr. Colton is
involved in handling  the  contracts,  sales of oil and gas  products  and legal
problems  of the  Company  along  with the day to day  decision  making  for the
Company with the Company's  President.  From 1981 to 1984, Mr. Colton was also a
partner in the law firm of Cannon, Hansen & Wilkinson. Mr. Colton is a member of
the  Utah  State  Bar  and a real  estate  broker.  He is also a  member  of the
Corporate  Counsel section for the Utah State Bar. Mr. Colton earned his BA from
the  University  of Utah in 1976 and a Juris  Doctor  and a Master  of  Business
Administration from Brigham Young University in 1981.

John O.  Anderson  serves as the  Company's  Office  Manager  along with being a
member of the Board of Directors. Mr. Anderson as Office Manager handles the day
to day accounting for the Company along with handling the  procurement of office
supplies.

The  Company  has  employed  Mr.  Anderson  since 1981 and prior to joining  the
Company he worked in land  investments.  Mr. Anderson received his BS in Zoology
in 1968 from the University of California.

Michael L.  Pinnell  serves as the  Company's  Exploration  Manager and has been
employed by the Company  from 1989 to the present.  Mr.  Pinnell is in charge of
performing and supervising the geological and geophysical interpretation for the
Company's  drilling  prospects.  Mr.  Pinnell worked as a consultant for various
companies from 1985 to 1989 and performed  geological and geophysical  services.
From 1981 to 1985 Mr.  Pinnell  was the  Exploration  Manager  for  Fortune  Oil
Company.  Mr. Pinnell received a BS in Geology in 1970 and an MS in Geology from
Brigham Young University.

<PAGE>

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
officers  and  directors,  and  persons  who own more  than ten  percent  of the
Company's  Common  Stock,  to file reports of ownership and changes in ownership
with the Securities and Exchange  Commission  ("SEC").  Officers,  directors and
greater than ten percent stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they
file.

The  following  disclosure  is based solely upon a review of the Forms 3 and any
amendments  thereto  furnished to the Company  during the Company's  fiscal year
ended  September 30, 2002, and Forms 5 and amendments  thereto  furnished to the
Company  with respect to such fiscal year,  or written  representations  that no
Forms 5 were  required to be filed by such  persons.  Based on this review there
were no reports or SEC forms  required to be filed by  directors  of the Company
for the fiscal year ended September 30, 2002.

ITEM 10 - EXECUTIVE COMPENSATION

The following Summary  Compensation Table sets forth all cash compensation paid,
distributed or accrued for services, including salary and bonus amounts rendered
in all capacities for the Company's CEO during the fiscal years ended, September
30, 2002,  2001,  and 2000.  All other tables  required to be reported have been
omitted as there has been no  compensation  awarded to, earned by or paid to any
of the executives of the Company that is required to be reported other than what
is stated below:

                           SUMMARY COMPENSATION TABLE

Name and                      Amount of                           Fiscal
Principal Position            Compensation                        Year Ended

Don J. Colton, CEO            $90,504(1)                          2002
Don J. Colton, CEO            $90,504(1)                          2001
Don J. Colton, CEO            $90,504(1)                          2000


          (1) The amount of  compensation  included  in the table above for each
          fiscal  year does not  include  amounts  paid by the  Company  for the
          Company's  Employee  Stock  Ownership  Plan.  Under the Employee Stock
          Ownership Plan 10% of the employees compensation for salary or bonuses
          is paid on behalf of the employee for Company  stock in the  Company's
          Employee  Stock  Ownership  Plan  before  October  1,  2002 and  after
          September  30,  2002,  15% is paid.  All  full-time  employees  of the
          Company  participate in the Employee Stock  Ownership Plan on the same
          terms and conditions as  management.  For the fiscal years shown above
          10% of the  compensation  amount  above was paid  towards the Employee
          Stock Ownership Plan in the form of Company stock.

<PAGE>

          The Company in its June 27, 2001, annual shareholders meeting approved
          an  incentive  stock  option  plan for its  employees,  directors  and
          officers.  After the approval of the incentive  stock option plan, the
          Company  canceled all of the options  presently  existing at that time
          and replaced  them with the same number of incentive  stock options in
          accordance with the plan approved by the  shareholders.  Below are the
          options  granted  in the  last  two  years  that  are  required  to be
          disclosed under this filing:

                     OPTION GRANTS IN LAST TWO FISCAL YEARS

                             % of Total
                             Number of        Options
                             Securities       Granted to
                             Underlying       Employees in   Exercise       Exp.
         Name                Options Granted  Fiscal Year    Price ($/Sh)   Date


         Don J. Colton, CEO     120,000          28.57%       $.20/Share     (1)

          (1) The expiration  date for the 120,000 options granted above are due
          to expire on August 9, 2011. No options were exercised during the year
          by any  officer,  director  or  employee  granted  options  under  the
          Company's incentive option stock plan.

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth  certain  information  regarding the  beneficial
ownership of the Company's Common Stock by each person or group that is known by
the  Company  to be the  beneficial  owner  of more  than  five  percent  of its
outstanding Common Stock, each director of the Company, each person named in the
Summary  Compensation  Table,  and all directors  and executive  officers of the
Company as a group as of September 30, 2002.  Unless  otherwise  indicated,  the
Company believes that the persons named in the table below, based on information
furnished by such owners,  have sole voting and investment power with respect to
the Common Stock beneficially owned by them, where applicable.

Title of  Name and Address of           Amount and Nature              Percent
 Class    Beneficial Owner              of Beneficial Owner            of Class

Common    Don J. Colton                      780,822(1)                  9.3%
          2172 E Gambel Oak Drive
          Sandy, Utah 84092

Common    Gregg B. Colton                    815,172(1)                  9.7%
          10026 Ridge Gate Circle
          Sandy, Utah 84092

Common    John O. Anderson                   391,700(1)                  4.7%
          7462 S Parkridge Circle
          Salt Lake City, Utah 84121


Common   Pioneer Employee Stock              1,388,677(2)               16.6%
         Ownership Plan
         1206 W. South Jordan Parkway
         Unit B
         South Jordan, Utah 84095-5512

All Directors and Officers as a Group
(3 Persons)                                  1,987,694                  23.7%


<PAGE>

          (1) Includes currently exercisable options to purchase common stock in
          the  Company  as long as the  person  is  serving  as a  director  and
          employee  of the  Company.  Each  of the  persons  listed  under  this
          footnote  has  options to  purchase  120,000  shares of the  Company's
          Common Stock.

          (2) Persons  listed above have their  vested  shares under the Pioneer
          Employee Stock Ownership Plan included under their name. Don J. Colton
          and  Gregg  B.  Colton  as  Trustees  of the  Pioneer  Employee  Stock
          Ownership  Plan have the  right to vote all the  shares of the Plan at
          any shareholder meeting of the Company.

The  Company  currently  has no  arrangements,  which may  result in a change of
control.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Board of Directors  approved  more than 10 years ago a  resolution  to allow
employees of the Company to purchase 25% of any oil and gas  producing  property
acquired by the Company at the same time as the Company  acquires the  property.
The  resolution  required  that the employees pay for 25% of the cost of the oil
and gas properties at the same time the Company purchased the properties. In the
event, the Company is unable to fund the total cost of any producing  properties
the  employees  of the Company may  purchase the amount the Company is unable to
fund even if it exceeds 25%. The employees also have the right to acquire 25% of
any non-producing oil and gas leases acquired by the Company on similar terms as
those for producing properties.

The Company also leases  office  space that is owned by the Board of  Directors.
The office space is leased to the Company on terms  reasonable for the same kind
of office  space in the area that it is located.  The new office space has 1,950
square feet with an unfinished basement of approximately 975 square feet.

The Board of  Directors  has also  authorized  the Company to  repurchase  up to
2,000,000 of its common shares as treasury stock and during the fiscal year 2001
the  Company  repurchased  148,400  common  shares.  During  fiscal  year ending
September 30, 2002,  the Company  repurchased  25,000 common  shares.  The exact
timing, price and terms for the purchase of the stock shall be at the discretion
of the officers of the Company.

<PAGE>


                                     PART IV

         ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

PART F/S                   FINANCIAL STATEMENTS

The  financial  statements  of the Company as required by Item 310 of Regulation
S-B are included in Part II, Item 7 of this report.

PART III.                  INDEX TO EXHIBITS

                The following Exhibits are filed herewith:

Exhibit No.                    Description

3(i)                           Articles of Incorporation (1) (with
                               amendments)

3(ii)                          Bylaws (1)

10                             Line of Credit Agreement (1)

23                             Fall Line Energy letter from Petroleum Engineer


                (1) Incorporated by reference from the Company's 2000 Form 10SB.

                               REPORTS ON FORM 8-K

The  Company  did not  file  any  reports  on Form 8-K  during  its year  ending
September 30, 2002.

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.
                                                          /s/
                                              By: ______________________
                                                    Don J. Colton
                                                    Director/President

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

         /s/
_________________________ Director/President
   Don J. Colton
         /s/
_________________________ Director/Vice President/Secretary
   Gregg B. Colton
        /s/
_________________________ Director
   John O. Anderson

<PAGE>

                             Fall Line Energy, Inc.
         PO Box 2935 o Centennial, Colorado 80161-2935 o (303) 795-9887


                                November 19, 2002


Mr. Don Colton
Pioneer Oil and Gas
1206 W. South Jordan Parkway, Unit B
South Jordan, UT  84095-4551


                                                    RE:    Pioneer Oil and Gas
                                                           2002 Reserve Report
                                                           SEC Pricing


Dear Mr. Colton:

This report provides an appraisal of net oil and gas reserves and the associated
economic benefit to Pioneer Oil and Gas (POG) as of September 30, 2002. The only
reserves class evaluated was Proved Developed Producing.  No credit was given to
behind pipe zones, potential enhanced oil recovery, infill drilling or wells not
currently producing due to operational problems.

Product Pricing

As requested,  the economics were run using SEC pricing guidelines.  The product
pricing used was based on actual spot prices  available  on September  30, 2002.
Where necessary, prices were estimated based on historical differentials between
the different  properties or with quoted indexes such as the WTI Cushing prices,
obtained from the US Government - Energy Information Agency (EIA).

The volume weighted  average  wellhead price was determined to be $24.76/Bbl and
$1.10/MCF.  The wellhead  prices reflect the recent  extreme price  differential
that exists between Rocky  Mountain gas and most other  markets.  For comparison
purposes,  the  average  NYMEX  Henry Hub price  for the same  time  period  was
$4.09/MMBTU,  the  average  price  for the  Questar  Rocky  Mountain  Index  was
$1.09/MMBTU,  and the  average  WTI Cushing  price was  $30.45/Bbl.  All product
pricing was held flat for the life of the project.

Reserves Classification:

Only one class of reserves were evaluated,  Proved Developed Producing (PDP). No
credit was given to behind pipe zones,  potential enhanced oil recovery,  infill
drilling or wells not  currently  producing  due to  operational  problems.  The
reserves were classified using the Society of Petroleum Evaluation Engineers
Reserve Definitions, a copy of which is attached to this report.


<PAGE>



Estimates of oil,  condensate,  natural gas liquids, and gas reserves and future
net revenue  should be regarded  only as estimates  that are likely to change as
actual  production and pressure  history  becomes  available.  Not only are such
reserve and  revenue  estimates  based on that  information  which is  currently
available,  but such estimates are also subject to the uncertainties inherent in
the application of judgmental factors in interpreting such information.

Sources of Information

The  majority of the data used in the  preparation  of this report was  obtained
from POG. This information consisted of revenue check details,  division orders,
oil run statements, ownership interests,  spreadsheets detailing operating costs
and miscellaneous pricing information.  Additional information was obtained from
the individual property  operators,  industry contacts and other public sources.
Production  information was obtained from the operator,  IHS Energy Group (IHS),
the Utah Division or Oil, Gas & Mining, and the Wyoming Oil and Gas Conservation
Commission.  No attempt was made to  independently  verify the  accuracy of this
data. A field examination of the properties was not considered necessary for the
purposes of this evaluation.

Operating Costs

The operating costs used in the economics were based on actual historical costs.
The estimated  operating expense includes field operating costs, pumper charges,
direct  supervision  and third party  operator  overhead  charge.  No  allocated
overhead was included for POG operated  properties.  As with pricing,  operating
expenses were held flat for the life of the project

Ownership:

The working interest and net revenue interest  ownerships used in this appraisal
were  provided  by  POG.  No  Farmouts  or  reversions  were  considered  in the
economics.  The  ownership  within the Hunter Mesa Unit and the Grassy Mesa Unit
are  undergoing  changes as the unit  participating  areas are revised.  Several
revisions are  currently  waiting for the BLM to approve  them.  The  ownerships
utilized in this report are based on the latest revisions, pending BLM approval.

Methodology:

The estimates of Expected  Ultimate  Recovery  (EUR) by well were prepared using
primarily decline curve analysis. Where appropriate, EUR estimates were made for
oil wells by extrapolating  the  Water-Oil-Ratio  vs.  Cumulative Oil Production
plot to a determined  economic limit.  These  methodologies are commonly used by
the petroleum industry once detailed production data is available.

Evaluator Information:

Scott H Stinson is a consulting petroleum engineer with 22 years experience. His
primary  emphasis  has been on  exploration,  project  economics  and  formation
evaluation.  Mr. Stinson  started Fall Line Energy,  a small oil and gas company
and consulting firm in 1993. Prior to Fall Line, Mr. Stinson held positions with
Chevron,  Terra Resources (Later Pacific  Enterprises Oil Company) and Conley P.
Smith Operating Company.


<PAGE>



Mr. Stinson is an active member of the Independent  Petroleum Association of the
Mountain  States  (IPAMS).  Previously,  he held the position of Rocky  Mountain
Vice-Chairman and Wyoming Reserves  Coordinator for the American Gas Association
(AGA). In addition, he is an active member of the Society of Petroleum Engineers
(SPE)  and is  Chairman  of the  Denver  chapter  of the  Society  of  Petroleum
Evaluation Engineers (SPEE).

Mr. Stinson earned a Bachelor of Science  degree in Petroleum  Engineering  from
the  University  of  Wyoming in 1981 and a Masters  in  Business  Administration
(Finance)  from the  University of  Colorado-Denver  in 1994. He is a registered
petroleum engineer in the states of Colorado and Wyoming.

Neither Fall Line Energy,  nor Scott H Stinson,  has any interest in the subject
properties and neither the employment to make this study nor the compensation is
contingent  on the  estimates of reserves and the future income from the subject
properties.

Thank  you for the  opportunity  to  perform  this  evaluation.  If you have any
questions or require any additional information, please do not hesitate to call.

                             Sincerely,

                             Fall Line Energy, Inc.

                                    /s/

                             Scott H Stinson, P.E.
                             President



<PAGE>






                             Fall Line Energy, Inc.
         PO Box 2935 o Centennial, Colorado 80161-2935 o (303) 795-9887


                                December 13, 2002

Mr. Don Colton
Pioneer Oil and Gas
1206 W. South Jordan Parkway, Unit B
South Jordan, UT  84095-4551


                                                     RE:    Pioneer Oil and Gas
                                                            2002 Reserve Report


Dear Mr. Colton:

The 2002 Annual  Reserve  Report for Pioneer Oil and Gas (POG) has been prepared
for your use by Fall Line Energy  Incorporated and covers the fiscal year ending
September  30,  2002.  The original  report was signed on November 9, 2002.  The
report was prepared for  inclusion in standard  company  filings and  accurately
reflects  the value to POG as of September  30,  2002.  This report was prepared
using  Security  and  Exchange  Commission  (SEC) and the  Society of  Petroleum
Evaluation  Engineers (SPEE)  guidelines.  The only reserves class evaluated was
Proved Developed Producing.

The 2002 Annual Reserve Report was prepared by Scott H Stinson, P.E. Mr. Stinson
is a registered Professional Engineer in the States of Wyoming and Colorado. Mr.
Stinson's  registration  number in Wyoming is #5290, his registration  number in
Colorado is #28624.

Neither Fall Line Energy,  nor Scott H Stinson,  has any interest in the subject
properties and neither the employment to make the study nor the compensation was
contingent  on the  estimates of reserves and the future income from the subject
properties.

If you have any questions or require any additional  information,  please do not
hesitate to call.

                             Sincerely,

                             Fall Line Energy, Inc.

                                     /s/


                             Scott H Stinson, P.E.
                             President


<PAGE>



                      CERTIFICATION PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

     I, Don J. Colton,certify that:

     1. I have  reviewed  this  annual  report on Form 10-KSB of Pioneer Oil and
Gas.

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not misleading with respect to the period covered by this report.

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this annual report.

     4. I am responsible for  establishing and maintaining  disclosure  controls
and  procedures  (as  defined in Exchange  Act Rules  13a-14 and 15d-14) for the
registrant and have:

          a) designed  such  disclosure  controls and  procedures to ensure that
     material information relating to the registrant, including its consolidated
     subsidiaries,  is  made  known  to  us by  others  within  those  entities,
     particularly  during  the period in which  this  quarterly  report is being
     prepared;

          b) evaluated the effectiveness of the registrant's disclosure controls
     and procedures as of a date within 90 days prior to the filing date of this
     annual report (the Evaluation Date); and

          c)  presented  in  this  annual  report  our  conclusions   about  the
     effectiveness  of the  disclosure  controls  and  procedures  based  on our
     evaluation as of the Evaluation Date;

     5.  I  have  disclosed,  based  on  the  most  recent  evaluation,  to  the
registrant's auditors and the audit committee of registrant's board of directors
(or  persons   performing  the  equivalent   functions):

     a) all  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls.

     6. I have  indicated  in this  annual  report  whether  or not  there  were
significant  changes  in  internal  controls  or in  other  factors  that  could
significantly affect internal controls subsequent to the date of the most recent
evaluation,   including  any  corrective  actions  with  regard  to  significant
deficiencies and material weaknesses.

DATE: December 10, 2002


                                            /s/ Don J. Colton
                                            -----------------------
                                            Don J. Colton, President

<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In  connection  with the filing of the Annual Report of Pioneer Oil and Gas
(the  "Company")  on Form 10-KSB for the period  ended  September  30, 2002 (the
"Report"),  I, Don J. Colton,  Chief Executive Officer of the Company,  certify,
pursuant  to 18  U.S.C.  ss.  1350,  as  adopted  pursuant  to  ss.  906  of the
Sarbanes-Oxley Act of 2002, that:

     (i) The Report fully complies with the requirements of section 13(a) of the
Securities Exchange Act of 1934; and

     (ii) The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.

/s/ Don J. Colton
-------------------------
Don J. Colton
Chief Executive Officer
December 10, 2002