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, 2004.

                         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 $1,918,272.

The  aggregate  market value on September  30th,  2004, of common shares held by
non-affiliates was approximately  $4,128,783 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 December 18, 2004 the issuer had 7,912,819  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 84095-5512.  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.

RECENT DEVELOPMENTS:

During  the last  three  years,  the  Company  has been  focusing  on  obtaining
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  30th,  2004, the Company has sold drilling  ventures for its Emigrant
Gap Prospect in Natrona County, Wyoming; Yankee Mine West Prospect in White Pine
County, Nevada and its Abel Springs Prospect in Nye County,  Nevada. The Company
has also entered into an  agreement to sell the  remaining  acreage in its Uinta
Basin  Overpressured  Gas Prospect in Utah and has accepted a deposit of $50,000
with the closing anticipated to occur on or before January 18, 2005. The Company
is  currently  marketing  its trend  acreage  in  central  Utah that is near the
overthrust  discovery  of  Wolverine  Gas  and  Oil.  The  Company  owns a 37.5%
undivided interest in approximately 60,000 acres on this overthrust trend. It is
also selling a large lease in the  northwest  portion of the Uinta Basin that is
about 12 miles  north of it Uinta Basin  Overpressured  Gas  Prospect  mentioned
above

The Yankee Mine West  Prospect in White Pine County  Nevada  commenced  drilling
operations  in  December  of 2004 with a  projected  drill  depth of 4500  feet.
Drilling on the Emigrant  Prospect and Abel Springs  Prospect is not anticipated
to begin  prior to spring of 2005 and most  likely will be delayed to the summer
of 2005.

During the last year the Company has increased the amount of undeveloped oil and
gas leases it holds from 59,018 gross acres on 9/30/03 to 109,933 gross acres on
9/30/04  primarily due to the purchase of acreage in Central  Utah.  (See "Wells
and Acreage").

<PAGE>

The  Company has also been  involved in a 3D seismic  project in Texas that will
continue  to cause the  Company  to expend  funds  during  the  current  year on
prospective prospects identified on 3D seismic. The Company owns a 1.65% working
interest in the 3D seismic  venture in Texas and has already  drilled four wells
on the 3D seismic  venture.  One of the wells has been deemed a producer and the
others dry holes.  The fifth well is  currently  being  drilled  and has not yet
reached the objective pay zone.  The producer is  anticipated to begin sales the
last part of December 2004.

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.  Primary among these  overriding  royalty  interests is the Hunter Mesa
Unit and Grass Mesa Unit in Garfield County,  Colorado. The Company's overriding
royalty interest  although less than a half of a percent in both the Hunter Mesa
Unit and the Grass Mesa Unit accounts for the majority of the Company's  royalty
income since the Units contain  several  hundred  wells.  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.

The Company over the last few 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.

<PAGE>

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 office 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.

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.

<PAGE>

The Company carries  comprehensive general liability in the amount of $6,000,000
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 blowouts of wells or environmental  problems 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 future the delays will not be more
expensive.

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
been  estimated  and is listed  under  the  classification  of asset  retirement
obligation  under  the  Statement  of  Operations  in  the  Company's  Financial
Statements.

<PAGE>


OTHER

The Company had a total of four full-time employees as of September 30, 2004.

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.  Contract  pumpers familiar with the oil and gas business in the area
that the well is located generally oversee wells operated by the Company.

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 500 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  primary  non-operated
properties  of the Company are its  interests  in the Hunter Mesa and Grass Mesa
Units in Garfield County,  Colorado.  Although the Company owns less then a half
of a percent  overriding  royalty interest in these  properties,  the revenue is
significant to the Company since the Company's  override in these  properties is
in more than 500 wells. The non-operating  properties of the Company account for
a little less than 50% 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.

EXPLORATION AND PRODUCTION

During the fiscal years ending  September  30, 2004,  and September 30, 2003 the
Company  participated as a working  interest owner in the drilling of wells only
in the Texas 3D seismic venture referenced above.  However, the Company plans to
participate as operator,  working interest owner in the drilling of its Emigrant
Gas Prospect and two Nevada ventures during the next 12 months. The Company also
will be drilling  additional  wells in the Texas 3D seismic  venture  during the
coming fiscal year along with participating in some of the overpressured acreage
for  which  it  retained  an  interest,  when and if a well is  drilled  on that
acreage.

<PAGE>


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, 2004. 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 product pricing used was based on actual spot prices  available
on  September  30,  2004.  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 $43.46/Bbl and $4.55/MCF.  The wellhead  prices are net of BTU and
gravity adjustments,  transportation  deductions and differentials between Rocky
Mountain gas and most other markets. For comparison purposes,  the average NYMEX
Henry Hub price for the same time period was $6.43/MMBTU,  the average price for
the Questar Rocky  Mountain Index was  $4.53/MMBTU,  and the average WTI Cushing
price was  $49.51/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                  11.442        24.639     $   219.193
-------------------------------------------------------------------------------
  Climax 7-2                         52.533         0.000         699.452
-------------------------------------------------------------------------------
  Pilot A-1 and Delta 1               0.360        98.984          64.501
-------------------------------------------------------------------------------
  Sheldon Tribal Lease (includes
-------------------------------------
  31-1, 21-1, 42-1 wells)            12.589         0.000         153.190
-------------------------------------------------------------------------------
  South Pine Ridge 7-6                0.127        44.370         104.290
-------------------------------------------------------------------------------
  Willow Creek 29-13                  8.340        21.174         208.047
-------------------------------------------------------------------------------

 Non-Operated
  Mamm Creek                          0.057        39.525          99.727
-------------------------------------------------------------------------------
  Climax Minnelusa Unit               2.600         0.000          31.186
-------------------------------------------------------------------------------
  Hunter Mesa Unit                    1.917       990.555       3,279.095
-------------------------------------------------------------------------------
  Grassy Mesa Unit                    0.548       161.964         516.330
-------------------------------------------------------------------------------
  Murdock 41-10                       3.143         0.000          30.519
-------------------------------------------------------------------------------
Totals                               93.656     1,381.211      $5,405.530
-------------------------------------------------------------------------------


     (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 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.

<PAGE>


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 2003 and 2004 prices again
have been extremely  volatile with oil prices  increasing  significantly  during
fiscal year ending  September  30th,  2004.  There can be no assurance  that oil
and/or  natural gas 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 as a source of energy as
compared with natural gas, 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 other factors,  all of which are beyond the control or influence of the
Company.

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, 2004,  the Company owned 5.89 net  productive  wells and 14
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,
2004.

             Developed Acreage              Undeveloped Acreage
             -----------------              -------------------
             Gross       Net                Gross       Net
             ------     -------             -------     --------
             2,600      1,600               107,333     66,415

Annual rentals on all  undeveloped  leases for the fiscal year ending  September
30, 2004 are expected to be approximately $75,000.

<PAGE>


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,
                                              -----------------------
                                                   2003       2004
                                                  -----      -----
Average net daily production of oil (Bbl)            44         37
Average net daily production of gas (MCF)           449        494
Average sales price of oil ($ per Bbl)           $26.43     $32.31
Average sales price of gas ($ per MCF)            $4.08      $4.97
Average lifting cost per bbl oil equiv.           $8.42      $7.54

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 is  located in an 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 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 84095-5512.  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.

<PAGE>



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

On July 28,  2004,  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             6,951,212           42,860         300
     Gregg B. Colton           6,951,212           42,860         300
     John O. Anderson          6,951,212           42,860         300

     2. To ratify the  appointment of Jones Simkins as independent  auditors for
     Pioneer Oil and Gas for the next fiscal year ending September 30, 2004.

                               For appointment
                               of Jones Simkins    Against        Abstained

     Number of Shares          6,961,307           30,980         2,103


     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, 2004        High            Low

First Quarter                       $.46            $.30
Second Quarter                       .70             .32
Third Quarter                        .90             .61
Fourth Quarter                      3.00             .55


Year Ended September 30, 2003        High            Low

First Quarter                       $.36            $.27
Second Quarter                       .45             .21
Third Quarter                        .43             .25
Fourth Quarter                       .47             .16

As of September 30, 2003 the Company had issued and outstanding 7,912,819 common
shares held by approximately 1,016 holders of record.

<PAGE>


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.

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.

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  in 1997 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 OPERATIONS -2004 Compared to 2003

Total  revenue for fiscal year 2004 was  $1,918,272 as compared to total revenue
for fiscal year 2003 of $1,929,279.  Total oil and gas sales (including  royalty
revenue)  increased 33 percent from  $1,360,985 to $1,805,077.  This increase in
oil and gas revenue was  primarily  due to higher  product  prices and increased
production  from our  Hunter  Mesa and Grassy  Mesa  units.  Average  gas prices
increased  22% from $4.08 MCF  (2003) to $4.97 MCF  (2004).  Average  oil prices
increased  22  percent  from  $26.43  per barrel in 2003 to $32.31 per barrel in
2004.

Project and lease sales income  decreased  from  $566,365 in 2003 to $113,195 in
2004. The Company sold  two-thirds of its  overpressured  gas project and a 3500
acre  coalbed  methane  lease  block in 2003.  Sales of leases  near Vernal Utah
accounted for most of the project and lease sales in 2004. Total revenue for the
company  declined  slightly  due to lower  project and lease  sales  income even
though oil and gas revenues increased significantly.

Costs of operations increased from $632,264 to $679,132.  This item includes all
well  operating  expenses and any amounts paid to employees  and other  interest
owners for their interest in producing  properties.  Increased  disbursements to
interest owners due to higher product prices accounted for most of the increase.

General  and  administrative  costs  increased  from  $316,259 in fiscal 2003 to
$346,970 in fiscal 2004 primarly due to higher payroll costs.

In fiscal 2004 loss on assets sold or abandoned  decreased  from $355,459 to $0.
The write-off of some of the Company's producing assets in Wyoming during fiscal
2003 accounted for the difference.

The  Company's  total   stockholders'   equity   increased  from  $1,034,808  to
$1,533,335.  Net income  increased  from  $177,413  in 2003 to $492,344 in 2004.
Earnings per share increased from $.02 in fiscal 2003 to $.06 in fiscal 2004.

LIQUIDITY AND CAPITAL RESOURCES

Historically the Company has funded operations  primarily from earnings and bank
borrowing.  As of  September  30,  2004  the  Company  had  working  capital  of
$1,151,486 and an unused line of credit with Zions Bank for $750,000.  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,  2003,  and was renewed for a
two year period  ending  December 31, 2005.  As of September  30, 2003 and as of
September 30, 2004, the amount on the credit line was $0 and $0 respectively.

During fiscal 2004 cash provided by operating activities was $274,903 while cash
used for investing activities was for $133,255. There was a net increase in cash
of $119,563,  as cash increased from $371,527 to $491,090.  The increase in cash
for operating  activities was primarily the result of a drilling advance for our
Yankee Mine Well in Nevada.

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  (before  income taxes) of all the
Company's properties as of September 30, 2004 was $5,405,530.

<PAGE>


INCOME TAXES

As of September 30, 2004,  the Company had net operating  loss carry forwards of
approximately  $1,164,000.  The present net operating loss  carry-forward of the
Company  will begin to expire in the year 2012.  If  substantial  changes in the
Company's  ownership  should  occur there would be an annual  limitation  of the
amount  of NOL  carry  forward  which  could be  utilized.  Also,  the  ultimate
realization of these carry forwards is due, in part, on the tax law in effect at
the time and future events that cannot be determined.

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 - FINANCIAL STATEMENTS

<PAGE>

                              PIONEER OIL AND GAS

                              FINANCIAL STATEMENTS

                          September 30, 2004 and 2003

<PAGE>



                               PIONEER OIL AND GAS

                              FINANCIAL STATEMENTS

                           September 30, 2004 and 2003



                                                    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-17




<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,  2004  and  2003,  and  the  related  statements  of  operations,
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 generally accepted auditing standards
as established by the Auditing Standards Board (United States) and in accordance
with the auditing  standards of the Public Company  Accounting  Oversight  Board
(United States).  Those standards  require that we plan and perform the audit to
obtain reasonable  assurance about whether the financial  statements are free of
material misstatement.  The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Company's internal control over financial  reporting.  Accordingly we express no
such  opinion.  An audit also  includes  examining,  on a test  basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by management,  as
well as evaluating the overall financial statement presentation. We believe that
our 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,  2004 and 2003,  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, P.C.
Logan, Utah
November 18, 2004


                                      F-2

<PAGE>
<TABLE>
<CAPTION>

                                                    PIONEER OIL AND GAS
                                                 STATEMENTS OF OPERATIONS
                                          Years Ended September 30, 2004 and 2003

                                                                                            2004                 2003
<S>                                                                               <C>                    <C>
                                                                                       -----------------    -----------------
Revenue:
Oil and gas sales                                                                   $          954,970              963,244
Royalty revenue                                                                                850,107              397,741
Operational reimbursements                                                                           -                1,929
Project and lease sales income                                                                 113,195              566,365
                                                                                      -----------------    -----------------

                                                                                             1,918,272            1,929,279
                                                                                      -----------------    -----------------

Costs and expenses:
Cost of operations                                                                             679,132              632,264
General and administrative expenses                                                            346,970              316,259
Exploration costs                                                                              208,309              248,753
Lease rentals                                                                                   54,083               57,395
Depreciation, depletion and amortization                                                        87,770              141,019
                                                                                      -----------------    -----------------

                                                                                             1,376,264            1,395,690
                                                                                      -----------------    -----------------

Income from operations                                                                         542,008              533,589
                                                                                      -----------------    -----------------

Other income (expense):
Loss on assets sold or abandoned                                                                     -             (355,459)
Interest income                                                                                 15,287               15,518
Interest expense                                                                                (3,059)             (23,476)
Other                                                                                           19,629                7,241
                                                                                      -----------------    -----------------

                                                                                                31,857             (356,176)
                                                                                      -----------------    -----------------

Income before provision for income taxes                                                       573,865              177,413

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

Net income before cumulative effect of a change in
  accounting principle                                                                         573,865              177,413

Cumulative effect of a change in accounting principle - asset
  retirement obligation                                                                        (81,521)                   -
                                                                                      -----------------    -----------------

Net income                                                                          $          492,344              177,413
                                                                                      =================    =================

Net income per common share - basic and diluted:
Income before cumulative effect of accounting change                                $              .07                  .02
Loss from cumulative effect of change in accounting principle                                     (.01)                   -
                                                                                      -----------------    -----------------

                                                                                    $              .06                  .02
                                                                                      =================    =================

Weighted average common shares - basic and diluted                                           7,931,000            7,962,000
                                                                                      =================    =================

                 See accompamying notes to financial statements

                                       F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                  PIONEER OIL AND GAS
                                                    BALANCE SHEETS
                                              September 30, 2004 and 2003


                                                                                     2004                   2003
                                                                              -------------------    -------------------
<S>                                                                       <C>                      <C>
                                 Assets

Current assets:
Cash                                                                        $            491,090                371,527
Accounts receivable                                                                      301,450                149,793
Resale leases, at lower of cost or market                                              1,052,292                219,677
                                                                              -------------------    -------------------

Total current assets                                                                   1,844,832                740,997

Property and equipment, net                                                              537,969                438,881
Other assets                                                                               2,230                  2,230
                                                                              -------------------    -------------------

                                                                            $          2,385,031              1,182,108
                                                                              ===================    ===================

                  Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable                                                            $            108,208                122,093
Accrued expenses                                                                          28,565                 25,207
Advances on drilling costs                                                               556,573                      -
                                                                              -------------------    -------------------

Total current liabilities                                                                693,346                147,300
                                                                              -------------------    -------------------

Asset retirement obligation                                                              158,350                      -
                                                                              -------------------    -------------------

Commitments and contingencies

Stockholders' equity:
Common stock, par value $.001 per share,
  50,000,000 shares authorized; 7,912,819 and
  7,961,618 shares issued and outstanding, respectively                                    7,912                  7,961
Additional paid-in capital                                                             2,473,256              2,495,292
Stock subscription receivable                                                           (203,659)              (231,927)
Accumulated deficit                                                                     (744,174)            (1,236,518)
                                                                              -------------------    -------------------

Total stockholders' equity                                                             1,533,335              1,034,808
                                                                              -------------------    -------------------

                                                                            $          2,385,031              1,182,108
                                                                              ===================    ===================


                 See accompamying notes to financial statements

                                       F-4
</TABLE>
<PAGE>

<TABLE>
<CAPTION>




                                     Common Stock           Additional    Stock
                                    --------------------     Paid-in      Subscription     Accumulated
                                    Shares       Amount      Capital      Receivable       Deficit           Total
                                    ---------    -------   ------------   ------------   -------------   ------------
                                    ---------    -------   ------------   ------------   -------------   ------------
<S>                               <C>          <C>       <C>            <C>            <C>             <C>

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

Payments on stock subscription
  receivable                                -          -              -         26,292               -         26,292

Net income                                  -          -              -              -         177,413        177,413
                                    ---------     -------   ------------   ------------   -------------   ------------
                                    ---------     -------   ------------   ------------   -------------   ------------

Balance at September 30, 2003       7,961,618      7,961      2,495,292       (231,927)     (1,236,518)     1,034,808

Payments on stock subscription
  receivable                                -          -              -         28,268               -         28,268

Purchase and retirement of common
  stock                               (48,799)       (49)       (22,036)             -               -        (22,085)

Net income                                  -          -              -              -         492,344        492,344
                                    ---------    -------   ------------   ------------   -------------   ------------
                                    ---------    -------   ------------   ------------   -------------   ------------

Balance at September 30, 2004       7,912,819    $ 7,912   $  2,473,256   $   (203,659)  $    (744,174)  $  1,533,335
                                    =========    =======   ============   ============   =============   ============
                                    =========    =======   ============   ============   =============   ============


                 See accompamying notes to financial statements

                                       F-5
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                               PIONEER OIL AND GAS
                            STATEMENTS OF CASH FLOWS
                     Years Ended September 30, 2004 and 2003


                                                                                           2004                 2003
                                                                                     -----------------    -----------------
<S>                                                                              <C>                   <C>
Cash flows from operating activities:
Net income                                                                         $          492,344              177,413
Adjustments to reconcile net income to net cash
  provided by operating activities:
Loss on assets sold, abandoned, and dry hole costs                                             19,984              355,459
Depreciation, depletion and amortization                                                       87,770              141,019
Accretion expense                                                                               4,609
Cumulative effect of change in accounting principle                                            81,521                    -
Employee benefit plan expense                                                                  41,772               41,396
Interest income                                                                               (13,504)             (15,104)
(Increase) decrease in:
Accounts receivable                                                                          (151,657)             (28,620)
Resale leases                                                                                (833,982)             308,131
Other assets                                                                                        -                 (230)
Increase (decrease) in:
Accounts payable                                                                              (13,885)              (6,334)
Accrued expenses                                                                                3,358               (5,745)
Advances on drilling costs                                                                    556,573                    -
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Net cash provided by operating activities                                                     274,903              967,385
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Cash flows from investing activities:
Acquisition of property and equipment                                                        (133,255)             (32,158)
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Net cash used in investing activities                                                        (133,255)             (32,158)
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Cash flow from financing activities:
Decrease in note payable                                                                            -             (654,158)
Purchase of common stock                                                                      (22,085)                   -
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Net cash used in financing activities                                                         (22,085)            (654,158)
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Net increase in cash                                                                          119,563              281,069

Cash, beginning of year                                                                       371,527               90,458
                                                                                     -----------------    -----------------
                                                                                     -----------------    -----------------

Cash, end of year                                                                  $          491,090              371,527
                                                                                     =================    =================
                                                                                     =================    =================
</TABLE>
                 See accompamying notes to financial statements

                                       F-6

<PAGE>
                               PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003




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 could 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, 2004 and 2003


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

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, 2004 and 2003



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

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 non-current,  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  non-current  depending on the periods in
which the temporary  differences are expected to reverse.  Temporary differences
result  primarily from net operating  loss  carryforwards,  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.

Stock-Based Compensation

The  Company   accounts  for  stock  options  granted  to  employees  under  the
recognition  and  measurement  principles of APB Opinion No. 25,  Accounting for
Stock  Issued to  Employees,  and related  Interpretations,  and has adopted the
disclosure-only provisions of Statement of Financial Accounting Standards (SFAS)
No. 123, "Accounting for Stock-Based Compensation." Accordingly, no compensation
cost has been  recognized in the financial  statements,  as all options  granted
under  those plans had an  exercise  price  equal to or greater  than the market
value of the  underlying  common stock on the date of grant.  Had the  Company's
options  been  determined  based  on the  fair  value  method,  the  results  of
operations  would have  remained  unchanged  as all options were vested in prior
years.

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.

                                      F-9

<PAGE>
                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


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

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.

<TABLE>
<CAPTION>


Note 2 - Property and Equipment

Property and equipment consists of the following:
                                                                                           September 30,
                                                                                     2004                2003
<S>                                                                        <C>                   <C>

         Oil and gas properties (successful efforts method)                  $      1,987,099          1,914,635
         Capitalized asset retirement cost                                            116,376               -
         Office furniture and equipment                                               139,360            133,321

                                                                                    2,242,835          2,047,956

         Less accumulated depreciation, depletion and
           amortization                                                            (1,704,866)        (1,609,075)

                                                                             $        537,969            438,881


</TABLE>

                                      F-10

<PAGE>
                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003


Note 3 - Asset Retirement Obligation

The Company has an obligation  to plug and abandon  certain oil and gas wells it
owns. Accordingly, a liability has been established equal to the obligation.

Following is a reconciliation of the aggregate  retirement  liability associated
with the Company's obligation to plug and abandon its oil and gas properties:

                                                                 2004

         Balance at beginning of year                    $          -
         Initial amount recorded for ARO                      116,376
         Cumulative effect of accounting change                37,365
         Additional obligations incurred                            -
         Revisions of estimate                                      -
         Accretion expense                                      4,609

         Balance at end of year                      $        158,350


Note 4 - Cumulative Effect of Change In Accounting Principle

The  Company  has  adopted  the  provisions  of SFAS 143  "Accounting  for Asset
Retirement  Obligations"  which requires  entities to record the fair value of a
legal liability for an asset retirement  obligation in the period in which it is
incurred.  The Company has recognized a liability  based on the present value of
the estimated  costs  related to its  obligation to plug and abandon the oil and
gas wells it owns. The Company has also  capitalized  the costs of the liability
through  increasing  the  carrying  amount  of its oil and gas  properties.  The
liability  is accreted  to its  estimated  present  value each  period,  and the
capitalized cost is amortizated over the useful life of the related asset.  Upon
settlement  of the  liability,  the Company will settle the  obligation  for its
recorded amount or incur a gain or loss upon settlement.

The effect of adopting SFAS 143 is recorded as the cumulative effect of a change
in accounting principle as follows:

         Amortization                                  $         44,156
         Accretion of asset retirement obligation                37,365

         Cumulative effect of change                   $         81,521

                                      F-11

<PAGE>
                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003

Note 5 - 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, 2005 and had no
outstanding  balance at September  30, 2004 and 2003.  Also, as of September 30,
2004, $20,000 of the $750,000 was reserved for an outstanding letter of credit.


Note 6 - 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 12).
During the years  ended  September  30, 2004 and 2003,  the  Company  recognized
$13,504 and $15,104 of interest income related to this note.


Note 7 - Income Taxes

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

                                                       Years Ended
                                                      September 30,
                                                   2004                2003

Income tax provision at statutory rate       $  160,000              45,000
Change in valuation allowance                  (160,000)            (45,000)
                                               --------            --------
                                           $          -                   -
                                               ========            ========

                                      F-12
<PAGE>

                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003

Note 7 - Income Taxes (continued)

Deferred tax assets (liabilities) are comprised of the following:

                                                       September 30,
                                                 2004                2003
                                               -------             ------
 Intangible drilling costs and depletion     $ 129,000             15,000
 Net operating loss carryforwards              396,000            696,000
 Asset Retirement Obligation                    31,000               -
 AMT credit carryforward                         -                  5,000
                                               -------            -------
                                               556,000            716,000
                                               -------            -------
 Valuation allowance                          (556,000)          (716,000)

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

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, 2004,  the Company had net operating loss  carryforwards  of
approximately  $1,164,000.  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 these  carryforwards  is due, in part, on the
tax law in effect at the time and future events that cannot be determined.


Note 8 - Sales to Major Customers

The Company had sales to major  customers  during the years ended  September 30,
2004 and 2003, which exceeded ten percent of total sales as follows:

                                            September 30,
                                             2004                2003
                                           -------            -------
         Company A                   $     788,000            115,000
         Company B                         434,000            420,000
         Company C                         207,000            414,000
         Company D                           -                134,000

                                      F-13

<PAGE>

                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003

Note 9 - 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, 2004 and 2003 there was $14,016 and $17,917,
respectively,  included in accounts payable due to officers as a result of these
activities.  Also at  September  30,  2004 and 2003  there was  $26,673  and $0,
respectively,  included in accounts  receivable due from officers 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 year are $30,000.  Rent expense for the years ended  September  30,
2004 and 2003 was approximately $30,000 each year.

The Company has a stock subscription receivable from the ESOP (see Note 6).


Note 10 - Supplemental Disclosures of Cash Flow Information

During the year ended September 30, 2004:

o The Company recorded an asset retirement  obligation and increased oil and gas
properties in the amount of $116,376.

o The  Company  transferred  property  from  Leases  for  Resale  to  Developing
Properties in the amount of $1,367.

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

                                            September 30,
                                       2004               2003
                                     ------             -------
         Interest            $        3,000              23,000
         Income taxes                     -                   -


Note 11 - 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.

                                      F-14

<PAGE>
                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003

Note 12 - Stock Options

The Company has granted  stock  options 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 is equal to or in
excess of the fair market  value of the stock on the date of grant.  All options
were granted and vested prior to 2003.

Information related to these options at September 30, 2004 is as follows:

                       Outstanding                         Exercisable
-------------------------------------------------    --------------------------
                            Weighted
                            Average
                            Remaining   Weighted                    Weighted
                            Contractual Average                     Average
Exercise      Number        Life        Exercise     Number         Exercise
Price         Outstanding  (Years)      Price        Exercisable    Price

$.20            420,000      6.9         $.20         420,000        $.20
====            =======      ===         ====         =======        ====

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, 2004 and 2003 was $41,772 and $41,396  respectively.
All  outstanding  shares  held by the ESOP are  included in the  calculation  of
earnings per share.


Note 13 - 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, 2004, the Company was unaware
of any such obligations or claims arising from this partnership.


                                      F-15
<PAGE>
                              PIONEER OIL AND GAS
                          NOTES TO FINANCIAL STATEMENTS
                           September 30, 2004 and 2003

Note 13 - Commitments and Contingencies (continued)

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.

Letter of Credit

The  Company  has  a  $20,000  letter-of-credit  related  to  its  oil  and  gas
operations.  The  letter-of-credit  was issued in connection  with the Company's
line-of-credit (see Note 5).

                                      F-16
<PAGE>

                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2004 and 2003





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."

<TABLE>
<CAPTION>


         Capitalized Costs Relating to Oil and Gas Producing Activities
                                                                                         September 30,

                                                                                     2004                2003
<S>                                                                        <C>                   <C>
Proved oil and gas properties and related equipment                          $      1,763,802          1,763,802
Unproved oil and gas properties                                                       223,298            150,833

         Subtotal                                                                   1,987,099          1,914,635

Accumulated depreciation, depletion and amortization
 and valuation allowances                                                          (1,553,389)        (1,483,991)

                                                                             $        433,710            430,644

</TABLE>


Costs  Incurred  in  Oil  and  Gas  Acquisition,   Exploration  and  Development
Activities
<TABLE>
<CAPTION>
                                                                                           September 30,
                                                                                     2004                2003
<S>                                                                        <C>                         <C>
Acquisition of properties:
        Proved                                                               $          -                   -
        Unproved                                                             $          -                   -
Exploration costs                                                            $          -                   -
Development costs                                                            $         91,081             96,272
</TABLE>


                                      F-17

<PAGE>

                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2004 and 2003
<TABLE>
<CAPTION>


                 Results of Operations for Producing Activities

                                                                                            Years Ended
                                                                                           September 30,
                                                                                     2004                2003
<S>                                                                        <C>                   <C>
Oil and gas - sales                                                          $      1,805,077          1,360,985
Production costs net of reimbursements                                               (733,215)          (687,730)
Exploration costs                                                                    (208,309)          (248,753)
Depreciation, depletion and amortization
   and valuation provisions                                                           (69,397)          (136,726)

Net income before income taxes                                                        794,156            287,776

Income tax provision                                                                 (270,000)           (98,000)

Results of operations from producing activities
 (excluding corporate overhead and interest costs)                           $        524,156            189,776

</TABLE>


                                      F-18
<PAGE>

                               PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2004 and 2003

                    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,
                                                                         2004                      2003
                                                                    Oil          Gas          Oil          Gas
                                                                  (bbls)        (mcf)       (bbls)        (mcf)
<S>                                                             <C>        <C>            <C>          <C>
Proved developed and undeveloped reserves:
  Beginning of year                                               116,486      879,320      118,572      774,733
  Revision in previous estimates                                   (9,212)     682,220       13,841       53,677
  Discoveries and extensions                                         -            -            -         214,708
  Purchase in place                                                  -            -            -           -
  Production                                                      (13,618)    (180,329)     (15,927)    (163,798)
  Sales in place                                                     -            -            -            -

  End of year                                                      93,656    1,381,211      116,486      879,320

Proved developed reserves:
  Beginning of year                                               116,486      879,320      118,572      774,733
  End of year                                                      93,656    1,381,211      116,486      879,320



</TABLE>
                                      F-19

<PAGE>


                              PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2004 and 2003

Standardized Measure of Discounted Future Net Cash Flows and Changes Therein
Relating to Proved Oil and Gas Reserves (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Years Ended
                                                                                           September 30,
                                                                                     2004                2003
<S>                                                                      <C>                        <C>
Future cash inflows                                                        $       10,409,000          7,340,000
Future production and development costs                                            (2,586,000)        (1,905,000)
Future income tax expenses                                                         (2,660,000)        (1,848,000)

                                                                                    5,163,000          3,587,000

10% annual discount for estimated timing of cash flows                             (1,953,000)        (1,415,000)

Standardized measure of discounted future net cash flows                   $        3,210,000          2,172,000

</TABLE>

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-20

<PAGE>
                              PIONEER OIL AND GAS
                      SCHEDULE OF SUPPLEMENTARY INFORMATION
                            ON OIL AND GAS OPERATIONS
                           September 30, 2004 and 2003

                     Changes in the Standardized Measure of
                    Discounted Future Cash Flows (Unaudited)
<TABLE>
<CAPTION>

                                                                                           Years Ended
                                                                                           September 30,
                                                                                     2004                2003
<S>                                                                        <C>                      <C>

Balance, beginning of year                                                   $      2,172,000            877,000
Sales of oil and gas produced net of production costs                                (839,000)          (539,000)
Net changes in prices and production costs                                          1,424,000         (1,186,000)
Extensions and discoveries, less related costs                                          -                876,000
Purchase and sales of minerals in place                                                 -                   -
Revisions of estimated development costs                                                -                   -
Revisions of previous quantity estimate                                               771,000            351,000
Accretion of discount                                                                 217,000             88,000
Net changes in income taxes                                                          (535,000)          (667,000)

Balance, end of year                                                         $      3,210,000          2,172,000


                                      F-21
</TABLE>

<PAGE>


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

The  Company  has had no changes in and/or  disagreements  with its  Accountants
during the last two fiscal years.

ITEM 8A-CONTROLS AND PROCEDURES

The term "disclosure controls and procedures" (defined in Rule 13a-15(e)) refers
to the  controls  and  procedures  of a company that are designed to ensure that
information  required to be  disclosed by a company in the reports that it files
under the Securities and Exchange Act of 1934 (the "Exchange  Act") is recorded,
processed,  summarized and reported within required time periods.  The Company's
Chief  Executive  Officer  and  Chief  Financial  Officer,   has  evaluated  the
effectiveness of the Company's  disclosure  controls and procedures as of a date
within 90 days before the filing of this annual report,  and he concluded  that,
as of such date, the Company's controls and procedures were effective.


                                    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             58      President/Treasurer & Director
     Gregg B. Colton           51      Vice President/Secretary & Director
     John O. Anderson          62      Office Manager/Director
     Michael L. Pinnell        60      Exploration Manager
     Lynn Woodbury             41      Director

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.

<PAGE>

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 in 1972.

Lynn  Woodbury  became a member of the Board of Directors of the Company in July
of 2004 and is the sole member of the Company's  audit  committee.  Ms. Woodbury
works  full-time  for  International  Petroleum  LLC  as  their  Controller  and
supervises  all phases of accounting  for  International  Petroleum LLC. She has
been employed by International  Petroleum LLC from 1999 to the present. Prior to
joining  International  Petroleum  LLC,  Ms.  Woodbury  from  1996 to  1999  was
self-employed  and provided tax  planning and  compliance  services for clients.
From 1986 to 1996, Ms. Woodbury was a staff  accountant for Kevin R. Huntington.
Ms. Woodbury  obtained a BS in Accounting in 1985 from Brigham Young  University
and has been a licensed  certified public accountant since 1994. She is a member
of the American  Institute of Certified  Public  Accountants and a member of the
Utah Association of Certified Pubic Accountants.

AUDIT COMMITTEE

The Company's  Audit  Committee  has the  responsibility  of assisting  with the
selection  of the  independent  auditors,  approving  all  audit  and  non-audit
services,  reviewing with management and the independent  auditors the Company's
financial  statements,   significant   accounting  and  financial  policies  and
practices,  audit scope and adequacy of internal audit and control systems.  The
Audit Committee is comprised of Lynn Woodbury,  presently the sole member of the
committee.  Ms.  Woodbury  will  meet  each  quarter  to  review  the  financial
statements of the Company prior to submission with the SEC. Ms. Woodbury, a CPA,
is  considered  an  independent   director  in  accordance   with  the  National
Association of Securities  Dealer's listing standards and serves as the Chairman
and  designated  financial  expert for the audit  committee.  All members of the
Audit  Committee  are  able  to  read  and  understand   fundamental   financial
statements.

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.

<PAGE>


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, 2004, 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, 2004.

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, 2004,  2003,  and 2002.  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        $91,129(1)               2004
Don J. Colton, CEO        $90,504(1)               2003
Don J. Colton, CEO        $90,504(1)               2002


     (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 fiscal
     year 2002 shown above 10% and in 2003 and in 2004, 15% of the  compensation
     amount above was paid towards the Employee Stock Ownership Plan in the form
     of Company  stock.

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 three  years that are
required to be  disclosed  under this filing:

<PAGE>


                        OPTION GRANTS IN LAST TWO FISCAL
                                     YEARS

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


   Don J. Colton, CEO   120,000         0.0%              $.20/Share     (1)

     (1) 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, 2004.  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                      880,625(1)             10.6%
          2172 E Gambel Oak Drive
          Sandy, Utah 84092

Common    Gregg B. Colton                    890,664(1)             10.7%
          10026 Ridge Gate Circle
          Sandy, Utah 84092

Common    John O. Anderson                   535,703(1)              6.4%
          7462 S Parkridge Circle
          Salt Lake City, Utah 84121

Common    Lynn Woodbury
          4834 South Highland Drive
          Salt Lake City, Utah 84117

Common    Pioneer Employee Stock            1,018,290(2)            12.22%
          Ownership Plan
          1206 W. South Jordan Parkway
          Unit B
          South Jordan, Utah 84095-5512

All Directors and Officers as a Group
(3 Persons)                                 2,306,992               27.69%

          (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.

<PAGE>


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 benefits its employees  other
than by monetary  compensation  by  assigning  overriding  royalty  interests to
Company  employees  that have  assisted  the  Company on the various oil and gas
projects.

The Company  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,  during the fiscal year 2004
the Company  repurchased a total of 48,799 common shares through its purchase of
small  shareholder  stock.  During fiscal year ending  September  30, 2002,  the
Company  repurchased  25,000  common  shares and none during  fiscal year ending
September 30, 2003.  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 letters from Petroleum Engineer

31                     Certification of the Chief Executive
                       Officer and Chief Financial Officer
                       pursuant to Rule 13a-14 of the
                       Securities and Exchange Act of 1934,
                       as amended, as adopted pursuant to
                       Section 302 of the Sarbanes-Oxley
                       Act of 2002.

32                     Certification of the Chief Executive Officer and
                       Chief Financial Officer pursuant to 18 U.S.C.
                       Section 1350 as adopted pursuant to
                       Section 906 of the Sarbanes-Oxley
                       Act of 2002.

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

REPORTS ON FORM 8-K

                The Company filed one form 8K during fiscal year ending
September 30, 2004, regarding the Company's buyback of common shares from
shareholders owning 1000 or less shares in the Company. Most of the common
shares acquired by the Company during fiscal year 2004 were purchased pursuant
to the small shareholder buyback plan.

<PAGE>


ITEM 14-PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees: The Company's  principal  accountants  billed fees of  approximately
$14,000  and $13,570 for the fiscal  years  ended  September  30, 2004 and 2003,
respectively,  for the audit of the Company's  annual  financial  statements and
review of quarterly financial statements reported on Form 10-QSB.

Tax Fees: The Company's  principal  accountants  billed the Company for tax fees
during  fiscal  years 2004 and 2003 for  assistance  with filing the federal tax
return  and state tax  return in Utah in the amount of  $1,681.76  and  1,581.76
respectively.

All Other Fees:  The Company was not billed for any other fees by its  principal
accountants during the fiscal years ended September 30, 2004, or 2003. The Audit
Committee  commencing  this year requires that all audit and non-audit  services
performed  by the  Company's  principal  accountants  are approved by the entire
Audit Committee.

                                   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

          /s/
_________________________ Director
   Lynn  Woodbury


<PAGE>


                                   Exhibit 23




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


                                November 15, 2004


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


                                            RE:    Pioneer Oil and Gas
                                                   2004 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, 2004. 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 were based on actual spot prices  available on September  30, 2004.
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 $43.46/Bbl and
$4.55/MCF. This represents an increase of $17.61/Bbl and a decrease of $0.24/MCF
from  last  years  report.  The  wellhead  prices  are  net of BTU  and  gravity
adjustments,  transportation deductions and differentials between Rocky Mountain
markets and most other  markets.  For comparison  purposes,  the NYMEX Henry Hub
price for September 30th, 2004 was $6.43/MMBTU,  the price for the Questar Rocky
Mountain Index was  $4.53/MMBTU,  and the WTI Cushing price was $49.51/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.
Ownership  in the Hunter  Mesa Unit was based on the  twentieth  revision of the
Unit Participating Area (PA), effective December 1, 2003. Ownership in the Grass
Mesa Unit was based on the twenty-first  revision of the Unit PA, effective June
1, 2003.

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.  Reserve
estimates for the Hunter Mesa and Grass Mesa Unit were obtained by extrapolating
the performance of average or normalized  wells in the field to the total number
of wells currently in the unit as obtained from the operator, EnCana Oil and Gas
(USA) Inc.


<PAGE>



Estimation of Plugging Liability:
In order to facilitate the financial planning needed to cover future obligations
for the Plugging and Abandonment (P&A) of wells in which POG owns a working
interest, a cursory review of the wells and the potential costs was performed
and is summarized in the table below.




                     POG      # of    Approximate   * Est. P&A         Net POG
Property Name        WIO%     Wells   Depth-ft      Cost/ Well       Obligation

-------------------------------------------------------------------------------
Sheldon Tribal       20.0%    5       5,000          $ 40,000          $ 40,000
Pilot A-1           100.0%    2       4,000          $ 30,000          $ 60,000
Climax Unit           5.8%    3       8,000          $ 50,000           $ 8,640
Climax 7-2           80.5%    1       8,000          $ 70,000          $ 56,375
Canyon State 2-36    76.0%    1       5,000          $ 50,000          $ 38,000
S. Pine Ridge        37.5%    1       6,000          $ 40,000          $ 15,000
Murdock #41-10        8.3%    1       7,000          $ 50,000           $ 4,166
Willow Creek         76.1%    1       5,000          $ 40,000          $ 30,440
-------------------------------------------------------------------------------
                              15                                      $ 252,621

* Cost does not include any salvage value for surface  facilities,  equipment or
casing.

In the individual  property cashflows attached to this report, no P&A obligation
was  included.  The  assumption  was made that the cost to plug and  abandon the
wells would be offset by the salvage value of the equipment.

Evaluator Information:
Scott H Stinson is a consulting petroleum engineer with 24 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.

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 was  recently  the  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.

<PAGE>


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 27, 2004

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


                                                  RE:    Pioneer Oil and Gas
                                                         2004 Reserve Report


Dear Mr. Colton:

The 2004 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, 2004.  The original  report was signed on November 15, 2004.  The
report was prepared for  inclusion in standard  company  filings and  accurately
reflects  the value to POG as of September  30,  2004.  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 2004 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>



Exhibit 31

                      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 28, 2004


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

<PAGE>



Exhibit 32

                            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,  2004  (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 28, 2004