UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

[X]     Quarterly report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934
        For the quarterly period ended: June 30, 2008

[ ]    Transition report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the transition period from _______ to _________

                       Commission file number: 000-53124
                              COLONY ENERGY, INC.
             (Exact name of registrant as specified in its charter)

       Delaware                                     76-0662309
(State or other jurisdiction of                   (I.R.S. Employer
 incorporation or organization)                  Identification No.)


2100 West Loop South, Suite 900, Houston, Texas        77027
   (Address of principal executive offices)          (Zip Code)

                                  713/590-5060
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]   No [ ]

Indicate  by  check mark whether the registrant is a large accelerated filer, an
accelerated  filer, a non-accelerated filer, or a smaller reporting company. See
the  definitions  of "large accelerated filer," "accelerated filer" and "smaller
reporting  company"  in  Rule  12b-2  of  the  Exchange  Act.

     Large  accelerated  filer [ ]               Accelerated  filer [ ]

     Non-accelerated  filer  [ ]                 Smaller  Reporting  Company [X]
(Do  not  check  if  a  smaller  reporting  company)

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

The number of shares of common stock, $.001 par value, outstanding as of August
06, 2008: 6,375,000 shares




<PAGE>
                              COLONY ENERGY, INC.
                           PERIOD ENDED JUNE 30, 2008

                                     INDEX

PART I.  FINANCIAL INFORMATION                                            Page

   ITEM 1.     FINANCIAL STATEMENTS                                        1

     Financial statements of Colony Energy, Inc. (unaudited):

        Balance sheets as of June 30, 2008 and December 31, 2007           1

        Statements of expenses for the three and six months ended
        June 30, 2008 and 2007 and period from July 20, 2000
        (inception) through June 30, 2008                                  2

        Statements of cash flows for the six months ended June 30,
        2008 and 2007 and period from July 20, 2000 (inception)
        through June 30, 2008                                              3

        Notes to financial statements                                      4

   ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS                         5

   ITEM 4T.    CONTROLS AND PROCEDURES                                     9

PART II.  OTHER INFORMATION

   ITEM 1.     LEGAL PROCEEDINGS                                           9

   ITEM 6.     EXHIBITS                                                    9

SIGNATURES                                                                10

<PAGE>


PART I.   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS


                              COLONY ENERGY, INC.
                         (AN EXPLORATION STAGE COMPANY)
                                 BALANCE SHEETS
                                  (UNAUDITED)

                                                     JUNE 30,    DECEMBER 31,
                                                      2008          2007
ASSETS

Current Assets
    Cash                                           $     23,764   $     136,168
    Prepaid expenses                                      6,874           1,470
                                                   ----------------------------
Total Current Assets                                     30,638         137,638

OIL AND GAS PROPERTIES, full cost method
    Unevaluated properties, Net of
       Impairment Expense                               277,711         277,383
                                                   ----------------------------
TOTAL ASSETS                                       $    308,349  $      415,021
                                                   ============================

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
    Accounts payable                               $      4,955  $        6,532
    Accrued interest payable - related parties           32,978           6,767
    Notes payable - related parties                     555,000         525,000
                                                   ----------------------------
Total  Current Liabilities and Total Liabilities        592,933         538,299

STOCKHOLDERS'  DEFICIT

Preferred stock, $0.01 par value, 10,000,000
    shares authorized, none outstanding                       -               -

Common stock, 50,000,000 common shares authorized
    with a par value of $0.001, 6,375,000 common
    shares issued and outstanding                         6,375           6,375

Subscription receivable                                 (9,000)          (9,000)

Additional paid-in capital                               5,693            5,693

Deficit accumulated during the exploration stage      (287,652)        (126,346)
                                                   ----------------------------
Total Stockholders' Deficit                           (284,584)        (123,278)
                                                   ----------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT        $   308,349  $       415,021
                                                   ============================

   The accompanying notes are an integral part of these financial statements.

                                       1

<PAGE>


                              COLONY ENERGY, INC.
                        ( AN EXPLORATION STAGE COMPANY)
                             STATEMENTS OF EXPENSES
             THREE AND SIX MONTHS ENDED JUNE 30, 2008 AND 2007 AND
          PERIOD FROM JULY 20, 2000 (INCEPTION) THROUGH JUNE 30, 2008
                                  (UNAUDITED)

                     Three                           Six      For the period
                     months     Three     Six       months      July 20, 2000
                     ended      months   months     ended       (Inception)
                    June 30, ended June ended June June 30,  through June 30,
                     2008      30, 2007 30, 2008    2007            2008

OPERATING EXPENSES:

General and admini-
  strative         $ 61,756  $      -   $ 135,095        -    $    182,187
Impairment of un-
  evaluated oil and
  gas properties          -         -           -        -          64,383
                   -------------------------------------------------------
Total Operating
   Expenses          61,756         -     135,095        -         246,570
                   -------------------------------------------------------

LOSS FROM
   OPERATIONS       (61,756)        -    (135,095)       -        (246,570)
                   -------------------------------------------------------

OTHER EXPENSE

Interest expense    (13,122)     (213)    (26,211)    (336)        (41,082)
                   -------------------------------------------------------
Total Other
   Expenses         (13,122)     (213)    (26,211)    (336)        (41,082)
                   -------------------------------------------------------

NET LOSS            (74,878)     (213)   (161,306)    (336)       (287,652)
                   =======================================================


Net loss per common
   share - basic
   and diluted     $  (0.01) $      -   $   (0.03)  $    -
                   ==========================================

Weighted average
  shares outstanding
  - basic and
  diluted         6,375,000       N/A   6,375,000      N/A
                  ============================================


   The accompanying notes are an integral part of these financial statements.

                                       2


<PAGE>
                              COLONY ENERGY, INC.
                         (AN EXPLORATION STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
                  SIX MONTHS ENDED JUNE 30, 2008 AND 2007 AND
          PERIOD FROM JULY 20, 2000 (INCEPTION) THROUGH JUNE 30, 2008
                                  (UNAUDITED)

                                                            For the period July
                                              Six Months         20, 2000
                          Six Months Ended    Ended June   (Inception) through
                            June 30, 2008    June 30,2007    June 30, 2008


CASH FLOWS FROM OPERATING ACTIVITIES

   Net loss                $   (161,306)     $     (336)    $       (287,652)
   Adjustments to reconcile
    net loss to cash used in
    operating activities:
      Stock and Warrants
        issued for
        compensation                  -               -                  593
      Impairment of un-
        evaluated oil and
        gas properties                -               -               64,383

      Changes in assets and
        liabilities:
         Prepaid expenses        (5,404)              -               (6,874)
         Accounts payable
          and accrued
          liabilities            24,634             336               31,601
                           -------------------------------------------------
Net Cash Used in Operating
  Activities                   (142,076)              -             (197,949)
                           -------------------------------------------------

CASH FLOWS USED IN INVESTING ACTIVITIES

Purchase of  oil and gas
  property                         (328)              -             (335,562)
                           -------------------------------------------------
Net Cash Used in Investing
  Activities                       (328)              -             (335,562)
                           -------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from the sale of
  common stock                        -               -                2,275
Proceeds of note payable
  - related party                30,000           7,500            1,017,500
Repayment of note payable
  - related party                     -               -             (462,500)
                           -------------------------------------------------
Net cash Provided by
  Financing Activities           30,000           7,500              557,275
                           -------------------------------------------------

NET INCREASE IN CASH           (112,404)          7,500               23,764

CASH AT BEGINNING OF PERIOD     136,168             972                    -

CASH AT END OF PERIOD      $     23,764       $   8,472       $       23,764
                           =================================================

Supplemental cash flow Disclosures

Interest Paid              $          -       $       -       $        8,104

Income taxes Paid          $          -       $       -                    -


The accompanying notes are an integral part of these financial statements.

                                       3



<PAGE>
                              COLONY ENERGY, INC.
                         (AN EXPLORATION STAGE COMPANY)
                         NOTES TO FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE 1.   ORGANIZATION AND BASIS OF PRESENTATION

Organization

Colony  Energy,  Inc. ("Colony" or the "Company") was originally incorporated in
the  State  of  Delaware  on  July  7,  2000 as "DirectMoviesOnline.Com Inc" but
changed  its  name  to  Colony  Energy,  Inc. on September 12, 2006. The Company
engages  primarily  in the exploration and development of oil and gas properties
in  the  United States. The Company currently participates in the exploration of
several  unevaluated  oil  and  gas  properties.

Basis of Presentation

The  accompanying  unaudited  interim  financial  statements of Colony have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of  America  and  the  rules  of  the  Securities  and  Exchange
Commission,  and  should  be  read  in  conjunction  with  the audited financial
statements  and  notes thereto contained in Colony's Form 10-12G. In the opinion
of  management,  all  adjustments,  consisting  of normal recurring adjustments,
necessary  for  a  fair  presentation  of  financial position and the results of
operations  for  the  interim  periods presented have been reflected herein. The
results  of operations for the interim periods are not necessarily indicative of
the  results to be expected for the full year. Notes to the financial statements
that  would  substantially  duplicate  the  disclosures contained in the audited
financial  statements  for fiscal 2007 as reported in the Form 10-12G, have been
omitted.

Certain  prior  period  numbers  are  reclassified  to conform to current period
presentation.

NOTE 2.   GOING CONCERN

Colony  has  been  in  the exploration stage since its formation and has not yet
realized  any  revenues  from its planned operations. It is primarily engaged in
the  acquisition,  exploration  and  development  of oil and gas properties. The
ability  of the Company to emerge from the exploration stage with respect to its
principal  business  activity  is dependent upon its successful efforts to raise
additional debt and/or equity financing and generate significant revenue. Colony
has incurred losses of $287,652 since inception. These factors raise substantial
doubt  regarding  Colony's  ability  to  continue as a going concern. Management
plans  to raise additional capital through equity and/or debt financings. Colony
cannot offer any assurances that it will be successful in executing its plans to
continue  as  a going concern. Colony's financial statements at June 30, 2008 do
not  include any adjustments that might result from the inability to continue as
a  going  concern.

NOTE  3.  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

See  the  audited  financial  statements and notes thereto contained in Colony's
Form  10-12G  filed  with  the  SEC  on  March  6,  2008.

NOTE 4.   RELATED PARTY TRANSACTIONS

During the quarter ended June 30, 2008, Colony entered into $ $30,000 promissory
note agreement with a related party. The amount is due upon demand and interest
is accrued at the stated rate of 10% per annum.

All  debt  is  due on demand classified as current in the accompanying financial
statements.

NOTE 5.   SUBSEQUENT EVENTS

Subsequent  to  the  quarter  ended  June  30, 2008, Colony entered into $20,000
promissory  note  agreement  with a related party. The amount is due upon demand
and  interest  is  accrued  at  the  stated  rate  of  10%  per  annum.

On  July 31, 2008, the Company entered into contribution agreements with a total
of six parties, whereby these parties would contribute and assign to the Company
certain assets separately owned by them in exchange for shares of a new class of
preferred  stock  and  for  the  assumption  of  an  aggregate  of  $890,000  in
indebtedness.

                                       4

<PAGE>



ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

                                    GENERAL

     Colony  Energy, Inc. is an early-stage, independent oil and gas exploration
and  production company based in Houston, Texas.  Our company was formed for the
purpose  of providing video-on-demand service to consumers by means of broadband
or  high-speed  Internet  connections.  This  business  did not succeed, and our
company  had been inactive from a business perspective since early 2001.  During
the  summer  of  2006,  we  began  considering  the  possible  re-activation  of
operations  with  a focus on the acquisition of attractive crude oil and natural
gas prospects, and the exploration, development and production of oil and gas on
these  prospects.  We  entered  into our first project related to oil and gas in
August  2007.

     On  August  29, 2007, we entered into an agreement (the "Enexco Agreement")
with  Enexco,  Inc.  ("Enexco"), a privately held entity engaged in the drilling
and completion of wells on oil and gas leases covering lands located in Oklahoma
and  Texas.  Under the terms of the Enexco Agreement, we will make available, at
our  discretion, to Enexco funds to cover 65% of the costs incurred by Enexco in
connection  with  its  acquisition  of  three certain oil and gas leases, two in
Oklahoma  and one in Texas. In consideration of our providing this financing, we
received  an  interest in each of the three leases, and an option to participate
in  the  drilling  of  each well on any of these leases.  Before any well can be
drilled  on  any  of  these leases, Enexco must repay the amount loaned by us to
acquire  the  lease.  Enexco  has  subsequently  paid  off  all amounts advanced
pursuant  to  the  Enexco  Agreement.

     We  have  acquired  our  only  oil  and gas assets thus far pursuant to the
Enexco Agreement, although we are currently seeking other assets to acquire. The
first well in which we participated pursuant to the Enexco Agreement was drilled
to  its  target  depth  and  encountered  the target sand. However, the sand was
"tight," and this well on the lease in Okfuskee County, Oklahoma was plugged and
abandoned.  Shortly prior to the date of this Quarterly Report, the second well,
located  in Seminole County, Oklahoma and in which we are participating pursuant
to  the  Enexco Agreement, was fracture stimulated. On July 29, 2008 the service
rig  on  this  second  well  pulled  the  rods,  and  the well was put back into
production.  During  the seven days thereafter, the average production from this
well  was approximately 15 bbls/day of crude oil and 146 mcf/day of natural gas.

     On  July  31, 2008, the Company entered into contribution agreements with a
total  of  six parties, whereby these parties would contribute and assign to the
Company  certain assets separately owned by them in exchange for shares of a new
class  of  preferred  stock  and  for the assumption of aggregate of $890,000 in
indebtedness.  The  consummation  of  this  transaction  is  subject  to several
closing  conditions,  including,  without  limitation, that the Company complete
(within  180  days  of  the  execution of the contribution agreements) a private
placement of common stock raising at least $15.0 million, and (in certain cases)
the  Company  procure  releases  of  certain  personal  guaranties.  If  this
transaction  is  completed,  the  Company  expects the Board of Directors of the
Company  will  be  reconstituted  and elected largely by the contributors of the
assets, who would then own a significant percentage of the Company's outstanding
voting  stock.  In such event, the reconstituted Board will control the Company.
There can be no assurance that the transactions described in this paragraph will
be  consummated.

     Furthermore,  there  can  be no assurance that we will be successful in our
exploration,  development,  and production activities.  The oil and gas business
involves  numerous  risks,  the  principal  ones  of  which are described in the
section  captioned  "Risk  Factors"  in  our  General  Form  for Registration of
Securities  on  Form  10.

     The  following  discussion  and  analysis  of  our  financial condition and
results  of  operations  should  be  read  in  conjunction  with  our  financial
statements  and  related notes included elsewhere in this Report. In addition to
historical  information,  the discussion in this Report contains forward-looking
statements  that  involve  risks  and uncertainties. Actual results could differ
materially  from  those  anticipated  by these forward-looking statements due to
factors including, but not limited to, those factors set forth elsewhere in this
Report  and  in  the  section  captioned  "RISK FACTORS" in our General Form for
Registration  of  Securities  on  Form  10.

                                       5
<PAGE>

                             RESULTS OF OPERATIONS

    Quarter Ended June 30, 2008 Compared to the Quarter Ended June 30, 2007
    -----------------------------------------------------------------------

     We  had  minimal operations in the second quarter of 2008 consisting of the
continuation  of  the  activation  of our oil and gas exploration and production
activities.  In second quarter of 2007, our activities were even more minimal as
we  merely  prepared  to activate our exploration and production activities.  We
had  no  revenues  in either the second quarter of 2008 or the second quarter of
2007.  In  the  second  quarter  of 2007, our only expenses consisted of $213 in
interest  expense.  In  the  second  quarter  of  2008,  our largest expense was
$61,756  in  general  and  administrative expenses.  Our interest expense in the
second  quarter of 2008 increased to $13,122 as a result of a larger outstanding
balance  of  indebtedness.  As  a result of these two expenses, we experienced a
$74,878  loss  for the second quarter of 2008, or a net loss of $0.01 per share.

 Six Months Ended June 30, 2008 Compared to the Six Months Ended June 30, 2007
 -----------------------------------------------------------------------------

     We  had  minimal  operations  in  the  first half of 2008 consisting of the
continuation  of  the  activation  of our oil and gas exploration and production
activities.  In  first half of 2007, our activities were even more minimal as we
merely  prepared  to activate our exploration and production activities.  We had
no  revenues in either the first half of 2008 or the first half of 2007.  In the
first half of 2007, our only expenses consisted of $336 in interest expense.  In
the  first  half  of  2008,  our  largest  expense  was  $135,095 in general and
administrative  expenses.  Our  interest  expense  in  the  first  half  of 2008
increased  to  $26,211  as  a  result  of  a  larger  outstanding  balance  of
indebtedness.  As a result of these two expenses, we experienced a $161,306 loss
for  the  first  half  of  2008,  or  a  net  loss  of  $0.03  per  share.

                        LIQUIDITY AND CAPITAL RESOURCES

     As  of  June  30, 2008, we had cash of approximately $23,764, a decrease of
$112,404,  versus  cash,  of  approximately  $136,168  as  of December 31, 2007.

     We have already raised "seed" capital in the form of loans in the aggregate
amount  of  approximately  $555,000.  The party who made some of these loans was
CEI  Ventures,  LLC, an entity owned by Kent E. Lovelace, Jr. (a director and an
officer  of  ours),  the F.E.I. Energy Trust (a significant stockholder of our),
and  Westside  Resources,  L.P.  ("WRLP"), an entity of which Jimmy D. Wright (a
director  of  ours) is the sole owner.  The loans from CEI Ventures, LLC totaled
approximately  $525,000.  The bulk of the proceeds of this loan went to fund our
obligations  under  the  Enexco  Agreement.  This  loan is secured by all of our
assets,  including  our  oil and gas interests heretofore received in connection
with  the  Enexco  Agreement,  as  well  as  all  future  oil and gas interests.
Interest  accrues on this loan at a rate of 10% per annum.  This loan can become
due  and payable at any time upon the demand of the lender.  In consideration of
making  the  loan,  we  granted  warrants  to the owners of CEI Ventures, LLC to
purchase  up  to  an  aggregate  of  1,050,001  shares of our common stock for a
per-share  exercise  price  of  $.50.  These  warrants  have  a  term of and are
exercisable for five years.  In connection with this loan, we agreed to register
all shares separately owned by the owners of CEI Ventures, LLC or to be acquired
pursuant  to  derivative  securities,  including  the shares to be acquired upon
exercise  of  the  warrants issued in connection with the loans described above.
In connection with this loan, we entered into a "piggy back" registration rights
agreement  with  each  of  the owners of CEI Ventures, LLC, whereby each of them
will  have the right to include in any registration with the U.S. Securities and
Exchange  Commission any and all shares owned by them or to be acquired pursuant
to  derivative  securities, including the shares to be acquired upon exercise of
the warrants issued in connection with the loan described above.  In addition to
the  loans  from  CEI  Ventures, LLC, WRLP has advanced an outstanding principal
balance  of  $30,000  as  of  the  date  of this Report.  The proceeds from this
advance  were  used  for  overhead  expenses.  WRPL's  advance  was  made  on an
unsecured,  demand  basis,  bearing  interest  at  the  rate  of  10% per annum.

                                       6
<PAGE>


     Currently,  we  can  finance  only  the limited exploration activity by the
Enexco  Agreement  described above.  We will have to obtain additional financing
to  pursue  additional  opportunities.  At  the  present  time, we are currently
trying to determine the scope of the business activities that we wish to pursue.
The amount of capital that we will need will depend on the scope of the business
activities that we ultimately decide to pursue, which is uncertain at this time.
However, for us to pursue business activities much greater than those related to
the  Enexco  Agreement,  we  would  be  required  to undertake certain financing
activities.  We  currently  do  not have any binding commitments for, or readily
available  sources  of,  additional  financing.  We  cannot  assure  anyone that
additional  financing will be available to us when needed or, if available, that
it  can  be  obtained  on  commercially  reasonably  terms.  If we do not obtain
additional  financing we will not be able to expand the scope of our business or
even  stay  in  business for that matter.  If we are unable to obtain additional
funds,  we  may  have to reduce the scope our business activities.  If we do not
obtain  additional  financing,  we may be constrained to attempt to sell our oil
and  gas  interests  that we have accumulated.  However, we cannot assure anyone
that  we  will be able to find interested buyers or that the funds received from
any  such  sale  would  be  adequate  to  fund  our  activities.  Under  certain
circumstances,  we  could  be  forced  to cease our operations and liquidate our
remaining  assets,  if  any.

     Production  from our exploration and drilling efforts would provide us with
cash  flow,  and  a  proven  reserve base would increase the value of our leased
rights  and  could  enable  us  to  obtain  bank financing (after the wells have
produced  for  a  period  of  time  to  satisfy  the  related  lender).

     To  conserve  on  our  capital requirements, we intend occasionally to seek
other  industry  investors who are willing to participate in our exploration and
production  activities.  We  expect  to  retain  a promotional interest in these
prospects,  but  generally  we  will  have to finance a portion (and sometimes a
significant  portion)  of  the  acquisition  and  drilling  costs.  Also, we may
acquire  interests  in  properties  by  issuing  shares  of  our  common  stock.

                   CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Our  discussion  of  our  financial  condition and results of operations is
based  on  the information reported in our financial statements. The preparation
of  our  financial statements requires us to make assumptions and estimates that
affect  the  reported  amounts  of assets, liabilities, revenues and expenses as
well  as  the  disclosure of contingent assets and liabilities as of the date of
our  financial  statements.  We base our assumptions and estimates on historical
experience  and  other  sources  that  we  believe to be reasonable at the time.
Actual  results  may  vary  from  our estimates due to changes in circumstances,
weather,  politics,  global  economics,  mechanical  problems,  general business
conditions  and  other factors. Our significant accounting policies are detailed
in  Note  3  to  our financial statements included in this Quarterly Report.  We
have outlined below certain of these policies that have particular importance to
the  reporting  of  our  financial  condition and results of operations and that
require  the  application  of  significant  judgment  by  our  management.

KEY  DEFINITIONS
----------------

     Proved  reserves,  as  defined  by the SEC, are the estimated quantities of
crude  oil,  condensate, natural gas and natural gas liquids that geological and
engineering data demonstrate with reasonable certainty are recoverable in future
years  from  known  reservoirs under existing economic and operating conditions.
Valuations  include consideration of changes in existing prices provided only by
contractual  arrangements,  but not on escalations based upon future conditions.
Prices do not include the effect of derivative instruments, if any, entered into
by  us.

     Proved  developed  reserves  are  those  reserves  expected to be recovered
through existing equipment and operating methods. Additional oil and gas volumes
expected  to  be  obtained  through  the application of fluid injection or other
improved recovery techniques for supplementing the natural forces and mechanisms
of primary recovery are included as proved developed reserves only after testing
of  a pilot project or after the operation of an installed program has confirmed
through  production  response  that  increased  recovery  will  be  achieved.

                                       7
<PAGE>


     Proved  undeveloped  reserves  are  those  reserves that are expected to be
recovered  from new wells on non-drilled acreage, or from existing wells where a
relatively  major  expenditure  is  required  for  re-completion.  Reserves  on
non-drilled  acreage  are  limited to those drilling units offsetting productive
units  that  are  reasonably certain of production when drilled. Proved reserves
for  other  non-drilled units are claimed only where it can be demonstrated with
certainty  that  there  is continuity of production from the existing productive
formation.

USE  OF  ESTIMATES
------------------

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  and 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.

 OIL  AND  GAS  PROPERTIES
 -------------------------

     We  account for our oil and natural gas producing activities using the full
cost  method  of  accounting  as  prescribed by the United States Securities and
Exchange  Commission  (SEC). Accordingly, all costs incurred in the acquisition,
exploration, and development of proved oil and natural gas properties, including
the  costs  of  abandoned  properties,  dry holes, geophysical costs, and annual
lease  rentals  are  capitalized. All general and administrative corporate costs
unrelated  to  drilling  activities  are  expensed  as  incurred. Sales or other
dispositions  of oil and natural gas properties are accounted for as adjustments
to  capitalized costs, with no gain or loss recorded unless the ratio of cost to
proved  reserves  would  significantly  change.  Depletion  of evaluated oil and
natural  gas  properties  is computed on the units of production method based on
proved  reserves.  The  net  capitalized  costs  of  proved  oil and natural gas
properties  are subject to a full cost ceiling limitation in which the costs are
not  allowed to exceed their related estimated future net revenues discounted at
10%,  net  of  tax considerations.  Costs associated with unevaluated properties
are  excluded  from  the full cost pool until we have made a determination as to
the  existence  of  proved reserves. We review our unevaluated properties at the
end  of  each  quarter  to  determine  whether  the  costs  incurred  should  be
transferred  to  the  full  cost  pool  and  thereby subject to amortization and
ceiling  test.

ASSET  RETIREMENT  OBLIGATIONS
------------------------------

     In  August  2001,  the  FASB  issued  SFAS  No.  143,  Accounting for Asset
Retirement  Obligations  (SFAS 143). SFAS 143 requires that the fair value of an
asset  retirement  cost, and corresponding liability, should be recorded as part
of  the  cost  of  the  related  long-lived  asset and subsequently allocated to
expense  using  a  systematic  and  rational  method.

REVENUE  RECOGNITION
--------------------

     We  recognize  oil  and  natural  gas  revenue  under  the  sales method of
accounting  for  our  interests  in  producing  wells  as oil and natural gas is
produced  and  sold  from  those  wells.

PROVISIONS  FOR  TAXES
----------------------

     We  have  adopted  SFAS  No. 109 "Accounting for Income Taxes". Pursuant to
this  pronouncement, income taxes are accounted for using an asset and liability
approach.  SFAS  No.  109  requires  the  recognition of deferred tax assets and
liabilities  for  the  expected future tax consequences of temporary differences
between  the financial statements and tax bases of assets and liabilities at the
applicable  tax  rates. A valuation allowance is utilized when it is more likely
than  not,  that  some portion of, or all of the deferred tax assets will not be
realized.  Deferred  tax  assets and liabilities are adjusted for the effects of
changes  in  tax  laws  and  rates  on  the  date  of  enactment.

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<PAGE>


                           FORWARD-LOOKING STATEMENTS

     Statements  in  the  preceding  discussion  relating  to  future  plans,
projections,  events,  or  conditions  are  forward-looking  statements.  Actual
results,  including  production  growth  and  capital  spending,  could  differ
materially  due  to  changes  in long-term oil or gas prices or other changes in
market  conditions  affecting  the  oil  and  gas  industry; political events or
disturbances;  severe  weather  events;  reservoir  performance; changes in OPEC
quotas;  timely  completion  of  development  projects;  changes in technical or
operating  conditions; and other factors including those discussed herein and in
the  section  captioned  "RISK  FACTORS" in our General Form for Registration of
Securities  on  Form  10.

ITEM 4T.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     Our  Principal  Executive  Officer  and  Principal Financial Officer, after
evaluating  the  effectiveness  of  our  disclosure  controls and procedures (as
defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of
the  period covered by this report, have concluded that, based on the evaluation
of  these  controls  and procedures, that our disclosure controls and procedures
were  not  effective  due  to  the  lack  of  segregation of duties in financial
reporting,  as  our  accounting  functions  are  performed by one person with no
internal review, as our company does not have an audit committee. This is due to
the  company's lack of working capital to hire additional staff. To remedy this,
we  intend  to  engage  another accountant to assist with financial reporting as
soon  as  our  finances  will  allow.

CHANGE  IN  INTERNAL  CONTROLS  OVER  FINANCIAL  REPORTING

     There have not been any changes in our predecessors' internal controls over
financial  reporting  that  occurred  during the quarterly period ended June 30,
2008 that has materially affected, or is reasonably likely to materially affect,
our  internal  controls  over  financial  reporting.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     We  are  not  now  a  party to any legal proceeding requiring disclosure in
accordance  with  the  rules of the U.S. Securities and Exchange Commission.  In
the  future,  we  may  become involved in various legal proceedings from time to
time,  either  as  a  plaintiff  or as a defendant, and either in or outside the
normal  course  of business.  We are not now in a position to determine when (if
ever)  such  a  legal proceeding may arise. If we ever become involved in such a
legal  proceeding,  our  financial condition, operations, or cash flows could be
materially  and  adversely  affected,  depending  on the facts and circumstances
relating  to  such  proceeding.

ITEM 6.  EXHIBITS

(a)     The  following  exhibits  are  filed  with  this Quarterly Report or are
incorporated  herein  by  reference:

Exhibit
Number   Description

31.01     Certification pursuant to Rule 13a-14(a) of the Securities Exchange
          Act of 1934.
31.02     Certification pursuant to Rule 13a-14(a) of the Securities Exchange
          Act of 1934.
32.01     Certification Pursuant to 18 U.S.C. Section 1350, as pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.
32.02     Certification Pursuant to 18 U.S.C. Section 1350, as pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

                                       9
<PAGE>


                                  SIGNATURES

     In accordance with the requirements of the Exchange Act, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto
duly  authorized.

                                  COLONY ENERGY, INC.
                                  (Registrant)


                                  By:    /s/ Kent E. Lovelace, Jr.
                                         Kent E. Lovelace, Jr.,
                                         ----------------------
                                         Chief Executive Officer
                                         (Principal Executive Officer, Principal
                                         Financial Officer and Principal
                                         Accounting Officer)

August 13, 2008


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