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, 2011

or

[ ]     TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________
to _____________

_________________

PRECISION PETROLEUM CORPORATION

(Exact name of registrant as specified
in its charter)

_________________

|Nevada                            | 000-53199    | 71-1029846         
|--------------------------------- | ------------ | -------------------
|(State or Other Jurisdiction      | (Commission  | (I.R.S. Employer   
|of Incorporation or Organization) | File Number) | Identification No.)

624 W. Independence, Suite 101 A,
Shawnee, OK 74804(Address of Principal Executive Offices) (Zip Code)

(405) 924-0298(Registrant’s telephone number, including area code)

N/A(Former name or former address and former fiscal year, if changed since last report)

_________________

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

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). 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.

|Large accelerated filero | Accelerated filero | Non-accelerated filero | Smaller reporting company  [X]
|------------------------ | ------------------ | ---------------------- | ------------------------------

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     YesoNo 
[X]

APPLICABLE ONLY TO REGISTRANTS INVOLVED
IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by SectionS 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     YesoNo 
[X]

APPLICABLE ONLY TO CORPORATE ISSUERS

Number of shares of common stock outstanding as of August 18,
2011: 84,401,584.













PART I — FINANCIAL INFORMATION

|Item 1. | Financial Statements                                                                  | 3 
|------- | ------------------------------------------------------------------------------------- | --
|Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk                            | 15
|Item 4. | Controls and Procedures                                                               | 15

PART II — OTHER INFORMATION

|Item 1.  | Legal Proceedings                                           | 16
|-------- | ----------------------------------------------------------- | --
|Item 1A. | Risk Factors                                                | 16
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds | 16
|Item 3.  | Defaults Upon Senior Securities                             | 16
|Item 4.  | Submission of Matters to a Vote of Security Holders         | 16
|Item 5.  | Other Information                                           | 16
|Item 6.  | Exhibits                                                    | 16







2









|PRECISION PETROLEUM CORPORATION                     
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|BALANCE SHEETS                                      
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|Current                                             
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|Property and equipment, net                         
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|Oil and gas properties, - using full cost accounting
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|Long term assets                                    
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|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)      
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|Current liabilities                                 
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|Long term liabilities                               
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|Capital stock                                       
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|Additional paid-in capital                          
|Accumulated deficit                                 
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3







|PRECISION PETROLEUM CORPORATION  
|---------------------------------
|STATEMENTS OF OPERATIONS         
|(Unaudited)                      
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|Revenues                         
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|Expenses                         
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|Other income (expense)           
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|Net loss                         
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|Basic loss per share             
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|Weighted average number of shares
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4







|PRECISION PETROLEUM CORPORATION                  
|-------------------------------------------------
|STATEMENTS OF CASH FLOWS                         
|(Unaudited)                                      
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|Operating Activities                             
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|Cash used in operating activities                
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|Investing Activities                             
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|Cash provided by investing activities            
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|Financing Activities                             
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|Cash provided by financing activities            
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|Decrease in cash during the year                 
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|Cash, beginning of the period                    
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|Cash, end of the period                          
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|Supplemental disclosure of cash flow information:
|Cash paid during the year for income taxes       
|Cash paid during the year for interest           
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|Non-cash investing and financing activities      
|                                                 
|                                                 
|                                                 





















5





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Note 1	Interim Reporting



The accompanying financial statements of Precision Petroleum Corporation
have not been audited by independent public accountants. In the opinion of management, the accompanying financial statements reflect
all adjustments necessary to present fairly our financial position at June 30, 2011 and our income, stockholder’s equity
(deficit) and cash flows for the three and nine months ended June 30, 2011 and 2010. All such adjustments are of a normal recurring
nature. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported
amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results
for interim periods are not necessarily indicative of annual results.



Certain disclosures have been condensed or omitted from these financial
statements. Accordingly, these financial statements should be read with the financial statements included in our 2010 Annual Report
on Form 10-K.





Note 2	Nature and Continuance of Operations



Precision Petroleum Corporation (the “Company”) was
incorporated under the name of “Tidewater Resources, Inc.” under the laws of the State of Nevada on February 7, 2007.
On October 27, 2008 the Company changed its name to Precision Petroleum Corporation. The Company has established its corporate
offices in Shawnee, Oklahoma. The Company is engaged primarily in the acquisition, development, production, exploration for, and
the sale of oil, gas and natural gas liquids. All business activities are conducted in Oklahoma and the Company sells its oil and
gas to a limited number of domestic purchasers. The Company does not operate the leases; they own working and overriding royalty
interests and are invoiced monthly for joint operating costs and receive revenues from third party purchasers of oil and gas chosen
by the operators.



These financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its
obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying
values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values
and classifications of assets and liabilities should the Company be unable to continue as a going concern. At June 30, 2011, the
Company had not yet achieved profitable operations, has an aggregate accumulated deficit of $647,163, has a working capital deficiency
of $473,260, and expects to incur further losses in the development of its business, all of which casts substantial doubt about
the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent
upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and
repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address
this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances,
however there is no assurance of additional funding being available. The accompanying financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might
result from the outcome of this uncertainty.



6





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Note 3	Summary of Significant Accounting Policies



The financial statements of the Company have been prepared in accordance
with accounting principles generally accepted in the United States of America. Because a precise determination of many assets and
liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use
of estimates, which have been made using careful judgment. Actual results may vary from these estimates.



The financial statements have, in management’s opinion, been
properly prepared within the framework of the significant accounting policies summarized below:



Reclassification



The Company reclassified $32,754 of accounts payable and accrued
liabilities as of June 30, 2011 to due to related party to conform to the current presentation.



The Company reclassified $10,000 of advances as of June 30, 2011
to notes payable-related party to conform to the current presentation. These reclassifications had no effect on the Company’s
financial condition, results of operation, or cash flows.



Cash and cash equivalents



The Company considers cash and cash equivalents to be all highly
liquid debt instruments with a maturity when purchased of three months or less.



The Company maintains its cash balances in one financial institution
in Shawnee, Oklahoma. The balance at this institution is generally insured by the Federal Deposit Insurance Corporation (FDIC)
up to $250,000. As of June 30, 2011 and September 30, 2010, the Company’s cash in this financial institution was less than
the federally insured limits.



Allowance for doubtful accounts



Accounts receivable are stated at the amount management expects
to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings
and a credit to an allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding
after management has used reasonable collection efforts are written off through a charge to the valuation allowance. Changes in
the allowance have not been material to the financial statements.







7





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Property and equipment



Equipment is recorded at cost. Depreciation is provided using the
straight line method.



Oil and Gas Properties



The Company follows the full cost method of accounting for oil and
gas operations whereby all costs of exploring for and developing oil and gas reserves are initially capitalized on a country-by-country
(cost center) basis. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing
properties, costs of drilling and overhead charges directly related to acquisition and exploration activities.



Costs capitalized, together with the costs of production equipment,
are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. Petroleum products and
reserves are converted to a common unit of measure, using 6 MCF of natural gas to one barrel of oil.



The costs of acquisition and exploration of unproved oil and gas
properties, including any related capitalized interest expense, are not subject to depletion, but are assessed for impairment either
individually or on an aggregate basis. The costs of certain unevaluated leasehold acreage are also not subject to depletion. Costs
not subject to depletion are periodically assessed for possible impairment or reductions in recoverable value. If a reduction in
recoverable value has occurred, costs subject to depletion are increased or a charge is made against earnings for those operations
where a reserve base is not yet established.



Future net cash flows from proved reserves using period-end, non-escalated
prices and costs are discounted to present value and compared to the carrying value of oil and gas properties.



Proceeds from a sale of petroleum and natural gas properties are
applied against capitalized costs, with no gain or loss recognized, unless such a sale would alter the rate of depletion by more
than 25%.



Assets Retirement Obligations



The Company recognizes the fair value of a liability for an assets
retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made. The carrying amount
of the related long-lived asset is increased by the same amount as the liability.









8





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Changes in the liability for an asset retirement obligation due
to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase
in the liability and an accretion expense in the statement of operations. Changes resulting from revisions to the timing or the
amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of
the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount
of the related long-lived asset.



The Company owns interests in oil and natural gas properties, which
may require expenditures to plug and abandon the wells when the oil and natural gas reserves in the wells are depleted. Fair value
of legal obligations to retire and remove long-lived assets is recorded in the period in which the obligation is incurred (typically
when the asset is installed at the production location). When the liability is initially recorded, this cost is capitalized by
increasing the carrying amount of the related properties and equipment. Over time the liability is increased for the change in
its present value, and the capitalized cost in properties and equipment is depreciated over the useful life of the remaining asset.
The Company does not have any assets restricted for the purpose of settling the liabilities.



The following table shows the activity for the nine months ended
June 30, 2011 and September 30, 2010 relating to the Company’s retirement obligation for the liability:



|                               |  | June 30, 2011 |  | September 30, 2010
|------------------------------ |  | ------------- |  | ------------------
|Beginning Balance at October 1 |  | $22,912       |  | $   -             
|Accretion expense              |  | 1,718         |  | -                 
|                               |  |               |  |                   
|Ending balance at June 30      |  | $24,630       |  | $   -             





Impairment of Long-Lived Assets



The Company reviews long-lived assets and certain identifiable intangibles
to be held and used for impairment whenever events or changes in circumstances have indicated that the carrying amount of assets
might not be recoverable and have appropriately recorded the adjustment.















9





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Basic and Diluted Loss Per Share



Basic loss per share is computed using the weighted average number
of shares outstanding defined by FASB Accounting Standards Codification Topic 260, “Earnings Per Share” during the
period. Fully diluted earnings (loss) per share are computed similar to basic income (loss) per share except that the denominator
is increased to include the number of common stock equivalents (primarily outstanding options and warrants). Common stock equivalents
represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method,
at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common
stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculated date. As
of June 30, 2011 and 2010, the Company did not have any outstanding stock options or warrants.



Revenue Recognition



Revenue from the sale of the oil and gas production is recognized
when title passes from the operator of the oil and gas properties to purchasers.



Note 4	Oil and Gas Properties



a)	Effective July 1, 2009, the Company purchased various producing
properties located in Garvin County, Pottawatomie County, Nowata County and Seminole County, Oklahoma. The Company utilized short-term
financing to acquire these properties. The various net revenue acquired range from .2808% to a 67.97% net revenue interest. The
Company also increased their working interest in the Teresa #1 well by 11% and in the Quinlan #1 by 2%.



In November of 2009, the Company acquired a 57.2682% working interest
in the Thompson #2 well, located in Garvin County, Oklahoma. They sold 30% of their working interest in the Thompson #2 well for
$8,400 in November 2010 and another 13.46774% for $35,016 in January 2011. The Company still owns a 13.80046% working interest
in this well.



In June of 2010, the Company acquired an additional 25% working
interest in the Mason Burns well in exchange for the assumption of the seller’s debt to the operator of the well in the amount
of $1,657.







10





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





In December 2010, the Company sold 19.003906% of its working interest
in the Ward McNeil lease for $19,440. The Company still owns a 10% working interest in this well.



b)	In an agreement dated on December 1, 2009, but made effective
January 1, 2010, the Company sold all of its working interest in the Heath lease located in Seminole County, Oklahoma. The sales
price for this transaction was $55,000, to be paid on or before one year from the date of the agreement. The Company received a
payment in the amount of $4,583 from the purchaser with a balance due of $50,417.



On September 16, 2010, the Company, along with Global Energy, LLC
(Plaintiffs), filed a joint petition against Reed Power Tongs, Inc. and 4K Energy, LLC (Defendants), alleging breach of contract
of the joint operating agreement the Plaintiffs entered into with the Defendants covering the Karsyn No. 1, the Heath well and
the Josh well.



On January 19, 2011, the Company along with Global Energy, LLC entered
into a settlement agreement in this matter, with the Defendants agreeing to pay the Company $70,000 and for the Company to assign
its interest in the Karsyn, Heath and Josh wells. The Company applied $50,417 of the proceeds to the accounts receivable owed to
them by the Defendants and applied the balance of the proceeds, $19,583, as a gain on settlement. Additionally, the Company recognized
an impairment of $118,036 on the Karsyn well as of June 30, 2011.



c)	On February 22, 2010, the Company sold all of its working
interest in the Jameson lease, retaining a three percent (3%) overriding royalty interest. The sale price for this transaction
was $10,000 and has been paid in full.



d)	On January 27, 2009, the Company entered into a Participation
Agreement with Nitro Petroleum Incorporated (“Nitro”), pursuant to which the Company obtained from Nitro the right
to participate in Phase One of Nitro’s Powder River Basin Project in Montana. Nitro acquired certain oil and gas leases in
the Powder River Basin in Montana pursuant to a Memorandum of Understanding dated January 26, 2009 with REDS, LLC.



Pursuant to the terms of the Participation Agreement, Nitro is being
carried to the tanks with respect to a 25% working interest in Phase One of the Powder River Basin Project. The Company is acquiring
a 37.5% working interest in Phase One of the Powder River Basin Project in exchange for an agreement to pay 50% of the expenses
of Phase One of the Powder River Basin Project. Additionally, the Company shall have the right to purchase up to a 37.5% working
interest in Phase Two and Phase Three of the Powder River Basin Project upon substantially the same terms as Phase One. Nitro will
be the operator of all wells drilled during Phase One of the Powder River Basin Project.



The Company has paid $57,500 towards the Participation Agreement
with Nitro. The payments have been recorded in the financial statements as participation deposits.





11





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Note 5	Notes Payable and Short-Term Financing



At December 23, 2010, the Company has a short term note payable
to Sierra Growth, Inc., an investment company located in Charlestown, Nevis, West Indies. This note bears an interest rate of 10%
per annum and is due upon demand. If the Holder makes a demand for repayment, the Company must repay the principal balance of this
note and accrued and unpaid interest thereon within sixty (60) days. Effective the December 23, 2010, the Company converted $715,588
of this debt into 40,001,584 shares of common stock of the Company. A total of $88,027 of interest related to this principal amount
was forgiven. The Company has a short term note payable with Sierra Growth in the amount of $36,126 with accrued interest of $6,315
as of June 30, 2011.



At March 31, 2011, the Company had a short term note payable to
Global Energy, LLC, an oil and gas company located in Shawnee, Oklahoma. This note bears an interest rate of 10% per annum and
is payable upon demand. If the Holder makes a demand for repayment, the Company must repay the principal balance of this note and
accrued and unpaid interest thereon within sixty (60) days. Interest has been accrued in the amount of $42,347 as of June 30, 2011
($24,227; September 30, 2010) and has a principal balance of $242,266 ($242,266; September 30, 2010).



The Company has also obtained financing from a consultant with a
balance of $32,754 ($31,754: September 30, 2010) and also has received advances of $89,916 ($92,416: September 30, 2010) from unrelated
third parties and $10,000 ($0: September 30, 2010) from a related party as discussed in Note 6. The balances are due on demand
and are not interest bearing. However, Generally Accepted Accounting Principles (GAAP) requires interest expense to be imputed
on the outstanding balances of the advances. The Company has accrued interest in the amount of $23,603 for these advances as of
June 30, 2011 (2009, $0).



Note 6	Related Party Transactions



During the nine months ended June 30, 2011 and 2010, the Company
incurred management fees charged by a director of the Company totaling $11,000 and $9,000, respectively.



As discussed in Note 5, the Company converted a short term payable
to Sierra Growth in the amount of $715,588 along with accrued interest in the amount of $88,027 into 40,001,584 shares of its common
stock. After this conversion, Sierra Growth owned 47% of the Company’s issued and outstanding common stock.



Also discussed in Note 5, the Company had a short term note payable
with Sierra Growth in the amount of $36,126 with accrued interest of $6,315 as of June 30, 2011.



As discussed in Note 5, the Company also has received an advance
from Sierra Growth in the amount of $10,000 ($0; September 30, 2010). The balance is due on demand and is not interest bearing.
However, Generally Accepted Accounting Principles (GAAP) requires interest expense to be imputed on the outstanding balance of
the advance. The Company has accrued interest in the amount of $1,630 for this advance as of June 30, 2011 (2009, $0).



12





PRECISION PETROLEUM CORPORATION

NOTES TO THE INTERIM FINANCIAL STATEMENTS

JUNE 30, 2011

(Unaudited)





Note 7	Common Stock



By written consent of the Board of Directors effective December
23, 2010, the Company and Sierra Growth agreed to convert the $715,588 of principal amount due to Sierra Growth into 40,001,584
common shares of the Company based on the weighted average price of stock from December 8, 2010 to December 21, 2010 which was
calculated to be $.017889. Furthermore, an accrued interest expense in the amount of $88,027 was forgiven at the time of conversion.
As of June 30, 2011 there were 84,401,584 shares of common stock issued and outstanding. (See Note 5 and 6 for additional discussion).



On May 4, 2011, a director of the Company disclosed that he engaged
in a “short-swing transaction” under Section 16(b) of the Securities Exchange Act of 1934. The director returned the
profits of the short-swing transaction totaling $379 to the Company and this amount was recognized as an increase in additional
paid in capital.













13







Management's Discussion and Analysis



As used in this Interim Report: (i) the terms "we", "us",
"our" and the "Company" mean Precision Petroleum Corporation (ii) "SEC" refers to the Securities
and Exchange Commission; (iii) "Exchange Act" refers to the United States Securities Exchange Act of 1934, as amended;
and (iv) all dollar amounts refer to United States dollars unless otherwise indicated.



The following is a discussion of our plan of operations, results
of operations and financial condition as of and for the three and nine months ended June 30, 2011.





Liquidity and Capital Resources



The Company had a cash balance of $2,109 as of June 30, 2011, compared
to cash balance of $8,495 as of September 30, 2010.



The Company will continue to utilize the free labor of its directors
and stockholders until such time as funding is sourced from the capital markets. It is anticipated that funding for the next twelve
months will be required to maintain the Company.





Results of Operations



For the three months ended June 30, 2011, the Company had revenue
of $43,374, as compared to $40,104 for the three months ended June 30, 2010. For the nine months ended June 30, 2011, the Company
had revenue of $149,941, as compared to $141,061 for the nine months ended March 31, 2010.



Cost of continued operations and other expenses for the three months
ended June 30, 2011 was $70,691 resulting in a net loss for the period of $37,697 compared to costs of continued operations and
other expenses of $76,556 for the three months ended June 30, 2010 resulting in a net loss for the period of $64,267. Depletion,
legal costs and general and administrative costs were down significantly from the prior quarter. For the nine months ended June
30, 2011, the Company had a net loss of $241,547, as compared to a net loss of $190,599 for the nine months ended June 30, 2010.



The Company expects to continue to receive revenues from the properties
on the Oklahoma properties and the Company expects for these revenues to increase. Planned exploration ventures should increase
revenues for the fiscal year ending September 30, 2011.





Going Concern



The Company has not attained profitable operations and is dependent
upon obtaining financing to pursue any extensive acquisitions and exploration activities. For these reasons, the Company's auditors
stated in their report on the Company's audited financial statements that they have substantial doubt the Company will be able
to continue as a going concern without further financing.





Off-Balance Sheet Arrangements



We have not entered into any off-balance sheet arrangements that
have or are reasonably likely to have a current or future effect on our financial condition, changes of financial condition, revenues,
expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.



14









Plan of Operation for the Next Twelve (12) Months



The following discussion of our plan of operation, financial condition,
results of operations, cash flows and changes in financial position should be read in conjunction with our most recent financial
statements and notes appearing in our Form 10-K annual report for the year ended September 30, 2010.



Our plan of operations for the next twelve months is to maintain
the current properties we have which we feel will generate more revenue.



We estimate that our expenditures over the next twelve months will
be $120,000 to cover ongoing general and administrative expenses. As at June 30, 2011, we had cash and cash equivalents of $2,109
and an accumulated deficit of $647,163.



During the twelve-month period following the date of this report,
we anticipate that we will continue to generate revenue from our oil and gas leases. However, we anticipate that such revenue will
not be sufficient to cover all of our expenses. Accordingly, we will be required to obtain additional financing in order to continue
our plan of operations during and beyond the next twelve months. We anticipate that additional funding could be in the form of
either debt or equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot
provide investors with any assurance that we will be able to raise sufficient funding to fund our operations. In the absence of
such financing, our business plan will fail. Even if we are successful in obtaining financing to fund our operations, there is
no assurance that we will obtain the funding necessary to pursue any further exploration of our properties. If we do not obtain
additional financing, we may be forced to dispose of operating oil and gas leases located in Oklahoma.





ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



As a smaller reporting company, we are not required to provide the
information required by this Item.





ITEM 4. CONTROLS AND PROCEDURES



Disclosure Controls and Procedures



As of the end of the period covered by this report, we conducted
an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our
disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act")).
Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange
Commission's rules and forms.





Internal Control Over Financial Reporting



There has been no change in our internal control over financial
reporting during the current quarter that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.





14









PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



None.





ITEM 1A. RISK FACTORS



As a smaller reporting company, we are not required to provide the
information required by this Item.





ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



None.





ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None.





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



None.





ITEM 5. OTHER INFORMATION



None.





ITEM 6. EXHIBITS



(a) Pursuant to Rule 601 of Regulation S-B, the following exhibits
are included herein or incorporated by reference.



|Exhibit Number | Description                                                                                                                                     
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------
|31.1           | Section 302 Certification - Chief Executive Officer                                                                                             
|31.2           | Section 302 Certification - Chief Financial Officer                                                                                             
|32.1           | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer
|32.2           | Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer





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SIGNATURES

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

Date:  August 18, 2011

| | Precision Petroleum Corporation                            
| | -----------------------------------------------------------
| | By:  /s/ Richard Porterfield                               
| | Richard Porterfield President (principal executive officer)



| |                                                                                     
| | ------------------------------------------------------------------------------------
| | By:  /s/ James Kirby                                                                
| | James Kirby Treasurer (principal financial officer and principal accounting officer)







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