|UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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 December 31, 2008
|------------------------------------------------



|OR
|--

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



|For the transition period from 
__________
to 
______________
|-------------------------------------------------------------

|Commission File Number000-53199                                    
|-------------------------------------------------------------------
|                                                                   
|PRECISION PETROLEUM CORPORATION                                    
|(Exact name of registrant as specified in its charter)             
|                                                                   
|Nevada
State or other jurisdiction of incorporation or organization

None

(Former name, 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 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 [ ]

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



|Accelerated filer [ ]Smaller reporting company [X]
|--------------------------------------------------

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

APPLICABLE ONLY TO ISSUERS 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. Yes [ ] No [ ] SEC 1296 (02-08) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Number of shares outstanding of the registrants class of common stock as of January 31, 2009: 44,400,000

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|        |  |                       |  | Precision Petroleum Corporation                     |  |            
|------- |  | --------------------- |  | --------------------------------------------------- |  | -----------
|        |  |                       |  | INDEX TO THE FORM 10-Q                              |  |            
|        |  |                       |  | For the quarterly period ended December 31, 2008    |  |            
|        |  |                       |  |                                                     |  | PAGE       
|        |  |                       |  |                                                     |  |            
|       
|PART I  |  | FINANCIAL INFORMATION |  | F-1                                                
|        |  | ITEM 1.               |  | FINANCIAL STATEMENTS (unaudited)                    |  | F-1        
|        |  |                       |  | Balance Sheets                                      |  | F-2        
|        |  |                       |  | Statements of Operations and Comprehensive Income   |  | F-3        
|        |  |                       |  | Statement of Stockholders Deficit                  |  | F-4        
|        |  |                       |  | Statements of Cash Flows                            |  | F-5        
|        |  |                       |  | Notes to the Financial Statements                   |  | F-6 to F-13
|        |  | ITEM 2.               |  | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL   |  | 16         
|        |  |                       |  | CONDITION AND RESULTS OF OPERATIONS                 |  |            
|        |  | ITEM 3.               |  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT       |  | 17         
|        |  |                       |  | MARKET RISK                                         |  |            
|        |  | ITEM 4.               |  | CONTROLS AND PROCEDURES                             |  | 17         
|        |  | ITEM 4T.              |  | CONTROLS AND PROCEDURES                             |  | 17         
|PART II |  | OTHER INFORMATION     |  | 17                                                 
|        |  | ITEM 1.               |  | LEGAL PROCEEDINGS                                   |  | 17         
|        |  | ITEM 1A.              |  | RISK FACTORS                                        |  |            
|        |  | ITEM 2.               |  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF  |  | 17         
|        |  |                       |  | PROCEEDS                                            |  |            
|        |  | ITEM 3.               |  | DEFAULTS UPON SENIOR SECURITIES                     |  | 17         
|        |  | ITEM 4.               |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |  | 17         
|        |  | ITEM 5.               |  | OTHER INFORMATION                                   |  | 18         
|        |  | ITEM 6.               |  | EXHIBITS                                            |  | 18         
|        |  |                       |  | SIGNATURES                                          |  | 19         

2

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|Precision Petroleum Corporation(An Exploration Stage Company)Interim Financial Statements(Expressed in U.S. Dollars)
|--------------------------------------------------------------------------------------------------------------------

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

F-1

---

|Precision Petroleum Corporation                                |  |              |  |              
|-------------------------------------------------------------- |  | ------------ |  | -------------
|FKA: Tidewater Resources Inc.                                  |  |              |  |              
|(An Exploration Stage Company)                                 |  |              |  |              
|Balance Sheets                                                 |  |              |  |              
|(Expressed in U.S. Dollars)                                    |  |              |  |              
|                                                               |  |              |  |              
|                                                              
|                                                               |  | As of        |  | **As of**    
|                                                               |  | December 31, |  | September 30,
|                                                               |  | 2008         |  | 2008         
|                                                               |  | (Unaudited)  |  | (Audited)    
|                                                              
|Assets                                                         |  |              |  |              
|                                                              
|                                                              
|Mineral claims (Note 4)                                        |  | $ -          |  | $ 4,464      
|                                                               |  |              |  |              
|Total assets                                                   |  | $ -          |  | $ 4,464      
|                                                               |  |              |  |              
|                                                              
|Liabilities and Stockholders Deficit                          |  |              |  |              
|                                                              
|Current Liabilities                                            |  |              |  |              
|Bank overdraft                                                 |  | $ -          |  | $ 274        
|Accounts payable and accrued liabilities                       |  | 16,841       |  | 14,148       
|Advances                                                       |  | 5,276        |  | -            
|                                                               |  |              |  |              
|Total current liabilities                                      |  | 22,117       |  | 14,422       
|                                                               |  |              |  |              
|                                                              
|Stockholders Deficit                                          |  |              |  |              
|Common stock, 200,000,000 shares authorized, $0.001 par value; |  |              |  |              
|44,400,000 shares issued and outstanding                       |  | 44,400       |  | 44,400       
|Additional paid in capital                                     |  | 67,635       |  | 67,635       
|Deficit accumulated during the exploration stage               |  | (136,233)    |  | (122,290)    
|                                                               |  |              |  |              
|                                                               |  | (24,198)     |  | (10,255)     
|Other comprehensive income (loss):                             |  |              |  |              
|Foreign currency gain (loss)                                   |  | 2,081        |  | 297          
|                                                               |  |              |  |              
|Total stockholders deficit                                    |  | (22,117)     |  | (9,958)      
|                                                               |  |              |  |              
|Total liabilities and stockholders deficit                    |  | $ -          |  | $ 4,464      
|                                                               |  |              |  |              

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

F-2

---



|Precision Petroleum CorporationFKA: Tidewater Resources Inc.(An Exploration Stage Company)Statements of Operations and Comprehensive Income(Expressed in U.S. Dollars)
(Unaudited)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                           |  |                            |  |                       |  | From Inception
|------------------------------------------ |  | -------------------------- |  | --------------------- |  | --------------
|                                           |  | For the three months ended |  | (February 7, 2007) to
|                                           |  | December 31                |  | December 31,         
|                                           |  | 2008                       |  | 2007                  |  | 2008          
|                                           |  |                            |  |                       |  |               
|Revenues                                   |  |                           
|                                           |  | $                         |  | $                    |  | $            
|                                           |  |                            |  |                       |  |               
|                                          
|                                          
|Expenses                                   |  |                            |  |                       |  |               
|Mineral claims expense (Note 4)            |  | 4,464                      |  | -                     |  | 4,464         
|General and administrative                 |  | -                          |  | 1,052                 |  | 9,770         
|Legal and accounting (refunded)            |  | 9,479                      |  | 11,897                |  | 93,099        
|Management fees (Note 5)                   |  | -                          |  | 3,600                 |  | 20,400        
|Rent expense (Note 5)                      |  | -                          |  | 1,500                 |  | 8,500         
|                                           |  |                            |  |                       |  |               
|                                          
|Net loss                                   |  | (13,943)                   |  | (18,049)              |  | (136,233)     
|                                          
|Other Comprehensive income (loss)          |  |                            |  |                       |  |               
|Foreign currency translation adjustment    |  | 1,787                      |  | (92)                  |  | 2,081         
|                                           |  |                            |  |                       |  |               
|                                          
|Comprehensive loss                         |  | $ (12,156)                 |  | $ (18,141)            |  | $ (134,152)   
|                                           |  |                            |  |                       |  |               
|                                          
|                                          
|Net loss per share  basic                 |  | $ (0.00)                   |  | $ (0.00)              |  |               
|                                           |  |                            |  |                       |  |               
|                                          
|Weighted Average Common Shares Outstanding |  | 44,400,000                 |  | 7,000,001             |  |               
|                                           |  |                            |  |                       |  |               

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

F-3

---

|Precision Petroleum Corporation                                          |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|------------------------------------------------------------------------ |  | ------------- |  | -------- | - | ---------- | ------- | -------- | ------ | ----------- | ----------- | ------------- | ------ | -------- | ---
|FKA: Tidewater resources Inc.                                            |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|(An Exploration Stage Company)                                           |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|Statement of Stockholders Deficit                                       |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|For the three months ended December 31                                   |  |               |  |          |   |            |         |          |        |             |             |               |       
|(Expressed in U.S. Dollars)                                              |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|(Unaudited)                                                              |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|                                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|                                                                        
|                                                                        
|                                                                        
|                                                                         |  |               |  |          |   |            |         |          |        |             | Accumulated |               |        |          |    
|                                                                         |  | Common Shares |  |          |   |            |         | Deficit  |        |             |             |               |        |         
|                                                                         |  |               |  |          |   |            |         |          |        |             | During      |               |        |          |    
|                                                                         |  | Number        |  | Par      |   | Additional |         | Stock    |        | Exploration |             | Other         |        |          |    
|                                                                         |  |               |  | Value    |   | Paid-in    |         | Payable  |        | Stage       |             | Comprehensive |        | December
|                                                                         |  |               |  |          |   |            | Capital |          |        |             |             |               | Income |          |    
|                                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|                                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|Balance                                                                  |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|February 7, 2007                                                         |  | 12            |  | $ -      |   | $ -        |         |          |        | $ -         |             | $ -           |        | $ -     
|                                                                        
|Donated                                                                  |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|management                                                               |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|services and rent                                                        |  | -             |  |          | - |            | 13,600  |          | -      |             | -           |               |        |          | -  
|                                                                        
|Stock payable                                                            |  | -             |  |          | - |            | -       |          | 83,135 |             | -           |               |        |          | -  
|                                                                        
|Foreign currency                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|gain (loss)                                                              |  | -             |  |          | - |            | -       |          | -      |             | -           |               |        |          | 124
|                                                                        
|Net gain (loss)                                                          |  | -             |  |          | - |            | -       |          | -      |             | (25,981)    |               |        |          | -  
|                                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|                                                                        
|Balance                                                                  |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|September 30,                                                            |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|2007                                                                     |  | 12            |  |          | - |            | 13,600  |          | 83,135 |             | (25,981)    |               |        |          | 124
|                                                                        
|Issued stock for                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|cash October                                                             |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|2007                                                                     |  | 36,000,000    |  | 36,000   |   | (33,000)   |         | (3,000)  |        | -           |             |               |        | -        |    
|                                                                        
|Issued stock for                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|cash October                                                             |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|2007                                                                     |  | 48,000,000    |  | 48,000   |   | 32,135     |         | (80,135) |        | -           |             |               |        | -        |    
|                                                                        
|Donated                                                                  |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|management                                                               |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|services and rent                                                        |  | -             |  |          | - |            | 15,300  |          | -      |             | -           |               |        |          | -  
|                                                                        
|Foreign currency                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|gain (loss)                                                              |  | -             |  |          | - |            | -       |          | -      |             | -           |               |        |          | 173
|                                                                        
|Retirement of                                                            |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|shares                                                                   |  | (39,600,012)  |  | (39,600) |   | 39,000     |         | -        |        | -           |             |               |        | -        |    
|                                                                        
|Net loss                                                                 |  | -             |  |          | - |            | -       |          | -      |             | (96,309)    |               |        |          | -  
|                                                                         |  |               |  |          |   |            |         |          |        |             |             |               |        |          |    
|                                                                        
|                                                                        
|                                                                        
|The accompanying notes are an integral part of the financial statements.

F-4

---

|Balance          |  |            |  |        |  |        |  |   |  |           |  |       |  |         
|---------------- |  | ---------- |  | ------ |  | ------ |  | - |  | --------- |  | ----- |  | --------
|September 30,    |  |            |  |        |  |        |  |   |  |           |  |       |  |         
|2008             |  | 44,400,000 |  | 44,400 |  | 67,635 |  | - |  | (122,290) |  | 297   |  | (9,958) 
|                
|Foreign currency |  |            |  |        |  |        |  |   |  |           |  |       |  |         
|gain (loss)      |  | -          |  | -      |  | -      |  | - |  | -         |  | 1,784 |  | 1,784   
|                
|Net loss         |  | -          |  | -      |  | -      |  | - |  | (13,943)  |  | -     |  | (13,943)
|                 |  |            |  |        |  |        |  |   |  |           |  |       |  |         
|                
|Balance          |  |            |  |        |  |        |  |   |  |           |  |       |  |         
|December 31,     |  |            |  |        |  |        |  |   |  |           |  |       |  |         
|2008 (unaudited) |  | 44,400,000 |  | 44,400 |  | 67,635 |  | - |  | (136,233) |  | 2,081 |  | (22,117)
|                 |  |            |  |        |  |        |  |   |  |           |  |       |  |         

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

F-5

---



|Precision Petroleum CorporationFKA: Tidewater Resources Inc.(An Exploration Stage Company)Statements of Cash Flows(Expressed in U.S. Dollars)
(Unaudited)
|---------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                         |  |                    |  |              |  | From Inception    
|------------------------------------------------------------------------ |  | ------------------ |  | ------------ |  | ------------------
|                                                                         |  |                    |  |              |  | (February 7, 2007)
|                                                                         |  | Three months ended |  | to          
|                                                                         |  | December 31        |  | December 31,
|                                                                         |  | 2008               |  | 2007         |  | 2008              
|                                                                         |  |                    |  |              |  |                   
|                                                                        
|Cash Flows Used In Operating Activities:                                 |  |                    |  |              |  |                   
|                                                                        
|Net loss                                                                 |  | $ (13,943)         |  | $ (18,049)   |  | $ (136,233)       
|Adjustments to reconcile net loss to net cash used in                    |  |                    |  |              |  |                   
|operating activities:                                                    |  |                    |  |              |  |                   
|Mineral claim fee                                                        |  | 4,464              |  | -            |  | 4,464             
|Donated management fees and rent                                         |  | -                  |  | 5,100        |  | 28,900            
|Changes in operating assets and liabilities:                             |  |                    |  |              |  |                   
|Accounts payable and accrued liabilities                                 |  | 2,693              |  | 4,978        |  | 16,841            
|                                                                         |  |                    |  |              |  |                   
|Net Cash Used in Operating Activities                                    |  | (6,786)            |  | (7,971)      |  | (86,028)          
|                                                                         |  |                    |  |              |  |                   
|                                                                        
|Cash Flows Used In Investing Activities:                                 |  |                    |  |              |  |                   
|Purchase of mineral claims                                               |  | -                  |  | -            |  | (4,464)           
|                                                                         |  |                    |  |              |  |                   
|Net Cash Used In Investing Activities                                    |  | -                  |  | -            |  | (4,464)           
|                                                                         |  |                    |  |              |  |                   
|                                                                        
|Cash Flows From Financing Activities:                                    |  |                    |  |              |  |                   
|Proceeds from common stock issuance                                      |  | -                  |  | -            |  | 83,135            
|Advances from related parties                                            |  | 5,276              |  | -            |  | 5,276             
|                                                                         |  |                    |  |              |  |                   
|Net Cash Provided by Financing Activities                                |  | 5,276              |  | -            |  | 88,411            
|                                                                         |  |                    |  |              |  |                   
|                                                                        
|Effect of Foreign Currency Translation                                   |  | 1,784              |  | (92)         |  | 2,081             
|                                                                         |  |                    |  |              |  |                   
|Increase (Decrease) in Cash and Cash Equivalents                         |  | 274                |  | (8,063)      |  | -                 
|Cash and Cash Equivalents, beginning of period                           |  | (274)              |  | 67,448       |  |                  
|                                                                         |  |                    |  |              |  |                   
|Cash and Cash Equivalents, end of period                                 |  | $ -                |  | $ 59,385     |  | $ -               
|                                                                         |  |                    |  |              |  |                   
|                                                                        
|Supplemental Disclosures                                                 |  |                    |  |              |  |                   
|Interest paid                                                            |  | $ -                |  | $           |  | $                
|Income of common stock for common stock payable                          |  | $ -                |  | $ 83,135     |  | $ 83,135          
|                                                                         |  |                    |  |              |  |                   
|The accompanying notes are an integral part of the financial statements.

F-6

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

|1) | Business and History                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Precision Petroleum Corporation (the Company) was incorporated under the name 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 is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (SFAS) No.7Accounting and Reporting by Development Stage Enterprises.The Companys principal business is the acquisition and exploration of mineral resources. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Companys interests in the underlying properties, and the attainment of profitable operations. As at December 31, 2008, the Company has a working capital deficit of $22,117 ($14,422 as of September 30, 2008) and has accumulated losses of $136,233 since inception. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Companys ability to continue as a going concern.
|  
|   | While the information in the accompanying interim three-month financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented. All adjustments are of a normal recurring nature. Except as disclosed below, these interim financial statements follow the same accounting policies and methods of their application as Precision Petroleum Corporations audited September 30, 2008 annual financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | The results of operations for the three month period ending December 31, 2008 are not necessarily indicative of the results to be expected for the year ending September 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | These unaudited interim financial statements should be read in conjunction with the September 30, 2008 audited financial statements of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|2) | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | The following is a summary of significant accounting policies used in the preparation of these financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  

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

F-7

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

|2) | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
|  
|   | c.                                                    
|  
|   |                                                       
|  
|   |                                                       
|  
|   | d.                                                    
|  
|   |                                                       
|  
|   |                                                       
|  
|   | e.                                                    
|  
|   |                                                       
|  
|   | f.                                                    
|  
|   |                                                       
|  

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

F-8

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

|2) | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
|  
|   | f.                                                    
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|   |                                                       
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|   | g.                                                    
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|   | h.                                                    
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|   | i.                                                    
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|   | j.                                                    
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|   | k.                                                    
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|   |                                                       
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The accompanying notes are an integral part of the financial statements.

F-9

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

**2)            Summary of Significant Accounting Policies (continued)**

**l.****Income Taxes**

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 Accounting for Income Taxesas of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

**m. Basic and Diluted Net Income (Loss) Per Share**

The Company computes net loss per share in accordance with SFAS No. 128,Earnings per Share.SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. At December 31, 2008, there are no dilutive potential common shares.

n. Comprehensive Loss

The Company follows Statement of Financial Accounting Standards (SFAS) 130,"Reporting Comprehensive Income".SFAS 130 establishes standards for the reporting and display of comprehensive income and its components in the financial statements

3) Recent Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts  An interpretation of FASB Statement No. 60.SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprises risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In May 2008, the FASB issued SFAS No. 162,The Hierarchy of Generally Accepted Accounting Principles.SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411,The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

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

F-10

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

|3) | Recent Accounting Pronouncements (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | In March 2008, the FASB issued SFAS No. 161,Disclosures about Derivative Instruments and Hedging Activities  an amendment to FASB Statement No. 133.SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.
|  
|   | In December 2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated Financial Statements Liabilities an Amendment of ARB No. 51.This statement amends ARB 51 to establish accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | In February 2007, the FASB issued SFAS No. 159,The Fair Value Option for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115Accounting for Certain Investments in Debt and Equity Securitiesapplies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entitys first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157,Fair Value Measurements.The adoption of this statement did not have a material effect on the Company's reported financial position or results of operations.                                                                    
|  
|   | In September 2006, the FASB issued SFAS No. 157,Fair Value Measurements.The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement did not have a material effect on the Company's reported financial position or results of operations.                                                                                                                                                                                                                                                       
|  
|   | In December 2007, the FASB issued SFAS No. 141R,Business Combinations.This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.                                                                                        
|  

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

F-11

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

|4) | Mineral Property                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Pursuant to a mineral property staking and Net Smelter Returns Royalty agreement (the Agreement) dated April 19, 2007, the Company had acquired a 100% undivided right, title and interest in a gold/silver/copper mineral claim unit of the Kammatika Claims (the Claims), located in the province of British Columbia, Canada for a cash payment of $4,464 (CDN$5,000).                                                 
|  
|   | As of December 31, 2008, the Companys claims have expired. Consequently, the Company expensed the claims during the quarter ended December 31, 2008.                                                                                                                                                                                                                                                                         
|  
|5) | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   | The authorized number of common shares remains at 200,000,000 common shares with a par value of $0.001.                                                                                                                                                                                                                                                                                                                       
|  
|   | a.                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | b.                                                                                                                                                                                                                                                                                                                                                                                                                            
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|   | c.                                                                                                                                                                                                                                                                                                                                                                                                                            
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|   | d.                                                                                                                                                                                                                                                                                                                                                                                                                            
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|   | e.                                                                                                                                                                                                                                                                                                                                                                                                                            
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|   |                                                                                                                                                                                                                                                                                                                                                                                                                               
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|6) | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | On January 20, 2009 the President of the Company Ms Sharron Farris resigned as President and Mr. Richard Porterfield was appointed as President and Treasurer of the Company. Ms Sharon Farris remains as Secretary of the Company.                                                                                                                                                                                           
|  
|   | The Company has not entered into any transaction with Mr. Porterfield that would be regarded as related party transactions. Mr. Porterfield is not a director of any other publicly registered company.                                                                                                                                                                                                                       
|  
|   | 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.
|  

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

F-12

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|Precision Petroleum Corporation(An Exploration Stage Company)Notes to the interim financial statementsDecember 31, 2008(Expressed in U.S. Dollars)(Unaudited)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------

6) Subsequent Events (continued)

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 accompanying notes are an integral part of the financial statements.

F-13

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

Precision Petroleum Corporation (we, us, our or similar terms) was organized under the laws of the State of Nevada on February 7, 2007 to explore
mineral properties. Our principal executive offices are located at 9250 75thStreet,
Lexington, OK 73051. Our telephone number is (405) 924-0298.

On March 20, 2008, our Registration Statement on Form S-1 was declared effective, allowing our sole shareholder to sell 44,400,000 shares of our common stock at a price of $0.02
per share.

The following discussion should be read in conjunction with our most recent financial statements and notes appearing elsewhere in this quarterly report. In addition to the historical
consolidated financial information, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of
certain factors.

FULL FISCAL YEARS

Liquidity

At December 31, 2008, we had a working capital deficit of $22,117, compared to a working capital deficit of $14,422, at September 30, 2008. At December 31, 2008, our total
assets were Nil, compared to total assets in the amount of $4,464 at September 30, 2008, consisting of mineral claims. This decrease in assets was due to the expiration of mining claims and expensing the amount of claims during the quarter ended
December 31, 2008.

At December 31, 2008, our total current liabilities increased to $22,117 from $14,422 at September 30, 2008.

Our short and long term survival is dependent on funding from shareholder loans or outside sources.

Result of Operations

For the three (3) months ended December 31, 2008, operating expenses were $13,943 compared to $18,049 for the three (3) months ended December 31, 2007. The decrease of
$4,106 was due to a decrease mainly in general and administrative expenses. Operating expenses during the quarter ended December 31, 2008 consisted of legal and accounting fees of $9,479 and mineral claims expense of $4,464. This
compares with expenses during the three (3) months ended December 31, 2007, consisting of legal and accounting fees of $11,897, management fees of $3,600, general and administrative costs of $1,052 and rent expense of
$1,500.

We recognized a gain of $1,787 on foreign exchange for the quarter ended December 31, 2008, compared with a loss of $92 on foreign exchange during the quarter from the prior
year.

We posted a comprehensive loss of $12,156 for the quarter ended December 31, 2008, compared to a comprehensive loss of $18,141 for the same period from the previous year. From
inception (February 7, 2007) to December 31, 2008, we have incurred a total comprehensive loss of $134,152. The principal components of losses were legal and accounting fees of $93,099, management fees of $20,400, general and
administrative costs of $9,770, mining claims expense of $4,464 and rent expense of $8,500.

As of December 31, 2008, our net cash balance is $Nil. We do not have any lending arrangements in place with banking or financial institutions and we do not anticipate that we
will be able to secure these funding arrangements in the near future.

We believe our market risk exposures arise primarily from exposures to fluctuations in interest rates and exchange rates. We presently only transact business in Canadian and United
States Dollars. We believe that the exchange rate risk surrounding our future transactions will not materially or adversely affect our future earnings. We do not use derivative financial instruments to manage risks or for speculative or trading
purposes.

16

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Off Balance Sheet Arrangements.

None.

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 PROCEDURESSee Item 4T.ITEM 4T. 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.



|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.   |                                                            

17

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|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

|3.1  | Articles of Incorporation, as Amended*                                                                                                           
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------
|    
|3.2  | Bylaws*                                                                                                                                          
|    
|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.
|    

*Incorporated by reference to our Form S-1 Registration Statement filed on April 24, 2008, SEC File Number 333-149823.

18

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|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, on this 13thday of February, 2009.

PRECISION PETROLEUM CORPORATION

|Date: February 13, 2009 | By: /s/ Richard Porterfield                                                              
|----------------------- | -----------------------------------------------------------------------------------------
|                        | Name: Richard Porterfield                                                                
|                        | Title: President (principal executive officer)and Treasurer (principal financial officer)
|                        |                                                                                          
|                        |                                                                                          
|                        |                                                                                          
|                        | By:  /s/ Sharon Farris                                                                   
|                        | Name: Sharon Farris                                                                      
|                        | Title: Principal accounting officer                                                      







19

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