UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

(Mark One)



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



For the quarterly period ended November 30, 2010

OR

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



For the transition period from to



XUN ENERGY, INC.

(Exact name of registrant as specified in its charter)



|                         |                          |                                  
|------------------------ | ------------------------ | ---------------------------------
|                         |                          |                                  
|Nevada                   | 000-53466                | 26-1616719                       
|(State of incorporation) | (Commission File Number) | (IRS Employer Identification No.)



12518 NE Airport Way, Suite 148 No. 156 Portland Oregon  97230

(Address of principal executive offices)



| |                                                  | 
| | ------------------------------------------------ | 
| | (725)-200-0505                                   | 
| | (Issuers telephone number, including area code) | 



Real Value Estates, Inc.

3970 Casa Blanca Road, Reno, Nevada  89502

| |                                                                                    | 
| | ---------------------------------------------------------------------------------- | 
| | (Former name, former address and former fiscal year, if changed since last report) | 



Indicate by a 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 the filing requirements for the past 90 days.   Yes  þ   No   ̈



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

Large accelerated Filer

[   ]

Accelerated Filer

[  ]

Non-accelerated Filer

[   ]

Small 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 [ X]   No[   ]



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 Section 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 o   No o



APPLICABLE ONLY TO CORPORATE ISSUERS:



Indicate the number of shares outstanding of each of the issuers classes of Common Stock as of the latest practicable date:  512,453,500 shares of common stock are issued and outstanding as of October 8, 2010



1

XUN ENERGY, INC.



INDEX





|         |                                                                                                                                                                                                        |  |     
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|         | PART I.  FINANCIAL INFORMATION                                                                                                                                                                        |  | Page
|         |                                                                                                                                                                                                        |  |     
|Item 1.  | Financial Statements                                                                                                                                                                                   |  | 3   
|         |                                                                                                                                                                                                        |  |     
|         | Balance Sheets at  November 30, 2010  (unaudited) and May 31,  2010  (audited)                                                                                                                         |  | 3   
|         |                                                                                                                                                                                                        |  |     
|         | Statement of Operations for the Three Months  ended November 30, 2010 and November 30, 2009, for the Six Months ended November 30, 2010 and November 30, 2009  and from  Inception (December 20, 2007) |  | 4   
|         |                                                                                                                                                                                                        |  |     
|         | Statements of Stockholders Equity from Inception (December 20, 2007) to November 30, 2010                                                                                                              |  | 5   
|         |                                                                                                                                                                                                        |  |     
|         | Statements of Cash Flows  for the Six Months Ended November 30, 2010 and November 30, 2009  and
Cumulative since Inception to November 30, 2010  (unaudited)                                           |  | 6   
|         |                                                                                                                                                                                                        |  |     
|         | Notes to Interim Financial Statements as of  November 30,  2010                                                                                                                                        |  | 7   
|         |                                                                                                                                                                                                        |  |     
|Item 2.  | Managements Discussion and Analysis of Financial Condition and Results of Operation                                                                                                                   |  | 14  
|         |                                                                                                                                                                                                        |  |     
|Item 3.  | Quantitative and Qualitative Disclosure About Market Risk                                                                                                                                              |  | 16  
|         |                                                                                                                                                                                                        |  |     
|Item 4.  | Controls and Procedures                                                                                                                                                                                |  | 16  
|         |                                                                                                                                                                                                        |  |     
|         | PART II.  OTHER INFORMATION                                                                                                                                                                           |  |     
|         |                                                                                                                                                                                                        |  |     
|Item 1   | Legal Proceedings.                                                                                                                                                                                     |  | 16  
|         |                                                                                                                                                                                                        |  |     
|Item 1A. | Risk Factors                                                                                                                                                                                           |  | 16  
|         |                                                                                                                                                                                                        |  |     
|Item 2.  | Unregistered Sales of Equity Securities.                                                                                                                                                               |  | 16  
|         |                                                                                                                                                                                                        |  |     
|Item 3.  | Defaults upon senior securities.                                                                                                                                                                       |  | 17  
|         |                                                                                                                                                                                                        |  |     
|Item 4.  | Submission of matters to a vote of security holders.                                                                                                                                                   |  | 17  
|         |                                                                                                                                                                                                        |  |     
|Item 5.  | Other information                                                                                                                                                                                      |  | 17  
|         |                                                                                                                                                                                                        |  |     
|Item 6.  | Exhibits                                                                                                                                                                                               |  | 17  



2



|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              |  | 
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ----------------- |  | - |  | ------------ |  | 
|                                     |                                                                                                                                              | ITEM 1.      FINANCIAL STATMENTS                       
|                                     |                                                                                                                                              |                                                        
|                                     |                                                                                                                                              | XUN ENERGY, INC.                                       
|                                     |                                                                                                                                              | BALANCE SHEETS
As of NOVEMBER 30, 2010 and MAY 31, 2010
|                                     |                                                                                                                                              | (Expressed in U.S. dollars)                            
|                                     |                                                                                                                                              |                                                         | November 30, 2010 |  |   |  | May 31, 2010 | 
|                                     |                                                                                                                                              |                                                         | (unaudited)       |  |   |  | (audited)    | 
|                                     | ASSETS                                                                                                                                       |                                                         |                   |  |   |  |              | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     | Current Assets                                                                                                                               |                                                         |                   |  |   |  |              | 
|                                     | Cash                                                                                                                                         | $                                                       | 2,289             |  | $ |  | 22,386       | 
|                                     | Accounts Receivable                                                                                                                          | $                                                       | 192               |  | $ |  | -            | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     | Total Current Assets                                                                                                                         | $                                                       | 2,481             |  | $ |  | -            | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     | Total Assets                                                                                                                                 | $                                                       | 2,481             |  | $ |  | 22,386       | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                                                                                              |                                                         |                   |  |   |  |             
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     | Current  Liabilities                                                                                                                         |                                                         |                   |  |   |  |              | 
|                                     | Accounts payable and accrued expenses                                                                                                        | $                                                       | 7,913             |  | $ |  | 3,177        | 
|                                     | Loan payable                                                                                                                                 | $                                                       | 60,000            |  | $ |  | 60,000       | 
|                                     | Total Current Liabilities                                                                                                                    | $                                                       | 67,913            |  | $ |  | 63,177       | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     | Stockholders' Equity (Deficit)                                                                                                               |                                                         |                   |  |   |  |              | 
|                                     | Preferred Stock, par value $0.0001, 50,000,000 shares authorized,                                                                            |                                                         |                   |  |   |  |              | 
|                                     | none issued and outstanding                                                                                                                  | $                                                       | -                 |  | $ |  | -            | 
|                                     | Common Stock, par value $0.0001, 5,000,000,000 shares authorized,                                                                            |                                                         |                   |  |   |  |              | 
|                                     | 512,453,500 and 510,416,000 shares issued and outstanding, respectively                                                                      | $                                                       | 51,245            |  | $ |  | 51,042       | 
|                                     | Paid in Capital                                                                                                                              | $                                                       | 112,263           |  | $ |  | 9,166        | 
|                                     | Receivables for issuance of stock, net                                                                                                       | $                                                       | (62,950)          |  | $ |  | -            | 
|                                     | Deficit Accumulated During the Development Stage                                                                                             | $                                                       | (165,991)         |  | $ |  | (100,999)    | 
|                                     | Total Stockholders' Equity (Deficit)                                                                                                         | $                                                       | (65,433)          |  | $ |  | (40,791)     | 
|                                     |                                                                                                                                              |                                                         |                   |  |   |  |              | 
|                                     | Total Liabilities and Stockholders' Equity (Deficit)                                                                                         | $                                                       | 2,481             |  | $ |  | 22,386       | 
|                                     | *1 - The number of issued and outstanding shares of common stock has been adjusted to reflect an 80:1 forward split effective August 3, 2010 |                                                         |                   |  |   |  |              | 





The Accompanying Notes Are an Integral Part Of These Financial Statements



3

|                                                                              
|------------------------------------------------------------------------------
|XUN ENERGY, INC.
STATEMENTS OF OPERATIONS                                     
|FOR THE YEARS ENDED
NOVEMBER 30, 2010  and  2009 and CUMULATIVE FROM INCEPTION
|(Expressed in U.S. dollars)                                                   





|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|-------------------------- |  | - | -------------------------------------------- |  | - | -------------------------------------------- |  | - | ------------------------------------------ |  | - | ------------------------------------------ |  | - | -------------------------------------------------- | 
|                           |  |   | For the three months ended November 30, 2010 |  |   | For the three months ended November 30, 2009 |  |   | For the six months ended November 30, 2010 |  |   | For the six months ended November 30, 2009 |  |   | December 20, 2007 (Inception) To November 30, 2010 | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |  
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |  
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Revenue                    |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Revenue  Operations       |  | $ | -                                            |  | $ | -                                            |  | $ | -                                          |  | $ | -                                          |  | $ | -                                                  | 
|Total Revenue              |  | $ | -                                            |  | $ | -                                            |  | $ | -                                          |  | $ | -                                          |  | $ | -                                                  | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Expenses                   |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Filing Fees                |  | $ | 369                                          |  | $ | 80                                           |  | $ | 1,977                                      |  | $ | 400                                        |  | $ | 6,097                                              | 
|General and Administrative |  | $ | 4,003                                        |  | $ | 850                                          |  | $ | 8,563                                      |  | $ | 870                                        |  | $ | 30,581                                             | 
|Professional Fees          |  | $ | 19,755                                       |  | $ | 1,500                                        |  | $ | 51,823                                     |  | $ | 3,500                                      |  | $ | 126,092                                            | 
|Loss before income taxes   |  | $ | (24,127)                                     |  | $ | (2,430)                                      |  | $ | (62,363)                                   |  | $ | (4,770)                                    |  | $ | (162,770)                                          | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Other income (expense)     |  | $ | (1,434)                                      |  | $ | -                                            |  | $ | (2,629)                                    |  | $ | -                                          |  | $ | (3,220)                                            | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Provision for Income Taxes |  | $ | -                                            |  | $ | -                                            |  | $ | -                                          |  | $ | -                                          |  | $ | -                                                  | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Net (Loss)                 |  | $ | (25,561)                                     |  | $ | (2,430)                                      |  | $ | (64,991)                                   |  | $ | (4,770)                                    |  | $ | (165,991)                                          | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Basic and Diluted          |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|(Loss) per Common Shares   |  |   | a                                            |  |   | a                                            |  |   | a                                          |  |   | a                                          |  |   |                                                    | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Weighted Average           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 
|Number of Common Shares*1  |  |   | 510,450,615                                  |  |   | 510,416,000                                  |  |   | 510,433,213                                |  |   | 510,416,000                                |  |   |                                                    | 
|                           |  |   |                                              |  |   |                                              |  |   |                                            |  |   |                                            |  |   |                                                    | 





The Accompanying Notes Are An Integral Part Of These Financial Statements



4

| |                                                                                                                                              |  |                                                     |                             |   |        |  |   |                            |              |   |                                                  |  |   |          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 
| | -------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------- | --------------------------- | - | ------ |  | - | -------------------------- | ------------ | - | ------------------------------------------------ |  | - | -------- |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 
| |                                                                                                                                              |  | XUN ENERGY, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
| |                                                                                                                                              |  |                                                     | (Expressed in U.S. dollars)
| |                                                                                                                                              |  |                                                     |                             |   |        |  |   |                            |              |   |                                                  |  |   |         
| |                                                                                                                                              |  |                                                     |                             |   |        |  |   |                            |              |   | Deficit Accumulated During the Development Stage |  |   |          | 
| |                                                                                                                                              |  |                                                     |                             |   |        |  |   | Additional Paid in Capital |              |   |                                                  |  |   |         
| |                                                                                                                                              |  | Common Stock                                        |                             |   |        |  |   |                            | Total Equity |  
| |                                                                                                                                              |  | Shares*1                                            |                             |   | Amount |  |   |                            |              |   |                                                  | 
| | Inception December 20, 2007                                                                                                                  |  | -                                                   |                             | $ | -      |  | $ | -                          |              | $ | -                                                |  | $ | -        | 
| | Common stock issued  to Directors                                                                                                            |  | 400,000,000                                         |                             | $ | 40,000 |  | $ | (35,000)                   |              | $ | -                                                |  | $ | 5,000    | 
| | For cash December 20, 2007                                                                                                                   |  |                                                     |                             |   | -      |  |   | -                          |              |   |                                                  |  |   | -        | 
| | at 0.001 per share                                                                                                                           |  |                                                     |                             |   |        |  |   |                            |              |   |                                                  |  |   |          | 
| | Private placement closed on                                                                                                                  |  |                                                     |                             |   |        |  |   |                            |              |   |                                                  |  |   |          | 
| | March 31 at 0.04 per share                                                                                                                   |  | 110,416,000                                         |                             | $ | 11,042 |  | $ | 44,166                     |              | $ | -                                                |  | $ | 55,208   | 
| | Net loss for the year                                                                                                                        |  |                                                     |                             |   |        |  |   |                            |              | $ | (85)                                             |  | $ | (85)     | 
| | Balance, May 31, 2008                                                                                                                        |  | 510,416,000                                         |                             | $ | 51,042 |  | $ | 9,166                      |              | $ | (85)                                             |  | $ | 60,123   | 
| | Net loss for the year                                                                                                                        |  |                                                     |                             |   |        |  |   |                            |              | $ | (50,170)                                         |  | $ | (50,170) | 
| | Balance, May 31, 2009                                                                                                                        |  | 510,416,000                                         |                             | $ | 51,042 |  | $ | 9,166                      |              | $ | (50,255)                                         |  | $ | 9,953    | 
| | Net loss for the year                                                                                                                        |  |                                                     |                             |   |        |  |   |                            |              | $ | (50,744)                                         |  | $ | (50,744) | 
| | Balance, May 31, 2010                                                                                                                        |  | 510,416,000                                         |                             | $ | 51,042 |  | $ | 9,166                      |              | $ | (100,999)                                        |  | $ | (40,791) | 
| | Common stock issued  to Directors                                                                                                            |  | 37,500                                              |                             | $ | 4      |  | $ | 3,296                      |              | $ |                                                  |  | $ | 3,300    | 
| | For purchase of Accounts Receivable                                                                                                          |  | 1,259,000                                           |                             | $ | 126    |  | $ | 62,824                     |              | $ |                                                  |  | $ | 62,950   | 
| | For cash November 30, 2010                                                                                                                   |  | 741,000                                             |                             | $ | 74     |  | $ | 36,976                     |              | $ |                                                  |  | $ | 37,050   | 
| | Net loss for the period                                                                                                                      |  |                                                     |                             |   |        |  |   |                            |              | $ | (64,991)                                         |  | $ | (64,991) | 
| | Balance, November 30, 2010                                                                                                                   |  | 512,453,500                                         |                             | $ | 51,245 |  | $ | 112,263                    |              | $ | (165,991)                                        |  | $ | (65,433) | 
| | *1 - The number of issued and outstanding shares of common stock has been adjusted to reflect an 80:1 forward split effective August 3, 2010 |  |                                                     |                             |   |        |  |   |                            |              |   |                                                  |  |   |          | 
| |                                                                                                                                              |  |                                                     |                             |   |        |  |   |                            |              |   |                                                  |  |   |          | 



The Accompanying Notes Are An Integral Part Of These Financial Statements



5

XUN ENERGY, INC.

|                                                                             
|-----------------------------------------------------------------------------
|STATEMENTS OF CASH FLOWS                                                     
|FOR THE PERIOD ENDED NOVEMBER 30, 2010 and 2009 and CUMULATIVE FROM INCEPTION
|(Expressed in U.S. dollars)                                                  



| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| | --------------------------------------------------- | - | ------------------------------------------ |  | - | ------------------------------------------ |  | - | -------------------------------------------------- | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| |                                                     |   | For the six months ended November 30, 2010 |  |   | For the six months ended November 30, 2009 |  |   | December 20, 2007 (Inception) To November 30, 2010 | 
| |                                                     |   |                                            |  |   |                                            | 
| |                                                     |   |                                            |  |   |                                            | 
| | Operating Activities                                |   |                                            |  |   |                                            |  |   |                                                    | 
| | Net (Loss)                                          | $ | (64,991)                                   |  | $ | (4,770)                                    |  | $ | (165,991)                                          | 
| | Adjustments To Reconcile Net Loss To                |   | -                                          |  |   | -                                          |  |   | -                                                  | 
| | Share based compensation                            | $ | 3,300                                      |  | $ | -                                          |  | $ | 3,300                                              | 
| | Changes in net assets and liabilities-              |   |                                            |  |   |                                            |  |   |                                                    | 
| | Accounts receivable and accrued receivables         | $ | (192)                                      |  | $ | -                                          |  | $ | (192)                                              | 
| | Accounts payable and accrued liabilities            | $ | 4,737                                      |  | $ | -                                          |  | $ | 7,913                                              | 
| | Net Cash Used By Operating Activities               | $ | (57,147)                                   |  | $ | (4,770)                                    |  | $ | (154,969)                                          | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| | FINANCING ACTIVITIES                                |   |                                            |  |   |                                            |  |   |                                                    | 
| | Proceeds from issuance of common stock              | $ | 100,000                                    |  | $ | -                                          |  | $ | 160,208                                            | 
| | Receivables for issuance of stock                   | $ | (62,950)                                   |  | $ | -                                          |  | $ | (62,950)                                           | 
| | Repayment of loans                                  | $ | (21,000)                                   |  | $ | -                                          |  | $ | (21,000)                                           | 
| | Proceeds from loans                                 | $ | 21,000                                     |  | $ | -                                          |  | $ | 81,000                                             | 
| | Cash Provided by Financing Activities               | $ | 37,050                                     |  | $ | -                                          |  | $ | 157,258                                            | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| | Net Increase (Decrease) in Cash                     | $ | (20,097)                                   |  | $ | (4,770)                                    |  | $ | 2,289                                              | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| | Cash, Beginning of Period                           | $ | 22,386                                     |  | $ | 9,953                                      |  | $ | -                                                  | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| | Cash, End of Period                                 | $ | 2,289                                      |  | $ | 5,183                                      |  | $ | 2,289                                              | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 
| | Supplemental disclosure with respect to cash flows: |   |                                            |  |   |                                            |  |  
| | Cash paid for income taxes                          | $ | -                                          |  | $ | -                                          |  | $ | -                                                  | 
| | Cash paid for interest                              | $ | 237                                        |  | $ | -                                          |  | $ | 237                                                | 
| |                                                     |   |                                            |  |   |                                            |  |   |                                                    | 



The Accompanying Notes Are An Integral Part Of These Financial Statements



6



|                                                                                              
|----------------------------------------------------------------------------------------------
|XUN ENERGY, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
November 30, 2010



NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS



The Company was incorporated under the laws of the state of Nevada on December 20, 2007 as Real Value Estates, Inc. On July 20, 2010, the Company changed its name to Xun Energy, Inc.



The Company has limited operations and is considered a development stage company and has not yet realized any revenues from its planned operations.



As a development stage enterprise, the Company discloses the deficit accumulated during the development stage and the cumulative statements of operations and cash flow from inception to the current balance sheet date.



NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES



BASIS OF ACCOUNTING



The Companys financial statements are prepared using the accrual method of accounting. The Company has elected a May 31 fiscal year end.



UNAUDITED INTERIM FINANCIAL STATEMENTS



The interim financial statements of Xun Energy, Inc. as of November 30, 2010, and for the six months then ended, and cumulative from inception, are unaudited. However, in the opinion of management, the interim financial statements include all adjustments, consisting only of normal recurring adjustments, necessary to present fairly Xun Energy, Inc.s financial position as of November 30, 2010, and the results of its operations and its cash flows for the six months ended November 30, 2010, and 2009, and cumulative from inception. These results are not necessarily indicative of the results expected for the fiscal year ending May 31, 2011. The accompanying financial statements and notes thereto do not reflect all disclosures required under accounting principles generally accepted in the United States of America. Refer to the Companys audited financial statements as of May 31, 2010, filed with the SEC for additional information, including significant accounting policies.



EARNINGS PER SHARE



Basic earnings (loss) per share amount are computed by dividing the net income (loss) by the weighted average number of common shares outstanding.  Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.



CASH EQUIVALENTS



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



ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS



The carrying value of the Companys financial instruments, consisting of accounts payable and accrued liabilities approximate their fair value due to the short-term maturity of such instruments.  Unless otherwise noted, it is managements opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial statements.



INCOME TAXES



Income taxes are provided in accordance with FASB ASC 740.  A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards.  Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.



Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.



7



USE OF ESTIMATES



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.



SOFTWARE DEVELOPMENT COSTS



Software development costs representing capitalized costs of design, configuration, coding, installation and testing of the Companys website up to its initial implementation.  Upon implementation, the asset will be amortized to expense over its estimated useful life of three years using the straight-line method.  Ongoing website post-implementation costs of operation, including training and application maintenance, will be charged to expense as incurred.



NOTE 3.   ADVERTISING



The Companys policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of November 30, 2010.



NOTE 4.   GOING CONCERN



The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  The Company has net losses for the period from inception (December 20, 2007) to November 30, 2010. This condition raises substantial doubt about the Companys ability to continue as a going concern. The Companys continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



Management is planning to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be successful in these efforts.



NOTE 5.   RELATED PARTY TRANSACTIONS



The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.



On December 20, 2007, pursuant to the terms of a subscription agreement, we sold 80,000,000 (post forward split) shares of our common stock to Ms. Marina Karpilovski, the Company's former President and a director, for cash payment to us of $1,000. We believe this issuance was deemed to be exempt under Regulation S of the Securities Act, as no advertising or general solicitation was employed in offering the securities, the offering and sale was made only to Ms. Karpilovski who is a non-U.S. citizen, and transfer was restricted by us in accordance with the requirements of the Securities Act.



On December 20, 2007 pursuant to the terms of a subscription agreement, we sold 320,000,000 (post forward split) shares of our common stock to Mr. Michael Zazkis, the Company's former Secretary, Treasurer and a director, for cash payment to us of $4,000. We believe this issuance was deemed to be exempt under Regulation S of the Securities Act, as no advertising or general solicitation was employed in offering the securities, the offering and sale was made only to Mr. Zazkis who is a non-U.S. citizen, and transfer was restricted by us in accordance with the requirements of the Securities Act.



The Company reserved 37,500 common shares for the 3 months ending November 30, 2010 with an average price of $0.088 per share and an aggregate of 37,500 for the fiscal year with an average price of $0.088 per share to the Executive and Board per a Management and Financial Service Agreement with Mr. Peter Matousek and a Member Compensation Agreement with Mr. Peter Matousek and Mr. Donald Lynch, refer to NOTE 14: EXECUTIVE AND BOARD COMPENSATION for additional detail.



NOTE 6.  INCOME TAXES



The Company uses the liability method, where deferred tax assets and liabilities are determined based on the expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income tax reporting purposes.   During fiscal 2010, 2009 and 2008, the Company incurred net losses and, therefore, has no tax liability.  The net deferred tax asset of approximately $58,097 (assuming a 35% effective tax rate) generated by the loss carry-forward has been fully reserved.



8



NOTE 7.  NET OPERATING LOSSES



As of November 30, 2010, the Company has a net operating loss carry-forward of approximately $165,991, which will expire 20 years from the date the loss was incurred.



NOTE 8. STOCKHOLDERS EQUITY



AUTHORIZED



The Company is authorized to issue 5,000,000,000 shares of $0.0001 par value common stock and 50,000,000 shares of preferred stock, par value $0.0001. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.



On July 20, 2010, the Company filed a Certificate of Amendment to the Companys certificate of incorporation with the Nevada Secretary of State which increased the Companys authorization to issue 5,000,000,000 shares of $0.0001 par value common stock, refer to NOTE 12: CORPORATE ACTION.



ISSUED AND OUTSTANDING



On December 20, 2007, the Company issued 400,000,000 (post forward split) common shares to its Directors for cash of $5,000.



Since inception (December 20, 2007) to November 30, 2009, the Company accepted subscriptions for 110,416,000 (post forward split) common shares from 37 investors under a private placement which closed on March 31, 2008. The private placement was not subject to any minimum investment and was priced at $0.0005 per share (post forward split). The Company accepted the subscriptions on various dates throughout the year.



The Company reserved 37,500 common shares for the 3 months ending November 30, 2010 with an average price of $0.088 per share and an aggregate of 37,500 for the fiscal year with an average price of $0.088 per share to the Executive and Board per a Management and Financial Service Agreement with Mr. Peter Matousek and a Member Compensation Agreement with Mr. Peter Matousek and Mr. Donald Lynch, refer to NOTE 14: EXECUTIVE AND BOARD COMPENSATION for additional detail.



The Company issued 1,259,000 common shares on November 30, 2010 for $62,950.00 for Accounts Receivable assignment, refer to NOTE 15: ACCOUNTS RECEIVABLE PURCHASE.



The Company issued 741,000 common shares on November 30, 2010 for $37,050.00 cash in a negotiated transaction with an investor to fund the ongoing operations of the Company.



9



NOTE 9: RECENT ACCOUNTING PRONOUNCEMENTS



In April 2009, the FASB issued FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (FSP FAS 157-4), codified in FASB ASC 820-10-65, which provides additional guidance for estimating fair value in accordance with ASC 820-10 when the volume and level of activity for an asset or liability have significantly decreased. ASC 820-10-65 also includes guidance on identifying circumstances that indicate a transaction is not orderly. The adoption of ASC 820-10-65 did not have an impact on the Company's results of operations or financial condition.



In May 2009, the FASB issued SFAS No. 165, "Subsequent Events" ("SFAS 165") codified in FASB ASC 855-10-05, which provides guidance to establish general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. FASB ASC 855-10-05 is effective for interim and annual periods ending after June 15, 2009. FASB ASC 855-10-05 requires that public entities evaluate subsequent events through the date that the financial statements are issued.



In June 2009, the FASB issued SFAS No. 166, "Accounting for Transfers of Financial Assets - an amendment of FASB Statement No. 140" ("SFAS 166"), codified as FASB ASC 860, which requires entities to provide more information regarding sales of securitized financial assets and similar transactions, particularly if the entity has continuing exposure to the risks related to transferred financial assets. FASB ASC 860 eliminates the concept of a "qualifying special-purpose entity," changes the requirements for derecognizing financial assets and requires additional disclosures. FASB ASC 860 is effective for fiscal years beginning after November 15, 2009. The adoption of FASB ASC 860 did not have an impact on the Company's financial condition, results of operations or cash flows.



In June 2009, the FASB issued SFAS No. 167, "Amendments to FASB Interpretation No. 46(R)" ("SFAS 167"), codified as FASB ASC 810-10, which modifies how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. FASB ASC 810-10 clarifies that the determination of whether a company is required to consolidate an entity is based on, among other things, an entity's purpose and design and a company's ability to direct the activities of the entity that most significantly impact the entity's economic performance. FASB ASC 810-10 requires an ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity. FASB ASC 810-10 also requires additional disclosures about a company's involvement in variable interest entities and any significant changes in risk exposure due to that involvement. FASB ASC 810-10 is effective for fiscal years beginning after November 15, 2009. The adoption of FASB ASC 810-10 did not have an impact on the Company's financial condition, results of operations or cash flows.



In June 2009, the FASB issued FASB ASC 105, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification as the sole source of authoritative generally accepted accounting principles. Pursuant to the provisions of FASB ASC 105, we have updated references to GAAP in our financial statements. The adoption of FASB ASC 105 did not impact the Company's financial position or results of operations.



10



NOTE 10: CHANGE OF CONTROL



On February 9, 2010 certain shareholders sold and transferred an aggregate of 400,000,000 (post forward split) shares of Common Stock representing approximately 78.37% of the issued and outstanding shares of the Company to certain buyers (Buyers), at $0.000625 per share, post forward split, for an aggregate purchase price of $250,000 (the Purchase Price). Such transaction is hereinafter referred to as the Takeover or the Transaction.



The table below represents the ownership and percentage of control by each of the new shareholders:



|                                                |                                                                                              |                                                                          |                        
|----------------------------------------------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ | -----------------------
|Name of
Beneficial Owner                        | Class of Voting Stock                                                                        | Number of Shares (Post Forward Split) of Voting Stock Beneficially Owned | Percentage of Class (1)
|Donald Lynch                                    | Common Stock                                                                                 | 80,000,000                                                               | 15.67%                 
|Peter Matousek                                  | Common Stock                                                                                 | 320,000,000                                                              | 62.69%                 
|All Officers & Directors As a Group (2 Persons) | Common Stock                                                                                 | 400,000,000                                                              | 78.37% (1)             
|                                                | (1)
Based on 510,416,000 (post forward split) shares of Common Stock issued and outstanding. |                                                                         



In connection with the Agreement, there was a change in the majority of the Companys Board of Directors. Upon the consummation of the Takeover, Marina Karpilovski President and Director, and Michael Zazkis, Secretary, Treasurer & Director resigned and Mr. Donald Lynch was appointed as Director and Executive Officer of the Company and Mr. Peter Matousek was appointed as Director and Executive Officer of the Company.



NOTE 11: LOAN PAYABLE



The Company has a loan in the amount of $60,000.00 which consists of two unsecured Promissory Notes which accrue interest at 8 per cent per annum. The Promissory Notes are not callable and mature one year from the date of the Promissory Note with interest paid on maturity of the Promissory Note. The $10,000.00 Promissory Note and interest is due on March 16, 2011 and the $50,000.00 Promissory Note and interest is due on April 22, 2011.



The Company has acquired from a third party shareholder the Accounts Receivable of $147,965, discounted, from Global Power and Water Industries, Inc., the Promissory Notes holder. The Company plans to offset the Promissory Notes against the Accounts Receivable purchased, subject to a successful civil action commenced by the seller of the Accounts Receivable. Refer to NOTE 15: ACCOUNTS RECEIVABLE PURCHASE for additional detail.



11





NOTE 12: CORPORATE ACTION



A Certificate of Amendment to the Certificate of Incorporation was authorized by the Companys Board of Directors on May 15, 2010 and approved by the written consent of the holders of a majority of the Companys shareholders owning a majority of the outstanding issued and outstanding voting shares. The Certificate of Amendment provided for the Company to:



·

Change its name from Real Value Estates, Inc. to Xun Energy, Inc.;

·

Increase the number of authorized shares of its common stock from 100 million shares $0.0001 par value to 5 billion shares of common stock, $0.0001 par value; and

·

An 80:1 forward split of the Companys issued and outstanding common stock.



On July 20, 2010, the Company filed a Certificate of Amendment to the Companys certificate of incorporation with the Nevada Secretary of State to effect the name change to Xun Energy, Inc. and to increase the authorized common stock to 5 billion shares of common stock, $0.0001 par value.



On August 3, 2010, the corporate action became effective whereby the 6,380,200 issued and authorized shares of common stock were forward split resulting in 510,416,000 issued and outstanding shares of common stock.



NOTE 13: COMMITMENTS



The Company entered into a Management and Financial Service Agreement with the interim CEO for a 6 month period ending August 31, 2010 whereby the interim CEO was paid $5,000 per month. The Financial Service Agreement was not renewed by the Company when the Financial Service Agreement ended on November 30, 2010. There was no disagreement between the Company and Mr. Kushner regarding the Companys operations or accounting.



NOTE 14: EXECUTIVE AND BOARD COMPENSATION



The Company entered into a Management and Financial Service Agreement with Mr. Peter Matousek for a 12 month period ending August 31, 2011 whereby Mr. Matousek will be paid $30,000 in cash payments and 2,500 shares per month in stock of the Company. The stock will be valued based on the average of the 5 trading day close price prior to each month end. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000.



The Company entered into a Board Member Compensation Agreement with Mr. Peter Matousek and Mr. Donald Lynch for a 12 month period ending August 31, 2011 whereby Mr. Matousek and Mr. Lynch will be paid 5,000 shares per month in stock of the Company. The stock will be valued based on the average of the 5 trading day close price prior to each month end. The terms and conditions will be renegotiated upon the successful consummation of a Business Combination through the acquisition of, or merger or consolidation with, a company that has substantial additional capital and or operating revenues; or the Company is able to finance operating expenses with additional debt or through equity financing of not less than $5,000,000.

The table below represents the shares issued to the Executive and Board with the 5-Day Average Share Closing Price:



|              |           |        |           |               |               |          
|------------- | --------- | ------ | --------- | ------------- | ------------- | ---------
|              |           |        |           | Fiscal Year   | 5-Day         |          
|              | Shares    | Total  | Aggregate | Average Share |              
|Month         | Executive | Board  | Shares    | Shares        | Closing Price | Amount   
|June          | -         | -      | -         | -             | -             | -        
|July          | -         | -      | -         | -             | -             | -        
|August        | -         | -      | -         | -             | -             | -        
|Quarter Total | -         | -      | -         | -             | -             | -        
|September     | 2,500     | 10,000 | 12,500    | 12,500        | $0.1500       | $1,875.00
|October       | 2,500     | 10,000 | 12,500    | 12,500        | $0.0600       | $750.00  
|November      | 2,500     | 10,000 | 12,500    | 12,500        | $0.0540       | $675.00  
|Quarter Total | 7,500     | 30,000 | 37,500    | 37,500        | $0.0880       | $3,300.00



12



NOTE 15: ACCOUNTS RECEIVABLE PURCHASE



The Company, on November 30, 2010, entered into an Accounts Receivable Assignment (the Assignment) with Comtax Services Inc. (Comtax) whereby Comtax assigned to the Company $147,965 in accounts receivable due Comtax from Global Power and Water Industries, Inc. (Global)  in consideration for 1,259,000 common shares of the Company at a share price of $.05 for a total of $62,950.00. The $62,950 to Comtax represents the monies owed by the Company to Global in the form of Promissory Notes and interest due in March 2011 and April 2011 discussed in Note 11.



If within 150 days from the execution of the Assignment, the Company is not able to collect all accounts receivable, then the Company may re-transfer to Comtax and Comtax shall repurchase any outstanding accounts receivable for the balance owed.



Since entering the Assignment, Comtax has filed a civil action on December 16, 2010, Case Number 05-2010-CA-064575, with the County of Brevard, in the State of Florida, seeking judgment against Global for $147,965.00 plus interest, costs and other relief this court deems just and proper. Successful award of the judgment will allow the Company to offset the Loan Payable to Global, discussed in NOTE 11: LOAN PAYABLE, against the Accounts Receivable.



NOTE 16: SUBSEQUENT EVENTS



The Company, on December 9, 2010, executed a Letter of Intent with Global Energy Acquisitions, LLC (GEA) which provides in part for the Company to acquire from GEA a 51% gross royalty interest in up to 500 producing oil wells in Kentucky. GEA is in the business of exploring, developing, operating, and investing in, acquiring, selling, managing and drilling oil and gas properties.



It is anticipated that GEA will form a new, wholly owned subsidiary (the Subsidiary) and transfer the royalty interests in the oil wells to this entity. The Company will then acquire 51% of the common stock of the Subsidiary. The parties reserve the right to modify the structure of the transaction to facilitate any required regulatory approvals and to minimize the tax consequences of the transaction.



The Purchase Price for the acquisition of its equity position in the Subsidiary shall be paid in the Companys common stock based upon the fair market value of the equity percentage of the Subsidiarys common stock. The Letter of Intent further contemplates that the Company will redeem a percentage of the shares of common stock owned by the Companys officers and directors in an amount equal to the proportionate share of the common stock issued to GEA. In addition, Peter Matousek will tender 100 million shares of common stock for redemption by the Company for nominal consideration.



Closing of the transaction is subject to further due diligence, execution of a definitive agreement, and satisfaction of conditions precedent including delivery of audited financial statements. There can be no assurance that the parties will come to terms on a definitive agreement or that the proposed transaction will in fact close.



The Company entered in a Management and Financial Service Agreement with Mr. Wayne St. Cyr as the Executive Vice President, Marketing and Strategic Development on December 21, 2010 for a ten day period ending December 31, 2010.



The Company entered into an employment agreement with Mr. Wayne St. Cyr as the Executive Vice President, Marketing and Strategic Development effective January 1, 2011. Mr. Wayne St. Cyrs responsibilities will include but not be limited to raise the funds for the Company to complete an aggressive drilling program of 15 wells per month over the next 4 years subject to the closing of the acquisition from GEA a 51% gross royalty interest in up to 500 producing oil wells in Kentucky. GEA is in the business of exploring, developing, operating, and investing in, acquiring, selling, managing and drilling oil and gas properties.



13



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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION



This Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2010 contains forward-looking statements. Generally, the words believes, anticipates, may, will, should, expect, intend, estimate, continue, and similar expressions or the negative thereof or comparable terminology are intended to identify  forward-looking statements which include, but are not limited to, statements concerning the Companys expectations regarding its working capital requirements, financing requirements, business prospects, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. Such statements are subject to certain risks and uncertainties, including the matters set forth in this Quarterly Report or other reports or documents the Company files with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected.



These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein.



Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.



OTHER PERTINENT INFORMATION



When used in this report, the terms "Xun Energy," the "Company," we," "our," and "us" refer to Xun Energy, Inc., a Nevada corporation.



Overview and History:



We were incorporated on December 20, 2007 in the State of Nevada. We are a development stage company, and to date have not earned any revenue and currently do not have any significant assets. Our original business plan was to develop a website related to the residential real estate foreclosure market, containing an online social network for those involved in foreclosures, an online database with residential real estate foreclosure property listings and a knowledge base with educational and informational materials about the foreclosure market. We planned to include foreclosure listings searchable by state, county and city throughout the United States.  We were not successful with this endeavor.



In February 2010, the Company installed new officers and directors and changed its business plan to focus on emerging opportunities in solar energy.  In March 2010, the Company entered into a Share Exchange Agreement with Global Power and Water Industries, Inc., a company whose focus was the development and installation of high-efficiency concentrator solar cell arrays, thermal electric technologies and advanced tracking systems in China. The Agreement was terminated in May 2010 without liability.



Since Xun no longer has operations, our focus is  to effect a merger, exchange of capital stock, asset acquisition or other  similar business combination  with an operating or development stage business which desires to utilize our status as a reporting corporation under the Securities Exchange Act of 1934 ("Exchange Act"). We will not restrict our search to any specific business, industry or geographical location, and we may participate in a business venture of virtually any kind or nature. Our management may become involved in management of the target business and/or may hire qualified but as yet unidentified individuals to manage the target business.



"Shell" Corporation



Currently, we have virtually no business operations other than our efforts to effectuate a Business Combination. As a result we can be characterized as a "shell" corporation. As a shell corporation, we face special risks inherent in the investigation, acquisition, or involvement in a new business opportunity. We face all of the unforeseen costs, expenses, problems, and difficulties related to such companies. We are dependent upon our management to effectuate a Business Combination.



With limited capital resources and the uncertainties in the equities market, we have chosen to expand our search for possible acquisition candidates to encompass most industries and businesses.  The financial information set forth below represents the results of operations during our formative stages and is not indicative of the likely results from any new operations.



Subsequent Event



On December 9, 2010 we executed a Letter of Intent with Global Energy Acquisitions, LLC (GEA) which provides in part for the Company to acquire from GEA a 51% gross royalty interest in up to 500 producing oil and gas wells in Kentucky. GEA is in the business of exploring, developing, operating, and investing in, acquiring, selling, managing and drilling oil and gas properties.  The Purchase Price for the acquisition of its equity position in the Subsidiary will be paid in the Companys common stock based upon the fair market value of the equity percentage of the Subsidiarys common stock.



Closing of the transaction is subject to, execution of a definitive agreement.  There can be no assurance that the parties will come to terms on a definitive agreement or that the proposed transaction will in fact close.



14



Results Of Operations For The Three and Six Months Ended November 30, 2010 and 2009 and from Inception (December 20, 2007) to November 30, 2010



Revenues



We have never generated any revenues from operations and only nominal income from interest income earned on our cash deposits. Our operations to date have been financed by the sale of our common stock and third party loans. Operating expenses for the three and six months ended November 30, 2010 and 2009 totalled $24,127 and $62,363 as compared to $2,430 and $4,770 respectively. Total operating expenses since inception were $162,770. The primary reason for the significant increase in our operating expenses is attributable to an increase in professional fees from $1,500 and $3,500 for the three and six months ended November 30, 2009 to $19,755 and $51,823 for the three and six months ended November 30, 2010.  Professional fees since inception totalled $126,092. Most of these professional fees were incurred in connection with our regulatory filings with the Securities and Exchange Commission and in connection with ongoing corporate activities.  We incurred general and administrative expenses of $4,003 and $8,563 for the three and six months ended November 30, 2010 as compared to $850 and $870 for the three and six months ended November 30, 2009. We incurred other income (expenses) of $(1,434) and $(2,629) for the three and six months ended November 30, 2010 as compared to no other income (expenses) for the three and six months ended November 30, 2009. There were no other significant expenses.



For the three months and six months ended November 30, 2010 we incurred a net loss of $(25,561) and $(64,991) as compared to $(2,430) and $(4,770) for the three and six months ended November 30, 2009.  Total losses since inception were $(165,991).



Until we complete a business combination, we do not anticipate generating revenues, and any revenues that we generate may not be sufficient to satisfy our operating expenses.  In which case we may have to cease operations and you may lose your entire investment.



Assets and Liabilities



At November 30, 2010 we had $2,289 in cash as compared to $22,386 at May 31, 2010.  The significant decrease in our cash holdings is attributable to managements decision to satisfy ongoing operating expenses and outstanding liabilities due and owing to creditors.  We continue to remain obligated to a third party creditor pursuant to a loan agreement in the amount of $60,000.  Our accounts payable at November 30, 2010 totaled $7,913 as compared to $3,177 at May 31, 2010.



Our total liabilities were $67,913 at November 30, 2010 as compared to $63,177 at May 31, 2010.  We have a working capital deficit of $65,432 as compared to a working capital deficit of $40,791 at May 31, 2010.



We have no revenues to satisfy our ongoing liabilities.  Our auditors have issued a going concern opinion. Unless we secure equity or debt financing, of which there can be no assurance, or identify an acquisition candidate, with revenues sufficient to meet ongoing and accrued expenses, it is unlikely that we will be able to continue our operations in which case you will lose your investment.



Off-Balance Sheet Arrangements



We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



15



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK



Not applicable.



ITEM 4. CONTROLS AND PROCEDURES



(a)

Evaluation of Disclosure Controls and Procedures



Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.



(b)

Changes in Internal Control over Financial Reporting



During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



(c)

Inherent Limitations of Disclosure Controls and Internal Controls over Financial Reporting



Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.





PART II. OTHER INFORMATION



ITEM 1.   LEGAL PROCEDINGS.





None.





ITEM 1A.   RISK FACTORS



There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the period ended May 31, 2010.



ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES.



On November 30, 2010 the Company issued 1,259,000 shares of its common stock for an accounts receivable assignment.  The Company also issued 741,000 shares of its common stock for $37,050   in order to finance ongoing operations.



The Company has reserved for issuance 37,500 shares to its chief executive officer and two board members.



The issuance of the common stock was exempt from registration under Section 4(2) of the Securities Act.



At all times relevant:



- the  sale  was  made  to  a  sophisticated  or  accredited  investor;



-  we gave the purchaser the opportunity to ask questions and receive answers concerning the Companys operations and to verify the accuracy of information furnished;



- at a reasonable time prior to the sale of securities, we advised the purchaser of the limitations on resale of the securities; and



- neither we nor any person acting on our behalf sold the securities by any form of general solicitation or general advertising



16



ITEM 3.   DEFAULTS UPON SENIOR SECURITIES.



None



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



None.



ITEM 5.  OTHER INFORMATION



None.



ITEM 6.   EXHIBITS



Exhibit No.

Description



31.1

Certificate of the Chief Executive Officer pursuant Section 302 of the Sarbanes-Oxley Act of 2002



31.2

Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



32 .1



Certificate of the Chief Executive Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



32 .2



Certificate of the Chief Financial  Officer  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



17



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.

|                       |                  |                        
|---------------------- | ---------------- | -----------------------
|                       | XUN ENERGY, INC.
|                       |                  |                        
|                       |                  |                        
|Date: January 13, 2011 | By:              | /s/ Peter Matousek     
|                       |                  | Peter Matousek         
|                       |                  | Chief Executive Officer
|                       |                  |                        
|                       |                  |                        
|Date: January 13, 2011 |                  | /s/ Peter Matousek     
|                       |                  | Peter Matousek         
|                       |                  | Chief Financial Officer



18

# Endnotes