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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

(Mark One)

[ x ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

OR

[]
  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from _____________to _____________

Commission file number 000-52300

SUN CAL ENERGY, INC.(Exact
name of small business issuer as specified in its charter)

|Nevada                                                               | 81-0659377                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

Suite 700, 205 - 5th Avenue, SW, Calgary, AB Canada T2P
2V7(Address of principal executive offices)

403.538.4772(Issuers telephone number)

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

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

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

Check whether the registrant filed all documents and reports required
  to be filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution
  of securities under a plan confirmed by a court. 
  []
  Yes []
  No

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date: 82,463,333
shares of common stock issued and outstanding as of May 16, 2008.

Transitional Small Business Disclosure Format (Check one): []
  Yes [ x ] No

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PART I  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

These financial statements have been prepared by Sun Cal
Energy, Inc. (the Company) without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted in accordance with such SEC rules and regulations. In the opinion of
management, the accompanying statements contain all adjustments necessary to
present fairly the financial position of the Company as of March 31, 2008, and
its results of operations, stockholders equity, and its cash flows for the nine
month period ended March 31, 2008 and for the period from inception (July 20,
2004) to March 31, 2008. The results for these interim periods are not
necessarily indicative of the results for the entire year. The accompanying
financial statements should be read in conjunction with the financial statements
and the notes thereto filed as a part of the Companys annual report filed on
Form 10-KSB.

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- 3 -

|Sun Cal Energy, Inc.          
|------------------------------
|(An Exploratory Stage Company)
|Condensed Balance Sheet       
|As at March 31, 2008          

|                                                       |  | March 31, 2008 |  
|------------------------------------------------------ |  | -------------- | -
|                                                       |  | (Unaudited)    |  
|ASSETS                                                 |  |                |  
|                                                       |  |                |  
|Current Assets                                         |  |                |  
|Cash & cash
      equivalents                          |  | 54,388         |  
|Accounts receivable                                    |  | 77,760         |  
|Prepaid expenses                                       |  | 5,372          |  
|                                                       |  | 137,520        |  
|Property and equipment                                 |  |                |  
|Petroleum and natural gas
      properties             |  | 6,956,299      |  
|                                                       |  |                |  
|Intangible assets                                      |  | 8,575          |  
|                                                       |  |                |  
|Total Assets                                           |  | 7,102,394      |  
|                                                       |  |                |  
|LIABILITIES AND STOCKHOLDERS EQUITY                   |  |                |  
|                                                       |  |                |  
|Current liabilities                                    |  |                |  
|Accounts payable
      and accrued expenses            |  | 43,665         |  
|                                                       |  |                |  
|Stockholders' equity                                   |  |                |  
|Common stock:                                          |  |                |  
|Authorized: 750,000,000 with $0.001 par value          |  |                |  
|Issued and fully paid: 82,463,333 as of                |  |                |  
|March 31, 2008                                         |  | 82,463         |  
|Additional paid-in capital                             |  | 8,925,537      |  
|Deficit
      accumulated during the exploratory stage |  | (1,949,271     | )
|                                                       |  | 7,058,729      |  
|                                                       |  |                |  
|Total Liabilities and Stockholders' Equity             |  | 7,102,394      |  

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- 4 -

|Sun Cal Energy, Inc.                           
|-----------------------------------------------
|(An Exploratory Stage Company)                 
|Condensed Consolidated Statements of Operations

|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   | From        |  
|-------------------------------------- | - | ------------------ | - | - | ----------------- | - | - | ------------- | - | - | ----------- | - | - | ----------- | -
|                                       |   | Three Months Ended |   |   | Nine Months Ended |   |   | July 20, 2004 |  
|                                       |   | March 31           |   |   | March 31,         |   |   | (Inception)   |  
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   | through     |  
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   | March 31,   |  
|                                       |   | 2007               |   |   | 2008              |   |   | 2007          |   |   | 2008        |   |   | 2008        |  
|                                       |   | (Unaudited)        |   |   | (Unaudited)       |   |   | (Unaudited)   |   |   | (Unaudited) |   |   | (Unaudited) |  
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Net revenue from oil and gas sales     | $ | -                  |   | $ | 73,837            |   | $ | -             |   | $ | 84,994      |   | $ | 84,994      |  
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Operating expenses                     |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Abandoned exploration costs            |   | -                  |   |   | -                 |   |   | -             |   |   | -           |   |   | 12,500      |  
|Oli and gas expenses                   |   | 37,568             |   |   | 10,880            |   |   | 37,568        |   |   | 12,749      |   |   | 12,749      |  
|General and administrative expenses    |   | 122,341            |   |   | 296,338           |   |   | 210,481       |   |   | 1,319,374   |   |   | 2,010,326   |  
|                                       |   | 159,909            |   |   | 307,218           |   |   | 248,049       |   |   | 1,332,123   |   |   | 2,035,575   |  
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Net
      loss from operations         |   | (159,909           | ) |   | (233,381          | ) |   | (248,049      | ) |   | (1,247,129  | ) |   | (1,950,581  | )
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Other income (expense)                 |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Interest income                        |   | -                  |   |   | 1,307             |   |   | -             |   |   | 1,891       |   |   | 1,891       |  
|Loss on disposition of
      asset     |   | -                  |   |   | -                 |   |   | -             |   |   | -           |   |   | (581        | )
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Net loss                               | $ | (159,090           | ) | $ | (232,074          | ) | $ | (248,049      | ) | $ | (1,245,238  | ) | $ | (1,949,271  | )
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Net loss per share - basic and diluted | $ | (0.01              | ) | $ | (0.00             | ) | $ | (0.00         | ) | $ | (0.02       | ) |   |             |  
|                                       |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|Weighted average common shares         |   |                    |   |   |                   |   |   |               |   |   |             |   |   |             |  
|outstanding  basic and diluted        |   | 30,111,526         |   |   | 82,463,333        |   |   | 73,756,502    |   |   | 81,958,242  |   |   |             |  

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- 5 -

|Sun Cal Energy, Inc.             
|---------------------------------
|(An Exploratory Stage Company)   
|Condensed Statements of Cash Flow

|                                                          |   |                   |   |   |             |   |   | From           |  
|--------------------------------------------------------- | - | ----------------- | - | - | ----------- | - | - | -------------- | -
|                                                          |   |                   |   |   |             |   |   | July 20, 2004  |  
|                                                          |   | Nine Months Ended |   |   | (Inception) |  
|                                                          |   | March 31,         |   |   | Through     |  
|                                                          |   | 2007              |   |   | 2008        |   |   | March 31, 2008 |  
|                                                          |   | (Unaudited)       |   |   | (Unaudited) |   |   | (Unaudited)    |  
|Cash Flows From Operating Activities:                     |   |                   |   |   |             |   |   |                |  
|Net loss                                                  | $ | (248,049          | ) | $ | (1,245,238  | ) | $ | (1,949,271     | )
|Adjustments to reconcile net loss to
      net cash       |   |                   |   |   |             |   |   |                |  
|used in
      operating activities:                       |   |                   |   |   |             |   |   |                |  
|Loss on
      disposition of asset                        |   | -                 |   |   | -           |   |   | 581            |  
|Non cash consulting services                              |   | -                 |   |   | 321,000     |   |   | 346,000        |  
|Contributed
      rent and services                       |   | -                 |   |   | -           |   |   | 18,750         |  
|Depletion                                                 |   | -                 |   |   | 12,479      |   |   | 12,479         |  
|Depreciation                                              |   | -                 |   |   | -           |   |   | 369            |  
|Amortization                                              |   | 417               |   |   | 3,337       |   |   | 4,773          |  
|Changes in assets:                                        |   |                   |   |   |             |   |   |                |  
|(Increase) in accounts receivable                         |   | -                 |   |   | (77,760     | ) |   | (77,760        | )
|(Increase) in
      prepaid expenses                      |   | -                 |   |   | (822        | ) |   | (4,371         | )
|Changes in liabilities:                                   |   |                   |   |   |             |   |   |                |  
|Increase
      (decrease) in accounts payable             |   | 13,249            |   |   | 11,750      |   |   | 43,666         |  
|Net cased used in operating activities                    |   | (234,383          | ) |   | (975,254    | ) |   | (1,605,784     | )
|                                                          |   |                   |   |   |             |   |   |                |  
|Cash Flows From Investing
      Activities:               |   |                   |   |   |             |   |   |                |  
|Acquisition of oil and gas properties                     |   | (650,000          | ) |   | (1,411,105  | ) |   | (2,768,779     | )
|Acquisition of computer
      equipment                   |   | -                 |   |   | -           |   |   | (950           | )
|Website design costs                                      |   | (5,000            | ) |   | -           |   |   | (13,349        | )
|Net cash used in investing activities                     |   | (655,000          | ) |   | (1,411,105  | ) |   | (2,783,078     | )
|                                                          |   |                   |   |   |             |   |   |                |  
|Cash Flows From Financing
      Activities:               |   |                   |   |   |             |   |   |                |  
|Proceeds from issuance of common stock                    |   | 1,148,000         |   |   | 1,850,000   |   |   | 4,443,250      |  
|Loans received from
      related party                   |   | 9,200             |   |   | -           |   |   | 32,200         |  
|Loans repaid to related party                             |   | -                 |   |   | -           |   |   | (32,200        | )
|Net cash provided by
      financing activities           |   | 1,157,200         |   |   | 1,850,000   |   |   | 4,443,250      |  
|                                                          |   |                   |   |   |             |   |   |                |  
|Net Increase (decrease) in
      cash and cash equivalent |   | 267,817           |   |   | (536,359    | ) |   | 54,388         |  
|Cash and cash equivalents , beginning of period           |   | -                 |   |   | 590,747     |   |   | -              |  
|Cash and cash equivalents, end of period                  | $ | 267,817           |   | $ | 54,388      |   | $ | 54,388         |  
|Supplemental disclosures of cash flow information:        |   |                   |   |   |             |   |   |                |  
|Interest paid                                             | $ | -                 |   | $ | -           |   |   |                |  
|Income taxes paid                                         | $ | -                 |   | $ | -           |   |   |                |  

Supplemental disclosures of non-cash investing and financing
activities:

In October 2007, the Company issued a
total of 300,000 shares of its common stock to three members of its advisory
board which were valued at $321,000. The $321,000 was charged to operations and
included in consulting fees.

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- 6 -

Sun Cal Energy, Inc.(An Exploratory Stage
Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

Organization

Sun Cal Energy, Inc. (the Company), was incorporated in the
State of Nevada on July 20, 2004 under the name Host Ventures, Inc. On November
6, 2006, the Company changed its name to Sun Cal Energy, Inc. The Company is in
the exploratory stage, as defined in Statement of Financial Accounting Standards
(SFAS) No. 7,  Accounting and Reporting by Development Stage Enterprises,
with its principal activity being the exploration and development of oil and gas
properties.

Effective March 12, 2007, the Company acquired all of the
outstanding shares of Sun Cal Energy Corporation (SCEC) in exchange for
issuing 26,925,000 of its common stock. SCEC was incorporated in the state of
Nevada on June 2, 2006. As of the date of the acquisition, both companies were
under common control, and therefore for financial reporting purposes, the
acquisition is treated as if it occurred on July 1, 2006. Assets acquired from
SCEC were recorded at their historical cost bases on July 1, 2006 and the
financial statements included herein combine the activities of both companies
since July 1, 2006.

Basis of Presentation

The accompanying unaudited financial statements of Sun Cal
Energy, Inc. contain all adjustments (consisting only of normal recurring
adjustments) which, in the opinion of management, are necessary to present
fairly the financial position of the Company as of March 31, 2008, and its
results of operations, stockholders equity, and its cash flows for the three
month and nine month periods ended March 31, 2008 and for the period from
inception (July 20, 2004) to March 31, 2008. Certain information and footnote
disclosures normally included in financial statements have been condensed or
omitted pursuant to rules and regulations of the U.S. Securities and Exchange
Commission (the Commission). The Company believes that the disclosures in the
financial statements are adequate to make the information presented not
misleading. However, the financial statements included herein should be read in
conjunction with the financial statements and notes thereto included in the
Companys Annual Report on Form 10-K for the year ended June 30, 2007 filed with
the Commission on October 15, 2007.

The accompanying financial statements include the accounts and
transactions of the Company and its wholly owned subsidiary, Sun Cal Energy
Corporation, and have been prepared in conformity with accounting principles
generally accepted in the United States of America, which contemplate
continuation of the Company as a going concern. The Company has no established
source of material revenue, has incurred a net loss for the nine months ended
March 31, 2008 of $1,245,238 and has and has an accumulated deficit since its
inception of $1,949,271. These conditions raise substantial doubt as to the
Company's ability to continue as a going concern. These financial statements do
not include any adjustments that might result from the outcome of this
uncertainty. These financial statements do not include any adjustments relating
to the recoverability and classification of recorded asset amounts, or amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

Management recognizes that the Company must generate additional
resources to enable it to continue operations. Management intends to raise
additional funds through debt and/or equity financing or through other means
that it deems necessary. However, no assurance can be given that the Company
will be successful in raising additional capital. Further, even if the company
raises additional capital, there can be

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- 7 -

no assurance that the Company will achieve profitability or
positive cash flow. If management is unable to raise additional capital and
expected significant revenues do not result in positive cash flow, the Company
will not be able to meet its obligations and may have to cease operations.

Stock Split

Effective November 6, 2006, the Company authorized a 10-for-1
stock split. All references in the accompanying financial statements to the
number of shares outstanding and per-share amounts have been restated to reflect
the indicated stock split.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying financial statements include the accounts and
transactions of Sun Cal Energy, Inc. and its subsidiary. Intercompany
transactions and balances have been eliminated in consolidation.

Stock Based Compensation

The Company accounts for stock-based compensation under SFAS
  No. 123R, "Share- based Payment and SFAS No. 148, "Accounting for Stock-Based
  Compensation Transition and Disclosure--An amendment to SFAS No. 123." These
  standards define a fair value based method of accounting for stock-based compensation.
  In accordance with SFAS Nos. 123R and 148, the cost of stock-based employee
  compensation is measured at the grant date based on the value of the award and
  is recognized over the vesting period. The value of the stock-based award is
  determined using the Black-Scholes option-pricing model, whereby compensation
  cost is the excess of the fair value of the award as determined by the pricing
  model at the grant date or other measurement date over the amount an employee
  must pay to acquire the stock. The resulting amount is charged to expense on
  the straight-line basis over the period in which the Company expects to receive
  the benefit, which is generally the vesting period. During the nine months ended
  March 31, 2008, the Company recognized no compensation expense under SFAS No.
  123R as no options were issued to employees during the period.

Issuance of Stock for Non-Cash Consideration

All issuances of the Company's stock for non-cash consideration
have been assigned a per share amount equaling either the market value of the
shares issued or the value of consideration received, whichever is more readily
determinable. The majority of the non-cash consideration received pertains to
services rendered by consultants and others and has been valued at the market
value of the shares on the dates issued.

The Company's accounting policy for equity instruments issued
to consultants and vendors in exchange for goods and services follows the
provisions of EITF 96-18, Accounting for Equity Instruments That are Issued
to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services and EITF 00-18, Accounting Recognition for Certain
Transactions Involving Equity Instruments Granted to Other Than Employees.
The measurement date for the fair value of the equity instruments issued is
determined at the earlier of (i) the date at which a commitment for performance
by the consultant or vendor is reached or (ii) the date at which the consultant
or vendor's performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term
of the consulting agreement. In accordance with EITF 00-18, an asset acquired in
exchange for the issuance of fully vested, nonforfeitable equity instruments
should not be presented or classified as an offset to equity on the grantor's
balance sheet once the equity instrument is granted for accounting purposes.
Accordingly, the Company records the fair value of the fully vested
non-forfeitable common stock issued for future consulting services as prepaid
services in its consolidated balance sheet.

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- 8 -

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 disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting periods. Actual results could differ
from these estimates.

Fair Value of Financial Instruments

The Companys financial instruments consist of cash and cash
equivalents, accounts payable, accrued expenses and notes payable, Pursuant to
SFAS No. 107, Disclosures About Fair Value of Financial Instruments,
the Company is required to estimate the fair value of all financial instruments
at the balance sheet date. The Company considers the carrying values of its
financial instruments in the financial statements to approximate their fair
values.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company
defines cash equivalents as all highly liquid debt instruments purchased with a
maturity of three months or less, plus all certificates of deposit.

Property and Equipment

Property and equipment are stated at cost less accumulated
depreciation and amortization. Depreciation and amortization are calculated
using the straight-line method over the estimated useful lives of the related
assets. When property and equipment are retired or otherwise disposed of, the
related cost and accumulated depreciation are removed from the respective
accounts, and any gain or loss is included in operations. Expenditures for
maintenance and repairs are charged to operations as incurred; additions,
renewals and betterments are capitalized.

Long- Lived Assets

The Company accounts for its long-lived assets in accordance
with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets." SFAS No. 144 requires that long-lived assets be reviewed for impairment
whenever events or changes in circumstances indicate that the historical cost
carrying value of an asset may no longer be appropriate. The Company assesses
recoverability of the carrying value of an asset by estimating the future net
cash flows expected to result from the asset, including eventual disposition. If
the future net cash flows are less than the carrying value of the asset, an
impairment loss is recorded equal to the difference between the asset's carrying
value and fair value or disposable value. As of December 31, 2007, the Company
did not deem any of its long-term assets to be impaired.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist of cash. Currently, the Company maintains
its cash in bank accounts which are not insured.

Revenue recognition

The Company recognizes revenue in accordance with Staff
Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial
Statements, as revised by SAB No. 104. As such, the Company recognizes revenue
when persuasive evidence of an arrangement exists, title transfer has occurred,
the price is fixed or readily determinable and collectibility is probable. Sales
are recorded net of sales

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- 9 -

discounts. For the three months ended December 31, 2007, the
Company earned $11,157, its allocated share of production from the Centurion
Properties as discussed in Note 3.

Oil and Gas Properties

The Company follows the full cost method of accounting for
crude oil and natural gas properties. Under this method, all direct costs and
certain indirect costs associated with acquisition of properties and successful
as well as unsuccessful exploration and development activities are capitalized.
Depreciation, depletion, and amortization of capitalized crude oil and natural
gas properties and estimated future development costs, excluding unproved
properties, are based on the unit-of-production method based on proved reserves.

Website development costs

Under FASB Emerging Issues Task Force Statement 00-2, Accounting
  for Web Site Development Costs ("EITF 00-2"), costs and expenses incurred during
  the planning and operating stages of the Company's web site development are
  expensed as incurred. Under EITF 00-2, costs incurred in the web site application
  and infrastructure development stages are capitalized by the Company and amortized
  to expense over the web site's estimated useful life or period of benefit. As
  of March 31, 2008, the Company had net capitalized costs of $8,575 related to
  its web site development, which are being depreciated on a straight-line basis
  over an estimated useful life of 3 years.

Website cost and accumulated depreciation as of March 31, 2008
is as follows:

Capitalized website costs
    $
    13,349Less accumulated amortization
    
    (4,774
    )$
    8,575


Income Taxes

The Company accounts for income taxes under the provisions of
SFAS No. 109, Accounting for Income Taxes. Under SFAS No. 109, deferred tax
assets and liabilities are recognized for future tax benefits or consequences
attributable to temporary differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. A valuation allowance is
provided for significant deferred tax assets when it is more likely than not
that the asset will not be realized through future operations.

The Company has total net operating tax loss carry forwards at
March 31, 2008 of approximately $1,949,000 for federal income tax purposes.
These net operating losses have generated a deferred tax asset of approximately
$662,660 on which a valuation allowance equaling the total tax benefit has been
provided due to the uncertain nature of it being realized. Net operating loss
carryforwards expire in various years through June 30, 2028 for federal tax
purposes.

Loss Per Share

The Company reports earnings (loss) per share in accordance
with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is
computed by dividing income (loss) available to common shareholders by the
weighted average number of common shares available. Diluted earnings (loss) per
share is computed similar to basic earnings (loss) per share except that the
denominator is increased to include the number of additional common shares that
would have been outstanding if the potential common shares had been issued and
if the additional common shares were dilutive. Diluted earnings (loss) per share
as

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- 10 -

not been presented since the effect of the assumed conversion
of warrants to purchase common shares would have an anti-dilutive effect. The
only potential common shares as of March 31, 2008 were 3,688,333 warrants that
have been excluded from the computation of diluted net loss per share because
the effect would have been anti-dilutive. If such shares were included in
diluted EPS, they would have resulted in weighted-average common shares of
86,128,715 and 85,257,121 for the three months and nine months ended March 31,
2008, respectively. There were no potential common shares outstanding at March
31, 2007.

Recent Accounting Pronouncements

SFAS No. 161 - In March 2008, the FASB issued Statement No.
161, Disclosures about Derivative Instruments and Hedging Activitiesan
amendment of FASB Statement No. 133. This Statement changes the disclosure
requirements for derivative instruments and hedging activities. 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.

This Statement is intended to enhance the current disclosure
framework in Statement 133. The Statement requires that objectives for using
derivative instruments be disclosed in terms of underlying risk and accounting
designation. This disclosure better conveys the purpose of derivative use in
terms of the risks that the entity is intending to manage. Disclosing the fair
values of derivative instruments and their gains and losses in a tabular format
should provide a more complete picture of the location in an entitys financial
statements of both the derivative positions existing at period end and the
effect of using derivatives during the reporting period. Disclosing information
about credit-risk-related contingent features should provide information on the
potential effect on an entitys liquidity from using derivatives. Finally, this
Statement requires cross-referencing within the footnotes, which should help
users of financial statements locate important information about derivative
instruments.

This Statement is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008, with early
application encouraged. This Statement encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.

The Company is currently evaluating SFAS 161 and has not yet
determined its potential impact on its future results of operations or financial
position.

NOTE 3  OIL AND GAS PROPERTIES

On October 18, 2006, the Company entered into an agreement to
purchase 1.5% of an overriding royalty in the City of Hobart lease located in
Oklahoma for $525,000 and 1,500,000 shares of its common stock. Under the terms
of the agreement, $375,000 was paid and 1,500,000 shares of the Companys common
stock were issued in October 2006, and the remaining $150,000 was paid in
January 2007. The Seller has agreed to drill a second well on the leased
property in consideration for an additional 1,000,000 shares of the Companys
common stock. The Company valued the 1,500,000 shares at $1.00 per share based
upon the share price being offered in its private offerings.

On October 4, 2006, the Company entered into an agreement to
purchase a 45% undivided interest in 45 separate leases known as the Lokern in
addition to any leases taken in the prospect area. The Lokern leases are located
in California. The Company purchased its interest for $125,000 and 1,300,000
shares of common stock. The $125,000 was paid and 1,300,000 shares were issued
in October 2006. Under the terms of the purchase, the Company will receive 75%
of the net revenue produced by wells located on the leased properties. In
addition, the Company is responsible for its allocated share of all costs
associated

---

- 11 -

with the leased properties including, but not limited to land,
title, lease bonuses, and drilling. The Company valued the 1,300,000 shares at
$1.00 per share based upon the share price being offered in its private
offerings.

On April 19, 2007, the Company entered into an agreement to
acquire a 5% working interest in certain leases and to receive certain rights
and privileges to approximately 9,440 acres of State of Louisiana leases. Along
with the leases and 3d seismic data relating to the Prospect, the acquisition
included ongoing rights to a larger Area of Mutual Interest. Under the terms of
the purchase, the Company will receive 3.5% of the net revenue produced by wells
located on the leased properties. In addition, the Company is responsible for
its allocated share of all costs associated with the leased properties
including, but not limited to land, title, lease bonuses, and drilling. The
purchase price of these leases is $640,000 in cash and 400,000 shares of the
Companys common stock. The Company valued the 400,000 shares at $1.00 per share
based upon the share price being offered in its private offerings.

On August 15, 2007, the Company entered into an agreement with
Desert Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases
in the Jonah Field region of Wyoming. The Jonah Prospects are identified as
South Jonah, which consists of 2,477.68 acres and West Jonah, consisting of
3,546.89 acres. The acquisition was completed on September 5, 2007 by paying to
Desert Mining, Inc. an aggregate of $821,799.

On October 1, 2007, the Company entered into an agreement to
purchase a 5% overriding royalty interest on certain leases to be acquired by
seller located in the States of Alabama, Louisiana, Mississippi, Oklahoma, and
Texas, known as the Centurion Properties. The purchase price of the royalty
interest is $275,000. If the seller does not acquire the royalty interest on the
properties defined in the agreement, the Company has the right to have the funds
paid refunded or to have the funds applied to other offering of the seller.

On October 24, 2007, the Company signed a Letter of Intent to
acquire a 100% working interest in 8,695 acres of leases in the Cherokee and
Forest City Basins of Kansas. The Letter of Intent was set to expire on October
31, 2007 but the Company is currently negotiating an extension of the Letter of
Intent with the counter party. The purchase price paid by the Company would
include (a) an upfront payment of $500,000; (b) the issuance of 6,916,667 shares
of common stock to the seller; (c) the granting of a 5% overriding royalty to
the seller on the Kansas assets; and (d) the assumption of $1,200,000 of the
sellers existing debt on the properties. Further, the Company would agree to
initiate plans to provide $2,000,000 in work over costs to develop the
properties within 6 months of the closing date. The Company is currently working
to close on mezzanine financing for $2,000,000 within 60 days of the closing
date of the purchase. If the Company does not initiate plans to provide
$2,000,000 in work over costs with the 6 months of the closing date, the seller
will retain a 12.5% overriding royalty on the Kansas assets until the $2,000,000
work over begins.

On March 21, 2008, the Company acquired a 2% joint venture interest
  in the 83 & 84 Project JV located in West Texas for $160,000.

NOTE 4  EQUITY

Common Stock

The Company is authorized to issue 750,000,000 shares of common
stock. Each shareholder of common is entitled to one vote. As indicated, the
accompanying financial statements include the combined activity of Sun Cal
Energy Inc. (the Company) and its wholly owned subsidiary, Sun Cal Energy
Corporation (SCEC) from the inception of both companies. Common stock
activities for both companies since inception, taking into account the Companys
10-for-1 stock split of November 6, 2006, are as follows:

Warrants

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- 12 -

The following is a summary of the outstanding warrants:

WeightedAverageNumber of
    
    
    Exercisewarrants
    
    
    PriceOutstanding  June 30, 2007
    
    2,255,000
    
    $
    1.62Granted
    
    1,433,333
    
    $
    1.70Exercised
    
    --
    
    
    --Forfeited
    
    --
    
    
    --Outstanding  March 31, 2008
    
    3,688,333
    
    $
    1.65


The expiration date of the warrants range from two to three
years after date of grant with exercise prices ranging from $1.50 to $3.00 per
share.

---

- 13 -

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

FORWARD LOOKING STATEMENTS

This quarterly report contains forward-looking statements.
Forward-looking statements are projections of events, revenues, income, future
economic performance or managements plans and objectives for our future
operations. In some cases, you can identify forward-looking statements by
terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled Risk Factors and the
risks set out below, any of which may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
financial statements and the related notes that appear elsewhere in this
quarterly report.

In this quarterly report, unless otherwise specified, all
references to common shares refer to the common shares in our capital stock
and the terms we, us, our and Sun Cal mean Sun Cal Energy, Inc. and our
wholly-owned subsidiaries, Sun Cal Energy Corp., a Nevada corporation and Sun
Cal Energy Canada Corp., a British Columbia corporation.

Introduction

We were incorporated under the laws of the State of Nevada on
July 20, 2004 under the name Host Ventures, Inc. On November 6, 2006, we changed
our name to Sun Cal Energy, Inc. through a merger with our wholly owned
subsidiary, which was incorporated solely for the purpose of the merger.

Our Current Business

We are in the business of oil and gas exploration. Our
subsidiary, Sun Cal Energy Canada Corp. recently entered into two agreements: an
agreement with TriMar Energy Partners, Inc. to acquire an 1.5% of 8/8ths overriding royalty interest in an oil and gas lease
known as the Hobart Lease, and an agreement with Western Energy Capital, LLC. to
acquire an undivided 45% interest in certain oil and gas leases known as the
Lokern Leases.

The Hobart Lease is an oil and gas lease obtained by TriMar
Energy Partners, Inc., as the lessee, from the City of Hobart, as the lessor, on
April 1, 2004, covering a total of 1,211.44 acres in the city of Hobart, Washita
County, Oklahoma.

The Lokern Leases are a collection of 34 oil and gas
exploration leases entered into by Western Energy Capital, LLC. with various
private parties between November 2005 to May 2006. The location of these leases
are located in Kern County, California.

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- 14 -

In addition to the interests in the Hobart Lease and the Lokern
Leases, we have also acquired a 5% working interest in the Britlind Prospect in
Louisiana, a 5% Overriding Royalty Interest in the Centurion Property in Texas
and a 100% working interest in the Jonah Propect in Wyoming. We also signed a
letter of intent to acquire a 100% working interest in certain leases in the
Cherokee and Forest City Basins of Kansas. This Letter of Intent was set to
expire on October 31, 2007 but we are currently still negotiating an extension
of this Letter of Intent with the counter party.

Since we are an exploration stage company, there is no
assurance that commercially viable resources or reserves exist on any of our
properties, and a great deal of further exploration will be required before a
final evaluation as to the economic and legal feasibility for our future
exploration is determined. To date, we have not discovered an economically
viable resource or reserve on any of our properties, and there is no assurance
that we will discover one.

PLAN OF OPERATION

The following discussion and analysis summarizes our plan of
operation for the next 12 months and changes in our financial condition from our
quarter ended March 31, 2008. The following discussion should be read in
conjunction with the Managements Discussion and Analysis or Plan of Operation
included in our quarterly report on Form 10-QSB for the quarter ended March 31,
2008. The following discussion contains forward-looking statements that reflect
our plans, estimates and beliefs. Our actual results could differ materially
from those discussed in the forward looking statements. Factors that could cause
or contribute to such differences include, but are not limited to, those
discussed below and elsewhere in this current report, particularly in the
section entitled Risk Factors in this quarterly report.

The Hobart Lease

The Hobart Lease is an oil and gas lease obtained by TriMar
Energy Partners, Inc., as the lessee, from the City of Hobart, as the lessor,
dated April 1, 2004, and as recorded on Book 983, official records, Washita
County, Oklahoma, covering a total of 1,211.44 acres in the city of Hobart,
Washita County, Oklahoma. We paid a total of $525,000 and 1,500,000 shares of
common stock to TriMar Energy Partners, Inc. and its designates to earn the 1.5%
of 8/8ths overriding royalty interest in the Hobart Lease. We are currently
working with TriMar Energy Partners, Inc. on finalizing the assignment of the
overriding royalty interest to our company. Under the agreement, we were also
obligated to issue to TriMar Energy Partners, Inc. or its designates an
additional 1,000,000 shares of our common stock upon the written proposal of a
second well to be drilled on the Hobart Lease. Since such a written proposal has
been submitted, we have issued the additional 1,000,000 shares of our common
stock to the designates of TriMar Energy Partners, Inc.

On April 27, 2007, the operator on the Hobart Lease, Marathon
Oil, spudded and began drilling a deep development gas well on our Hobart Lease
interest in Washita county, Oklahoma. The well, the Sturgeon.1-11, was set to
test through the Springer formation and was targeting multiple pay zones. Up to
April 27, 2007, the Sturgeon 1-11 had successfully reached a depth of 17,400
feet with a total authorized depth of 20,000 feet. By May 30, 2007, well data
collection and evaluation were completed on the Sturgeon 1-11 well, which was
deemed commercially viable. The well reached a final depth of 19,990 feet on May
15, 2007 after slightly more than 3 months of drilling. To help evaluate the
amount of pay encountered in the well, an open hole logging suite consisting of
density, neutron, HRI induction, sonic, and gamma tools was run to a depth of
19,980 feet. The operator on the Hobart Lease, Marathon Oil, then ran production
casing to a depth of 19,978 feet. The drilling rig was then moved off location
and it is expected that completion operations will commence soon.

On July 11, 2007, a second permit was filed and drilling and
testing of a second deep development well on our Hobart Prospect in Washita,
County, Oklahoma was scheduled to begin shortly. The proposed

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- 15 -

well, Cunningham 1-2, builds on the successful drilling of the
Sturgeon 1-11 well also located in the Hobart Prospect. On September 6, 2007,
the second deep development gas well, Cunningham 1-2, was spudded and drilling
activities begun. The target depth was the Springer Morrow, which has proved to
be productive in Oklahoma and Texas. No value has been assigned, pending
definitive testing.

On August 28, 2007, Range Production Company filed for a third
well to be drilled on our Hobart Prospect in Oklahoma. This development follows
the recent application for a permit to drill and test a second deep development
well, Cunningham 1-2, on its Hobart Prospect in Oklahoma. The proposed well also
builds on the successful drilling of the Sturgeon 1-11 well, also located in the
Hobart Prospect. Filed before the Corporation Commission of the State of
Oklahoma, Range Production Company is seeking to establish a 640-acre drilling
and spacing unit for a third scheduled well to be drilled in the Hobart
Prospect.

On October 24, 2007, we announced that drilling on the second
deep development gas well, Cunningham 1-02, reached a depth in excess of 14,000
feet. The target depth is 20,500 feet, and is being drilled by the same operator
of the Sturgeon 1-11. On January 25, 2008, we were advised by the operator of
the Cunningham 1-02 well on the Hobart Prospect in Washita County, Oklahoma that
the daily gas flow rates from the Cunningham 1-02 well are in excess of 12
million cubic feet a day.

The Lokern Leases

The Lokern Leases are a collection of 34 oil and gas
exploration leases entered into by Western Energy Capital, LLC. with various
private parties between November 2005 to May 2006. The location of these leases
are located in Kern County, California. We paid an aggregate of $125,000 and
1,300,000 shares of our common stock to Western Energy Capital, LLC and its
designates to acquire an undivided 45% of all rights, title and interests in the
Lokern Leases. Pursuant to this agreement, Western Energy Capital, LLC agrees
that all leases made part of the agreement will be executed and assigned to our
company in a timely manner and Western Energy Capital, LLC will issue our
company a standard joint operating agreement. All leases and assignments taken
by Western Energy Capital, LLC for our company shall call for Western Energy
Capital, LLC to deliver a 75% Net Revenue Interest to our company.

On June 15, 2007, we acquired additional 2-D seismic data
relating our Lokern Leases in California. Acquisition of the data will allow for
additional geophysical correlation and interpretation of our Lokern Leases and
allow our company to firm up well locations for drilling in 2007. The additional
seismic data will also provide insight into the reserve estimates of the
prospect. Regional 2-D seismic data is a key tool for oil and gas exploration
due to its affordability and wide area of coverage compared to 3-D data. The
acquisition of this data set is in line with our exploration program and
initiatives, and will allow greater marketability of our prospect to large
exploration and production companies.

On October 18, 2007, we assigned back to a designate of Western
Energy Capital, LLC a 5% overriding royalty interest net to our 45% Working
Interest for a net 2.25% overriding royalty interest in the Lokern Prospect. We
are still working with Western Energy Capital, LLC to assigned the working
interests in these leases to our company and Western Energy Capital, LLC will
issue our company a standard joint operating agreement.

The Britlind Prospect Leases

On April 19, 2007, we entered into an agreement with Western
Energy Capital, LLC (Western) to acquire a partial interest in the Britlind
Prospect and leases situated in the prolific Breton Sound area, offshore
Louisiana. Western has originally entered into an agreement with BTE Energy, LLC
(BTE) whereby Western acquired a contractual interest in the Britlind Prospect
from BTE, including all rights

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- 16 -

and privileges to approximately 9,440 acres of State of
Louisiana leases, ownership interest in approximately 25 square miles of 3D
seismic data, and interests in certain hardware and software in conjunction with
the interpretation and display of the 3D seismic data. In April and May of 2007,
we paid an aggregate of $640,000 to Western Energy Capital, LLC pursuant to the
agreement for a 5% working interest in the Britlind Prospect lease interests,
seismic data, hardware and software and ongoing rights to an area of mutual
interest. We have also issued 400,000 shares of our common stock to a designate
of Western Energy Capital, LLC. It was also acknowledged that the Britlind
Prospect leases were originally acquired under the name of McGuinty Durham and
Associates and assignment of leasehold out of McGuinty Durham and Associates
will be made in due course. At such time Western Energy Capital will take
appropriate actions to assign the interest to our company. Also pursuant to this
agreement, we agreed to pay our proportionate share of all expenses, including
geological, rentals and additional leases, etc. from May 11, 2007 and on.

Overriding Royalty Interest in Ceturion Property

On October 1, 2007, we acquired a 5% Overriding Royalty
Interest in the Centurion Property from King Royalty Corporation pursuant to an
offering of royalty interests by King Royalty Corporation. The Centurion
Property combines more than 17,000 acres of producing oil and gas assets across
Texas, Oklahoma, Alabama, Louisiana and Mississippi. There are 153 producing
wells on the asset with more than 50 additional proven/undeveloped drilling
sites. Current production is comprised of 90% natural gas and 10% oil. As an
interest holder we are entitled to share in revenues generated from oil and/or
gas production from wells located on the Centurion Property. Approximately 90
days after the operators of the wells on the properties sell oil and gas
production to local purchasers, we are entitled to receive payment of revenues
generated by those wells attributable to our interest. However, we have no
control over when we receive our payment of revenues, as each operator has its
own internal policies and procedures regarding the transfer of ownership. As an
interest holder we have no responsibility for operating expenses incurred in
connection with the operation of wells on the properties. Lastly, we do not have
responsibility for liabilities to third parties resulting from operations on the
properties, which is the responsibility of the operators of the properties and
the owners of working interests.

The Jonah Prospects

On August 15, 2007, we entered into an agreement with Desert
Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases in the
Jonah Field region of Wyoming. This is the fourth core exploration and
development region for our company. Our Jonah Prospects are identified as South
Jonah, which consists of 2,477.68 acres and West Jonah, consisting of 3,546.89
acres. We completed our acquisition on September 5, 2007 by paying to Desert
Mining, Inc. an aggregate of $821,799.

The Jonah Field and the Pinedale Anticline are acknowledged as
the premier gas fields in the Rocky Mountains. These fields are located in
Wyoming's Greater Green River Basin. According to the Wyoming State Geological
Survey, the Greater Green River Basin contains approximately 26 TCF of natural
gas which is the largest reserve in the State. The Jonah Field is estimated to
contain 7 to 10 TCF of Natural Gas, which currently produces from more than 500
wells.

On December 27, 2007, we engaged Schlumberger to conduct a
reserve analysis and target drilling program on our Jonah Prospect

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- 17 -

Other Interest

On October 24, 2007, we signed a letter of intent to acquire a
100% working interest in certain leases in the Cherokee and Forest City Basins
of Kansas. This Letter of Intent was set to expire on October 31, 2007 but we
are currently still negotiating an extension of this Letter of Intent with the
counter party.

On April 7, 2008, we announced that we acquired a minority
joint venture interest in three-well prospect in the West Gomez Field within
Peco County, Texas.

Cash Requirements

Our plan of operations for the next 12 months involves the
exploration of oil and gas properties under the two agreements held by Sun Cal
Energy Corp. as well as our interests in three other oil and gas exploration
properties.

As provided under the agreement with Western Energy Capital,
LLC on the Lokern Leases, we will be a joint working interest owner together
with Western Energy Capital, LLC for the Lokern Leases, and will be required to
pay our proportionate share of all land, title, lease bonuses and drilling
costs. In addition to the exploration activities on the oil and gas properties
under the two agreements held by Sun Cal Energy Corp., we will be required to
pay our proportionate share of all land, title, lease bonuses and drilling costs
for other properties in which we hold a working interest such as the Britlind
Prospect Leases and the Jonah Prospects. Furthermore, we will continue to seek
opportunities to acquire other oil and gas properties of merit.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We anticipate that we will expend approximately $360,000 in the next 12 months
for our operating expenses. We therefore expect to incur significant losses into
the foreseeable future. We recognize that if we are unable to generate
significant revenues from the exploration of our oil and gas properties in the
future, we will not be able to earn profits or continue operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and we can provide no assurance that we will generate any
revenues or ever achieve profitability.

We will also need more funds if the costs of the exploration of
our oil and gas properties are greater than we have anticipated. We will also
require additional financing to sustain our business operations if we are not
successful in earning revenues. We currently do not have any arrangements for
further financing and we may not be able to obtain financing on commercially
reasonable terms or terms that are acceptable to us when it is required.

We recorded a net loss from operations of $233,381 for the three
  months ended March 31, 2008 and have an accumulated deficit of $1,949,271 since
  inception. As at March 31, 2008 we had cash of $54,388.

RESULTS OF OPERATIONS

Third Quarter and Nine Months Summary

|                           |  | Third Quarter Ended March 31, 2008 |  |  | Nine Months Ended March 31, 2008 | 
|-------------------------- |  | ---------------------------------- |  |  | -------------------------------- | 
|                           |  |                                    |  |  |                                  | 
|                           |  |                                    |  |  |                                  | 
|                           |  | 2007                               |  |  | 2008                             | 
|Revenue                    |  | Nil                                |  |  | 73,837                           | 
|Operating Expenses         |  | 159,909                            |  |  | 307,218                          | 
|Interest & Dividend Income |  | Nil                                |  |  | 1,307                            | 

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- 18 -

|         |  | Third Quarter Ended March 31, 2008 |  |  | Nine Months Ended March 31, 2008 | 
|-------- |  | ---------------------------------- |  |  | -------------------------------- | 
|         |  |                                    |  |  |                                  | 
|         |  |                                    |  |  |                                  | 
|         |  | 2007                               |  |  | 2008                             | 
|Net Loss |  | 159,090                            |  |  | 232,074                          | 

Revenue

We are an exploratory stage company that from inception to
March 31, 2008 has only accrued revenues in the amount of $84,994.

We have only recently accrued revenues and have experienced
losses since inception. Our plan of operations for the next 12 months involves
the exploration of oil and gas properties under the agreements held by Sun Cal
Energy Corp. as well as our interests in our other oil and gas exploration
properties.

As provided under the agreement with Western Energy Capital,
LLC on the Lokern Leases, we will be a joint working interest owner together
with Western Energy Capital, LLC for the Lokern Leases, and will be required to
pay our proportionate share of all land, title, lease bonuses and drilling
costs. In addition to the exploration activities on the oil and gas properties
under the two agreements held by Sun Cal Energy Corp., we will be required to
pay our proportionate share of all land, title, lease bonuses and drilling costs
for other properties in which we hold a working interest such as the Britlind
Prospect Leases and the Jonah Prospects. Furthermore, we will continue to seek
opportunities to acquire other oil and gas properties of merit.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We anticipate that we will expend approximately $360,000 in the next 12 months
for our operating expenses. We therefore expect to incur significant losses into
the foreseeable future. We recognize that if we are unable to generate
significant revenues from the exploration of our oil and gas properties in the
future, we will not be able to earn profits or continue operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and we can provide no assurance that we will generate any
revenues or ever achieve profitability.

We will also need more funds if the costs of the exploration of
our oil and gas properties are greater than we have anticipated. We will also
require additional financing to sustain our business operations if we are not
successful in earning revenues. We currently do not have any arrangements for
further financing and we may not be able to obtain financing on commercially
reasonable terms or terms that are acceptable to us when it is required.

Expenses

Our operating expenses for the quarters ended March 31, 2008
and 2007 are outlined in the table below:

|                         |  | Third Quarter Ended March 31, 2008 |  |  | Nine Months Ended March 31, 2008 | 
|------------------------ |  | ---------------------------------- |  |  | -------------------------------- | 
|                         |  |                                    |  |  |                                  | 
|                         |  |                                    |  |  |                                  | 
|                         |  | 2007                               |  |  | 2008                             | 
|Oil and gas expenses     |  | 37,568                             |  |  | 10,880                           | 
|General and              |  | 122,341                            |  |  | 296,338                          | 
|Administrative           |  |                                    |  |  |                                  | 
|Expense                  |  |                                    |  |  |                                  | 
|Total Operating Expenses |  | 159,909                            |  |  | 307,218                          | 

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- 19 -

Liquidity and Financial Condition

Working Capital

|                    |  |                |  |  |                   |  |  | Amount                |  
|------------------- |  | -------------- |  |  | ----------------- |  |  | --------------------- | -
|                    |  | March 31, 2008 |  |  | December 31, 2007 |  |  | Increase / (Decrease) |  
|Current Assets      |  | 137,520        |  |  | 522,807           |  |  | (385,287              | )
|Current Liabilities |  | 43,665         |  |  | 29,739            |  |  | 13,926                |  
|Working Capital     |  | 93,855         |  |  | 493,068           |  |  | (400,213              | )

Future Financings

We anticipate continuing to rely on equity sales of our common
shares in order to continue to fund our business operations. Issuances of
additional shares will result in dilution to our existing shareholders. There is
no assurance that we will achieve any of additional sales of our equity
securities or arrange for debt or other financing to fund our exploration and
development activities.

Since we are an exploration stage company, there is no
assurance that commercially viable resources or reserves exist on any of our
properties, and a great deal of further exploration will be required before a
final evaluation as to the economic and legal feasibility for our future
exploration is determined. To date, we have not discovered an economically
viable resource or reserve on any of our properties, and there is no assurance
that we will discover one.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that is material to
stockholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with
United States generally accepted accounting principles requires our management
to make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

Our significant accounting policies are disclosed in Note 2 to
the unaudited financial statements included in this Quarterly Report on Form
10-QSB.

RISK FACTORS

Shares of our common stock are speculative, especially since we
are in the exploration-stage of our new business. We operate in a volatile
sector of business that involves numerous risks and uncertainties. The risks and
uncertainties described below are not the only ones we face. Other risks and
uncertainties, including those that we do not currently consider material, may
impair our business. If any of the risks discussed below actually occur, our
business, financial condition, operating results or cash flows could be
materially adversely affected. This could cause the trading price of our
securities to decline, and you may lose all or part of your investment.
Prospective investors should consider carefully the risk factors set out below.

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- 20 -

Risks Related To Our Business

As our properties are in the exploration stage there can be
no assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to
a number of risk factors. While the rewards to an investor can be substantial if
an economically viable discovery is made, few of the properties that are
explored are ultimately developed into producing oil and/or gas wells. Our
properties are in the exploration stage only and are without proven reserves of
oil and gas. There can be no assurance that we will establish commercial
discoveries on any of our properties.

The potential profitability of oil and gas ventures depends
upon factors beyond the control of our company

The potential profitability of oil and gas properties is
dependent upon many factors beyond our control. For instance, world prices and
markets for oil and gas are unpredictable, highly volatile, potentially subject
to governmental fixing, pegging, controls, or any combination of these and other
factors, and respond to changes in domestic, international, political, social,
and economic environments. Additionally, due to world-wide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations.
A productive well may become uneconomic in the event water or other deleterious
substances are encountered which impair or prevent the production of oil and/or
gas from the well. In addition, production from any well may be unmarketable if
it is impregnated with water or other deleterious substances. The marketability
of oil and gas which may be acquired or discovered will be affected by numerous
factors beyond our control. These factors include the proximity and capacity of
oil and gas pipelines and processing equipment, market fluctuations of prices,
taxes, royalties, land tenure, allowable production and environmental
protection. The extent of these factors cannot be accurately predicted but the
combination of these factors may result in our company not receiving an adequate
return on invested capital.

Competition in the oil and gas industry is highly
competitive and there is no assurance that we will be successful in acquiring
interests in oil and gas properties.

The oil and gas industry is intensely competitive. We compete
with numerous individuals and companies, including many major oil and gas
companies, which have substantially greater technical, financial and operational
resources and staffs. Accordingly, there is a high degree of competition for
desirable oil and gas properties for drilling operations and necessary drilling
equipment, as well as for access to funds. There can be no assurance that the
necessary funds can be raised or that any projected work will be completed.

The marketability of natural resources will be affected by
numerous factors beyond our control which may result in us not receiving an
adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired
  or discovered by us will be affected by numerous factors beyond our control.
  These factors include market fluctuations in oil and gas pricing and demand,
  the proximity and capacity of natural resource markets and processing equipment,
  governmental regulations, land tenure, land use, regulation concerning the importing
  and exporting of oil and gas and environmental protection regulations. The exact
  effect of these factors cannot be accurately predicted, but the combination
  of these factors may result in us not receiving an adequate return on invested
  capital to be profitable or viable.

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Oil and gas operations are subject to comprehensive
regulation which may cause substantial delays or require capital outlays in
excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal and local laws
relating to the protection of the environment, including laws regulating removal
of natural resources from the ground and the discharge of materials into the
environment. Oil and gas operations are also subject to federal and local laws
and regulations which seek to maintain health and safety standards by regulating
the design and use of drilling methods and equipment. Various permits from
government bodies are required for drilling operations to be conducted; no
assurance can be given that such permits will be received. No assurance can be
given that environmental standards imposed by federal or local authorities will
not be changed or that any such changes would not have material adverse effects
on our activities. Moreover, compliance with such laws may cause substantial
delays or require capital outlays in excess of those anticipated, thus causing
an adverse effect on us. Additionally, we may be subject to liability for
pollution or other environmental damages which it may elect not to insure
against due to prohibitive premium costs and other reasons.

Exploration and production activities are subject to certain
environmental regulations which may prevent or delay the commencement or
continuance of our operations.

In general, our exploration and production activities are
subject to certain federal and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuance of a given operation. Compliance with these laws and regulations has
not had a material effect on our operations or financial condition to date.
Specifically, we are subject to legislation regarding emissions into the
environment, water discharges and storage and disposition of hazardous wastes.
In addition, legislation has been enacted which requires well and facility sites
to be abandoned and reclaimed to the satisfaction of state authorities. However,
such laws and regulations are frequently changed and we are unable to predict
the ultimate cost of compliance. Generally, environmental requirements do not
appear to affect us any differently or to any greater or lesser extent than
other companies in the industry.

We believe that our operations comply, in all material
respects, with all applicable environmental regulations.

Because some of our property interests are still registered
under the names of other entities, our title to these property interests may be
serious affected if formal assignments of these property interest to under our
name are not registered in due course.

Some of our property interests, such as our working interest in
the Lokern lease and the Britlind Prospect leases were originally acquired under
the name of third parties. Assignment of leasehold out of the third parties are
to be made in due course. However, if formal assignments of these property
interests are not registered under our name in due course, we face seriously
risks to our title to these property interests and may even lose our title to
these property interests.

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Risks Associated With Our Company

Our future is dependent upon our ability to obtain
financing. If we do not obtain such financing, we may have to cease our
exploration activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will
generate positive cash flow in the future. We will require additional financing
in order to proceed beyond the first few months of our exploration program. We
will also require additional financing for the fees we must pay to maintain our
status in relation to the rights to our properties and to pay the fees and
expenses necessary to become and operate as a public company. We will also need
more funds if the costs of the exploration of our oil and gas properties are
greater than we have anticipated. We will also require additional financing to
sustain our business operations if we are not successful in earning revenues. We
currently do not have any arrangements for further financing and we may not be
able to obtain financing on commercially reasonable terms or terms that are
acceptable to us when it is required. Our future is dependent upon our ability
to obtain financing. If we do not obtain such financing, our business could fail
and investors could lose their entire investment.

Because we may never earn revenues from our operations, our
business may fail and then investors may lose all of their investment in our
company.

We have no history of revenues from operations. We have never
had significant operations and have no significant assets. We have yet to
generate positive earnings and there can be no assurance that we will ever
operate profitably. Our company has a limited operating history and is in the
exploration stage. The success of our company is significantly dependent on the
uncertain events of the discovery and exploitation of oil and gas reserves on
our properties or selling the rights to exploit those oil and gas reserves. If
our business plan is not successful and we are not able to operate profitably,
then our stock may become worthless and investors may lose all of their
investment in our company.

Prior to completion of our exploration stage, we anticipate
that we will incur increased operating expenses without realizing any revenues.
We therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our oil and gas properties in the future, we will not be able to
earn profits or continue operations. There is no history upon which to base any
assumption as to the likelihood that we will prove successful, and we can
provide no assurance that we will generate any revenues or ever achieve
profitability. If we are unsuccessful in addressing these risks, our business
will fail and investors may lose all of their investment in our company.

We have no employees other than our Chief Executive Officer,
Lewis Dillman, and our sole director and Chief Financial Officer, George
Drazenovic.

Our Chief Executive Officer, Lewis Dillman, and our Chief
Financial Officer and director, George Drazenovic, will be the only persons
responsible for our managerial responsibilities. As such, they will have
ultimate authority with respect to our business decisions, our disclosure and
our implementation of accounting controls and procedures. If Messrs. Dillman and
Drazenovic are unable to properly institution such procedures and comply with
reporting obligation requirements, our operations may be adversely impacted.

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Our By-laws contain provisions indemnifying our officers and
directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions with respect to the
indemnification of our officers and directors against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by him, including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is made a party by reason of his being or having been one
of our directors or officers.

Investors' interests in our company will be diluted and
investors may suffer dilution in their net book value per share if we issue
additional shares or raise funds through the sale of equity securities

Our constating documents authorize the issuance of 750,000,000
shares of common stock with a par value of $0.001. In the event that we are
required to issue any additional shares or enter into private placements to
raise financing through the sale of equity securities, investors' interests in
our company will be diluted and investors may suffer dilution in their net book
value per share depending on the price at which such securities are sold. If we
issue any such additional shares, such issuances also will cause a reduction in
the proportionate ownership and voting power of all other shareholders. Further,
any such issuance may result in a change in our control.

Our By-laws do not contain anti-takeover provisions which
could result in a change of our management and directors if there is a take-over
of our company

We do not currently have a shareholder rights plan or any
anti-takeover provisions in our By-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company, which may result in a
change in our management and directors.

As a result of our sole director and officers being resident
of other countries other than the United States, investors may find it difficult
to enforce, within the United States, any judgments obtained against our company
or our director and officers

We do not currently maintain a permanent place of business
within the United States. In addition, our current sole director and officer is
a national and resident of a country other than the United States, and all or a
substantial portion of such person's assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against our company or our director and
officer, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.

Risks Associated With Our Common Stock

We do not intend to pay dividends on any investment in the
shares of stock of our company.

We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stocks price. This may never happen and investors
may lose all of their investment in our company.

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Our stock is a penny stock. Trading of our stock may be
restricted by the SEC's penny stock regulations which may limit a stockholder's
ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standard risk disclosure document
in a form prepared by the SEC which provides information about penny stocks and
the nature and level of risks in the penny stock market. The broker-dealer also
must provide the customer with current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the
transaction and monthly account statements showing the market value of each
penny stock held in the customer's account. The bid and offer quotations, and
the broker-dealer and salesperson compensation information, must be given to the
customer orally or in writing prior to effecting the transaction and must be
given to the customer in writing before or with the customer's confirmation. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from these rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for the stock that is subject to these
penny stock rules. Consequently, these penny stock rules may affect the ability
of broker-dealers to trade our securities. We believe that the penny stock rules
discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a
stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the
Financial Industry Regulatory Authority (FINRA) has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, FINRA
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. FINRA requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

Trading in our common stock on the OTC Bulletin Board is
limited and sporadic making it difficult for our shareholders to sell their
shares or liquidate their investments

Shares of our common stock are currently quoted on the OTC
Bulletin Board. The trading price of our common stock has been subject to wide
fluctuations. Trading prices of our common stock may fluctuate in response to a
number of factors, many of which will be beyond our control. The stock market
has generally experienced extreme price and volume fluctuations that have often
been unrelated or disproportionate to the operating performance of companies
with no current business operation. There can be no assurance that trading
prices and price earnings ratios previously experienced by our common stock will
be matched or maintained. These broad market and industry factors may adversely
affect the market price of our common stock, regardless of our operating
performance.

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In the past, following periods of volatility in the market
price of a company's securities, securities class-action litigation has often
been instituted. Such litigation, if instituted, could result in substantial
costs for us and a diversion of management's attention and resources.

ITEM 3. CONTROLS AND PROCEDURES.

As required by Rule 13a-15 under the Exchange Act, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures at March 31, 2008, which is the end of the period
covered by this report. This evaluation was carried out by our principal
executive officer and our principal financial officer. Based on this evaluation,
our principal executive officer and our principal financial officer have
concluded that the design and operation of our disclosure controls and
procedures are effective as at the end of the period covered by this report.
There were no changes in our internal control over financial reporting or in
other factors that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting in our most
recent fiscal quarter.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our company 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 SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by our company in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not party to any legal proceedings.

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

None

ITEM 3. DEFAULT UPON SENIOR SECURITIES.

None

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

None

ITEM 5. OTHER INFORMATION.

None

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Item 6. Exhibits.

The following exhibits, required by Item 601 of Regulation S-B,
are being filed as part of this quarterly report, or are incorporated by
reference where indicated:

Number
    Description3.1
    Articles of (Incorporation incorporated by
      reference to our registration statement on form SB-2 filed on July 11,
      2005)3.2
    Bylaws (incorporated by reference to our
      registration statement on form SB-2 filed on July 11, 2005)3.3
    Articles of Merger (incorporated by reference
      to our current report on Form 8-K filed on November 7, 2006)3.4
    Certificate of Change (incorporated by
      reference to our current report on Form 8-K filed on November 7, 2006)3.2
    Bylaws (incorporated by reference to our
      registration statement on form SB-2 filed on July 11, 2005)10.1
    Mineral property purchase agreement dated April
      26, 2005 (incorporated by reference to our registration statement on form
      SB-2 filed on July 11, 2005)10.2
    Share Exchange Agreement dated January 31, 2007
      (incorporated by reference to our current report on Form 8-K filed on
      March 22, 2007)10.3
    Letter Agreement dated October 4, 2006 with
      Western Energy Capital, LLC for the acquisition of 45% working interest in
      the Lokern leases (incorporated by reference to our current report on Form
      8-K filed on March 22, 2007)10.3
    Letter Agreement dated October 18, 2006 with
      TriMar Energy Partners, Inc. for the acquisition of 1.5% of 8/8th
      Overriding Royalty Interest in the Hobart Lease (incorporated by reference
      to our current report on Form 8-K filed on March 22, 2007)10.4
    Consulting Agreement dated May 1, 2007
      (incorporated by reference to our current report on Form 8-K filed on May
      7, 2007)10.5
    Letter Agreement dated April 19, 2007 with
      Western Energy Capital, LLC for the acquisition of 5% working interest in
      the Britlind Prospect Leases (incorporated by reference to our annual
      report on Form 10-KSB filed on October 15, 2007)10.6
    Purchase and Sale Agreement between our company
      and King Royalty Corporation for the acquisition of 5% interest in the
      Centurion property (incorporated by reference to our annual report on Form
      10-KSB filed on October 15, 2007)10.7
    Purchase and Sale Agreement between our company
      and Desert Mining, Inc. for the acquisition of interests in the Jonah
      property (incorporated by reference to our annual report on Form 10-KSB
      filed on October 15, 2007)14.1
    Code of Ethics (incorporated by reference to
      our annual report on Form 10-KSB filed on October 15, 2007)16.1
    Letter re change in certifying accountant
      (incorporated by reference to our current report on Form 8-K filed on
      February 13, 2007)21.1
    Sun Cal Energy, Corp. a Nevada company, 100%
      wholly-owned subsidiary31.1*
      CEO Certification pursuant
        to Rule 13a-14(a) under the Securities Exchange Act of 193431.2*
      CFO Certification pursuant
        to Rule 13a-14(a) under the Securities Exchange Act of 193432.1*
      CEO Certification pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 200232.2*
      CEO Certification pursuant
        to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
        Oxley Act of 2002


*filed herewith

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SIGNATURES

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

SUN CAL ENERGY, INC.

By:

/s/ Lewis Dillman
  Lewis Dillman 
  Chief Executive Officer 
  (Principal Executive Officer) 
  May 20, 2008

By:

/s/ George Drazenovic
  George Drazenovic
  Chief Financial Officer, and sole Director
  (Principal Financial Officer and Principal Accounting Officer) 
  May 20, 2008

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