---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, 2009

or

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

For the transition period from _______________ to:
_______________

Commission File Number: 000-52300

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

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

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

(403) 538-4772(Registrants telephone
number, including area code)

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

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

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

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


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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable 
  date: 83,463,333 common shares issued and outstanding as of May 18, 2009.

---

- ii -

TABLE OF CONTENTS

|PART I - FINANCIAL
      INFORMATION                                                                | 1 
|--------------------------------------------------------------------------------------------------- | --
|ITEM 1. FINANCIAL STATEMENTS                                                                        | 1 
|ITEM 2. MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 14
|ITEM 3. QUANTITATIVE AND QUALITATIVE
      DISCLOSURES ABOUT MARKET RISK.                           | 20
|ITEM 4T. CONTROLS AND
      PROCEDURES                                                              | 20
|PART II - OTHER INFORMATION                                                                         | 21
|ITEM 1. LEGAL
      PROCEEDINGS                                                                     | 21
|ITEM 1A. RISK FACTORS                                                                               | 21
|ITEM 2. UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                           | 26
|ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                             | 26
|ITEM 4. SUBMISSION OF
      MATTERS TO A VOTE OF SECURITY HOLDERS                                   | 26
|ITEM 5. OTHER INFORMATION                                                                           | 26
|ITEM 6. EXHIBITS.                                                                                   | 27
|SIGNATURES                                                                                          | 28

---

- 1 -

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

These financial statements have been prepared by Sun Cal
Energy, Inc. without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. 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
our company as of March 31, 2009, and its results of operations, stockholders
equity, and its cash flows for the three and nine month period ended March 31,
2009 and for the period from inception (July 20, 2004) to March 31, 2009. 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 our companys annual report filed on Form 10-KSB on September 29, 2008.

---

- 2 -

Sun Cal Energy, Inc.(An Exploratory Stage
Company)Condensed Consolidated Balance Sheets

|                                                              |   | June 30,   |   |   | March 31,   |  
|------------------------------------------------------------- | - | ---------- | - | - | ----------- | -
|                                                              |   | 2008       |   |   | 2009        |  
|                                                              |   |            |   |   | (Unaudited) |  
|ASSETS                                                        |   |            |   |   |             |  
|                                                              |   |            |   |   |             |  
|Current assets                                                |   |            |   |   |             |  
|Cash and cash equivalents                                     | $ | 256        |   | $ | 902         |  
|Accounts receivable                                           |   | 122,610    |   |   | 37,985      |  
|                                                              |   | 122,866    |   |   | 38,887      |  
|Property and
      equipment                                  |   |            |   |   |             |  
|Oil and gas properties, full cost method of accounting        |   | 7,032,850  |   |   | 7,025,406   |  
|                                                              |   |            |   |   |             |  
|Intangible assets                                             |   | 7,463      |   |   | 4,126       |  
|                                                              |   |            |   |   |             |  
|Total assets                                                  | $ | 7,163,179  |   | $ | 7,068,419   |  
|                                                              |   |            |   |   |             |  
|                                                              |   |            |   |   |             |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                          |   |            |   |   |             |  
|                                                              |   |            |   |   |             |  
|Current
      liabilities                                     |   |            |   |   |             |  
|Accounts payable and accrued expenses                         | $ | 51,360     |   | $ | 43,335      |  
|Payable to related party                                      |   | 10,000     |   |   | 18,157      |  
|                                                              |   |            |   |   |             |  
|Total liabilities                                             |   | 61,360     |   |   | 61,492      |  
|                                                              |   |            |   |   |             |  
|Stockholders'
      equity                                    |   |            |   |   |             |  
|Common stock:                                                 |   |            |   |   |             |  
|Authorized 750,000,000
      shares; $0.001 par value; issued |   |            |   |   |             |  
|and outstanding 82,796,666 shares June
      30, 2008 and     |   |            |   |   |             |  
|83,463,333 shares
      outstanding as of March 31, 2009      |   | 82,796     |   |   | 83,463      |  
|Additional paid-in capital                                    |   | 9,025,204  |   |   | 9,124,537   |  
|Deficit accumulated during the exploratory stage              |   | (2,006,181 | ) |   | (2,201,074  | )
|                                                              |   | 7,101,819  |   |   | 7,006,926   |  
|                                                              |   |            |   |   |             |  
|Total liabilities and stockholders' equity                    | $ | 7,163,179  |   | $ | 7,068,419   |  

---

- 3 -

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

June 20, 2004(inception)Three Months Ended
      
      
      Nine Months Ended
      
      
      throughMarch 31,
      
      
      March 31,
      
      
      March 31,2008
      
      
      2009
      
      
      2008
      
      
      2009
      
      
      2009(Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)Net revenue
      $
      73,837
      
      $
      20,921
      
      $
      84,994
      
      $
      49,631
      
      $
      190,963Operating expensesAbandoned exploration costs
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      12,500Oil and gas expenses
      
      10,880
      
      
      3,138
      
      
      12,749
      
      
      7,444
      
      
      28,360General and administrative expenses
      
      296,338
      
      
      22,202
      
      
      1,319,373
      
      
      237,079
      
      
      2,351,179307,218
      
      
      25,340
      
      
      1,332,122
      
      
      244,523
      
      
      2,392,039Net loss from operations
      
      (233,381
      )
      
      (4,419
      )
      
      (1,247,128
      )
      
      (194,892
      )
      
      (2,201,076
      )Other income (expense)Interest income
      
      1,307
      
      
      -
      
      
      1,890
      
      
      
      
      
      583Loss on disposition
        of asset
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (581
      )Net loss
      $
      (232,074
      )
      $
      (4,419
      )
      $
      (1,245,238
      )
      $
      (194,892
      )
      $
      (2,201,074
      )Net loss per share - basic and diluted
      $
      (0.00
      )
      $
      (0.00
      )
      $
      (0.02
      )
      $
      (0.00
      )Weighted average common sharesoutstanding - basic and diluted
      
      82,463,333
      
      
      83,463,333
      
      
      81,958,242
      
      
      83,239,488


---

- 4 -

Sun Cal Energy, Inc. (An Exploratory Stage
Company) Condensed Consolidated Statements of Cash Flows

|                                                           |   |                   |   |   |             |   |   | June 20, 2004 |  
|---------------------------------------------------------- | - | ----------------- | - | - | ----------- | - | - | ------------- | -
|                                                           |   |                   |   |   |             |   |   | (Inception)   |  
|                                                           |   | Nine Months Ended |   |   | through     |  
|                                                           |   | March 31,         |   |   | March 31,   |  
|                                                           |   | 2008              |   |   | 2009        |   |   | 2009          |  
|                                                           |   | (Unaudited)       |   |   | (Unaudited) |   |   | (Unaudited)   |  
|Cash flows from operating activities:                      |   |                   |   |   |             |   |   |               |  
|Net loss                                                   | $ | (1,245,238        | ) | $ | (194,892    | ) | $ | (2,201,074    | )
|Adjustment 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            |   |   | 7,444       |   |   | 28,354        |  
|Depreciation                                               |   | -                 |   |   | -           |   |   | 369           |  
|Amortization                                               |   | 3,337             |   |   | 3,337       |   |   | 9,223         |  
|Changes in assets:                                         |   |                   |   |   |             |   |   |               |  
|(Increase) decrease
      in accounts receivable           |   | (77,760           | ) |   | 84,625      |   |   | (37,985       | )
|(Increase)
      decrease in prepaid expenses              |   | (822              | ) |   | -           |   |   | -             |  
|Changes in liabilities:                                    |   |                   |   |   |             |   |   |               |  
|Increase
      (decrease) in accounts payable              |   | 11,750            |   |   | (8,025      | ) |   | 43,337        |  
|Net cash used in operating activities                      |   | (975,254          | ) |   | (107,511    | ) |   | (1,792,445    | )
|                                                           |   |                   |   |   |             |   |   |               |  
|Cash flows from investing activities:                      |   |                   |   |   |             |   |   |               |  
|Acquisition of oil and
      gas properties                |   | (1,411,105        | ) |   | -           |   |   | (2,853,761    | )
|Acquisition of computer equipment                          |   | -                 |   |   | -           |   |   | (950          | )
|Website design costs                                       |   | -                 |   |   | -           |   |   | (13,349       | )
|Net cash used in investing activities                      |   | (1,411,105        | ) |   | -           |   |   | (2,868,060    | )
|                                                           |   |                   |   |   |             |   |   |               |  
|Cash flows from financing activities:                      |   |                   |   |   |             |   |   |               |  
|Proceeds
      from issuance of common stock               |   | 1,850,000         |   |   | 100,000     |   |   | 4,643,250     |  
|Loans received from
      related party                    |   | -                 |   |   | 32,812      |   |   | 75,012        |  
|Loans
      repaid to related party                        |   | -                 |   |   | (24,655     | ) |   | (56,855       | )
|Net cash provided by financing activities                  |   | 1,850,000         |   |   | 108,157     |   |   | 4,661,407     |  
|                                                           |   |                   |   |   |             |   |   |               |  
|Net increase (decrease) in cash and cash
      equivalents |   | (536,359          | ) |   | 646         |   |   | 902           |  
|                                                           |   |                   |   |   |             |   |   |               |  
|Cash and cash equivalents, beginning of period             |   | 590,747           |   |   | 256         |   |   | -             |  
|                                                           |   |                   |   |   |             |   |   |               |  
|Cash and cash equivalents, end of period                   | $ | 54,388            |   | $ | 902         |   | $ | 902           |  

---

- 5 -

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.

Interim Financial Statements

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted pursuant to such
rules and regulations.

In the opinion of management, all adjustments, consisting of
normal and recurring adjustments, necessary for a fair presentation of the
financial position and the results of operations for the periods presented have
been included. The operating results of the Company on a quarterly basis may not
be indicative of operating results for the full year. For further information,
refer to the financial statements and notes included in Sun Cal Energy Inc.s
Form 10-K for the year ended June 30, 2008.

Going Concern

The accompanying condensed consolidated 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, 2009 of $194,892, and has and has an accumulated deficit since its
  inception of $2,201,074. 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.

---

- 6 -

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 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, 2009, the Company recognized no compensation expense
under SFAS No. 123R and recognized $321,000 is stock based compensation during
the nine-months ended March 31, 2008 through the issuance of 300,000 shares of
its common stock valued at $321,000.

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

---

- 7 -

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.

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 March 31, 2009, the Company
  did not deem any of its long-term assets to be impaired.

---

- 8 -

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 collectability is probable.

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. Website development costs are being amortized on a
straight-line basis over an estimated useful life of 3 years.

Website costs and accumulated amortization as of March 31, 2009
is as follows:

Capitalized website costs
    $
    13,349Less accumulated amortization
    
    (9,223
    )$
    4,126


Amortization for the three-months ended March 31, 2008 and 2009
amounted to $1,112 and $1,112 respectively. Amortization for the nine months
ended March 31, 2008 and 2009 amounted to $3,337 and $3,337 respectively.

---

- 9 -

Amortization expense for the remaining life of the website is
as follows:

March 31,2010
    $
    3,3362011
    
    790$
    4,126


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, 2009 of approximately $2,200,000 for federal income tax purposes.
These net operating losses have generated a deferred tax asset of approximately
$748,000 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
carry forwards expire in various years through June 30, 2029 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 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, 2009 were 4,688,332 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 83,463,333 and
88,151,664 for the three months and nine-months ended March 31, 2009,
respectively. 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, the and 86,128,715 and 85,257,121 for the three
months and nine-months ended March 31, 2008.

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.

---

- 10 -

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 adoption of
SFAS No 160 should not have a significant impact on our consolidated financial
statements.

FASB issued Staff Position No. 142-3 - In April 2008,
the FASB issued Staff Position No. 142-3, Determination of the Useful Life of
Intangible Assets (FSP 142-3). FSP 142-3 amends the factors that should be
considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under FASB Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets. FSP 142-3
is effective for the Company in the first quarter of 2009. The adoption of FSP
142-3 should not have a significant impact on our financial statements.

FASB issued Staff Position No. EITF 03-6-1 - In June
2008, the FASB issued Staff Position No. EITF 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities (EITF 03-6-1). EITF 03-6-1 addresses whether instruments granted
in share-based payment transactions are participating securities prior to
vesting, and therefore, need to be included in the earnings allocation in
calculating earnings per share under the two-class method described in FASB
Statement of Financial Accounting Standards No. 128, Earnings per Share. EITF
03-6-1 requires companies to treat unvested share-based payment awards that have
non-forfeitable rights to dividend or dividend equivalents as a separate class
of securities in calculating earnings per share. EITF 03-6-1 is effective for
fiscal years beginning after December 15, 2008. EITF 03-6-1 is effective for the
Company in the first quarter of 2009. The adoption of EITF 03-6-1 has not had a
significant impact on our financial statements.

SFAS No. 157 - The Company adopted in the first quarter
of fiscal 2009, the Statement of Financial Accounting Standards No. 157, Fair
Value Measurements, (SFAS No. 157) for all financial assets and financial
liabilities and for all non-financial assets and non-financial liabilities
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). SFAS No. 157 defines fair value, establishes a
framework for measuring fair value, and enhances fair value measurement
disclosure. The adoption of SFAS No. 157 did not have a significant impact on
our consolidated financial statements and the resulting fair values calculated
under SFAS No. 157 after adoption were not significantly different than the fair
values that would have been calculated under previous guidance.

In October 2008, the Financial Accounting Standards Board
(FASB) issued Financial Staff Position 157-3, Determining the Fair Value of a
Financial Asset When the Market for That Asset Is Not Active, (FSP 157-3). FSP
157-3 clarifies the application of SFAS No. 157 in a market that is not active,
and addresses application issues such as the use of internal assumptions when
relevant observable data does

---

- 11 -

not exist, the use of observable market information when the
market is not active, and the use of market quotes when assessing the relevance
of observable and unobservable data. FSP 157-3 is effective for all periods
presented in accordance with SFAS No. 157. The adoption of FSP 157-3 did not
have a significant impact on our consolidated financial statements or the fair
values of our financial assets and liabilities.

In December 2008, the FASB issued Financial Staff Position
(FSP) Financial Accounting Standard No. 140-4 and FASB Interpretation 46(R)-8,
Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets
and Interests in Variable Interest Entities (FSP FAS 140-4 and FIN 46(R)-8).
The document increases disclosure requirements for public companies and is
effective for reporting periods (interim and annual) that end after December 15,
2008. FSP FAS 140-4 and FIN 46(R)-8 became effective for the Company on December
31, 2008. The adoption of FSP FAS 140-4 and FIN 46(R)-8 did not have a
significant impact on our consolidated financial statements.

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 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.

---

- 12 -

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 still working to
find funding for this project and based upon the delay in closing, the seller
now retains a 12.5% overriding royalty on the Kansas assets until the $2,000,000
in financed and work over commences.

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

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. On September 30,
2008, the Company sold 666,666 units under a private offering for $100,000. Each
unit consists of one share of its common stock and a warrant to purchase one
share of its common stock at a price of $.20 per share. The warrants expire on
September 23, 2011.

Warrants

The following is a summary of the outstanding warrants:

| |                              |  |           |  |   | Weighted | 
| | ---------------------------- |  | --------- |  | - | -------- | 
| |                              |  |           |  |   | Average  | 
| |                              |  | Number of |  |   | Exercise | 
| |                              |  | warrants  |  |   | Price    | 
| |                              |  |           |  |   |          | 
| | Outstanding  June 30, 2008  |  | 4,021,666 |  | $ | 1.55     | 
| |                              |  |           |  |   |          | 
| | Granted                      |  | 666,666   |  | $ | .20      | 
| | Exercised                    |  | --        |  |   | --       | 
| | Forfeited                    |  | --        |  |   | --       | 
| |                              |  |           |  |   |          | 
| | Outstanding  March 31, 2009 |  | 4,688,332 |  | $ | 1.36     | 

The expiration date of the warrants range from two to three years
  after date of grant with exercise prices ranging from $ .20 to $3.00 per share.

---

- 13 -

NOTE 5  RELATED PARTY TRANSACTIONS

During the nine months ended March 31, 2009, the Company
received $9,344 from the Companys President. The balance due at March 31, 2009
was $18,157. The advances are unsecured, non-interest bearing, and due on
demand.

---

- 14 -

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

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 shares of our common stock and the
terms we, us, our and Sun Cal mean Sun Cal Energy, Inc. and/or our
wholly-owned subsidiaries, Sun Cal Energy Corp., a Nevada corporation and Sun
Cal Energy Canada Corp., a British Columbia corporation.

Our Current Business

We are in the business of oil and gas exploration. In October
2006, Sun Cal Energy Corp. entered into two agreements: an agreement with TriMar
Energy Partners, Inc. to acquire a 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. To date significantly all of our revenues have been derived from our
holding of a 1.5% of 8/8th overriding
royalty interest in an oil and gas lease from the City of Hobart, as the lessor,
covering a total of 1,211.44 acres in the city of Hobart, Washita County,
Oklahoma, and we have losses since our inception. We currently rely upon the
sale of our securities to fund operations.

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, except for the Sturgeon 1-11 and Cunningham
1-2 wells of which we own a 1.5% overriding royalty interest, 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.

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.

---

- 15 -

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 three 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 Sturgeon 1-11 well began production in
June of 2007 and has produced a total of 470,409 mcf of natural gas up to June
of 2008.

On July 11, 2007, a second permit was filed for drilling and
testing of a second deep development well on the Hobart Prospect in Washita,
County, Oklahoma. 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. The Cunningham 1-2 well began production in June of 2007
and has produced a total of 1,285,074 mcf of natural gas up to June of 2008.

On August 28, 2007, Range Production Company filed for a third
well to be drilled on our Hobart Prospect in Oklahoma. Filed before the
Corporation Commission of the State of Oklahoma, Range Production Company was
seeking to establish a 640-acre drilling and spacing unit and pooling orders for
a third scheduled well in Section 14, Township 8 North, Range 18 West in Washita
County, Oklahoma. With a target depth of 19,800 feet, the estimated completion
costs for this well are estimated at $12,245,000.

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. 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 2009. 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.

Sun Cal Energy has the exclusive oil and gas rights for the
Lokern Prospect which comprises approximately 400 acres of prime land in the
Kern County region in the San Joaquin Valley in Southern California. Our company
owns a 45% Working Interest and a 75% net revenue interest in the prospect. 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 assign 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 to acquire a partial interest in the Britlind Prospect and
leases situated in the Breton Sound area, offshore Louisiana. Western Energy
Capital,

---

- 16 -

LLC has originally entered into an agreement with BTE Energy,
LLC whereby Western Energy Capital, LLC acquired a contractual interest in the
Britlind Prospect from BTE Energy, LLC, including all rights 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 also issued 400,000 shares
of our common stock to Western Energy Capital, LLC or its designates. 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 Captial, LLC 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.

In June of 2008, we received a well proposal from TDE Property
Holdings LP to drill the SL 18994, Well No. 1 in Breton Sound Block 2, Eloi Bay
Field, St. Bernard Parrish, Louisiana. The costs for drilling and testing the
well were estimated to be $2,219,000. After careful consideration, our company
decided to elect not to participate for the 5% working interest share of the
well, at an estimate net cost of $110,950.

Overriding Royalty Interest in Centurion 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. Well
operators include companies such as Exxon, Kerr-KcGee, Hunt Oil, Quicksilver and
Vintex. 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 entitle 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 $821,798.45.

With current well spacing regulations, we believe we can drill
up to 37 wells on this acreage. These fields are located in Wyoming's Greater
Green River Basin. On December 27, 2007, we engaged Schlumberger to conduct a
reserve analysis and target drilling program on our Jonah Prospect. 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.

---

- 17 -

Results of Operations

Nine months Ended March 31
      
      
      Three Months Ended March 31Percentage
      
      
      
      
      
      
      
      
      PercentageIncrease
      
      
      
      
      
      
      
      
      Increase2009
      
      
      2008
      
      
      (Decrease)
      
      
      2009
      
      
      2008
      
      
      (Decrease)Net revenue
      $
      49,631
      
      
      84,994
      
      
      (41.63%)
      
      $
      20,921
      
      
      73,837
      
      
      (71.66%)Operating expenses
      
      244,523
      
      
      1,332,122
      
      
      (81.64%)
      
      $
      25,340
      
      
      307,218
      
      
      (91.75%)Net loss fromoperations
      $
      4,419
      
      
      232,074
      
      
      (98.10%)
      
      $
      194,892
      
      
      1,245,238
      
      
      (84.35%)


Revenue

We are an exploration stage company that from inception to
March 31, 2009 has accrued revenues in the amount of $190,9643 since our
inception on July 20, 2004 to March 31, 2009. Our revenues during the three
months ended March 31, 2009 were derived primarily from royalty payments from
properties in which we have an interest. Because Marathon Oil has received
correspondence from third parties asserting an interest over 0.4% of our
overriding royalty interest in the Hobart Lease, Marathon Oil has held back a
small portion of the royalty payments owed to us representing the 0.4% of our
overriding royalty interest. We are confident that we will be able to resolve
this issue soon and the withheld payment will be paid to us in the near
future.

Expenses

Our operating expenses for the three months ended March 31,
2009 and 2007 are outlined in the table below:

Nine
        months Ended December 31
      
      
      Three
        Months Ended December 31Percentage
      
      
      
      
      
      
      
      
      PercentageIncrease
      
      
      
      
      
      
      
      
      Increase2009
      
      
      2008
      
      
      (Decrease)
      
      
      2009
      
      
      2008
      
      
      (Decrease)Oil and gas expenses
      $
      7,444
      
      
      12,749
      
      
      (41.61%)
      
      $
      3,138
      
      
      10,880
      
      
      (71.16%)General andadministrativeexpenses
      
      237,079
      
      
      1,319,373
      
      
      (82.03%)
      
      $
      22,202
      
      
      296,338
      
      
      (92.51%)Operating expensesTotal
      $
      244,523
      
      
      1,332,122
      
      
      (81.64%)
      
      $
      25,340
      
      
      307,218
      
      
      (91.75%)


Liquidity and Capital Resources

Working Capital

|                          |   | March 31, 2009 |   |  | June
      30, 2008 | 
|------------------------- | - | -------------- | - |  | ------------------- | 
|Current assets            | $ | 38,887         |   |  | 122,866             | 
|Current liabilities       |   | 61,492         |   |  | 61,360              | 
|Working capital (deficit) |   | (22,605        | ) |  | 61,506              | 

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. As we are still
in exploration stage, we anticipate that we will incur increased operating
expenses while realizing little or no 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.

---

- 18 -

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
anticipate spending approximately $5,000 in ongoing general and administrative
expenses per month for the next 12 months, for a total anticipated expenditure
of $60,000 over the next 12 months. The general and administrative expenses for
the year will consist primarily of professional fees for the audit and legal
work relating to our regulatory filings throughout the year, as well as transfer
agent fees, annual mineral claim fees and general office expenses.

During the next 12 month period, we anticipate that we will
generate little or no revenues. Accordingly, we will be required to obtain
additional financing in order to continue our plan of operations. We believe
that debt financing will not be an alternative for funding additional phases of
exploration as we do not have tangible assets to secure any debt financing. We
anticipate that additional funding will be in the form of equity financing from
the sale of our common stock or through shareholder or related party loans.
However, we cannot provide investors with any assurance that we will be able to
raise sufficient funding from the sale of our common stock to fund our
exploration programs. In the absence of such financing, we will not be able to
continue exploration of our properties and our business plan will fail. Even if
we are successful in obtaining equity financing to fund our exploration program,
there is no assurance that we will obtain the funding necessary to pursue any
advanced exploration of our properties. If we do not continue to obtain
additional financing, we will be forced to abandon our properties and our plan
of operations

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.

Additional Disclosure of Outstanding Share Data

Common Stock

As of March 31, 2009, we had 83,463,333 shares of common stock
issued and outstanding.

Warrants

As of March 31, 2009, we had 4,688,332 warrants issued and
outstanding. The exercise prices of these warrants range from $0.20 to $3.00 per
share and the weighted average exercise price of these warrants is $1.36. The
expiration date of the warrants range from two to three years after the date of
grant.

---

- 19 -

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
shareholders.

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. Presented below is a description of the
accounting policies that are most critical to an understanding of our financial
statements.

Revenue recognition

We recognize revenue in accordance with Staff Accounting
Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements, as
revised by SAB No. 104. As such, we recognize 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 discounts.

Stock Based Compensation

We account 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 we expect to receive
the benefit, which is generally the vesting period.

Issuance of Stock for Non-Cash Consideration

All issuances of our 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.

Our 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, we record the fair value of the fully vested non-forfeitable common
stock issued for future consulting services as prepaid services in its
consolidated balance sheet.

---

- 20 -

Loss per Share

We report 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 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 September 30, 2008 were 4,688,332 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 86,818,332 for the three months
ended September 30, 2008.

Fair Value of Financial Instruments

Our 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, we are required
to estimate the fair value of all financial instruments at the balance sheet
date. We consider the carrying values of our financial instruments in the
financial statements to approximate their fair values.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK.

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under
the Securities Exchange Act of 1934, as amended, we are required to
maintain, and our management is required to evaluate the effectiveness of our
companys disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) of the Exchange Act). Our management with the participation of our
principal executive officer and principal financial officer evaluated the
effectiveness our companys disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period
covered by this quarterly report on Form 10-Q. Based on this evaluation, our
management determined that our companys disclosure controls and procedures were
effective as of March 31, 2009.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our company's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include controls and procedures designed to ensure that information
required to be disclosed in our company's reports filed under the Exchange Act
is accumulated and communicated to our principal executive officer and our
principal accounting officer, as appropriate, to allow timely decisions
regarding required disclosure.

Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
reporting during our last fiscal quarter that have materially affected or are
reasonably likely to materially affect, our internal control over financial
reporting.

---

- 21 -

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, our principal executive
and principal financial officer, or persons performing similar functions, and
effected by our board of directors, management and other personnel, to provide
reasonable assurance regarding the reliability of our financial reporting and
the preparation of our financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and
procedures that:

| | 1. | pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the issuer;                                                                                                                                                                      
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                               
| | 2. | provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that our
      receipts and expenditures are being made only in accordance with
      authorizations of our management and directors; and,
| |    |                                                                                                                                                                                                                                                                                                                                               
| | 3. | provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of our
      assets that could have a material effect on our financial
    statements.                                                                                                                            

Certifications

Certifications with respect to disclosure controls and
procedures and internal control over financial reporting under Rules 13a-14(a)
or 15d-14(a) of the Exchange Act are attached to this quarterly report on Form
10-Q.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not party to any legal proceedings.

ITEM 1A. 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.

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. 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 current global economic crisis could lead to an extended
  recession in the U.S. and around the world. A an extended slowdown in economic
  activity caused by a recession would reduce national and worldwide demand for
  oil and natural gas and result in lower commodity prices for long periods of
  time. Prices for oil and natural gas have already decreased significantly from
  highs in 2008. We have put our exploration programs on hold, which is having
  a material adverse impact on our business, financial condition and results of
  operations. and adverse If oil and gas prices do not increase before we can
  no longer afford to pay our debts as they come due, our exploration program
  will likely never become economically feasible, we will go out of business and
  investors will lose their entire investment in our company.

---

- 22 -

Since October 2008, oil prices have decreased by two thirds off
their highest prices and natural gas prices have decreased in half or more
during the same time period. Costs of exploration, development and production
have not yet adjusted to current economic conditions or in proportion to the
significant reduction in product prices. Prolonged, substantial decreases in oil
and natural gas prices would likely have a material adverse effect on our
business, financial condition and results of operations, could further limit our
access to funds through the sale of our equity securities or through loans to
satisfy our capital requirements.

Capital and credit markets have experienced unprecedented
volatility and disruption during the last half of 2008 and continue to be
unpredictable. Given the current levels of market volatility and disruption, the
availability of funds from those markets has diminished substantially. Further,
arising from concerns about the stability of financial markets generally and the
solvency of borrowers specifically, the cost of accessing the credit markets has
increased as many lenders have raised interest rates, enacted tighter lending
standards or altogether ceased to provide funding to borrowers.

Due to these capital and credit market conditions, we cannot be
certain that funding will be available to us in amounts or on terms that we
believe are acceptable. We have decided to put our exploration program on hold
until carrying them out becomes economically feasible. This hold on our
exploration program is having a material adverse impact on our business,
financial condition and results of operations. If oil and gas prices do not
increase before we can no longer afford to pay our debts as they come due, our
exploration program will likely never become economically feasible, we will go
out of business and investors will lose their entire investment in our company.

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.

---

- 23 -

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.

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 we 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 interests are not
registered to our name 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.

---

- 24 -

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 only recently accrued revenues and have experienced
losses since inception. 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.

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.

---

- 25 -

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 officers and sole director being
residents of 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 officers and director.

We do not currently maintain a permanent place of business
within the United States. In addition, our current officers and sole director
are nationals and residents of a country other than the United States, and all
or a substantial portion of their 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 officers and director,
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.

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

---

- 26 -

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.

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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

---

- 27 -

ITEM 6. EXHIBITS.

Exhibits required by Item 601 of Regulation S-K:

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 corporation, 100% wholly-owned
          subsidiary21.2
      Sun Cal Energy Canada Corp., a British Columbia corporation,
          100% wholly-owned subsidiary31.1*
      Section 302 Certification of
          Chief Executive Officer31.2*
      Section 302 Certification of
          Chief Financial Officer32.1*
      Section 906 Certification of
          Chief Executive Officer32.2*
      Section 906 Certification of
          Chief Financial Officer


* Filed herewith.

---

- 28 -

SIGNATURES

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

SUN CAL ENERGY, INC.

By:

*/s/ Lewis Dillman*
  Lewis Dillman
  President and Chief Executive Officer 
  (Principal Executive Officer) 
  Date: May 20, 2009

By:

*/s/ George Drazenovic*
  George Drazenovic
  Chief Financial Officer, Secretary, Treasurer and Director 
  (Principal Financial Officer and Principal Accounting Officer) 
  Date: May 20, 2009

---