U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-KSB


[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act
             of 1934 for the fiscal year ended December 31, 2002, 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 No. 333-37842


                               MOUNTAIN OIL, INC.
           (Name of Small Business Issuer as specified in its charter)

            Utah                                          87-0639343
            ----                                          ----------
             (State or Other Jurisdiction of           (IRS Employer
           Incorporation or Organization)          Identification No.)

             3954 East 200 North East Highway 40, Ballard, UT 84066
              (Address of Principal Executive Offices and Zip Code)

                   Issuer's Telephone Number:  (435) 722-2992

           Securities registered under Section 12(b) of the Act:  None

           Securities registered under Section 12(g) of the Act:  None

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

 Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
      registrant's knowledge, in definitive   proxy or information statements
   incorporated by reference in Part III of this Form 10-KSB or any amendment to
                             this Form 10-KSB. [ X ]

      The Registrant's revenues for its most recent fiscal year:  $705,273

 The aggregate market value of voting stock held by non-affiliates:  $1,963,076

    As of December 31, 2001, the Registrant had outstanding 3,102,749 shares of
                           common stock, no par value.

                   Documents incorporated by reference:  None.

<PAGE>
TABLE  OF  CONTENTS
<TABLE>
<CAPTION>



<S>                                                                   <C>
ITEM NUMBER AND CAPTION. . . . . . . . . . . . . . . . . . . . . . .  Page



Part I

1.    Description of Business. . . . . . . . . . . . . . . . . . . .     3

2.    Description of Property. . . . . . . . . . . . . . . . . . . .     7

3.    Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .    10

4.    Submission of Matters to a Vote of Security Holders. . . . . .    10

Part II

5.    Market for Common Equity and Related Stockholder Matters . . .    10

6.    Management's Discussion and Analysis and Plan of Operation . .    11

7.    Financial Statements . . . . . . . . . . . . . . . . . . . . .    13

8.    Changes in and Disagreements with Accountants. . . . . . . . .    13
      on Accounting and Financial Disclosure

Part III

9.    Directors, Executive Officers, Promoters and Control Persons .    13

10.   Executive Compensation . . . . . . . . . . . . . . . . . . . .    14

11.   Security Ownership of Certain Beneficial Owners and Management    16

12.   Certain Relationships and Related Transactions . . . . . . . .    17

13.   Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . .    17

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    19

Certification. . . . . . . . . . . . . . . . . . . . . . . . . . . .    20
</TABLE>



                                        2

<PAGE>

          PART  I

STATEMENTS  MADE  OR  INCORPORATED  IN  THIS  ANNUAL  REPORT INCLUDE A NUMBER OF
FORWARD-LOOKING  STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT  OF  1933  AND  SECTION  21E  OF  THE  SECURITIES  EXCHANGE  ACT  OF  1934.
FORWARD-LOOKING  STATEMENTS  INCLUDE,  WITHOUT LIMITATION, STATEMENTS CONTAINING
THE  WORDS  "ANTICIPATES", "BELIEVES", "EXPECTS", "INTENDS", "FUTURE", AND WORDS
OF  SIMILAR IMPORT WHICH EXPRESS MANAGEMENT'S BELIEF, EXPECTATIONS OR INTENTIONS
REGARDING  THE COMPANY'S FUTURE PERFORMANCE OR FUTURE EVENTS OR TRENDS. RELIANCE
SHOULD  NOT  BE  PLACED ON FORWARD-LOOKING STATEMENTS BECAUSE THEY INVOLVE KNOWN
AND  UNKNOWN  RISKS,  UNCERTAINTIES  AND  OTHER  FACTORS, WHICH MAY CAUSE ACTUAL
RESULTS,  PERFORMANCE  OR  ACHIEVEMENTS OF THE COMPANY TO DIFFER MATERIALLY FROM
ANTICIPATED  FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
SUCH  FORWARD-LOOKING  STATEMENTS.  IN  ADDITION,  THE  COMPANY  UNDERTAKES  NO
OBLIGATION  TO  PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER
AS  A  RESULT  OF  NEW  INFORMATION,  FUTURE  EVENTS  OR  OTHERWISE.


     ITEM  1.  DESCRIPTION  OF  BUSINESS

General

     Mountain  Oil,  Inc.,  a  Utah  corporation  formed on July 30, 1999, is an
independent  oil  and  gas exploration and development company that holds 11,989
acres  of leased mineral rights located within a thirty-mile radius of Duchesne,
Utah.  On  our  acreage  we have ten wells producing oil and gas at December 31,
2002,  with  pumps  in  place.  An  additional  ten  of our wells are capable of
producing  with  pumps  in  place,  but are not in production now because of the
previously  low price of oil. We believe we can successfully rework the wells we
are  swabbing  and four additional wells for production, but do not intend to do
so  until  we  can  locate  additional  capital  to  fund  the  project.

     On January 19, 2001, we commenced a registered public offering of 1,000,000
shares  of  common stock at a gross sales price of  $2,250,000.  On February 28,
2001,  we  closed  our public offering after selling 715,068 shares resulting in
gross  proceeds  of $1,609,000.  Net proceeds of the offering were approximately
$1,524,053.  We  used approximately $374,722 of the net proceeds to purchase oil
well  equipment,  $547,071  to  rework  wells, and  $252,233 to purchase service
equipment.
                                        3

<PAGE>

     On  March  1, 2003, Mountain Oil executed an agreement that, subject to the
fulfillment  of  the  terms by both parties, effectively reduces the outstanding
shares of the company, eliminates the company's debt, and leases the Company's 4
highest  producing  well  properties with their corresponding equipment to a new
entity  named Mountain Oil and Gas (MOG), of which Craig Phillips and Daniel Sam
would  be  the  officers  and directors.  Craig Phillips and Daniel Sam would be
removed  from  the  board  of  directors  and would no longer be officers of the
company.  Joseph  Ollivier  would  become  President  of  Mountain  Oil and Lynn
Stratford  would  be  added  to  the  board  of  directors  and  also become the
secretary,  treasurer, and chief financial officer of the Corporation.  Mountain
Oil would reduce the amount of shares outstanding by 807,266, which would mainly
come  from stock held by Craig Phillips and Daniel Sam.  Mountain Oil would also
receive a lease payment of $6,500 per month and the current debt by Mountain Oil
would also be transferred to MOG.  MOG has the right to lease the properties and
equipment  from  Mountain  Oil for one year and also has the ability to purchase
certain  of  Mountain Oil's equipment for $650,000 after the lease term is over.
This  agreement  is  only  effective  once all terms have been fulfilled by both
parties.

     If the terms of the agreement between MOG and Mountain Oil are not met, our
plan for the coming year is to preserve our leases through limited production of
our  wells,  seek  additional  financing  to  fund our operations and pursue the
rework  project  on  our  existing  wells,  and  seek farm out or joint drilling
arrangements  to  drill new wells on our undeveloped acreage.  If joint drilling
arrangements  can not be secured, we will seek to lease our properties and wells
to  another  company  and  cut  all  overhead.

Operations

     We  conduct our own operator services for our oil and gas wells.  Operating
services  includes  maintaining  producing wells and related equipment, swabbing
certain  wells  without  pumps to bring oil to the surface, and pulling pipe and
performing  other tasks related to reworking our wells. We reduced the number of
field  employees  from 13 earlier this year to two because of low oil prices and
the  resulting  reduction  of  revenue.  Our two full-time employees perform the
services  required  to  maintain  production  from nine of our wells.  We own an
office  and storage facility in Ballard, Utah where we store equipment and tools
and  from  which  we  operate  to  service  our  wells.

     We  cannot  predict  when  we will bring back into production our ten wells
that  can  produce  with  pumps in place or when we will pursue reworking of our
five additional wells, since we do not currently have the capital required to do
so.  While  we  are  looking  for opportunities to develop our undeveloped lease
acreage  by  drilling  new  wells  or  through  farm out arrangements, we cannot
predict  whether  we  will  be  able  to  locate  and take advantage of any such
opportunities  even  with  improved  oil  prices.

     Our  operations are subject to all of the risks incident to exploration for
and  production  of oil and gas, including blow-out of the well due to excessive
pressure,  cratering of the well due to ground subsidence, pollution, and fires,
each  of  which could result in damage to or destruction of oil and gas wells or
production  facilities  or  injury to persons and property.  We currently have a
$1,000,000  insurance  policy  for public liability and $5,000,000 for claims or
losses. If our insurance does not fully cover certain of these risks, the impact
could  have  a  material  adverse  effect  on  our  financial  position.
                                        4

<PAGE>

     Future  drilling  activities  are subject to many risks, including the risk
that no commercially productive reservoirs will be encountered.  There can be no
assurance that any new wells drilled in which we participate will recover all or
any  portion  of  the related investment.  The cost of drilling, completing, and
operating wells is often uncertain and cost overruns can occur.  Future drilling
programs  might  be  curtailed,  delayed,  or  canceled  as a result of numerous
factors,  many of which are beyond our control.  These factors include financial
resources  of  Mountain  Oil  or  its partners, commodity prices, land and title
issues,  mechanical  problems,  weather  conditions,  and  compliance  with
governmental requirements.  Unsuccessful drilling and development activities may
have  a  material  adverse effect on Mountain Oil and its results of operations.

Market

     Our  oil  and  gas  production is marketed to third parties consistent with
industry practices. Typically, oil is sold at field posted prices, plus or minus
adjustments for quality and transportation. We currently sell our oil to Chevron
Corporation  under  a  month-to-month  contract that can be terminated by either
party with 30 days prior notice. Natural gas is usually sold under a contract at
a  negotiated price based upon factors normally considered in the industry, such
as  gas  quality,  distance  from  the well to the pipeline, estimated reserves,
liquid  hydrocarbon  content  of  natural  gas,  and  prevailing  supply/demand
conditions.  Coastal  field Services operates a gas gathering system in the area
where  our  producing  wells  are  located and purchases our gas at spot prices.
Coastal Field Services delivers to us propane or butane to run our batteries and
pumps,  the  cost  of  which  is  offset  against  the amount owed to us for gas
gathered  from  our  wells.  At  December  31,  2002,  we  were  selling our oil
production  at  approximately $25 per barrel and gas production at $3.40 per mcf
of  gas,  as  compared to sales at prices averaging $17.50 per barrel of oil and
$1.94  per  mcf  of  gas  a  year  ago.

     The  availability of a ready market for our oil and gas depends on numerous
factors  beyond our control, including the demand for and supply of oil and gas,
the  proximity  of  our  natural gas reserves to pipelines, the capacity of such
pipelines,  fluctuations  in  production  and  seasonal  demand,  the effects of
inclement weather and governmental regulation.  New gas wells may be shut-in for
lack  of  a  market  until  a  gas  pipeline  or gathering system with available
capacity  is extended into the area. New oil wells may have production curtailed
until  production  facilities  and  equipment  are  acquired  or  developed. Our
business  will  always  be  subject  to  these  types  of  risks.

Regulation

     The production and sale of gas and oil are subject to a variety of federal,
state  and  local  government  regulations, including regulations concerning the
prevention  of  waste,  the  discharge  of  materials  into the environment, the
conservation of natural gas and oil, pollution, permits for drilling operations,
drilling  bonds,  reports  concerning  operations,  the  spacing  of  wells, the
unitization  and  pooling  of  properties, and various other  matters, including
taxes.  Many  jurisdictions  have  at  various  times imposed limitations on the
production  of gas and oil by restricting the rate of flow for gas and oil wells
below  their  actual  capacity to produce.  In addition, many states have raised
state  taxes  on  energy  sources  and  additional  increase may occur, although
increases  in state energy taxes would have no predictable effect on natural gas
and  oil  prices.  We  believe  we are in substantial compliance with applicable
environmental  and
                                        5

<PAGE>

 other government laws and regulations.  However, there can be no assurance that
significant  costs  for  compliance  will  not  be  incurred  in  the  future.

     All  aspects  of  the  oil  and  gas  industry are extensively regulated by
federal, state and local governments. Regulations govern such things as drilling
permits,  production  rates,  environmental  protection  and  pollution control,
royalty  rates, and taxation rates. These regulations may substantially increase
the  cost  of  doing  business  and  sometimes  prevent  or  delay  the start or
continuation  of  any given exploration or development project.  Regulations are
subject  to  future  changes  by  legislative  and  administrative action and by
judicial  decisions,  which  may  adversely  affect  the  petroleum  industry.

     We  believe  our  operations  comply  with  all  applicable legislation and
regulations  in all material respects and that the existence of such regulations
has  had  no  more  restrictivity  effect on our method of operations than other
similar  companies  in  the  industry.  Although  we do not believe our business
operations  presently  impair  environmental  quality,  compliance with federal,
state  and  local  regulations  that have been enacted or adopted regulating the
discharge  of  materials  into the environment could have an adverse effect upon
our  capital  expenditures,  earnings  and  competitive  position.

     In  the  areas  which  we  conduct  our  operations,  there  are  statutory
provisions  regulating  the  production of oil and natural gas.  These rules may
restrict  the  oil  and  gas  production  rate  to  below the rate our wells can
produce.  We  are  also  subject  to numerous laws and regulations governing the
discharge  of  materials  into  the  environment  or  otherwise  relating  to
environmental  protection.  We may be required to obtain permits before drilling
and operating our wells. Also, we may be subject to liability for pollution that
results  from our operations.  It is impossible to predict if and to what extent
these  regulations  may  impact  our  operations.

     State  regulatory  authorities  have  established  rules  and  regulations
requiring  permits  for  drilling  operations,  drilling  bonds  and/or  reports
concerning  operations.  The state regulatory authorities may also have statutes
and  regulations  concerning  the  spacing  of  wells, environmental matters and
conservation.

     We  currently  have  certain  of our lease agreements and property taxes in
arrears,  but  anticipate being able to remedy this problem in order to maintain
our  lease  rights.

     At  present,  our  compliance efforts consist of filing monthly production,
inventory  and  sales  reports with the state of Utah and the Mineral Management
Services. We are also required to file notices when there are any changes in the
wells  such as relocating tanks and pipes, cleanouts and other activity.  We may
incur  additional  costs for clean up in the event of an oil spill.  We estimate
that  we  currently  spend approximately $30,000 per year to maintain compliance
with  regulatory  requirements.  We  intend  to  comply  with  all  regulations
pertaining  to  our  operations.  However, future legislation and regulation may
have  adverse  impact  on  our  business.


Competition

     In  developing and producing oil and gas, we compete with a number of other
companies,
including  large  oil  and  gas  companies  and other independent operators with
greater financial, operational, and management resources than ours. There can be

                                        6
<PAGE>
no assurance we can compete effectively with these larger entities.  The oil and
gas  industry  is  highly  competitive  in all phases.  We will encounter strong
competition  from  other  independent oil companies in all areas of our business
including  marketing,  production,  and  obtaining  external  financing  for new
development.

Employees

     We  presently have one full-time officer and one full time office staff. In
addition,  we  employ  consultants from time-to-time to assist in evaluating oil
and gas properties.  We employ two additional full time production employees who
are  on  call  24  hours  a  day.

     Our  success  will  be  largely  dependent  upon  the  efforts  and  active
participation  of  Craig  Phillips  our  president  and  Joe  Ollivier our chief
financial  officer.  The  loss  of  the  services  of  any of these officers may
adversely  affect  our business development.  We have key man insurance in place
for  Craig  Phillips,  but do not anticipate purchasing key man insurance on any
other  employee  until  such  time  as  revenues  from  operations  allow.

     Our  directors  and  officers,  are,  or  may  become  in  their individual
capacity, officers, directors, controlling shareholders and/or partners of other
entities  engaged  in  a  variety  of  businesses.  Thus,  there exist potential
conflicts  of interest including, among other things, time, effort and corporate
opportunity,  involved  in participation with such other business entities.  The
amount  of  time,  which our officers and directors will devote to our business,
may be limited.  It is not anticipated that any of such other business interests
will  be  ones  that  are,  or  will  be,  in  competition  with  us.


     ITEM  2.  DESCRIPTION  OF  PROPERTY

Principal  Offices

     Our  offices  are  located at 3954 East Highway 40, Ballard, Uintah County,
Utah.  Our  building  consists of a total of 2,400 square feet with 1,200 square
feet  on  each  of  two floors.  All administrative and managerial functions are
performed at our office location. We have purchased our building and adjacent 10
acres  for  $29,325  and  are  current  in  our  mortgage  payments.

Oil  and  Gas  Properties

     Mountain  Oil  operates  10 developed wells, owns nine developed wells that
are  not  now in production, and owns mineral interests in five additional wells
located on 11,989 acres of leased mineral rights in Duchesne and Uintah counties
of  Utah.  The  wells  are completed in oil and gas formations between 4,000 and
17,000 feet deep. At one time all wells were producing.  However, due to lack of
maintenance  over the years, most of the wells had ceased production at the time
we  acquired  them  in  1999.  Since  July  1999, we have focused our efforts on
settling outstanding liabilities, raising capital, and reworking existing wells.

     Total  net  proved  reserves are 1,034 Mbbls of oil and 857 Mmcf of natural
gas  with  a net present value of $4,284,927, before consideration of any income
tax  affect,  as  of  December  31,  2002.  The  net present value of our proved
reserves  is  the  present  value  of  the  future  revenues we estimate will be
generated  from  production  of proved reserves net of estimated lease operating
expenses,  production  taxes,  and  future  development  costs.
                                        7
<PAGE>
     Prices  included  in the estimation of the net present value of future cash
flows  from  our  wells,  do not include future escalation of gas and oil prices
Future  cash  flows  were  discounted  at 10 percent per annum.  An oil price of
$27.23/bbl  for  black  wax crude and $31.88/bbl for yellow wax crude, and a gas
price  of  $2.73/mcf  was  used in the economic analysis of the reserves. Proved
developed  reserves  were  assigned at December 31, 2002, to eight pumping wells
totaling  157  Mbbls  of  oil  and  no  natural  gas with a net present value of
$856,655,  before income tax effects.  Proved undeveloped reserves were assigned
to two undrilled locations totaling 876 Mbbls of oil and 857 Mmcf of natural gas
with  a  net  present  value  of  $3,428,272,  before  income  tax  effects.

     On  March  1, 2003, Mountain Oil executed an agreement that, subject to the
fulfillment  of  the  terms by both parties, effectively reduces the outstanding
shares of the company, eliminates the company's debt, and leases the Company's 4
highest  producing  well  properties with their corresponding equipment to a new
entity  named Mountain Oil and Gas (MOG), of which Craig Phillips and Daniel Sam
would  be  the  officers  and directors.  Craig Phillips and Daniel Sam would be
removed  from  the  board  of  directors  and would no longer be officers of the
company.  Joseph  Ollivier  would  become  President  of  Mountain  Oil and Lynn
Stratford  would  be  added  to  the  board  of  directors  and  also become the
secretary,  treasurer, and chief financial officer of the Corporation.  Mountain
Oil would reduce the amount of shares outstanding by 807,266, which would mainly
come  stock  held  by  Craig  Phillips  and Daniel Sam.  Mountain Oil would also
receive a lease payment of $6,500 per month and the current debt by Mountain Oil
would also be transferred to MOG.  MOG has the right to lease the properties and
equipment  from  Mountain  Oil for one year and also has the ability to purchase
certain  of  Mountain Oil's equipment for $650,000 after the lease term is over.
This  agreement  is  only  effective  once all terms have been fulfilled by both
parties.

     If  this  agreement  is  not  fulfilled,  we  intend  to develop our proved
undeveloped reserves through farm out arrangements with larger oil companies and
joint  drilling  agreements.  Our  un-drilled  locations  have been evaluated by
several  independent  oil  and  gas  companies  that  have expressed interest in
participating  in the development, but we have yet to negotiate the terms of any
farm  out  or  joint drilling arrangement, and we cannot predict when we will be
able  to  do  so.

     We  do  not  own  the land on which the wells are located, but we lease the
minerals rights subject to royalty interests. The land and royalty interests are
owned by the Bureau of Land Management, the state of Utah, the Ute Indian Tribe,
or by private individuals.  The average annual rental on the lease agreements is
$1.25  per  acre per year.  Some of the leases do not require any annual payment
and are held by production, which means we hold the mineral rights lease as long
as there is production or we are developing the lease for production. Because of
cash  flow  issues,  and inability to identify certain royalty holders, Mountain
Oil,  Inc.  is  behind  on  some royalty payments to regular, non-tribal royalty
owners.  In  addition,  because  the  Bureau  of Indian Affairs had not finished
processing  paperwork  for  the  Fausset  1-26A1E and the Dye Hall wells, we are
unable to pay our royalties to the Minerals Management Service for the two wells
referenced.  We have accrued both of these liabilities on our balance sheet.  In
addition,  we  have increased our efforts to identify fee royalty owners, and to
push  our  paperwork  through the B.I.A. so that we can pay these royalties to a
more  current  status.

Oil  and  Gas  Reserve  Information

     The  following  reserve  report  is  based  upon  oil and gas sales prices,
production  history,  working  interests,  net  revenue  interests, drilling and
completion costs, and operating costs provided by Mountain Oil to an independent
                                        8
<PAGE>
petroleum engineer.  The evaluation is based upon utilization of the oil and gas
prices believed to be in effect on December 31, 2002. A field examination of the
producing  wells  was  not  conducted.

     Estimates  of  reserves  and  of  future net revenue may vary substantially
depending,  in  part,  on  the assumptions made and may be subject to adjustment
either  up  or  down  in the future.  The actual amounts of production, revenue,
taxes,  development  expenditures,  operating  expenses,  and  quantities  of
recoverable  oil  and gas reserves to be encountered may vary substantially from
the engineer's estimates.  Oil and gas reserve estimates are necessarily inexact
and  involve matters of subjective and engineering judgment.  If these estimates
of  quantities,  prices  and  costs  prove  inaccurate,  we  are unsuccessful in
increasing  our  producing oil and gas wells, and/or declines in and instability
of  oil  and  gas  prices  occur,  then  write  downs  in  the capitalized costs
associated  with  our oil and gas assets may be required.  While we believe that
the  estimated proved oil and gas reserves and estimated future net revenues are
reasonable, there is no assurance that certain revisions will not be made in the
future.

     Our  productive wells are situated on 2,080 total gross acres and 1,261 net
developed acres of oil and gas leases in Duchesne and Uintah Counties, Utah. The
wells  are  between  7,000  and 14,000 feet deep and are completed to either the
Green  River  or  Wasatch  substrata  formations.  The  following table presents
information  as  of  December  31,  2002,  on  our  productive  wells:


--------------------------------------------------------------------------------
                                Productive  Wells
--------------------------------------------------------------------------------
            Oil                        Gas                       Total
--------------------------------------------------------------------------------
    Gross          Net         Gross          Net         Gross         Net
--------------------------------------------------------------------------------
    22             22          -0-            -0-         22            22
--------------------------------------------------------------------------------

     Mountain  Oil has two 320-acre proved undeveloped drilling locations in the
Wasatch  and  Green River formations in the Altamont and Bluebell fields.  These
drilling  locations  represent  640 gross and 451 net acres of undeveloped lease
acreage.  In  addition,  Mountain  Oil  holds 9,536 gross and 8,007 net acres of
undeveloped  properties in the Altamont, Bluebell, Brundage Canyon, Myton Bench,
Duchesne,  West  Willow  Creek North, and Bridgeland fields, which have not been
assigned  proved  undeveloped reserves in the December 31, 2002, reserve report.
Mountain  Oil  intends  to lease certain of its property to Mountain Oil and Gas
(MOG) a new entity formed by Craig Phillips and Daniel Sam as previously stated,
thus eliminating the current debt and lowering the number of shares outstanding.
If  this  agreement  is  not  fulfilled in its entirety, Mountain Oil intends to
focus  its  efforts  on reworking existing wells for production and will use the
net  proceeds of this offering for that purpose. Excess cash flow from increased
production  from these wells will be used to advance our development program for
undeveloped  reserves.  During  this  period  we  also intend to implement joint
drilling agreements to develop the reserves and pursue debt and equity financing
for  specific  drilling  projects.

     The  following table sets forth certain information regarding our developed
and  undeveloped  leasehold  acreage  as  of  December  31,  2002:

                                        9
<PAGE>
--------------------------------------------------------------------------------
         Developed                 Undeveloped                   Total
--------------------------------------------------------------------------------
    Gross          Net         Gross          Net         Gross         Net
--------------------------------------------------------------------------------
    2,080         1,261        10,176         8,458       12,256       9,719
--------------------------------------------------------------------------------


     ITEM  3.  LEGAL  PROCEEDINGS

     Mountain  Oil is not a party to any material pending legal proceedings, and
to  the  best  of  its knowledge, no such proceedings by or against Mountain Oil
have  been  threatened.


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

     No matter was submitted to a shareholder vote for the fourth the quarter of
the  2002  calendar  year.


     PART  II


     ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER
               MATTERS

     In  the  second  calendar  quarter of 2001, Mountain Oil's common stock was
included  in  the  NASD's  Bulletin  Board system under the symbol  "MOLI".  The
following  table  sets  forth  the  prices  of  the  common  stock  in  the
over-the-counter  market,  as  reported and summarized by the OTC Bulletin Board
for  each  quarter in 2002.  Such prices are based on inter-dealer bid and asked
prices,  without  markup,  markdown,  commissions,  or  adjustments  and may not
represent  actual  transactions.
<TABLE>
<CAPTION>



<S>                     <C>            <C>
Calendar Quarter Ended  High Bid ($)       Low Bid ($)

March 31,2002. . . . .  $        1.46      $       0.55
June 30, 2002. . . . .  $        0.80      $       0.40
September 30, 2002 . .  $        0.67      $       0.30
December 31, 2002. . .  $        0.90      $       0.18
</TABLE>



     All  shares  of  common  stock outstanding may be sold without restriction,
except  1,522,005  shares, which are restricted securities within the meaning of
Rule  144  and  cannot  be sold without registration under the Securities Act of
1933  or  in  a  transaction  exempt  from  registration.

     Since  its  inception, no dividends have been paid on Mountain Oil's common
stock.  We  intend to retain any earnings for use in its business activities, so
it  is  not expected that any dividends on the common stock will be declared and
paid  in  the foreseeable future. At December 31, 2002, there were approximately
279  holders  of  record  of  our  common  stock.

                                       10
<PAGE>
     ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  AND  PLAN  OF
               OPERATION

Results  of  Operations  for  the  Fiscal Years Ended December 31, 2002 and 2001

     During  the  year  ended  December  31,  2002, Mountain Oil had a loss from
operations  of  $331,000  on revenues net of royalty interests, of  $578,000, as
compared  to  a  loss  from operations of $1,606,000 on revenues, net of royalty
interests,  of  $1,053,000 for calendar year 2001. The decrease in our loss from
operations  from  2001  to  2002 is attributable to substantial decreases in our
operating  costs  related  to  the  decline  in  production  due  to  pressure
fluctuations  of  our  developed oil wells, general and administrative expenses,
impairment  of  property  and  equipment,  depletion  and amortization expenses.

     Operating costs in 2002 were  $411,000, compared to  $784,000 in 2001. This
decrease  was  primarily  related  to  the decrease in production volumes due to
pressure  fluctuations  in  our  developed  oil wells. Operating costs were also
reduced  in  relation  to 2001 because of a one-time repair of its oil rig which
incurred fire damage in 2001 and resulted in significant repair costs.    Due to
volatility  of  oil  prices  and  constraints on capital funding the company has
reduced  its  rework  expenses  on  its  lower  volume  producing  wells.

     Administrative  expenses  declined in 2002 as compared to 2001 by $144,000.
We  reduced  our  administrative  and field personnel significantly in 2002 as a
result  of  lower  production volumes and limited capital resources, and thereby
reduced our payroll and related expenses significantly.  In addition the company
did  not  contemplate any mergers as it had in 2001 which reduced certain travel
and  consulting  fees.  However,  administrative  expense  as  a  percent of net
revenues  increased  by  10%  in  2002 over 2001 as a result of lower production
volumes.

     Our  expense  for  depreciation, depletion, and amortization decreased from
$597,000  in 2001, to $163,000 in 2002. This reduction was a result of lower oil
production  volumes and a lower per unit depletion cost in 2002 compared to 2001
due  to  a  significant  impairment of our oil property and equipment in 2001 of
$761,000.  The impairment in 2001 was a result of certain oil wells being deemed
uneconomical  due to reserve study estimates at prices that were in effect as of
December  31,  2001.

     At  December  31,  2002,  we  updated our reserve study. As a result of the
significant  increase  in  oil prices from approximately $16 at the beginning of
the  year  to  $25  at the end of the year, certain of our productive wells were
deemed  to  be  economical  at  December  31,  2002.  Consequently, the reserves
associated  with  these  wells  were included in proved reserves at December 31,
2002.

     Other expense and income items in 2002 did not have a significant impact on
our  results  of  operations.  Interest  expense in 2002 was  $7,000 compared to
$31,000  in  2001,  which  is a result of having significantly lower outstanding
debt.  Our  interest income totaled approximately $1,000, compared to $12,000 in
2001.  Other  income  decreased  from  $46,000  in  2001  to  $13,000.

     As  a  result  of  the  foregoing  factors,  the  company had a net loss of
$324,000 in 2002, compared to a net loss of $1,579,000 in 2001, which results in
a  loss  per  common  share  of  $.10  in  2002  compared  to  $.52  in  2001.
                                       11
<PAGE>
Liquidity  and  Capital  Resources

     At  December  31,  2002,  Mountain  Oil  had  a  working capital deficit of
$251,000, compared to a working capital deficit of $86,000 at December 31, 2001.
This  difference  in  our  working  capital deficit is a result of reductions in
production  volumes affecting cash flows from sales and the limited availability
of  long-term  debt  financing  or equity funding compared to 2001.  In February
2001, we closed a public offering after selling 715,068 shares, resulting in net
proceeds of  $1,524,053.  From the net proceeds of the offering we used $374,722
to  purchase oil well equipment,  $547,071 to rework wells, $252,233 to purchase
service  equipment,  $282,000  to  repay  outstanding  loans  from  directors of
Mountain  Oil,  $18,527  for  payment  of  interest, and $49,000 for general and
administrative  expenses.

     During  the  year  we  used cash of $9,000 for the purchase of property and
equipment.  Cash  flows  used in operating activities were $53,000.  The company
has  significantly  delayed  payment  of certain royalties and other payables to
continue  to  fund  its  operations  in  2002  and has not been able to generate
sufficient  production  volumes  to  provide  cash  flows  from  operations  to
adequately  fund  those  activities.  We  recognized  a  decrease  in  cash from
$173,000  at  the  beginning  of  2002  to  $106,000  at  the  end  of  2002.

     Mountain  Oil  suffered  from  the  substantial drop in oil prices from the
middle  of 2001 to the middle of 2002.  As a result of that period of low of oil
prices, we are only operating nine of our oil wells at reduced rates to maintain
our  existing  leases.  Our  remaining  productive  wells were not economical at
previous  oil  prices  and  we  did  not  pursue  further rework projects on our
remaining  wells  while  oil prices were at lower levels.   During late 2001 and
early  2002  we  took  steps  to  substantially reduce our operating expenses by
laying  off employees and reducing or eliminating other items. We cannot predict
at this time whether we can reach a break-even point of operation, or whether we
will  continue  to  operate at a net loss. The foregoing factors, as well as our
recurring history of losses, raises substantial doubt of our ability to continue
as a going concern.  If we are unable to further implement cost-saving measures,
which will enable us to support with revenues our operating structure, we may be
forced  to  seek  debt  or  equity  financing  from outside sources. There is no
assurance  that  we  will be successful in our efforts to sustain our operations
internally,  or  locate  financing  from  outside  sources  on  terms  that  are
acceptable  to  Mountain  Oil.

Recent  Sales  of  Unregistered  Securities

     In  April  of  2000,  we issued convertible debentures to 41 individuals in
exchange  for  $825,000.  The  debentures were issued to accredited investors in
reliance  on Section 4(2) of the Securities Act in transactions by an issuer not
involving a public offering.  Each of the investors received written information
Mountain  Oil  on  its  existing  and  proposed  business  activities, financial
condition and terms of the investment. No commissions were paid to any person in
connection  with  the  transaction.  In  March  2001, the holders of $802,000 in
principal  amount of the debentures elected to convert the debentures to 534,667
shares of our common stock.  The balance of $23,000 were redeemed by the company
in  January  2001  at  a  10%  discount.


ITEM  7.  FINANCIAL  STATEMENTS

     The  financial  statements of Mountain Oil appear at the end of this report
beginning  with  the  Index  to  Financial  Statements  on  page  17.

                                       12
<PAGE>
     ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
               ACCOUNTING  AND  FINANCIAL  DISCLOSURE

     None.


     PART  III


     ITEM  9.  DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL
               PERSONS

Directors  and  Officers

The  following  table sets forth the names, ages, and positions of our directors
and  executive  officers.

Name                    Age   Position                                    Since

Craig  K.  Phillips     50    President  and  Director               July  1999

Joseph F. Ollivier      60    Vice President - Chief Financial        July 1999
                              Officer/Investor  Relations
                              Officer  and  Director

Daniel  S.  Sam         41    Secretary,  Treasurer,  General        July  1999
                              Counsel  and  Director

Harry  L.  Peterson     59    Director                              March  2001

Biographies

     The  following  are  brief  biographies  of  the  officers  and  directors:

     Craig  K. Phillips, President and Director. Craig K. Phillips has nearly 30
years  of  experience  in  the oil industry.  Mr. Phillips began his career on a
drilling  crew  and  progressed  into managing drilling projects and oil and gas
production  services.  From  January  1995  to October 1997,  Mr.  Phillips  was
superintendent  for Uintah Oil & Gas,  and from  October 1997 through July 1999,
Mr. Phillips was self-employed as a consultant in the oil and gas industry.  Mr.
Phillips'  primary  responsibility  is  the  firm's  day-to-day operations.  Mr.
Phillips  is  one  of  the  co-founders  of  Mountain  Oil.

     Joseph  F.  Ollivier, Vice President, Chief Financial Officer and Director.
Since  1995,  Mr.  Ollivier has been a managing member of First Capital Funding,
LLC, a private mortgage company, where he supervises loan activity. Mr. Ollivier
is  responsible  for  overseeing  our  budgeting  and  financial direction.  Mr.
Ollivier  is  also the President of Datigen.com, Inc., a public company, engaged
in  the  business  of  trip  hazard  removal.
                                       13
<PAGE>
     Daniel  S. Sam, Secretary, Treasurer, General Counsel and Director. Mr. Sam
is  a  licensed  attorney and has been engaged in the practice of law in Vernal,
Utah,  focusing  on  natural  resources  law  for  the  past  nine  years.

     Harry  L.  Peterson, Director.  Harry L. ("Pete") Peterson has served since
1987 as the president of Business Insurance Group, Inc., a private company based
in  Salt  Lake  City,  Utah,  that  provides  employee  benefit  brokerage  and
administrative  services  to  businesses.


     ITEM  10.  EXECUTIVE  COMPENSATION

Annual  Compensation

     The  table  on  the following page sets forth certain information regarding
the annual and long-term compensation for services in all capacities to Mountain
Oil for the prior fiscal years ended December 31, 2001, 2000, and 1999, of those
persons  who  were  either  (i) the  chief  executive  officer  during  the last
completed  fiscal  year or (ii) one of the other  four most  highly  compensated
executive  officers as of the end of the last completed fiscal year whose annual
salary  and  bonuses  exceeded  $100,000  (collectively,  the  "Named  Executive
Officers").
<TABLE>
<CAPTION>



<S>                           <C>   <C>     <C>         <C>               <C>           <C>                    <C>
                                                                               Annual            Long Term
                                                                               Compensation      Compensation
                                                                                                 Securities Underlying
Name and Principal Position                                         Year       Salary ($)        Options/SARs (#)

Craig K. Phillips, President                                        2002       36,000                            -0-
                                                                    2001       36,000                            -0-
                                                                    2000       36,000                         25,000
                                                                    1999          -0-                            -0-
</TABLE>






Stock  Options

     No  options  were  granted  to  the  Named  Executive  Officers  in  2002.

     The  following  table  sets  forth  certain  information  with  respect  to
unexercised options held by the Named Executive Officers. No outstanding options
held  by  the  Named  Executive  Officers  were  exercised  in  2002.
<TABLE>
<CAPTION>



<S>                                                                                             <C>       <C>
                                       Number of Securities           Value of Unexercised
                                    Underlying Unexercised            In-the-Money Options
                                            Options                   At Fiscal Year End ($)
                                     at Fiscal YearEnd (#)
                                         Exercisable/                     Exercisable/
                                        Unexercisable                     Unexercisable
Name and
Principal Position

Craig K. Phillips (1) (2)                25,000/ -0-                         -0-/ -0-
  President
                                       14
<PAGE>
Joseph F. Ollivier (2)                   25,000/ -0-                         -0-/ -0-
  CFO

Daniel S. Sam (2)                        25,000/ -0-                         -0-/ -0-
  President

Harry L. Peterson (2)                    25,000/ -0-                         -0-/ -0-
  President
</TABLE>




(1)     This value is determined on the basis of the difference between the fair
market  value of the securities underlying the options and the exercise price at
December  31,  2001.  The  fair  market  value of Mountain Oil's common stock at
December  31, 2001, is determined by the last sale price on that date, which was
$1.01  per  share.

(2)     As of December 31, 2002, awards in the form of stock options to purchase
a total of 100,000 shares were outstanding under the plan. This includes options
issued  to  Craig  K.  Phillips,  our president, to purchase 25,000 shares at an
exercise price of $1.10 per share that expire in January 2010, options issued to
Joseph  F.  Ollivier  and  Daniel  S.  Sam  to purchase 25,000 shares each at an
exercise  price  of  $1.00  per  share  that expire in January 2010, and options
issued  to  Harry  L. Peterson to purchase 25,000 shares at an exercise price of
$2.25  per  share  that  expire  in  March  2011.


Description  of  Long  Term  Stock  Incentive  Plan

     The  purpose of the Long Term Stock Incentive Plan is to provide directors,
officers,  employees,  and  consultants with additional incentives by increasing
their  ownership  interest  in  Mountain  Oil.  Directors,  officers,  and other
employees  of  Mountain  Oil and its subsidiaries are eligible to participate in
the  plan.  In addition, awards may be granted to consultants providing valuable
services  to  Mountain  Oil.  As  of  December  31,  2002, Mountain Oil employed
approximately  four  individuals  who are eligible to participate in the plan. A
committee of the board or the entire board grants awards under the plan.  Awards
may  include  incentive  stock  options,  non-qualified  stock  options,  stock
appreciation  rights,  stock  units,  restricted  stock, restricted stock units,
performance  shares,  or  performance  units.

     The  committee  or  the  Board of Directors has discretion to determine the
terms  of  a  plan award, including the type of award, number of shares or units
covered by the award, option price, term, vesting schedule, and post-termination
exercise period or payment.  Notwithstanding this discretion:  (i) the number of
shares  subject  to  an award granted to any individual in any calendar year may
not  exceed 100,000 shares;  (ii) the option price per share of common stock may
not  be less than 100 percent of the fair market value of such share at the time
of grant or less than 110% of the fair market value of such shares if the option
is  an  incentive  stock option granted to a stockholder owning more than 10% of
the  combined  voting  power of all classes of the stock of Mountain Oil (a "10%
stockholder");  and (iii) the term of any incentive  stock option may not exceed
10 years,  or five years if the option is  granted to a 10%  stockholder.  As of
December  31,  2002,  awards in the form of stock options to purchase a total of
100,000  shares were outstanding under the plan. This includes options issued to
Craig K. Phillips, our president, to purchase 25,000 shares at an exercise price
                                       15
<PAGE>
of  $1.10  per  share  that  expire in January 2010, options issued to Joseph F.
Ollivier  and  Daniel S. Sam to purchase 25,000 shares each at an exercise price
of  $1.00  per share that expire in January 2010, and options issued to Harry L.
Peterson  to purchase 25,000 shares at an exercise price of $2.25 per share that
expire  in  March  2011.

     A  maximum  of 500,000 shares of common stock may be subject to outstanding
awards,  determined  immediately  after  the  grant of any award under the plan.
Shares  of  common  stock,  which  are attributable to awards that have expired,
terminated,  or  been  canceled  or  forfeited  during  any  calendar  year, are
available  for  issuance  or  use  in  connection  with  future  awards.

     The plan was effective January 15, 2000, and is not limited in duration. No
incentive  stock  option  may  be granted more than 10 years after the effective
date.  The  plan may be amended by the Board of Directors without the consent of
the stockholders, except that stockholder approval is required for any amendment
that  materially  increases  the aggregate number of shares of stock that may be
issued  under the plan or materially modifies the requirements as to eligibility
for  participation  in  the  plan.


     ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
MANAGEMENT

     The  following  table  sets  forth  as of December 31, 2002, the number and
percentage  of  the  outstanding  shares of common stock which, according to the
information supplied to Mountain Oil, were beneficially owned by (i) each person
who  is  currently  a director,  (ii) each executive officer,  (iii) all current
directors  and  executive  officers  as a group and (iv) each person who, to our
knowledge,  is  the  beneficial  owner of more than 5% of the outstanding common
stock.  Except  as otherwise indicated, the persons named in the table have sole
voting  and  dispositive  power  with  respect to all shares beneficially owned,
subject  to  community  property  laws  where  applicable.

<TABLE>
<CAPTION>



<S>                                                        <C>                   <C>  <C>
Name and Address                           Common Shares.             Percent of Class (1)

Craig K. Phillips (2)(3)                      396,010                         12.7
P.O. Box 1622
Roosevelt, UT 84066

Joseph F. Ollivier (2)(3)                     307,800                          9.8
3191 N. Canyon Rd.
Provo, UT 84604

Daniel S. Sam (2)(3)                          371,182                         11.9
319 W. 100 South
Vernal, UT 84078

Harry L. Peterson (2)(4)                      184,117                          5.9
2063 N. Main
Centerville, UT 84014
                                       16
<PAGE>
All officers and Directors as
a Group (4 persons)                         1,259,109                         39.3
</TABLE>



(1) These figures represent the percentage of ownership of the named individuals
assuming  each of them alone has exercised his options, and percentage ownership
of  all  officers  and directors as a group assuming all purchase rights held by
such  individuals  are  exercised.

(2)  These  persons  are  all  executive  officers or directors of Mountain Oil.


(3)  The  number of shares listed for Craig K. Phillips includes shares issuable
under  an  option to purchase 25,000 shares of common stock at an exercise price
of  $1.10 per share. The number of shares listed for Joseph F. Ollivier includes
shares  issuable under an option to purchase 25,000 shares of common stock at an
exercise price of $1.00 per share. The number of shares listed for Daniel S. Sam
includes  shares  issuable  under  an option to purchase 25,000 shares of common
stock  at  an  exercise  price  of  $1.00  per  share.


(4)  The  shares  attributed to Harry L. Peterson include 111,117 shares held in
the  name  of PKP Investments, a limited liability company of which Mr. Peterson
is the president, 25,000 shares issuable under an option at an exercise price of
$2.25  per  share,  and  48,000  shares  in  the  name  of  Harry  L.  Peterson.


     ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

On  May  16,  2002,  Mr.  Ollivier and Mr. Peterson made additional loans to the
company  of  which  $9,016  is left owing as of December 31, 2002.  During 2002,
Mountain  Oil,  Inc.  loaned $12,193.87 to PetroCo, Inc., of which Mr. Phillips,
President  of  Mountain  Oil, Inc. is a principal officer. These loans were made
prior  to  July  31,  2002,  the effective date of the Sarbanes Oxley Act, which
prohibits  personal loans to officers and directors.  On March 1, 2003, Mountain
Oil  executed an agreement that, subject to the fulfillment of the terms by both
parties,  effectively  reduces the outstanding shares of the company, eliminates
the  company's debt, and leases the equipment to a new entity named Mountain Oil
and  Gas (MOG), of which Craig Phillips and Daniel Sam would be the officers and
directors.  Craig  Phillips  and  Daniel  Sam would be removed from the board of
directors and would no longer be officers of the company.  Joseph Ollivier would
become  President of Mountain Oil and Lynn Stratford would be added to the board
of  directors  and  also  become  the  secretary, treasurer, and chief financial
officer  of  the  Corporation.  This  agreement is only effective once all terms
have  been  fulfilled  by  both  parties.


     ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

Exhibits

Exhibit  No.  Title  of  Document                                       Location

    3.1     Articles  of  Incorporation                                        *

    3.2     Amended  Articles  of  Incorporation                               *
                                       17
<PAGE>
    3.3     By-Laws                                                            *

   10.1     Form  of  Oil  and  Gas  Lease  with  U.S.  Bureau  of  Land       *
               Management**

   10.2     Form  of  Oil  and  Gas  Lease  with  U.S.  Bureau  of  Land       *
            Management**

   10.3     Form  of  Oil  and  Gas  Lease  with  U.S.  Bureau  of             *
            Indian  Affairs**


   10.4     Form  of  Oil  and  Gas  Lease  with  Private  Person  **          *

   10.5     Schedule  of  Leases  with  BLM,  BIA,  and  Private               *
            Persons*

   10.6     Options  Issued  to  Management  -  Phillips                       *

   10.7     Options  Issued  to  Management  -  Ollivier                       *

   10.8     Options  Issued  to  Management  -  Sam                            *

   10.9     Options  Issued  to  Management  -  Peterson

   10.10    Stock  Option  Plan                                                *

*  These  exhibits  are  incorporated herein by this reference to Mountain Oil's
Registration  Statement  on  Form  SB-2  filed  with the Securities and Exchange
Commission  on  May  25, 2000 as amended by Amendment No. 1 filed on October 19,
2000,  Amendment  No. 2 filed on December 27, 2000, and Amendment No. 3 filed on
January  16,  2001.

Form  8-K  Filings

     No  reports on Form 8-K were filed during the fourth quarter ended December
31,2001.


     ITEM  14.   CONTROLS  AND  PROCEDURES

The  Company's  chief executive officer and chief financial officer ("Certifying
Officers")  are responsible for establishing and maintaining disclosure controls
and  procedures  for the Company. The Certifying Officer has concluded (based on
his  evaluation  of these controls and procedures as of a date within 90 days of
the  filing  of  this  report)  that  the  design and operation of the Company's
disclosure  controls  and  procedures  (as  defined  in Rule 13a-14(c) under the
Securities Exchange Act of 1934) are effective. No significant changes were made
in  the Company's internal controls or in other factors that could significantly
affect  those  controls  subsequent to the date of the evaluation, including any
corrective  actions  with regard to slight deficiencies and material weaknesses.
                                       18
<PAGE>
                                   SIGNATURES

     In  accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused  this report to be signed on its behalf by the undersigned thereunto duly
authorized.

                                   MOUNTAIN  OIL,  INC.

Date:  March  7, 2003                 By:  /s/ Craig K. Phillips, President, CEO

Date:  March  7,  2003                By:  /s/  Joseph  F.  Ollivier,
                                                Chief  Financial Officer

     In  accordance  with the Exchange Act, this registration statement has been
signed  by  the  following  persons  on  behalf  of  the  registrant  and in the
capacities  and  on  the  dates  indicated.


Date:  March  7,  2003                      /s/  Craig  K.  Phillips,  Director


Date:  March  7,  2003                      /s/  Joseph  F.  Ollivier,  Director


Date:  March  7,  2003                      /s/  Daniel  S.  Sam,  Director


Date:  March  7,  2003                      /s/  Harry  L.  Peterson,  Director

                                       19
<PAGE>

<TABLE>
<CAPTION>



<S>                                        <C>  <C>   <C>  <C>  <C>
                                                                PAGE
                                                                ----


Independent Auditor's report                                     F-2


Balance sheet                                                    F-3


Statement of operations                                          F-4


Statement of stockholders' equity                                F-5


Statement of cash flows                                          F-6


Notes to financial statements                                    F-7


Schedules of supplementary information on
  oil and gas operations                                        F-21
</TABLE>

<PAGE>
                                                    INDEPENDENT AUDITOR'S REPORT



TO  THE  BOARD  OF  DIRECTORS  AND
STOCKHOLDERS  OF  MOUNTAIN  OIL,  INC.

We  have  audited  the  accompanying  balance  sheet of MOUNTAIN OIL, INC. as of
December  31,  2002  and  2001,  and  the  related  statements  of  operations,
stockholders'  equity, and cash flows for the years then ended.  These financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the  financial  position  of  MOUNTAIN OIL, INC. as of
December  31,  2002  and  2001,  and  the  related  statements  of  operations,
stockholders' equity, and cash flows for the years then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will continue as a going concern.  As discussed in note 2 to
the  financial  statements,  the  Company  has a working capital deficiency, has
property  taxes  in  arrears,  does  not  have sufficient capital to develop its
proved  reserves,  and  has  incurred substantial losses from operations.  These
conditions  raise substantial doubt about the ability of the Company to continue
as  a  going  concern.  Management's  plans  in regard to these matters are also
described  in  note  2.  The financial statements do not include any adjustments
that  might  result  from  the  outcome  of  this  uncertainty.





Salt  Lake  City,  Utah
January  29,  2003

                                      F-2
<PAGE>
Balance Sheet
December 31,

<TABLE>
<CAPTION>


<S>                                                    <C>           <C>
ASSETS. . . . . . . . . . . . . . . . . . . . . . . .         2002          2001
-----------------------------------------------------  ------------  ------------

Current assets:
Cash. . . . . . . . . . . . . . . . . . . . . . . . .  $   106,000   $   173,000
Accounts receivable . . . . . . . . . . . . . . . . .       39,000        44,000
Related party receivables . . . . . . . . . . . . . .       18,000        23,000
Inventory . . . . . . . . . . . . . . . . . . . . . .       55,000        50,000
Other current assets. . . . . . . . . . . . . . . . .        3,000         4,000
                                                       ------------  ------------

Total current assets. . . . . . . . . . . . . . . . .      221,000       294,000

Property and equipment, net . . . . . . . . . . . . .    1,057,000     1,211,000
                                                       ------------  ------------

                                                       $ 1,278,000   $ 1,505,000
                                                       ============  ============


LIABILITIES AND STOCKHOLDERS' EQUITY
-----------------------------------------------------

Current liabilities:
Cash overdraft. . . . . . . . . . . . . . . . . . . .  $         -   $    66,000
Accounts payable. . . . . . . . . . . . . . . . . . .      246,000       163,000
Accrued expenses. . . . . . . . . . . . . . . . . . .      203,000       118,000
Related party advances payable. . . . . . . . . . . .       13,000             -
Current portion of long-term debt . . . . . . . . . .       10,000        33,000
                                                       ------------  ------------

Total current liabilities . . . . . . . . . . . . . .      472,000       380,000

Long-term debt. . . . . . . . . . . . . . . . . . . .       29,000        39,000

Commitments . . . . . . . . . . . . . . . . . . . . .            -             -

Stockholders' equity:
Preferred stock, no par value, audthorized 10,000,000
  shares;  no shares issued or outstanding. . . . . .            -             -
Common stock, no par value, 50,000,000 shares
  authorized; 3,129,249 and 3,109,249 shares
  issued and outstanding, respectively. . . . . . . .    3,099,000     3,084,000
Accumulated deficit . . . . . . . . . . . . . . . . .   (2,322,000)   (1,998,000)
                                                       ------------  ------------

Total stockholders' equity. . . . . . . . . . . . . .      777,000     1,086,000
                                                       ------------  ------------

                                                       $ 1,278,000   $ 1,505,000
                                                       ============  ============
</TABLE>

                                      F-3
<PAGE>

Statement Of Operations
<TABLE>
<CAPTION>



<S>                                               <C>          <C>
                                                        2002          2001
                                                  -----------  ------------

Oil and gas sales, net . . . . . . . . . . . . .     569,000       920,000
Other revenues . . . . . . . . . . . . . . . . .       9,000       133,000
                                                  -----------  ------------

                                                     578,000     1,053,000

Costs and expenses:
Operating costs. . . . . . . . . . . . . . . . .     411,000       784,000
Production and other taxes . . . . . . . . . . .      31,000        69,000
General and administrative expenses. . . . . . .     304,000       448,000
Impairment of property and equipment . . . . . .           -       761,000
Depreciation, depletion and amortization expense     163,000       597,000
                                                  -----------  ------------

Total operating expenses . . . . . . . . . . . .     909,000     2,659,000
                                                  -----------  ------------

Loss from operations . . . . . . . . . . . . . .    (331,000)   (1,606,000)
                                                  -----------  ------------

Other income (expense):
Interest expense . . . . . . . . . . . . . . . .      (7,000)      (31,000)
Other income . . . . . . . . . . . . . . . . . .      13,000        46,000
Interest income. . . . . . . . . . . . . . . . .       1,000        12,000
                                                  -----------  ------------

Loss before provision for income taxes . . . . .    (324,000)   (1,579,000)

Benefit from income taxes. . . . . . . . . . . .           -             -
                                                  -----------  ------------

Net loss . . . . . . . . . . . . . . . . . . . .  $ (324,000)  $(1,579,000)
                                                  ===========  ============

Loss per common share - basic and diluted. . . .  $     (.10)  $      (.52)
                                                  ===========  ============

Weighted average number of common shares -
basic and diluted. . . . . . . . . . . . . . . .   3,119,000     3,015,000
                                                  ===========  ============
</TABLE>
                                      F-4
<PAGE>
Statement Of Stockholders' Equity
<TABLE>
<CAPTION>



<S>                           <C>              <C>            <C>                  <C>         <C>           <C>
                                       PREFERRED STOCK                    COMMON STOCK         ACCUMULATED
                              ---------------------------------------------------------------
                              SHARES           AMOUNT         SHARES               AMOUNT      DEFICIT       TOTAL
                              ---------------  -------------  -------------------  ----------  ------------  -----------

Balance, January 1, 2001 . .                -  $           -            1,859,500  $  735,000  $  (419,000)  $   316,000

Common stock issued for:
Cash . . . . . . . . . . . .                -              -              715,082   1,547,000            -     1,547,000
Debt . . . . . . . . . . . .                -              -              534,667     802,000            -       802,000

Net loss . . . . . . . . . .                -              -                    -           -   (1,579,000)   (1,579,000)
                              ---------------  -------------  -------------------  ----------  ------------  ------------

Balance, December 31, 2001 .                -              -            3,109,249   3,084,000   (1,998,000)    1,086,000

Common stock issued for cash                -              -               20,000      15,000            -        15,000

Net loss . . . . . . . . . .                -              -                    -           -     (324,000)     (324,000)
                              ---------------  -------------  -------------------  ----------  ------------  ------------

Balance, December 31, 2002 .                -  $           -            3,129,249  $3,099,000  $(2,322,000)  $   777,000
                              ===============  =============  ===================  ==========  ============  ============
</TABLE>
                                      F-5
<PAGE>
Statement Of Cash Flows

<TABLE>
<CAPTION>



<S>                                             <C>         <C>
                                                     2002          2001
                                                ----------  ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss . . . . . . . . . . . . . . . . . . .  $(324,000)  $(1,579,000)
Adjustments to reconcile net loss to net cash
  used in operating activities:
Depreciation and depletion . . . . . . . . . .    163,000       597,000
Impairment of property and equipment . . . . .          -       761,000
Allowance for doubtful accounts. . . . . . . .    (17,000)       17,000
Decrease (increase) in:
Accounts receivable. . . . . . . . . . . . . .     45,000        29,000
Related party receivables. . . . . . . . . . .    (18,000)            -
Inventory. . . . . . . . . . . . . . . . . . .     (5,000)        8,000
Other current assets . . . . . . . . . . . . .      1,000        75,000
Deposits . . . . . . . . . . . . . . . . . . .          -        11,000
Increase (decrease) in:
Cash overdraft . . . . . . . . . . . . . . . .    (66,000)       66,000
Accounts payable . . . . . . . . . . . . . . .     83,000      (158,000)
Accrued expenses . . . . . . . . . . . . . . .     85,000       105,000
                                                ----------  ------------

Net cash used in operating activities. . . . .    (53,000)      (68,000)
                                                ----------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES-
purchase of property and equipment . . . . . .     (9,000)   (1,421,000)
                                                ----------  ------------

Net cash used in investing activities. . . . .     (9,000)   (1,421,000)
                                                ----------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock . . . .     15,000     1,547,000
Payments on related party notes payable. . . .          -      (338,000)
Payments on long-term debt . . . . . . . . . .    (33,000)       (7,000)
Proceeds from related party notes payable. . .     13,000             -
                                                ----------  ------------

Net cash (used in) provided by
financing activities . . . . . . . . . . . . .     (5,000)    1,202,000
                                                ----------  ------------

Net change in cash and cash equivalents. . . .    (67,000)      159,000

Cash and cash equivalents at beginning of year    173,000        14,000
                                                ----------  ------------

Cash and cash equivalents at end of year . . .  $ 106,000   $   173,000
                                                ==========  ============
</TABLE>
                                      F-6
<PAGE>




                                                   NOTES TO FINANCIAL STATEMENTS

                                                      DECEMBER 31, 2002 AND 2001
<TABLE>
<CAPTION>




<S>             <C>
1.ORGANIZATION  ORGANIZATION AND BUSINESS
AND
SUMMARY OF . .  Mountain Oil, Inc. (the Company) is incorporated  under the laws of
SIGNIFICANT. .  the state of Utah and is primarily engaged in the business of
ACCOUNTING . .  producing and selling oil and gas through re-developing existing wells.
POLICIES . . .  All of the companies operations are conducted in the continental
                United States.


                CASH AND CASH EQUIVALENTS

                For purposes of the statement of cash flows, the Company considers
                all highly liquid investments with a maturity of three months or less to
                be cash equivalents.


                CONCENTRATION OF CREDIT RISK

                Financial instruments which potentially subject the Company to
                concentration of credit risk consist primarily of trade receivables.  In
                the normal course of business, the Company provides credit terms to
                its customers.  Accordingly, the Company performs ongoing credit
                evaluations of its customers and maintains allowances for possible
                losses which, when realized, have been within the range of
                management's expectations.


                The Company maintains its cash in bank deposit accounts which, at
                times, may exceed federally insured limits.  The Company has not
                experienced any losses in such account.  The Company believes it is
                not exposed to any significant credit risk on cash and cash
                equivalents.
</TABLE>

                                      F-7
<PAGE>


<TABLE>
<CAPTION>




<S>                            <C>

<PAGE>
MOUNTAIN OIL, INC.
NOTES TO FINANCIAL STATEMENTS
CONTINUED



1.  ORGANIZATION. . . . . . .  OIL AND GAS PRODUCING ACTIVITIES
 AND
 SUMMARY OF . . . . . . . . .  The Company utilizes the successful efforts method of accounting for
 SIGNIFICANT. . . . . . . . .  its oil and gas producing activities.  Under this method, all costs
 ACCOUNTING . . . . . . . . .  associated with productive exploratory wells and productive or
 POLICIES . . . . . . . . . .  nonproductive development wells are capitalized while the costs of
 CONTINUED. . . . . . . . . .  nonproductive exploratory wells are expensed.  If an exploratory well
                               finds oil and gas reserves, but a determination that such reserves can
                               be classified as proved is not made after one year following
                               completion of drilling, the costs of drilling are charged to operations.
                               Indirect exploratory expenditures, including geophysical costs and
                               annual lease rentals, are expensed as incurred.  Unproved oil and
                               gas properties that are individually significant are periodically
                               assessed for impairment of value, and a loss is recognized at the time
                               of impairment.  Capitalized costs of producing oil and gas properties,
                               after considering estimated dismantlement and abandonment costs
                               and estimated salvage values, are depreciated and depleted by the
                               unit-of-production method.  Support equipment and other property
                               and equipment are depreciated over their estimated useful lives.


                               On the sale or retirement of a complete unit of a proved property, the
                               cost and related accumulated depreciation, depletion, and
                               amortization are eliminated from the property accounts, and the
                               resultant gain or loss is recognized.  On the retirement or sale of a
                               partial unit of proved property, the cost is charged to accumulated
                               depreciation, depletion, and amortization with a resulting gain or loss
                               recognized in income.


                               On the sale of an entire interest in an unproved property for cash or
                               cash equivalent, gain or loss on the sale is recognized, taking into
                               consideration the amount of any recorded impairment if the property
                               had been assessed individually.  If a partial interest in an unproved
                               property is sold, the amount received is treated as a reduction of the
                               cost of the interest retained.

                               INVENTORY

                               Inventory consists mainly of crude oil and are recorded at estimated
                               net realizable value as of December 31, 2002. and 2001
</TABLE>
                                      F-8



<PAGE>
<TABLE>
<CAPTION>




<S>               <C>
1.  ORGANIZATION  PROPERTY AND EQUIPMENT
 AND
 SUMMARY OF. . .  Property and equipment are stated at cost less accumulated
 SIGNIFICANT . .  depreciation.  Depreciation is provided using the straight-line method
 ACCOUNTING. . .  over the estimated useful lives of the assets.  Expenditures for
 POLICIES. . . .  maintenance and repairs are expensed when incurred and
 CONTINUED . . .  betterments are capitalized.  When assets are sold, retired or
                  otherwise disposed of, the applicable costs and accumulated
                  depreciation, depletion, and amortization are removed from the
                  accounts, and the resulting gain or loss is reflected in operations.

                  INCOME TAXES

                  Deferred income taxes arise from temporary differences resulting
                  from income and expense items reported for financial accounting and
                  tax purposes in different periods.  Deferred taxes are classified as
                  current or non-current, depending on the classification of the assets
                  and liabilities to which they relate.  Deferred taxes arising from
                  temporary differences that are not related to an asset or liability are
                  classified as current or non-current depending on the periods in which
                  the temporary differences are expected to reverse.

                  REVENUE RECOGNITION

                  Revenue is recognized from oil sales at such time as the oil is
                  delivered to the buyer.  Revenue is recognized from gas sales when
                  the gas passes through the pipeline at the well head. Oil and gas
                  sales are reported net of royalty fees, which fees were $127,000 and
                  194,000 for the years ended December 31, 2002 and 2001,
                  respectively.  Revenues from services provided to other well
                  operators are recognized when the services have been performed.


                  The Company does not have any gas balancing arrangements.

                  USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

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


                                      F-9

<PAGE>
<TABLE>
<CAPTION>




<S>                                    <C>
1.  ORGANIZATION. . . . . . . . . . .  EARNINGS PER SHARE
 AND
 SUMMARY OF . . . . . . . . . . . . .  The computation of basic earnings per common share is based on the
 SIGNIFICANT. . . . . . . . . . . . .  weighted average number of shares outstanding during the period.
 ACCOUNTING
 POLICIES
 CONTINUED. . . . . . . . . . . . . .  The computation of diluted earnings per common share is based on the
                                       weighted average number of shares outstanding during the period plus
                                       the common stock equivalents which would arise from the exercise of
                                       stock options and warrants outstanding using the treasury stock
                                       method and the average market price per share during the period.
                                       Options to purchase 100,000 shares of common stock at prices ranging
                                       from $1.00 to $2.25 per share were outstanding at December 31, 2002
                                       and 2001.  Options to purchase shares of common stock were not
                                       included in the diluted loss per share calculation because the effect
                                       would have been antidilutive.


                                       STOCK-BASED COMPENSATION

                                       The Company accounts for stock options granted to employees under
                                       the recognition and measurement principles of APB Opinion No. 25,
                                       Accounting for Stock Issued to Employees, and related Interpretations,
                                       and has adopted the disclosure-only provisions of Statement of
                                       Financial Accounting Standards (SFAS) No. 123, "Accounting for
                                       Stock-Based Compensation."  Accordingly, no compensation cost has
                                       been recognized in the financial statements, as all options granted
                                       under those plans had an exercise price equal to or greater than the
                                       market value of the underlying common stock on the ate of grant.  Had
                                       the Company's options been determined based on the fair value
                                       method, the results of operations would have been reduced to the pro
                                       forma amounts indicated below:


                                                                                2002                2001
                                                                           ----------------   ---------------

                                       Net loss applicable to common
                                         shares - as reported                (324,000)             (1,579,000)
                                       Deduct:
                                         Total stock based employee
                                           compensation expense
                                           determined under fair value
                                           based method for all awards,
                                           net of related tax effects              -                 (51,000)
                                                                           ----------------   ---------------


                                       Net loss applicable to common
                                         shares - pro forma                  (324,000)              (1,630,000)
                                       Loss per common share - as reported       (.10)                    (.52)
                                       Loss per common share - pro forma         (.10)                    (.54)
                                                                           ================    ================

</TABLE>

                                      F-10

<PAGE>
<TABLE>
<CAPTION>




<S>                                                                              <C>
1.  ORGANIZATION                       The fair value of each option grant is estimated on the date of grant
    AND                                using the Black-Scholes option pricing model with the following
    SUMMARY OF                         assumptions in 2001:
    SIGNIFICANT
    ACCOUNTING                         Expected dividend yield                                    $        -
    POLICIES                           Expected stock price volatility                                 84.69%
    CONTINUED                          Risk-free interest rate                                          4.75%
                                       Expected option life                                           5 years



                  RECLASSIFICATION
                  Certain accounts in the 2001 financial statements have been
                  reclassified to conform with the current year presentation.


2.  GOING
   CONCERN        The accompanying financial statements have been prepared assuming
                  that the Company will continue as a going concern.  As of
                  December 31, 2002, the Company had a working capital deficiency, an
                  accumulated deficit, and has incurred substantial operating losses.  In
                  addition, the Company is in violation of certain gas and oil lease
                  agreements because it has not met its annual rent obligations
                  according to the terms of those agreements.  The company has not
                  complied with state property tax payment requirements and is subject
                  to loosing certain of its gas and oil lease properties if those payments
                  are not satisfied.  The Company is not generating sufficient capital to
                  develop its proved reserves and may not be able to obtain sufficient
                  capital to do so. These conditions raise substantial doubt about the
                  ability of the Company to continue as a going concern.  The financial
                  statements do not include any adjustments that might result from the
                  outcome of these uncertainties.


                  Management intends to comply with annual lease rental payment
                  requirements and pay its property taxes which are in arrears to
                  safeguard its rights to oil and gas lease properties.  Management also
                  intends to restructure the Company operations in order to generate
                  cash flows from operations and obtain further equity financing.
                  However, there can be no assurance that the Company will be
                  successful in its efforts to comply with its lease and property tax
                  obligations, restructure its operations, or secure equity financing.


                                      F-11
<PAGE>
3.  ACCOUNTS. . . . . . . . . . . .  Accounts receivable is comprised of the following at December 31:
    RECEIVABLE
                                                                             2002                 2001
                                                                        ------------------------------
                                       Trade accounts receivable        $   39,000         $    61,000
                                       Allowance for doubtful accounts          -              (17,000)
                                                                        ==============================
                                                                        $   39,000         $    44,000

4.  PROPERTY AND. . . . . . . . . .  Property and equipment consist of the following at December 31:
    EQUIPMENT
                                                                             2002                 2001
                                                                        ------------------------------

                                       Oil and gas properties
                                         (successful efforts method)    $1,198,000         $ 1,191,000
                                       Oil and gas equipment
                                         (successful efforts method)       504,000             502,000
                                       Vehicles and equipment              334,000             334,000
                                       Building                             36,000              36,000
                                       Office furniture and fixtures        12,000              12,000
                                                                        ------------------------------

                                                                         2,084,000           2,075,000

                                       Less accumulated depreciation,
                                         and depletion                  (1,027,000)          (864,000)
                                                                        ------------------------------
                                                                         1,057,000           1,211,000



5.  ACCRUED. . . . . . . . . . . .  Accrued expenses are comprised of the following at December 31:
    EXPENSES
                                                                             2002                 2001
                                                                        ------------------------------
                                       Royalties                           164,000             100,000
                                       Production taxes                     21,000               8,000
                                       Payroll expenses                     10,000              10,000
                                       Other expenses                        8,000                  -
                                                                        ------------------------------
                                                                           203,000             118,000
                                                                        ==============================
                                      F-12
<PAGE>
6.  LONG-TERM.. . . . . . . . . . . Long-term debt consists of the following at December 31:
    DEBT
                                                                             2002                 2001
                                                                        ------------------------------
                                       Mortgage payable, due in monthly
                                       installments of $300, including
                                       interest at 8%, secured by real
                                       property, and maturing in August
                                       2010                              $  22,000        $     24,000

                                       Note payable to a finance
                                       company, due in monthly
                                       installments of $500,
                                       including interest at 10.3%,
                                       secured by equipment and
                                       maturing in November 2004            10,000             15,000

                                       Note payable to a bank bearing
                                       interest at 9.45%, secured by
                                       vehicles and due in monthly
                                       installments of $340, maturing
                                       in October 2004                       7,000             10,000

                                       Convertible debentures with an
                                       effective interest rate of 12%,
                                       convertible into common stock at
                                       $1.50 per share, due March 2002         -               23,000
                                                                        ------------------------------
                                                                            39,000             72,000
                                       Less current portion                (10,000)           (33,000)
                                                                        ------------------------------
                                       Long-term debt                   $   29,000        $    39,000
                                                                        ==============================

                                      F-13
<PAGE>
                                       Future maturities of long-term debt are as follows:

                                          YEAR ENDING DECEMBER 31:                     AMOUNTS
                                          ------------------------                  ----------
                                               2003                                 $   10,000
                                               2004                                     11,000
                                               2005                                      3,000
                                               2006                                      3,000
                                               2007                                      3,000
                                               Thereafter                                9,000
                                                                                    ----------
                                                                                        39,000
                                                                                    ==========
</TABLE>




<PAGE>
<TABLE>
<CAPTION>




<S>              <C>
7.  COMMITMENTS  GAS AND OIL ROYALTIES AND LEASE PAYMENTS
    AND
    CONTINGENCIES.  The Company has not paid its royalties in the amount of $164,000 and
                 lease obligations in the amount of $7,000 according to terms of
                 several of its gas and oil leases.  Violation of the terms of these
                 agreements subject the company to significant risk of loosing their
                 leasehold rights to produce oil and gas.  The Company is unaware of
                 any pending or threaten litigation to this intent and has accrued these
                 delinquent payments in current liabilities.

                 PROPERTY TAXES

                 The Company has included in accounts payable approximately
                 21,000 of property taxes in arrears.  The Company's highest
                 producing well, which constitutes almost one-third of the Company's
                 total production, will become delinquent by five years in March 2003.
                 This subjects that property to repossession by the State of Utah in
                 which all rights of the Company on the property would cease.  Other
                 wells will be subject to the same conditions if property taxes become
                 delinquent by five years.

8.  IMPAIRMENT.  As of December 31, 2001, based on an updated reserve study, dated
    OF OIL       as of December 31, 2001, the Company determined that its oil and
    AND GAS      gas properties were impaired.  The principal reason for such
    PROPERTIES   impairment was the significant decline in oil and gas prices during
                 2001.  Due to the decline in prices, certain wells were considered to
                 be uneconomical for development as of December 31, 2001.
                 Therefore the reserves associated with such wells were not included
                 as proved reserves.  The impairment, calculated on a well by well
                 basis, was based on the amount of recorded costs in excess of the
                 net future discounted cash flows from such wells.  The total amount of
                 impairment recorded for the years ended December 31, 2002 and
                 2001 was $0 and $761,000, respectively.
</TABLE>


                                      F-14


<PAGE>
<TABLE>
<CAPTION>




<S>                                     <C>
9.  INCOME
    TAXES  . . . . . . . . . . . . . .  The provision for income taxes differs from the amount computed at
                                        federal statutory rates as follows at December 31:


                                                                                   2002                     2001
                                                                                  ------------    --------------
                                       Income tax benefit at statutory rate        $ 122,000          $  584,000
                                       Depletion carry forward                        17,000              15,000
                                       Other                                           1,000               1,000
                                       Change in valuation allowance                (140,000)           (600,000)
                                                                                 -------------    --------------

                                                                                  $       -        $         -
                                                                                  ===============   ============

                                        Deferred tax assets (liabilities) are comprised of the following at
                                        December 31:


                                                                                   2002                    2001
                                                                               ---------           ------------

                                       Net operating loss carry forward            $  586,000     $    464,000
                                       Depreciation and depletion                     (43,000)         (44,000)
                                       Impairment on fixed assets                     284,000          284,000
                                       Allowance for bad debt                              -             6,000
                                       Depletion carry forward                         53,000           30,000
                                       Valuation allowance                           (880,000)        (740,000)
                                                                                   -----------     ------------
                                                                                   $       -       $         -
                                                                                   ===========     ============

                                        A valuation allowance has been recorded for the full amount of the
                                        deferred tax asset because it is more likely than not that the deferred
                                        tax asset will not be realized.


                                        As of December 31, 2002, the Company had a net operating loss carry
                                        forward of approximately $1,571,000.  This carry forward begins to
                                        expire in 2019.  If substantial changes in the Company's ownership
                                        should occur, there would be an annual limitation of the amount of
                                        NOL carry forward which could be utilized.  The ultimate realization of
                                        this carry forward is due, in part, on the tax law in effect at the time and
                                        future events which cannot be determined.
</TABLE>




                                      F-15

<PAGE>
<TABLE>
<CAPTION>




<S>                  <C>
10.  SALES TO . . .  The Company's had sales to entities which represent more than 10%
 MAJOR. . . . . . .  as follows for the years ended December 31:
 CUSTOMER

                                                              2002                      2001
                                                           -----------              ---------
                                       Company A           $   680,000            $   847,000
                                       Company B           $        -             $   244,000
                                       Company C           $        -             $   124,000



11.  RELATED PARTY.  Related party advances payables at December 31, 2002 consisted of
     TRANSACTIONS . .advances payable to officers and shareholders totaling $13,000, with
                     no specific repayment terms and bearing no interest.

                     Related party receivables, at December 31, 2002 consist of advances
                     of $13,000 to the president of the company and an advance to an
                     employee of $5,000.  The amount is due on demand and unsecured.


12.  SUPPLEMENTAL .  Operations reflect actual amounts paid for interest and income taxes
 DISCLOSURES. . . .  as follows:
 OF CASH FLOW
 INFORMATION
                                                              2002                      2001
                                                           -----------               -------

                                       Interest            $   7,000              $   31,000
                                                           -----------            ----------
                                       Income taxes        $      -               $        -


                     During the year ended December 31, 2001:

                     -  The Company issued 534,667 shares of common stock in
                     exchange for $802,000 of convertible debt.

                     -  The Company acquired vehicles of $11,000, in exchange for
                     long-term debt.
</TABLE>



                                      F-16

<PAGE>
<TABLE>
<CAPTION>




<S>             <C>
13.  PREFERRED  The Company's preferred stock may be issued from time to time in one
     STOCK . .  or more series, with such distinctive serial designations as may be
                stated or expressed in the resolution or resolutions providing for the
                issue of such stock adopted from time to time by the Board of
                Directors.  In such resolution or resolutions providing for the issuance
                of shares of each particular series, the Board of Directors is also
                expressly authorized to fix:


                -  The right to vote


                -  The consideration for which the shares of such series are to be
                issued, the number of shares constituting such series and
                whether shares of such series shall be subject to redemption
                and the terms


                -  The rate of dividends, the times at which dividends shall be
                payable, and preferences and whether such dividends shall be
                cumulative or non-cumulative


                -  The rights which the holders of shares of such series shall
                have in the event of any voluntary or involuntary liquidation,
                merger, consolidation, distribution or sale of assets, dissolution
                or winding up of the affairs of the corporation


                The rights which the holder of shares of such series shall have to
                convert such shares into or exchange such shares for shares of any
                other class or any other series of stock of the corporation
</TABLE>



                                      F-17

<PAGE>
<TABLE>
<CAPTION>




<S>                                                   <C>
14.  STOCK . . . . . . . . . . . . . . . . . . . . .  A summary of the stock option and warrant activity is as follows:
     OPTIONS AND
     WARRANTS
                                                                                                  WEIGHTED
                                                                                                  AVERAGE
                                                                                 NUMBER OF        EXERCISE
                                                                                 SHARES           PRICE
                                                                                --------------------------

                                       Outstanding at January 1, 2001               75,000        $   1.03
                                          Granted                                   25,000        $   2.25
                                          Exercised                                     -               -
                                                                                --------------------------

                                       Outstanding at December 31, 2001            100,000       1.03-2.25
                                          Granted                                       -               -
                                          Exercised                                     -               -
                                                                                --------------------------


                                       Outstanding at December 31, 2002           100,000        1.03-2.25
                                                                                ==========================

                                   The weighted average fair value of options granted during the year
                                   ended December 31, 2001 is $2.03.  No options were granted in 2002.

                                   The following table summarizes information about stock options and
                                   warrants outstanding at December 31, 2002:


                                      OUTSTANDING                      EXERCISABLE
                                --------------------------------------------------------------------------
                                            WEIGHTED
                                            AVERAGE         WEIGHTED                         WEIGHTED
               RAGNGE OF                    REMAINING       AVERAGE                          AVERAGE
               EXERCISE        NUMBER       CONTRACTUAL     EXERCISE          NUMBER         EXERCISE
               PRICES         OUTSTANDING   LIFE (YEARS)    PRICE           EXERCISEABLE     PRICE
              -----------------------------------------------------------------------------------------
               $ 1.00 - 1.10      75,000           7.04     $   1.03              75,000     $   1.03
                        2.25      25,000           8.18         2.25              25,000         2.25
              -----------------------------------------------------------------------------------------
               $ 1.00 - 2.25     100,000           7.33     $   1.34             100,000     $   1.34




15.  FAIR VALUE OF .The Company's financial instruments consist of cash, receivables,
     FINANCIAL . . .payables, and notes payable.  The carrying amount of cash,
     INSTRUMENTS . .receivables and payables approximates fair value because of the short-
                    term nature of these items.  The aggregate carrying amount of the
                    notes payable approximates fair value as the individual borrowings bear
                    interest at market interest rates.
</TABLE>



                                      F-18

<PAGE>
<TABLE>
<CAPTION>




<S>                 <C>
16.  ENVIRONMENTAL  Various federal, state and local laws and regulations covering
     REGULATION. .  discharge of materials into the environment, or otherwise relating to
                    the protection of the environment, may affect the Company's
                    operations and the costs of its oil and natural gas exploitation,
                    development and production operations.  The Company does not
                    anticipate that it will be required in the near future to expend amounts
                    material in relation to the financial statements taken as a whole by
                    reason of environmental laws and regulations.  Because these laws
                    and regulations are constantly being changed, the Company is unable
                    to predict the conditions and other factors, over which it does not
                    exercise control, that may give rise to environment liabilities affecting
                    the Company.


17.  RECENT. . . .  In June 2001, the Financial Accounting Standards Board issued
     ACCOUNTING. .  Statement of Financial Accounting Standards No. 143, "Accounting
     PRONOUNCE-. .  for Asset Retirement Obligations".  This Statement addresses
     MENTS . . . .  financial accounting and reporting for obligations associated with the
                    retirement of tangible long-lived assets and the associated asset
                    retirement costs.  This Statement is effective for financial statements
                    issued for fiscal years beginning after June 15, 2002.  This Statement
                    addresses financial accounting and reporting for the disposal of long-
                    lived assets.  Management is assessing if the impact of SFAS 143 will
                    have a significant impact on the financial position or results of
                    operations of the Company.


                    In August 2001, the Financial Accounting Standards Board issued
                    Statement of Financial Accounting Standards No. 144 "Accounting for
                    the Impairment of Long-Lived Assets". This Statement addresses
                    financial accounting and reporting for the impairment of long-lived
                    assets and for long-lived assets to be disposed of.  This Statement
                    supercedes FASB Statement 121 and APB Opinion No. 30. This
                    Statement retains certain fundamental provisions of Statement 121,
                    namely; recognition and measurement of the impairment of long-lived
                    assets to be held and used, and measurement of long-lived assets to
                    be disposed of by sale.   The Statement also retains the requirement
                    of Opinion 30 to report discontinued operations separately from
                    continuing operations. This Statement also amends ARB No. 51 to
                    eliminate the exception of consolidation for a temporarily controlled
                    subsidiary.  The provisions of this statement are effective for financial
                    statements issued for fiscal years beginning after December 15,   2001.
</TABLE>

                                      F-19

<PAGE>
<TABLE>
<CAPTION>




<S>          <C>
17.  RECENT      In April 2002, the Financial Accounting Standards Board (FASB)
     ACCOUNTING  issued Statement of Financial Accounting Standards (SFAS) No. 145,
     PRONOUNCE-  "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
     MENTS. . .  FASB Statement No. 13, and Technical Corrections." This statement
     CONTINUED.  requires the classification of gains or losses from the extinguishments
                 of debt to meet the criteria of Accounting Principles Board Opinion
                 No. 30 before they can be classified as extraordinary in the income
                 statement.  As a result, companies that use debt extinguishment as
                 part of their risk management cannot classify the gain or loss from
                 that extinguishment as extraordinary.  The statement also requires
                 sale-leaseback accounting for certain lease modifications that have
                 economic effects similar to sale-leaseback transactions.  The
                 Company does not expect the adoption of SFAS No. 145 to have a
                 material impact on its financial position or future operations.

                 In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
                 Associated with Exit or Disposal Activities."  This standard, which is
                 effective for exit or disposal activities initiated after December 31,
                 2002, provides new guidance on the recognition, measurement and
                 reporting of costs associated with these activities.  The standard
                 requires companies to recognize cost associated with exit or disposal
                 activities when they are incurred rather than at the date the company
                 commits to an exit or disposal plan.  The adoption of SFAS No. 146
                 by the Company is not expected to have a material impact on the
                 Company's financial position or future operations.

                 In December 2002, the Financial Accounting Standards Board issued
                 SFAS No. 148 "Accounting for Stock-Based Compensation--
                 Transition and Disclosure--an amendment of FASB Statement No.
                 123," which is effective for all fiscal years ending after December 15,
                 2002.  SFAS No. 148 provides alternative methods of transition for a
                 voluntary change to the fair value based method of accounting for
                 stock-based employee compensation under SFAS No. 123 from the
                 intrinsic value based method of accounting prescribed by Accounting
                 Principles Board Opinion No. 25.  SFAS 128 also changes the
                 disclosure requirements of SFAS 123, requiring a more prominent
                 disclosure of the pro-forma effect of the fair value based method of
                 accounting for stock-based compensation.  The adoption of SFAS No.
                 148 by the Company did not have a material impact on the
                 Company's financial position or operations.
</TABLE>


                                      F-20

<PAGE>
                                                              MOUNTAIN OIL, INC.

<PAGE>
                 SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS




The  information  on  the  Company's  oil  and  gas  operations as shown in this
schedule  is  based  on  the  successful  efforts  method  of  accounting and is
presented  in  conformity  with  the  disclosure  requirements  of  Statement of
Financial  Accounting  Standards No. 69 "Disclosures about Oil and Gas Producing
Activities."

         CAPITALIZED COSTS RELATING TO OIL AND GAS PRODUCING ACTIVITIES

<TABLE>
<CAPTION>



<S>                                                   <C>           <C>          <C>
                                                                         DECEMBER 31,
                                                                    -----------------------
                                                                        2002        2001
                                                                    ------------ ----------

Proved oil and gas properties and related equipment                 $1,531,000   $1,522,000
Unproved oil and gas properties                                        171,000      171,000
                                                                    ------------ ----------

       Subtotal                                                      1,702,000    1,693,000

Accumulated depreciation, depletion and amortization
  and valuation allowances                                            (888,000)    (786,000)
                                                                    ------------ ----------
                                                                    $  814,000   $  907,000
                                                                    ============ ==========

</TABLE>



                   COSTS INCURRED IN OIL AND GAS ACQUISITION,
                     EXPLORATION AND DEVELOPMENT ACTIVITIES
<TABLE>
<CAPTION>



<S>                         <C>                      <C>     <C>
                                                                   YEAR ENDED DECEMBER 31,
                                                                   -----------------------
                                                                        2002    2001
                                                                   -----------------------

Acquisition of properties:
 Proved                                                            $    -       $      -
 Unproved                                                          $    -       $  23,000
Exploration costs                                                  $    -       $      -
Development costs                                                  $ 7,000      $ 587,000
</TABLE>


                                      F-21

<PAGE>
                 SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS
                                                                       CONTINUED



                 RESULTS OF OPERATIONS FOR PRODUCING ACTIVITIES
<TABLE>
<CAPTION>



<S>                                                   <C>           <C>         <C>
                                                                          YEARS ENDED
                                                                           DECEMBER 31,
                                                                    ------------------------
                                                                         2002       2001
                                                                    ------------------------

Oil and gas sales, net                                              $ 569,000   $   920,000
Production costs                                                     (442,000)     (853,000)
Exploration costs                                                          -             -
Impairment on properties and equipment                                     -       (761,000)
Depreciation, depletion and amortization provisions                  (163,000)     (597,000)

Net loss before income taxes                                          (36,000)   (1,291,000)

Income tax provision                                                       -             -
                                                                    ------------------------

Results of operations from producing activities
  (excluding corporate overhead and interest costs)                 $ (36,000)  $(1,291,000)
                                                                    ========================
</TABLE>



                                      F-22

<PAGE>
                 SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS
                                                                       CONTINUED




                    RESERVE QUANTITY INFORMATION (UNAUDITED)

The  estimated  quantities of proved oil and gas reserves disclosed in the table
below  are  based  upon  estimates  by  a  qualified  petroleum  engineer.  Such
estimates  are inherently imprecise and may be subject to substantial revisions.

Revisions  may  occur because current prices of oil and gas and current costs of
operating  are  subject  to  fluctuations,  past  performance  of wells does not
necessarily  guarantee  future performance and rates used to estimate decline of
reserves  could  vary  from  that  which  is  projected.

All quantities shown in the table are proved reserves and are located within the
United  States.
<TABLE>
<CAPTION>



<S>                               <C>                        <C>       <C>        <C>
                                                      YEARS ENDED DECEMBER 31,
                                            -----------------------------------------------
                                                      2002      2001
                                            -----------------------------------------------
                                                  OIL        GAS       OIL         GAS
                                                 (BBLS)     (MCF)     (BBLS)      (MCF)
                                            ---------------  -------- ---------   ---------

Proved developed and undeveloped
  reserves:
 Beginning of period . . . . . .                   396,000   413,000    942,000    863,000
 Revision in previous estimates.                   670,000   461,000   (496,000)  (416,000)
 Discoveries and extension . . .                        -         -          -          -
 Purchase in place . . . . . . .                        -         -          -          -
 Production. . . . . . . . . . .                   (32,000)  (17,000)   (50,000)   (34,000)
 Sales in place. . . . . . . . .                        -         -          -          -

 End of period . . . . . . . . .                 1,034,000   857,000    396,000    413,000
                                            ===============================================

Proved developed reserves:
 Beginning of period . . . . . .                   115,000        -      62,000         -
 End of period . . . . . . . . .                   158,000        -     115,000         -

</TABLE>


                                      F-23

<PAGE>
                 SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS
                                                                       CONTINUED






            STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
               RELATING TO PROVED OIL AND GAS RESERVES (UNAUDITED)
<TABLE>
<CAPTION>



<S>                                                            <C>           <C>            <C>
                                                                                 YEARS ENDED
                                                                                 DECEMBER 31,
                                                                        --------------------------
                                                                            2002          2001
                                                                        --------------------------

Future cash inflows                                                     $ 33,093,000   $ 9,021,000
Future production costs                                                  (12,307,000)   (4,152,000)
Development costs                                                         (9,023,000)   (2,823,000)
Future income tax expenses                                                (4,388,000)     (763,000)
                                                                        --------------------------
                                                                           7,375,000     1,283,000
                                                                        --------------------------
10% annual discount for estimated timing of cash flows                    (4,688,000)     (966,000)
                                                                        --------------------------
Standardized measure of discounted future net cash flows                $  2,687,000   $   317,000
                                                                        ==========================
</TABLE>




The  preceding  table sets forth the estimated future net cash flows and related
present value discounted at a 10% annual rate from the Company's proved reserves
of  oil,  condensate  and  gas.  The estimated future net revenue is computed by
applying  the period end prices of oil and gas (including price changes that are
fixed  and  determinable)  and  current  costs  of development and production to
estimated  future  production  assuming  continuation  of  existing  economic
conditions.  The  values  expressed  are  estimates  only,  and  may not reflect
realizable  values or fair market values of the oil and gas ultimately extracted
and  recovered.  The  ultimate  year  of  realization  is  also  subject  to
accessibility of petroleum reserves and the ability of the Company to market the
products.

                                      F-24
<PAGE>
                 SCHEDULE OF SUPPLEMENTARY INFORMATION ON OIL AND GAS OPERATIONS
                                                                       CONTINUED







                     CHANGES IN THE STANDARDIZED MEASURE OF
                  DISCOUNTED FUTURE NET CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>



<S>                                                    <C>           <C>            <C>
                                                                           YEAR ENDED
                                                                           DECEMBER 31,
                                                                           ------------
                                                                         2002         2001
                                                                       -----------------------

Balance, beginning of period                                         $   317,000   $ 2,658,000
Sales of oil and gas produced net of production costs                   (127,000)      (67,000)
Net changes in prices and production costs                              (109,000)   (1,974,000)
Extensions and discoveries, less related costs                                -             -
Purchase and sales of minerals in place                                       -             -
Revisions of estimated development costs                              (2,258,000)    2,967,000
Revisions of previous quantity estimates                               6,092,000    (5,171,000)
Accretion of discount                                                     92,000       266,000
Net changes in income taxes                                           (1,320,000)    1,638,000
                                                                     --------------------------
Balance, end of year                                                 $ 2,687,000   $   317,000
</TABLE>

                                      F-25
<PAGE>
                                  CERTIFICATION

I,  Craig  Phillips  certify  that:

1.     I  have  reviewed this annual report on Form 10-QSB of Mountain Oil, Inc.

2.     Based  on  my  knowledge,  this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report;

4.     The  registrant's  other  certifying  officers  and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  annual  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  as  of a date within 90 days prior to the filing date of this annual
report  (the  "Evaluation  Date");  and

c)     presented  in  this annual report our conclusions about the effectiveness
of  the  disclosure  controls  and  procedures based on our evaluation as of the
Evaluation  Date;

5.     The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or  persons  performing  the equivalent
functions):

a)     all  significant  deficiencies  in  the  design  or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.     The  registrant's  other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.



Date:  ____________________________      _______________________________________
                                                   Craig  Phillips
                                                   President  /  CEO
                                       20
<PAGE>


                                  CERTIFICATION

I,  Joseph  Ollivier  certify  that:

1.     I  have  reviewed this annual report on Form 10-KSB of Mountain Oil, Inc.

2.     Based  on  my  knowledge,  this annual report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not  misleading  with  respect to the period covered by this annual
report;

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this  annual  report,  fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods  presented  in  this annual report;

4.     The  registrant's  other  certifying  officers  and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  annual  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  as  of a date within 90 days prior to the filing date of this annual
report  (the  "Evaluation  Date");  and

c)     presented  in  this annual report our conclusions about the effectiveness
of  the  disclosure  controls  and  procedures based on our evaluation as of the
Evaluation  Date;

5.     The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or  persons  performing  the equivalent
functions):

a)     all  significant  deficiencies  in  the  design  or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.     The  registrant's  other certifying officers and I have indicated in this
annual  report whether there were significant changes in internal controls or in
other  factors  that  could significantly affect internal controls subsequent to
the  date  of  our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.



Date:  ____________________________      _______________________________________
                                                    Joseph  Ollivier
                                                    CFO

                                       21
<PAGE>