---

UNITED STATES**SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

(Mark One)

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

For the quarterly period ended December 31,
2006

OR

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

For the transition period from _____________ to
_____________

Commission file number 000-52300

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

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

Suite 700, 205 - 5thAvenue,
S.W., Calgary, Alberta T2P 2V7 Canada(Address of principal executive
offices)

403.538.4772(Issuers telephone number)

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date:

51,250,000 shares of common stock issued and outstanding as
of February 14, 2006.

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

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

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PART I  FINANCIAL INFORMATION

Item
1.                    
Financial Statements

These financial statements have been prepared by Sun Cal
Energy, Inc. (the Company) without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted in accordance with such SEC rules and regulations. In the opinion of
management, the accompanying statements contain all adjustments necessary to
present fairly the financial position of the Company as of December 31, 2006,
and its results of operations, stockholders deficit, and its cash flows for the
six month period ended December 31, 2006 and 2005. The results for these interim
periods are not necessarily indicative of the results for the entire year. The
accompanying financial statements should be read in conjunction with the
financial statements and the notes thereto filed as a part of the Companys Form
10-KSB.

2

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SUN CAL ENERGY, INC. (formerly Host Ventures, Inc.)
(An Exploratory Stage Company) BALANCE SHEETDecember 31, 2006
(Unaudited)

|ASSETS                                    |  
|----------------------------------------- | -
|                                          |  
|Current assets                            | $
|                                          |  
|Property and equipment                    |  
|Office equipment (net accumulated         |  
|depreciation of $369)                     |  
|                                          |  
|                                          | $
|                                          |  
|LIABILITIES &
      STOCKHOLDERS' DEFICIT |  
|                                          |  
|                                          |  
|Current liabilities                       |  
|Accounts payable                          | $
|                                          |  
|                                          |  
|Stockholders' deficit                     |  
|Common stock, $.0001 par value;           |  
|750,000,000 shares authorized;            |  
|51,250,000 issued and outstanding         |  
|Additional paid in capital                |  
|Deficit accumulated during the            |  
|exploration stage                         |  
|                                          |  
|Total stockholders' deficit               |  
|                                          |  
|                                          | $

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

---

SUN CAL ENERGY, INC. (formerly Host Ventures, Inc.)
(An Exploratory Stage Company) STATEMENTS OF OPERATIONS

July 20, 2004(Inception)Three Months Ended
      
      
      Six Months Ended
      
      
      ThroughDecemb**er 31,**
      
      
      December 31,
      
      
      Period Ended2005
      
      
      2006
      
      
      2005
      
      
      2006
      
      
      Dec 31, 2006(Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)
      
      
      (Unaudited)Revenue
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -Expenses:Bank charges
      
      -
      
      
      27
      
      
      
      
      
      51
      
      
      56Legal & accounting
      
      1,900
      
      
      4,139
      
      
      3,290
      
      
      7,139
      
      
      17,957Mining property expenses
      
      5,000
      
      
      -
      
      
      5,000
      
      
      5,500
      
      
      18,000Office expense
      
      -
      
      
      44
      
      
      1,366
      
      
      345
      
      
      6,248Rent
      
      750
      
      
      -
      
      
      1,500
      
      
      750
      
      
      3,750Meals and Entertainment
      
      -
      
      
      
      
      
      -
      
      
      115
      
      
      693Travel
      
      500
      
      
      745
      
      
      500
      
      
      1,593
      
      
      2,430Transfer agent
      
      3,120
      
      
      811
      
      
      3,120
      
      
      1,465
      
      
      4,585Depreciation
      
      53
      
      
      79
      
      
      53
      
      
      158
      
      
      369Administration and management
      
      3,000
      
      
      100
      
      
      4,824
      
      
      1,600
      
      
      13,60014,323
      
      
      5,945
      
      
      19,653
      
      
      18,716
      
      
      67,688Loss from operations
      
      (14,323
      )
      
      (5,945
      )
      
      (19,653
      )
      
      (18,716
      )
      
      (67,688
      )Other income (expense)
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -


---

Income (loss) before provision for income
      taxes
    
    (14,323
    )
    
    (5,945
    )
    
    (19,653
    )
    
    (18,716
    )
    
      (67,688
    )Provision for income tax
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
      -Net income (loss)
    $
    (14,323
    )
    $
    (5,945
    )
    $
    (19,653
    )
    $
    (18,716
    )
    $
      (67,688
    )Net income (loss) per share(Basic and fully diluted)
    $
    (0.00
    )
    $
    (0.00
    )
    
    (0.00
    )
    $
    (0.00
    )Weighted average number ofcommon shares outstanding
    
    51,250,000
    
    
    51,250,000
    
    $
    51,250,000
    
    
    51,250,000


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

---

SUN CAL ENERGY, INC. (former Host Ventures, Inc.) (An
Exploratory Stage Company) STATEMENTS OF CASH FLOWS

|                                                              |   |              |   |   |              |   |   | July 20, 2004 |  
|------------------------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                              |   |              |   |   |              |   |   | (Inception)   |  
|                                                              |   | Six Months   |   |   | Six Months   |   |   | Through       |  
|                                                              |   | Ended        |   |   | Ended        |   |   | Period Ended  |  
|                                                              |   | Dec 31, 2005 |   |   | Dec 31, 2006 |   |   | Dec 31, 2006  |  
|                                                              |   | (Unaudited)  |   |   | (Unaudited)  |   |   | (Unaudited)   |  
|Cash Flows From Operating Activities:                         |   |              |   |   |              |   |   |               |  
|Net income (loss) during the exploration
      stage          | $ | (19,653      | ) | $ | (18,716      | ) | $ | (67,688       | )
|                                                              |   |              |   |   |              |   |   |               |  
|Adjustments to reconcile net loss to                          |   |              |   |   |              |   |   |               |  
|net cash provided by (used for)                               |   |              |   |   |              |   |   |               |  
|operating activities:                                         |   |              |   |   |              |   |   |               |  
|Accounts payable                                              |   | -            |   |   | 4,169        |   | $ | 4,169         |  
|Donated office space and services                             |   | 4,500        |   |   | 2,350        |   |   | 18,850        |  
|Depreciation and amortization                                 |   | 53           |   |   | 158          |   |   | 369           |  
|Net cash provided by (used for)                               |   |              |   |   |              |   |   |               |  
|operating activities                                          |   | (15,100      | ) |   | (12,039      | ) |   | (44,300       | )
|                                                              |   |              |   |   |              |   |   |               |  
|Cash Flows From Investing Activities:                         |   |              |   |   |              |   |   |               |  
|Equipment purchases                                           |   | (950         | ) |   | -            |   |   | (950          | )
|Net cash provided by (used for)                               |   |              |   |   |              |   |   |               |  
|investing activities                                          |   | (950         | ) |   | -            |   |   | (950          | )
|                                                              |   |              |   |   |              |   |   |               |  
|Cash Flows From Financing
      Activities:                   |   |              |   |   |              |   |   |               |  
|Proceeds from sale common stock                               |   | -            |   |   | -            |   |   | 45,250        |  
|Net cash provided by (used for)                               |   |              |   |   |              |   |   |               |  
|financing activities                                          |   | -            |   |   | -            |   |   | 45,250        |  
|                                                              |   |              |   |   |              |   |   |               |  
|Net Increase (Decrease) In Cash                               |   | (16,050      | ) |   | (12,039      | ) |   | -             |  
|                                                              |   |              |   |   |              |   |   |               |  
|Cash At The Beginning Of The Period                           |   | 34,745       |   |   | 12,039       |   |   | -             |  
|                                                              |   |              |   |   |              |   |   |               |  
|Cash At The End Of The Period                                 | $ | 18,695       |   | $ | -            |   | $ | -             |  
|                                                              |   |              |   |   |              |   |   |               |  
|Schedule Of Non-Cash Investing And Financing
      Activities |   |              |   |   |              |   |   |               |  
|None                                                          |   |              |   |   |              |   |   |               |  
|Supplemental Disclosure                                       |   |              |   |   |              |   |   |               |  
|                                                              |   |              |   |   |              |   |   |               |  
|Cash paid for interest                                        |   |              |   | $ | -            |   | $ | -             |  
|Cash paid for income taxes                                    |   |              |   | $ | -            |   | $ | -             |  

---

SUN CAL ENERGY, INC. (formerly Host Ventures, Inc.)
(An Exploratory Stage Company) NOTES TO FINANCIAL STATEMENTS

NOTE 1  ORGANIZATION AND BASIS OF PRESENTATION

Organization

Host Ventures, Inc. (the Company), was incorporated in
the State of Nevada on July 20, 2004. On November 6, 2006, we changed our name
to Sun Cal Energy, Inc. The Company is currently in the exploratory stage with
its principal activity being the exploration of mining properties for future
commercial development and production.

Basis of Presentation

The accompanying interim financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission (the SEC) for interim financial reporting. These
interim financial statements are unaudited and, in the opinion of management,
include all adjustments (consisting of normal recurring adjustments and
accruals) necessary to present fairly the balance sheet, operating results and
cash flows for the periods presented in accordance with accounting principles
generally accepted in the United States of America (GAAP). Operating results
for the six-months ended December 31, 2006 are not necessarily indicative of the
results that may be expected for the year ending June 30, 2007 or for any other
interim period during such year. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with GAAP have
been omitted in accordance with the rules and regulations of the SEC. These
interim financial statements should be read in conjunction with the audited
financial statements and notes thereto contained in the Companys Form 10-K for
the year ended June 30, 2006.

Going Concern

The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplate continuation of the Company as a going concern. The
Company has no established source of material revenue, has incurred a net loss
for the six-months ended December 31, 2006 of $18,716 and as of December 31,
2006 had a negative working capital of $4,169. The Companys accumulated deficit
since its inception amounted to $67,688 through December 31, 2006. These
conditions raise substantial doubt as to the Company's ability to continue as a
going concern. These financial statements do not include any adjustments that
might result from the outcome of this uncertainty. These financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts, or amounts and classification of liabilities that might
be necessary should the Company be unable to continue as a going concern.

Management plans to take the following steps that it believes
will be sufficient to provide the Company with the ability to continue in
existence: 1) The Company plans to raise additional operating funds through
equity or debt financing; and 2) the Company plans to merge with a Company with
on-going operations. There is no assurance that the Company will be able to
arrange for financing and has not, to date, had any substantive discussions with
any third parties regarding such financing.

Stock Split

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

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and cash equivalents

The Company considers all highly liquid investments with an
original maturity of three months or less as cash equivalents.

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SUN CAL ENERGY, INC. (formerly Host Ventures, Inc.)
(An Exploratory Stage Company) NOTES TO FINANCIAL STATEMENTS

Use of Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect 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.

Income Taxes

The Company accounts for income taxes in accordance with SFAS
No. 109, "Accounting for Income Taxes." Deferred taxes are provided on the
liability method whereby deferred tax assets are recognized for deductible
temporary differences, and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.

Loss Per Share

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

Revenue recognition

Revenue is recognized on an accrual basis as earned under
contract terms. The Company has had no revenue to date.

Mineral Properties

Costs of acquiring specific mineral properties are capitalized
on a property by property basis. Mineral properties are periodically assessed
for impairment of value and any impairments are charged to operations at the
time of impairment. Should a property be sold or abandoned, its capitalized
costs are charged to operations and gain or loss recognized. In April 2005, the
Company acquired a mining claim located in Scalding Township, Ontario Canada for
$7,500, which was expensed during 2005. After studying the various claims on the
property, Management determined to abandon the property during the quarter ended
December 31, 2006.

Property and Equipment

Property and equipment are stated at cost. Major renewals and
improvements are charged to the asset accounts while replacements, maintenance,
and repairs that do not improve or extend the lives of the respective assets are
expensed. At the time property and equipment are retired or otherwise disposed
of, the asset and related accumulated depreciation accounts are relieved of the
applicable amounts. Gains or losses from retirements or sales are credited or
charged to income.

Equipment consisted of computer equipment which is being
depreciated over its estimated useful lives using the straight-line method.
Depreciation expense for the three months ended December 31, 2005 and 2006
amounted to $53 and $79, respectively. Depreciation expense for the six months
ended December 31, 2005 and 2005 amounted to $53 and $158, respectively.

---

SUN CAL ENERGY, INC. (formerly Host Ventures, Inc.)
(An Exploratory Stage Company) NOTES TO FINANCIAL STATEMENTS

Financial Instruments

The carrying value of the Companys financial instruments,
including cash and cash equivalents, as reported in the accompanying balance
sheet, approximates fair value.

NOTE 3. RELATED PARTY TRANSACTIONS

For the current quarter, the Company recorded compensation
expense of $100 for administrative and management services donated to the
Company by the newly appointed officer.

NOTE 4. INCOME TAXES

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

The Company has total net operating loss carryforwards at
December 31, 2006 of approximately $68,000 for federal income tax purposes.
These net operating losses have generated a deferred tax asset of approximately
$10,200 on which a valuation allowance equaling the total tax benefit has been
provided due to the uncertain nature of it being realized. Net operating loss
carryforwards expire in various years through June 30, 2027 for federal tax
purposes.

NOTE 5. SUBSEQUENT EVENTS

On January 31, 2007, we entered into a Share Exchange Agreement
with the shareholders of Sun Cal Energy, Corp. to acquire all of the issued and
outstanding shares of common stock of Sun Cal Energy, Corp. If we complete the
transactions contemplated in this Share Exchange Agreement, we will have to
issue a total of 26,925,000 share of our common stock to the shareholders of Sun
Cal Energy, Corp. We anticipate that we will be completing the transactions
contemplated in the Share Exchange Agreement in February of 2007.

---

Item
2.                    
Managements Discussion and Analysis or Plan of Operation.

FORWARD LOOKING STATEMENTS

This Quarterly Report may contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 that involve
risks and uncertainties. In particular such forward-looking statements may be
found in this section. The following discussion and analysis of the financial
condition and results of operations should be read in conjunction with the
financial statements and related notes included elsewhere in this Quarterly
Report. In some cases, you can identify forward-looking statements by
terminology such as may, should, intends, expects, plans,
anticipates, believes, estimates, predicts, potential, or continue
or the negative of these terms or other comparable terminology. These statements
are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks in the section entitled Risk Factors on
page 10, which may cause our or our industrys actual results, levels of
activity or performance to be materially different from any future results,
levels of activity or performance expressed or implied by these forward-looking
statements. Other unidentified risks and uncertainties that may affect our
actual performance and results of operations include the following: general
economic conditions; exploration successes, the acquisition of oil and gas
assets, continued availability of capital and financing; adverse weather;
governmental regulations; changes in governmental and public policy; changes in
economic conditions specific to our business; competition; availability of
equipment and qualified personnel and unexpected operational difficulties. Other
risks and uncertainties may also affect the outcome of our actual performance
and results of operations. You are cautioned not to place undue reliance on the
forward-looking statements made in this Managements Discussion and Analysis or
Plan of Operations.

Overview

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

We have been in the business of mineral exploration. We are an
exploration stage company, which means we are engaged in the search for
mineral deposits (reserves) which are not in either the development or
production stage. We have not generated any revenues from our operations and
have achieved losses since our inception. We currently rely upon the sale of our
securities to fund operations.

Our business plan has been to engage in the acquisition and
exploration of mineral properties with a view to exploiting any mineral deposits
we discover. We own a 100% interest in one mineral claim known as the Scadding
West claim. This interest does not confer any real property rights. We solely
own the right to explore the Scadding West claim for minerals and extract them
from the surface and subsurface of the property. The owner of the real property
interest in the land covered by the Scadding West claim is a private party. The
Company abandoned the claim during this quareter. In the course of our
exploration programs, we will be required to return the property to as close as
possible to its original state. This is known as reclamation. Reclamation may
include planting trees, moving earth and filing holes that we create during
exploration. Due to minimal land disturbance, we will not be required to conduct
any reclamation activities on the Scadding West claim after the planned phase
one and two programs. When our exploration program proceeds to the drilling
stage, we may be required to post small bonds if the rights of a private land
owner may be affected. We anticipate that the cost of a bond for a phase three
drilling program and any required reclamation would not exceed $5,000.

There is no assurance that a commercially viable mineral
deposit exists on the Scadding West claim. We do not have any current plans to
acquire interests in additional mineral properties, though we may consider such
acquisitions in the future.

Mineral property exploration is typically conducted in phases.
Each subsequent phase of exploration work is recommended by a geologist based on
the results from the most recent phase of exploration. We have not yet commenced
the initial phase of exploration on the Scadding West claim. Once we have
completed each phase of exploration, we will make a decision as to whether or
not we proceed with each successive phase based upon the analysis of the results
of that program. Our director will make this decision based upon the
recommendations of the independent geologist who oversees the program and
records the results.

---

On October 18, 2006, George Drazenovic purchased from William Stewart, our then sole director and officer, 1,980,000 restricted shares of common stock of our company. Subsequently, on November 7, 2006, William Stewart resigned as a director and
President, Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary of our company and George Drazenovic was appointed as a director and President, Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary. As a
result, we may consider the possibility to acquiring a private oil and gas exploration company by issuance of additional securities of our company to the owner(s) of such private oil and gas exploration company.

Also on November 6, 2006, we completed a merger with our subsidiary, Sun Cal Energy, Inc. As a result, we have changed our name from "Host Ventures Inc." to "Sun Cal Energy, Inc." We changed the name of our company to better reflect the possible new
direction and business of our company. In addition, effective November 6, 2006 we have effected a ten (10) for one (1)forward stock split of our authorized, issued and outstanding common stock. As a result, our authorized capital has increased from
75,000,000 shares of common stock with a par value of $0.001 to 750,000,000 shares of common stock with a par value of $0.001. Our issued and outstanding share capital has increased from 5,125,000 shares of common stock to 51,250,000 shares
of common stock.

On January 31, 2007, we entered into a Share Exchange Agreement with the shareholders of Sun Cal Energy, Corp. to acquire all of the issued and outstanding shares of common stock of Sun Cal Energy, Corp. If we complete the transactions contemplated
in this Share Exchange Agreement, we will have to issue a total of 26,925,000 share of our common stock to the shareholders of Sun Cal Energy, Corp. We anticipate that we will be completing the transactions contemplated in the Share Exchange
Agreement in February of 2007.

Plan of Operations

The following discussion should be read in conjunction with our financial statements and the related notes included herein. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual
results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this current report,
particularly in the section entitled Risk Factors in this quarterly report.

Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

We have no revenues, have experienced losses since inception. Our plan of operation has been to conduct exploration work on the Scadding West claim in order to ascertain whether it possesses economic quantities of gold, copper, nickel, platinum and
palladium. There can be no assurance that an economic mineral deposit exists on the Scadding West claim until appropriate exploration work is completed. An economic mineral deposit exists on a claim when an independent geologist or
engineer determines that the property contains sufficient mineralization that mining operations would be profitable.

Even if we complete our proposed exploration programs on the Scadding West claim and we are successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know if we
have a commercially viable mineral deposit.

If our proposed exploration programs are not successful in identifying economic mineralization on the Scadding West mineral claim, we intend to acquire an interest in an alternative mineral property in order to assess its potential to contain a
mineral deposit.

We are currently considering the possibility to acquiring a private oil and gas exploration company by issuance of additional securities of our company to the owner(s) of such private oil and gas exploration company. On January 31, 2007, we entered
into a Share Exchange Agreement with the shareholders of Sun Cal Energy, Corp. to acquire all of the issued and outstanding shares of common stock of Sun Cal Energy, Corp. If we complete the transactions contemplated in this Share Exchange
Agreement, we will enter into the business of oil and gas exploration. Sun Cal Energy, Corp. has entered into two agreements to acquire interests and explore oil and gas properties, one in the City of Hobart, Washita County, Oklahoma and the other
one in Lokern, Kern County, California. We have not

---

completed our acquisition of all of the issued and outstanding shares of common stock of Sun Cal Energy, Corp. at the time of this quarterly report. We anticipate that we will be completing the transactions contemplated in the Share Exchange
Agreement in February of 2007.

We anticipate spending approximately $2,000 in ongoing general and administrative expenses per month for the next twelve months, for a total anticipated expenditure of $24,000 over the next twelve months. The general and administrative
expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees, annual mineral claim fees and general office expenses.

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

We may consider entering into a joint venture arrangement to provide the required funding to develop the mineral claims. We have not undertaken any efforts to locate a joint venture partner for the mineral claims. Even if we determined to pursue a
joint venture partner, there is no assurance that any third party would enter into a joint venture agreement with us in order to fund exploration of our mineral claims. If we entered into a joint venture arrangement, we would likely have to assign a
percentage of our interest in our mineral claims to the joint venture partner.

Results of Operations

We have not earned any revenues from our incorporation on July 20, 2004 to December 31, 2006. We incurred operating expenses in the amount of 67,688 for the period from our inception on July 20, 2004 to December 31, 2006. These operating expenses
were comprised of mineral property acquisition costs and expenses of $18,000, administration and management expenses of $13,600, legal and accounting costs of $17,957, office expenses of $6,248, rent of $3,750, meals and
entertainment of $693, travel of $2,430, transfer agent fees of $4,585, depreciation of $369 and bank charges of $56.

We have not attained profitable operations and are dependent upon obtaining financing to pursue exploration activities.

Liquidity and Capital Resources

At December 31, 2006, we had no cash on hand and a working deficit of $4,169 which consists of trade payables.

Cash used in operating activities was $12,039 for the six months ended December 31, 2006 largely due to our professional fees and mining property expenses incurred during the period. This compares with cash used in operating activities of
$19,653 for the six months ended December 31, 2005.

Off-Balance Sheet Arrangements

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

---

Critical Accounting Policies and Estimates

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

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

RISK FACTORS

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

RISKS RELATED TO OUR COMPANY

If we do not obtain additional financing, our business will
fail.

Our current operating funds are less than necessary to complete
all intended exploration of the Scadding West claim, and therefore we will need
to obtain additional financing in order to complete our business plan. We
currently do not have any operations and we have no income.

Our business plan calls for significant expenses in connection
with the exploration of the Scadding West claim. We will need additional funds
to complete our current exploration activities and to cover anticipated
administrative expenses. Even after completing an additional phase of
exploration, we will not know if we have a commercially viable mineral deposit.
We will require additional financing to sustain our business operations if we
are not successful in earning revenues once exploration is complete. We do not
currently have any arrangements for financing and may not be able to find such
financing if required.

Because we only have sufficient capital for initial
exploration of the scadding west claim, we may need to sell additional shares to
fund operations, which will dilute the interests of investors in this
offering.

Our current capital is only sufficient to cover the phase two
exploration program on the Scadding West claims, as well as a portion of
anticipated administrative expenses over the next 12 months. We will likely have
to sell additional shares of our common stock in order to fund future
operations. Any sale of shares will result in dilution to existing shareholders,
which may have a negative impact on the value of their investment.

Because we have only recently commenced business operations,
have not earned revenue and are unlikely to earn revenue in the foreseeable
future, we face a high risk of business failure.

We have only recently commenced exploration on the Scadding
West claim. Accordingly, we have no way to evaluate the likelihood that our
business will be successful. We have not earned any revenues as of the date of
this annual report and are unlikely to earn revenue in the foreseeable future.
Potential investors should be aware of the difficulties normally encountered by
new mineral exploration companies and the high rate of failure of such
enterprises. The likelihood of success must be considered in light of the
problems, expenses, difficulties, complications and delays encountered in
connection with the exploration of the mineral properties that we plan to
undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.

---

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are
unable to generate significant revenues from development of the Scadding West Property and the production of minerals from the claim, we will not be able to earn profits or continue operations.

There is no history upon which to base any assumption as to the likelihood that we will prove successful, and it is doubtful that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing
these risks, our business will most likely fail.

Because of the speculative nature of exploration of mining properties, there is a substantial risk that our business will fail.

The search for valuable minerals as a business is extremely risky. The likelihood of our mineral claim containing economic mineralization or reserves is extremely remote. Exploration for minerals is a speculative venture necessarily involving
substantial risk. In all probability, the Scadding West claim does not contain any reserves and funds that we spend on exploration will be lost. As well, problems such as unusual or unexpected formations and other conditions are involved in mineral
exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan. In such circumstances, we intend to acquire an interest in an alternative mineral property in order to assess its
potential to contain a mineral deposit.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure.
The payment of such liabilities may have a material adverse effect on our financial position.

Even if we discover commercial reserves of metals on the Scadding West Claim, we may not be able to successfully commence commercial production.

The Scadding West claim does not contain any known bodies of mineralization. If our exploration programs are successful in establishing gold of commercial tonnage and grade, we will require additional funds in order to place the Scadding West claim
into commercial production. We may not be able to obtain such financing.

Because George Drazenovic acts as our sole director and officer, he will be the only person responsible for all aspects of our business. If he is unable to adequately maintain proper disclosure, controls and procedures, our operations will
suffer.

Our sole director and officer, George Drazenovic, will be the only person responsible for our managerial responsibilities. As such, he will have ultimate authority with respect to our business decisions, our disclosure and our implementation of
accounting controls and procedures. If Mr. Drazenovic is unable to properly institution such procedures and comply with reporting obligation requirements, our operations may be adversely impacted.

Because our sole director has no technical experience in mineral exploration, our business has a higher risk of failure.

George Drazenovic, our sole director, has no technical training in the field of geology and specifically in the areas of exploring for, starting and operating a mine. He has not completed any education in the fields of geology or mining engineering.
As a result, we may not be able to recognize and take advantage of potential acquisition and exploration opportunities in the sector without the aid of qualified geological consultants. As well, with no direct training or experience, our management
may not be fully aware of the specific requirements related to working in this industry. As well, his decisions may not take into account standard engineering or managerial approaches that mineral exploration companies commonly use. His decisions
and choices may not be well thought out and our operations, earnings and ultimate financial success may suffer irreparable harm as a result.

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RISKS RELATED TO OUR COMMON STOCK

Trading of our stock may be restricted by the SECs Penny Stock regulations which may limit a stockholder's ability to buy and sell our stock

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

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

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

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

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

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

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Because of the early stage of development and the nature of
our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of its development. We
are engaged in the business of exploring and, if warranted, developing
commercial reserves of oil and gas. Our properties are in the exploration stage
only and are without known reserves of oil and gas. Accordingly, we have not
generated any revenues nor have we realized a profit from our operations to date
and there is little likelihood that we will generate any revenues or realize any
profits in the short term. Any profitability in the future from our business
will be dependent upon locating and developing economic reserves of oil and gas,
which itself is subject to numerous risk factors as set forth herein. Since we
have not generated any revenues, we will have to raise additional monies through
the sale of our equity securities or debt in order to continue our business
operations.

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

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

RISKS RELATED TO OUR COMPANY

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

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

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

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

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

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

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

We do not currently maintain a permanent place of business
within the United States. In addition, our current sole director and officer is
a national and resident of a country other than the United States, and all or a
substantial

---

portion of such person's assets are located outside the United
States. As a result, it may be difficult for investors to enforce within the
United States any judgments obtained against our company or our director and
officer, including judgments predicated upon the civil liability provisions of
the securities laws of the United States or any state thereof.

Item
3.                    
Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we carried
out an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures as of December 31, 2006, being the end of the
period covered by this quarterly report. This evaluation was carried out under
the supervision and with the participation of our Chief Executive Officer and
Chief Financial Officer, Mr. George Drazenovic. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting management
to material information relating to us required to be included in our periodic
SEC filings as at the end of the period covered by this report. There have been
no changes in our internal controls or in other factors that could significantly
affect internal controls subsequent to the date we carried out our
evaluation.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the SECs rules
and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and our Chief
Financial Officer, to allow timely decisions regarding required disclosure.

During our most recently completed fiscal quarter ended
December 31, 2006 there were no changes in our internal control over financial
reporting that have materially affected, or are reasonably likely to affect, our
internal control over financial reporting.

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

(a)         
 Pertain to the maintenance of records that in reasonable detail accurately
and fairly reflect the transactions and dispositions of our assets;

(b)         
 Provide reasonable assurance that transactions are recorded as necessary
to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of our
company are being made only in accordance with authorizations of our management
and directors; and

(c)          
Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of our assets that could have a
material effect on the financial statements.

PART II  Other Information

Item
1.                    
Legal Proceedings.

We are not party to any legal proceedings.

Item
2.                    
Unregistered Sales of Equity Securities and Use of Proceeds.

None.

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Item
3.                    
Default upon Senior Securities.

None.

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

None.

Item
5.                    
Other Information.

None.

Item
6.                    
Exhibits.

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

|Exhibit |                                                                                                                                                                                             
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     | Description of Exhibit                                                                                                                                                                      
|        |                                                                                                                                                                                             
|(3)     | Articles of Incorporation
        and By-laws                                                                                                                                               
|        |                                                                                                                                                                                             
|3.1     | Articles of Incorporation (incorporated
        by reference from our registration statement on Form SB-2 filed July 11,
        2005)                                                      
|        |                                                                                                                                                                                             
|3.2     | By-Laws (incorporated by reference
        from our registration statement on Form SB-2 filed July 11, 2005)                                                                                
|        |                                                                                                                                                                                             
|3.3     | Articles of Merger, as filed
        with the Nevada Secretary of State (incorporated by reference from our
        current report Form 8-K filed November 7, 2006)                         
|        |                                                                                                                                                                                             
|3.4     | Certificate of Change to increase
        authorized and issued and outstanding share capital (incorporated by reference
        from our current report on Form 8-K filed November 7, 2006)
|        |                                                                                                                                                                                             
|(31)    | Section 302 Certification                                                                                                                                                                   
|        |                                                                                                                                                                                             
|31.1    | Certification
        Statement of the Chief Executive Officer and Chief Financial Officer pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002                                
|        |                                                                                                                                                                                             
|(32)    | Section 906 Certification                                                                                                                                                                   
|        |                                                                                                                                                                                             
|32.1    | Certification
        Statement of the Chief Executive Officer and Chief Financial Officer pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002                                

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SIGNATURES

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

SUN CAL ENERGY, INC.

Date: February 20, 2007

|By: | /s/ George
      Drazenovic                                                | 
|--- | -------------------------------------------------------------------------- | 
|    | George Drazenovic, Chief Executive Officer, Chief
      Financial Officer, | 
|    | President, Treasurer and Secretary                                         | 
|    | (Principal Executive Officer, Principal Financial                          | 
|    | Officer and Principal Accounting Officer)                                  | 



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