UNITED STATESSECURITIES 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 endedSeptember 30, 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                                                                                  
|(State or other jurisdiction of
      incorporation or organization)                    
|                                                                                        
|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 November 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 StatementsThese 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 September 30, 2006, and its results of
operations, stockholders equity, and its cash flows for the three month period
ended September 30, 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 Exploration Stage Company)

FINANCIAL STATEMENTS

September 30, 2006
(Unaudited)

3

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SUN CAL ENERGY, INC. formerly
HOST VENTURES, INC. (An Exploration Stage Company) BALANCE
SHEETSeptember 30, 2006

|ASSETS                                                
|------------------------------------------------------
|Current
      assets                                  
|Cash                                                  
|Total current assets                                  
|Fixed assets                                          
|Less
      accumulated depreciation                   
|                                                      
|Total Assets                                          
|LIABILITIES & STOCKHOLDERS' EQUITY                    
|Liabilities                                           
|Stockholders' Equity                                  
|Common stock,
      $.001 par value;                  
|75,000,000 shares authorized;                         
|5,125,000 issued and outstanding                      
|Additional
      paid in capital                      
|Deficit
      accumulated during the exploration stage
|Total Stockholders' Equity                            
|Total Liabilities and Stockholders' Equity            

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

4

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SUN CAL ENERGY, INC. formerly
HOST VENTURES, INC. (An Exploration Stage Company) STATEMENT OF
OPERATIONS

|                                                                | Three Months    Ended 
        Sept. 30, 2005 |           | Three Months    Ended 
        Sept. 30, 2006 |   | July 20, 2004 
        (Inception)    Through 
        Period Ended    Sept. 30,
      2006
|--------------------------------------------------------------- | --------------------------------------------- | --------- | --------------------------------------------- | - | -------------------------------------------------------------------------------------------
|                                                                |                                               |          
|                                                                |                                               |          
|                                                                |                                               |          
|                                                                |                                               |          
|                                                                |                                               |           |                                               |   |                                                                                            
|Revenue                                                         | $                                             | -         |                                               | $ | -                                                                                          
|Expenses:                                                       |                                               |           |                                               |   |                                                                                            
|Bank
      charges                                              |                                               |           |                                               |   | 24                                                                                         
|Legal &
      accounting                                        |                                               | 1,390     |                                               |   | 3,000                                                                                      
|Mining
      property expenses                                  |                                               |           |                                               |   | 5,500                                                                                      
|Office
      expense                                            |                                               | 1,366     |                                               |   | 301                                                                                        
|Rent                                                            |                                               | -         |                                               |   | 750                                                                                        
|Meals and
      Entertainment                                   |                                               | -         |                                               |   | 115                                                                                        
|Travel                                                          |                                               | -         |                                               |   | 848                                                                                        
|Transfer
      agent                                            |                                               | -         |                                               |   | 654                                                                                        
|Depreciation                                                    |                                               | -         |                                               |   | 79                                                                                         
|Administration
      and management                             |                                               | 2,574     |                                               |   | 1,500                                                                                      
|                                                                |                                               | 5,330     |                                               |   | 12,771                                                                                     
|Loss from
      operations                                      |                                               | (5,330)   |                                               |   | (12,771)                                                                                   
|Other income
      (expense)                                    |                                               | -         |                                               |   | -                                                                                          
|Income (loss)
      before provision for income taxes           |                                               | (5,330)   |                                               |   | (12,771)                                                                                   
|                                                                |                                               |           |                                               |   |                                                                                            
|Provision for income
      tax                                  |                                               | -         |                                               |   | -                                                                                          
|Net income
      (loss)                                         | $                                             | (5,330)   |                                               | $ | (12,771)                                                                                   
|Net income (loss) per share                                     |                                               |           |                                               |   |                                                                                            
|(Basic and fully
      diluted)                                 | $                                             | (0.00)    |                                               |   | (0.00)                                                                                     
|Weighted
      average number ofcommon shares
      outstanding |                                               | 5,125,000 |                                               |   | 5,125,000                                                                                  

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

5

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SUN CAL ENERGY, INC. formerly
HOST VENTURES, INC. (An Exploration Stage Company) STATEMENTS OF
STOCKHOLDERS' EQUITY(Unaudited)

|                                    | Common Stock |  | Paid In    Capital |        | DeficitAccum.During theExplorationStage |   | Stock-    holders' 
        Equity
|----------------------------------- | ------------ |  | ------------------ | ------ | --------------------------------------- | - | ----------------------------------
|                                    |              |  |                   
|                                    |              |  |                   
|                                    |              |  |                   
|                                    | Shares       |  |                    | Amount |                                         |   |                                   
|Balances at July 30,
      2005     | 5,125,000    |  | $                  | 5,125  |                                         | $ | 47,625                            
|July 1, 2005  June 30,
      2006  |              |  |                    |        |                                         |   |                                   
|Services and
      office space     |              |  |                    |        |                                         |   |                                   
|provided by
      officer           |              |  |                    |        |                                         |   | 9,000                             
|Gain (loss) for the
      period    |              |  |                    |        |                                         |   | (30,967)                          
|Balances at July 30,
      2006     | 5,125,000    |  | $                  | 5,125  |                                         | $ | 56,625                            
|July 1, 2006  Sept. 30,
      2006 |              |  |                    |        |                                         |   |                                   
|Services and
      office space     |              |  |                    |        |                                         |   |                                   
|provided by
      officer           |              |  |                    |        |                                         |   | 2,250                             
|Gain (loss) for the
      period    |              |  |                    |        |                                         |   |                                   
|Balances at Sept. 30,
      2006    | 5,125,000    |  | $                  | 5,125  |                                         | $ | 58,875                            

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

6

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SUN CAL ENERGY, INC. formerly
HOST VENTURES, INC. (An Exploration Stage Company) STATEMENT OF CASH
FLOWS(Unaudited)

|                                                               | Three Months    Ended 
        Sept. 30, 2005 |         | Three Months    Ended 
        Sept. 30, 2006 |   | July 20, 2004 
        (Inception)    Through 
        Period Ended    Sept. 30,
      2006
|-------------------------------------------------------------- | --------------------------------------------- | ------- | --------------------------------------------- | - | -------------------------------------------------------------------------------------------
|                                                               |                                               |        
|                                                               |                                               |        
|                                                               |                                               |        
|                                                               |                                               |        
|Cash Flows From Operating
      Activities:                    |                                               |         |                                               |   |                                                                                            
|Net income
      (loss) during the exploration stage           | $                                             | (5,330) |                                               | $ | (12,771)                                                                                   
|                                                               |                                               |         |                                               |   |                                                                                            
|Adjustments to
      reconcile net loss to                     |                                               |         |                                               |   |                                                                                            
|net cash
      provided by (used for)                          |                                               |         |                                               |   |                                                                                            
|operating
      activities:                                    |                                               |         |                                               |   |                                                                                            
|Donated office space and
      services                        |                                               | 2,250   |                                               |   | 2,250                                                                                      
|Depreciation and amortization                                  |                                               | -       |                                               |   | 79                                                                                         
|**Net cash provided by (used for) operating
      activities** |                                               | (3,080) |                                               |   | (10,442)                                                                                   
|Cash Flows From
      Investing Activities:                    |                                               |         |                                               |   |                                                                                            
|Fixed asset
      purchases                                    |                                               | -       |                                               |   | -                                                                                          
|**Net cash provided by (used for)** investing
      activities |                                               | -       |                                               |   | -                                                                                          

(Continued On Following
Page)

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

7

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SUN CAL ENERGY, INC. formerly
HOST VENTURES, INC. (An Exploration Stage Company) STATEMENT OF CASH
FLOWS

(Unaudited)

(Continued From Previous
Page)

|                                            | Three Months    Ended 
        Sept. 30, 2005 |         | Three Months    Ended 
        Sept. 30, 2006 |   | July 20, 2004 
        (Inception)    Through 
        Period Ended    Sept. 30,
      2006
|------------------------------------------- | --------------------------------------------- | ------- | --------------------------------------------- | - | -------------------------------------------------------------------------------------------
|                                            |                                               |        
|                                            |                                               |        
|                                            |                                               |        
|                                            |                                               |        
|Cash Flows
      From Financing Activities: |                                               |         |                                               |   |                                                                                            
|Sale of common
      stock                  |                                               | -       |                                               |   | -                                                                                          
|Net cash
      provided by (used for)       |                                               |         |                                               |   |                                                                                            
|financing
      activities                  |                                               | -       |                                               |   | -                                                                                          
|Net Increase
      (Decrease) In Cash       |                                               | (3,080) |                                               |   | (10,442)                                                                                   
|Cash At The
      Beginning Of The Period   |                                               | 34,745  |                                               |   | 12,039                                                                                     
|                                            |                                               |         |                                               |   |                                                                                            
|Cash At The
      End Of The Period         | $                                             | 31,665  |                                               | $ | 1,597                                                                                      

Schedule Of Non-Cash Investing And
Financing Activities

None

|Supplemental
      Disclosure    |   |   |   |   |   |  
|-------------------------------- | - | - | - | - | - | -
|Cash paid for
      interest     | $ | - | $ | - | $ | -
|Cash paid for income
      taxes | $ | - | $ | - | $ | -

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

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SUN CAL ENERGY,
INC.formerly HOST VENTURES,
INC.(An Exploration Stage
Company)NOTES TO FINANCIAL
STATEMENTS(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Host Ventures, Inc. (the Company), was
incorporated in the State of Nevada on July 20, 2004. The Company was formed to
engage in the acquisition, exploration, and production of precious minerals. The
Company may also engage in any other business permitted by law, as designated by
the Board of Directors of the Company.

Exploration Stage

The Company is currently in the
exploration stage and has no significant operations to date.

Cash and cash
equivalents

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

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 tax

The Company accounts for income taxes
under Statement of Financial Accounting Standards No. 109 (SFAS 109). Under
SFAS 109 deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and operating loss
carryforwards 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 not be
realized. Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.

Fiscal year

The Company employs a fiscal year ending
June 30.

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SUN CAL ENERGY,
INC.formerly HOST VENTURES,
INC.(An Exploration Stage
Company)NOTES TO FINANCIAL
STATEMENTS(Unaudited)

NOTE 1. ORGANIZATION, OPERATIONS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Net income (loss) per
share

The net income (loss) per share is
computed by dividing the net income (loss) by the weighted average number of
shares of common outstanding. Warrants, stock options, and common stock issuable
upon the conversion of the Company's preferred stock (if any), are not included
in the computation if the effect would be anti-dilutive and would increase the
earnings or decrease loss per share.

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.

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 2. RELATED PARTY
TRANSACTIONS

The Company recorded rent expense of $250
per month for the use of office space donated to the Company by an officer.
Total rent expense under this arrangement was $750 for the three months ended
September 30, 2006. The Company also recorded compensation expense of $500 per
month ($1,500 total) for administrative and management services donated to the
Company by an officer.

NOTE 3. INCOME TAXES

At September 30, 2006 the Company had a
net operating loss carryforward for tax purposes of approximately $43,000 which
will begin to expire in 2025. The deferred tax asset of $8,500 created by the
net operating loss has been offset by a 100% valuation allowance. The change in
the valuation allowance in fiscal year 2007 was $2,093.

10

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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 14, 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 the government of Canada. Because the land covered by our mineral claim
is in a remote, undeveloped area, we do not anticipate any conflict between our
proposed exploration activities and the governments interest.

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

11

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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.

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. If we complete such an agreement to acquire a private
oil and gas exploration company, we will shift the focus of our exploration
activities from mineral to oil and gas. However, until such a transaction has
been completed, we intend to continue conducting exploration work on the
Scadding West claim.

12

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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 September 30, 2006. We do not anticipate
earning revenues unless we enter into commercial production on the Scadding West
claim, which is doubtful. We have only recently commenced the exploration stage
of our business and can provide no assurance that we will discover economic
mineralization on the Scadding West claim, or if such minerals are discovered,
that we will enter into commercial production.

We incurred operating expenses in the
amount of $61,743 for the period from our inception on July 20, 2004 to
September 30, 2006. These operating expenses were comprised of mineral property
acquisition costs and expenses of $18,000, administration and management
expenses of $13,500, legal and accounting costs of $13,818, office expenses of
$6,204, rent of $3,750, meals and entertainment of $693, travel of $1,685,
transfer agent fees of $3,774, depreciation of $290 and bank charges of
$29.

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

Liquidity and Capital
Resources

At September 30, 2006, we had cash on hand
of $1,597 and working capital of $1,597.

Cash used in operating activities was
$12,771 for the three months ended September 30, 2006 largely due to our
professional fees and mining property expenses incurred during the period. This
compares with cash used in operating activities of $5,330 for the three months
ended September 30, 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.

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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 1 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.

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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

17

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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 September 30,
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 September 30, 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.

|By: | /s/ George
      Drazenovic                                                                           
|--- | ------------------------------------------------------------------------------------------------------
|    | George
    Drazenovic                                                                                 
|    | Chief Executive Officer,
      Chief Financial Officer,                                               
|    | President, Treasurer and
      Secretary                                                              
|    | (Principal Executive
      Officer, Principal FinancialOfficer and Principal
      Accounting Officer)
|   
|    | Date: November 17,
      2006                                                                         

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