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**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 ended **March 31, 2005**

OR

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

For the transition period from _____________ to _____________

Commission file number **000-51241**

RED SKY RESOURCES INC.
  (Exact name of small business issuer as specified in its charter)

|Nevada                                                         | 98-0443283                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)

Suite 2410, 650 West Georgia Street, PO Box 11524 Vancouver, British Columbia, V6B 4N7, Canada
  (Address of principal executive offices)

(604) 689-8336
  (Issuer’s telephone number)

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
   ̈
  No x

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: 2,196,500 shares
  of common stock are issued and outstanding as of May 12, 2005.

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

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PART I – FINANCIAL INFORMATION

Item 1.                 Financial
  Statements.

These financial statements have been prepared by Red Sky Resources Inc. (the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote
disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with such SEC rules and regulations. In the opinion of management, the accompanying statements
contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2005, and its results of operations for the three month periods ended March 31, 2005 and 2004, and its cash flows for the three month periods
ended March 31, 2005 and 2004. 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 SB-2.

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|RED SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Balance Sheets 
        (Unaudited – Prepared by Management)
      (Expressed in U.S. Dollars)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                       |   | March 31 |   |   | December 31 |  
|-------------------------------------------------------------------------------------- | - | -------- | - | - | ----------- | -
|                                                                                       |   | 2005     |   |   | 2004        |  
|ASSETS                                                                                 |   |          |   |   |             |  
|                                                                                       |   |          |   |   |             |  
|Current assets                                                                         |   |          |   |   |             |  
|Cash and cash equivalents                                                              | $ | 71,427   |   | $ | 81,934      |  
|                                                                                       |   |          |   |   |             |  
|Total current assets                                                                   |   | 71,427   |   |   | 81,934      |  
|                                                                                       |   |          |   |   |             |  
|Mineral Property (Note 3)                                                              |   | -        |   |   | -           |  
|                                                                                       |   |          |   |   |             |  
|Oil and gas property (Note 4)                                                          |   | -        |   |   | -           |  
|                                                                                       |   |          |   |   |             |  
|Total assets                                                                           | $ | 71,427   |   | $ | 81,934      |  
|                                                                                       |   |          |   |   |             |  
|                                                                                       |   |          |   |   |             |  
|LIABILITIES                                                                            |   |          |   |   |             |  
|                                                                                       |   |          |   |   |             |  
|Current liabilities                                                                    |   |          |   |   |             |  
|Accounts payable and
      accrued liabilities                                         | $ | 20,409   |   | $ | 2,825       |  
|                                                                                       |   |          |   |   |             |  
|Total current liabilities                                                              |   | 20,409   |   |   | 2,825       |  
|                                                                                       |   |          |   |   |             |  
|STOCKHOLDERS’ EQUITY                                                                   |   |          |   |   |             |  
|                                                                                       |   |          |   |   |             |  
|Share capital (Note 5)                                                                 |   |          |   |   |             |  
|Preferred stock, $0.0001
      par value, 5,000,000 shares authorized, none issued and |   |          |   |   |             |  
|outstanding                                                                            | $ | -        |   | $ | -           |  
|Common stock, $0.0001
      par value, 100,000,000 shares authorized, 2,196,500 issued |   |          |   |   |             |  
|and outstanding (December 31, 2004 - 2,196,500)                                        |   | 220      |   |   | 220         |  
|                                                                                       |   |          |   |   |             |  
|Additional paid in capital                                                             |   | 129,405  |   |   | 129,405     |  
|Deficit accumulated during the exploration stage                                       |   | (78,607  | ) |   | (50,516     | )
|                                                                                       |   |          |   |   |             |  
|Total stockholders’ equity                                                             |   | 51,018   |   |   | 79,109      |  
|                                                                                       |   |          |   |   |             |  
|Total liabilities and stockholders’ equity                                             | $ | 71,427   |   | $ | 81,934      |  

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

---

|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        For the period from December 31, 2003 to March 31, 2005 
        Statements of Stockholders’ Equity 
        (Unaudited – Prepared by Management)
      (Expressed in U.S. Dollars)
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                      |                 |        |              |           |             |            | Deficit       |   |         |  
|------------------------------------- | --------------- | ------ | ------------ | --------- | ----------- | ---------- | ------------- | - | ------- | -
|                                      |                 |        |              |           |             |            | accumulated   |   |         |  
|                                      |                 |        |              |           |             | Additional | during        |   | Total   |  
|                                      | Preferred Stock |        | Common Stock | paid-in   | exploration |            | Stockholders’ |  
|                                      | Shares          | Amount |              | Shares    | Amount      | capital    | stage         |   | equity  |  
|                                      |                 |        |              |           |             |            |               |   |         |  
|Stocks issued at $0.0001 per share in |                 |        |              |           |             |            |               |   |         |  
|October 2001                          | -               | -      |              | 1,500,000 | 150         | -          | -             |   | 150     |  
|                                      |                 |        |              |           |             |            |               |   |         |  
|Net (loss) for the period             | -               | -      |              | -         | -           | -          | (542          | ) | (542    | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Balance,December 31, 2001             | -               | -      |              | 1,500,000 | 150         | -          | (542          | ) | (392    | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Stocks issued at $0.15 per share in   | -               | -      |              | 196,500   | 20          | 29,455     | -             |   | 29,475  |  
|February 2002                         |                 |        |              |           |             |            |               |   |         |  
|                                      |                 |        |              |           |             |            |               |   |         |  
|Net (loss) for the period             | -               | -      |              | -         | -           | -          | (9,283        | ) | (9,283  | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Balance,December 31, 2002             | -               | -      |              | 1,696,500 | 170         | 29,455     | (9,825        | ) | 19,800  |  
|                                      |                 |        |              |           |             |            |               |   |         |  
|Net (loss) for the period             | -               | -      |              | -         | -           | -          | (24,450       | ) | (24,450 | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Balance,December 31, 2003             | -               | -      |              | 1,696,500 | 170         | 29,455     | (34,275       | ) | (4,650  | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Stocks issued at $0.20 per share in   |                 |        |              |           |             |            |               |   |         |  
|December 2004                         | -               | -      |              | 500,000   | 50          | 99,950     | -             |   | 100,000 |  
|                                      |                 |        |              |           |             |            |               |   |         |  
|Net (loss) for the period             | -               | -      |              | -         | -           | -          | (16,241       | ) | (16,241 | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Balance,December 31, 2004             | -               | -      |              | 2,196,500 | 220         | 129,405    | (50,516       | ) | 79,109  |  
|                                      |                 |        |              |           |             |            |               |   |         |  
|Net (loss) for the period             | -               | -      |              | -         | -           | -          | (28,091       | ) | (28,091 | )
|                                      |                 |        |              |           |             |            |               |   |         |  
|Balance,March 31, 2005 (Unaudited)    | -               | -      |              | 2,196,500 | 220         | 129,405    | (78,607       | ) | 51,018  |  

The accompanying notes are an integral part of these financial statements

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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Statements of Operations
        (Unaudited – Prepared by Management)
      (Expressed in U.S. Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                     |   | Cumulative       |   |   |              |   |   |              |  
|------------------------------------ | - | ---------------- | - | - | ------------ | - | - | ------------ | -
|                                     |   | October 14,      |   |   | Three Months |   |   | Three Months |  
|                                     |   | 2001 (inception) |   |   | Ended        |   |   | Ended        |  
|                                     |   | to March 31,     |   |   | March 31,    |   |   | March 31,    |  
|                                     |   | 2005             |   |   | 2005         |   |   | 2004         |  
|                                     |   |                  |   |   |              |   |   |              |  
|General and administrative expenses  |   |                  |   |   |              |   |   |              |  
|Bank charges                         | $ | 813              |   | $ | 147          |   | $ | 230          |  
|Consulting fees                      |   | 4,068            |   |   | -            |   |   | -            |  
|Management fees                      |   | 16,050           |   |   | -            |   |   | 6,420        |  
|Mineral property expenditures        |   | 11,924           |   |   | 1,737        |   |   | -            |  
|Office and Miscellaneous             |   | 3,912            |   |   | 334          |   |   | 50           |  
|Professional fees                    |   | 35,526           |   |   | 22,417       |   |   | 3,238        |  
|Transfer agent and
      filing fees |   | 6,314            |   |   | 3,456        |   |   | -            |  
|                                     |   |                  |   |   |              |   |   |              |  
|Net loss for the period              | $ | (78,607          | ) | $ | (28,091      | ) | $ | (9,938       | )
|                                     |   |                  |   |   |              |   |   |              |  
|Basic and diluted loss per share,    |   |                  |   |   |              |   |   |              |  
|Net loss per share                   |   |                  |   | $ | (0.01        | ) | $ | (0.01        | )
|                                     |   |                  |   |   |              |   |   |              |  
|Weighted average number of           |   |                  |   |   |              |   |   |              |  
|common shares outstanding            |   |                  |   |   | 2,196,500    |   |   | 1,696,500    |  

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

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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Statements of Cash Flows 
        (Unaudited – Prepared by Management)
      (Expressed in U.S. Dollars)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                 |   | Cumulative       |   |   |              |   |   |              |  
|---------------------------------------------------------------- | - | ---------------- | - | - | ------------ | - | - | ------------ | -
|                                                                 |   | October 14, 2001 |   |   | Three Months |   |   | Three Months |  
|                                                                 |   | (inception) to   |   |   | Ended        |   |   | Ended        |  
|                                                                 |   | March 31,        |   |   | March 31,    |   |   | March 31,    |  
|                                                                 |   | 2005             |   |   | 2005         |   |   | 2004         |  
|                                                                 |   |                  |   |   |              |   |   |              |  
|Cash flows from (used in) operating activities                   |   |                  |   |   |              |   |   |              |  
|Net (loss) for the
      period                                  | $ | (78,607          | ) | $ | (28,091      | ) | $ | (9,938       | )
|Changes in non-cash
      working capital items:                 |   |                  |   |   |              |   |   |              |  
|- accounts payable
      and accrued liabilities                 |   | 20,409           |   |   | 17,584       |   |   | 3,499        |  
|                                                                 |   |                  |   |   |              |   |   |              |  
|Net cash used in operating activities                            |   | (58,198          | ) |   | (10,507      | ) |   | (6,439       | )
|                                                                 |   |                  |   |   |              |   |   |              |  
|Cash flows from (used in) financing activities                   |   |                  |   |   |              |   |   |              |  
|Proceeds from issuance
      of common stock                     |   | 129,625          |   |   | -            |   |   | -            |  
|Due from a related
      party                                   |   | -                |   |   | -            |   |   | 1,000        |  
|Due to a related party                                           |   | -                |   |   | -            |   |   | 6,420        |  
|                                                                 |   |                  |   |   |              |   |   |              |  
|Net cash provided by financing activities                        |   | 129,625          |   |   | -            |   |   | 7,420        |  
|                                                                 |   |                  |   |   |              |   |   |              |  
|Increase (decrease) in cash and cash equivalents                 |   | 71,427           |   |   | (10,507      | ) |   | 981          |  
|                                                                 |   |                  |   |   |              |   |   |              |  
|Cash and cash equivalents (deficiency),beginning
      of period |   | -                |   |   | 81,934       |   |   | (7           | )
|                                                                 |   |                  |   |   |              |   |   |              |  
|Cash and cash equivalents, end of period                         | $ | 71,427           |   | $ | 71,427       |   | $ | 974          |  
|                                                                 |   |                  |   |   |              |   |   |              |  
|Supplemental cash flow information:                              |   |                  |   |   |              |   |   |              |  
|Interest expenses
      paid                                     | $ | -                |   | $ | -            |   | $ | -            |  
|Income taxes paid                                                |   | -                |   |   | -            |   |   | -            |  

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

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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Notes to Financial Statements 
        March 31, 2005 
        (Unaudited – Prepared by Management) (Expressed in U.S. Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1. | Incorporation and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Red Sky Resources Inc. (the “Company”)
        was formed on December 20, 2004 upon the merger (the “Merger”)
        of Pacific Petroleum Inc., a Delaware corporation (“Pacific Petroleum”)
        with its wholly owned subsidiary, Red Sky Resources Inc., a Nevada corporation
        (“Red Sky Nevada”). Pacific Petroleum was incorporated under
        the laws of the State of Delaware on October 14, 2001. Red Sky Nevada
        was incorporated under the laws of the State of Nevada on November 23,
        2004. At the time of the Merger, Pacific Petroleum owned all of the issued
        and outstanding shares of Red Sky Nevada. Each share of Pacific Petroleum
        common stock issued and outstanding immediately prior to the Merger was
        converted into one share of common stock of Red Sky Nevada. The surviving
        legal entity is Red Sky Nevada while the financial statements are the
        continuation of Pacific Petroleum.
|  
|   | The Company is in the business of exploring
        mineral properties. The Company has not yet determined whether its properties
        contain mineral resources that may be economically recoverable. The Company
        therefore has not reached the development stage and is considered to be
        an exploration stage company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|  
|   | The recoverability of mineral property
        costs is dependent upon the existence of economically recoverable reserves,
        confirmation of the Company’s interest in the underlying mineral
        claims, the ability of the Company to obtain necessary financing to complete
        the exploration and upon future profitable production.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | These financial statements have been prepared
        in accordance with generally accepted accounting principles applicable
        to a going concern, which contemplates the realization of assets and the
        satisfaction of liabilities and commitments in the normal course of business.
        The Company has not generated any revenue and requires additional funds
        to maintain its operations. Management’s plans in this regard are
        to raise equity financing as required.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|  
|   | These conditions raise substantial doubt
        about the Company’s ability to continue as a going concern. These
        financial statements do not include any adjustments that might result
        from this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | The Company has not generated any material
        operating revenues to date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Notes to Financial Statements 
        March 31, 2005 
        (Unaudited – Prepared by Management) (Expressed in U.S. Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Significant Accounting Policies (continued)
|-- | -------------------------------------------
|  
|   | c)                                         
|  
|   |                                            
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|   | d)                                         
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|   | e)                                         
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|   | g)                                         
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|   |                                            
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|   | h)                                         
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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Notes to Financial Statements 
        March 31, 2005 
        (Unaudited – Prepared by Management) (Expressed in U.S. Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Significant Accounting Policies(continued)
|-- | ------------------------------------------
|  
|   | i)                                        
|  
|   |                                           
|  
|   | j)                                        
|  
|   |                                           
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|   | k)                                        
|  
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|   | l)                                        
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|   | m)                                        
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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Notes to Financial Statements 
        March 31, 2005 
        (Unaudited – Prepared by Management) (Expressed in U.S. Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2. | Significant Accounting Policies(continued)
|-- | ------------------------------------------
|  
|   | n)                                        
|  
|   |                                           
|  
|   | o)                                        
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|   |                                           
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|RED
        SKY RESOURCES INC.
        (An exploration stage enterprise) 
        Notes to Financial Statements 
        March 31, 2005 
        (Unaudited – Prepared by Management) (Expressed in U.S. Dollars)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Mineral Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During the year ended December 31, 2004, the Company
        staked twenty-five mining claims located in the Iliamna Recording District
        of Southwestern Alaska. As the claims do not contain any known reserves,
        the acquisition costs were expensed during the year ended December 31,
        2004. The mineral claims are renewable on the 1st of every September conditional
        on meeting certain mineral exploration expenditures or by paying cash
        in lieu of mineral exploration expenditures.                                                     
|  
|4. | Oil and gas Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | In June 2003, the Company entered into a farmout
        agreement with Banks Energy Inc. (“Banks”), a related company
        by virtue of sharing a common officer and director, for the right to earn
        a 10.75% net revenue interest in one section of land by paying 12.75%
        of the drilling, completing and tie-in costs. The section of land is located
        in Tehama County, California. In July 2003, the Company expended $22,580
        for the drilling costs on a well on the property, which represented 12.75%
        of the estimated drilling costs.
|  
|   | In December 2003, Banks entered into an agreement
        with the operator of the property to sell all of its working interests
        in the property, including the Company’s 10.75% working interest,
        back to the operator for a minor loss. In conjunction with the sale, Banks
        agreed to reimburse the Company in full for all its exploration expenditures
        incurred on the property to date. The Company received $22,580 from
        Banks during the year ended December 31, 2004 for the reimbursement.                                             
|  
|5. | Share Issuances                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | During the year ended December 31, 2004, the Company
        received $100,000 for the issuance of 500,000 common stock at $0.20
        per share.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|6. | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | During the three months ended March 31, 2005, the
        Company paid management fees of $nil (three months ended March 31,
        2004 - $6,420) to the sole officer and director of the Company.                                                                                                                                                                                                                                                                                                                                                                                    
|  
|7. | Comparative Figure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | Certain of the comparative figures have been reclassified
        to conform to the current period’s presentation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|8. | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | Subsequent to the quarter ended March 31, 2005,
        the Company entered into a geophysical survey agreement with a third party.
        The agreement required the Company to make a deposit of $10,000 Canadian
        dollars (US $8,200) to secure the geophysical equipment for the planned
        Alaskan exploration work program.                                                                                                                                                                                                                                          

---

Item 2.                 Management’s
  Discussion and Analysis or Plan of Operations.

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 in our Form SB-2 filed March 15, 2005.
  Words or phrases such as “will”, “hope”, “expect”,
  “intend”, “plan” or similar expressions are generally
  intended to identify forward-looking statements. Those statements involve risks
  and uncertainties that could cause actual results to differ materially from
  the results discussed herein. The principal risks and uncertainties that may
  affect our actual performance and results of operations include the following:
  general economic conditions; exploration successes, continued availability of
  capital and financing; adverse weather; governmental regulation; 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 are in the business of mineral exploration. We acquired
  twenty-five mineral claims in southwestern Alaska via staking which we believe
  are prospective for gold and copper. Our mineral claims consist of twenty-five
  quarter sections which cover approximately 4,000 acres or 6.25 square miles
  and are in good standing with the State of Alaska through to September 1, 2005.

Our objective is to conduct mineral exploration activities
  on the property in order to assess whether it possesses commercially exploitable
  reserves of minerals. To date, we have not discovered an economically viable
  mineral deposit on the mineral claims, and there is no assurance that we will
  discover one. A great deal of further exploration will be required before a
  final evaluation as to the economic and legal feasibility for our future development
  is determined.

Plan of Operations

Our plan of operations for the next twelve months is to complete
  the following objectives within the time periods specified, subject to our obtaining
  the funding necessary for the continued exploration of our mineral claims:

1.    We plan to conduct phase one of our recommended
  exploration program on our mineral claims. Phase one will consist of an IP and
  ground magnetic survey and is estimated to cost approximately $30,000. We
  expect to commence this first phase of our exploration program in late May of
  2005 depending on the availability of personal and equipment. Phase one is expected
  to take approximately two weeks to complete and an additional four weeks for
  the interpretation of the data. We have engaged Alaska Earth Sciences, Inc.
  pursuant to a mineral exploration management services agreement dated March
  7, 2005 to complete this phase of our work program. In addition, in April 2005,
  we entered into a geophysical survey agreement with a third party to supply
  the geophysical equipment required for the work program.

2.    If warranted by the results of phase
  one, we intend to proceed with phase two of our recommended exploration program.
  Phase two is estimated to cost $23,000. We anticipate that we will have
  to raise additional funding in order to conduct the phase two program. If we
  obtain the necessary financing, we anticipate that phase two would be conducted
  during the late summer of 2005 or late spring 2006 and would take approximately
  six weeks to complete.

3.    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.

As at March 31, 2005, we had cash reserves of $71,427
  and working capital of $51,018. We anticipate that our cash and working
  capital will be sufficient to enable us to complete phase one of our exploration

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program and to pay for the costs of our general and administrative
  expenses for the next twelve months. However, our ability to complete phase
  two of the recommended work program will be subject to us obtaining additional
  financing as these expenditures will exceed our cash reserves.

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. However, we do not have any financing arranged and 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 phase two of our exploration
  program. 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 phase two 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 had no operating revenues since our inception on October
  14, 2001 through to the March 31, 2005. We anticipate that we will not generate
  any revenues for so long as we are an exploration stage company. Our activities
  have been financed from the proceeds of share subscriptions. From our inception,
  on October 14, 2001, to March 31, 2005, we have raised a total of $129,625
  from private offerings of our securities.

For the three month period ended March 31, 2005, we incurred
  operating costs of $28,091 compared to operating costs of $9,938 during
  the three month period ended March 31, 2004. During the current period, the
  operating costs included $22,417 in professional fees for the legal and
  accounting costs of the Form SB-2 filings during the period and mineral property
  expenditures of $1,737 relating to the preparation of a geological report
  on the Alaskan mineral property. During the comparative period in 2004, our
  operating costs included $6,420 in management fees to Mr. Lee, our sole
  executive officer, for compensation of his services and $3,238 in professional
  fees for our ongoing operations.

Liquidity and Capital resources

At March 31, 2005, we had cash on hand of $71,427 and
  working capital of $51,018. This compares with cash on hand of $81,934
  and working capital of $79,109 as at December 31, 2004. The decrease in
  working capital between the periods was due to our net loss of $28,091 during
  the current period.

Cash used in operating activities was $10,507 for the
  three month period ended March 31, 2005, compared with $6,439 cash used
  in operating activities for the three months ended March 31, 2004. The rise
  in cash used reflects the activity of our operations between the periods.

We anticipate that our cash and working capital will be sufficient
  to enable us to complete phase one of our exploration program and to pay for
  the costs of our general and administrative expenses for the next twelve months.
  However, our ability to complete phase two of the recommended work program will
  be subject to us obtaining adequate financing as these expenditures will exceed
  our cash reserves. We anticipate that our cash and working capital will be sufficient
  to enable us to sustain our operations for the next twelve months, provided
  that we do not complete phase two during this period. If we determine to proceed
  with phase two during the next twelve months, then we will require additional
  financing.

By September 1, 2005, we must complete $10,000 in annual
  labor or exploration expenditures on our mineral claims and file confirmation
  of work with the applicable mining recording office of the State of Alaska or
  make payment in lieu. In addition, by September 1, 2005, we must make payment
  to the State of

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Alaska of an annual rental fee of $2,500 for our twenty-five
  mineral claims, to keep our claims in good standing.

READERS SHOULD REFER TO RISK FACTORS SET OUT IN THE FORM
  SB-2 WE FILED MARCH 15, 2005, TO SEE RISK FACTORS THAT COULD AFFECT AND SUBSTANTIALLY
  ALTER OUR PLAN OF OPERATION.

Item 3.                 Controls
  and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to
  ensure that we are able to collect the information we are required to disclose
  in the reports we file with the Securities and Exchange Commission (SEC), and
  to process, summarize and disclose this information within the time periods
  specified in the rules of the SEC. Based on their evaluation of our disclosure
  controls and procedures which took place on March 31, 2005, the end of the period
  covered by this report, the Chief Executive and Financial Officers believe that
  these controls and procedures are effective to ensure that we are able to collect,
  process and disclose the information we are required to disclose in the reports
  we file with the SEC within the required time periods.

We also maintain a system of internal controls designed to
  provide reasonable assurance that: transactions are executed in accordance with
  management’s general or specific authorization; transactions are recorded
  as necessary (1) to permit preparation of financial statements in conformity
  with generally accepted accounting principles, and (2) to maintain accountability
  for assets; access to assets is permitted only in accordance with management’s
  general or specific authorization; and the recorded accountability for assets
  is compared with the existing assets at reasonable intervals and appropriate
  action is taken with respect to any differences.

During our last fiscal quarter, there have been no significant
  changes in such controls or in other factors that have materially affected,
  or is reasonably likely to materially affect, those controls.

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PART II.–OTHER INFORMATION

Item 1.                 Legal
  Proceedings.

None

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

None

Item 3.                 Default
  upon Senior Securities.

None

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

None

Item 5.                 Other
  Information.

None.

Item 6.                 Exhibits.

|Exhibit |  |                                                                                                                                                              
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description
      of Exhibit                                                                                                                                 
|3.1(1)  |  | Articles of Incorporation                                                                                                                                    
|3.2(1)  |  | By-Laws                                                                                                                                                      
|3.3(1)  |  | Articles of Merger, as filed with the
        Nevada Secretary of State                                                                                      
|3.4(1)  |  | Certificate of Merger, as filed with
        the Delaware Secretary of State                                                                                 
|5.1(2)  |  | Opinion of Lang Michener LLP, with consent
        to use, regarding the legality of the securities being registered                                         
|10.1(1) |  | Farmout Agreement with Banks Energy Inc.
        (formerly, Banks Ventures Ltd.) dated June 1, 2003                                                          
|10.2(1) |  | Mining Quitclaim Deed dated August 16,
        2004                                                                                                          
|10.3(2) |  | Agreement and Plan of Merger between
        Red Sky Resources Inc. and Pacific Petroleum Inc. dated December 6, 2004                                        
|10.4(2) |  | Mineral Exploration Management Services
        Agreement between Red Sky Resources Inc. and Alaska Earth Sciences Inc.
        dated March 7, 2005          
|10.5(3) |  | Geophysical
        Survey Agreement between Red Sky Resources Inc. and SJ Geophysical Ltd.
        dated April 14, 2005                                     
|31.1(3) |  | Certification
        Statement of the Chief Executive Officer pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002.                            
|31.2(3) |  | Certification
        Statement of the Chief Financial Officer pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002.                            
|32.1(3) |  | Certification
        Statement of the Chief Executive Officer and Chief Financial Officer pursuant
        to Section 906 of the Sarbanes-Oxley Act of 2002.

|(1) | Filed as an exhibit to our registration statement
        on Form SB-2 filed with the Commission on January 28, 2005                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed as an exhibit to our Amendment No. 1 to
        our registration statement on Form SB-2 filed with the Commission on March
        15, 2005.
|(3) | Filed as an exhibit to this Form 10-QSB.                                                                                                          

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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.

RED SKY RESOURCES INC.

|Signature        |  | Title                                                                          | Date        
|---------------- |  | ------------------------------------------------------------------------------ | ------------
|                 |  |                                                                                |             
|                 |  |                                                                                |             
|/S/ D. Barry Lee |  | President, Chief Executive Officer, Chief Financial
      Officer and Director | May 12, 2005
|D. Barry Lee     |  | (Principal Executive Officer and Principal Accounting
      Officer)           |             
|                 |  |                                                                                |             

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