UNITED STATESSECURITIES AND EXCHANGE COMMISSION


**Washington, D.C. 20549**







**FORM 10-QSB**







**QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF**
 **THE SECURITIES EXCHANGE ACT OF 1934.**
  **For the quarterly period ended September 30, 2004.**


x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004




 ̈ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM___________ TO __________




COMMISSION FILE NUMBER: 033-90355






QUEST OIL CORPORATION****


**(Exact name of small business issuer as specified in its charter)**




GameState Entertainment Inc.


**(Former name of registrant)**




**Nevada**

**000-26619**
****
**98-0207745**(State or other jurisdiction

(Commission File Number)

(IRS Employerof Incorporation)



Identification Number)**2000 East Lamar Boulevard**
**Suite 600****Arlington, Texas 76006**(Address of principal executive offices)**817-462-4091**(Registrants Telephone Number)




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




Securities registered pursuant to Section 12(g) of the Act:  Shares of Common Stock




Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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  ̈





As of the date of this Report, the Registrant had 20,436,920 shares of common stock issued and outstanding.




Transitional Small Business Disclosure Format (check one) Yes  ̈ No x



















Section
Heading
PagePart I
Financial InformationItem 1
Financial StatementsAuditor's Review Letter
F-1Balance Sheet as of September 30, 2004 (Unaudited) and March 31, 2003 (Audited)
F-2Interim Statement of Operations for the three months and six months ended September, 2004 and 2003
F-3Interim Statement of  Stockholders' Equity/(Deficit) at September 30, 2004Statement of Cash Flows for the three months and six months ended September, 2004 and 2003
F-4Notes to Financial Statements
F-5 - F-10Item 2
Management's Discussion and Analysis of Financial Condition and Results of Operations
1Item 3
Quantitative and Qualitative Disclosures about Market Risk
3Item 4
Controls and Procedures
3Part II
Other InformationItem 1
Legal Proceedings
4Item 2
Changes in Securities and Use of Proceeds
4Item 3
Defaults Upon Senior Notes
4Item 4
Submission of Matters of a Vote to Security Holders
4Item 5
Other Information
4Item 6
Exhibits and Reports on Form 8-K
4Signatures
5Sarbanes-Oxley Certifications




**(FORMERLY GAMESTATE ENTERTAINMENT, INC.)**


**(A Development Stage Company)**




**INTERIM FINANCIAL STATEMENTS**


**AS AT SEPTEMBER 30, 2004**


**(Unaudited - Prepared by Management)**



































**------INDEX------**








**Auditors Review Letter**





**Interim Balance Sheet**





**Interim Statement of Operations**





**Interim Statement of Stockholders Equity/(Deficit)**





**Interim Cash Flow Statement**





**Notes to Interim Financial Statements**














INDEPENDENT ACCOUNTANT'S REPORT





Quest Oil Corporation


(formerly GameState Entertainment, Inc.)


(formerly LanWerX Entertainment, Inc.)


(formerly Luna Medical Technologies Inc.)


(A Development Stage Company)





We have reviewed the accompanying balance sheet of Quest Oil Corporation (formerly GameState Entertainment,Inc.) (formerly LanWerX Entertainment, Inc.) (formerly Luna Medical Technologies Inc.) (a development stage company) as of September 30, 2004 and the related statement of operations for the three and six months ended September 30, 2004 and 2003 and the statement of cash flows for the six month periods ended September 30, 2004 and 2003. These financial statements are the responsibility of the Company's management.





We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.





We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the balance sheet of Quest Oil Corporation (formerly GameState Entertainment, Inc.) (formerly LanWerX Entertainment, Inc.) (formerly Luna Medical Technologies Inc.) (a development stage company) as of March 31, 2004, and the related statements of operations, cash flows, and stockholders' equity for the year then ended (not presented herein); and in our report dated July 7, 2004, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of March 31, 2004, is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.





Note 2 of the Company's audited financial statements as of March 31, 2004, and for the year then ended discloses that the Company has suffered recurring losses from operations and has no established source of revenue at March 31, 2004. Our auditors' report on those financial statements includes an explanatory paragraph referring to the matters in Note 2 of those financial statements and indicating that these matters raised substantial doubt about the Company's ability to continue as a going concern. As indicated in Note 2 of the Company's unaudited interim financial statements as of September 30, 2004, and for the three and six months then ended, the Company has continued to suffer recurring losses from operations and still has no established source of revenue at September 30, 2004. The accompanying interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





Respectfully Submitted,





\s\ MacKay LLP, Chartered Accountants








Vancouver, British Columbia, Canada


November 19, 2004





F-1










**QUEST OIL CORPORATION****(FORMERLY GAMESTATE ENTERTAINMENT, INC.)****(A Development Stage Company)****INTERIM BALANCE SHEET****AS AT SEPTEMBER 30, 2004 WITH AUDITED FIGURES AT MARCH 31, 2004****(Unaudited - Prepared by Management)****(Stated in US Dollars)**


(Unaudited)

(Audited)Sept 30, 2004

March 31, 2004ASSETSCURRENT ASSETSPrepaid expenses and deposits

$
1,250

$
1,2501,250


1,250EQUIPMENT (Notes 4(ii) and 5)Computer equipment


8,500


10,000Total Assets

$
9,750

$
11,250LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)CURRENT LIABILITIESBank overdraft

$
39

$
313Accounts payable


167,296


96,386Accrued expenses


1,350


6,500Convertible notes payable (Notes 6 and 10)


57,460


57,380Advances from shareholders (Notes 7, 10, and 12)


443,827


342,336669,972


502,915LONG TERMLoan payable (Note 8)


101,732


78,353Total Liabilities


771,704


581,268STOCKHOLDERS' EQUITY/(DEFICIT)Preferred shares, 5,000,000 shares authorized, $0.001 par value;no shares issued and outstanding (Note 9)Common shares, 95,000,000 shares authorized, $0.001 par value;20,436,920 and 16,461,920 shares issued and outstanding respectively (Note 10)


20,437


16,462Additional paid-in capital


1,066,368


826,093Accumulated deficit


(1,848,759
)

(1,412,573
)Total Stockholders' Equity/(Deficit)


(761,954
)

(570,018
)Total Liabilities and Stockholders' Equity/(Deficit)

$
9,750

$
11,250




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


F-2








**QUEST OIL CORPORATION****(FORMERLY GAMESTATE ENTERTAINMENT, INC.)****(A Development Stage Company)****INTERIM STATEMENT OF OPERATIONS****FOR THE THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER, 2004 AND 2003****(Unaudited - Prepared by Management)****(Stated in US Dollars)**









3 months

3 months

6 months

6 monthsended

ended

ended

endedSept 30, 2004

Sept 30, 2003

Sept 30, 2004

Sept 30, 2003REVENUES

$
-

$
1,225

$
-

$
1,225-


1,225


-


1,225EXPENSESAmortization


750


-


1,500


-Audit and accounting


1,089


1,219


2,674


1,219Bank charges and interest


9,742


6,203


22,475


11,862Consulting


182,220


9,605


234,442


9,605Foreign exchange loss


-


1,107


-


1,107Investor relations activities


984


-


984


-Legal


52,997


4,395


54,129


4,769Management fees


109,966


30,000


109,966


60,000Office


4,197


687


5,075


758Parking


1,486


186


1,486


186Promotional expenses


-


730


-


730Regulatory fees


1,545


-


1,545


307Rent


2,054


573


2,054


573Telephone


-


235


-


235Transfer agent


870


-


930


-Travel


303


2,171


303


2,171368,203


57,111


437,563


93,522Other ItemForgivness of Debt


(1,377
)

-


(1,377
)

-NET LOSS FOR THE PERIOD

$
(366,826
)
$
(55,886
)
$
(436,186
)
$
(92,297
)NET LOSS PER COMMON SHARE (Note 4(iii))

$
(0.02
)
$
(0.03
)
$
(0.02
)
$
(0.07
)WEIGHTED AVERAGE NUMBER OF BASIC ANDDILUTED COMMON SHARES OUTSTANDING


19,118,587


2,161,920


17,790,253


1,411,920


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





F-3








**QUEST OIL CORPORATION****(FORMERLY GAMESTATE ENTERTAINMENT, INC.)****(A Development Stage Company)****INTERIM STATEMENT OF STOCKHOLDERS' EQUITY/(DEFICIT)****AS AT SEPTEMBER 30, 2004****(Unaudited - Prepared by Management)****(Stated in US Dollars)**


(Unaudited)Common Shares

Additional



TotalNumber



Paid-In

Accumulated

Stockholders'of Shares

Amount

Capital

Deficit

Equity/(Deficit)Balance, March 31, 2001


8,095,660

$
8,096

$
434,459

$
(759,459
)
$
(316,904
)Net loss for the year endedMarch 31, 2002


-


-


-


(71,389
)

(71,389
)Balance, March 31, 2002


8,095,660


8,096


434,459


(830,848
)

(388,293
)Issuance of common shares inexchange for debt at $0.005 per share


25,000,000


25,000


100,000


-


125,000Net loss for the year endedMarch 31, 2003


-


-


-


(156,170
)

(156,170
)Balance, March 31, 2003


33,095,660


33,096


534,459


(987,018
)

(419,463
)Share consolidation of 1 new for 50 old


(32,433,740
)

(32,434
)

32,434


-


-Issuance of common shares inexchange for debt at $0.005 per share


15,000,000


15,000


60,000


-


75,000Issuance of common shares inexchange for assets $0.25 per share


800,000


800


199,200


-


200,000Net loss for the year endedMarch 31, 2004


-


-


-


(425,555
)

(425,555
)Balance, March 31, 2004


16,461,920


16,462


826,093


(1,412,573
)

(570,018
)Issuance of common shares inexchange for debt at $0.25 per share


40,000


40


9,960


-


10,000Issuance of common shares inexchange for legal and consulting fees


3,935,000


3,935


230,315


-


234,250Net loss for period endedSeptember 30, 2004


-


-


-


(436,186
)

(436,186
)Balance, September 30, 2004


20,436,920

$
20,437

$
1,066,368

$
(1,848,759
)
$
(761,954
)





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


F-4





**QUEST OIL CORPORATION****(FORMERLY GAMESTATE ENTERTAINMENT, INC.)****(A Development Stage Company)****INTERIM CASH FLOW STATEMENT****FOR THE THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 2004 AND 2003****(Unaudited - Prepared by Management)****(Stated in US Dollars)**


3 months

3 months

6 months

6 monthsended

ended

ended

endedSept 30, 2004

Sept 30, 2003

Sept 30, 2004

Sept 30, 2003OPERATING ACTIVITIESNet loss for the period

$
(366,826
)
$
(55,886
)
$
(436,186
)
$
(92,297
)Add back non-cash items:Amortization


750


-


1,500


-Forgiveness of debt


(1,377
)

-


(1,377
)

-Legal and consulting fees paid with shares


234,250


-


234,250


-(133,203
)

(55,886
)

(201,813
)

(92,297
)Changes in non-cash working capital itemsAccounts receivable


-


10,000


-


-Prepaid expenses


-


(1,250
)

-


(1,250
)Accounts payable


52,713


5,694


70,910


6,067Cash provided/(used) by operating activities


(80,490
)

(41,442
)

(130,903
)

(87,480
)FINANCING ACTIVITIESConvertible notes payable issued


-


-


-


10,000Accrued interest on convertible notes not paid


3,852


2,612


11,457


4,759Loan advanced


-


26,702


19,794


26,702Accrued interest on loan not paid


2,073


44


3,585


44Advances from shareholders


75,454


23,804


101,491


57,776Accrued expenses


(5,150
)

(6,500
)

(5,150
)

(6,500
)Cash provided/(used) by financing activities


76,229


46,662


131,177


92,781CASH INCREASE/(DECREASE)


(4,261
)

5,220


274


5,301CASH/(OVERDRAFT), BEGINNING OF PERIOD


4,222


81


(313
)

-CASH/(OVERDRAFT), END OF PERIOD

$
(39
)
$
5,301

$
(39
)
$
5,301SUPPLEMENTAL DISCLOSURE:Interest paid

$
-

$
-

$
-

$
-Income taxes paid

$
-

$
-

$
-

$
-NON-CASH ACTIVITIES:Issued stock for reduction in debt

$
10,000

$
75,000

$
10,000

$
75,000Issued stock for capital assets and goodwill

$
-

$
200,000

$
-

$
200,000Issued stock for legal and consulting fees

$
234,250

$
-

$
234,250

$
- *The accompanying notes are an integral part of these financial statements*





F-5







**QUEST OIL CORPORATION**


**(FORMERLY GAMESTATE ENTERTAINMENT, INC.)**


**(A Development Stage Company)**




**NOTES TO INTERIM FINANCIAL STATEMENTS**


**FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004**




**(Unaudited - Prepared by Management)**








1.
ORGANIZATION AND DESCRIPTION OF THE BUSINESS





Quest Oil Corporation (QOIL or the Company) is in the business of acquiring and participating in development stage oil and gas properties around the globe. The Company was incorporated on January 19, 1999 under the laws of the State of Nevada, and its principal executive offices are presently headquartered in Arlington, Texas.





These interim financial statements include all activity of the Company.





As a result of the change in business (see note 10) cumulative from inception figures have not been presented as management does not consider that these figures would provide meaningful information.





The Company has elected a fiscal year-end of March 31.








2.
GOING CONCERN





The accompanying interim financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying interim financial statements, the Company incurred a net loss of $436,186 for the six months ended September 30, 2004, and has negative working capital. These interim financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue in existence.








3.
BASIS OF PRESENTATION





These unaudited interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended September 30, 2004 and 2003 are not necessarily indicative of the results that may be expected for any interim period or the entire year. For further information, this interim financial statement and the related notes should be read in conjunction with the Companys audited annual financial statements for the year ended March 31, 2004 included in the Companys annual report on Form 10-KSB.





F-6


**QUEST OIL CORPORATION**
 **(FORMERLY GAMESTATE ENTERTAINMENT, INC.)**
 **(A Development Stage Company)**
  **NOTES TO INTERIM FINANCIAL STATEMENTS**
 **FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004**
  **(Unaudited - Prepared by Management)**


4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





A summary of the Companys significant accounting policies are included in the Companys 2004 Annual Report. Significant accounting policies which affect the Company or that may have been developed since March 31, 2004 are summarized below:





(i) Accounting Method





The Companys financial statements are prepared using the accrual method of accounting.





(ii) Equipment





Equipment is recorded at historical cost. The declining-balance method is used for the assets at the following annual rates:





Computer equipment  30%





(iii) Loss Per Share





Basic loss per share was computed by dividing the net loss by the weighted average number of shares outstanding during the period. The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted loss per share is the same as basic loss per share, as the inclusion of common stock equivalents would be anti-dilutive.





(iv) Provision for Taxes





At September 30, 2004, the Company had net operating losses of approximately $1,848,000 that may be offset against operating income in future years. No provision for taxes or tax benefits has been reported in these interim financial statements as there is not a measurable means of assessing future profits or losses.





(v) Use of Estimates





The process of preparing financial statements requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues, and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts.





(vi) Advertising





Advertising costs are charged to operations in the year incurred.





(vii) Cash and Cash Equivalents





The Company considers all highly liquid investments with maturity of three months or less at the date of acquisition to be cash equivalents.





(viii) Derivative Instruments





At September 30, 2004, the Company had not engaged in any transactions that would be considered derivative instruments or hedging activities.





(ix) Compensated Absences





The Company has no employees. At such time as the Company hires personnel, its employees will be entitled to paid vacation, paid sick days, and personal days off depending on job classification, length of service, and other factors. The Companys policy will be to recognize the cost of compensated absences when actually paid to employees.


****


F-7


**QUEST OIL CORPORATION**


**(FORMERLY GAMESTATE ENTERTAINMENT, INC.)**


**(A Development Stage Company)**




**NOTES TO INTERIM FINANCIAL STATEMENTS**


**FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004**




**(Unaudited - Prepared by Management)**




4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- Continued




(x) Foreign Currency Transactions





All figures presented are in US dollars. Foreign currency transactions are translated to US dollars using the exchange rate in effect at the time of the transaction.





(xi) Financial Instruments





All significant financial assets, financial liabilities, and equity instruments of the Company are either recognized or disclosed in these interim financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk, and credit risk. Where practicable, the fair value of financial assets and financial liabilities have been determined and disclosed; otherwise, only available information pertinent to the fair value has been disclosed.




5.  EQUIPMENT





30Sep04

30Sep04

31Mar04Cost

Accumulated Amortizatoin

Net Book Value

Net Book ValueComputer equipment

$
20,399

$
11,899

$
8,500

$
10,000








6.
CONVERTIBLE NOTES PAYABLE





There are three convertible notes payable at September 30, 2004. The notes are dated June 1, 2002 totalling $30,000 with interest at 2% per month compounded semi-annually which were due and payable on May 31, 2003. The principal and interest is convertible into common shares at a conversion price of $0.01 per share, at the option of the lender, with the conversion price of $0.01 based on the Companys share structure as of June 1, 2002.





During the quarter ended September 30, 2004,the holders of two convertible promissory notes in the principal amount of $10,000 converted the notes into 40,000 common shares of the Company.











F-8







**QUEST OIL CORPORATION**
 **(FORMERLY GAMESTATE ENTERTAINMENT, INC.)**
 **(A Development Stage Company)**
  **NOTES TO INTERIM FINANCIAL STATEMENTS**
 **FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004**
  **(Unaudited - Prepared by Management)**





7. ADVANCES FROM SHAREHOLDERS





Advances from shareholders consist of the following at September 30, 2004:





(i)
There was an advance including interest from Campbell Capital Advisory, Inc. totalling $152,940 (March 31, 2004 - $139,080). The amount is unsecured and bears 10% interest per annum. Campbell Capital Advisory, Inc. is a related company under the control of a shareholder of the Company (see Notes 10 and 12).





(ii)
There is a note payable to Javelin Enterprises totalling $2,932 including interest (March 31, 2004 - $2,790). The note payable is unsecured, has no stated maturity, and bears 10% interest per annum. During December of 1999, the Company issued 80,000 common shares as partial satisfaction of the note. Javelin Enterprises is a shareholder of the Company (see Note 12).





(iii)
There were advances from King Capital Corporation totalling $287,955 (March 31, 2004 - $200,466). The amount is unsecured and bears no interest. King Capital Corporation is a shareholder of the Company (see Notes 10 and 12).








8.
LOAN PAYABLE





A loan facility of $100,000 has been provided by an arms length third party with $95,590 (March 31, 2004 - $75,796) advanced to the Company as at September 30, 2004. The loan is due in three years from the date of the first advance being September 11, 2006 with interest only payable quarterly at 8% per annum, simple interest.






9. PREFERRED SHARES





The Company is authorized to issue up to 5,000,000 preferred shares with a par value of $0.001 per share. The preferred shares do not carry any pre-emptive or preferential rights to subscribe to any unissued stock or any other securities which the Company may be authorized to issue and does not carry voting rights. No preferred shares were issued as of September 30, 2004.








10. COMMON SHARES





The Company is authorized to issue up to 95,000,000 common shares with a par value of $0.001 per share. The voting rights of the common shares are non-cumulative.





Upon incorporation, 7,310,660 common shares were sold, 7,170,000 at $0.001 per share and 140,660 at $0.50 per share.





During the year ended March 31, 2000, the Company issued 630,000 common shares for cash at $0.50 per share. The Company also issued 100,000 common shares in settlement of outstanding debt at $0.50 per share.





During the year ended March 31, 2001, the Company issued 55,000 shares at $0.001 per share for a subscription receivable that was subsequently paid.





During the year ended March 31, 2003, the Company issued 25,000,000 sharesat $0.005 per share for a total of $125,000, for a reduction of debt;the Companys shares were consolidated on the basis of 1 new share for 50 old shares; the Company issued 15,000,000 common shares at $0.005 per share for a total of $75,000 for a reduction of debt to related parties; and the Company issued 800,000 common shares to the sellers of the Netopia Internet Café in exchange for all the assets, goodwill, trademarks, and intellectual property of the business.





On July 16, 2004, the holders of the two convertible promissory notes totalling $10,000 converted the notes and accrued interest into 40,000 common shares of the Company.





On August 3, 2004, the Company issued a total of 3,935,000 stock options at an exercise price of $0.001 or $0.05 to consultants pursuant to the 2004 Stock Incentive Plan. These stock options were immediately exercised into shares as per the terms of the consulting agreements. Consideration for the exercise of the stock options was the amount of the consulting agreements signed to provide services totalling $234,250.





F-9  **QUEST OIL CORPORATION**
 **(FORMERLY GAMESTATE ENTERTAINMENT, INC.)**
 **(A Development Stage Company)**
  **NOTES TO INTERIM FINANCIAL STATEMENTS**
 **FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2004**
  **(Unaudited - Prepared by Management)**





11. WARRANTS AND OPTIONS





No warrants or options were issued and outstanding at September 30, 2004.








12. RELATED PARTIES





The Companys former secretary, Gordon C. McDougall, is also the president and shareholder of Campbell Capital Advisory, Inc. (CCA) which had advanced funds to the Company for operations and to retain the services of an attorney. As of September 30, 2004, the Company owes CCA $152,940 (see Notes 7 and 10).





The Company executed a promissory note in favour of a shareholder for funds advanced to the Company. As partial satisfaction of the note, 80,000 common shares were issued. As of September 30, 2004, the balance owing on the note was $2,932 (see Note 7).





As at September 30, 2004, the Company also received advances from a corporation owned by the chief financial officer of the Company totalling $287,955 (see Notes 7 and 10).








13. FOREIGN OPERATIONS





The accompanying interim balance sheet includes the Companys assets in Canada. Although Canada is considered politically and economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Companys operations.








14. SUBSEQUENT EVENTS





On September 15, 2004, the Company announced that it entered into an agreement with Grey Creek Petroleum Corp. (Grey Creek) of Vancouver, British Columbia, Canada to acquire all the capital stock, including rights and interests to the Application Petroleum Prospectors Licenses that Grey Creek holds in Papua, New Guinea. On October 13, 2004, the letter of intent to acquire Grey Creek expired and the Company did not renew its interest.





On October 27, 2004, the Company established its new corporate head office at Suite 600 - 2000 East Lamar Blvd., Arlington, Texas, 76006.





On October 29, 2004, the Company announced the acceptance of Robert Martin to the Board of Directors.





On November 8, 2004, the Company established a wholly owned Canadian subsidiary, Quest Canada Corporation, in Edmonton, Alberta for the purpose of holding Alberta oil and gas property acquisitions.




F-10


**ITEM 2 -MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS**
 
 **BUSINESS HISTORY AND DEVELOPMENT**
 
 Quest Oil Corporation, formerly known as Gamestate Entertainment Inc., currently trades on the OTC Bulletin Board under the symbol QOIL and is referred to in this Form 10-QSB as the Company, the Registrant or the Issuer.
  During 2003, and until August of 2004, the company was attempting to acquire an active business. In August of 2004, the company changed its name to Quest Oil Corporation to reflect its intended acquisition of a new business as described below.
  On August 18, 2004, the Company signed a letter of intent to acquire 100% interest in Grey Creek Petroleum Ltd. (Grey Creek), a company incorporated in British Columbia, Canada with assets.
  In keeping with the companys new business plan and direction on August 18, 2004, the Company accepted the resignations of Ms. Gwenda Ellwood, Mr. Connor Cochrane and Mr. Gordon Skene.
  **Company Activity**
  The following business activities took place in the third quarter:
  1)
A variety of business sectors and related opportunities were reviewed for the companies business plan through July and August, the oil and gas sector was identified as the most prudent path for the Company;  2)
An LOI was entered into on August 18thfor all of the shares of Grey Creek Petroleum;  3)
Gamestate Entertainment Inc. changed its name to Quest Oil Corporation on September 7th, 2004;  4)
Collateral material supporting the name and business including a website and executive summary were developed and launched in September;  5)
Additions and deletions were made to the board of directors and advisory boards to support the Companies business plan;  6)
Consultants were engaged that could support the evaluation and acquisition of oil and gas properties;  7)
Additional Oil & Gas sector properties were sought out for acquisition.  Plan of Operation .
 
 As of the date of this report, the Company has one prospect under intent related to the oil and gas sector. Its business plan is to seek one or more potentially profitable oil and gas business combinations or acquisitions to secure profitability for shareholders. At the present time the Company is concentrating substantially all of its efforts in raising capital and developing business operations in the oil and gas sector.
 
 This should not be read or understood that the Company will engage in capital formation before an acquisition target has been secured and disclosed. A corporation with no current business is generally unable to sell securities for two reasons: first, because it has no basis on which to interest investors, and second, because its ability to do is substantially restricted by current rules and regulations. Accordingly, we will not seek to raise funds by offering securities before disclosure of any arrangement to secure valuable business assets.
 
 The Company has had substantial operating losses for the past years and is dependant upon outside financing to start operations. Such additional financing cannot be obtained before we find and disclose an acquisition of, or an arrangement to acquire, valuable business assets. This Company will seek one or more profitable business combinations or acquisitions. It will not and cannot engage in capital formation until and unless it acquires or adopts a specific business plan or business assets and can project the nature of its intended operations.
  The short term goals of Quest Oil Corporation include:
  1) Completion of an agreement to acquire an interest in an oil and gas property or properties that is at the development stage (vs. exploration) in the North American Market;
  2) secure the required capital for completion of the acquisition of the oil and gas property and its development through to production;
  3) Completion of an agreement to acquire an interest in an oil and gas property or properties in the North American market that are already in production and have revenues;
  4) Completion of an agreement to acquire an interest in a major oil and gas development prospect on an International level.
  1
 **Liquidity and Capital Resources**
  As of the date of this report, we require additional capital investments or borrowed funds to meet cash flow projections and carry forward our new business objectives. There can be no assurance that we will be able to raise capital from outside sources in sufficient amounts to fund our new business.
 
 The failure to secure adequate outside funding would have an adverse affect on our plan of operation and results there from and a corresponding negative impact on shareholder liquidity.
  **Plan of Operation for the Next Twelve Months**
  For the next twelve months we plan to continue to solidify acquisition contracts that are currently in the negotiation phase, complete the development plan for each of those acquisitions and aggressively seek out additional opportunities that will diversify the revenue source from the oil and gas sector.
  During the period ended September 30, 2004, we have been focusing on effectuating and implementing our business plan, that includes building relationships in the oil and gas sector, building a strong board of directors and advisory board capable in the oil and gas sector, establishing alliances that will assist in the necessary funding of the development programs contemplated and finding suitable targets for acquisition.  As such, we will require additional financing to continue implementing our business plan. We plan to reduce our losses during the next year by generating revenue at the well head and reducing certain operating expenses, including changes in management, and the location of  our administrative offices. However, there is no assurance that we will be able to obtain additional financing. There is no assurance that we will be able to generate revenue from the sale of oil and gas. The financial statements do not include any adjustments that might result from the outcome of those uncertainties.
  Over the next 12 months, we expect to have continual and consistent growth. However, in order to implement our business plan, we expect that during 2004/2005 our operating costs will more than offset our gross profit.
  We anticipate funding our working capital needs for the next 12 months through equity capital markets, private advances and loans. Although the foregoing actions are expected to cover our anticipated cash needs for working capital and capital expenditures for at least the next 12 months, no assurance can be given that we will be able to raise sufficient cash to meet these cash requirements.
  We plan to improve cash flow and operating results via the acquisition of development properties and from raising additional capital through private placements of stock, private advances, and loans. Should the Company acquire development properties, we may need to hire additional employees, agents, or independent contractors as well as purchase or lease additional equipment.
  We are dependent for our continuing operations on further debt or equity financings. Failure to obtain such financings could result in the company not being unable to continue its operations
  **OFF-BALANCE SHEET ARRANGEMENTS**
  As of the date of this Quarterly Report, the Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the Company is a party, under which the Company has (i) any obligation arising under a guarantee contract, derivative instrument or variable interest; or (ii) a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
  **Internal and External Sources of Liquidity**
  Quest Oil has funded its operations principally from issuance of common stock and borrowings in the form of advances from related parties.
  2
 ***Uncertainties relating to Forward Looking Statements***
 
 *This Form 10-QSB Quarterly Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by their use of words like plans, expect, aim, believe, projects, anticipate, intend, estimate, will, should, could and other expressions that indicate future events and trends. All statements that address expectations or projections about the future, including statements about Quest Oils strategy for growth, product development, market position, expenditures and financial results are forward-looking statements.*
 
 ***Forward-looking statements in this Form 10-QSB include statements regarding the following expectations:***
 **
 *The foregoing discussion, as well as the other sections of this Quarterly Report on Form 10-QSB, contains forward-looking statements that reflect the Company's current views with respect to future events and financial results. Forward-looking statements usually include the verbs "anticipates," "believes," "estimates," "expects," "intends," "plans," "projects," "understands" and other verbs suggesting uncertainty. The Company reminds shareholders that forward-looking statements are merely predictions and therefore inherently subject to uncertainties and other factors which could cause the actual results to differ materially from the forward-looking statements. Potential factors that could affect forward-looking statements include, among other things, the Company's ability to identify, produce and complete film projects that are successful in the marketplace, to arrange financing, distribution and promotion for these projects on favorable terms in various markets and to attract and retain qualified personnel.*
 **
 *All forward-looking statements are made as of the date of filing of this Form 10-QSB and Quest Oil disclaims any duty to update such statements.*
 **
 *Certain parts of this Form 10-QSB may contain forward-looking statements within the meaning of the Securities Exchange Act of 1934 based on current managements expectations. Actual results could differ materially from those in the forward looking statements due to a number of uncertainties including, but not limited to, those discussed in this section. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives requires the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate.*
 **
 *Quest Oil may, from time to time, make oral forward-looking statements. Quest Oil strongly advises that the above paragraph and the risk factors described in this quarterly report and in Quest Oils other documents filed with the United States Securities and Exchange Commission should be read for a description of certain factors that could cause the actual results of Quest Oil to materially differ from those in the oral forward-looking statements. Quest Oil disclaims any intention or obligation to update or revise any oral or written forward-looking statements whether as a result of new information, future events or otherwise*.
 
 **Currency Risks and Fluctuations**
 
 The Companys revenues to date and for the foreseeable future are received in Canadian dollars. The Canadian dollar has, in the quarter ending September 30, 2004, depreciated against the US dollar in which the Companys financial statements are prepared. If this trend continues, and given that some major expenses of the Company are fixed in US dollars, the Companys operating results could be negatively impacted by such currency fluctuations.
  **ITEM 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
  We face exposure to fluctuations in the price of our common stock due to the very limited cash resources we have. For example, the Company has very limited resources to pay legal and accounting professionals. If we are unable to pay a legal or accounting professional in order to perform various professional services for the company, it may be difficult, if not impossible, for the Company to maintain its reporting status under the '34 Exchange Act. If the Company felt that it was likely that it would not be able to maintain its reporting status, it would make a disclosure by filing a Form 8-K with the SEC. In any case, if the Company was not able to maintain its reporting status, it would become "delisted" and this would potentially cause an investor or an existing shareholder to lose all or part of his investment.
  ***Evaluation of Disclosure Controls and Procedures*** ******
  Within the ninety days prior to the date of this report, the Companys Chief Executive Officer and the Chief Financial Officer carried out an evaluation of the effectiveness of the design and operations of the Companys disclosure controls and procedures. The Companys disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in its periodic SEC filings is recorded, processed and reported within the time periods specified in the SECs rules and forms. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Companys disclosure controls and procedures are effective in a timely alerting time to material information relating to the Company required to be included in the Companys periodic SEC filings.
  ***Changes in Internal Controls*** ******
  There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.
  3   **Part II.**
 
 **Other Information**
 
 **Item 1.**  **Legal Proceedings**
 
 None.
 
 **Item 2.** **** **Unregistered Sales of Equity Securities and Use of Proceeds**
 
 None.
 
 **Item 3.** ****  **Defaults Upon Senior Securities**
 
 None.
 
 **Item 4.**  **Submission of Matters to a Vote of Security Holders**
 
 None.
 
 **Item 5.** **** **Other Information**
 
 On August 3, 2004, the Company entered into various Consulting Agreements, and as consideration for the services to be provided thereunder, the Company issued 3,935,000 shares of common stock options pursuant to the Companys 2004 Stock Incentive Plan. The Company filed, with the Securities and Exchange Commission, the material terms and conditions of the 2004 Stock Incentive Plan, on Form S-8 on August 5, 2004. The options issued pursuant to the Consulting Agreements were immediately exercised into shares of the Companys common stock.
 
 **Item 6.** **** **Exhibits and Reports Filed on Form 8-K:**
 
 (a) Exhibits (numbered in accordance with Item 601 of Regulation S-B)
 
 3.1 Articles of Incorporation, as Amended (1)
 3.2 Bylaws of Company (1)
 31.1**     Certification of Chief Executive Officer Pursuant to Section 302
 31.2**     Certification of Chief Financial Officer Pursuant to Section 302
 32.1**     Certification of Chief Executive Officer Pursuant Section 906
 32.2**     Certification of Chief Financial Officer Pursuant Sections 906
 
 (1)     Filed with the Securities and Exchange Commission in the Exhibits to Form 10-SB, filed in July, 1997 and are incorporated by reference herein.
 ** Filed herewith.
 
 (b) Forms 8-K
 
 On October 29, 2004, the Company filed an 8-K announcing the election of a new director, an increase in its authorized shares and a change in the Companys transfer agent.
   4   **Quest Oil Corporation.**
 
 **SIGNATURES**
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 **QUEST OIL CORPORATION.**
(Registrant)DATED: November 19, 2004



By:
/s/ Rod BartlettRod Bartlett*CEO*