10QSB

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

FORM 10-QSB

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

For the quarterly period ended August 31, 2008

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

For the transition period from _________ to __________

Commission file number 000-50375

CALIFORNIA OIL & GAS CORPORATION
(Exact name of small business issuer as specified in its charter)

Nevada	98-0389524
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

#2000, 633 – 6th Avenue SW, Calgary, Albert Canada T2P 2Y5
(Address of principal executive offices)

(403) 261-1965
(Issuer’s telephone number)

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

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

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

46,088,471 common shares issued and outstanding as of October 17, 2008.

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

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

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PART I

Item 1. Financial Statements

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

California Oil & Gas Corporation

BALANCE SHEETS

		August 31, 2008			November 30, 2007
		(unaudited)
ASSETS
Current assets
Cash	$	237,103			238,140
Joint interest billings receivables		113,384			1,217,948
Restricted cash - certificates of deposit		60,000			30,000
Deposits		7,065			16,250
Total current assets		417,552			1,502,338
Long term assets
Oil and gas properties, net (successful efforts method)		873,357			924,778
Property and equipment, net		1,907			2,119
Total long term assets		875,264			926,897
Total Assets	$	1,292,816		$	2,429,235
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	658,967		$	1,964,200
Debentures, related parties		175,000			175,000
Advances, related parties		72,000			-
Loan payables, net of discount		221,700			-
Total current liabilities		1,127,667			2,139,200
Total liabilities		1,127,667			2,139,200
Contingencies
Shareholders' equity
Common Stock - $.001 par value, 600,000,000 shares
authorized, 42,088,471 and 40,888,471 issued and
outstanding as of August 31, 2008 and November 30,
2007 respectively		42,089			40,889
Additional paid in capital		4,361,855			3,741,018
Accumulated deficit		(4,238,795	)		(3,491,872	)
Total shareholders' equity		165,149			290,035
Total Liabilities and Shareholders' Equity	$	1,292,816		$	2,429,235

The accompanying notes are an integral part of these financial statements

California Oil & Gas Corporation

STATEMENTS OF OPERATIONS
(unaudited)

		For the three months ended						For the nine months
		August 31,						ended August 31,
		2008			2007			2008			2007
REVENUES
Gas sales, net of royalty	$	21,777		$	65,806		$	127,423		$	76,595
EXPENSES
Production costs		10,672			-			47,203			-
General & administrative		124,918			160,517			717,964			374,010
Depletion and depreciation		-			4,961			92,752			18,139
Impairment of oil and gas properties		-			8			-			253,217
Total expenses		135,590			165,486			857,919			645,366
Operating loss		(113,813	)		(99,680	)		(730,496	)		(568,771	)
Other income and expense
Interest income		392			2			392			145
Interest expense		(14,201	)		-			(16,819	)		-
Net loss	$	(127,622	)	$	(99,678	)	$	(746,923	)	$	(568,626	)
Net loss per share
Basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.01	)
Weighted average shares outstanding
Basic and diluted		41,653,688			39,820,766			41,279,380			39,597,933

The accompanying notes are an integral part of these financial statements

California Oil & Gas Corporation

STATEMENTS OF CASH FLOWS
(unaudited)

		For the nine months ended August 31,
		2008			2007
Cash flows from operating activities
Net loss	$	(746,923	)	$	(568,626	)
Adjustments to reconcile net loss to cash
used by operating activities
Amortization of loan discount		14,200			-
Depreciation and depletion		92,752			18,139
Impairment of oil and gas properties		-			253,217
Stock based compensation		474,562			58,771
Net changes in :
Investment in certificate of deposit		(30,000	)		-
Deposits		9,185			100,000
Joint interest billing receivables		1,104,565			(51,331	)
Accounts payable and accrued liability		(1,305,234	)		(25,586	)
Net cash flows used in operating activities		(386,893	)		(215,416	)
Cash flows from investing activities
Acquisition of oil and gas properties		(41,119	)		(1,704,656	)
Net cash flows used in investing activities		(41,119	)		(1,704,656	)
Cash flows from financing activities
Proceeds from loan payable		250,000			-
Proceeds from advances from related party		72,000			-
Proceeds from sale of common shares, net		104,975			1,239,912
Net cash flows provided by financing activities		426,975			1,239,912
Net decrease in cash		(1,037	)		(680,160	)
Cash, beginning of period		238,140			709,502
Cash, end of period	$	237,103		$	29,342
Net cash paid during the period for:
Interest	$	-		$	-
Income taxes	$	-		$	-
Non cash transactions:
Oil and gas properties financed with accounts payable	$	-		$	699,251
Deposits reclassified to oil & gas properties	$	-		$	250,000
Issuance of common shares in connection with the
issuance of loan payable	$	42,500		$	-

The accompanying notes are an integral part of these financial statements

California Oil & Gas Corporation

Notes to the Financial Statements August 31, 2008
(unaudited)

1.	Basis of Presentation
	The accompanying unaudited interim financial statements of California Oil & Gas Corporation (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report filed with the SEC on Form 10-KSB. In the opinion of management, all adjustments, consisting of normal adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year end November 30, 2007 as reported in Form 10-KSB, have been omitted.
2.	Reclassification
	Certain amounts in the 2007 financial statements have been reclassified to conform to the 2008 financial statement presentation.
3.	Common Stock
	As of August 31, 2008, there were 42,088,471 common shares issued and 45,672,276 common shares, on a diluted basis.
	On April 9, 2008, the Company issued 700,000 units of our company to one investor, who is the wife of the president of the Company, in a private placement at a price of $0.15 per unit for aggregate proceeds of US$105,000. Each unit consists of one common share and one half common share purchase warrant. Each full common share purchase warrant entitles the holder to purchase one additional common share of our company at a price of $0.20 per warrant share until the warrants expire on April 8, 2009. The fair market value of the 350,000 purchase warrants issued in April 2008 was valued at $24,190. The fair market value of these warrants was calculated using the Black Scholes option pricing with the following assumption; risk free interest rate – 3.36%, volatility – 111%, expected life of two years.
	On August 19, 2008, we issued 500,000 shares of our company to one investor in consideration for a loan of $250,000 ($221,700 net of discount as at August 31, 2008). The 500,000 shares were valued at $42,500 and, as at August 31, 2008, $14,200 of this value was charged to interest expense in the third quarter of 2008. The lender is not a U.S. person and we relied on the exemption from the requirements of the Securities Act of 1933 provided by Regulation S promulgated thereunder.
	The fair market value of the 2,500,000 options issued in November 2007 was valued at $838,212 and is being expensed ratably over the three year vesting period. Stock-based compensation of $474,562 and $58,771 was expensed during the nine months ended August 31, 2008 and August 31, 2007, respectively. The fair market value of the options was calculated using the Black-Scholes option pricing as follows:

	2007
Risk free interest rate (%)	3.36
Volatility (%)	137
Expected life (years)	3

California Oil & Gas Corporation

4.	Oil and Gas Properties
	During the nine month period ended August 31, 2008, the Company acquired certain non-producing oil and gas leases in California for $41,119. The Krotz Springs property, which is the Company’s only proved property, generated $127,423 in net revenues, after deducting royalties of $5,711 for the nine months ended August 31, 2008. As of August 31, 2008, the net book value of the oil and gas properties was $873,357 which is made up of $873,357 from unproven properties.
	As at August 31, 2008 the Krotz Springs property is fully depleted.
5.	Litigation Contingency
	On April 3, 2008, The Company received a petition filed by Daybreak Oil & Gas, Inc. in the Nineteenth Judicial t Court of the State of Louisiana, Parish of East Baton Rouge, Suit Number 562933, Division SEC.24. In that petition, Daybreak Oil & Gas alleges that the Company owes Daybreak Oil & Gas the amount of $587,465, being 25% of the cost of the #60 Haas-Hirsch well in the Krotz Springs Prospect, as the result of our breach of a Joint Operating Agreement in which we agreed to pay 25% of the costs associated with the well. Daybreak Oil & Gas is also seeking interest on the amounts alleged owing plus a reasonable attorney’s fee and the costs of the action. The Company has filed a statement of defense in the State of Louisiana. As of August 31, 2008, the full amount of the asserted damages, less attorney’s fees and interest, has been accrued by the Company. Ultimately, if litigation ensues and judgement requiring immediate payment results, there could be a significant adverse impact on the Company’s operations. Daybreak Oil & Gas, as operator and with the Company’s permission, retains the royalty income earned by the Company on the aforementioned producing well, and offsets these amounts against the balance of operating costs they claim is owed to them by the Company. Accordingly, the Company has no cash flow from its revenue stream.
6.	Related Party
	During the three month period ended August 31, 2008, the Company received advances from a corporation controlled by an officer of the company. In total $72,000 was advanced to the Company. There are no repayment terms on these advances and no interest expense was calculated.
7.	Loan Payable
	On August 14, 2008, we signed a loan agreement with Humboldt Capital Corporation whereby Humboldt Capital Corporation agreed to loan to our company $250,000 in consideration for the issuance of 500,000 shares of our common stock to Humboldt Capital Corporation. A fair value of $42,500 was attributed to this consideration and expensed in the third quarter of 2008.
	The loan is due and payable on September 30, 2008 together with interest from the date of the advance to September 30, 2008 at a rate of 10% per annum.
8.	Subsequent Events
	On September 29, 2008 the Company sold 4,000,000 shares to one investor in a private placement of $0.05 per share for proceeds of $200,000. The investor is the wife of an officer of the Company and is not a U.S. person. In closing the private placement the Company relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Regulation S promulgated thereunder.
	On September 1, 2008 the Company entered into a $100,000 loan agreement with a non related party investor. In consideration for the investor making the loan, the Company has issued to the investor a promissory note due December 31, 2009 and warrants to buy up to 2,000,000 shares of the Company's common stock at an initial exercise price of $0.12 per share. If the promissory note is not repaid in full on or before December 31, 2009 or if sooner, upon the occurrence of an Event of Default as defined in the promissory note agreement, permitting acceleration of the Obligations hereunder, the outstanding principal and all accrued interest may be converted, in Lender's sole and absolute discretion, into shares of the Company's common stock at a conversion price equal to six ($0.06) cents per share.

California Oil & Gas Corporation

The Company received an extension on the loan payable of $250,000 due to Humboldt Capital Corporation. An extension was granted until November 15, 2008.

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Item 2. Management’s Discussion and Analysis and Plan of Operation.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. Forward-looking statements are statements that relate to future events, future financial performance or are otherwise projections of future results. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section of this quarterly report on Form 10-QSB entitled “Risk Factors”, that may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

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

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to shares of our common stock.

As used in this quarterly report, the terms “we”, “us”, “our”, “our company” and “California Oil & Gas” mean our company, California Oil & Gas Corporation, unless otherwise indicated.

Our Current Business

We are an early stage production company engaged in the identification, acquisition and exploration of oil and natural gas properties. Since transitioning our focus from mineral resource properties to oil and natural gas properties in January of 2006, we have entered into letters of intent and agreements, all of which are discussed below in greater detail, whereby we have earned, or we hope in the future to earn, an interest in certain oil and gas properties located in California and Louisiana.

Plan of Operation and Cash Requirements

Overview

You should read the following discussion of our financial condition and results of operations together with our reviewed but unaudited financial statements and the notes to those reviewed but unaudited financial statements included elsewhere in this filing prepared in accordance with accounting principles generally accepted in the United States. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those anticipated in these forward-looking statements.

California

To date, our partners in the East Slopes project have leased over 19,000 acres of mineral property in four prospect areas. Initial interpretation of a 3-D seismic program conducted over three of these four areas has been completed. Using this information and acting in consultation with our partners and Chevron U.S.A. Inc., we have selected locations for four exploration earning wells. We anticipate that drilling should begin during the next four weeks, with the four wells drilled by December 31, 2008, subject to equipment availability, government approvals (including environmental approvals) and the normal constraints of weather and financing.

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On July 9, 2007, we, together with the other participants in the East Slopes project, entered into a seismic option farm-in agreement dated for reference June 21, 2007 with Chevron U.S.A. Inc. granting to Chevron an option to farm-in to a 50% interest in the East Slopes project if Chevron funded a High Definition 3-D Exploration Seismic Survey over a project area in the San Joaquin area of Southern California consisting of approximately 22,500 acres. The project area is comprised of 19,000 gross acres of mineral leaseholds to be contributed by our current partners and approximately 3,500 gross acres of mineral leaseholds contributed by Chevron, all of which has been subdivided into three prospect areas. Under the terms of the agreement, Chevron had the right, but was not obligated, to fund the high definition 3-D exploration seismic survey over the project area. The agreement provides that if Chevron chose to fund the survey (which they did), our company would act as the operator. The agre ement also provides that if the survey was shot and the data are acquired, processed and delivered to the other parties to the agreement, Chevron will have earned 50% of the interest held by our partners in the 19,000 gross acres of mineral leaseholds contributed by them and our current partners would have the option to farm-in to a 50% interest in the 3,500 gross acres contributed to the project by Chevron by drilling four initial test wells on what all of our partners mutually agree to be the best exploration prospects within the seismic acquisition area. If this occurs, then our current partners as a group and Chevron will then each hold a 50% interest in the lands and wells. The agreement provides that our company would also be the operator for the purposes of drilling each of these four test wells. If after we have drilled these four test wells the parties decide to continue exploration in any of the prospect areas, Chevron will have the right, at its option, to become the operator in place of our co mpany for the production phase. Beginning in mid-September, 2007, we began preliminary work on the 3-D seismic project and data acquisition began October 15, 2007. Field data acquisition for the 35.2 square mile seismic survey has been completed, the data have been processed and an initial interpretation of the data has been completed. Final agreement on the initial four exploration earning well has been reached. Drilling is planned to follow as governed by equipment availability, surface access and permitting. Drilling permits have been obtained for three of the four well locations, and an application for a drilling permit has been submitted for the fourth well. Approval is pending.

With the exception of the 50% working interest (reduced to 25% through the farm-in by Chevron) recently acquired in 320 acres of leases in the Dyer Creek area, our company does not currently own any interest in this Eastern Slopes project. We have previously entered into a farm-in agreement with our current partners that gives us the ability to earn an interest. Under this agreement, and following final interpretation of the seismic data derived from the High Definition 3-D Exploration Seismic Survey, we will have the option to earn a 12.5% interest (including recovery of 200% of costs) in the seismic area leases and wells by paying 25% of the cost of three wells in each of the three prospect areas covered by the seismic survey. We have elected to exercise the option and plan to participate in the program. Following the earning phase, our capital requirements would be to a 12.5% working interest.

Under the farm-in agreement with Chevron, Chevron has a ‘call’ right to purchase any oil, gas or other hydrocarbons produced under the terms of the agreement at posted, competitive pricing.

We anticipate that we will spend approximately $2 million to earn and maintain our interest in the East Slopes project over the next 12 months.

In the North project, basic exploration techniques have identified an area that could be prospective for shallow oil production. Over the next 12 months we plan to continue our geologic analysis of the area, the acquisition of oil and gas leases in areas considered prospective, and acquisition of 2-D and 3-D seismic data in anticipation of beginning exploratory drilling. We anticipate that we will spend approximately $500,000 on this project over the next 12 months, although the prime focus of our company during this period will be on operation of the initial drilling, and potential subsequent development of any exploration drilling successes, in the area covered by the 3-D seismic program.

Our company, in partnership with Consolidated Beacon Resources Ltd. (TSX-V:KBC-V), a Canadian public company, acquired from third parties a 50% interest in 320 acres of oil and gas leases in each of the Dyer Creek and Southeast Edison fields in the San Joaquin Basin in California. The Dyer Creek acreage (50% working interest) is within the area covered by the 3-D seismic survey and was subject to the Chevron farm-in which reduced our interest to 25%. The Southeast Edison leases (50% working interest) are outside all areas of mutual interest. Both fields were productive in the 1940’s and were abandoned.

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We executed a Letter of Intent with Consolidated Beacon Resources Ltd. to acquire its interests in the San Joaquin Basin, which include an approximately 10% interest in both the southern and northern areas, Consolidated Beacon’s 50% working interest in the 320 acre Dyer Creek parcel and 50% of their 50% interest in the 320 acre Southeast Edison parcel. Consideration is to be $1,250,000 ($575,000 cash and the remainder in shares of our common stock at a deemed price of $0.50 per share). This transaction was conditioned on the approval of Consolidated Beacon’s shareholders, the TSX Venture Exchange, financing and other regulatory approval. Consolidated Beacon’s shareholders, at their Annual General Meeting on May 2, 2008, did not approve the transaction. As a result of the failure of the condition, the Letter of Intent has expired.

Louisiana

As we have previously disclosed, the cost of the Krotz Springs well in Louisiana was significantly over budget. As a result, our share of the well drilling and completion costs increased from the original estimate of $1,000,000 to $2,277,058. We have paid $1,913,796 of this amount to the operator and $363,262 remained outstanding at August 31, 2008. Although the operator has demanded payment of the balance, we have not made any further payments. We have previously assigned our share of revenue from the well to the operator and as revenue is received it goes to reduce the balance claimed by the operator. The operator has recently filed a lawsuit in State Court in Louisiana to recover the balance due. We believe that we have defences to this lawsuit. This lawsuit is discussed in more detail in the section of this Quarterly Report on Form 10-QSB, titled “Legal Proceedings”, beginning at page 15, below.

The well is currently producing. For the period December 2007 through August 2008 the revenues from this well, net of royalty, were $127,423. With the exception of ongoing production, we believe that there will be no activity at Krotz Springs during the next 12 months. As a result of a minor maintenance procedure, current well production has been significantly higher than in the past, which has resulted in higher revenue from the well. This revenue is paid directly to the partner who operated the drilling of the well to reduce any amount owing on the well.

Our “E” project in Louisiana involves the potential exploration of a subterranean structure. Current operations involve leasing of acreage over the structure that our partners believe may be prospective for oil, gas and/or condensate. After leasing is completed, we expect that our partners will consider acquisition of 3-D seismic data. If interpretation of the seismic data identifies prospective locations, exploration wells might be planned and drilled. We believe that it is unlikely that a well will be drilled during the 12 month period ending October 20, 2009. The project is currently on hold and we anticipate only minimal expenditures over the next 12 months. We are considering reducing our interest in this project through a sale or farm-out of our interest.

Other Activity

We expect to continue to investigate other opportunities within the oil and gas sector, both domestic and international, over the next 12 months. We anticipate that our costs for these activities over the next 12 months should be approximately $100,000.

Employees

We do not currently have any employees (other than our directors and officers who, at present, have not signed an employment or consulting agreement with us). One of our directors works full-time for our company, for which he earns a salary. We do not expect any material changes in the number of employees over the next 12 month period (although we may enter into employment or consulting agreements with our officers or directors). We do and will continue to outsource contract employment as needed. We have an agreement with one consultant who performs general administrative and clerical functions for our company on an as-needed basis.

Financial Condition, Liquidity and Capital Resources

From inception on June 21, 2002 to November 30, 2006 (the date that we abandoned our mineral exploration business), we were engaged in the acquisition and exploration of mineral properties. Our principal capital resources have been acquired through the issuance of common stock.

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At August 31, 2008, we had a working capital deficiency of $710,115.

At August 31, 2008, our total assets of $1,292,816 consisted of current assets of $417,552 and oil and gas properties and other long term assets of $875,264. This compares with our total assets at November 30, 2007 of $2,429,235 which consisted of current assets of $1,502,338 and long term assets of $926,897. The decrease in total assets is primarily due to a decrease in accounts receivable of $1,104,564.

At August 31, 2008, our total liabilities were $1,127,667 compared to our liabilities of $2,139,200 as at November 30, 2007. The 45% decrease in these liabilities consisted primarily of a decrease in trade payables of $1,305,233.

On August 7, 2007, we closed a private placement of 363,636 units for gross proceeds of $200,000. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one additional common share of our company at a price of $0.55 per warrant share until the warrants expire on August 7, 2008.

On November 1, 2007, we closed a private placement of 315,791 units for gross proceeds of $180,001. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one additional common share of our company at a price of $0.67 per warrant share until the warrants expire on October 31, 2009.

On April 9, 2008, we closed a private placement of 700,000 units for gross proceeds of $105,000. Each unit consisted of one common share and one common share purchase warrant. Each common share purchase warrant entitles the holder to purchase one additional common share of our company at a price of $0.20 per warrant share until the warrants expire on April 8, 2009.

On August 14, 2008, we signed a loan agreement with Humboldt Capital Corporation whereby Humboldt Capital Corporation agreed to loan to our company $250,000 ($221,700 net of discount) in consideration for the issuance of 500,000 shares of our common stock to Humboldt Capital Corporation. The loan is due and payable on September 30, 2008 together with interest from the date of the advance to September 30, 2008 at a rate of 10% per annum. We were granted an extension on the repayment of the loan to November 15, 2008.

On August 19, 2008, we issued 500,000 shares of our company in consideration for a loan of $250,000.

On September 1, 2008, we issued a promissory note to one accredited investor in the amount of $100,000. As part of the consideration for the loan evidenced by this promissory note, we issued warrants to purchase up to 2,000,000 shares of our common stock at an initial exercise price of $0.12 (subject to adjustment). The promissory note is due December 31, 2009. If we do not repay the loan by that date, or if we default in our obligations under the promissory note prior to maturity, the principal and all accrued interest may be converted, at the lender’s option, into shares of our common stock at a conversion price equal to $0.06 per share.

On September 29, 2008, we closed a private placement of 4,000,000 shares of our company for gross proceeds of $200,000.

Cash Requirements

Over the next 12 months, we intend to spend approximately $400,000 on general and administrative expenses, approximately $100,000 on the search for new opportunities and approximately $2,500,000 on our oil and gas activities. At August 31, 2008, we had cash of $237,103 and a working capital deficiency of $710,115. Our working capital requirements could increase if we identify, assess and acquire one or more new oil and gas exploration or development properties during the year. The amount of the increase will depend, to a large extent, on the nature of the opportunities identified, if any.

Specifically, we estimate our operating expenses for the next 12 months to be as follows:

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California Projects	$	2,500,000
Acquisition evaluation	$	100,000
General and Administrative	$	400,000
Total	$	3,000,000

We do not have the funds required to pay for our proposed expenditures over the next 12 months. If we cannot raise these funds when needed we will be required to scale down or discontinue our plan of operations. As we cannot assure a lender that we will be able to successfully explore and develop our properties, we believe that we will be unable to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity, but there can be no assurance that we will be able to do so on commercially reasonable terms, if at all. If we cannot raise the money that we need to in order to pursue our business plan, we may be forced to delay, scale back, or even eliminate our exploration activities. If this were to happen, our business could fail.

Exploration and Development

Our business plan is focused on a strategy of acquiring and maximizing the long-term exploration and development of oil and gas opportunities. To date, execution of our business plan has largely focused on assessing prospective oil and gas interests and acquiring the interests that we have acquired in California and Louisiana, as well as those that we recently failed to farm-in on in Chile. As our plans for these properties continue to develop based on leasing progress, results of initial wells and other exploration and related events that will evolve over time, we hope to structure and implement an exploration and development plan. In addition, we continue to look for additional properties of interest.

Going Concern

Our financial statements for the year ended November 30, 2007 were prepared assuming that we would continue as a going concern. As described in the explanatory paragraph to our independent auditors' report on our financial statements for the year ended November 30, 2007, which were included in our annual report on Form 10-KSB filed with the SEC on March 12, 2008, we have suffered recurring losses from operations, we have negative cash flows, we have a stockholders’ deficiency and we are dependent upon obtaining adequate financing in order to continue to pursue our business plan. These factors raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Recently Issued Accounting Standards

Management does not anticipate that any recently issued accounting pronouncements will have a material impact on the financial statements or cash flows of our company.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.

We have historically incurred losses and through August 31, 2008 have incurred losses of $4,238,795 since inception. Because of these historical losses, we will require additional working capital to develop our business operations. We do not anticipate that we will derive any revenues from operations unless and until we establish the existence of a reserve on any of our properties and put a well into production. There can be no assurance that we can do so or that, even if we are successful in doing so that we will be able to operate profitably.

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We intend to raise additional working capital as and when we need it through private placements, public offerings and/or bank financing. We have historically raised working capital through the sale of equity securities but there can be no assurance that we will be able to continue to do so. As of the date of this quarterly report on Form 10-QSB, we are not engaged in any discussions with prospective investors and we have no definitive agreements for the investments of any funds in our company.

There are no assurances that we will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should we be unable to continue as a going concern.

RISK FACTORS

GENERAL STATEMENT ABOUT RISKS

An investment in our common stock involves a number of very significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this quarterly report in evaluating our company and our business before purchasing shares of our company’s common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. You could lose all or part of your investment due to any of these risks.

This quarterly report on Form 10-QSB contains forward-looking statements. Forward-looking statements are statements that relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this quarterly report include statements about:

• Our future operating results,
• Our future capital expenditures,
• Our expansion and growth of operations, and
• Our future investments in and acquisitions of oil and natural gas properties.

These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including:

• General economic and business conditions,
• Exposure to market risks in our financial instruments,
• Fluctuations in worldwide prices and demand for oil and natural gas,
• Fluctuations in the levels of our oil and natural gas exploration and development activities,
• Risks associated with oil and natural gas exploration and development activities,
• Competition for raw materials and customers in the oil and natural gas industry,
• Technological changes and developments in the oil and natural gas industry,
• Regulatory uncertainties and potential environmental liabilities, and
• the risks in the section of this quarterly report entitled “Risk Factors”,

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any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our common shares are considered speculative during the development of our new business operations. Prospective investors should consider carefully the risk factors set out below.

Risks Relating to Our Business:

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.

During the three month period ended August 31, 2008, we generated revenues from operations due to natural gas production from our well in Krotz Springs, Louisiana. This well commenced production in May 2007 and has generated oil and gas revenues, net of royalties, of $21,777 for the three month period ended August 31, 2008. We incurred a net loss of $127,622 for the three month period ended August 31, 2008 and $99,678 for the three month period ended August 31, 2007. We anticipate that we will continue to incur operating expenses in excess of revenues from operations unless and until we find oil or natural gas in sufficient quantities as will enable us to realize a profit or until we sell a property for a profit. On August 31, 2008, we had cash of $237,103. At August 31, 2008, we had a working capital deficiency of $710,1155. We estimate our average monthly operating expenses to be approximately $33,000 each month, excluding exploration but including general and administrative expense and investor relations expenses. We estimate that we will need approximately $2,600,000 for drilling, exploration, leasing and other exploration and development costs arising from our exploration activities during the next 12 months. Therefore, we believe that we will require approximately $3,000,000 to fund our continued operations and our working capital deficiency for the next 12 months. As we cannot assure a lender that we will be able to successfully acquire, explore and develop oil and gas properties, we believe that we will not be able to raise debt financing from traditional lending sources. We have traditionally raised our operating capital from sales of equity securities, but there can be no assurance that we will continue to be able to do so. If we cannot raise the money that we need to continue to acquire, explore and develop oil and gas properties, we may be forced to delay, scale back, or eliminate our activities. If any of these were to occur, there is a substantial risk that our business would fail.

These circumstances raise substantial doubt about our ability to continue as a going concern, as described in the explanatory paragraph to our independent auditors’ report on our consolidated financial statements for the year ended November 30, 2007, which were included in our annual report on Form 10-KSB filed with the SEC on March 12, 2008. Although our consolidated financial statements raise substantial doubt about our ability to continue as a going concern, they do not reflect any adjustments that might result if we are unable to continue our business.

If we are able to obtain additional funding by selling our equity securities, our existing shareholders may suffer substantial dilution.

We believe that we will require approximately $3,000,000 in additional funds to maintain or expand our operations over the next 12 months. We have historically raised funds required for this purpose from the sale of equity securities. While there can be no assurance that we will be able to raise any additional funds through the sale of our equity securities, any success may result in substantial dilution to our existing shareholders.

We are an early stage production company with a limited operating history implementing a new business plan.

We are an early stage production company with only a limited operating history upon which to base an evaluation of our current business and future prospects, and we have just begun to implement our business plan, having started in the oil and gas exploration and development industry in February of 2006. Our operations will be subject to all the

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risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. If we cannot successfully implement our business plan and we are not able to operate profitably, you could lose some or all of your investment in our company.

Our directors and executive officers are employed elsewhere and their time and efforts will not be devoted to our company full-time.

With the exception of Mel Threthart, one of our directors who works for our company on a full-time basis managing the California program, our directors and executive officers are employed in other positions with other companies. As a result, they manage our company on a part-time basis. Because of this, the management of our company may suffer and our company could under-perform or fail.

The oil and natural gas industry is highly competitive and there is no assurance that we will be successful in acquiring leases.

The oil and natural gas industry is intensely competitive. Although we do not compete with other oil and gas companies for the sale of any oil and gas that we may produce, as there is sufficient demand in the world market for these products, we compete with numerous individuals and companies, including many major oil and natural gas companies which have substantially greater technical, financial and operational resources and staff. Accordingly, there is a high degree of competition for desirable oil and natural gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised or that any projected work will be completed.

There can be no assurance that we will identify and acquire an oil and natural gas exploration property. Even if we do acquire such a property, there can be no assurance that we will discover oil or natural gas in any commercial quantity thereon.

Exploration for economic reserves of oil and natural gas is subject to a number of risks. There is competition for the acquisition of available oil and natural gas properties. Even if we are able to acquire an oil and natural gas exploration property, few properties that are explored are ultimately developed into producing oil and/or natural gas wells. If we cannot acquire one or more oil and natural gas exploration properties and discover oil or natural gas in any commercial quantity thereon, our business will fail.

Even if we acquire an oil and natural gas exploration property and establish that it contains oil or natural gas in commercially exploitable quantities, the potential profitability of oil and natural gas ventures depends upon factors beyond the control of our company.

The potential profitability of oil and natural gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and natural gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls or any combination of these and other factors, and respond to changes in domestic, international, political, social and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. In addition, adverse weather conditions can hinder drilling operations. These changes and events may materially affect our future financial performance. These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital.

In addition, a productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or natural gas from the well. Production from any well may be unmarketable if it is impregnated with water or other deleterious substances. Also, the marketability of oil and natural gas which may be acquired or discovered will be affected by numerous related factors, including the proximity and capacity of oil and natural gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection, all of which could result in greater expenses than revenue generated by the well.

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The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and natural gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and natural gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and natural gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Oil and natural gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and natural gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages. To date, we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in the future and this may affect our ability to expand or maintain our operations.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuation of our operations.

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuation of a given operation. Specifically, we may be subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry.

Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on our financial position.

Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour natural gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labor, and other risks are involved. We may become subject to liability for pollution or hazards against which we cannot adequately insure or which we may elect not to insure. Incurring any such liability may have a material adverse effect on our financial position and operations.

There are significant title risks associated with the properties subject to our farm-out agreements.

In the event that we or our operating partners do not meet regulated expenditure requirements or development conditions to convert permits to leases or obtain an extension of such development requirements, the right to explore for bitumen or oil shale, as applicable, may be lost. We believe that we or our operating partners have good and proper right, title and interest in and to the permits and leases that we intend to exploit. However, we have not obtained title opinions on all of our interests. Even with respect to interests where we have obtained title opinions, the opinions may be subject to unregistered claims. Accordingly, ownership of our oil and natural gas exploration rights could be subject to prior unregistered agreements or interests or undetected claims or interests.

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We have not yet established any reserves and resources and we cannot assure you that we will ever establish any reserve or resource on the properties subject to our farm-out agreements.

There are numerous uncertainties inherent in estimating quantities of oil and natural gas resources, including many factors beyond our control, and no assurance can be given that the recovery of oil and natural gas resources will be realized. In general, estimates of recoverable oil and natural gas resources are based upon a number of factors and assumptions made as of the date on which the resource estimates were determined, such as geological and engineering estimates which have inherent uncertainties and the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from actual results. All such estimates are, to some degree, uncertain and classifications of oil and natural gas resources are only attempts to define the degree of uncertainty involved. For these reasons, estimates of the recoverable oil and natural gas resources, the classification of oil and natural gas resources based on risk of recovery, prepared by different engineers or by the same engineers at different times, may vary substantially. No estimates of commerciality or recoverable oil and natural gas resources can be made at this time, if ever.

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

The business of oil and natural gas exploration and development is subject to substantial regulation under various countries laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation, and transportation of oil and natural gas and related products and other matters. Amendments to current laws and regulations governing operations and activities of oil and natural gas exploration and development operations could have a material adverse impact on our business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to the properties subject to our farm-out agreements and the oil and natural gas industry generally will not be changed in a manner which may adversely affect our progress and cause delays, inability to explore and develop or abandonment of these interests.

Permits, leases, licenses, and approvals are required from a variety of regulatory authorities at various stages of exploration and development. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted in respect of our activities or, if granted, will not be cancelled or will be renewed upon expiry. There is no assurance that such permits, leases, licenses, and approvals will not contain terms and provisions which may adversely affect our exploration and development activities.

Risks Relating to Our Shares of Common Stock

Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these

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penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

Financial Industry Regulatory Authority sales practice requirements may also limit a stockholder’s ability to buy and sell our shares of common stock.

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

We do not currently have a shareholder rights plan or any anti-takeover provisions in our by-laws.

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

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

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

In the future, the trading price of our common shares may be subject to wide fluctuations.

In the future, the trading price of our common shares may be subject to wide fluctuations. Trading prices of the common shares may fluctuate in response to a number of factors, many of which will be beyond our control. In addition, the stock market in general, and the market for oil and natural gas exploration and development companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. Market and industry factors may adversely affect the market price of the common shares, regardless of our operating performance.

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

Item 3. Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer, principal accounting and financial officer (our president, chief executive officer and chief financial officer) to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and

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operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of August 31, 2008, the end of the three month period year covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our president and chief executive officer and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president, chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

There have been no significant changes in our internal controls over financial reporting that occurred during the quarter ended August 31, 2008 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Except for the lawsuit described below, we know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

On or about April 1, 2008, we received a petition filed by Daybreak Oil & Gas, Inc. in the Nineteenth Judicial District Court of the State of Louisiana, Parish of East Baton Rouge, Suit Number 562933, Division SEC.24. In that petition, Daybreak Oil & Gas alleges that our company is in breach of a Joint Operating Agreement which required that we pay to them an amount equal to 25% share of the cost of the #60 Haas-Hirsch well in the Krotz Springs Prospect. Daybreak Oil & Gas claims that the balance due to them on this obligation is $587,464.55 and they are claiming for this amount plus interest, a reasonable attorney’s fee and the costs of the action. We have filed a statement of defence in the State of Louisiana. As of August 31, 2008 the full amount of the asserted damages, less attorney’s fees and interest, has been accrued by our company.

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

On August 19, 2008, we issued 500,000 shares of our company to one investor in consideration for a loan of $250,000. The lender is not a U.S. person and we relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Regulation S promulgated thereunder.

On September 29, 2008, we sold 4,000,000 shares of our company to one investor in a private placement at a price of $0.05 per share for proceeds of $200,000. The investor is the wife of an officer of our company and is not a U.S. person. In closing the private placement we relied on the exemption from the registration requirements of the Securities Act of 1933 provided by Regulation S promulgated thereunder.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibits Required by Item 601 of Regulation S-B.

Exhibit	Description
Number
(3)	Articles of Incorporation and Bylaws
3.1	Articles of Incorporation (incorporated by reference to the Company’s SB-2 Registration Statement filed January 23, 2003).
3.2	Bylaws (incorporated by reference to the Company’s SB-2 Registration Statement filed January 23, 2003).
3.3	Certificate of Change filed with the Nevada Secretary of State on December 21, 2004 (incorporated by reference to our Current Report on Form 8-K filed on December 22, 2004).
3.4	Certificate of Change filed with the Nevada Secretary of State on January 18, 2006 (incorporated by reference to our Current Report on Form 8-K filed on January 26, 2006).
3.5	Articles of Merger filed with the Nevada Secretary of State on January 31, 2006 (incorporated by reference to our Current Report on Form 8-K filed on February 6, 2006).
(4)	Instruments Defining the Rights of Security Holders
4.1	2006 Stock Option Plan (incorporated by reference from our Current Report on Form 8-K filed on April 26, 2006).
4.2	2007 Nonqualified Stock Option Plan (incorporated by reference from our Current Report on Form 8-K filed on November 28, 2007).
(10)	Material Contracts
10.1	Form of Subscription Agreement (incorporated by reference from our Current Report on Form 8-K filed on March 21, 2006).
10.2	Letter of Intent with Nomad Hydrocarbons LLC (incorporated by reference from our Annual Report on Form 10-KSB filed on March 15, 2007).
10.3	Letter of Intent with Nomad Hydrocarbons LLC (incorporated by reference from our Quarterly Report on Form 10-QSB filed on April 13, 2006).
10.4	Investor Relations Consulting Agreement dated April 10, 2006 with Cypress Point Capital Inc. (incorporated by reference from our Current Report on Form 8-K filed on April 26, 2006).
10.5	Letter of Understanding with March Resources Corp. dated September 11, 2006 (incorporated by reference from our Current Report on Form 8-K filed on September 12, 2006).
10.6	Purchase and Sale Agreement with Aspire Capital, Inc. dated November 14, 2006 (incorporated by reference from our Annual Report on Form 10-KSB filed on March 15, 2007).
10.7	Seismic Option Farmin Agreement with Calstar Oil & Gas Ltd., Nomad Hydrocarbons Ltd., Nomad Hydrocarbons LLC, Daybreak Oil and Gas, Inc. and Consolidated Beacon Resources Ltd. (incorporated by reference from our Quarterly Report on Form 10-QSB filed on July 13, 2007).
10.8	Form of Subscription Agreement (incorporated by reference from our Current Report on Form 8-K filed on August 8, 2007).
10.9	Form of Subscription Agreement (US Subscriber) (incorporated by reference from our Current Report on Form 8-K filed on November 11, 2007).
10.10	Form of Subscription Agreement (Non-US Subscriber) (incorporated by reference from our Current Report on Form 8-K filed on November 11, 2007).

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Exhibit	Description
Number
10.11	Form of Warrant Certificate (US Subscriber) (incorporated by reference from our Current Report on Form 8-K filed on November 11, 2007).
10.12	Form of Warrant Certificate (Non-US Subscriber) (incorporated by reference from our Current Report on Form 8-K filed on November 11, 2007).
10.13	Subscription Agreement dated April 2, 2008 with Carol McLeod (incorporated by reference from our Quarterly Report on Form 10-QSB filed on April 21, 2008).
10.14	Loan Agreement dated August 5, 2008 with Humboldt Capital Corporation (signed by our company on August 14, 2008) (incorporated by reference from our Current Report on Form 8-K filed on August 21, 2008)
10.15	Subscription Agreement dated September 29, 2008 with Carol McLeod (incorporated by reference from our Current Report on Form 8-K filed on October 1, 2008)
(14)	Code of Ethics
14.1	Code of Business Conduct and Ethics (incorporated by reference from our Annual Report on Form 10- KSB filed on February 27, 2004).
(31)	Section 302 Certifications
31.1*	Section 302 Certification of John G.F. McLeod.
(32)	Section 906 Certification
32.1*	Section 906 Certification of John G.F. McLeod.

*Filed herewith.

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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.

CALIFORNIA OIL & GAS CORPORATION

/s/ John McLeod
John McLeod, President, Treasurer,
Secretary and Director
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)

Date: October 20, 2008

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John McLeod, certify that:

1.           I have reviewed this quarterly report on Form 10-QSB of California Oil & Gas Corporation.;

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

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

4.           The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

(a)           Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)           Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)           Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)           Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting;

5.           The small business issuer’s other certifying officer (s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

(a)           All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b)           Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting..

Date: October 20, 2008

/s/ John McLeod
John McLeod, President, Treasurer, Secretary
and Director
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, John McLeod, the President, Secretary, Treasurer and a director of California Oil & Gas Corporation, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           the quarterly report on Form 10-QSB of California Oil & Gas Corporation for the period ended August 31, 2008 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of California Oil & Gas Corporation.

Dated October 20, 2008.

/s/ John McLeod
John McLeod
President, Secretary, Treasurer and Director
(Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)