U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

  X .   Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended December 31, 2013

      .    Transition Report under Section 13 or 15(d) of the Exchange Act

For the Transition Period from ________to __________

Commission File Number: 333-144504

Pacific Oil Company

(Exact Name of Registrant as Specified in its Charter)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 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       .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Large accelerated filer       .  

Accelerated filer       .

Non-accelerated filer       .  

Smaller reporting company   X .

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

As of March 31, 2014, the issuer had 60,079,000 shares of common stock issued and outstanding.

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ITEM 1. FINANCIAL STATEMENTS

PACIFIC OIL COMPANY

(A Development Stage Company)

FINANCIAL STATEMENTS

December 31, 2013 (unaudited) and September 30, 2013

C O N T E N T S

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                            PACIFIC OIL COMPANY

(A Development Stage Company)

Balance Sheets

The accompanying notes are an integral part of these financial statements

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                      PACIFIC OIL COMPANY

               (A Development Stage Company)

Statements of Operations (unaudited)

The accompanying notes are an integral part of these financial statements

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PACIFIC OIL COMPANY

(A Development Stage Company)

Statements of Cash Flows (unaudited)

The accompanying notes are an integral part of these financial statements

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PACIFIC OIL COMPANY

(unaudited)

The accompanying notes are an integral part of these financial statements

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2013, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2013 audited financial statements. The results of operations for the periods ended December 31, 2013 and 2012 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Basis of Presentation

The financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles.

Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.  As of the period ended December 31, 2013 and September 30, 2013, there were no cash equivalents.

Development Stage Company

The Company is considered a development stage company, having limited operating revenues during the period presented, as defined by Accounting Standards Codification ASC 915-205 “Development-Stage Entities”. ASC 915- 205 requires companies to report their operations, shareholders equity and cash flows since inception through the date that revenues are generated from management’s intended operations, among other things.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Derivative Liability

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

Fair Value Measurements

On January 1, 2008, the Company adopted ASC No. 820-10 (ASC 820-10), Fair Value Measurements. ASC 820-10 relates to financial assets and financial liabilities.

ASC 820-10 defines fair value, establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (GAAP), and expands disclosures about fair value measurements. The provisions of this standard apply to other accounting pronouncements that require or permit fair value measurements and are to be applied prospectively with limited exceptions.

ASC 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property. ASC 820-10 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions, about market participant assumptions that are developed based

on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820-10 are described below:

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Level 1. Observable inputs such as quoted prices in active markets;

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Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

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Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The following table presents assets and liabilities that are measured and recognized at fair value as of December 31, 2013, on a recurring basis:

The following table presents assets and liabilities that are measured and recognized at fair value as of September 30, 2013, on a recurring basis:

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Basic and Diluted Loss per Share

The Company computes loss per share in accordance with “ASC-260”, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

The Company has no potential dilutive instruments and accordingly basic loss and diluted loss per share are equal.

Advertising

The Company follows the policy of charging the costs of advertising to expenses incurred. The Company incurred $0 in advertising costs during the three months period ended December 31, 2013.

Stock-based Compensation

The Company records stock based compensation in accordance with the guidance in ASC Topic 718 which requires the Company to recognize expenses related to the fair value of its employee stock option awards. This eliminates accounting for share-based compensation transactions using the intrinsic value and requires instead that such transactions be accounted for using a fair-value-based method. The Company recognizes the cost of all share-based awards on a graded vesting basis over the vesting period of the award.

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition

The Company recognizes service revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Correction of an error in previously issued financial statements

The Company follows guidance under ASC 250-10-45-23 for reporting any error in the financial statements of a prior period discovered after the financial statements are issued or are available to be issued. The current comparative statements as presented reflect the retroactive application of any error corrections. Those items that are reported as error corrections in the Company’s restatements of net income and retained earnings, as well as other affected balances for all periods reported there-in, are disclosed in Note 5 of the footnotes to the financial statements presented herein.

Recent Accounting Pronouncements

In February 2013, Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in the ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP. The new amendments will require an organization to:

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Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income (but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period); and

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Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.

The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). The amendments are effective for reporting periods beginning after December 15, 2012, for public companies. Early adoption is permitted. The adoption of ASU No. 2013-02 is not expected to have a material impact on our financial position or results of operations.

In January 2013, the FASB issued ASU No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities, which clarifies which instruments and transactions are subject to the offsetting disclosure requirements originally established by ASU 2011-11. The new ASU addresses preparer concerns that the scope of the disclosure requirements under ASU 2011-11 was overly broad and imposed unintended costs that were not commensurate with estimated benefits to financial statement users. In choosing to narrow the scope of the offsetting disclosures, the FASB determined that it could make them more operable and cost effective for preparers while still giving financial statement users sufficient information to analyze the most significant presentation differences between financial statements prepared in accordance with U.S. GAAP and those prepared under IFRSs. Like ASU 2011-11, the amendments in this update will be effective for fiscal periods beginning on, or after January 1, 2013. The adoption of ASU 2013-01 is not expected to have a material impact on our financial position or results of operations.

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill . The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company had received $121,079 and $0 as of September 30, 2013 and December 31, 2013 as advances from related parties to fund ongoing operations. As of December 31, 2013 the related party payables balance is $44,429. The related party payable is non-interest bearing, unsecured and due upon demand. The Company has recorded imputed interest expense at 8% on the payable as additional paid in capital. For the three months ended December 31, 2013 the imputed interest was $1,576.

NOTE 5 - CORRECTION OF AN ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The Company follows guidance under ASC 250-10-45-23 for reporting any error in the financial statements of a prior period discovered after the financial statements are issued or are available to be issued. The error resulted from the Company not properly reporting convertible debt to a related party and the associated derivative liability. The current comparative statements as presented reflect the retroactive application of any error corrections. Those items that are reported as error corrections in the Company’s restatements of net income and retained earnings, as well as other affected balances for all periods reported there-in, are disclosed in Note 5 of the footnotes to the financial statements presented herein.

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 6 – DERIVATIVE LIABILITIES

As discussed in Note 7 under Convertible Debentures, the Company issued convertible notes payable that provide for the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date.

The fair values of the Company’s derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice model. The Company recorded current derivative liabilities of $2,632 and $173,856 at December 31, 2013 and September 30, 2013, respectively. The change in fair value of the derivative liabilities resulted in a loss of $252 and $0 for the three months ended December 31, 2013 and 2012, respectively, which has been reported as other income (expense) in the statements of operations. The loss of $252 for the three months ended December 31, 2013 consisted of a loss of $252 attributable to the fair value of attributable to the fair value of the convertible notes and settlement of derivative liability from conversion of $171,476.

The following presents the derivative liability value at December 30, 2013 and September 30, 2013:

The following is a summary of changes in the fair market value of the derivative liability during the three months ended December 31, 2013 and the year ended September 30, 2013:

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Key inputs and assumptions used to value the convertible debentures and warrants issued during the nine months ended December 31, 2013 and the year ended September 30, 2013:

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The underlying stock price was used as the fair value of the common stock;

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The note amount as of issuance 7/1/13 and 9/30/13 was $77,823.50. The principal amounts of $20,650, $7,000, $10,500, $10,500, $8,750 and $8,750 were converted out by the various Note assignees on 10/4/13. The remaining principal balance as of 12/31/13 was $1,173.50.

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Capital raising events are not a factor for this Note since it was unlikely that the Company would raise capital at less than 50% of market during the term which would reset the conversion feature;

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It was assumed that the Company would not file a registration statement and it would not become effective.

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The Issue would redeem based on availability of alternative financing, 0% of the time increasing 1.0% monthly to a maximum of 10%;

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The Holder would convert over a six month term;

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The projected annual volatility for each valuation period was based on the historic volatility of the company

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Events of default were not modeled since there was no penalty for default

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PACIFIC OIL COMPANY

(A Development Stage Company) Notes to Consolidated Financial Statements

December 31, 2013 (unaudited)

NOTE 7 – CONVERTIBLE NOTE – RELATED PARTIES

On July 1, 2013, the Company issued a convertible promissory note to a related party in the amount of $77,824 with no stated interest and maturity date.  The Convertible Note is convertible at 50% of the average of the 3 lowest trading prices for the last 20 trading days and contains dilutive reset provisions. The Holders have the right, and until any time until the Convertible Note is fully paid, to convert any outstanding and unpaid principal portion of the Convertible Note, into fully paid and non-assessable shares of Common Stock. The variable conversion rate increases to 75% if a registration statement covering the underlying shares is filed and increases to 85% upon the registration statement becoming effective. See Note 6 for the derivative valuation.

During the period ended December 31, 2013 the Company had a note balance of $1,174.  Derivative liability for the same period was $2,632.  The reduction was due to conversion of $76,650 of debt for 29,100,000 shares of the Company’s common stock, see note 8.  As a result of conversion, the Company recognized a loss on conversion of $193,258.

NOTE 8 – COMMON STOCK

On October 1, 2013 the Company issued 38,100,000 shares to Anthony Sarvucci which resulted in a change in control of the Company.  The shares were valued as founder’s shares.

On October 4, 2013, the Company issued 29,100,000 as a result of a conversion on a note payable.  The total debt relieved was $76,650.  The Company issued 21,889,489 additional shares outside the term of the conversion; the excess shares were valued at $193,258 or $0.0088 per share, which is recorded as a loss on debt conversion. These shares were valued by a valuation expert as there had been no orderly trades of the Company’s stock to date.

On December 31, 2013, the Company issued 23,241 common stock for services performed. The Company valued the shares based on fair market value on the date of grant and recorded an expense of $116,205.

NOTE 9 – SUBSEQUENT EVENTS

There are no events subsequent to period ended December 31, 2013 that would warrant further disclosures.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); finding suitable merger or acquisition candidates; expansion and growth of the Company's business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this Filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.

Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

GENERAL DESCRIPTION OF BUSINESS

CORPORATE BACKGROUND

Pacific Oil Company is a junior energy company with established production and assets within the center of Canada's highest reserve epicenters; the oil boom provinces of Alberta and now Saskatchewan.  Pacific Oil has recently entered into an agreement to purchase producing assets in the above listed areas of Alberta and Saskatchewan. This purchase was facilitated using the company’s common stock. These assets are oil-producing assets and are currently shut in for financial reasons.  Once a small financing is completed these assets can be turned back on and the Company believes that revenues can be generated in short period of time.  

Pacific Oil operates under the notion that phase changes in commodity price cycles require different strategies and the Company will identify opportunities for growth regardless of phase.  By acquiring previously producing oil and gas properties that require only cash injection to initiate production, the Company believes it will continue to unlock the upside potential of these acquired properties, leading to increased production and incremental reserves. The experienced team at Pacific has the expertise and proven execution required for success in today's rapidly changing energy sector.

Company History

The Company was originally incorporated in Nevada on December 5, 2005 as Kat Racing, Inc.  On January 4, 2013, the Articles of Incorporation of the Company were amended to change the name of the Company to Prairie West Oil & Gas, Ltd.  On July 26, 2013, the Company’s Articles of Incorporation were amended to change the name of the registrant to Pacific Oil Company.

Previous Business Model Under Kat Racing

From the Company’s inception until the Company’s transition into the oil and natural gas business in early 2013, Kat Racing designed, manufactured, marketed, sold and distributed custom off-road racing and recreational vehicles and provided marketing and lead services. Most of the Company’s activity during 2012 had been in the marketing and lead generation areas due to the downturn in the economy and the effect it has had on the market for high end off road racing vehicles.     

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Kat Racing’s goal was to provide the Company’s customers with cost-efficient high quality custom-built, off-road racing and recreational vehicles. These vehicles were assembled by an affiliate, Kat Metal Worx, Inc.  Kat Metal Worx is 100% owned by Kenny Thatcher who was previously the President of Kat Racing.  The arrangement between Kat Metal Worx and Kat Racing was as follows.  Kat Racing paid for the parts and materials to build the car.  Kat Metal Worx built all of the cars. There was no mark up on the materials or parts.  Kat Racing then marketed the products.   The profits from the sales were to be split 50/50 between Kat Racing and Kat Metal Worx. Kat Metal Worx, Inc. did not charge Kat Racing for any labor or overhead in building a car. 

Kat Racing was engaged in the businesses of:

(1) Designing, manufacturing, marketing and selling custom fabricated off-road racing and recreational vehicles to sports and recreational enthusiasts;

(2) Providing a full-range of services that catered to the off-road automotive enthusiast, including post-purchase add-on customization and the installation of additional accessories; and

(3) The restoration, repair, servicing of these vehicles.

During its affiliation with Kat Racing, Kat Metal built a total of 9 vehicles:  6 cars in '06, 1 in '07 and 2 cars were completed in '08.

Prairie West Oil and Gas Ltd. and the Company’s Transition into Oil and Gas

As the market for high end off road vehicles suffered due to the downturn in the economy, the Company’s management began to look for acquisitions and other opportunities outside of its market.   Through its contact with Anthony Sarvucci, an executive with substantial experience in the oil and natural gas sectors, Kat Racing sought to arrange the purchase of certain oil and gas properties which were owned by Prairie West Oil and Gas Ltd., a Canadian company through a share exchange.  

Pursuant to this transaction, the Company changed its name from Kat Racing to Prairie West Oil and Gas Ltd. and Mr. Sarvucci was asked by the Company’s Board of Directors to join the Company as President, in order to oversee its expansion into the oil and gas business.  To secure Mr. Sarvucci’s employment, the Company offered Mr. Sarvucci 38,100,000 on October 1, 2013 shares to help secure certain assets the Company needed to launch its oil and gas operations

On January 22, 2013, Prairie West Oil & Gas, Ltd. (Nevada) (“Prairie Nevada”) entered into an exchange agreement to purchase 100% of the outstanding interests of Prairie West Oil & Gas, Ltd. (Canada) (“Prairie Canada”) in exchange for 5,000,000 common shares of Prairie Nevada stock.  

As reported in the Company’s 8-K dated July 9, 2013, due to the Company’s inability to secure adequate financing the Exchange Agreement between the parties dated January 22, 2013 was terminated in its entirety as the conditions for closing never occurred and the transaction was never closed.  Both parties were returned to their status before this agreement was signed. Even though the transaction did not close, Prairie Canada consented to the Company’s continued use of the Prairie West name, and negotiations continued as both parties sought a way to make the transaction work.    

Continued Negotiations with the Emporium Group

Due to Mr. Sarvucci’s contacts in the industry, the Company continued to pursue the acquisition of oil and gas assets.  Prairie Canada owned certain assets which were mortgaged to the Emporium Group, S.A., a Panamanian company which lent funds to purchase and drill the properties.  Due to lack of additional funding from the public markets and the closure of the Frankfurt Open Market, Prairie Canada was unable to raise the additional funding they required to repay the Emporium loan and further develop these properties.

Therefore the Emporium Group repossessed the assets that they had lent on and they were looking for some help in liquidating the assets they had seized.  Mr. Sarvucci contacted Emporium and was able to arrange the purchase of a minority interest in two former Prairie Canada assets.

The Company arranged the purchase of the Maidstone heavy oil project (“Sundance Project”) and the Shackelton gas project(“Lacadena Project”) in an agreement signed following the end of the Company’s fiscal year, on November 8, 2013,with an effective date of March 3, 2014 (the “Effective Date”).  On the Effective Date the Company will purchase the assets from Emporium using the Company’s common stock.

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Sundance Project

Pacific Oil has arranged the purchase of 36% of the Sundance Project with the November 8, 2013 agreement.   Currently the Company is negotiating to acquire the other 64% of the project’s ownership and operatorship from a bankruptcy trustee because the joint venture partner/operator on the project, Western Plains Petroleum, Ltd., is currently in bankruptcy.  Due to the bankruptcy, Western Plains’ assets are frozen, Western Plains is not operating, and thus the project is not creating revenue. The Sundance Project’s oil wells are historically revenue generating but currently production has ceased due to the bankruptcy of Western Plains.

Lacadena Project

With the November 8, 2013 agreement, Pacific Oil has also arranged the purchase of 100% of the Lacadena Project.   This project is a 9600 acre gas project that currently has 27 drilled gas wells which have been temporarily taken offline, or “shut in” and money is needed to reactivate these gas wells. As gas wells sit over time, the process to reactivate becomes more difficult as pressure testing and clean out of well bores is important for the longevity of the wells. At this time Pacific Oil’s goal is to reactivate approximately 10 of the 27 wells and to spend approximately $5,000 to $7,000 USD per well in that process.  The Company believes this represents a small amount of money to clean up the wells and bring them back on to production, and this is the reason the Company will continue negotiations with the bankruptcy trustee to purchase Western Plains’ ownership and operatorship from the bankruptcy estate.  

GrantThornton serves as Trustee in the bankruptcy proceeding, which was commenced on or about August 26, 2013 in the Court of Queen’s Bench, Calgary, Canada under Case Number 25-1782064.   

Operatorship of Oil and Gas Wells

Historically, Pacific Oil has relied on other operators in the area of the wells to both generate production and to carry the required insurance necessary to operate in this area.  Most of the time, these arrangements are joint ventures in which the operators hold an ownership stake in the property.  Due to the situation with Western Plains, whose creditor issues have shut down production on two projects which would otherwise be producing, the Board of Directors feels this presents an opportunity for Pacific Oil, and has made the decision to apply for operatorship in Saskatchewan.

Pacific Oil Company’s Oil and Gas Business Model

1) Develop to full potential through lower risk 'developmental drilling' the Company's current long term developmental projects.

2) Acquire oil and gas producing properties that have proven reserves and established in-field drilling locations through a combination of cash, debt, and equity.  Positive metrics and the ability to enhance for maximum production efficiency is key. In addition, there must be the opportunity to streamline operational costs, and overhead with the goal maximizing profits.

3) Add value and reserves through the identification of plays and prospects which demonstrate attractive metrics and a high chance of success.

4) Focus operational efforts around today's technological advancements so that the Company can effectively maximize return on capital invested by reducing drilling risk and enhancing ability to cost effectively grow reserves and production volumes.

5) Keep operational costs to the lowest possible levels through a streamlined operational and management process.   

6) Continue to practice strict fiscal discipline, as the Company’s management team is experienced enough to know that a large debt load can easily be the end of  a junior energy corporation. Pacific has been able to accomplish all it has done to date with no bank or institutional financing.

7) Continue to have strong due diligence control mechanisms in place in regards to potential acquisitions.

8) Continue to mitigate risk through diversification and expertise.

9) Successfully raise capital through the public markets to further finance company goals and objectives.

10) Remain fully transparent to shareholders through open communication, regular updates and filings.

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Employees

At December 31, 2013, the Company had three full time employees that have dedicated their time for no compensation to date.  The Company’s officers and directors had not taken any salary as of December 31, 2013.  None of its employees were represented by a collective bargaining arrangement.

The Company does not carry key person life insurance on any of its Directorial personnel. The loss of the services of any of its executive officers or other directors could have a material adverse effect on the business, results of operations and financial condition of the Company. The Company's future success also depends on its ability to retain and attract highly qualified technical and managerial personnel.

There can be no assurance that the Company will be able to retain its key managerial and technical personnel or that it will be able to attract and retain additional highly qualified technical and managerial personnel in the future. The inability to attract and retain the technical and managerial personnel necessary to support the growth of the Company's business, due to, among other things, a large increase in the wages demanded by such personnel, could have a material adverse effect upon the Company's business, results of operations and financial condition.

The Company’s total issued and outstanding shares of common stock increased from a post-reverse-split total of 57,490 as of September 30, 2013 to 60,079,240 as of December 31, 2013.  On October 1, 2013 the Company issued 38,100,000 shares to Anthony Sarvucci which resulted in a change in control of the Company.  The shares were valued as founder’s shares.

Additionally, a total of 21,900,000 shares of common stock were converted from a Promissory Note the Company issued to Julie Bauman, who served as an officer and director of the Company from its inception in 2005 until her resignation in January of 2013. The Promissory Note was issued by the Company on July 1, 2013 for a debt which was past due as of January 1, 2013.  The debt owed to Ms. Bauman was for the reimbursement of monies she contributed to the Company from 2005 through January 1, 2013 for general and administrative expenses, including costs for legal, accounting, and audit fees.  Such monies were recorded by the Company to its auditors on an annual basis during that time period and are shown in the Company’s prior filings.  On October 9, 2013, the Company’s Board of Directors approved the assignment of portions of the Note to other parties, and the Company entered into Conversion Agreements with Ms. Bauman and six other parties, which resulted in conversion of such debt, and the issuance of 21,900,000 shares of common stock.  

On December 7, 2013, Paula Pearce resigned from all positions with the Company. On that same date, Edward Loven was appointed to serve as Director, Secretary and Treasurer to serve until the next regularly scheduled election of Directors.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The Company has a limited operating history upon which an evaluation of the Company, its current business and its prospects can be based. The Company's prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. Such risks include inadequate funding the company's inability to anticipate and adapt to a developing market, the failure of the company's infrastructure, changes in laws that adversely affect the company's business, the ability of the Company to manage its operations, including the amount and timing of capital expenditures and other costs relating to the expansion of the company's operations, the introduction and development of different or more extensive communities by direct and indirect competitors of the Company, including those with greater financial, technical and marketing resources, the inability of the Company to attract, retain and motivate qualified personnel and general economic conditions.

The Company expects that its operating expenses will increase significantly, especially as it implements its business plan. To the extent that increases in its operating expenses precede or are not followed by commensurate increases in revenues, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition would be materially and adversely affected. There can be no assurances that the Company can achieve or sustain profitability or that the Company's operating losses will not increase in the future.

RESULTS OF OPERATIONS

The Company has achieved no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future. The Company incurred a net loss of approximately $354,562 for the three months ended December 31, 2013, compared with a net loss of $8,953 for the three months ended December 31, 2012.

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LIQUIDITY AND CAPITAL RESOURCES

Since its inception the Company has had limited operating capital, and has relied heavily on debt and equity financing.

The financial statements as of and for the period ended on December 31, 2013 expressed their substantial doubt as to the Company's ability to continue as a going concern. Without additional capital, it is unlikely that the Company can continue as a going concern. The Company plans to raise operating capital via debt and equity offerings. However, there are no assurances that such offerings will be successful or sufficient to fund the operations of the Company. In the event the offerings are insufficient, the Company has not formulated a plan to continue as a going concern. Moreover, if such offerings are successful, they may result in substantial dilution to the existing shareholders.

CRITICAL ACCOUNTING POLICIES

In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period and the valuation of shares and underlying mineral rights acquired with shares. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to market risk related to interest rates or foreign currencies.

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE 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 president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

As of December 31, 2013 we carried out an evaluation, under the supervision and with the participation of our president (also our principal 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 and Chief Financial Officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this Quarterly Report due to certain deficiencies that existed in the design or operation of our internal controls over financial reporting and that may be considered to be material weaknesses.

CHANGES IN INTERNAL CONTROLS.

There was no change in our internal controls or in other factors that could affect these controls during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no sales of unregistered equity securities during the covered time period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. NOT USED

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are included or incorporated by reference as exhibits to this report:

Exhibit

Number

Description

31.1

Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as

adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

(b) REPORTS ON FORM 8-K

None.

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SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: April 2, 2014

Pacific Oil Company

Registrant

By: /s/ Anthony Sarvucci

Anthony Sarvucci

Chief Executive Officer

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