UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 10-Q

________________________

(Mark One)

[ X ]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter year ended September 30, 2011

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

For the transition period from _____ to _______

Commission file number: 333-103780

PARADIGM OIL AND GAS, INC.

(Exact name of small business issuer in its charter)

Nevada		33-1037546
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

123 E. Market St Mabank, Texas, United States of America		75147
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number: (903) 880 1161

Securities Registered Under Section 12(b) of the Exchange Act: None

Securities Registered Under Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes___ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ___ No þ

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-Q or any amendment to this Form 10-Q. Yes____ No þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

	Large accelerated filer	Accelerated filer

	Non-accelerated (Do not check if a smaller reporting company) filer	Smaller reporting company þ

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

The Company’s stock is traded on the OTC-BB. As of November 22, 2011, there were 23,887,826 shares of stock held by non-affiliates. As of November 22, 2011, 61,131,457 shares of the common stock of the registrant were outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

PARADIGM OIL AND GAS, INC.

(An Exploration Stage Company)

Index to Consolidated Financial Statements

		Page

Consolidated Balance Sheets at September 30, 2011 and December 31, 2010		F-2

Consolidated Statements of Operations for the three and nine months ended September 30, 2011 and three months ended September 30, 2010 and for the periods from January 28, 2010 (inception) through September 30, 2010 and through September 30, 2011.		F-3

Consolidated Statements of Comprehensive (Loss) for the nine months ended September 30, 2011 and for the periods from January 28, 2010 (inception) through September 30, 2010 and through September 30, 2011		F-4

Consolidated Statement of Changes in Shareholders' Equity for the period from January 28, 2010 (inception) through September 30, 2011		F-5

Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and for the periods from January 28, 2010 (inception) through September 30, 2010 and through September 30, 2011		F-6

Notes to Consolidated Financial Statements		F-7

F - 1

PARADIGM OIL AND GAS, INC.

(An Exploration Stage Company)

Consolidated Balance Sheets

September 30, 2011 and

December 31, 2010


	Sep-30			Dec-31
	2011			2010
Assets
Current assets:	(Unaudited)
Cash	$	21,131		$	68,644
Employee advances		9,895			7,059
Note receivable		28,050			25,050
Related party receivable (note 2)		55,007			45,807
Inventory		7,823			7,823
Total current assets		121,906			154,383

Furniture and fixtures, net of $5,218 and $ 2,436 in accumulated depreciation		19,134			22,605
Production equipment		196,124			196,124
Natural gas and oil properties Unproved (Note 4)		601,566			601,566
		816,824			820,295

Bond RRC		53,000			52,500

Total assets	$	991,730		$	1,027,178

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	196,866		$	168,210
Advances from shareholder		7,546			76,546
Short term convertible notes and accrued interest net of $135,336 and $0 in unamortized note payable discount		44,908			143,885
Short term loan		—			—
Note payable and accrued interest		95,492			96,066
Total current liabilities		344,812			484,707

Total liabilities		344,812			484,707

Shareholders’ equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued or outstanding		—			—
Common stock, $.001 par value; 300,000,000 shares authorized, 61,131,457 and 53,287,826 shares issued and outstanding		61,132			53,288
Additional paid-in capital		3,785,547			2,981,174
Accumulated deficit during the exploration stage		(3,195,781	)		(2,477,707	)
Accumulated comprehensive income		(3,980	)		(14,284	)

Total shareholders’ equity		646,918			542,471

	$	991,730		$	1,027,178

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

F - 2

Paradigm Oil and Gas, Inc

(an Exploration Stage Company)

Consolidated Statements of Operations

For the three months and nine months ended September 30, 2011 and three months ended September 30, 2010

and for the periods from January 28, 2010 (inception) through September 30, 2010 and through September 30, 2011

										January 28, 2010			January 28, 2010
	Three Months			Three Months			Nine Months			(Inception)			(Inception)
	Ended			Ended			Ended			Through			Through
	September 30,			September 30,			September 30,			September 30,			September 30,
	2011			2010			2011			2010			2011
Field operation expenses:
Labor	$	25,278		$	58,173		$	79,479		$	88,214		$	153,320
Lease costs		10,925			2,544			14,341			16,157			29,126
Legal		500			—			2,008			—			12,008
Maintenance		27,393			—			41,946			9,183			44,995
Natural gas and oil exploration costs		2,715			324			3,124			1,016			4,576
Travel		2,066			—			5,861			—			19,883
Utilities		—			—			940			5,571			6,511
Total field operation expenses		68,877			61,041			147,699			120,141			270,419

General expenses:
Accounting and audit		16,750			23,150			24,986			38,495			84,911
Administration		9,104			—			28,592			—			41,558
Advertising and promotion		49			139			90			7,095			660
Depreciation		1,035			1,747			3,471			1,747			5,218
Foreign exchange loss		0			—			—			—			—
Insurance		133			—			814			782			1,596
Interest (note 5)		186,623			1,173			196,160			3,517			202,265
Investor relations		1,500			—			6,184			—			16,059
Legal fees		8,542			1,224			9,375			50,975			35,990
Management fees		8,750			27,708			46,250			73,973			138,552
Meals and entertainment		244			1,189			1,006			2,685			2,711
Office		146			3,382			484			9,058			14,116
Office maintenance		—			—			—			—			2,157
Professional and consulting fees		7,767			25,000			19,526			29,958			77,713
Rent		125			—			3,922			—			6,172
Stock options		—			—			10,500			—			10,500
Telephone		2,095			3,668			6,571			8,568			18,842
Transfer agent fees		7,127			2,627			10,990			4,736			16,384
Travel		205			1,870			3,528			10,664			19,801
Utilities		150			—			2,530			1,290			3,477
Total general expenses		250,345			92,877			374,979			243,543			698,682

Loss from operations		(319,222	)		(153,918	)		(522,678	)		(363,684	)		(969,101	)

Other expense:

Assumption of liabilities in acquisition		—			—			—			(633,279	)		(633,279	)

Gain (Loss) from shares issued on debt conversion, net (Note 7)		195,396			41,995			195,396			(1,398,005	)		(1,536,208	)

Net loss	$	(514,618	)	$	(111,923	)	$	(718,074	)	$	(2,394,968	)	$	(3,195,781	)


Basic and diluted loss per share	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.05	)

Basic and diluted weighted average common shares outstanding		59,122,056			51,188,058			57,224,642			45,956,889

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

F - 3

PARADIGM OIL AND GAS, INC.

(An Exploration Stage Company)

Consolidated Statements of Comprehensive (Loss)

For the nine months ended September 30, 2011 and for the periods from

January 28, 2010 (Inception) through September 30, 2010 and 2011

				January 28, 2010			January 28, 2010
	Nine Months			(Inception)			(Inception)
	Ended			Through			Through
	September 30,			September 30,			September 30,
	2011			2010			2011

Net loss	$	(718,074	)	$	(2,394,968	)	$	(3,195,781	)

Other comprehensive loss:
Foreign currency translation adjustments		10,304			(6,227	)		(3,980	)

Comprehensive loss	$	(707,770	)	$	(2,401,195	)	$	(3,199,761	)

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

F - 4

PARADIGM OIL AND GAS, INC.

(An Exploration Stage Company)

Consolidated Statement of Changes in Shareholders Equity

For the period from January 28, 2010 (Inception) through September 30, 2011

					Additional						Other
	Common Stock				Paid-In			Accumulated			Comprehensive
	Shares		Par Value		Capital			Deficit			Loss			Total

Balance at January 28, 2010 (inception)		188,058	$	188	$	541,351		$	—		$	—		$	541,539

Issuance of common stock for acquisition		42,000,000		42,000		8,358,000			—			—			8,400,000

Adjustment to record basis in Intergrated Oil and Gas Solutions Inc.		—		—		(8,400,000	)		—			—			(8,400,000	)

Balance at January 28, 2010 after reverse acquisition		42,188,058		42,188		499,351			—			—			541,539

Common stock on conversion of debt (Note 8)		11,099,768		11,100		2,481,823			—			—			2,492,923

Net loss		—		—		—			(2,477,707	)		—			(2,477,707	)

Foreign currency translation adjustment		—		—		—			—			(14,284	)		(14,284	)

Balance at December 31, 2010		53,287,826		53,288		2,981,174			(2,477,707	)		(14,284	)		542,471

Common Stock on conversion of debt (Note 8)		7,843,631		7,844		478,179			—			—			486,023

Beneficial conversion features on issuance of convertible debt		—		—		315,694			—			—			315,694

Net loss		—		—		—			(718,074	)		—			(718,074	)

Stock options		—		—		10,500			—			—			10,500

Foreign currency translation adjustment		—		—		—			—			10,304			10,304

Balance at September 30, 2011		61,131,457	$	61,132	$	3,785,547		$	(3,195,781	)	$	(3,980	)	$	646,918

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

F - 5

Paradigm Oil and Gas, Inc

(an Exploration Stage Company)

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2011 and

for the periods from January 28, 2010 (inception) through September 30, 2010 and through September 30, 2011

				January 28, 2010			January 28, 2010
	Nine Months			(Inception)			(Inception)
	Ended			Through			Through
	September 30,			September 30,			September 30,
	2011			2010			2011
Cash flows from operating activities:
Net loss	$	(718,074	)	$	(2,394,968	)	$	(3,195,781	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on note payable		180,358			3,517			180,358
Stock options		10,500			—			10,500
Depreciation		3,471			1,747			5,218
Foreign Exchange					(4,116	)
Assumption of liabilities in acquisition		—			633,279			633,279
Loss from shares issued on debt conversion		195,395			1,398,005			1,593,400
		(328,350	)		(362,536	)		(773,026	)

Changes in operating assets and liabilities:
Employee advances		(2,836	)		(7,217	)		(9,895	)
Prepaid field services		—			(77,550	)		—
Inventory		—			(6,258	)		(7,823	)
Accrued interest		15,803			—			21,878
Accounts payable and accrued liabilities		59,732			13,901			71,659

Net cash used in operating activities		(255,651	)		(439,660	)		(697,207	)

Cash flows from (used in) investing activities:
Note receivable		(3,000	)		—			(28,050	)
Related party receivable		(9,200	)		—			(55,007	)
Bond RRC		(500	)		—			(53,000	)
Furniture and fixtures		—			(23,298	)		(24,352	)
Production equipment		—			(161,471	)		(196,124	)
Purchases on natural gas and oil properties		—			(60,027	)		(60,027	)
Cash acquired in acquisition		—			121			121

Net cash used in investing activities		(12,700	)		(244,675	)		(416,439	)

Cash flows from financing activities:
Proceeds from convertible debenture payable		—			734,918			734,918
Proceeds from advances from shareholder		7,000			29,521			61,051
Repayments for advances from shareholder		—			—			(17,530	)
Proceeds from short term convertible notes		216,000			—			358,500
Proceeds from short term loan		15,000			—			15,000
Repayments for short term loan plus interest		(17,162	)		—			(17,162	)
					—
Net cash provided by financing activities		220,838			764,439			1,134,777

Net change in cash		(47,513	)		80,104			21,131

Cash, beginning of period		68,644			—			—

Cash, end of period	$	21,131		$	80,104		$	21,131

Supplemental disclosure of cash flow information:
Foreign currency translation of liabilities	$	(10,303	)	$	(6,227	)	$	(3,980	)
Assumption of accounts payable in acquisition		—		$	147,510		$	147,510
Assumption of advances from shareholder in acquisition		—		$	40,025		$	40,025
Assumption of note payable in acquisition		—		$	85,864		$	85,864
Assumption of convertible debt in acquisition		—		$	360,000		$	360,000
Issuance of common stock for convertible debt	$	(290,628	)	$	(1,094,918	)	$	(1,094,918	)
Conversion of accounts payable to convertible debt	$	(25,000	)				$	(25,000	)
Conversion of advances from shareholder to convertible debt	$	(76,000	)				$	(76,000	)

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

F - 6

PARADIGM OIL & GAS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2011 and for the periods from

January 28, 2010 (inception) through September 30, 2010 and through September 30, 2011

1. UNAUDITED INFORMATION

The consolidated balance sheet of Paradigm Oil & Gas, Inc. (the “Company”) as of September 30, 2011, and the consolidated statements of operations for the three and nine months ended September 30, 2011 and three months ended September 30, 2010 and for the periods ended from January 28, 2010 (Inception) to September 30, 2010 and through September 30, 2011 have not been audited. However, in the opinion of management, such information includes all adjustments (consisting only of normal recurring adjustments) which are necessary to properly reflect the consolidated financial position of the Company as of September 30, 2011, and the results of operations for the three and nine months ended September 30, 2011.

Certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Interim period results are not necessarily indicative of the results to be achieved for an entire year. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements included in the Company’s consolidated financial statements as filed on Form 10-K for the year ended December 31, 2010.

BASIS OF PRESENTATION

Organization

Paradigm Enterprises, Inc. (the “Company”) was incorporated in the state of Nevada on July 15, 2002 to engage in the acquisition, exploration and development of oil and gas properties. On February 7, 2005 the Company changed its name to Paradigm Oil and Gas, Inc. Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation. The Transaction is considered to be a reverse acquisition. The acquisition date now becomes the inception date of the Company.

The Company is considered an exploration stage company, as it has not generated revenues from its operations.

Reverse merger of Intergrated Oil and Gas Solutions Inc.

On January 28, 2010, the Company entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired Company.

Paradigm issued 42,000,000 of its $.001 par value shares common shares representing 82% of the fully-diluted shares of the Company in exchange for 100% of the Acquired Company’s outstanding shares. The Acquired Company is now a 100% subsidiary of the Company.

The Acquired Company holds 100% working interests in certain oil and gas leases along with certain oil and gas production equipment. The total purchase price to acquire these assets amounted to $541,539. These costs have been capitalized on the Acquired Company’s books at cost as natural gas and oil properties, unproved properties.

F - 7

Subsidiary formed: Paradigm Integrated Technology Solutions Inc.

On May 20, 2010 the Company formed Paradigm Integrated Technology Solutions Inc., as a wholly owned subsidiary to conduct business related to technologies that enhance secondary oil recovery.

Going Concern

These financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation.

The Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. Inherent in the Company’s business are various risks and uncertainties, including its limited operating history, historical operating losses, dependence upon strategic alliances, and the historical success rate of oil and gas exploration. Management’s plan is to acquire interests in certain oil and gas properties with production and to rework existing wells to bring them on line for production.

As shown in the accompanying financial statements, the Company has incurred a net loss of $3,195,781 for the period from January 28, 2010 (inception) through September 30, 2011.

The Company has no revenue. The Company’s future success is primarily dependent upon the existence of oil and gas in quantities which are commercially viable to produce, on properties for which the Company owns a working interest or an option to acquire an interest and/or through its successful deployment of the Company’s Transportable Enhanced Oil Recovery Platform (T-EOR) and the Joint Venture Production Program. The Company’s success will also be dependent upon its ability to raise sufficient capital to fund its rework and exploration programs and, to exploit the discovery on a timely and cost-effective basis.

2. RECENT ACCOUNTING PRONOUNCEMENTS

During the period ended September 30, 2011, there were several new accounting pronouncements issued by the Financial Accounting Standards Board (FASB). Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s financial position or operating results. The Company will monitor these emerging issues to assess any potential future impact on its consolidated financial statements.

F - 8

3. ACCOUNTING POLICIES

RELATED PARTY RECEIVABLE

The Related Party receivable is expected to be repaid to the Company by December 31, 2011. However should the receivable not be repaid prior to the release of the Company’s audited financial statements for the year ended December 31, 2011, the Company will be reclassing the balance to non-current assets according to SEC guidelines.

OIL AND GAS PROPERTIES IMPAIRMENT REVIEW

Properties will continue to be carried as an asset pending determination of whether proved reserves have been found only as long as: i) the property has found a sufficient quantity of reserves to justify its completion as a producing property if the required capital expenditure is made and ii) there is enough geological and engineering evidence that supports a commercially producible quantity of reserves exist from a previously drilled well on the property. If the well properties cannot support any of these criteria, the property is assumed to be impaired, and its costs are charged to expense.

The impairment of unamortized capital costs is measured at a combined lease level and is reduced to fair value if it is determined that the sum of expected future net cash flows is less than the net book value. Paradigm determines if impairment has occurred through either adverse changes or as a result of the annual review of all the fields combined.

During the 3rd quarter the Company determined that no changes were determined in the status of the properties and no impairment is needed. In addition, the Company has determined work over programs were warranted and are being planned to be being implemented.

F - 9

4. OIL AND GAS INTERESTS

The Oil and Gas Interests are accounted for on a consolidated basis as follows;

	September 30, 2011
Chilson Property
Acquisition cost January 28, 2010	$	121,774
Cost of work over program		21,350

	$	143,124
Lett Finlay Property
Acquisition cost January 28, 2010	$	308,708

	$	308,708

Lumpkin Property Acquisition cost January 28, 2010	$	111,057
	$	111,057
Chilson B
Acquisition cost June 30, 2010	$	17,977

	$	17,977

Corsicana Acquisition cost June 22, 2010	$	20,700
	$	20,700

Todd Creek Property
Acquisition cost	$	298,631
Cash call		52,102
Refund		(17,022	)
Written off		(50,000	)
Impairment expense		(283,711	)
	$	-
Hillsprings Property
Acquisition cost	$	207,383
Impairment expense		(207,383	)
	$	-

Sawn Lake Property
Farmout and option agreement	$	152,423
Impairment expense		(152,423	)
		-
Total Oil and Gas Interests	$	601,566

F - 10

5. SHORT TERM CONVERTIBLE NOTES

The Company has entered into a series of Short Term Convertible Notes bearing annual interest of 8% which mature 180 days after the issue date (maturity date). The note plus interest can be converted in whole or in part to common shares at the holder’s option at the later of the maturity date or the default date. The Conversion price is calculated as 55% of the market price which is determined by averaging the lowest 3 day closing price over the last 10 trading day period ending one trading day prior to the day the conversion notice was sent by facsimile. If the note plus interest is not paid or converted on the maturity, then default interest begins to accrue on the whole amount bearing annual interest of 22%.

Conversion Price During Major Announcements

In the event the Company (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other than a merger in which the Company is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer all or substantially all of the assets of the Company or (ii) any person, group or entity (including the Company) publicly announces a tender offer to purchase 50% or more of the Company’s Common Stock (or any other takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth above. For purposes hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public announcement as contemplated by this paragraph has been made, the date upon which the Company (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused this paragraph to become operative.

The Company may prepay the note plus accrued interest at any time after 91 days after the issue date and ending up to 180 days after the issue date. The total amount calculated to be prepaid will bear an additional charge of 75% of the calculated prepaid amount. The Company is required at all times to have authorized and reserved five times the number of shares that is actually issuable upon full conversion of the notes (based on the Conversion Price of the Notes in effect from time to time).

	Convertible			Outstanding at
	Note			September 30
	Issued			2011
Issue Date
October 6, 2010	$	50,000		$	---
November 18, 2010		40,000			---
December 20, 2010		52,500			---
January 28, 2011		32,500			---
March 9, 2011		25,000			15,000
April 29, 2011		32,500			32,500
June 7, 2011		32,500			32,500
July 20, 2011		61,000			61,000
August 30, 2011		32,500			32,500
		358,500			173,500

Accrued Interest					1,744
					175,244

Issued for Debt		22,500			---
May 23, 2011		53,500			---
July 20, 2011		25,000			5,000
August 18, 2011		101,000			5,000

Unamortized Discount on Convertible Notes		(372,886	)		(135,336	)
	$	86,614		$	44,908

F - 11

Convertible debentures issued for cash

During the 2nd quarter of 2011 the Company converted the convertible notes and accrued interest dated October 6, 2010, and November 18, 2010 and partially the convertible note dated December 20, 2010. (see note 7). The Company entered into additional convertible notes dated April 29, 2011 and June 7, 2011.

During the 3rd quarter of 2011 the Company entered in additional convertible notes dated July 20, 2011 and August 30, 2011. The Company converted the convertible notes and accrued interest for the remainder of the note dated December 20, 2010, the full note dated January 28, 2011 and partially the convertible note dated March 9, 2011.

Convertible debentures issued for debt

On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was exchanged for a convertible note which was then converted into 243,932 common shares (see note 7). The Convertible note was to mature on June 1, 2012 and was convertible by the holder at any time. The convertible note carried a 5% annual interest rate.

During the 3rd quarter on July 20, 2011 the Company exchanged $53,500 in debt for two convertible notes each in the amount of $26,750. On July 21, 2011 both of these notes were converted into 2,949,284 common shares of the Company.

On August 18, 2011 $25,000 in debt was exchanged for a convertible note. On August 19, 2011, $20,000 of the note was converted for 1,069,519 common shares of the Company leaving $5,000 to be converted at a future date.

Discount on Convertible Notes

Convertible Notes that can be converted to common shares at a discount to the fair market value of those shares are discounted accordingly. The discount is then amortized over the life of the convertible note. For the nine months ended September 30, 2011, $315,694 had been recorded as a discount on the convertible notes issued throughout the period and credited to additional paid in capital. $180,550 had been amortized and expensed as interest leaving an unamortized discount balance of $135,336. The unamortized balance is netted against the outstanding convertible notes.

Failure to Deliver Common Stock Prior to Deadline.

Without in any way limiting the Holder’s right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is more than three (3) business days after the Deadline, the Company shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the Company fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to the Company by the first day of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance with the terms of this Note.

All stock issued under the terms of the convertible notes have been delivered in accordance with the agreement and no remedies have been required or are outstanding.

6. SHORT TERM LOAN

On March 9, 2011 the Company entered into a short term merchant account loan agreement for $15,000. The loan is secured by future sales/receivables and carries an annual interest of rate of 15%. Daily payments are made against the amount outstanding at a rate of up to $460 per day. As of September 30, 2011, the loan balance was $0.

7. NOTE PAYABLE

The Company is indebted under a note payable to 1132559 Alberta Ltd, bearing annual interest of 7% and secured by 100% of the first proceeds of production under the Farmout and Option Agreement for the Sawn Lake Property. There are no fixed repayment terms. The Company may be in default of this note as more fully explained in note 10 of the December 31, 2010 financial statements.

	September 30, 2011

1132559 Alberta Ltd	$	95,492
	$	95,492

F - 12

8. SHAREHOLDERS’ EQUITY

Common Stock

a) Effective January 28, 2010, Paradigm Oil & Gas Inc. (the "Company"), a Nevada corporation, entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired company The Acquired company is now a 100% subsidiary of the Company.

Prior to the Acquisition, there were 188,058 shares of the Company's Common Stock outstanding. Immediately following the Acquisition, there are 42,188,058 shares of Common Stock outstanding.

On the effective date of the acquisition, additional paid in Capital was increased by $ 8,358,000. This was adjusted by $ 8,400,000 to record the basis in Intergrated Oil and Gas Solutions Inc. An Expense of $ 633,279 was then recorded to recognize the assumption of Paradigms’ liabilities assumed at the time of the acquisition.

b) On February 2, 2010 the convertible note payable of $ 360,000 was converted into common shares at $ .04 per share. 9,000,000 shares were issued to the convertible debenture holders.

On the effective date of the conversion, additional paid in capital was increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the conversion to the book value of the convertible debenture.

c) On September 28, 2010 a convertible note in the amount of $ 734,918 was converted at $ 0.35 per share for a total of 2,099,768 Common Shares at a par value of $ 2,100. Additional paid in capital increased by $ 690,823. The share price was $ 0.33 on the closing of this transaction, as a result a gain of $ 41,995 was recognized and recorded as a Gain from issued shares on debt conversion.

d) During the 2nd quarter period from April 25, 2011 to June 30, 2011 convertible notes were converted into 1,271,382 common shares as follows:

ISSUE DATE	PRINCIPAL		INTEREST		DATE	AMOUNT		PRICE		# OF SHARES		SHARE PV		APIC

October 6, 2010	$	50,000	$	2,000	4/25/2011	$	15,000		0.1487		100,874	$	101	$	14,899
					4/28/2011	$	15,000		0.1249		120,096	$	120	$	14,880
					4/29/2011	$	12,000		0.1249		96,077	$	96	$	11,904
					5/4/2011	$	10,000		0.1212		82,508	$	83	$	9,917

November 18, 2010	$	40,000	$	1,600	5/25/2011	$	15,000		0.1137		131,926	$	132	$	14,868
					6/1/2011	$	15,000		0.1063		141,110	$	141	$	14,859
					6/3/2011	$	11,600		0.099		117,172	$	117	$	11,483

December 20, 2010	$	52,500	$	2,100	6/23/2011	$	15,000		0.0702		213,675	$	214	$	14,786
					6/30/2011	$	17,500		0.0653		267,944	$	268	$	17,232
						$	126,100				1,271,382	$	1,272	$	124,828

F - 13

e) The $ 22,500 convertible debenture entered into on May 23, 2011 was converted into 243,932 common shares as follows:

ISSUE DATE	PRINCIPAL		INTEREST		DATE	AMOUNT		PRICE		# OF SHARES		SHARE PV		APIC

May 23, 2011	$	22,500	$	28	5/24/2011	$	7,500		0.128		58,594	$	59	$	7,441
					6/1/2011	$	7,500		0.09		83,333	$	83	$	7,417
					6/10/2011	$	7,528		0.0738		102,005	$	102	$	7,426
						$	22,528				243,932	$	244	$	22,284

f) During the 3nd quarter period convertible notes were converted into 1,271,382 common shares as follows:

ISSUE DATE	PRINCIPAL		INTEREST		DATE	AMOUNT		PRICE		# OF SHARES		SHARE PV		APIC

December 20, 2010	$	52,500
Remaining	$	20,000	$	2,100	7/13/2011	$	12,000		0.0571		210,158	$	210	$	11,790
					7/18/2011	$	10,100		0.0528		191,288	$	191	$	9,909

January 28,2011	$	35,000	$	1,400	8/5/2011	$	12,000		0.0349		343,840	$	344	$	11,656
					8/10/2011	$	10,000		0.0363		275,482	$	275	$	9,725
					8/25/2011	$	10,000		0.0233		429,185	$	429	$	9,571
					9/13/2011	$	4,400		0.0223		197,309	$	197	$	4,203

March 09, 2011	$	25,000	$	1,000	9/21/2011	$	10,000		0.0151		662,252	$	662	$	9,338
	$	15,000	$	2,500
						$	68,500				2,309,514	$	2,308	$	66,192

F - 14

During the 3rd quarter period convertible debentures issued for debt were converted into 4,018,803 common shares as follows:

ISSUE DATE	PRINCIPAL		INTEREST		DATE	AMOUNT		PRICE		# OF SHARES		SHARE PV		APIC

July 20,2011	$	26,750		--	7/21/2011	$	26,750		0.0181		1,474,642	$	1,475	$	25,275

July 20,2011	$	26,750		--	7/21/2011	$	26,750		0.0181		1,474,642	$	1,475	$	25,275

August 18, 2011	$	25,000		--	8/19/2011	$	20,000		0.0187		1,069,519	$	1,070	$	18,930

						$	73,500				4,018,803	$	4,020	$	69,480

Total common shares issued for the 3rd quarter amounted to 6,328,317, year to date 7,843,631.

As of September 30, 2011 there were 61,131,457 Common Shares outstanding.

On July 21, 2011 two convertible debentures were converted to common shares below the conversion price resulting in a loss on conversion of $195,395 being realized. Additional paid in capital was increased by $195,395.

The increase in additional paid in capital throughout the nine months ended September 30, 2011 totaled $793,873.

9. RELATED PARTY TRANSACTIONS

During the year, loans of $ 7,000 were issued to the Company by a shareholder.

On May 23, 2011, part of a shareholder loan in the amount of $ 22,500 was exchanged for a convertible note which was then converted into 243,932 common shares.

On July 20, 2011 $53,500 of shareholder loans was exchanged for a convertible note of which then was converted on July 21, 2011 into 2,949,284 common shares.

A Shareholder of the Company has loans outstanding to the Company of $ 7,046 at September 30, 2011. The loans are interest free and have no formal terms of repayment.

10. CONTRACTUAL OBLIGATIONS AND COMMITMENTS

The Company is in default of its obligation to Compton Petroleum in respect to the Todd Creek Property, as it has not paid the full share of costs of drilling or to complete the well. As a result the Company has received no further information about the Todd Creek project. The Company does not expect to receive further information from the operator until all outstanding participation costs have been paid.

In conjunction with the year end audit in 2007 and 2008, 1132559 Alberta Ltd alleged that the Company was in default of the Sawn Lake Property Lake farmout agreement over which their note payable (refer to note 7) is secured by 100% of the first proceeds of production of the Sawn Lake Property. Accordingly 1132559 Alberta Ltd position is that they own the Sawn Lake Property Lake farmout agreement. The Company does not believe there has been any default and maintains its ownership in the Sawn Lake farmout agreement.

11. SUBSEQUENT EVENTS

On October 24, 2011 the Company entered into a $5,500,000 Securities Purchase Agreement with an Investor. Under the terms of the agreement the Company issued to the Investor for purchase a Convertible Debenture and an Equity Investment Agreement in exchange for a payment of $200,000. Under the terms of these agreements the Investor initially has paid the Company the $200,000 under a Convertible Debenture and has the right to purchase $2,000,000 in common shares of the Company in accordance with the terms of the agreement. In addition during the term of the agreement, the Investor may enter into an additional $300,000 Convertible Debenture and have the right to purchase an additional $3,000,000 in common shares of the Company under the exact terms of the initial Convertible Debenture and Equity Investment Agreement.

The Convertible Debenture matures on October 24, 2015 and carries a 4 ¾ percent per annum interest rate which is payable on a monthly basis commencing on the 15th day of each month following the month of issuance. The Investor has the option to receive payment in cash or in shares of Common Stock of the Company.

The Investor has the right to convert all or any portion of the Principal Amount of the debenture from time to time.

F - 15

The Conversion Price is determined as being equal to the lesser of i) $0.60 or ii) 70% of the average of the 3 lowest VWAPs during the twenty-one trading days prior to the date of the conversion notice. The VWAP means volume weighted average price of the Common Stock for the date of trading.

If on the conversion date the conversion price is below $0.03, the Company has the right to prepay that portion the Investor elected to convert at an amount equal to 120% of the conversion amount.

If at any time that the debenture is outstanding, the VWAP is below $0.02, or the company has not reserved enough of its Common Shares to account for the conversion of the debenture in full or the Investor is prohibited for any reason to convert the debenture, then the Investor can elect to convert any portion of the outstanding principal amount of the debenture.

The Equity Investment Agreement was also issued on October 24, 2011 and expires on October 24, 2015 giving the Investor the right from time to time to invest into the Company through the purchase of up to $2,000,000 of the Company’s Common Stock. The purchase price of each investment will be based on the following schedule:

60% of the investment will purchase Common Stock at 75% of the VWAP

40% of the investment will purchase Common Stock at 100% of the VWAP

The Company intends to use the proceeds of the Equity Investments to acquire additional properties that are producing, can utilize their Transportable Enhanced Oil Recovery System and that have upside potential in increasing production and reserves.

F - 16

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. Some discussions in this report may contain forward-looking statements that involve risk and uncertainty. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this report. Forward-looking statements are often identified by words like: "believe", "expect", "estimate", "anticipate", "intend", "project" and similar expressions or words which, by their nature, refer to future events.

In some cases, you can also identify forward-looking statements by terminology such as "may", "will", "should", "plans", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that 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.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity 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$) and are prepared in accordance with United States Generally Accepted Accounting Principles. Any references to "CA$" refer to Canadian Dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our", and "Paradigm" mean Paradigm Oil And Gas, Inc., unless otherwise indicated.

Paradigm is an exploration stage company. There is no assurance that commercially viable reserves of oil and/or gas exist on our farmin lands or that commercially viable mineral deposits exist on the claims that we have under option. Some further drilling and exploration will be required before a final evaluation as to the economic and legal feasibility of our properties can be determined.

OVERVIEW

We were incorporated as Paradigm Enterprises, Inc. in the state of Nevada on July 15, 2002 and established a year end of December 31. On February 7, 2005 we changed our name from Paradigm Enterprises, Inc. to Paradigm Oil And Gas, Inc. From July, 2002 to December, 2004, we were in the business of the exploration and development of a mineral property in British Columbia. The Company decided to abandon its interest in this mineral property and on August 26, 2005. We have not spent anything on research and development activities.

On December 06, 2004, we entered into two participation proposals with Win Energy Corporation. On June 18, 2005, the Company received a payment of $147,258 from Win for the sale of 50% of the Company's 10% interest in the Todd Creek Property and currently holds a 5% interest in the project.

On February 15, 2005, Paradigm entered into a Farmout and Option Agreement with 1132559 Alberta Ltd., a private Alberta corporation whereby Paradigm will farm in to a 5% interest in a test well at Township 91, Range 13 W5M, SE Section 36, and a similar interest in an additional option well at Township 91, Range 12 W5M, NW Section 29 in the Sawn Lake, Alberta, oil and gas project. In March 2006, a well was drilled in Section 36. The well is not producing at this time and Paradigm is waiting for further information from the operator on their plan of operations.

Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 Par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired Company . The Transaction is considered to be a reverse acquisition. The acquisition date now becomes the inception date of the Company. The Acquired Company is now a 100% subsidiary of Paradigm.

The Acquired Company holds 100% working interests in certain oil and gas leases along with certain Oil and Gas production equipment. The costs to acquire these assets have amounted to $541,539. These costs have been capitalized on the acquired company’s books at cost as Oil and Gas Properties under Lease.

On May 20, 2010 the Company formed Paradigm Integrated Technology Solutions Inc., as a wholly owned subsidiary to conduct business related to technologies that enhance secondary oil recovery.

On May 20, 2010 the Company’s subsidiary, Paradigm Integrated Technology Solutions Inc., entered into a Transfer of Technology and Know How Agreement for the worldwide marketing rights for the Transportable Enhanced Oil Recovery Platform. Under the terms of the agreement the Company agreed to purchase the first system which includes the exclusive ownership in the related technology and knowhow. $ 50,000 was paid on signing the agreement and $50,000 was to be paid within thirty days of signing the agreement towards the purchase of the first system and an additional $ 50,000 on delivery of the equipment. To date the Company has paid $ 161,471 towards this program and has taken delivery of the first system. In addition, the purchase of the next 10 systems carry an additional $ 10,000 charge per system above the list purchase price of the system for a total of $ 100,000, however the Company is under no obligation to purchase further systems. The first system was received on September 29, 2010 and has been fully tested and is now commissioned for production.

We have not been involved in any bankruptcy, receivership or similar proceeding nor has there been any material reclassification or merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of business other than the acquisition mentioned above on January 28, 2010.

OUR CURRENT BUSINESS

PETROLEUM EXPLORATION, DEVELOPMENT AND RECOVERY

Effective January 28, 2010, Paradigm Oil & Gas Inc. entered into a Share exchange agreement with the shareholders of Intergrated Oil and Gas Solutions Inc. (the "Acquired Company") a Texas corporation, whereby the Company has issued 42,000,000, US$.001 Par value common shares to unrelated shareholders in exchange for their one hundred percent (100%) interest in all of the capital stock of the Acquired company. The Acquired Company is now a 100% subsidiary of the Company.

The Acquired Company holds 100% working interests in certain oil and gas leases along with certain Oil and Gas production equipment. The costs to acquire these assets have amounted to $541,538.90. These costs have been capitalized on the acquired company’s books at cost as Oil and Gas Properties under Lease.

The oil and gas properties are comprised of 4 leases totaling approximately nine hundred and thirty four (934) net mineral Acres, all located in the State of Texas, USA. 692 acres in Kaufman County, carry a 80% Net Revenue Interest, 40 acres located in the County of Wood, carry a 80% Net Revenue Interest, 122.37 acres located in the County of Henderson carry a 81.25% Net Revenue Interest and 80 acres in the County of Wichita carry a 75% Net Revenue Interest. Combined there are a total of 9 existing previously producing wells and available spacing to support the drilling of approximately 30 new wells in the 3800’ to 9000’ range and approximately 50 new wells in the 800’ to 1,800’ range.

On June 22, 2010 the Company’s subsidiary, Intergrated Oil and Gas Solutions Inc. acquired the Corsicana lease. The cost to acquire this lease amounted to $ 20,700 for a 50% working interest in the 80% Net Revenue Interest. The lease has 9 previously producing wells and have spacing over a total of 60 acres to support the potential of 17 new wells to depths of up to 2000 feet. The Corsicana lease is located in Navarro County, Texas.

On June 25, 2010 the Company’s subsidiary, Intergrated Oil and Gas Solutions Inc. acquired 2 additional Chilson leases, known as Chilson B. The cost to acquire these leases amounted to $ 17,977 for a 100% working interest in the 81% Net Revenue Interest. Combined the 2 leases have 5 previously producing wells and have spacing over a total of 154 acres to support the potential of 37 new wells to depths of up to 2000 feet. The new Chilson leases are adjacent to the existing Chilson lease the Company has which are all located in Wichita County, Texas.

On May 20, 2010 the Company’s subsidiary, Paradigm Integrated Technology Solutions Inc., entered into a Transfer of Technology and Know How Agreement for the worldwide marketing rights for the Transportable Enhanced Oil Recovery Platform. Under the terms of the agreement the Company agreed to purchase the first system which includes the exclusive ownership in the related technology and knowhow. $ 50,000 was paid on signing the agreement and $50,000 was to be paid within thirty days of signing the agreement towards the purchase of the first system and an additional $ 50,000 on delivery of the equipment. To date the Company has paid $ 196,124 towards this program and has taken delivery of the first system. In addition, the purchase of the next 10 systems carry an additional $ 10,000 charge per system above the list purchase price of the system for a total of $ 100,000, however the Company is under no obligation to purchase further systems. The first system was received on September 29, 2010 and has been fully tested and is now commissioned for production and is currently being demonstrated for commercial use.

The Transportable Enhanced Oil Recovery Platform is a portable production system than can be easily and economically moved from well to well and quickly installed to remove Oil from the existing well bore. This allows for quick Oil recovery without the time and expense currently required to implement the infrastructure need to produce Oil today. By utilizing this system, wells can be produced from immediately and monitored as to flow rates to determine which wells are suitable for making additional investment for a more permanent operational infastructure. The company has begun to utilize this technology on its existing properties and is in the process to introduce this technology to the market place after it receives approval for commercial use from the Texas Railroad Commission.

BUSINESS PRIOR TO ACQUISITION OF JANUARY 28, 2010

On December 06, 2004, we entered into two participation proposal agreements with Win Energy Corporation.

HILLSPRINGS PROPERTY

Paradigm paid $207,383 to Win to acquire a 10% working interest in one section (640 acres) in the Hillsprings Property (Township 10, Range 34,Section 29 W4), Alberta, Canada. It is now anticipated that a test well will be drilled on our property interest in 2007.

TODD CREEK PROPERTY

Paradigm paid $298,631 to Win to acquire a 10% working interest in 13.75 sections (8800 acres) in the Todd Creek Property, Alberta, Canada. In June, 2005, we sold 50% of our interest back to Win for net proceeds of $127,349 (value of the interest less certain uppaid operating expenses) as of the date of this report, Paradigm holds a 5% in the Todd Creek property and has paid a net cost of $149,316 to acquire its interest. During the second quarter of 2005, a well located in Todd Creek property was drilled to a specifically targeted depth. This well is located in 13-28-9-2W5 in Alberta, Canada and we will refer to this well as the "13-28 well." The 13-28 well was evaluated and tested. The operator encountered gas reservoirs and concluded that this well is a potential gas well. This well was tied into a newly constructed gas processing plant and production commenced in September 2006. To date we have received no revenue from this well due to the fact we owe Win Energy drilling costs. In January 2007, we completed the drilling of a second well in the Todd Creek Prospect located in 13-33-8-2 in Alberta, Canada and we will refer to this well as the "13-33 well." Reports by other farmin partners indicate that no economic hydrocarbons are present.

SAWN LAKE PROJECT

On February 15, 2005 Paradigm entered into a Farmout and Option Agreement with 1132559 Alberta Ltd., a private Alberta corporation whereby Paradigm will farm in to a 5% interest in a test well at Township 91, Range 13 Section 36 W5M SE , and a similar interest in an additional option well at Township 91, Range 12, Section 29 W5M NW in the Sawn Lake, Alberta exploratory oil and gas project. Paradigm will also have a right of first refusal to participate in each drilling spacing unit through a farm-in on the lands held by Deep Well Oil and Gas, Inc. in the Sawn Lake project in which 1132559 Alberta Ltd has an interest. The final terms of the option for the additional DSUs are yet to be agreed upon by both parties. Paradigm will earn 100% of the farmor's interest (an undivided 10% interest in the drilling spacing unit) before payout (BPO), reverting to 50% of the farmor's interest (an undivided 5% interest) after payout (APO). Paradigm will have then earned a 5% interest in the remaining wells to be drilled in that drilling spacing unit.

In order to earn its interest in the initial test well, total costs of the test well, estimated to be CA $216,489, up to the point of commercial oil sales are to be borne one hundred percent (100%) by Paradigm. Total costs, estimated to be $173,200, of the option well up to the point of commercial oil sales are also to be borne one hundred percent (100%) by Paradigm in order to earn its undivided interest. Payment of the full AFE amount is due upon invoicing of Paradigm by the operator (1132559 Alberta Ltd.) for each of the test and option wells. In March 2006, a well was drilled in Section 36. The well is not producing at this time and Paradigm is waiting for further information from the operator on their plan of operations.

ITEM 2. DESCRIPTION OF PROPERTY

PROPERTY ACQUIRED BY ACQUISITION OF INTERGRATED OIL AND GAS SOLUTIONS INC. ON JANUARY 28, 2010

The oil and gas properties are comprised of 4 leases totaling approximately nine hundred and thirty four (934) net mineral Acres, all located in the State of Texas, USA. And are summarized as follows;

Chilson Property, 80 acres in the County of Wichita carry a 87.5% Net Revenue Interest. There are 7 existing wells on the property that have previously produced. Approximately 69 new wells can be drilled to depths that vary between 800 to 5,000 feet.

Lett Finley Property, Consists of 2 leases-40 acres located in the County of Wood, carry a 75% Net Revenue Interest, and 122.37 acres located in the County of Henderson carry a 81.25% Net Revenue Interest There are 2 existing wells on the properties that have previously produced. 2 new offset wells can be drilled to 9,500 feet and another 7 infield wells can be drilled.

Lumpkin Property 692 acres in Kaufman County, carry a 80% Net Revenue Interest. This lease is considered an exploration field with existing production nearby. 17 new wells can be drilled to 9,000 feet.

On June 30, 2010 the Company’s subsidiary, Intergrated Oil and Gas Solutions Inc. acquired 2 additional Chilson leases, known as Chilson B. The cost to acquire these leases amounted to $ 17,977 for a 100% working interest in the 81% Net Revenue Interest. Combined the 2 leases have 5 previously producing wells and have spacing over a total of 154 acres to support the potential of 37 new wells to depths of up to 2000 feet. The new Chilson leases are adjacent to the existing Chilson lease the Company has which are all located in Wichita County, Texas.

PETROLEUM PROPERTIES PRIOR TO JANUARY 28, 2010

HILLSPRINGS

In December 2004, we entered into a participation proposal with Compton Corporation whereby we could acquire an interest in the Hillsprings exploratory oil and gas drilling project about 100 miles south of Calgary in the Alberta foothills for the payment of a total of $207,383 excluding drilling costs. We acquired a 5% interest in one section (640 acres) of land located at Section 34, Township 5, Range 29 W4M. In 2008, due to the low prices for natural gas and the lack of sustainable production from the property we took an impairment charge against the Todd Creek property and wrote the value down to 0.

TODD

In December 2004, we entered into a second participation proposal with Compton whereby we could acquire an interest in the Todd exploratory oil and gas drilling project also about 100 miles south of Calgary in the foothills of the Rocky Mountains for the payment of a total of $298,631 including drilling costs. On January 25, 2005, we concluded final payments and finalized the agreements whereby we acquired a 10% interest in 13.75 sections (8800 acres) of land located at Section 16, Township 9, Range 2 W5 and an option to December 31, 2006 to earn a 7.5% interest in an additional seven sections 4480 acres) in the surrounding area by contributing 10% of the drilling costs. Contributions to each well drilled will earn an interest in two sections. On June 18, 2005, the Corporation received a net payment of CA $117,442.50 from Compton Corporation for the sale of 50% of Paradigm’s 10% interest in the Todd Creek Oil and Gas Property to Win, the original vendor. Paradigm now holds a 5% interest in the Todd Creek 13-28 well.

On June 27, 2005, we announced that drilling of the Todd Creek Well had been moved into the final completion stage which may take up to 50 days to complete. The operators have placed the well on "tight hole" status and further news will be released upon completion of testing. As of the date of this report, that status continues; we will release further information as it comes available. “Tight hole” is a petroleum industry term used colloquially in which the performance data of a well is closely guarded. During this period, all information about the well – depth, formations, drilling rates, logs and other pertinent data – is not shared or made public. We have not been given any further information regarding the Todd Creek property as we are delinquent in our payments to Compton.

A test well drilled in Section 16, Township 9, Range 2 W5 is included in the transaction, the results of which have not been released. Further details will be provided once the tight hole status has been lifted. The next proposed well will likely be drilled at location 13-28-9-2W5 with anticipated production from two reservoirs. Estimates indicate initial potential daily production could reach 400 barrels of oil equivalent per day based upon the flow rates from adjacent and similarly structured wells. It is anticipated that it will require more than 20 such wells to fully exploit the reservoirs in the project area.

Producing wells in the area typically are of long life with minimal declines. The gas is sweet with minimal sulfur or CO2 and generally receives excellent prices. Existing wells on the Todd Creek prospect typically produce at depths between 1,600 and 1,900 meters.

We are delinquent in our payments to Compton. Until we are current on our payments we will not receive any further information regarding the property. In 2008, due to the low prices for natural gas and the lack of sustainable production from the property we took an impairment charge against the Todd Creek property and wrote the value down to 0.

SAWN LAKE

On February 18, 2005, we announced that we have farmed into a 10% interest in a major heavy oil exploratory project located the Sawn Lake area of the Peace River region of Alberta in a project owned by 1132559 Alta. Ltd. The general terms of the farm-in agreement is that Paradigm will pay 10% to earn the full 10% interest until payout, and will retain 5% interest after payout. Paradigm's participation in any subsequent wells in that Drilling Spacing Unit (DSU) will be at 5% to earn an equal 5% interest. The first well will be drilled on DSU located at Township 91, Range 13 W5M, SE Section 36. Paradigm has also negotiated participation in another well in Township 91, Range 12 W5M, NW Section 29 under the same terms. Furthermore, Paradigm will have the option to participate in all future 1132559 Alta. Ltd.'s interests in Sawn Lake wells under terms to be negotiated.

Other operators targeting the deeper Slave Point Formation have previously drilled much of the land. Because of the earlier extensive exploration for deeper light oil, Sawn Lake project is able to benefit from data collected by others pertaining to the drilling of 67 wells that penetrated and partially delineated the Bluesky Formation heavy oil reservoir.

This acquisition is in line and consistent with Paradigm's investment strategy to acquire small interests in a variety of domestic and international upstream oil and gas projects to develop a high impact and diversified portfolio. Due to the ongoing dispute the cost of defending the Companies rights to the Sawn Lake property may cost more than the value of the property. In 2008 the Company took an impairment charge against the Sawn Lake property and wrote the value down to 0.

Financial Condition and Changes in Financial Condition

The Company had no revenues from the sale of oil and gas in the nine months ended, September 30, 2011.

Consolidated operating expenses for the 3rd quarter ended September 30, 2011 amounted $319,222 compared to $153,918 for the prior year’s 3rd quarter. The increase in consolidated operating expenses was primarily due to the Amortization of the discount on Convertible notes and the interest on the notes recorded at $186,623 under interest and in increases in field operation expenses for $7,836, Administration, Legal fees $7318 and a increase in transfer agent fees by $4,500 which were offset by a reduction in; Accounting and audit for $6,400, Management fees by $18,958 and Professional and consulting fees by $17,233. The reduction in Accounting and audit was due to less work required from an outside accountant to assist with the preparation of the Company books and records. Management fees declined due an over accrual in the prior periods and Professional and consulting fees declined due to the fees charged by a consultant were now being allocated to field labor under field operation expenses causing a increase in field operation expenses. Further increases were caused by increased activity in financing and administration of note conversions under Administration expenses, Interest increasing due to the interest being charged on the Convertible notes, Legal fees increased because of the legal costs associated with the Convertible notes and Transfer agent fees increased because of the conversions to common shares being exercised.

Overall field operation expenses for the 3rd quarter totaled $68,877 compared to $61,041 in prior years 3rd quarter.

September 30, 2011 3rd quarter general expenses totaled $250,345 compared to $92,877 for prior year’s 3rd quarter ended September 30, 2010.

All other costs were in line with the current level of activity at the company and consistent with the prior quarter.

On a year to date basis for the nine months ended September 30, 2011, field operation expenses totaled $147,699 compared to $120,141 for the same period in the prior year. The increase was primarily caused by lease maintenance expenses.

Total general expenses were $374,979 compared to $243,543 the prior year.

Other Income/(Expense) Items;

During the 3rd quarter ended September 30, 2011, a loss of $195,396 from shares issued on debt conversion was recorded. In the prior year’s 3rd quarter a convertible debenture was converted at a price higher than the Company`s Common Share trading price at the time of the conversion, resulting in as a gain of $ 41,995 being recognized and recorded as a Gain from issued shares on debt conversion.

On a year to date basis for the nine months ended September 30, 2011 the only item recorded was the loss of $195,396 from shares issued on debt conversion. During the same period last year in first quarter period the following items occurred;

Expense on Assumption of Liabilities on Acquisition

There was an expense on assumption of liabilities on acquisition which was booked in the period ended March 31, 2010.

On the effective date of the acquisition, additional paid in capital was increased by $ 8,358,000.This was offset by $ 8,400,000 to record the basis in Intergrated Oil and Gas Solutions Inc. An expense of $ 633,279 was then recorded to recognize the assumption of liabilities on the acquisition.

Loss from share issue on debt conversion

On the effective date of the conversion, additional paid in Capital was increased by $ 1,791,000. A loss of $ 1,440,000 was then recognized to match the conversion to the book value of the convertible debenture.

These charges were booked in the period ended March 31, 2010.

Gain from share issue on debt conversion

On September 28, 2010 a convertible debenture was converted at a price higher than the Company`s Common Share trading price at the time of the conversion, resulting in as a gain of $ 41,995 being recognized and recorded as a Gain from issued shares on debt conversion. For the nine months ended September 30, 2010 the net loss from share conversions was recorded at $1,398,005.

Net Loss for the 3rd quarter ended September 30, 2011 amounted to $514,618 compared to a Net Loss of $111,923 for the priors years 3rd quarter and on a year to date basis the net loss for the nine months ended September 30, 2011 was $718,074 compared to a net loss $2,394,968 for the prior year’s period ended September 30, 2010.

Current Assets

As of September 30, 2011 cash was recorded at $21,131. Employee Advances were $9,895 to cover contractors and employees performing field services. The note receivable remained at $ 28,050 that was set up for work that was performed on the Corsicana property and lease acquisition which is owing to the Company from the other working interest owner on the property, and the related party receivable was decreased to $55,007 for amounts advanced for acquisitions and work performed. The Bond RRC was increased by $500 to $ 53,000 which represents funds on deposit with the Texas Railroad Commission for the prepaid operating bond.

With the purchase of one of the leases, there was existing Oil in the storage tank on the lease and additional oil was collected from a test run of the Transportable Enhanced Oil Recovery Platform which amounted to $ 7,823 which has been accounted for as inventory.

Production Equipment $ 196,124

During the 2010, 2nd quarter, the Company’s subsidiary, Paradigm Integrated Technology Solutions Inc., entered into a Transfer of Technology and Know How Agreement for the worldwide marketing rights for the Transportable Enhanced Oil Recovery Platform. Under the terms of the agreement the Company agreed to purchase the first system which includes the exclusive ownership in the related technology and knowhow. $ 50,000 was paid on signing the agreement and $50,000 was to be paid within thirty days of signing the agreement towards the purchase of the first system and an additional $ 50,000 on delivery of the equipment. To date the Company has paid $ 161,471 towards this program and has taken delivery of the first system. In addition, the purchase of the next 10 systems carry an additional $ 10,000 charge per system above the list purchase price of the system for a total of $ 100,000, however the Company is under no obligation to purchase further systems. The first system was received on September 29, 2010 and has been fully tested and is now commissioned for production use. The system is now being demonstrated for commercial use and is being presented to Texas Railroad Commission for commercial use approval.

Natural Gas and Oil Properties

Natural gas and oil properties remained at $ 601,566.

Liquidity and Capital Resources

For the period ended September 30, 2011 we have yet to generate any revenues from our business operations.

Since inception, we have received loans or used our common stock to raise money for our optioned mineral and petroleum acquisitions, for corporate expenses, acquisitions and to repay outstanding indebtedness. Net cash provided by financing activities for the 3rd quarter ended September 30, 2011 amounted $93,500 all provided by way convertible notes payable. For the nine months ended September 30, 2011 the Company received $216,000 from Convertible notes, $15,000 from a short term loan and $7,000 in shareholder loans.

Subsequent to September 30, 2011 the Company entered into a Securities Purchase Agreement dated October 24, 2011. The Company has received $200,000 by way of a convertible Debenture under the terms of the agreement which if fully exercised will provide the Company with a total $500,000 by way of a Convertible Debenture and $5,000,000 by purchase of Common Shares to be issued by the Company.

During the 3rd quarter the Company converted $68,500 of the Convertible Notes into 2,309,514 Common Shares. An additional 4,018,803 Common Shares were issued to convert $73,500 of debt.

On a year to date basis the Company has converted $194,600 of Convertible Notes issued for cash into 3,580,896 Common Shares and $96,000 of debt into 4,262,735 Common Shares for a total of $290,000 converted for 7,843,631 Common Shares.

As of September 30, 2011 our total assets which consist of cash, advances, inventory, a note receivable and related party receivable, furniture, production equipment and oil and gas properties and a bond with the Texas Railroad Commission amounted to $991,730 and our total liabilities reduced to $344,812 primarily due to the discount recorded against the convertible notes and the conversion of notes into common shares of the company.

Working capital stood at $(222,906). Management continues to source additional financing and analyze Oil production acquisitions to support the Company’s cash requirements during the Company’s development phase.

Subsequent to September 30, 2011 the Company entered into a Securities Purchase Agreement dated October 24, 2011. The Company has received $200,000 by way of a Convertible Debenture under the terms of the agreement which if fully exercised will provide the Company with a total $500,000 by way of a Convertible Debenture and $5,000,000 by purchase of Common Shares to be issued by the Company.

There are no assurances that the Company will continue to be successful with these initiatives.

For the quarter ended September 30, 2011 our net loss was $(514,618) or $ (0.01) per share. The loss per share was based on a period weighted average of 59,122,056 common shares outstanding. On a year to date basis for the nine months ended September 30, 2011 the net loss was $(718,074) or $(0.01). The loss per share was based on a period weighted average of 57,224,642 common shares outstanding.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to the impact of market fluctuations associated with commodity prices and foreign currency. At this time, the Company has not entered into any hedging agreements due to limited value of transactions in foreign currency.

ITEM 4. CONTROLS AND PROCEDURES.

The Company maintains “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by the Company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

The management of the Company has designed and evaluated the Company’s disclosure controls and procedures. Management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

The Company’s management, including its principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of its disclosure controls and procedures as of September 30, 2011. Based on that evaluation, the Company’s Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period ended September 30, 2011 covered by this Form 10-Q, were effective.

CHANGE IN INTERNAL CONTROL OVER FINANCIAL REPORTING

None.

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

We are currently not a party to any pending legal proceedings and no such actions by, or to the best of our knowledge, against us have been threatened.

Item 1A.

Risk Factors

IN ADDITION TO THE OTHER INFORMATION IN THIS REPORT, THE FOLLOWING FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING OUR BUSINESS AND PROSPECTS, CONDITIONS EXIST WHICH CAUSE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

Market for Our Products and Services

The availability of a ready market for oil and gas, and the prices of such oil and gas, depends upon a number of factors, which are beyond our control. These include, among other things:

·	the level of domestic production;
·	actions taken by foreign oil and gas producing nations;

·	the availability of pipelines with adequate capacity;
·	the availability and marketing of other competitive fuels;

·	fluctuating and seasonal demand for oil, gas and refined products; and
·	the extent of governmental regulation and taxation (under both present and future legislation) of the production, importation, refining, transportation, pricing, use and allocation of oil, gas, refined products and alternative fuels.

In view of the many uncertainties affecting the supply and demand for crude oil, gas and refined petroleum products, it is not possible to predict accurately the prices or marketability of the gas and oil produced for sale.

Competition

The oil producing properties and exploratory drilling prospects, and gas industry is highly competitive in all its phases. Properties in which we have an interest will encounter strong competition from many other oil and gas producers, including many that possess substantial financial resources, in acquiring economically desirable producing properties and exploratory drilling prospects, and in obtaining equipment and labor to operate and maintain their properties.

Existing and Probable Governmental Regulation

We monitor and comply with current government regulations that affect our activities, although our operations may be adversely affected by changes in government policy, regulations or taxation. There can be no assurance that we will be able to obtain all of the necessary licenses and permits that may be required to carry out our exploration and development programs. It is not expected that any of these controls or regulations will affect our operations in a manner materially different than they would affect other natural gas and oil companies operating in the areas in which we operate.

Canadian Government Regulation and US State of Texas Regulation

The natural gas and oil industry is subject to extensive controls and regulations imposed by various levels of government. It is not expected that any of these controls or regulations will affect our operations in a manner materially different than they would affect other natural gas and oil companies of similar size.

Pricing and Marketing Natural Gas

In the United States in the State of Texas, we are focused on Oil production. Oil is sold to refineries at spot prices. In Canada, the price of natural gas sold in interprovincial and international trade is determined by negotiation between buyers and sellers. Natural gas exported from Canada is subject to regulation by the NEB and the Government of Canada. Exporters are free to negotiate prices and other terms with purchasers, provided that the export contracts continue to meet certain criteria prescribed by the NEB and the Government of Canada. Natural gas exports for a term of less than two years or for a term of two to 20 years (in quantities of not more than 30,000 m3/day), must be made pursuant to an NEB order. Any natural gas export to be made pursuant to a contract of longer duration (to a maximum of 25 years) or a larger quantity requires an exporter to obtain an export license from the NEB and the issue of such a license requires the approval of the Governor in Council.

The government of Alberta also regulates the volume of natural gas that may be removed from the province for consumption elsewhere based on such factors as reserve availability, transportation arrangements and market considerations.

Royalties and Incentives

In Canada in addition to federal regulation, each province has legislation and regulations that govern land tenure, royalties, production rates, environmental protection and other matters. The royalty regime is a significant factor in the profitability of natural gas and oil production. Royalties payable on production from lands other than Crown lands are determined by negotiations between the mineral owner and the lessee. Crown royalties are determined by government regulation and are generally calculated as a percentage of the value of the gross production, and the rate of royalties payable generally depends in part on prescribed reference prices, well productivity, geographical location, field discovery date and the type or quality of the petroleum product produced. In the United States in the State of Texas, mineral rights owners usually have a royalty paid to them which range from 5-25% of net revenue.

Land Tenure

Crude natural gas and oil located in the western provinces is owned predominantly by the respective provincial governments. Provincial governments grant rights to explore for and produce natural gas and oil pursuant to leases, licenses and permits for varying terms from two years and on conditions set forth in provincial legislation including requirements to perform specific work or make payments. Natural gas and oil located in such provinces can also be privately owned and rights to explore for and produce such natural gas and oil are granted by lease on such terms and conditions as may be negotiated. In the United States in the State of Texas, mineral owners sell and lease those rights to Operators who provide the infrastructure and support to develop and produce from the property. Leases usually remain in effect as long as work is being performed on the property or they are held by production.

Compliance with Environmental Laws

We did not incur any costs in connection with the compliance with any federal, state, or local environmental laws. However, costs could occur at any time through industrial accident or in connection with a terrorist act or a new project. Costs could extend into the millions of dollars for which we could be totally liable. In the event of liability, we would be entitled to contribution from other owners so that our percentage share of a particular project would be the percentage share of our liability on that project. However, other owners may not be willing or able to share in the cost of the liability. Even if liability is limited to our percentage share, any significant liability would wipe out our assets and resources.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3.

Defaults Upon Senior Securities.

None

Item 4.

Submission of Matters to a Vote of Security Holders.

None

Item 5.

Other Information.

None

Item 6.

Exhibits.

Exhibit Number	Exhibit Title

31.1	Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.ins	XBRL Instance

101.xsd	XBRL Schema

101.cal	XBRL Calculation

101.def	XBRL Definition

101.lab	XBRL Label

101.pre	XBRL Presentation

SIGNATURES

In accordance with the requirements of Section Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Paradigm Oil & Gas, Inc.

	By	/s/ Ron Polli
		Ron Polli
		President and Chief Executive Officer

Date: November 22, 2011	By:	/s/ Brian Kennedy
		Brian Kennedy
		Chief Financial Officer

Paradigm Oil & Gas, Inc. 10-Q