10-Q 1 precisiondecq.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2010 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 000-53199 PRECISION PETROLEUM CORPORATION (Exact name of registrant as specified in its charter) Nevada 71-1029846 State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) 624 W. Independence Suite 101 A. Shawnee, OK 74804 (Address of principal executive offices) None (Former name, former address and former fiscal year, if changed since last report) 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 [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. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ] Number of shares outstanding of the registrant's class of common stock as of February 15, 2011: 84,401,584 1 Precision Petroleum Corporation INDEX TO THE FORM 10-Q For the quarterly period ended December 31, 2010 PAGE ---- PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Balance Sheets F-1 Statements of Operations F-2 Statement of Stockholders' Deficit F-3 Statements of Cash Flows F-4 Notes to the Financial Statements F-5 to F-13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 5 ITEM 4. CONTROLS AND PROCEDURES 5 ITEM 4T. 5 PART II OTHER INFORMATION 5 ITEM 1. LEGAL PROCEEDINGS 5 ITEM 1A. RISK FACTORS 5 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 5 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 6 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 6 ITEM 5. OTHER INFORMATION 6 ITEM 6. EXHIBITS 6 SIGNATURES 7 2 PRECISION PETROLEUM CORPORATION BALANCE SHEETS

See accompanying notes F-1 PRECISION PETROLEUM CORPORATION STATEMENTS OF OPERATIONS (Unaudited)

See accompanying notes F-2 PRECISION PETROLEUM CORPORATION STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) For the three months ended December 31, 2010

See accompanying notes F-3 PRECISION PETROLEUM CORPORATION STATEMENTS OF CASH FLOWS (Unaudited)

F-4 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) Note 1 Interim Reporting The accompanying financial statements of Precision Petroleum Corporation have not been audited by independent public accountants. In the opinion of management, the accompanying financial statements reflect all adjustments necessary to present fairly our financial position at December 31, 2010 and our income, stockholder's equity (deficit) and cash flows for the three months ended December 31, 2010 and 2009. All such adjustments are of a normal recurring nature. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. Certain disclosures have been condensed or omitted from these financial statements. Accordingly, these financial statements should be read with the financial statements included in our 2010 Annual Report on Form 10-K. Note 2 Nature and Continuance of Operations Precision Petroleum Corporation (the "Company") was incorporated under the name of "Tidewater Resources, Inc." under the laws of the State of Nevada on February 7, 2007. On October 27, 2008 the Company changed its name to Precision Petroleum Corporation. The Company has established its corporate offices in Shawnee, Oklahoma. The Company is engaged primarily in the acquisition, development, production, exploration for, and the sale of oil, gas and natural gas liquids. All business activities are conducted in Oklahoma and the Company sells its oil and gas to a limited number of domestic purchasers. The Company does not operate the leases; they own working and overriding royalty interests and are invoiced monthly for joint operating costs and receive revenues from third party purchasers of oil and gas chosen by the operators. F-5 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classifications of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2010, the Company had not yet achieved profitable operations, has an aggregate accumulated deficit of $457,229 has a working capital deficiency of $451,282, and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty. Note 3 Summary of Significant Accounting Policies The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates. The financial statements have, in management's opinion, been properly prepared within the framework of the significant accounting policies summarized below: Cash and cash equivalents ------------------------- The Company considers cash and cash equivalents to be all highly liquid debt instruments with a maturity when purchased of three months or less. F-6 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) The Company maintains its cash balances in one financial institution in Shawnee, Oklahoma. The balance at this institution is generally insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of December 31, 2010 and September 30, 2010, the Company's cash in this financial institution was less than the federally insured limits. Allowance for doubtful accounts ------------------------------- Accounts receivable are stated at the amount management expects to collect from balances outstanding at year end. Management provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance. Changes in the allowance have not been material to the financial statements. Property and equipment ---------------------- Equipment is recorded at cost. Depreciation is provided using the straight line method. As of December 31, 2010 the Company did not have any property or equipment. Oil and Gas Properties ---------------------- The Company follows the full cost method of accounting for oil and gas operations whereby all costs of exploring for and developing oil and gas reserves are initially capitalized on a country-by-country (cost center) basis. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities. Costs capitalized, together with the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. Petroleum products and reserves are converted to a common unit of measure, using 6 MCF of natural gas to one barrel of oil. The costs of acquisition and exploration of unproved oil and gas properties, including any related capitalized interest expense, are not subject to depletion, but are assessed for impairment either individually or on an aggregated basis. The costs of certain unevaluated leasehold acreage are also not subject to depletion. Costs not subject to depletion are periodically assessed for possible impairment or reductions in recoverable value. If a reduction in recoverable value has occurred, costs subject to depletion are increased or a charge is made against earnings for those operations where a reserve base is not yet established. F-7 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) Future net cash flows from proved reserves using period-end, non-escalated prices and costs are discounted to present value and compared to the carrying value of oil and gas properties. Proceeds from a sale of petroleum and natural gas properties are applied against capitalized costs, with no gain or loss recognized, unless such a sale would alter the rate of depletion by more than 25%. Assets Retirement Obligations ----------------------------- The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made. The carrying amount of the related long-lived asset is increased by the same amount as the liability. Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. The Company owns interests in oil and natural gas properties, which may require expenditures to plug and abandon the wells when the oil and natural gas reserves in the wells are depleted. Fair value of legal obligations to retire and remove long-lived assets is recorded in the period in which the obligation is incurred (typically when the asset is installed at the production location). When the liability is initially recorded, this cost is capitalized by increasing the carrying amount of the related properties and equipment. Over time the liability is increased for the change in its present value, and the capitalized cost in properties and equipment is depreciated over the useful life of the remaining asset. The Company does not have any assets restricted for the purpose of settling the plugging liabilities. F-8 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) The following table shows the activity for the three months ended December 31, 2010 and September 30, 2010, relating to the Company's retirement obligation: December 31, September 30, 2010 2010 ---- ---- Beginning balance at October 1 $22,912 $22,912 Accretion expense 573 - Ending balance at December 31 $23,485 $22,912 Impairment of Long-Lived Assets ------------------------------- The Company reviews long-lived assets and certain identifiable intangibles to be held and used for impairment whenever events or changes in circumstances have indicated that the carrying amount of assets might not be recoverable and have appropriately recorded the adjustment. Basic and Diluted Loss Per Share -------------------------------- Basic loss per share is computed using the weighted average number of shares outstanding defined by FASB Accounting Standards Codification Topic 260, "Earnings Per Share" during the period. Fully diluted earnings (loss) per share are computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company's net income (loss) position at the calculated date. Diluted loss per share has not been provided as it would be anti-dilutive. As of December 31, 2010 and 2009, the Company did not have any outstanding stock options or warrants. F-9 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) Revenue Recognition ------------------- Revenue from the sale of the oil and gas production is recognized when title passes from the operator of the oil and gas properties to purchasers. Note 4 Oil and Gas Properties a) Effective July 1, 2009, the Company purchased various producing properties located in Garvin County, Pottawatomie County, Nowata County and Seminole County, Oklahoma. The Company utilized short-term financing to acquire these properties. The various net revenue acquired range from .2808% to a 67.97% net revenue interest. The Company also increased their working interest in the Teresa #1 well by 11% and in the Quinlan #1 by 2%. In November of 2009, the Company acquired a 57.2682% working interest in the Thompson #2 well, located in Garvin County, Oklahoma. In June of 2010, the Company acquired an additional 25% working interest in the Mason Burns well in exchange for the assumption of the seller's debt to the operator of the well in the amount of $1,657. b) In an agreement dated on December 1, 2009, but made effective January 1, 2010, the Company sold all of its working interest in the Heath lease located in Seminole County, Oklahoma. The sales price for this transaction was $55,000, to be paid on or before one year from the date of the agreement. The Company received a payment in the amount of $4,583 from the purchaser with a balance due of $50,417. The amount due is not in default as of December 30, 2010. On September 16, 2010, the Company, along with Global Energy, LLC (Plaintiffs), filed a joint petition against Reed Power Tongs, Inc. and 4K Energy, LLC (Defendants), alleging breach of contract of the joint operating agreement the Plaintiffs entered into with the Defendants covering the Karsyn No. 1, the Heath well and the Josh well. F-10 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) The Plaintiffs are alleging that the Defendants charged excessive fees for services rendered by unrelated entities, failed to obtain written approval from working interest owners before charging inflated fees with their affiliated companies and knowingly and intentionally withholding of production revenue from both Precision and Global. The Plaintiffs are demanding an accounting of all charges and revenue for the Karsyn, Josh and Heath wells and are asking for damages related to breach of contract and fraud. The Plaintiffs are asking for damages in excess of $10,000 for four different actions and also for sums in excess of $10,000 for punitive and exemplary damages for the Defendants conduct described in the petition. (See Note 8) On February 22, 2010, the Company sold all of its working interest in the Jameson lease, retaining a three percent (3%) overriding royalty interest. The sale price for this transaction was $10,000 and has been paid in full. c) On January 27, 2009, the Company entered into a Participation Agreement with Nitro Petroleum Incorporated ("Nitro"), pursuant to which the Company obtained from Nitro the right to participate in Phase One of Nitro's Powder River Basin Project in Montana. Nitro acquired certain oil and gas leases in the Powder River Basin in Montana pursuant to a Memorandum of Understanding dated January 26, 2009 with REDS, LLC. Pursuant to the terms of the Participation Agreement, Nitro is being carried to the tanks with respect to a 25% working interest in Phase One of the Powder River Basin Project. The Company is acquiring a 37.5% working interest in Phase One of the Powder River Basin Project in exchange for an agreement to pay 50% of the expenses of Phase One of the Powder River Basin Project. Additionally, the Company shall have the right to purchase up to a 37.5% working interest in Phase Two and Phase Three of the Powder River Basin Project upon substantially the same terms as Phase One. Nitro will be the operator of all wells drilled during Phase One of the Powder River Basin Project. The Company has paid $57,500 towards the Participation Agreement with Nitro. The payments have been recorded in the financial statements as participation deposits. The Company has sold interests in oil and gas leases that it presently owns. The Company sold 43.5% of the Thompson 2-18 in November 2010 for $8,916 and 19.003906% of the Ward McNeil in December 2010 for $19,440. F-11 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) Note 5 Notes Payable and Short-Term Financing At December 23, 2010, the Company had a short term note payable to Sierra Growth, Inc., an investment company located in Charlestown, Nevis, West Indies. This note bears an interest rate of 10% per annum and is due upon demand. If the Holder makes a demand for repayment, the Company must repay the principal balance of this note and accrued and unpaid interest thereon within sixty (60) days. Effective December 23, 2010, the Company converted $715,588 of this debt into 40,001,584 shares of common stock of the Company. A total of $88,027 of interest related to this principal amount was forgiven. The Company has a short term note payable with Sierra Growth in the amount of $36,126 with accrued interest of $4,523 as of December 31, 2010. At December 31, 2010, the Company had a short term note payable to Global Energy, LLC, an oil and gas company located in Shawnee, Oklahoma. This note bears an interest rate of 10% per annum and is payable upon demand. If the Holder makes a demand for repayment, the Company must repay the principal balance of this note and accrued and unpaid interest thereon within sixty (60) days. Interest has been accrued in the amount of $30,333 as of December 31, 2010 ($24,227: September 30, 2010) and has a principal balance of $242,266 ($242,266: September 30, 2010). The Company has also obtained financing from a consultant with a balance of $32,754 ($31,754: September 30, 2010)and also received advances of $92,416 ($92,416: September 30, 2010) from unrelated third parties. The balances are due on demand and are not interest bearing. However, Generally Accepted Account Principles(GAAP) requires interest expense to be imputed on the outstanding balances of the advances. The Company has accrued interest in the amount of $17,078 for these advances as of December 31, 2010 ($13,030: September 30, 2010). Note 6 Related Party Transactions During the three months ended December 31, 2010 and 2009, the Company incurred management fees charged by a director of the Company totaling $3,000 and $3,000, respectively. As discussed in Note 5, the Company converted a short term payable to Sierra Growth in the amount of $715,588 into 40,001,584 shares of its common stock. A total of $88,027 of interest related to this principal amount was forgiven. After this conversion, Sierra Growth owned 47% of the Company's issued and outstanding common stock. Also discussed in Note 5, the Company has a short term note payable with Sierra Growth in the amount of $36,126 with accrued interest of $4,523 as of December 31, 2010. F-12 PRECISION PETROLEUM CORPORATION NOTES TO THE INTERIM FINANCIAL STATEMENTS ----------------------------------------- DECEMBER 31, 2010 (Unaudited) Note 7 Common Stock By written consent of the Board of Directors effective December 23, 2010, Company and Sierra Growth agreed to convert the $715,588 of principal amount due to Sierra Growth into 40,001,584 common shares of the Company based on the weighted average price of stock from December 8, 2010 to December 21, 2010 which was calculated to be $0.017889. Furthermore, an accrued interest expense in the amount of $88,027 was forgiven at the time of conversion. As of December 31, 2010 there were 84,401,584 shares of common stock issued and outstanding. (See Note 5 and 6 for additional discussion). Note 8 Subsequent Events On January 21, 2011, the Company settled a lawsuit initiated by itself, along with Global Energy, LLC (Plaintiffs), filed against Reed Power Tongs, Inc. and 4K Energy, LLC (Defendants), alleging breach of contract of the joint operating agreement the Plaintiffs entered into with the Defendants covering the Karsyn No. 1, the Heath well and the Josh well. The Company will receive $80,000 in exchange of the accounts receivable of $50,417, due from the Defendants and an assignment of its interest in the Heath, Karsyn and Josh wells. (See Noted 4(b)) F-13 Management's Discussion and Analysis As used in this Interim Report: (i) the terms "we", "us", "our" and the "Company" mean Precision Petroleum Corporation (ii) "SEC" refers to the Securities and Exchange Commission; (iii) "Exchange Act" refers to the United States Securities Exchange Act of 1934, as amended; and (iv) all dollar amounts refer to United States dollars unless otherwise indicated. The following is a discussion of our plan of operations, results of operations and financial condition as of and for the three months ended December 31, 2010. Liquidity and Capital Resources The Company had a cash balance of $6,105 as of December 31, 2010, compared to cash balance of $8,495 as of September 30, 2010. The Company will continue to utilize the free labor of its directors and stockholders until such time as funding is sourced from the capital markets. It is anticipated that funding for the next twelve months will be required to maintain the Company. Results of Operations For the three months ended December 31, 2010, the Company had revenue of $43,550, as compared to $63,011 for the three months ended December 31, 2009. Cost of continued operations and other expense for the three months ended December 31, 2010 was $95,163 resulting in a net loss for the period of $51,613 compared to costs of continued operations and other expense of $98,258 for the three months ended December 31, 2009 resulting in a net loss for the period of $35,247. Depletion, legal costs and general and administrative costs were down significantly from the prior quarter. The Company expects to continue to receive revenues from the properties on the Oklahoma properties and the Company expects for these revenues to increase. Planned exploration ventures should increase revenues for the fiscal year ending September 30, 2011. 3 Going Concern The Company has not attained profitable operations and is dependent upon obtaining financing to pursue any extensive acquisitions and exploration activities. For these reasons, the Company's auditors stated in their report on the Company's audited financial statements that they have substantial doubt the Company will be able to continue as a going concern without further financing. Off-Balance Sheet Arrangements We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes of financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Plan of Operation for the Next Twelve (12) Months The following discussion of our plan of operation, financial condition, results of operations, cash flows and changes in financial position should be read in conjunction with our most recent financial statements and notes appearing in our Form 10-K annual report for the year ended September 30, 2010. Our plan of operations for the next twelve months is to maintain the current properties we have which we feel will generate more revenue. We estimate that our expenditures over the next twelve months will be $120,000 to cover ongoing general and administrative expenses. As at December 31, 2010, we had cash and cash equivalents of $6,105 and working deficit of $451,282. During the twelve-month period following the date of this report, we anticipate that we will continue to generate revenue from our oil and gas leases. However, we anticipate that such revenue will not be sufficient to cover all of our expenses. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations during and beyond the next twelve months. We anticipate that additional funding could be in the form of either debt or equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding to fund our operations. In the absence of such financing, our business plan will fail. Even if we are successful in obtaining financing to fund our operations, there is no assurance that we will obtain the funding necessary to pursue any further exploration of our properties. If we do not obtain additional financing, we may be forced to dispose of operating oil and gas leases located in Oklahoma. 4 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide the information required by this Item. ITEM 4. CONTROLS AND PROCEDURES Disclosure Controls and Procedures As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act")). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting during the current 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 None. ITEM 1A. RISK FACTORS As a smaller reporting company, we are not required to provide the information required by this Item. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS By written consent of the Board of Directors effective December 23, 2010, the Company issued 40,001,584 of the Company's common stock by converting $715,588 of the principal amount of debt owed to Sierra Growth and a total of $88,027 of interest which was forgiven. As of December 31, 2010 there were 84,401,584 shares of common stock issued and outstanding. 5 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 (a) Pursuant to Rule 601 of Regulation S-B, the following exhibits are included herein or incorporated by reference. Exhibit Number Description 3.1 Articles of Incorporation, as Amended* 3.2 Bylaws* 31.1 Section 302 Certification - Chief Executive Officer 31.2 Section 302 Certification - Chief Financial Officer 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Executive Officer. 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Chief Financial Officer. * Incorporated by reference to our Form S-1 Registration Statement filed on April 24, 2008, SEC File Number 333-149823. 6 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 20th day of August, 2010. PRECISION PETROLEUM CORPORATION Date: February 17, 2011 By: /s/ Richard Porterfield ----------------- ----------------------- Name: Richard Porterfield Title: President (principal executive officer) By: /s/ James Kirby -------------------------------- Name: James Kirby Title: Treasurer (principal financial officer and principal accounting officer) 7

PRECISION PETROLEUM Corp 10-Q