UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC D.C. 20549

~~FORM~~ Form 10-Q

~~x Quarterly Report pursuant to Section 13 or 15~~(d)Mark ~~of the Securities Exchange Act of 1934~~One)

~~For the quarterly period ended March 31, 2008~~[X]

~~o Transition~~QUARTERLY ~~Report pursuant~~REPORT toPURSUANT TO SECTION 13 orOR 15(d) ofOF ~~the~~THE ~~Securities~~SECURITIES ~~Exchange~~EXCHANGE ~~Act~~ACT ofOF 1934

For the ~~transition~~ quarterly period ~~from~~ended ~~_____~~September to30, ~~_____~~2014

~~Commission File Number: 333-140806~~[ ]

~~Capital City~~TRANSITION ~~Energy~~REPORT ~~Group,~~PURSUANT ~~Inc.~~TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(Exact name~~For ofthe ~~small~~transition ~~business~~period ~~issuer~~from as_______________ ~~specified~~to ~~in its charter)~~_______________.

Nevada		20-5131044
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

Commission file number: 333-140806

8351 N. High Street, Suite 101

Columbus, Ohio 43235

(Address of principal executive offices)

(614) 310-1614

(Issuer’s telephone number)

_______________________________

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: x Yes o No

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

Large Accelerated filer o Accelerated filer o Non-accelerated filer o Smaller Reporting Company x

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

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: There are 30,791,714 shares of Common Stock and 3,132,211 shares of Preferred A Stock issued and outstanding as of May 12, 2008.

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

Capital City Energy Group, Inc.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Plan of Operation	10
Item 3.	Controls and Procedures	13
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Submission of Matters to a Vote of Security Holders	14
Item 5.	Other Information	14
Item 6.	Exhibits	14
	Signatures	16

- 2 -

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited financial statements included in this Form 10-Q are as follows:

	Page
Report of Independent Registered Public Accounting Firm	4
Consolidated Balance Sheets as of March 31, 2008 (unaudited) and December 31, 2007 (audited)	5
Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007	6
Consolidated Statements of Stockholders’ Equity from December 31, 2006 through March 31, 2008 (unaudited)	7
Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007	8
Notes to Financial Statements	9

- 3 -

MOORE & ASSOCIATES, CHARTERED

ACCOUNTANTS AND ADVISORS

PCAOB REGISTERED

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Capital City Energy Group, Inc.

We have reviewed the accompanying balance sheets of Capital City Energy Group, Inc. as of March 31, 2008, and the related statements of operations, stockholders’ equity (deficit), and cash flows for the three-month periods ended March 31, 2008 and 2007. These interim financial statements are the responsibility of the Corporation’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists of principally applying analytical procedures and making inquiries of persons responsible for the financials and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such consolidated financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

/s/ Moore & Associates, Chartered

Moore & Associates, Chartered

Las Vegas, Nevada

May 16, 2008

2675 S. JONES BLVD. SUITE 109, LAS VEGAS, NEVADA 89146 (702) 253-7499 Fax: (702)253-7501

- 4 -

CAPITAL CITY ENERGY GROUP, INC.

~~BALANCE SHEETS~~(Exact name of registrant as specified in its charter)

		March 31,		December 31,
Nevada (State or other jurisdiction of incorporation or organization)	20-5131044 (I.R.S. Employer Identification No.)
		2008		2007
1335 Dublin Road, Suite 122-D Columbus, Ohio (Address of principal executive offices)	43215 (Zip Code)
		(unaudited)
ASSETS
CURRENT ASSETS
Cash		$	224,578	$	200,451
Prepaid expenses			142,428		40,991
Accounts receivable			1,003,351		414,826
Total Current Assets			1,370,357		656,268
PROPERTY AND EQUIPMENT, net			153,598		147,261
OIL AND GAS PROPERTIES, net			6,666,395		7,214,863
OTHER ASSETS
Deposits			4,485		4,485
TOTAL ASSETS		$	8,194,835	$	8,022,877
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	297,931	$	360,708
Notes payable-current portion			25,491		-
Notes payable-related party			-		100,000
Total Current Liabilities			323,422		460,708
LONG TERM LIABILITIES
Notes payable			50,984		-
Deferred income taxes payable			234,942		163,960
Total Long Term Liabilities			285,926		163,960
TOTAL LIABILITIES			609,348		624,668
STOCKHOLDERS' EQUITY
Preferred shares: $0.001 par value, 10,000,000 shares authorized: 3,142,650 shares issues and outstanding			3,143		3,143
Common shares: $0.001 par value, 90,000,000 shares authorized: 26,880,536 and 20,750,740 shares issues and outstanding, respectively			26,881		20,751
Additional paid-in capital			6,485,597		6,271,727
Retained earnings			1,069,866		1,102,588
Total Stockholders' Equity			7,585,487		7,398,209
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	8,194,835	$	8,022,877

~~The accompanying~~(614) ~~notes are an integral part of these financial statements.~~485-3110

-Registrant’s ~~5 -~~telephone number, including area code

_______________________N/A________________________

(Former address, if changed since last report)

______________________N/A_______________________

(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 þ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ¨ Yes þ 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 o		Accelerated Filer ¨		Non-Accelerated Filer ¨		Smaller Reporting Company þ

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

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

¨ Yes ¨ No

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of March 20, 2015, there were 85,949,061 shares of common stock, $0.001 par value, issued and outstanding.

CAPITAL CITY ENERGY GROUP, INC.

~~STATEMENTS~~ TABLE OF ~~OPERATIONS~~CONTENTS

(UNAUDITED)


PART I – FINANCIAL INFORMATION

Item 1	Financial Statements	F-2

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3	Quantitative and Qualitative Disclosures About Market Risk	10

Item 4	Controls and Procedures	10

PART II – OTHER INFORMATION

Item 1	Legal Proceedings	11

Item 1A	Risk Factors	11

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	11

Item 3	Default Upon Senior Securities	11

Item 4	Mine Safety Disclosures	11

Item 5	Other Information	11

Item 6	Exhibits	12

SIGNATURES		13

	For the Three Months Ended
	March 31,
	2008			2007
REVENUES
Oil and gas revenue	$	520,932		$	646,715
Management revenue		40,133			53,433
Total Revenues		561,065			700,148
OPERATING EXPENSES
Lease operating costs		204,879			200,470
Depreciation and depletion		186,991			190,320
General and administrative		510,094			216,418
Total Operating Expenses		901,964			607,208
INCOME (LOSS) FROM OPERATIONS		(340,899	)		92,940
OTHER INCOME (EXPENSE)
Gain on sale of assets		525,000			-
Interest expense		(2,097	)		(102,776	)
Total Other Income (Expense)		522,903			(102,776	)
NET INCOME (LOSS) BEFORE INCOME TAXES		182,004			(9,836	)
INCOME TAX EXPENSE		(70,982	)		-
NET INCOME (LOSS)	$	111,022		$	(9,836	)
BASIC EARNINGS (LOSS) PER SHARE	$	0.00		$	(0.00	)
FULLY DILUTED INCOME (LOSS) PER SHARE	$	0.00		$	(0.00	)
BASIC WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		22,488,138			18,095,740
FULLY DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING		29,083,588			24,691,190

~~The accompanying~~PART ~~notes~~I ~~are~~– anFINANCIAL ~~integral part of these financial statements.~~INFORMATION

This Quarterly Report includes forward-looking 6 statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider,” or similar expressions are used.

~~CAPITAL CITY~~Forward-looking ~~ENERGY~~statements ~~GROUP~~are not guarantees of future performance. They involve risks, ~~INC~~uncertainties, and assumptions. Our future results and shareholder values may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to put undue reliance on any forward-looking statements.

~~STATEMENTS OF STOCKHOLDERS’ EQUITY~~F-1

~~(UNAUDITED)~~ITEM 1. Financial Statements

									Additional						Total
	Preferred Stock				Common Stock				Paid-In			Retained			Stockholders'
	Shares		Amount		Shares		Amount		Capital			Earnings			Equity
Balance, December 31, 2006		3,142,650	$	3,143		18,095,740	$	18,096	$	7,382,111		$	914,987		$	8,318,337
Common stock issued for cash at $10.00 per share		-		-		2,155,000		2,155		2,152,845			-			2,155,000
Common stock issued upon exercise of warrants at $0.25		-		-		250,000		250		6,000			-			6,250
Common stock issued upon exercise of warrants at $1.00		-		-		250,000		250		24,750			-			25,000
Costs incurred by the Energy Funds not included in re-capitalization		-		-				-		(3,293,979	)		-			(3,293,979	)
Net income for the year ended December 31, 2007		-		-		-		-		-			187,601			187,601
Balance, December 31, 2007		3,142,650		3,143		20,750,740		20,751		6,271,727			1,102,588			7,398,209
Recapitalization		-		-		6,060,000		6,060		(6,060	)		-			-
Common stock issued for debt at $3.36 per share		-		-		29,796		30		99,970			-			100,000
Common stock issued for services at $3.00 per share		-		-		40,000		40		119,960			-			120,000
Dividends paid on preferred stock		-		-		-		-		-			(138,744	)		(138,744	)
Net income for the three months ended March 31, 2008		-		-		-		-		-			106,022			106,022
Balance, March 31, 2008		3,142,650	$	3,143		26,880,536	$	26,881	$	6,485,597		$	1,069,866		$	7,585,487

The unaudited consolidated financial statements of registrant for the three months ended September 30, 2014 and 2013 follow. The unaudited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. All such adjustments are of a normal and recurring nature.

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


CAPITAL CITY ENERGY GROUP, INC.
Consolidated Balance Sheets

ASSETS

			September 30,		December 31,
			2014		2013
CURRENT ASSETS			(Unaudited)

	Cash		$	534,589	$	640,342
	Accounts receivable			43,203		4,896
	Other current assets			38,229		9,299

		Total Current Assets		616,021		654,537

PROPERTY AND EQUIPMENT

	Oil and gas properties			5,553,149		5,534,535
	Accumulated depletion and depreciation			(5,303,254)		(5,267,990)

		Total Property and Equipment		249,895		266,545

OTHER PROPERTY AND EQUIPMENT, net				-		-

OTHER ASSETS

	Security deposits			375		375

		Total Other Assets		375		375

		TOTAL ASSETS	$	866,291	$	921,457

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

	Accounts payable and accrued expenses		$	2,563,818	$	2,254,310
	Participating interest			1,480,000		1,480,000
	ARO liability			64,154		60,061
	Joint venture liability			239,078		239,078
	Notes payable, current portion			942,167		940,167

		Total Current Liabilities		5,289,217		4,973,616

NON-CURRENT LIABILITIES

	Notes payable, long-term			37,365		42,615

		Total Non-Current Liabilities		37,365		42,615

		TOTAL LIABILITIES		5,326,582		5,016,231

STOCKHOLDERS' EQUITY (DEFICIT)

	Preferred Stock, $0.001 par value,
	10,000,000 shares shares authorized, 3,062,234 shares
	issued and outstanding			3,062		3,062
	Common stock, $0.001 par value, 500,000,000 shares
	authorized, 85,949,061 and 85,706,695 shares
	issued and outstanding			85,949		85,706
	Additional paid-in capital			30,528,633		30,518,876
	Retained earnings (deficit)			(35,077,935)		(34,702,418)

		Total Stockholders' Equity (Deficit)		(4,460,291)		(4,094,774)

		TOTAL LIABILITIES AND
		STOCKHOLDERS' EQUITY (DEFICIT)	$	866,291	$	921,457

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

- 7 -


CAPITAL CITY ENERGY GROUP, INC.
Consolidated Statements of Operations
(Unaudited)

			For the Three Months Ended				For the Nine Months Ended
			September 30,				September 30,
			2014		2013		2014		2013


REVENUE			$	210,396	$	205,249	$	525,232	$	550,017

COST OF SALES				81,945		120,654		215,903		307,104

GROSS PROFIT				128,451		84,595		309,329		242,913

OPERATING EXPENSES

	General and administrative expenses			30,600		90,702		143,631		189,282
	Impairment of oil and gas properties			-		-		31,768		-
	Depletion, depreciation, and accretion			12,993		24,383		38,978		73,150
	Professional fees			101,891		104,288		377,484		260,622

		Total Operating Expenses		145,484		219,373		591,861		523,054

LOSS FROM OPERATIONS				(17,033)		(134,778)		(282,532)		(280,141)

OTHER INCOME (EXPENSES)

	Gain on sale of assets			-		894,013		-		894,013
	Interest expense			(31,326)		(26,966)		(92,985)		(80,434)

		Total Other Income (Expenses)		(31,326)		867,047		(92,985)		813,579

INCOME (LOSS) BEFORE INCOME TAXES				(48,359)		732,269		(375,517)		533,438

PROVISION FOR INCOME TAXES				-		-		-		-

NET INCOME (LOSS)			$	(48,359)	$	732,269	$	(375,517)	$	533,438

BASIC AND DILUTED INCOME (LOSS)
PER SHARE			$	(0.00)	$	0.01	$	(0.00)	$	0.01

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING -
BASIC AND DILUTED				85,949,061		85,706,695		85,827,878		85,706,695

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

CAPITAL CITY ENERGY GROUP, INC.


CAPITAL CITY ENERGY GROUP, INC.
Consolidated Statements of Cash Flows
(Unaudited)

								For the Nine Months Ended
								September 30,
								2014				2013

CASH FLOWS FROM OPERATING ACTIVITIES
		Net income (loss)						$		(375,517)		$	533,438
		Adjustments to reconcile net income (loss) to net
		used in operating activities:
				Depreciation, depletion, and accretion						38,978			73,150
				(Gain) on disposal of assets						-			(894,013)
				Common stock issued for services						10,000			-
				Impairment of oil and gas properties						31,768			-
		Changes in operating assets and liabilities
				Prepaid expenses						(28,930)			-
				Other current assets						-			(19,989)
				Accounts receivable						(38,307)			-
				Accounts payable and accrued expenses						309,505			9,804

						Net Cash Used in Operating Activities				(52,503)			(297,610)

CASH FLOWS FROM INVESTING ACTIVITIES
				Purchase of fixed assets						(50,000)			844,165

						Net Cash (Used in) Provided by Investing Activities				(50,000)			844,165

CASH FLOWS FROM FINANCING ACTIVITIES
	Payments on notes payable								(3,250)				(4,500)

					Net Cash Used by Financing Activities				(3,250)				(4,500)

NET (DECREASE) INCREASE IN CASH									(105,753)				542,055

CASH AT BEGINNING OF PERIOD									640,342				64,988

CASH AT END OF PERIOD							$		534,589		$		607,043

SUPPLEMENTAL DISCLOSURES OF
	CASH FLOW INFORMATION:

	CASH PAID FOR:
			Interest				$		-		$		-
			Income Taxes				$		-		$		-

	NON CASH FINANCING ACTIVITIES:						$		-		$		-

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

~~STATEMENTS OF CASH FLOWS~~F-5

~~(UNAUDITED)~~CAPITAL CITY ENERGY GROUP, INC.

	For the Three Months Ended
	March 31,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	106,022		$	(9,836	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and depletion		186,991			190,320
Common stock issued for services		120,000			-
Gain on sale of assets		(525,000	)		-
Amortization of discount on debt		-			91,667
Changes in operating assets and liabilities
Changes in accounts receivable		(588,525	)		(17,974	)
Changes in prepaid expenses and deposits		(101,437	)		-
Changes in deferred taxes payable		70,982			-
Changes in accounts payable and accrued expenses		(62,777	)		51,934
Net Cash Provided by Operating Activities		(793,744	)		306,111
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of oil and gas properties		1,000,000			-
Purchase of property and equipment		(6,424	)		-
Purchase of oil and gas properties		(113,436	)		(1,345,871	)
Net Cash Used by Investing Activities		880,140			(1,345,871	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of notes payable		(11,312	)		-
Proceeds from notes payable		87,787			-
Costs incurred by the Energy Funds not included in re-capitalization		-			(85,886	)
Dividends paid		(138,744	)		-
Net Cash Provided by Financing Activities		(62,269	)		(85,886	)
NET DECREASE IN CASH		24,127			(1,125,646	)
CASH AT BEGINNING OF YEAR		200,451			1,169,749
CASH AT END OF YEAR	$	224,578		$	44,103
SUPPLIMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest	$	2,097		$	11,109
Income Taxes	$	-		$	-
NON CASH FINANCING ACTIVITIES:
Common stock issued for debt	$	100,000		$	-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The accompanying notes are an integral part of these financial statements.~~(Unaudited)

-Note ~~8 -~~1. Basis of Presentation

~~CAPITAL CITY~~The ~~ENERGY~~accompanying ~~GROUP~~unaudited interim consolidated financial statements of Capital City Energy Group, ~~INC~~Inc. (“Capital City”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in Capital City’s annual report filed with the SEC on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year ending December 31, 2013 as reported in Form 10-K have been omitted.

~~NOTES~~Note ~~TO FINANCIAL~~2. Organization ~~STATEMENTS~~and Business Operations

~~NOTE 1~~The -Company ~~CONDENSED~~was ~~FINANCIAL~~originally ~~STATEMENTS~~formed on June 27, 2006 as The Baby Dot Company to engage in the business of designing, marketing and distributing handcrafted baby blankets and other accessories made from quality fabrics. Our business operations had been conducted through a wholly owned subsidiary, Baby Dot LLC, a limited liability company formed under the laws of the State of Nevada. As used in this Annual Report, references to “the Company” or to “we,” “us” or “our” refer to Capital City Energy Group, Inc., together with its consolidated subsidiaries, Capital City Petroleum, Inc., Avanti Energy Partners, LLC, Eastern Well Services, LLC and Hotwell Services, Inc., unless the context otherwise requires.

~~The accompanying~~On ~~financial~~March ~~statements~~11, ~~have~~2008, ~~been~~the ~~prepared~~Company bymerged ~~the~~with ~~Company~~Capital ~~without audit~~City Energy Group, Inc. InCapital ~~the~~City ~~opinion~~Energy ofGroup, ~~management~~Inc., ~~all~~was ~~adjustments~~founded ~~(which~~in ~~include only~~2003 ~~normal~~and ~~recurring~~is ~~adjustments~~headquartered in its offices in Columbus, Ohio, from where it conducts its growing energy business that is principally in the upstream oil and gas exploration and production (“E&P”) ~~necessary~~industry. Its business has evolved from its beginnings to ~~present~~where ~~fairly~~it recently resumed its core pursuits as an innovative leader in the ~~financial position~~design, ~~results~~management and sponsorship of ~~operations~~retail and ~~cash~~institutional, ~~flows~~direct atparticipation ~~March~~energy 31programs. With fractional and wholly owned well holdings diversified across the United States, ~~2008~~the Company opportunistically seeks out conventional and ~~for~~unconventional ~~all periods~~projects, ~~presented~~occasionally ~~have~~self-operated ~~been~~and ~~made~~from among its historic and developing list of operator affiliates and partners.

~~Certain information~~The ~~and~~Company ~~footnote~~was ~~disclosures normally included~~ in ~~financial~~transition ~~statements prepared~~throughout in2008 ~~accordance~~as ~~with~~it ~~accounting~~moved ~~principles~~from ~~generally~~receiving ~~accepted in~~ the ~~United~~ ~~States~~majority of ~~America~~revenue ~~have~~from ~~been~~the ~~condensed~~Fund orManagement ~~omitted.~~Division Itof isthe ~~suggested~~Company ~~that these condensed financial statements be read~~ in ~~conjunction~~2007 ~~with the financial statements~~ and ~~notes~~previous ~~thereto~~years ~~included~~to inreceiving the ~~Company's~~majority ~~December 31, 2007 audited financial statements. The results~~ of ~~operations~~revenue ~~for~~from the ~~periods~~direct ~~ended March~~ownership ~~31, 2008 and 2007 are not necessarily indicative~~ of ~~the~~interests ~~operating~~in ~~results for~~energy ~~the full years~~properties.

- During 9 2008 the Company acquired Avanti Energy Partners, which had managed the Capital City Energy Funds. Avanti transitioned to a small, full-service oil and natural gas operating company during 2008. A second acquisition was transacted in the first half of 2008 in the oilfield service sector. The Company acquired was Eastern Well Services, LLC and began operations through consulting oil and natural gas operating companies on their well completion in the continental United States and internationally.

~~Item 2~~On December 11, 2008, Capital City Energy Fund XIV, LLC (the “LLC”) merged with and into Capital City Petroleum, Inc. ~~Plan~~, a wholly-owned subsidiary of ~~Operation~~the Company. Pursuant to the merger, the members of the LLC received 698,551 shares of the Company’s unregistered common stock based on the distribution provisions of the limited liability company agreement of the LLC.

~~Forward-Looking Statements~~Additionally, on December 11, 2008, Capital City Energy Fund XVI, LP (the “LP”) merger with and into Capital City Petroleum, Inc. Pursuant to the merger, the partners of the LP received 820,546 shares of the Company’s unregistered common stock based on the distribution provisions of the limited partnership agreement of the LP.

~~Certain statements,~~The ~~other~~Company ~~than~~acquired ~~purely~~100% historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the ~~Private~~capital ~~Securities Litigation~~stock ~~Reform Act~~ of ~~1995,~~Hotwell ~~Section 27A~~Services ~~of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934~~Inc. ~~These forward-looking statements generally are identified by the words~~ (“~~believes,~~Hotwell” ~~“project~~),” ~~“expects,”~~an ~~“anticipates,”~~emerging ~~“estimates,”~~oilfield ~~“intends,”~~service ~~“strategy,”~~company ~~“plan,” “may,”~~operating ~~“will,”~~in ~~“would,”~~the ~~“will~~Appalachian beBasin,” ~~“will~~on ~~continue,”~~December ~~“will likely result~~31,” ~~and similar expressions~~2008. The WeCompany ~~intend~~purchased ~~such~~Hotwell ~~forward-looking statements to be covered by the safe-harbor provisions~~ for ~~forward-looking~~$5,000,000, ~~statements~~through ~~contained in~~ the ~~Private~~ ~~Securities~~issuance ~~Litigation Reform Act~~ of ~~1995~~2,777,778 ~~and~~shares ~~are including this statement for purposes~~ of ~~complying~~common ~~with~~stock ~~those~~valued ~~safe-harbor~~at ~~provisions~~$1. ~~Forward-looking~~80 ~~statements~~per ~~are~~share. On ~~based~~February on15, ~~current~~2011 ~~expectations~~the ~~and~~Company ~~assumptions that~~entered ~~are~~into ~~subject~~an toAsset ~~risks~~Sale ~~and~~Agreement ~~uncertainties~~whereby ~~which may cause actual results to differ materially from~~ the ~~forward-looking~~Company ~~statements.~~sold ~~Our~~100% ~~ability to predict results or the actual effect~~ of ~~future~~Hotwell’s ~~plans~~assets ~~or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations~~ and ~~future~~approximately ~~prospects~~88 onpercent ~~a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability~~ of ~~capital,~~ ~~interest~~its ~~rates, competition, and generally accepted accounting principles~~liabilities. As These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of ~~new~~September ~~information~~30, ~~future events~~2013 orthe ~~otherwise.~~Hotwell ~~Further~~subsidiary ~~information concerning our business, including additional factors that could materially affect our financial results,~~ is ~~included~~ ~~herein~~largely ~~and in our other filings with the SEC~~inactive.

~~Management’s Assessment of Our Business~~F-6

~~Capital City~~CAPITAL ~~Energy~~CITY ~~Group,~~ENERGY ~~Inc.~~GROUP, ~~a Nevada corporation (“Capital City Energy Group,” the “Company,” “we,” or “our”), through its wholly-owned acquisition subsidiary, merged with Capital City Petroleum, Inc~~INC., a Delaware corporation (“CCP”), on March 11, 2008 and continued the business of CCP. Headquartered in Columbus, Ohio, the Company is a rapidly expanding energy company. Our business is evolving from being an innovative leader in the design, management and sponsorship of retail and institutional direct participation energy programs to become one of the few vertically integrated independent oil & natural gas companies. Our strategy, which we refer to as the “Triad,” is to continue to grow a portfolio of core areas which provide growth opportunities through grass-roots drilling, operating, service companies, acquisitions and fund management. The Triad consists of: Fund Management, Principal Investments and Strategic Acquisitions of energy related companies.

~~Founded in~~NOTES ~~2003,~~TO ~~CCP~~CONSOLIDATED ~~began~~FINANCIAL its operations when the price of oil & gas was undervalued and there were significant opportunities to create income streams and asset accumulation programs for investors through the development of private equity funds. At first, CCP managed various funds interested in investing in oil and gas properties. By late 2006, however, CCP began making principal investments in energy properties alongside the funds it was managing. With committed capital purchasing various interests in production and development wells for its own account, CCP made the first step advancing its innovative Triad business model. Since the Merger effected on March 11, 2008, the Company intends to continue the expansion of the Triad business model. We believe the direct ownership in the full spectrum of assets within the energy industry transforms Capital City Energy Group into a more dynamic and full-service energy company.STATEMENTS

~~Our vision is to rapidly grow shareholder value through our Triad business model. Each prong of our model is briefly discussed below.~~(Unaudited)

~~Fund~~Note ~~Management~~3. Summary of Significant Accounting Policies

~~Prior~~Use to the extended bull market in energy prices, the Company recognized the need to provide investors with some exposure to alternative asset classes such as commodities including oil and natural gas resources. This particular asset class did not correlate to the traditional returns associated with the stock or bond markets, and thus served to fill a void by providing high yield income opportunities, while lowering overall portfolio volatility. To take advantage of this non-correlation, we formed funds, each a blind pool designed to invest in direct participation in oil, natural gas and lease acreage opportunities across the country. The funds were each structured as a diverse and balanced collection of small working interest investments in a variety of energy properties including existing production, developmental drilling, lease acreage, and exploration opportunities with established and successful oil & natural gas operating companies. The Company formed nine funds with total investment capital of $18,302,000.Estimates

The ~~current~~ ~~funds~~preparation ~~are~~of ~~structured~~financial asstatements ~~partnerships~~in ~~and~~conformity ~~offer~~with aaccounting ~~diversified~~principles ~~holding~~generally ~~of income~~accepted ~~producing,~~in ~~direct~~the ~~investments~~United inStates ~~oil~~of ~~wells,~~America ~~natural~~requires ~~gas~~management ~~wells,~~to ~~pipelines, royalty~~make ~~acreage~~estimates and ~~mineral~~assumptions ~~rights.~~that ~~Coupled~~affect ~~with~~ the ~~intent~~reported toamounts ~~generate~~of ~~cash distributions,~~assets ~~the~~and ~~funds~~liabilities ~~are~~and ~~designed~~disclosure toof ~~maximize~~contingent ~~tax~~assets ~~deductions~~and ~~from~~liabilities ~~intangible drilling~~at ~~costs~~the ~~and~~date ~~other~~of ~~tax~~the ~~benefits~~financial ~~from~~statements and the ~~ownership~~reported amounts of ~~direct~~revenues ~~interests~~and ~~in oil~~expenses ~~and~~during ~~gas~~the ~~properties~~reporting period. Actual results could differ from those estimates.

~~There~~Capital ~~are significant~~City's ~~barriers~~consolidated tofinancial ~~entry~~statements ~~that~~are ~~relate~~based toon ~~this~~a ~~business~~number ~~model. A great deal~~ of ~~energy~~significant ~~industry~~estimates, ~~expertise~~including ~~has been assembled for the benefit of the Funds. Successful business relationships with external~~ oil and gas ~~operating~~reserve ~~companies have~~quantities ~~been~~which ~~established,~~are ~~fostered~~the ~~and~~basis ~~nurtured~~ for ~~several~~the ~~years.~~calculation Weof ~~have~~depreciation, ~~reached a~~depletion ~~point~~and inimpairment ~~the~~of ~~marketplace where additional successful~~ oil and gas ~~operators are beginning to seek out and make unsolicited contacts with us. Adding to this nucleus of energy industry experience are numerous supporting relationships from legal~~properties, ~~accounting, geological~~ and ~~marketing~~timing ~~organizations. The business model is also highly regulated from a federal~~ and ~~state~~costs ~~perspective.~~associated ~~The~~with ~~logistical operations~~its ~~that~~retirement ~~make up the back office have been established to be cost effective, scalable and efficient~~obligations.

-Cash ~~10 -~~and Cash Equivalents

~~After~~Cash the merger, we determined to operate the Fund Management Division through our wholly owned subsidiary, Avanti Energy Partners, LLC, an Ohio limited liability company (“Avanti”), which will oversee all duties related to the management of the Funds. The performance of each Fund is continually monitored, and ~~when~~ ~~necessary,~~cash ~~positions~~equivalents ~~are~~include ~~either~~cash acquired or sold for the benefit of the Fund. The primary responsibility of Avanti for each Fund is to locate, screen, evaluate and select the energy properties for the Funds. Avanti will utilize strategic business relationships with oil and gas operators across the United States to generate investment opportunities. These relationships have strengthened over time due to synergies in ~~the~~banks ~~business goals of the Funds~~ and ~~those~~ offinancial ~~the~~instruments ~~operators.~~which Asmature ~~part~~within ofthree amonths ~~prudent practice~~ of ~~risk management,~~ the ~~operating~~ ~~companies~~date ~~may offer up to 75%~~ of ~~a prospect to external venture partners~~purchase. In turn for receiving a readily available inventory of prospects, the Funds provide a steady source of investment capital to the operators allowing them to complete their projects. Over time, Avanti plans to leverage these relationships to conduct business with the highest quality oil and gas operators on a regular basis for the benefit of the Funds. This will allow Avanti to avoid the heavily promoted or syndicated projects, which is typically utilized by many of our competitors resulting in higher costs and excessive markups.

~~Avanti will~~Concentration rely on internal expertise along with input from independent consulting geologists to make investment decisions. As required, Avanti will employ Certified Petroleum Geologists with regional expertise. Furthermore, we have developed a proprietary economic analysis model that will allow Avanti to be used in concert with third party recommendations in making investment decisions. Conservative resource production and pricing scenarios are utilized to project investment returns and downside sensitivities are examined to provide further justification to the viability of ~~the~~Credit ~~project.~~Risk

~~All~~Financial ~~back office~~instruments ~~operations~~that ~~will~~potentially besubject ~~managed by~~ the Company, ~~through~~to ~~Avanti,~~concentration ~~including distribution~~ of ~~the~~credit ~~Funds,~~risk ~~issuing~~consist ~~certificates~~ of ~~ownership,~~cash. ~~receiving~~At ~~investor monies~~September 30, ~~processing~~2014 ~~operator~~and ~~revenue~~December ~~checks~~31, ~~and issuing monthly investor distribution checks. In addition~~2013, the Company ~~executes~~had ~~operator~~approximately ~~subscription documents~~$284,589 ~~joint~~and ~~operating agreements~~$390,342 ~~and~~in ~~files~~excess ~~title~~of ~~assignment~~federally ~~documents which~~insured ~~verify~~limits ~~ownership interests in~~ (the ~~energy~~FDIC ~~properties. The management~~insured ofdeposits ~~the~~have ~~Funds~~been ~~generates~~temporarily ~~fee~~increased ~~revenue~~to ~~from~~$250,000). The ~~front-end~~Company ~~management~~maintains ~~services and~~cash aaccounts ~~two~~only ~~percent~~at ~~annual~~large ~~advisory~~high ~~fee.~~quality ~~Front-end~~financial ~~fees~~institutions ~~pay~~and ~~for~~ the ~~distribution and~~Company ~~printing~~believes ~~costs,~~the ~~legal,~~credit ~~marketing,~~risk ~~accounting,~~associated ~~geological~~with ~~review,~~cash ~~evaluating the~~held ~~prospects~~in ~~for~~banks ~~investment~~is ~~and broker dealer sales commissions~~remote.

~~Principal Investments~~The Company's receivables primarily consist of accounts receivable from oil and gas sales. Accounts receivable are recorded at invoiced amount and generally do not bear interest. Any allowance for doubtful accounts is based on management's estimate of the amount of probable losses due to the inability to collect from customers. As of September 30, 2014 and December 31, 2013, no allowance for doubtful accounts has been recorded and none of the accounts receivable have been collateralized.

~~Under~~ Fair ~~our Principal~~Value Investment Division, we invest our own capital in energy properties through joint ventures and partnerships with other oil & natural gas companies. Our relationships with the various funds we manage allow us to make these independent investments in oil & gas properties. Nevertheless, our investments include strategic ownership in production, locations for future drilling, equipment, pipelines, seismic, acreage or other energy related properties that may not be suitable for our income oriented energy funds, but have potential for growth and strategic advantages for our energy funds and shareholders. This division of ~~our~~ ~~business~~Financial provides revenue through our direct ownership in producing assets. The long term goal of this division is to function strategically with the our other divisions in order to create attractive cash flow returns, while growing a strong asset base, including proven and probable oil & gas reserves.Instruments

~~The principal~~As ~~investment strategy~~ of ~~the~~September ~~Triad~~30, ~~is to continue investing in similar assets as the Funds~~2014, ~~while using~~ the ~~same~~fair ~~proven~~value ~~strategy employed by the Funds. The relationship between our own portfolio and that~~ of ~~the~~cash, ~~Funds~~accounts ~~will not be mutually exclusive~~receivable, and ~~provides~~accounts ~~for~~payable, ~~significant~~including ~~synergistic opportunities. While~~amounts ~~the~~due ~~goal for the funds is~~ to ~~generate steady cash distributions~~ and ~~tax~~from ~~benefits~~related toparties, ~~the~~if ~~investors~~any, ~~the~~approximate ~~objective~~carrying ~~for~~values ~~our~~because ~~own portfolio~~of ~~is long term growth and to be more opportunistic in adding value. An example is purchasing promising lease acreage which may not be drilled in~~ the short -term~~. If~~ ~~the~~maturity ~~value~~ of ~~the~~these ~~lease increases due to successful production established in close proximity, we are in a better position to take advantage of the increase in value even though no income stream has been established~~instruments. In addition, oil and gas operators working with the funds can be referred to us as a principal investor, while joint venture operating partners may be referred to the funds as a supplier of readily available production and other income producing projects.

~~Some~~Principles of ~~our~~ initial positions include the prolific Texas Barnett Shale natural gas formation, coal bed methane development in southeast Oklahoma along with production from the Woodford Shale, and horizontal drilling development of oil and gas from the Buda and Georgetown formations in southeast Texas. We are encouraged by the results of the investments we have made recently, specifically a 4-well position in central Kansas, and a second Barnett Shale gas well in Texas. We are continuing to evaluate several acreage opportunities for drilling prospects or to leverage royalty override income. We have the ability to purchase the Funds we manage, in order to provide a short term liquidity event to the investors. This affords us the long term benefits of the cash flow and accompanying assets. We anticipate utilizing this strategy to benefit both the Fund investors and our stockholders.Consolidation

~~Strategic Acquisitions~~The Company’s financial statements include the accounts of the Company and its wholly owned subsidiaries: Eastern Well Services, LLC, Capital City Petroleum, Inc. Avanti Energy Partners, Inc. and Hotwell, Inc. All significant intercompany transactions have been eliminated in the consolidation.

~~Under~~Oil ~~our Strategic Acquisition Division, we hope to acquire complementary energy-related businesses. We believe our ability to bring capital, contacts~~ and ~~financial~~ ~~structure~~Gas makes us an ideal partner for many privately held middle-market companies in the energy sector who seek to grow or capitalize their businesses. We anticipate financing these acquisitions with a combination of cashProperties, ~~stock~~Successful ~~and~~Efforts bank debt. These opportunities must be financially advantageous and strategic to the Fund Management and Principal Investment Divisions. Acquisitions may be in the form of a merger, joint venture or outright purchase of a company. We seek out opportunities to acquire and/or collaborate with reliable oil and natural gas industry partners. The acquisitions we target include well operators, drillers, pipelines, energy service companies and lease owners, among others. The direct ownership in the full spectrum of energy assets allows us to extend greater strategic control over our investments and strengthen our position as a vertically integrated, full-service energy company.Method

-The 11 Company uses the successful efforts method of accounting for oil and gas producing activities. Under the successful efforts method, costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells that find proved reserves, and to drill and equip development wells are capitalized. Costs to drill exploratory wells that do not find proved reserves, geological and geophysical costs, and costs of carrying and retaining unproved properties are expensed as incurred. We evaluate our proved oil and gas properties for impairment on a field-by-field basis whenever events or changes in circumstances indicate that an asset’s carrying value may not be recoverable. Capital City follows Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas, in performing an impairment test (ceiling test) for these evaluations. Unamortized capital costs are reduced to fair value if the undiscounted future net cash flows from our interest in the property’s estimated proved reserves are less than the asset’s net book value.

~~Our Strategic~~Unproved ~~Acquisition~~oil ~~Division~~and ~~will~~gas beproperties ~~overseen~~that byare ~~Daniel~~individually ~~Coffee,~~significant ~~the~~are ~~Company’s Chief~~periodically ~~Operating~~assessed ~~Officer,~~for ~~through~~impairment ~~Capital~~of ~~City~~value, ~~Petroleum~~ and ~~our~~a ~~wholly~~loss ~~owned subsidiary,~~is ~~Eastern~~recognized ~~Well~~at ~~Services,~~the ~~LLC,~~time anof ~~Ohio~~impairment ~~limited~~by ~~liability~~providing ~~company (“Eastern”). Eastern~~an ~~will~~impairment ~~manage~~allowance. ~~our~~Other ~~upstream~~unproved ~~operations,~~properties ~~while Capital~~are ~~City~~amortized ~~Petroleum~~based ~~will~~on ~~manage~~ the ~~downstream activities. Consistent~~Company's ~~with~~experience ~~the~~of ~~business~~successful ~~model,~~drilling ~~the~~and ~~Company~~average ~~continues to~~holding ~~assess~~period. ~~various~~Capitalized ~~merger~~costs ~~and~~of ~~acquisition~~producing ~~target~~oil ~~opportunities~~and ~~which~~gas ~~present themselves~~properties, ~~with~~after ~~greater~~considering ~~frequency~~estimated asdismantlement weand ~~continues~~abandonment tocosts ~~grow~~and byestimated ~~executing~~salvage ~~our~~values, ~~Triad business strategy. There~~ are ~~many~~depreciated ~~attractive~~and ~~opportunities~~depleted inby the ~~oil industry~~unit-of-production ~~lacking the capital resources to complete transactions~~method. ~~Because~~Support ofequipment ~~our history~~ and ~~our~~other ~~depth~~property ofand ~~management,~~equipment weare ~~have~~depreciated ~~access~~over totheir aestimated ~~proprietary~~useful ~~deal~~lives. The ~~flow with~~Company ~~well~~recognized ~~operators,~~impairment ~~seismic~~expense ~~data~~of ~~firms~~$31,768 ~~drilling companies, well servicing, wireline, pressure pumping, well cementing companies, pipeline operators, geologists, engineers~~ and ~~specialty~~$-0- ~~energy~~during ~~groups imbedded within large regional banks to access opportunities not readily available in~~ the ~~marketplace. This~~ ~~should~~nine-month ~~provide~~periods anended ~~excellent~~September ~~environment~~30, ~~for~~2014 ~~our forthcoming merger~~ and ~~acquisition~~2013, ~~activities~~respectively.

~~Also included in this aspect of our strategy is the opportunity to provide long~~F-term consulting services and field expertise to operators and service companies both on a domestic and international scale. To date, we place three consultants with domestic energy companies to assist them in their international exploration objectives. We have started to generate revenues, but these revenues have not been significant to date. We intend this consulting activity will add another source of income to the Company by utilizing long term consulting agreements to third parties worldwide, without adding much in the way of associated overhead burden or required capital investment.7

~~Other than~~CAPITAL ~~the~~CITY ~~consulting~~ENERGY ~~engagements~~GROUP, ~~we have not begun to implement this third part of the Triad for acquisitions and investments in energy businesses and related assets~~INC. ~~However, we believe that acquisitions provide the Company an immediate presence in the field, and serve to balance the income stream from the Funds with operations in oil and natural gas fields.~~

~~Capital City~~NOTES ~~Energy~~TO ~~Group~~CONSOLIDATED ~~understands~~FINANCIAL that high standards of business conduct, effective corporate governance, sound financial controls, operational integrity and community engagement are fundamental to sustained business success. The management and staff share this commitment and dedication to our core values, which are essential to our continued success.STATEMENTS

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION~~(Unaudited)

~~THE FOLLOWING~~Note ~~DISCUSSION~~3. Summary ~~SHOULD~~of BESignificant ~~READ~~Accounting ~~TOGETHER~~Policies ~~WITH THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS CURRENT REPORT ON FORM 10Q.~~(Continued)

~~The following~~Oil discussion reflects our plan of operation. This discussion should be read in conjunction with the financial statements of Capital City Petroleum for the fiscal years ended December 31, 2005, December 31, 2006 and ~~December~~Gas 31Properties, ~~2007.~~ ~~This~~Successful ~~discussion~~Efforts ~~contains~~Method forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including statements regarding our expected financial position, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report, particularly under the headings “Forward Looking Statements.”(Continued)

~~Results~~ Under Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas, drilling costs for exploratory wells are initially capitalized but generally must be charged to expense unless the wells are determined to be successful within one year after completion of drilling. The one-year limitation may be exceeded for an exploratory well only if sufficient reserves have been found to justify its completion and sufficient progress has been made in assessing the reserves and the economic and operating viability of the project. If the exploratory well does not meet both criteria, its capitalized costs are expensed, net of any salvage value. Annual disclosures are required under FSP No. 19-1 to provide information about management’s evaluation of capitalized exploratory well costs, including disclosure of (i) net changes from ~~Operations~~period to period in the costs for wells that are pending the determination of proved reserves, (ii) the amount of any exploratory well costs that have been capitalized for more than one-year after the completion of drilling and (iii) an aging of suspended exploratory well costs and the number of wells affected. See Note 2 – Oil and Gas Properties.

~~The results~~On ~~from~~the ~~operations~~sale ~~are~~or ~~confined~~retirement toof ~~the~~a ~~historical~~complete ~~business~~unit of ~~CCP~~a proved property, the cost and ~~its divisions~~related ~~only~~accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized. ~~The~~On ~~historical~~the ~~business~~retirement or sale of ~~BabyDot~~a partial unit of proved property, ~~LLC~~the ~~was~~cost ~~transferred~~is charged to ~~Ms. Jennie~~accumulated ~~Slade~~depreciation, indepletion, ~~connection~~and amortization with a resulting gain or loss recognized in income. On the ~~merger~~sale ~~completed~~of an entire interest in an unproved property for cash or cash equivalent, gain or loss on ~~March~~the 11sale is recognized, ~~2008~~ taking into consideration the amount of any recorded impairment if the property had been assessed individually.

~~Revenues~~If a partial interest in an unproved property is sold, the amount received is treated as a reduction of the cost of the interest retained.

~~Revenue fell~~Property ~~to $561,065~~ and net income rose to $111,022 during the first quarter of 2008 compared to revenue of $700,148 and a net loss of $9,836 recorded during the first quarter of 2007. Lower interest expense combined with a net gain on sale of assets helped boost net income over the same period in 2007.Equipment

~~Basic earnings~~The ~~per~~cost ~~share~~of ~~rose~~leasehold toimprovement ~~$0.005~~ and ~~fully~~office ~~diluted~~equipment ~~earnings~~are ~~per~~recorded ~~share~~at ~~rose~~cost ~~to $0.004, compared to zero basic~~ and ~~fully~~depreciated ~~diluted~~using ~~earnings~~the ~~per~~straight-line ~~share~~method ~~during~~over the ~~first~~ ~~quarter~~estimated ofuseful ~~2007,~~lives ~~after~~of ~~adjustment for~~ the 10assets, ~~for~~which 1range ~~exchange~~from asthree ato ~~result~~five ~~of the merger~~years.

~~Total operating~~Consolidation ~~expenses rose to $901,964 during the first quarter~~ of ~~2008,~~Variable ~~compared to~~Interest ~~total operating expenses of $607,208 during the first quarter of 2007. The increase was driven by higher consulting expenses for investor relations, marketing and financing activities.~~Entities

The Company evaluates and consolidates where appropriate its less than majority-owned investments pursuant to Accounting Standards Codification Topic 810, Consolidation. A ~~net gain~~variable oninterest ~~sale~~entity (VIE) is a corporation, partnership, trust, or any other legal structure used for business purposes that does not have equity investors with proportionate voting rights or has equity investors that do not provide sufficient financial resources for the entity to support its activities. Topic 810 requires a VIE to be consolidated by a company if that company is the primary beneficiary of ~~assets~~the VIE. The primary beneficiary of ~~$525,000~~a ~~was~~VIE ~~realized~~is ~~during~~an entity that is subject to a majority of the ~~first~~risk ~~quarter~~of loss from the VIE’s activities or entitled to receive a majority of ~~2008~~ the entity’s residual returns, or both. The Company has determined that the Capital City Energy Funds qualify as ~~mature~~VIEs, ~~production~~however, inthey have determined that the ~~portfolio~~Company ~~was~~is ~~monetized~~not ~~and~~the ~~targeted~~primary ~~for higher~~beneficiary. ~~return~~Accordingly, ~~investments~~the Company has not consolidated the Capital City Energy Funds.

~~Total~~Asset ~~net oil~~Retirement and gas production realized from principal investments was 33,892 MCF of natural gas and 4,798 barrels of oil during the first quarter of 2008. Comparative date for the first quarter of 2007 is unavailable.Obligations

The Company follows the provisions of Accounting Standards Codification 410, Asset Retirement and Environmental Obligations. The fair value of an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The present value of the estimated asset retirement costs is capitalized as part of the carrying amount of the long-lived 12 asset. For the Company, asset retirement obligations relate to the abandonment of oil and gas producing facilities. The amounts recognized are based upon numerous estimates and assumptions, including future retirement costs, future recoverable quantities of oil and gas, future inflation rates and the credit-adjusted risk-free interest rate.

~~Average commodity~~Income price realized on principal investment portfolio production during the first quarter of 2008 was $81.81 per barrel of oil, and $6.49 per thousand cubic feet (MCF) of natural gas. Comparative data for the first quarter of 2007 is unavailable.Taxes

~~Cash available~~The atCompany accounts for income taxes pursuant to Accounting Standards Codification 740, Accounting for Income Taxes," which requires recognition of deferred income tax liabilities and assets for the ~~end~~expected future tax consequences of events that have been recognized in our financial statements or tax returns. Deferred taxes are provided on temporary differences between the ~~first~~financial ~~quarter~~statements and tax basis of ~~2008~~assets ~~rose~~using the enacted tax rates that are expected to ~~$224,578~~apply ~~compared~~to taxable income when the temporary differences are expected to ~~cash~~ ~~available~~reverse. ofDeferred ~~$44~~tax assets are reduced by a valuation allowance when,~~103~~ atin the ~~end~~opinion of management, it is more likely than not that some portion or all of the ~~first~~deferred ~~quarter~~tax ~~2007~~assets will not be realized.

~~The~~Topic ~~year 2007~~740 ~~was~~establishes a ~~transition~~more-likely-than-not ~~year~~threshold ~~where~~for werecognizing ~~focused on broader distribution channels for~~ the ~~energy~~benefits ~~funds,~~of ~~structured~~tax anreturn ~~institutional~~positions ~~fund,~~in ~~expanded~~the ~~our~~financial ~~principal investments~~statements. ~~and~~Topic ~~continued~~740 toalso ~~build~~implements ~~our~~a ~~management~~process ~~team. During~~for ~~the first~~measuring ~~quarter~~those oftax ~~2008,~~positions ~~significant~~which ~~advancements~~meet ~~were achieved within~~ the ~~operating~~ ~~divisions~~recognition tothreshold ~~place~~of usbeing inultimately asustained ~~position~~upon toexamination ~~fully~~by ~~execute~~the ~~our~~taxing ~~business plan.~~authorities

~~Net Income~~F-8

~~Net income~~CAPITAL ~~for~~CITY ~~the~~ENERGY ~~year ended December 31~~GROUP, ~~2007 was $351,561, compared to net income of $476,922 for the same period ended 2006~~INC.

~~Liquidity and~~NOTES ~~Capital~~TO ~~Resources~~CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 208, we had total current assets of $1,370,357. The current assets consisted mainly of cash in the amount of $224,578, prepaid expenses in the amount of $142,428 and accounts receivable in the amount of $1,003,351. Our total current liabilities as of March 31, 2008 were $323,422. The current liabilities consist of accounts payable and accrued expenses in the amount of $297,931, and notes payable-current portion in the amount of $25,491. In addition, we had $$7,585,487 stockholder’s equity as of March 31, 2008. This compares to current assets of $200,451 and total liabilities of $460,708 for the period ended December 31, 2007. Assets at December 31, 2007 consisted of cash in the amount of $200,451, prepaid expenses of $40,991 and accounts receivable in the amount of $414,826. Liabilities as of December 31, 2007 consisted of accounts payable and accrued expenses in the amount of $360,708 and notes payable-related party in the amount of $100,000 remaining payable for the period ended December 31, 2007. As such, we had working capital of $195,560 as of December 31, 2007 as compared to working capital of $134,837.(Unaudited)

~~Our Offices~~Note 3. Summary of Significant Accounting Policies (Continued)

WeRevenue do not own any real property. We lease 3,508 square feet of office space for our corporate headquarters in Columbus, Ohio. Our lease is for a period of 5 years at commercial rates in the area. Additionally, as more fully discussed in Item 5. Other Information, on May 12, 2008, the Company entered into a lease with Daniel Coffee, its Chief Operating Officer, for office space and acreage in Wooster, Ohio. [Canton]Recognition

OnCapital ~~May 14,~~City ~~2008,~~recognizes weoil ~~entered~~and ~~into~~natural agas ~~lease~~revenue ~~for~~under ~~approximately~~the ~~2120~~sales ~~square~~method ~~feet~~ of ~~office space~~accounting for its interests in ~~the~~producing ~~Bourlas~~wells ~~Office~~as ~~Park~~oil ~~area~~and ofnatural ~~Canton,~~gas ~~Ohio~~is produced and sold from those wells. ~~The~~ ~~term~~Oil ~~of this~~and ~~lease~~natural isgas ~~five~~sold ~~(5)~~by ~~years~~Capital ~~beginning~~City onis ~~July~~not 1,significantly ~~2008~~different ~~and~~from ~~ending~~Capital onCity’s ~~June~~share ~~30, 2013~~of production. ~~The~~Revenues ~~office~~from ~~will~~management befees ~~used~~are ~~for~~recognized in the ~~purpose~~preceding month at end of ~~housing~~each ~~our~~calendar ~~entire accounting~~quarter ~~department~~and paid in arrears.

~~Off Balance~~Income ~~Sheet~~(Loss) ~~Arrangements~~per Share of Common Stock

AsBasic net loss per share is computed by dividing the net loss by the weighted average number of ~~March~~ 31shares of common stock outstanding during the periods presented. Diluted net loss per common share is computed using the weighted average number of common shares outstanding for the period, ~~2008~~and, ~~there~~if ~~were~~dilutive, nopotential ~~off~~common ~~balance~~shares ~~sheet~~outstanding ~~arrangements~~during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options, stock warrants, convertible preferred stock or other common stock equivalents. The Company did not have any potential common shares outstanding during the periods presented.

~~Going Concern~~Reclassification

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

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

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent ~~upon~~on ~~its ability~~the Company obtaining adequate capital to ~~successfully~~fund ~~accomplish~~operating ~~the~~losses ~~plans~~until ~~described~~it inbecomes profitable. If the ~~preceding paragraph~~Company is unable to obtain adequate capital, it could be forced to cease operations. The Company has incurred cumulative operating losses through September 30, 2014 and ~~eventually~~December ~~secure~~31, ~~other~~2013 ~~sources~~of $35,077,935 and $34,702,418, respectively, and had a working capital deficit of ~~financing~~$4,673,196 and ~~attain~~$4,319,079 ~~profitable operations~~at September 30, 2014 and December 31, 2013, respectively. Revenues ~~The~~for ~~accompanying~~the ~~financial~~nine-month ~~statements~~periods doended September 30, 2014 and 2013 were not ~~include~~sufficient ~~any~~to ~~adjustments that~~cover ~~might~~our operating costs and we continue to generate negative cash flows from operations. There can be ~~necessary~~no ifassurance that the Company iscan ~~unable~~or will be able to ~~continue~~generate assufficient arevenue ~~going concern~~or complete any debt or equity financing that might be needed to support operations in the future.

~~Item 3~~In order to continue as a going concern, the Company will need, among other things, additional capital resources. ~~Controls~~ Management’s plan is to obtain such resources for the Company by obtaining capital from management and ~~Procedures~~significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

~~We carried~~The ~~out~~ability ~~an evaluation~~ of the ~~effectiveness~~Company ofto ~~the~~continue ~~design and operation of our disclosure controls and procedures (~~as ~~defined~~a ingoing ~~Exchange~~concern ~~Act~~is ~~Rules 13a-15(e)~~dependent ~~and~~upon ~~15d-15(e))~~its asability ofto ~~December~~successfully ~~31,~~accomplish ~~2007. This evaluation was carried out under~~ the ~~supervision~~plans ~~and~~described ~~with~~in the ~~participation~~preceding ofparagraph ~~our~~and ~~Chief~~eventually ~~Executive Officer,~~secure ~~Mr.~~other ~~Timothy~~sources ~~Crawford~~of financing and ~~our~~attain ~~Chief~~profitable ~~Financial Officer, Mr~~operations. ~~David~~The ~~Beule, who~~accompanying ~~have~~financial ~~been~~statements ~~serving~~do innot ~~these~~include ~~capacities~~any ~~since~~adjustments ~~March 11, 2008. Based upon~~ that ~~evaluation,~~ ~~our~~might ~~Chief~~be ~~Executive~~necessary ~~Officer~~if ~~and~~the ~~Chief~~Company ~~Financial~~is ~~Officer~~unable ~~concluded that,~~to continue as ofa ~~March~~going ~~31, 2008, our disclosure controls and procedures are effective~~concern. The ~~There~~Company ~~have~~is ~~been~~in nothe ~~changes~~process inof ~~our~~raising ~~internal~~additional ~~controls~~capital ~~over~~through ~~financial reporting~~a ~~during~~related ~~the~~party ~~quarter~~private ~~ended~~fund ~~March~~management ~~31, 2008~~company.

~~Disclosure controls~~Note and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms4. ~~Disclosure~~ Oil ~~controls~~ and ~~procedures~~Gas include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.Properties

-Oil ~~13 -~~and gas properties are stated at cost. Depletion expense for the nine months ended September 30, 2014 and 2013 amounted to $35,265 and $64,711, respectively. Gains and losses on sales and disposals are included in the statements of operations. As of September 30, 2014 and December 31, 2013 oil and gas properties consisted of the following:

Limitations on the Effectiveness of Internal Controls


	2014		2013

Proved producing properties	$	5,553,149	$	5,534,535
Proved non-producing properties		-		-
Unproved properties		-		-
Total		5,553,149		5,534,535
Accumulated Depletion		(5,303,254)		(5,267,990)
Net Oil and Gas Properties	$	249,895	$	266,545

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decisionF-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.9

~~PART II~~CAPITAL -CITY ~~OTHER~~ENERGY ~~INFORMATION~~GROUP, INC.

~~Item 1. Legal~~NOTES ~~Proceedings~~TO CONSOLIDATED FINANCIAL STATEMENTS

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.(Unaudited)

~~Item 2~~Note 5. ~~Unregistered~~ Participating ~~Sales~~Interest ofFinancing ~~Equity Securities and Use of Proceeds~~Arrangement

~~None~~The Company entered into a series of financing agreements for aggregate proceeds of $1,500,000 whereby participating revenue interests were conveyed to individual lenders in certain oil and gas properties owned by the Company. The principal terms of the agreements provided for a production payment from the net revenue interests in certain wells in which the Company owns a working interest; provided a minimum return on investment of 12% in the first year only; and provided a put option to the holders in Month 13. The put option provided the holder the sole right to put the participating revenue interest to the Company for the original principal amount. The put options expired in May of 2009. Since the inception of the Arrangement the Company has repaid $20,000 against these participating interests. Accordingly, there are participating interest liabilities totaling $1,480,000 as of September 30, 2014 and December 31, 2013.

~~Item 3~~Note 6. ~~Defaults~~ Notes ~~upon Senior Securities~~Payable

~~None~~During the year ended December 31, 2008 the Company entered into a $51,206 note payable agreement with an unrelated third party entity. The note is non-interest bearing and is due on demand. The Company has paid $2,330 against the note principal, leaving the unpaid principal balance at $48,876 at September 30, 2014 and December 31, 2013.

~~Item 4~~On April 29, 2009 the Company consummated eleven notes payable with various lenders whereby the Company received cash proceeds totaling $605,000. ~~Submission~~ The ofnotes ~~Matters~~all toaccrue interest at a ~~Vote~~rate of ~~Security Holders~~14 percent per annum, and became due on March 11, 2014. As of September 30, 2014 and December 31, 2013 the Company had paid no principal payments on the notes. Accrued interest on the notes totaled $42,350 at September 30, 2014 and December 31, 2013.

~~No matters~~On ~~have~~August ~~been~~18, ~~submitted~~2009 tothe ~~our~~Company ~~security~~entered ~~holders~~into ~~for~~a note payable agreement with an unrelated third party entity whereby the Company borrowed $212,500. The note originally accrued interest at a ~~vote~~rate of seven percent per annum, ~~through~~but upon default the ~~solicitation~~ effective interest rate increased to 17.5 percent per annum. As of ~~proxies~~September, or2014 ~~otherwise~~and December 31, ~~during~~2013 the ~~period~~entire ~~ended~~principal ~~March~~balance 31of the note remained outstanding, ~~2008~~ and the Company owed accrued interest totaling $92,681 and $65,002, respectively.

~~Item 5~~On August 31, 2010 the Company entered into an $80,067 note payable agreement with a related party individual. ~~Other~~ The ~~Information~~note accrues at a nominal rate of seven percent per annum, with a default rate of ten percent per annum. The note is due on demand. Subsequent to the note date, the Company made payments on the note totaling $9,750, and made new borrowings under the note in the amount of $2,286. As of September 30, 2014 and December 31, 2013 the outstanding principal balance on the note totaled $72,792 and $73,792, respectively, and accrued interest of $20,761.

On ~~May 13~~June 5, ~~2008~~2012 wethe Company entered into a ~~long~~$47,054 ~~term~~note ~~lease/option~~agreement towith ~~purchase~~an ~~agreement~~unrelated ~~for property~~third ~~located~~party. The note accrues interest at ~~920~~a ~~West~~rate ~~Easton~~of ~~Road,~~six ~~Burbank,~~percent ~~Ohio~~per ~~44214~~annum and is due on demand. The ~~amount~~ ofnote ~~the~~calls ~~lease~~for isinterest topayments beof $~~4,000~~250 per month ~~rent~~through December 1, $42017,~~000~~ ~~security~~at ~~deposit.~~which ~~The term~~time a final payment of ~~this~~the ~~lease~~remaining open balance is 10due. During ~~years~~the ~~beginning~~periods ~~on June~~ended 1September 30, ~~2008~~2014 and ~~ending on~~December ~~June 30~~31, ~~2018. The~~2013 ~~property~~the ~~being~~Company ~~leased~~made ~~will~~payments betotaling ~~for~~$2,250 ~~the~~and ~~purpose of~~$3,011 ~~general~~on ~~office~~the ~~space~~note, ~~oil~~leaving ~~field~~an ~~service~~unpaid ~~equipment~~principal ~~storage,~~balance ~~oil~~of ~~field~~$40,365 ~~service truck~~and ~~parking~~$42,615 ~~storage~~as of ~~oil~~September ~~field~~30, ~~supplies~~2014 and December 31, ~~storage~~2013, ofrespectively. Accrued ~~radioactive~~interest ~~materials~~ on the notes totaled $5,950 and ~~explosives~~$4,130 ~~for~~at ~~oil~~September ~~field~~30, ~~use~~2014 and December 31, 2013, respectively.

OnFuture ~~May 14,~~maturities ~~2008~~on ~~we entered into a five (5) year lease agreement commencing July 1, 2008, for property located at 1611 N. Main Street, Suite A, N. Canton, Ohio 44720. The amount of~~ the ~~lease is $2,473.33 per month plus a security deposit equal to one month~~Company’s ~~rent. This~~outstanding ~~property~~notes ~~will~~payable beare ~~used~~as ~~to house our entire accounting department.~~follows:

Item 6. Exhibits


Year	Payments Due
2014	$ 942,167
2015	3,000
2016	3,000
2017	31,365
Total	$ 979,532

Exhibit Number		Description of Exhibit
3.1		Articles of Incorporation (1)
3.2		By-Laws (1)
31.1		Certification of Chief Executive Officer 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 Chief Financial Officer 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 Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Note 7 - Joint Venture Liability

~~(1)~~During ~~Previously~~the ~~included~~2008 ascalendar anyear ~~exhibit~~the Company’s Avanti subsidiary entered into a series of Joint Venture Participation Agreements with various unrelated entities for the purpose of acquiring fractional interests in oil and gas leases in Ohio, and the drilling, completion, and production of oil and gas. Avanti was to serve as the ~~8-KA~~Managing ~~filed~~Joint Venturer and as operator on ~~March~~all ~~14,~~of ~~2008~~the oil and gas leases to be acquired.

F- ~~14 -~~10

~~SIGNATURES~~CAPITAL CITY ENERGY GROUP, INC.

~~In accordance~~NOTES ~~with~~TO ~~the~~CONSOLIDATED ~~requirements~~FINANCIAL ~~of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~STATEMENTS

~~Capital City Energy Group, Inc. Date: May 20, 2008 By: /s/ David Beule David Beule Title: Chief Financial Officer, Principal Accounting Officer~~ (~~Since March 11, 2008~~Unaudited)

-Note 15 7 - Joint Venture Liability (Continued)

Pursuant to the sale of participation interests in the joint venture, Avanti raised $677,121. With these funds, the joint venture made $463,394 in expenditures toward the purchase and development of certain oil and gas properties. As of December 31, 2011, the acquired properties were deemed unsuccessful and the projects were abandoned.

As of September 30, 2014 and December 31, 2013, Avanti maintains a liability to the investors in the joint venture of $239,078, representing the difference between funds raised pursuant to the joint venture and funds actually expended toward the project’s stated objectives.

Note 8. Stockholders’ Equity

On January 17, 2014, 7,634 shares of the Company’s common stock were returned to treasury and cancelled.

On May 12, 2014 the Company issued 250,000 shares of common stock to an unrelated third party as payment for services rendered. The shares were valued at $0.04 per share, being the market price of the stock on the date of issuance, resulting in a total value of $10,000.

Note 9 – Asset Retirement Obligations

The total future asset retirement obligation is estimated by management based on the Company’s net working interests in all wells and facilities, estimated costs to reclaim and abandon wells and facilities and the estimated timing of the costs to be incurred in future periods. At September 30, 2014 and December 31, 2013, the Company estimated the undiscounted cash flows related to asset retirement obligation to total approximately $185,695. The fair value of the liability at September 30, 2014 and December 31, 2013 is estimated to be $64,154 and $60,061, respectively, using risk free rates between 2.48 and 4.24 percent and inflation rates between 2.75 and 4.20 percent. The actual costs to settle the obligation are expected to occur in approximately 25 years.

Changes to the asset retirement obligation were as follows:


	September 30,2014				December 31,2013
Balance, beginning of year		$		60,061		$		56,040
Liabilities incurred			380				--
Disposal			--				(929		)
Accretion expense			3,713				4,950
Balance, end of year	$		64,154		$		60,061

Note 10 - Subsequent Events

In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report.

F-11

ITEM 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion and analysis contains statements of a forward-looking nature relating to future events or our future financial performance or financial condition. Such statements are only predictions and the actual events or results may differ materially from the results discussed in or implied by the forward-looking statements. The historical results set forth in this discussion and analysis are not necessarily indicative of trends with respect to any actual or projected future financial performance. This discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this report.

Overview

Our Company, through our subsidiaries, is an expanding energy company that has evolved from the design, management and sponsorship of the Funds to become a integrated, independent energy company building a portfolio of core E&P assets which provide attractive returns on investment and growth opportunities through the development and ownership of both various, non-operated well interests and wells developed and operated by itself. Additionally, the Company will occasionally utilize its historic fund management experience in developing and managing upstream investment opportunities for others, through the various investment models with which it is familiar and the comprise the most advantageous structures. This business plan will continue to opportunistically evolve, along with emerging developments in contemporary energy markets.

Summary of Our Plan

While we will continue to be opportunistic, we will continue to focus all the majority of its attention on the oil and gas production activities of the CCP subsidiary as plans to obtain additional funding are finalized. More details of our business plan are found in the “Description of Our Company” portion of our most recent Annual Report for Form 10-K for the year ended December 31, 2013.

It is also our plan to abandon the operations for Eastern and significantly restrict Avanti’s activities to existing projects, managing Fund XVII and operating the wells in the Homer/Woody Project.

We do not currently have sufficient funding to implement all phases of our business plan for the next 12 months and do need to raise additional funding for this purpose.

Results of Operations for the Three and Nine Months ended September 30, 2014 compared to September 30, 2013


				For the Three-Months Ended September 30,
				2014		2013
Revenues			$	210,396	$	205,249

Cost of Sales				81,945		120,654

Gross Profit				128,451		84,595


Operating Expenses
	General and administrative			30,600		90,702
	Depletion, depreciation and accretion			12,993		24,383
	Professional fees			101,891		104,288
		Total operating expenses		145,484		219,373
Income (Loss) from operations				(17,033)		(134,778)
Other income (expense)
	Interest expense			(31,326)		(26,966)
	Gain on sale of asset			-		894,013
		Total other expenses	$	(31,326)	$	867,047
Net Income (Loss)			$	(48,359)	$	732,269


				For the Nine-Months Ended September 30,
				2014		2013
Revenues			$	525,232	$	550,017

Cost of Sales				215,903		307,104

Gross Profit				309,329		242,913


Operating Expenses
	General and administrative			143,631		353,141
	Impairment of oil and gas properties			31,768		-
	Depletion, depreciation and accretion			38,978		73,150
	Professional fees			377,484		96,763
		Total operating expenses		591,861		523,054
Loss from operations				(282,532)		(280,141)
Other income (expense)
	Interest expense			(92,985)		(80,434)
	Gain on sale of assets			-		894,013
		Total Other Income (Expenses)		(92,985)		813,579
Net Income (Loss)			$	(375,517)	$	533,428

Summary of Results of Operations

Revenue

On a consolidated basis our oil and gas revenues were $210,396 and $525,232 for the three and nine month periods ended September 30, 2014, compared to $205,249 and $550,017 for the three and nine month periods in 2013. The nominal changes in oil and gas revenues were primarily attributable to changes in weather.

Lease Operating Expenses

For the three and nine month periods ended September 30, 2014, lease operating expenses (LOE) were $81,945 and $215,903 compared to $120,654 and $307,104 during the three and nine month periods ended September 30, 2013. Typical LOE expenses include operating labor, field supervision, water hauling and disposal fees, communications, fuel, leased vehicles, environmental and safety compliance.

Depreciation, Depletion, and Accretion

Depreciation, depletion and accretion expenses totaled $12,993 and $38,978 for the three and nine month periods ended September 30, 2014, compared to $24,383 and $73,150 for the three and nine month periods ended September 30, 2013. The decrease was expected due primarily to decreased oil and gas production during the 2013 fiscal year.

Selling, General and Administrative Expenses

For the three and nine month periods ended September 30, 2014, the general and administrative expenses totaled $30,600 and $143,631, a decrease from the expenses of $90,702 and $189,282 posted during the same time periods in 2013.

Professional Fees

Professional fees totaled $101,891 and $377,484 for the three and nine month periods ended September 30, 2014, compared to $104,288 and $260,622 for the three and nine month periods ended September 30, 2013. This overall increase for the nine month period was expected due primarily to the engagement of accounting and legal professionals related to the preparation of financial and other information necessary to meet our public reporting obligations. Included in professional fees for each year is an accrual of $60,000 per quarter for officer compensation.

Impairment of Oil and Gas Properties

During the nine-month period ended September 30, 2014 the Company recognized a $31,768 impairment expense relating to its oil and gas properties. This impairment was recognized due to the fact that the net present value of the estimated future cash flows from certain of the Company’s oil and gas properties, as estimated in the Company’s December 31, 2014 reserve report, was less than the Company’s book value for the same properties.

Other Income (Expenses)

For the three and nine month periods ended September 30, 2014 the Company recognized no other income. However, the Company did recognize interest expense of $31,326 and $92,985, respectively, compared to $26,966 and 80,434 for the comparable periods of the 2013 fiscal year. The interest expenses for these periods are associated with the Company’s notes payable. Historically, these notes have been converted to equity where possible and/or have been repaid. We foresee meeting all outstanding notes subject to the raising of further capital and increasing revenues over the course of the 2014 and 2015 fiscal years. During the nine month period ended September 30, 2013, the Company recognized a gain of $894,013 on the sales of certain oil and gas assets.

Net Income (Loss)

We had net loss for the three and nine month periods ended September 30, 2014 of $48,359 and $375,517, respectively, compared to a net income of $732,269 and $533,438, for the three and nine month periods ended September 30, 2013.

Liquidity and Capital Resources for Nine-Months ended September 30, 2014 compared December 31, 2013

Our cash, current assets, total assets, current liabilities, and total liabilities as of September 30, 2014 compared to December 31, 2013 are as follows:


	September 30, 2014		December 31, 2013		Change

Cash	$	534,589	$	640,342	$	(105,753)
Total Current Assets		616,021		654,537		(38,516)
Total Assets		866,291		921,457		(55,166)
Total Current Liabilities		5,289,217		4,973,616		315,601
Total Liabilities	$	5,326,582	$	5,016,231	$	310,351

Our cash balance declined because of operating costs and because we invested $50,000 in oil properties during the current fiscal year. Our current liabilities increased because we accrued professional fees in connection with bringing our securities filings current.

The current liabilities as of September 30, 2014 consist of accounts payable and accrued expenses in the amount of $2,563,818, notes payable-current portion in the amount of $942,167, $1,480,000 of debt related to a participating interest financing arrangement, ARO liability of $64,154 accrued for estimated well closure costs and

joint venture liability totaling $239,078. These needs historically have been satisfied through proceeds from the sales of our securities and/or issuance of promissory notes. We are expecting to reduce the need for such short term financing as we continue to build our revenues through both acquisitions and organic growth. However, in order to repay our obligations in full or in part when due, we may be required to raise significant working capital from other sources. There is no assurance, however, that we will be successful in these efforts. . (See “Cash Requirements” below).

Cash Requirements

We had cash available of $534,589 as of September 30, 2014. Based on our revenues, cash on hand and current monthly burn rate, around $10,000, excluding professional fees and consultants on an as needs basis, we will need to continue borrowing from our shareholders and other related parties, and/or raise money from the sales of our securities, to fund operations.

Cash Flow From Operating Activities

For the nine-month period ended September 30, 2014, net cash used in operating activities was $52,503 compared to $297,610 net cash used in operating activities for the same nine-month period ended September 30, 2013.

Cash Flow From Investing Activities

For nine month period ended September 30, 2014, net cash used in investing activities was $50,000 primarily attributed to the purchase of certain oil and gas properties. For nine month period ended September 30, 2013, there was $844,165 provided by investing activities associated with the disposition of fixed assets.

Cash Flow From Financing Activities

For the nine month period ended September 30, 2014, net cash used by financing activities was $3,250 versus net cash used in financing activities of $4,500 for the same period in 2013. Financing activities principally consisted of proceeds from and payments on notes payable.

Going Concern

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. The Company has incurred cumulative operating losses through September 30, 2014 of $35,077,935 and has a working capital deficit of $4,673,196 at September 30, 2014. Revenues during the year ended December 31, 2013 were not sufficient to cover our operating costs and we continue to generate negative cash flows from operations. There can be no assurance that the Company can or will be able to generate sufficient revenue or complete any debt or equity financing that might be needed to support operations in the future.

The Company’s audited consolidated financial statements included in its annual report on Form 10-K for the fiscal year ended December 31, 2013 have been prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from the public markets and selected other investors sufficient to meet its minimal operating expenses, occasionally seeking additional equity and/or debt financing as warranted by future projects. However Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. An acceleration of acquisitions or our planned investments in energy properties and continued expansion of our various divisions over the next twelve months may require additional expenditures. Additional financing through partnering, public or private equity financings, lease transactions or other financing sources may not be available on acceptable terms, or at all. Any equity financing could result in significant dilution to our shareholders. The Company continues to analyze its monthly cost structure to reduce the overall cash expenditures until additional

capital is raised or cash flows from operations are generated. There can be no assurance that the Company can or will be able to generate sufficient revenue or complete any debt or equity financing that might be needed to support operations in the future.

Impact of Inflation

The impact of inflation on our operations has not been significant to date. However, there can be no assurance that a high rate of inflation in the future would not have an adverse impact on our operating results.

Off-Balance Sheet Arrangements

As of September 30, 2014, we had no off-balance sheet arrangements.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates, including those related to uncollectible receivables, inventory valuation, deferred compensation and contingencies. We base our estimates on historical performance and on various other assumptions that we believe to be reasonable under the circumstances. These estimates allow us to make judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We believe the following accounting policies are our critical accounting policies because they are important to the portrayal of our financial condition and results of operations and they require critical management judgments and estimates about matters that may be uncertain. If actual results or events differ materially from those contemplated by us in making these estimates, our reported financial condition and results of operations for future periods could be materially affected.

Revenue Recognition

The Company recognizes virtually all of its income from the from the sale of oil and gas production from the managed energy funds and from investments it makes for its own account. Revenues from the management of energy funds are recognized when the services are performed. Intercompany revenues are eliminated in the consolidation. Revenues from the production of natural gas and oil properties in which the Company have an interest are based on the respective Company’s net working interests. These revenues are recorded when the gas or oil passes to the purchasers.

Accounts Receivable

The majority of the accounts receivable is comprised of oil and gas revenues related to production which took place on or prior to the end of accounting periods, payment for which was not received prior to the end of the year. Accounts receivable include the Company’s share of income from the managed energy funds and from investments the Company made on it own behalf.

The Company’s receives distributions from the Funds based partially on the amount of its oil and gas revenues, net of lease operating expenses and applicable severance taxes. Part of the management services provided to the Funds by the Company is to review the purchasers credit worthiness prior of all oil and gas purchasers prior to executing division orders for the sale of hydrocarbons. Receivables are generally due in 30 to 60 days. When collections of specific amounts due are no longer reasonably assured, an allowance for doubtful accounts is established.

Oil and Gas Properties

In accordance with Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas, the Company follows the successful efforts method of accounting for its oil and gas activities. Accordingly, the cost associated with developmental oil and gas properties are capitalized and recovered using units of production cost depletion method. Exploratory cost, including the cost of exploratory dry holes and related geological and geophysical cost are charged as current expense. In instances where the status of a well is indeterminable at the end of the year, it is the Company’s practice to capitalize these costs as oil and gas properties, until such time as the outcome of drilling becomes known to the Company. Wells cannot remain in a status of indeterminable for a period greater than twelve months.

Impairment of Long Lived Assets and the Disposal of Long Lived Assets

Pursuant to Accounting Standards Codification Topic 932, the Company performs an impairment test (ceiling test) at each reporting date whereby the carrying value of the oil and gas properties is compared to the value of its proved reserves discounted at a ten percent interest rate of future net revenues.

During the nine-months ended September 30, 2014 the Company recognized an impairment expense of $31,768 relating to our oil and gas reserves. The Company had recognized no expense from impairment of our reserves during the 2013 and 2012 fiscal years.

Inflation

Management believes that inflation has not had a material effect on our results of operations.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position or statements.

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

(a)

Evaluation of Disclosure Controls Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure and control procedures are also designed to ensure that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures.

As of September 30, 2014, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their desired control objectives. Additionally, in evaluating and implementing possible controls and procedures, management is required to apply its reasonable judgment. We also do not have an audit committee. Based on the evaluation described above, and as a result, in part, of not having an audit committee and having one individual serve as our chief executive officer and chief financial officer has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective.

As funds become available to us, we expect to implement additional measures to improve disclosure controls and procedures.

(b)

Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

(c)

Officer’s Certifications

Appearing as an exhibit to this quarterly report on Form 10-Q are “Certifications” of our Chief Executive and Financial Officer. The Certifications are required pursuant to Sections 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the quarterly report on Form 10-Q contains information concerning the Controls Evaluation referred to in the Section 302 Certifications. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

PART II – OTHER INFORMATION

ITEM 1 -- Legal Proceedings

The Company filed a complaint in the United States District Court, Southern District of Ohio, Eastern Division, titled Capital City Energy Group, Inc., et. al., Plaintiffs, vs Kelley Drye & Warren LLP, et. al., Defendants, Case No. 2:11-cv-00207 (the “Matter”). The Company settled the Matter with the defendants and a stipulation of dismissal with prejudice was entered by the parties on March 6, 2014. From time to time, the Company may be a party to various legal actions in the normal course of our business. Currently, Management believes that the Company is not party to any litigation that, if adversely determined, would have a material adverse effect on our business, financial condition, result of operations or cash flows.

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

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

There have been no events that are required to be reported under this Item.

ITEM 3 -- Defaults Upon Senior Securities

There have been no events that are required to be reported under this Item.

ITEM 4 -- Mine Safety Disclosures

There have been no events that are required to be reported under this Item.

ITEM 5 -- Other Information

There have been no events that are required to be reported under this Item.

ITEM 6

-- Exhibits


31.1	Certification of Chief Executive Officer, Principal Executive Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer, Principal Executive Officer and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




101.INS *		XBRL Instance Document

101.SCH *		XBRL Taxonomy Extension Schema Document

101.CAL *		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF *		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB *		XBRL Taxonomy Extension Label Linkbase Document

101.PRE *		XBRL Taxonomy Extension Presentation Linkbase Document

*XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements 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.


	Capital City Energy Group, Inc.

Date: April 6, 2015	By:	/s/ Timothy S. Shear
		Timothy S. Shear
		Principal Executive Officer /Chief Executive Officer

Filing Compare · Capital City Energy Group, Inc.