Spotlight Capital (SLCH) 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2008

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

For the transition period from _______ to _______

Commission File #0-30503

PANGEA PETROLEUM CORPORATION

(Exact name of small business issuer as specified in its charter)

COLORADO	76-0635938
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)

9801 Westheimer, Suite 302, Houston, Texas 77042

(Address of principal executive offices)

(713) 706-6350

(Issuer's telephone number)

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

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

State the number of shares outstanding of each of the issuer’s classes of common stock as of the last practicable date:

365,499,544  shares of $0.001 par value Common Stock outstanding as of  November 13, 2008

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

PANGEA PETROLEUM CORPORATION

FORM 10-Q

Table of Contents

PART  I  -	FINANCIAL  INFORMATION	F-1
Item  1  -	Financial  Statements	F-1
Item  2  -	Management's  Discussion and Analysis or Plan of Operations	4
Item  3  -	Controls and Procedures	6
PART II  -	OTHER INFORMATION	7
Item 2 –	Unregistered Sales of Equity  Securities and Use of Proceeds	7
Item  6  -	Exhibits	8
SIGNATURES		9

FORWARD LOOKING STATEMENT

The following discussion should be read in conjunction with our unaudited consolidated interim financial statements and related notes thereto included in this quarterly report and in our audited consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") contained in our Form 10-KSB for the year ended December 31, 2007.

We are  including  the  following  cautionary  statement  in this Form 10-Q to make applicable and take advantage of the safe harbor provision of the Private  Securities  Litigation  Reform  Act  of  1995  for  any forward-looking statements  made  by,  or on behalf of, the Company.  Forward-looking statements include statements concerning  plans,  objectives,  goals,  strategies, expectations,  future events or performance and underlying assumptions and other statements , which  are other  than  statements  of  historical  facts.  The statements contained herein and other information contained in this report may be based, in part, on management's estimates, projections, plans and judgments. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. In this report, the words "anticipates", "believes", "expects", "intends", "future", "plans", "targets" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on the forward-looking statements contained herein.  We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that may arise after the date hereof.  Our  expectations,  beliefs  and  projections  are  expressed in good faith  and  are  believed  to have a reasonable basis, including without  limitations,  management's  examination of historical operating trends, data  contained  in  our records and other data available from third parties,  but  there can be no assurance that management's expectations, beliefs or  projections will result or be achieved or accomplished. In addition to other factors  and  matters  discussed  elsewhere  herein, the following are important factors  that could cause actual results to differ materially  from  those discussed in the forward-looking statements: our dependence on limited cash resources, dependence on certain key personnel within the Company, and the ability to raise additional capital; our ability to secure leases for our oil and gas projects; our ability to obtain acceptable forms and amounts of financing; the demand for, and price level of, our products and services; competitive factors; the ability to mitigate concentration of business in a small number of customers; the evolving industry and technology standards; the ability to protect proprietary technology; the dependence on key personnel; and the effect of business interruption due to political unrest; oil and gas prices; and our ability to efficiently manage our operations.  In addition, our ability to generate long-term value for the common stockholder is dependent upon the acquisition of profitable energy prospects. There are many companies participating in the oil and gas industry, many with greater resources. Greater competition for profitable operations can increase prices and make it more difficult to acquire assets at reasonable multiples of cash flow.  We believe that we will be able to compete in this environment and will be able to find attractive investments; however, it is not possible to predict competition or the effect this will have on operations. Operations are also significantly affected by factors, which are outside our control, including the prices of oil and natural gas, environmental and governmental regulations. Accordingly, actual results may differ, possibly materially, from the predictions contained herein.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The financial statements of the company are set forth beginning on page F-1.

F-1

PANGEA PETROLEUM CORPORATION

TABLE OF CONTENTS

	Page
Unaudited Consolidated Financial Statements:
Unaudited Consolidated Balance Sheets as of
September 30, 2008 and December 31, 2007	F-3
Unaudited Consolidated Statements of Operations
for the Three Months and Nine Months Ended
September 30, 2008 and 2007	F-4
Unaudited Consolidated Statements of Stockholders'
Deficit for the Nine Months Ended September 30, 2008	F-5
Unaudited Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 2008 and 2007	F-6
Notes to Unaudited Consolidated Financial Statements	F-7

F-2

PANGEA PETROLEUM CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
	2008			2007
ASSETS
Current assets:
Cash	$	1,980		$	2,718
Accounts receivable		1,844			-
Property and equipment:
Oil and gas properties (successful efforts method
net of accumulated depletion of $143,979 and $138,642)		12,884			40,478
Unproven oil and gas properties (successful efforts method)		183,585			171,462
Total property and equipment		196,469			211,940
Total assets	$	200,293		$	214,658
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	15,830		$	21,535
Accrued interest payable to related parties		58,983			126,730
Notes payable - other		15,507			15,507
Notes payable to related parties		671,271			528,041
Stock Payable		100,310			21,680
Total current liabilities		861,901			713,493
Long-term debt to related parties		-			5,000
Asset retirement obligations		8,193			8,193
Total liabilities		870,094			726,686
Stockholders' deficit:
Preferred stock: $.001 par value; 10,000,000 shares authorized,
none issued and outstanding		-			-
Common stock: $.001 par value; 500,000,000 shares authorized;
365,499,544 and 306,339,544 shares issued and outstanding at
September 30, 2008 and December 31, 2007, respectively		365,499			306,340
Additional paid-in capital		18,521,904			18,373,829
Accumulated deficit		(19,557,204	)		(19,192,197	)
Total stockholders' deficit		(669,801	)		(512,028	)
Total liabilities and stockholders' deficit	$	200,293		$	214,658

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

F-3

PANGEA PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Revenue	$	4,945		$	10,490		$	26,805		$	43,540
Costs and expenses:
Lease operating expenses		1,626			4,685			9,313			15,749
Production taxes		415			617			1,693			2,424
Selling, general and administrative		58,120			28,955			274,047			276,610
Impairment		0			15,737			42,696			15,737
Depreciation, depletion and amortization		745			11,085			5,337			33,077
Total costs and expenses		60,906			61,079			333,086			343,597
Loss from operations		(55,961	)		(50,589	)		(306,281	)		(300,057	)
Other income and (expenses):
Other income		257			-			257			-
Interest expense		(19,804	)		(15,971	)		(58,983	)		(47,486	)
Net loss	$	(75,508	)	$	(66,560	)	$	(365,007	)	$	(347,543	)
Basic and diluted net loss per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average common shares		362,192,411			304,674,756			337,033,267			296,167,327

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

F-4

PANGEA PETROLEUM CORPORATION

 CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

for the Nine Months Ended September 30, 2008

(Unaudited)

	Common Stock				Additional Paid-In		Accumulated			Stockholders’ Equity
	Shares		Amount		Capital		Deficit			(Deficit)
Balance at December 31, 2007		306,339,544	$	306,340	$	18,373,829	$	(19,192,197	)	$	(512,028	)
Common stock issued to compensate employees and consultants		49,160,000		49,159		126,075		-			175,234
Common stock issued for property Acquisition		10,000,000		10,000		22,000					32,000
Net loss		-		-		-		(365,007	)		(365,007	)
Balance at September 30, 2008		365,499,544	$	365,499	$	18,521,904	$	(19,557,204	)	$	(669,801	)

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

F-5

PANGEA PETROLEUM CORPORATION

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

for the Nine Months Ended September 30, 2008 and 2007

(Unaudited)

	2008			2007
Cash flows from operating activities:
Net loss	$	(365,007	)	$	(347,543	)
Adjustments to reconcile net loss to net cash
used in operating activities		352,769			318,119
Net cash used in operating activities		(12,238	)		(29,424	)
Cash flows from investing activities:
Capital and exploratory expenditures		-			(17,082	)
Cash flows from financing activities:
Repayment of debt					(6,981	)
Borrowings on debt		11,500			-
Net cash provided by (used in) financing activities		11,500			(6,981	)
Net increase/(decrease) in cash and cash equivalents		(738	)		(53,487	)
Cash and cash equivalents at beginning of period		2,718			53,690
Cash and cash equivalents at end of period	$	1,980		$	203
Supplemental Disclosures
Cash paid for interest	$	-		$	-
Cash paid for income taxes
Non Cash Disclosures
Reclass of accrued interest into principal		126,730
Reclass from longterm to short-term debt		5,000
Assumptions of debt associated with Oil & Gas Property		-			33,961
Seller financed purchase of O&G properties		-			7,515
Oil and gas property acquired with common stock issuance		32,000

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

F-6

PANGEA PETROLEUM CORPORATION

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited interim consolidated financial statements of Pangea Petroleum Corporation, a Colorado corporation, 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 the Pangea’s latest Annual Report filed with the SEC on Form 10-KSB.  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, December 31, 2007, as reported in Form 10-KSB, have been omitted.

2. Going Concern Considerations

Since its inception, Pangea has suffered recurring losses from operations and has been dependent on existing stockholders and new investors to provide cash resources to sustain its operations.  During the three months ended September 30, 2008 and 2007, Pangea reported net losses of $365,007 and $347,543, respectively. These conditions raise substantial doubt about Pangea’s ability to continue as a going concern.

Pangea has developed a multi-step plan and has taken actions to improve its financial position and deal with its liquidity problems. The final steps of the plan are still being developed, but may include additional private placements of Pangea’s common stock, additional oil and gas property acquisitions and/or exploration efforts, and efforts to raise additional debt financing or equity investments.  There can be no assurance that any of the plans developed by Pangea will produce cash flows sufficient to ensure its long-term viability as a going concern.

Pangea’s long-term viability as a going concern is dependent on certain key factors, as follows:

· Pangea’s ability to obtain adequate sources of outside financing to support near term operations and to allow the Company to continue forward with current strategic plans.

· Pangea’s ability to locate, prove and produce from economically viable oil and gas reserves.

· Pangea’s ability to ultimately achieve adequate profitability and cash flows to sustain continuing operations.

3. Stockholders’ Equity

During the nine months ended September 30, 2008, Pangea engaged in various transactions affecting stockholders’ equity, as follows:

· 48,500,000 shares of common stock were issued to employees and consultants.  Compensation expense of $173,100 was recorded based on market value on date of issuance.

· 300,000 shares of restricted common stock were issued to an independent director for services provided valued at $970.

· 360,000 shares of restricted common stock were issued to our Chief Financial Officer valued for services provided at $1,164.

· 10,000,000 shares of common stock were issued for a property acquisition valued at $32,000.

F-7

4. Related Party Transactions

Notes payable to related parties consist of the following at September 30, 2008:
Notes payable to Mary Pollock, daughter of the chief executive
officer. This note bears interest of 12% per year and
is due in a one time payment of principal and interest on December
31, 2008.  These notes are not collateralized.	$	146,691
Notes payable to Mary Pollack, daughter of the chief executive officer.
This note bears interest of 12% per year and is due in a onetime payment
of principal and interest on December 31, 2008.  These notes are not
collateralized.	$	11,500
Notes payable to Charles Pollock, the Chief Executive Officer and a
significant stockholder of the Company. This note bears interest
of 12% per year, and due in one time payment of principal and
interest on December 31, 2008. These notes are not collateralized.	$	400,911
Notes payable to Mark Weller, the Chief Operating Officer and a
significant stockholder of the Company. This note bears interest
of 12% per year, and due in one time payments of principal and
interest on December 31, 2008. These notes are not collateralized.		107,169
Notes payable to Mark Weller due on-demand		5,000
	$	671,271

The above consists of renewed promissory notes extending the maturity dates from the original due date of December 31, 2007, which combined prior principal and accrued interest into principal amount of new debt. Accrued interest payable to related parties of $58,983 at September 30, 2008 represents interest accrued on the above notes payable to related parties.

F-8

ITEM 2.      MANAGEMENT'S  DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

Pangea Petroleum Corporation ("Pangea" or "Company"), a Colorado corporation, was organized on March 11, 1997 as Zip Top, Inc. On December 11, 1998, we changed our name to Pangea Petroleum Corporation. Our offices are located at 9801 Westheimer, Suite 302, Houston, Texas 77042. Our website is www.pangeapetroleum.com.

Pangea is a publicly traded company listed on the OTC Electronic Bulletin Board under the symbol “PAPO”.  We are an independent energy company focused on the exploration and development of oil and natural gas reserves, whose core business is directed to the purchase and development of oil and gas prospects in proven onshore production areas. Pangea is pursuing a development program designed to achieve profitability by distributing risk across multiple oil and gas projects.  Pangea diversifies its risk by carefully identifying prospects that fit within strict parameters and by taking a minority working interest in each project. We devote essentially all of our resources to development of revenue producing activities by keeping overhead at a minimum level through the retention of carefully selected consultants, contractors and service companies.

We are working to create shareholder value by using capital and proven technology to exploit energy prospects that are of minor interest to larger companies due to their size and location.  We invest in projects at different levels of participation, generally as a minority owner, such that daily operating responsibility is in the hands of experienced, high quality partners and contractors.  Producing properties may be resold as appropriate to establish and maintain optimum asset value.

Since our inception, we have recurring losses from operations and have been dependent on existing stockholders and new investors to provide the cash resources to sustain its operations. During the nine months ended September 30, 2008, we reported a loss of $365,007 compared to a loss of $347,543 reported for the nine months ended September 30, 2007.

Our long-term viability as a going concern is dependent on certain key factors, as follows:

- Our ability to continue to obtain sources of outside financing to allow the Company to continue to make strategic investments in new oil and gas well prospects.

- Our ability to identify attractive oil and gas projects and secure adequate, timely outside financing and investment in order to increase revenue by buying existing production.

- Our ability to increase profitability and sustain a cash flow level that will ensure support for continuing operations.

RESULTS OF OPERATIONS

During the three months ended September 30, 2008, we reported $4,945 in revenue from the working interests in five producing wells.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of the financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles 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, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material.

We believe the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

-4-

OIL AND GAS PRODUCING ACTIVITIES

Pangea follows the "successful efforts" method of accounting for its oil and gas properties. Under this method of accounting, all property acquisition costs (cost to acquire mineral interests in oil and gas properties) and costs (to drill and equip) of exploratory and development wells are capitalized when incurred, pending determination of whether the well has found proved reserves. If an exploratory well has not found proved reserves in commercial quantities, the costs associated with the well are charged to expense. The costs of development wells are capitalized whether productive or nonproductive.  Geological and geophysical costs and the costs of carrying and retaining undeveloped properties are expensed as incurred.  Management estimates the future liability for plugging and abandonment of the related wells. Accordingly, a net cost of $8,193 has been accrued for plugging and abandonment.

Unproved oil and gas properties that are individually significant are periodically assessed for impairment of value, and a loss is recognized at the time of impairment by providing an impairment allowance.  Other unproved properties are amortized based on the average holding period. Capitalized costs of producing oil and gas properties after considering estimated dismantlement and abandonment costs and estimated salvage values are depreciated and depleted by the unit-of-production method.  On the sale or retirement of a complete unit of a proved property, the cost and related accumulated depreciation, depletion, and amortization are eliminated from the property accounts, and the resultant gain or loss is recognized. On the retirement or sale of a partial unit of proved property, the cost is charged to accumulated depreciation, depletion, and amortization with a resulting gain or loss recognized in the statement of operations.

On the sale of an entire interest in an unproved property for cash or cash equivalent, gain or loss on the sale is recognized, taking into consideration the amount of any recorded impairment if the property had been assessed individually. 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.

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2008 TO THREE MONTHS ENDED SEPTEMBER 30, 2007.

The net loss of $75,508for the three months ended September 30, 2008 increased by $8,948 from the net loss of $66,560 for the three months ended September 30, 2007.  The  increase results from an increase in interest on related party note payables and selling, general and administrative expenses which increased $29,165 but is offset by a decrease in the number of wells causing a decrease in lease operating expenses, production taxes and depreciation expenses.  Pangea generated revenue from the participation in ongoing oil and gas wells in the amount of $4,945 for the three months ended September 30, 2008, compared to $10,490  in revenue for the three months ended September 30, 2007.  This revenue decrease is a direct result of decreases in production.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2008 TO NINE MONTHS ENDED SEPTEMBER 30, 2007

The net loss of $365,007 for the nine months ended September 30, 2008 increased by $17,464 from the net loss of $347,543 for the nine months ended September 30, 2007. The increase is due to an increase in interest expense along with the increase in impairment expenses and a decrease in revenue.

We generated revenue from the participation in ongoing oil and gas wells in the amount of $26,805 for the nine months ended September 30, 2008 compared to $43,540 in the nine months ended September 30, 2007. This revenue decrease resulted from a decrease in the number of wells and a decrease in production of 1983 mcf  at September 30, 2008 compared to 3,131 at September 30, 2007..

-5-

LIQUIDITY AND CAPITAL RESOURCES

Our operating activities used cash in the amount of $12,238 for the nine months ended September 30, 2008 related primarily to professional fees and expenses on producing wells. For the nine months ended September 30, 2008, we were not able to generate positive cash flow from operations. However, we are generating revenue from five wells. We have been unable to raise cash from financing activities to fund investing activities in 2008. There was $11,500 provided by cash from financing activities at September 30, 2008 while there was $(6,981) used in financing activities at September 30, 2007.  We expect to raise working capital through private placements, debt financing or equity investment. There can be no assurance that any of the plans developed will produce cash flows sufficient to ensure its long-term viability.

2008 OUTLOOK

We are working on identifying additional prospects for purchase in 2008, but we currently have nothing scheduled. The current uncertain state of the industry as well as the unstable state of the  financial sector have forced us to pause and delay the search for investment opportunities.

Pangea’s 2.5% working interest in Stueben County, New York, which covers approximately 50,000 acres, has completed shooting twenty-two square miles of 3-D seismic.  The data is being processed and drilling prospects are being examined. Thus far there are leads identified in the Oriskany and Onandaga Reef sands.   Currently plans for drilling have been deferred due to land issues.  Pangea is evaluating how to proceed with the project and we plan to farm out the prospect to avoid future expenditures until operations proceed.

Pangea has an interest in a Geneva Reef project covering approximately 3600 acres in Clay, Effingham, Shelby, Fayette, and Cumberland Counties in Illinois.  Analysis of 2D seismic in the area indicated that there are at least six geologic features having potential to offset successful Geneva Reef production in the area.  The operator ran 3D seismic in the areas of interest and confirmed the existence of one reef structure that was drilled in 2007 and was unsuccessful.  It is anticipated that at least one of the remaining 2D prospects will have a drillable reef.  The operator is running additional 3D seismic to attempt to define drilling locations on this prospect. The offset reefs have had approximately three wells each, and initial total reef production has been between 500 and 1000 BOPD on the successful 3D finds.  Pangea has a 3.0% working interest and a 2.1% net interest in the project and again will farm out its interest to conserve cash.

We continue to review additional  projects to add to our prospect list.   Focus remains on investing in production projects that are supported by seismic data, proven production from the surrounding area, production history and good information from adjacent wells. The ability to invest further is entirely dependent on Pangea securing additional capital from investors or debt financing.  There is no assurance that additional equity or debt financing will be available on terms acceptable to Management.

ITEM 3.  CONTROLS AND PROCEDURES.

(a) Evaluation of disclosure controls and procedures.

Based on their evaluation of our disclosure controls and procedures (as defined in Rule 13a-15e under the Securities Exchange Act of 1934), our principal executive officer and principal financial officer have concluded that as of the end of the period covered by this quarterly report on Form 10-Q such disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.  We are continuing our efforts to enhance, improve and strengthen our control processes and procedures.

A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes using accounting principles generally accepted in the United States.

-6-

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

As of the end of the period of this report, our principal executive and principal financial officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer. Based on that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are not effective in timely alerting them to material information required to be included in the Company’s periodic reports to the Securities and Exchange Commission. During the third quarter, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

The weaknesses noted for the quarter ended September 30, 2008 were specifically the monitoring controls that ensured journal entries were posted accurately and in a timely fashion.  These controls were ineffective during the fiscal 2007 and first and second quarter 2008 closing process.  This resulted in a incorrect entry to oil and gas properties.  Although the missed or incorrect entries were not prevented or detected by the Company's existing system of internal controls, the entries were identified by the Company’ independent registered certified public accounting firm, and were corrected and properly reflected in the quarter ended September 30, 2008 financial statements.

We previously reported that we had material weaknesses in our disclosure controls and procedures and that they were not effective as of the end of fiscal year 2007 and the first  and  second quarters of 2008.  The Company continues to address these issues and continues to take steps to remediate the material weaknesses in our disclosure controls and procedures, including the steps to adopt policies for controls over accounting review and training personnel in the processing of transactions involving oil and gas properties and issuance of stock.

This report does not include an attestation report of the company’s registered public accounting firm regarding internal controls over financial reporting.  Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that the company to provide only management’s report in the annual report.

PART II – OTHER INFORMATION

Pursuant to the Instructions on Part II of the Form 10-Q, Items 1, 3, 4, and 5 are omitted.

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

During our quarter ended September 30, 2008, we completed the following transactions in reliance upon exemptions from registration under the Securities Act of 1933, as amended (the "Act") as provided in Section 4(2) thereof.  Each certificate issued for unregistered securities contained a legend stating that the securities have not been registered under the Act and setting forth the restrictions on the transferability and the sale of the securities.  None of the transactions involved a public offering.  We believe that each person had knowledge and experience in financial and business matters, which allowed them to evaluate the merits and risks of our securities.  We believe that each person was knowledgeable about our operations and financial condition.

During the nine months ended September 30, 2008, we issued the following:

§	48,500,000 shares of common stock were issued to employees and consultants.  Compensation expense of $173,100 was recorded based on market value on date of issuance.
§	300,000 shares of restricted common stock were issued to an independent director valued at $970.
§	360,000 shares of restricted common stock were issued to our Chief Financial Officer valued at $1,164.
§	10,000,000 shares of common stock were issued for a property acquisition valued at $32,000.

-7-

ITEM  6  EXHIBITS.

Exhibit  31.1  -	Certification of Chief Executive Officer of Pangea Petroleum Corporation required by Rule 13a - 14(1)  or Rule 15d - 14(a) of the Securities  Exchange  Act  of  1934,  as  adopted pursuant to Section 302 of the Sarbanes-Oxley  Act  of  2002.
Exhibit  31.2  -	Certification of Chief Financial Officer of Pangea Petroleum Corporation required  by  Rule  13a - 14(1)  or Rule 15d - 14(a) of the Securities  Exchange  Act  of  1934,  as  adopted pursuant to Section 302 of the Sarbanes-Oxley  Act  of  2002.
Exhibit  32.1  -	Certification of Chief Executive Officer of Pangea Petroleum Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of  18  U.S.C. 63.
Exhibit  32.2  -	Certification of Chief Financial Officer of Pangea Petroleum Corporation pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.

-8-

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.

PANGEA PETROLEUM CORPORATION

By:  /s/ Charles B.  Pollock	Date: November 14, 2008
Charles B.  Pollock,
Chairman of the Board and
Chief Executive Officer
By: /s/ Scott Duncan
Scott Duncan
Chief Financial Officer and
Principal Financial Officer

-9-