Sun Cal Energy 10Q 2009 Q3 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended:March 31, 2009

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

For the transition period from _______________ to: _______________

Commission File Number:000-52300

SUN CAL ENERGY, INC.
(Exact name of registrant as specified in its charter)

Nevada	81-0659377
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

Suite 700, 205 - 5th Avenue, SW, Calgary, AB Canada T2P 2V7
(Address of principal executive offices) (Zip code)

(403) 538-4772
(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes [X] No [ ]

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

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [ ]	(Do not check if a smaller reporting company)	Smaller reporting company [X]

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

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:83,463,333 common shares issued and outstanding as of May 18, 2009.

- ii -

TABLE OF CONTENTS

- 1 -

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

These financial statements have been prepared by Sun Cal Energy, Inc. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with such SEC rules and regulations. In the opinion of management, the accompanying statements contain all adjustments necessary to present fairly the financial position of our company as of March 31, 2009, and its results of operations, stockholders’ equity, and its cash flows for the three and nine month period ended March 31, 2009 and for the period from inception (July 20, 2004) to March 31, 2009. The results for these interim periods are not necessarily indicative of the results for the entire year. The accompanying financial statements should be read in conjunction with the financial statements and the notes thereto filed as a part of our company’s annual report filed on Form 10-KSB on September 29, 2008.

- 2 -

Sun Cal Energy, Inc.
(An Exploratory Stage Company)
Condensed Consolidated Balance Sheets

		June 30,			March 31,
		2008			2009
					(Unaudited)
ASSETS

Current assets
Cash and cash equivalents	$	256		$	902
Accounts receivable		122,610			37,985
		122,866			38,887
Property and equipment
Oil and gas properties, full cost method of accounting		7,032,850			7,025,406

Intangible assets		7,463			4,126

Total assets	$	7,163,179		$	7,068,419


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable and accrued expenses	$	51,360		$	43,335
Payable to related party		10,000			18,157

Total liabilities		61,360			61,492

Stockholders' equity
Common stock:
Authorized 750,000,000 shares; $0.001 par value; issued
and outstanding 82,796,666 shares June 30, 2008 and
83,463,333 shares outstanding as of March 31, 2009		82,796			83,463
Additional paid-in capital		9,025,204			9,124,537
Deficit accumulated during the exploratory stage		(2,006,181	)		(2,201,074	)
		7,101,819			7,006,926

Total liabilities and stockholders' equity	$	7,163,179		$	7,068,419

- 3 -

Sun Cal Energy, Inc.
(An Exploratory Stage Company)
Condensed Consolidated Statements of Operations

														June 20, 2004
														(inception)
		Three Months Ended						Nine Months Ended						through
		March 31,						March 31,						March 31,
		2008			2009			2008			2009			2009
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)


Net revenue	$	73,837		$	20,921		$	84,994		$	49,631		$	190,963

Operating expenses
Abandoned exploration costs		-			-			-			-			12,500
Oil and gas expenses		10,880			3,138			12,749			7,444			28,360
General and administrative expenses		296,338			22,202			1,319,373			237,079			2,351,179
		307,218			25,340			1,332,122			244,523			2,392,039

Net loss from operations		(233,381	)		(4,419	)		(1,247,128	)		(194,892	)		(2,201,076	)

Other income (expense)
Interest income		1,307			-			1,890						583
Loss on disposition of asset		-			-			-			-			(581	)

Net loss	$	(232,074	)	$	(4,419	)	$	(1,245,238	)	$	(194,892	)	$	(2,201,074	)

Net loss per share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.00	)

Weighted average common shares
outstanding - basic and diluted		82,463,333			83,463,333			81,958,242			83,239,488

- 4 -

Sun Cal Energy, Inc.
(An Exploratory Stage Company)
Condensed Consolidated Statements of Cash Flows

								June 20, 2004
								(Inception)
		Nine Months Ended						through
		March 31,						March 31,
		2008			2009			2009
		(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities:
Net loss	$	(1,245,238	)	$	(194,892	)	$	(2,201,074	)
Adjustment to reconcile net loss to net cash
used in operating activities:
Loss on disposition of asset		-			-			581
Non cash consulting services		321,000			-			346,000
Contributed rent and services		-			-			18,750
Depletion		12,479			7,444			28,354
Depreciation		-			-			369
Amortization		3,337			3,337			9,223
Changes in assets:
(Increase) decrease in accounts receivable		(77,760	)		84,625			(37,985	)
(Increase) decrease in prepaid expenses		(822	)		-			-
Changes in liabilities:
Increase (decrease) in accounts payable		11,750			(8,025	)		43,337
Net cash used in operating activities		(975,254	)		(107,511	)		(1,792,445	)

Cash flows from investing activities:
Acquisition of oil and gas properties		(1,411,105	)		-			(2,853,761	)
Acquisition of computer equipment		-			-			(950	)
Website design costs		-			-			(13,349	)
Net cash used in investing activities		(1,411,105	)		-			(2,868,060	)

Cash flows from financing activities:
Proceeds from issuance of common stock		1,850,000			100,000			4,643,250
Loans received from related party		-			32,812			75,012
Loans repaid to related party		-			(24,655	)		(56,855	)
Net cash provided by financing activities		1,850,000			108,157			4,661,407

Net increase (decrease) in cash and cash equivalents		(536,359	)		646			902

Cash and cash equivalents, beginning of period		590,747			256			-

Cash and cash equivalents, end of period	$	54,388		$	902		$	902

- 5 -

Sun Cal Energy, Inc.
(An Exploratory Stage Company)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Organization

Sun Cal Energy, Inc. (the “Company”), was incorporated in the State of Nevada on July 20, 2004 under the name Host Ventures, Inc. On November 6, 2006, the Company changed its name to Sun Cal Energy, Inc. The Company is in the exploratory stage, as defined in Statement of Financial Accounting Standards (“SFAS”) No. 7, “ Accounting and Reporting by Development Stage Enterprises,” with its principal activity being the exploration and development of oil and gas properties.

Effective March 12, 2007, the Company acquired all of the outstanding shares of Sun Cal Energy Corporation (“SCEC”) in exchange for issuing 26,925,000 of its common stock. SCEC was incorporated in the state of Nevada on June 2, 2006. As of the date of the acquisition, both companies were under common control, and therefore for financial reporting purposes, the acquisition is treated as if it occurred on July 1, 2006. Assets acquired from SCEC were recorded at their historical cost bases on July 1, 2006 and the financial statements included herein combine the activities of both companies since July 1, 2006.

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations.

In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. The operating results of the Company on a quarterly basis may not be indicative of operating results for the full year. For further information, refer to the financial statements and notes included in Sun Cal Energy Inc.’s Form 10-K for the year ended June 30, 2008.

Going Concern

The accompanying condensed consolidated financial statements include the accounts and transactions of the Company and its wholly owned subsidiary, Sun Cal Energy Corporation, and have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has no established source of material revenue, has incurred a net loss for the nine months ended March 31, 2009 of $194,892, and has and has an accumulated deficit since its inception of $2,201,074. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

- 6 -

Management recognizes that the Company must generate additional resources to enable it to continue operations. Management intends to raise additional funds through debt and/or equity financing or through other means that it deems necessary. However, no assurance can be given that the Company will be successful in raising additional capital. Further, even if the company raises additional capital, there can be no assurance that the Company will achieve profitability or positive cash flow. If management is unable to raise additional capital and expected significant revenues do not result in positive cash flow, the Company will not be able to meet its obligations and may have to cease operations.

Stock Split

Effective November 6, 2006, the Company authorized a 10-for-1 stock split. All references in the accompanying financial statements to the number of shares outstanding and per-share amounts have been restated to reflect the indicated stock split.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying financial statements include the accounts and transactions of Sun Cal Energy, Inc. and its subsidiary. Intercompany transactions and balances have been eliminated in consolidation.

Stock Based Compensation

The Company accounts for stock-based compensation under SFAS No. 123R, "Share- based Payment” and SFAS No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure--An amendment to SFAS No. 123." These standards define a fair value based method of accounting for stock-based compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based employee compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount an employee must pay to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which the Company expects to receive the benefit, which is generally the vesting period. During the nine months ended March 31, 2009, the Company recognized no compensation expense under SFAS No. 123R and recognized $321,000 is stock based compensation during the nine-months ended March 31, 2008 through the issuance of 300,000 shares of its common stock valued at $321,000.

Issuance of Stock for Non-Cash Consideration

All issuances of the Company's stock for non-cash consideration have been assigned a per share amount equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration received pertains to services rendered by consultants and others and has been valued at the market value of the shares on the dates issued.

The Company's accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of EITF 96-18, “Accounting for Equity Instruments That

- 7 -

are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. In accordance with EITF 00-18, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor's balance sheet once the equity instrument is granted for accounting purposes.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued expenses and notes payable, Pursuant to SFAS No. 107, “Disclosures About Fair Value of Financial Instruments,” the Company is required to estimate the fair value of all financial instruments at the balance sheet date. The Company considers the carrying values of its financial instruments in the financial statements to approximate their fair values.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with a maturity of three months or less, plus all certificates of deposit.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the related assets. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Expenditures for maintenance and repairs are charged to operations as incurred; additions, renewals and betterments are capitalized.

Long- Lived Assets

The Company accounts for its long-lived assets in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No. 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the carrying value of an asset by estimating the future net cash flows expected to result from the asset, including eventual disposition. If the future net cash flows are less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value or disposable value. As of March 31, 2009, the Company did not deem any of its long-term assets to be impaired.

- 8 -

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash. Currently, the Company maintains its cash in bank accounts which are not insured.

Revenue recognition

The Company recognizes revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104. As such, the Company recognizes revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable and collectability is probable.

Oil and Gas Properties

The Company follows the full cost method of accounting for crude oil and natural gas properties. Under this method, all direct costs and certain indirect costs associated with acquisition of properties and successful as well as unsuccessful exploration and development activities are capitalized. Depreciation, depletion, and amortization of capitalized crude oil and natural gas properties and estimated future development costs, excluding unproved properties, are based on the unit-of-production method based on proved reserves.

Website development costs

Under FASB Emerging Issues Task Force Statement 00-2, Accounting for Web Site Development Costs ("EITF 00-2"), costs and expenses incurred during the planning and operating stages of the Company's web site development are expensed as incurred. Under EITF 00-2, costs incurred in the web site application and infrastructure development stages are capitalized by the Company and amortized to expense over the web site's estimated useful life or period of benefit. Website development costs are being amortized on a straight-line basis over an estimated useful life of 3 years.

Website costs and accumulated amortization as of March 31, 2009 is as follows:

Capitalized website costs	$	13,349
Less accumulated amortization		(9,223	)
	$	4,126

Amortization for the three-months ended March 31, 2008 and 2009 amounted to $1,112 and $1,112 respectively. Amortization for the nine months ended March 31, 2008 and 2009 amounted to $3,337 and $3,337 respectively.

- 9 -

Amortization expense for the remaining life of the website is as follows:

March 31,
2010	$	3,336
2011		790
	$	4,126

Income Taxes

The Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes.” Under SFAS No. 109, deferred tax assets and liabilities are recognized for future tax benefits or consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that the asset will not be realized through future operations.

The Company has total net operating tax loss carry forwards at March 31, 2009 of approximately $2,200,000 for federal income tax purposes. These net operating losses have generated a deferred tax asset of approximately $748,000 on which a valuation allowance equaling the total tax benefit has been provided due to the uncertain nature of it being realized. Net operating loss carry forwards expire in various years through June 30, 2029 for federal tax purposes.

Loss Per Share

The Company reports earnings (loss) per share in accordance with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share as not been presented since the effect of the assumed conversion of warrants to purchase common shares would have an anti-dilutive effect. The only potential common shares as of March 31, 2009 were 4,688,332 warrants that have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive. If such shares were included in diluted EPS, they would have resulted in weighted-average common shares of 83,463,333 and 88,151,664 for the three months and nine-months ended March 31, 2009, respectively. The only potential common shares as of March 31, 2008 were 3,688,333 warrants that have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive. If such shares were included in diluted EPS, the and 86,128,715 and 85,257,121 for the three months and nine-months ended March 31, 2008.

Recent Accounting Pronouncements

SFAS No. 161 - In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. This Statement changes the disclosure requirements for derivative instruments and hedging activities. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows.

- 10 -

This Statement is intended to enhance the current disclosure framework in Statement 133. The Statement requires that objectives for using derivative instruments be disclosed in terms of underlying risk and accounting designation. This disclosure better conveys the purpose of derivative use in terms of the risks that the entity is intending to manage. Disclosing the fair values of derivative instruments and their gains and losses in a tabular format should provide a more complete picture of the location in an entity’s financial statements of both the derivative positions existing at period end and the effect of using derivatives during the reporting period. Disclosing information about credit-risk-related contingent features should provide information on the potential effect on an entity’s liquidity from using derivatives. Finally, this Statement requires cross-referencing within the footnotes, which should help users of financial statements locate important information about derivative instruments.

This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. The adoption of SFAS No 160 should not have a significant impact on our consolidated financial statements.

FASB issued Staff Position No. 142-3 - In April 2008, the FASB issued Staff Position No. 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”). FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”. FSP 142-3 is effective for the Company in the first quarter of 2009. The adoption of “FSP 142-3 should not have a significant impact on our financial statements.

FASB issued Staff Position No. EITF 03-6-1 - In June 2008, the FASB issued Staff Position No. EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (“EITF 03-6-1”). EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore, need to be included in the earnings allocation in calculating earnings per share under the two-class method described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” EITF 03-6-1 requires companies to treat unvested share-based payment awards that have non-forfeitable rights to dividend or dividend equivalents as a separate class of securities in calculating earnings per share. EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008. EITF 03-6-1 is effective for the Company in the first quarter of 2009. The adoption of EITF 03-6-1 has not had a significant impact on our financial statements.

SFAS No. 157 - The Company adopted in the first quarter of fiscal 2009, the Statement of Financial Accounting Standards No. 157, Fair Value Measurements, (“SFAS No. 157”) for all financial assets and financial liabilities and for all non-financial assets and non-financial liabilities recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. The adoption of SFAS No. 157 did not have a significant impact on our consolidated financial statements and the resulting fair values calculated under SFAS No. 157 after adoption were not significantly different than the fair values that would have been calculated under previous guidance.

In October 2008, the Financial Accounting Standards Board (“FASB”) issued Financial Staff Position 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, (“FSP 157-3”). FSP 157-3 clarifies the application of SFAS No. 157 in a market that is not active, and addresses application issues such as the use of internal assumptions when relevant observable data does

- 11 -

not exist, the use of observable market information when the market is not active, and the use of market quotes when assessing the relevance of observable and unobservable data. FSP 157-3 is effective for all periods presented in accordance with SFAS No. 157. The adoption of FSP 157-3 did not have a significant impact on our consolidated financial statements or the fair values of our financial assets and liabilities.

In December 2008, the FASB issued Financial Staff Position (“FSP”) Financial Accounting Standard No. 140-4 and FASB Interpretation 46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities (“FSP FAS 140-4” and “FIN 46(R)-8”). The document increases disclosure requirements for public companies and is effective for reporting periods (interim and annual) that end after December 15, 2008. FSP FAS 140-4 and FIN 46(R)-8 became effective for the Company on December 31, 2008. The adoption of FSP FAS 140-4 and FIN 46(R)-8 did not have a significant impact on our consolidated financial statements.

NOTE 3 – OIL AND GAS PROPERTIES

On October 18, 2006, the Company entered into an agreement to purchase 1.5% of an overriding royalty in the City of Hobart lease located in Oklahoma for $525,000 and 1,500,000 shares of its common stock. Under the terms of the agreement, $375,000 was paid and 1,500,000 shares of the Company’s common stock were issued in October 2006, and the remaining $150,000 was paid in January 2007. The Seller has agreed to drill a second well on the leased property in consideration for an additional 1,000,000 shares of the Company’s common stock. The Company valued the 1,500,000 shares at $1.00 per share based upon the share price being offered in its private offerings.

On October 4, 2006, the Company entered into an agreement to purchase a 45% undivided interest in 45 separate leases known as the Lokern in addition to any leases taken in the prospect area. The Lokern leases are located in California. The Company purchased its interest for $125,000 and 1,300,000 shares of common stock. The $125,000 was paid and 1,300,000 shares were issued in October 2006. Under the terms of the purchase, the Company will receive 75% of the net revenue produced by wells located on the leased properties. In addition, the Company is responsible for its allocated share of all costs associated with the leased properties including, but not limited to land, title, lease bonuses, and drilling. The Company valued the 1,300,000 shares at $1.00 per share based upon the share price being offered in its private offerings.

On April 19, 2007, the Company entered into an agreement to acquire a 5% working interest in certain leases and to receive certain rights and privileges to approximately 9,440 acres of State of Louisiana leases. Along with the leases and 3d seismic data relating to the Prospect, the acquisition included ongoing rights to a larger Area of Mutual Interest. Under the terms of the purchase, the Company will receive 3.5% of the net revenue produced by wells located on the leased properties. In addition, the Company is responsible for its allocated share of all costs associated with the leased properties including, but not limited to land, title, lease bonuses, and drilling. The purchase price of these leases is $640,000 in cash and 400,000 shares of the Company’s common stock. The Company valued the 400,000 shares at $1.00 per share based upon the share price being offered in its private offerings.

On August 15, 2007, the Company entered into an agreement with Desert Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases in the Jonah Field region of Wyoming. The Jonah Prospects are identified as South Jonah, which consists of 2,477.68 acres and West Jonah, consisting of 3,546.89 acres. The acquisition was completed on September 5, 2007 by paying to Desert Mining, Inc. an aggregate of $821,799.

- 12 -

On October 1, 2007, the Company entered into an agreement to purchase a 5% overriding royalty interest on certain leases to be acquired by seller located in the States of Alabama, Louisiana, Mississippi, Oklahoma, and Texas, known as the ”Centurion Properties”. The purchase price of the royalty interest is $275,000. If the seller does not acquire the royalty interest on the properties defined in the agreement, the Company has the right to have the funds paid refunded or to have the funds applied to other offering of the seller.

On October 24, 2007, the Company signed a Letter of Intent to acquire a 100% working interest in 8,695 acres of leases in the Cherokee and Forest City Basins of Kansas. The Letter of Intent was set to expire on October 31, 2007 but the Company is currently negotiating an extension of the Letter of Intent with the counter party. The purchase price paid by the Company would include (a) an upfront payment of $500,000; (b) the issuance of 6,916,667 shares of common stock to the seller; (c) the granting of a 5% overriding royalty to the seller on the Kansas assets; and (d) the assumption of $1,200,000 of the seller’s existing debt on the properties. Further, the Company would agree to initiate plans to provide $2,000,000 in work over costs to develop the properties within 6 months of the closing date. The Company is still working to find funding for this project and based upon the delay in closing, the seller now retains a 12.5% overriding royalty on the Kansas assets until the $2,000,000 in financed and work over commences.

On March 21, 2008, the Company acquired a 2% joint venture interest in the 83 & 84 Project JV located in West Texas.

NOTE 4 – EQUITY

Common Stock

The Company is authorized to issue 750,000,000 shares of common stock. Each shareholder of common is entitled to one vote. On September 30, 2008, the Company sold 666,666 units under a private offering for $100,000. Each unit consists of one share of its common stock and a warrant to purchase one share of its common stock at a price of $.20 per share. The warrants expire on September 23, 2011.

Warrants

The following is a summary of the outstanding warrants:

			Weighted
			Average
	Number of		Exercise
	warrants		Price

Outstanding – June 30, 2008	4,021,666	$	1.55

Granted	666,666	$	.20
Exercised	--		--
Forfeited	--		--

Outstanding – March 31, 2009	4,688,332	$	1.36

The expiration date of the warrants range from two to three years after date of grant with exercise prices ranging from $ .20 to $3.00 per share.

- 13 -

NOTE 5 – RELATED PARTY TRANSACTIONS

During the nine months ended March 31, 2009, the Company received $9,344 from the Company’s President. The balance due at March 31, 2009 was $18,157. The advances are unsecured, non-interest bearing, and due on demand.

- 14 -

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

Forward Looking Statements

This quarterly report contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for our future operations. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all references to “common shares” refer to the shares of our common stock and the terms “we”, “us”, “our” and “Sun Cal” mean Sun Cal Energy, Inc. and/or our wholly-owned subsidiaries, Sun Cal Energy Corp., a Nevada corporation and Sun Cal Energy Canada Corp., a British Columbia corporation.

Our Current Business

We are in the business of oil and gas exploration. In October 2006, Sun Cal Energy Corp. entered into two agreements: an agreement with TriMar Energy Partners, Inc. to acquire a 1.5% of⁸/₈^ths overriding royalty interest in an oil and gas lease known as the Hobart Lease and an agreement with Western Energy Capital, LLC to acquire an undivided 45% interest in certain oil and gas leases known as the Lokern Leases. To date significantly all of our revenues have been derived from our holding of a 1.5% of⁸/₈^th overriding royalty interest in an oil and gas lease from the City of Hobart, as the lessor, covering a total of 1,211.44 acres in the city of Hobart, Washita County, Oklahoma, and we have losses since our inception. We currently rely upon the sale of our securities to fund operations.

Since we are an exploration stage company, there is no assurance that commercially viable resources or reserves exist on any of our properties, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. To date, except for the Sturgeon 1-11 and Cunningham 1-2 wells of which we own a 1.5% overriding royalty interest, we have not discovered an economically viable resource or reserve on any of our properties, and there is no assurance that we will discover one.

The Hobart Lease

The Hobart Lease is an oil and gas lease obtained by TriMar Energy Partners, Inc., as the lessee, from the city of Hobart, as the lessor, dated April 1, 2004, and as recorded on Book 983, official records, Washita County, Oklahoma, covering a total of 1,211.44 acres in the city of Hobart, Washita County, Oklahoma. We paid a total of $525,000 and 1,500,000 shares of common stock to TriMar Energy Partners, Inc. and its designates to earn the 1.5% of⁸/₈^ths overriding royalty interest in the Hobart Lease.

- 15 -

On April 27, 2007, the operator on the Hobart Lease, Marathon Oil, spudded and began drilling a deep development gas well on our Hobart Lease interest in Washita county, Oklahoma. The well, the Sturgeon 1-11, was set to test through the Springer formation and was targeting multiple pay zones. Up to April 27, 2007, the Sturgeon 1-11 had successfully reached a depth of 17,400 feet with a total authorized depth of 20,000 feet. By May 30, 2007, well data collection and evaluation were completed on the Sturgeon 1-11 well, which was deemed commercially viable. The well reached a final depth of 19,990 feet on May 15, 2007 after slightly more than three months of drilling. To help evaluate the amount of pay encountered in the well, an open hole logging suite consisting of density, neutron, HRI induction, sonic, and gamma tools was run to a depth of 19,980 feet. The operator on the Hobart Lease, Marathon Oil, then ran production casing to a depth of 19,978 feet. The Sturgeon 1-11 well began production in June of 2007 and has produced a total of 470,409 mcf of natural gas up to June of 2008.

On July 11, 2007, a second permit was filed for drilling and testing of a second deep development well on the Hobart Prospect in Washita, County, Oklahoma. On September 6, 2007, the second deep development gas well, Cunningham 1-2, was spudded and drilling activities begun. The target depth was the Springer Morrow. The Cunningham 1-2 well began production in June of 2007 and has produced a total of 1,285,074 mcf of natural gas up to June of 2008.

On August 28, 2007, Range Production Company filed for a third well to be drilled on our Hobart Prospect in Oklahoma. Filed before the Corporation Commission of the State of Oklahoma, Range Production Company was seeking to establish a 640-acre drilling and spacing unit and pooling orders for a third scheduled well in Section 14, Township 8 North, Range 18 West in Washita County, Oklahoma. With a target depth of 19,800 feet, the estimated completion costs for this well are estimated at $12,245,000.

The Lokern Leases

The Lokern Leases are a collection of 34 oil and gas exploration leases entered into by Western Energy Capital, LLC with various private parties between November 2005 to May 2006. These leases are located in Kern County, California. We paid an aggregate of $125,000 and 1,300,000 shares of our common stock to Western Energy Capital, LLC and its designates to acquire an undivided 45% of all rights, title and interests in the Lokern Leases. Pursuant to this agreement, Western Energy Capital, LLC agrees that all leases made part of the agreement will be executed and assigned to our company in a timely manner and Western Energy Capital, LLC will issue our company a standard joint operating agreement. All leases and assignments taken by Western Energy Capital, LLC for our company shall call for Western Energy Capital, LLC to deliver a 75% net revenue interest to our company.

On June 15, 2007, we acquired additional 2-D seismic data relating our Lokern Leases in California. Acquisition of the data will allow for additional geophysical correlation and interpretation of our Lokern Leases and allow our company to firm up well locations for drilling in 2009. The additional seismic data will also provide insight into the reserve estimates of the prospect. Regional 2-D seismic data is a key tool for oil and gas exploration due to its affordability and wide area of coverage compared to 3-D data. The acquisition of this data set is in line with our exploration program and initiatives, and will allow greater marketability of our prospect to large exploration and production companies.

Sun Cal Energy has the exclusive oil and gas rights for the Lokern Prospect which comprises approximately 400 acres of prime land in the Kern County region in the San Joaquin Valley in Southern California. Our company owns a 45% Working Interest and a 75% net revenue interest in the prospect. On October 18, 2007, we assigned back to a designate of Western Energy Capital, LLC a 5% overriding royalty interest net to our 45% Working Interest for a net 2.25% overriding royalty interest in the Lokern Prospect. We are still working with Western Energy Capital, LLC to assign the working interests in these leases to our company and Western Energy Capital, LLC will issue our company a standard joint operating agreement.

The Britlind Prospect Leases

On April 19, 2007, we entered into an agreement with Western Energy Capital, LLC to acquire a partial interest in the “Britlind” Prospect and leases situated in the Breton Sound area, offshore Louisiana. Western Energy Capital,

- 16 -

LLC has originally entered into an agreement with BTE Energy, LLC whereby Western Energy Capital, LLC acquired a contractual interest in the Britlind Prospect from BTE Energy, LLC, including all rights and privileges to approximately 9,440 acres of State of Louisiana leases, ownership interest in approximately 25 square miles of 3D seismic data, and interests in certain hardware and software in conjunction with the interpretation and display of the 3D seismic data. In April and May of 2007, we paid an aggregate of $640,000 to Western Energy Capital, LLC pursuant to the agreement for a 5% working interest in the Britlind Prospect lease interests, seismic data, hardware and software and ongoing rights to an area of mutual interest. We also issued 400,000 shares of our common stock to Western Energy Capital, LLC or its designates. It was also acknowledged that the Britlind Prospect leases were originally acquired under the name of McGuinty Durham and Associates and assignment of leasehold out of McGuinty Durham and Associates will be made in due course. At such time Western Energy Captial, LLC will take appropriate actions to assign the interest to our company. Also pursuant to this agreement, we agreed to pay our proportionate share of all expenses, including geological, rentals and additional leases, etc. from May 11, 2007 and on.

In June of 2008, we received a well proposal from TDE Property Holdings LP to drill the SL 18994, Well No. 1 in Breton Sound Block 2, Eloi Bay Field, St. Bernard Parrish, Louisiana. The costs for drilling and testing the well were estimated to be $2,219,000. After careful consideration, our company decided to elect not to participate for the 5% working interest share of the well, at an estimate net cost of $110,950.

Overriding Royalty Interest in Centurion Property

On October 1, 2007, we acquired a 5% overriding royalty interest in the Centurion Property from King Royalty Corporation pursuant to an offering of royalty interests by King Royalty Corporation. The Centurion Property combines more than 17,000 acres of producing oil and gas assets across Texas, Oklahoma, Alabama, Louisiana and Mississippi. There are 153 producing wells on the asset with more than 50 additional proven/undeveloped drilling sites. Current production is comprised of 90% natural gas and 10% oil. Well operators include companies such as Exxon, Kerr-KcGee, Hunt Oil, Quicksilver and Vintex. As an interest holder we are entitled to share in revenues generated from oil and/or gas production from wells located on the Centurion Property. Approximately 90 days after the operators of the wells on the properties sell oil and gas production to local purchasers, we are entitle to receive payment of revenues generated by those wells attributable to our interest. However, we have no control over when we receive our payment of revenues, as each operator has its own internal policies and procedures regarding the transfer of ownership. As an interest holder we have no responsibility for operating expenses incurred in connection with the operation of wells on the properties. Lastly, we do not have responsibility for liabilities to third parties resulting from operations on the properties, which is the responsibility of the operators of the properties and the owners of working interests.

The Jonah Prospects

On August 15, 2007, we entered into an agreement with Desert Mining, Inc. to acquire a 100% working interest in 6,000 acres of leases in the Jonah Field region of Wyoming. This is the fourth core exploration and development region for our company. Our Jonah Prospects are identified as South Jonah, which consists of 2,477.68 acres and West Jonah, consisting of 3,546.89 acres. We completed our acquisition on September 5, 2007 by paying to Desert Mining, Inc. an aggregate of $821,798.45.

With current well spacing regulations, we believe we can drill up to 37 wells on this acreage. These fields are located in Wyoming's Greater Green River Basin. On December 27, 2007, we engaged Schlumberger to conduct a reserve analysis and target drilling program on our Jonah Prospect. On April 7, 2008, we announced that we acquired a minority joint venture interest in three-well prospect in the West Gomez Field within Peco County, Texas.

- 17 -

Results of Operations

		Nine months Ended March 31				Three Months Ended March 31
				Percentage				Percentage
				Increase				Increase
		2009	2008	(Decrease)		2009	2008	(Decrease)
Net revenue	$	49,631	84,994	(41.63%)	$	20,921	73,837	(71.66%)
Operating expenses		244,523	1,332,122	(81.64%)	$	25,340	307,218	(91.75%)
Net loss from
operations	$	4,419	232,074	(98.10%)	$	194,892	1,245,238	(84.35%)

Revenue

We are an exploration stage company that from inception to March 31, 2009 has accrued revenues in the amount of $190,9643 since our inception on July 20, 2004 to March 31, 2009. Our revenues during the three months ended March 31, 2009 were derived primarily from royalty payments from properties in which we have an interest. Because Marathon Oil has received correspondence from third parties asserting an interest over 0.4% of our overriding royalty interest in the Hobart Lease, Marathon Oil has held back a small portion of the royalty payments owed to us representing the 0.4% of our overriding royalty interest. We are confident that we will be able to resolve this issue soon and the withheld payment will be paid to us in the near future.

Expenses

Our operating expenses for the three months ended March 31, 2009 and 2007 are outlined in the table below:

		Nine months Ended December 31				Three Months Ended December 31
				Percentage				Percentage
				Increase				Increase
		2009	2008	(Decrease)		2009	2008	(Decrease)
Oil and gas expenses	$	7,444	12,749	(41.61%)	$	3,138	10,880	(71.16%)
General and
administrative
expenses		237,079	1,319,373	(82.03%)	$	22,202	296,338	(92.51%)
Operating expenses
Total	$	244,523	1,332,122	(81.64%)	$	25,340	307,218	(91.75%)

Liquidity and Capital Resources

Working Capital

		March 31, 2009		June 30, 2008
Current assets	$	38,887		122,866
Current liabilities		61,492		61,360
Working capital (deficit)		(22,605	)	61,506

As provided under the agreement with Western Energy Capital, LLC on the Lokern Leases, we will be a joint working interest owner together with Western Energy Capital, LLC for the Lokern Leases, and will be required to pay our proportionate share of all land, title, lease bonuses and drilling costs. In addition to the exploration activities on the oil and gas properties under the two agreements held by Sun Cal Energy Corp., we will be required to pay our proportionate share of all land, title, lease bonuses and drilling costs for other properties in which we hold a working interest such as the Britlind Prospect Leases and the Jonah Prospects. Furthermore, we will continue to seek opportunities to acquire other oil and gas properties of merit. As we are still in exploration stage, we anticipate that we will incur increased operating expenses while realizing little or no revenues. We anticipate that we will expend approximately $360,000 in the next 12 months for our operating expenses. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the exploration of our oil and gas properties in the future, we will not be able to earn profits or continue operations.

- 18 -

There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability.

We will also need more funds if the costs of the exploration of our oil and gas properties are greater than we have anticipated. We will also require additional financing to sustain our business operations if we are not successful in earning revenues. We currently do not have any arrangements for further financing and we may not be able to obtain financing on commercially reasonable terms or terms that are acceptable to us when it is required. We anticipate spending approximately $5,000 in ongoing general and administrative expenses per month for the next 12 months, for a total anticipated expenditure of $60,000 over the next 12 months. The general and administrative expenses for the year will consist primarily of professional fees for the audit and legal work relating to our regulatory filings throughout the year, as well as transfer agent fees, annual mineral claim fees and general office expenses.

During the next 12 month period, we anticipate that we will generate little or no revenues. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations. We believe that debt financing will not be an alternative for funding additional phases of exploration as we do not have tangible assets to secure any debt financing. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or through shareholder or related party loans. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our exploration programs. In the absence of such financing, we will not be able to continue exploration of our properties and our business plan will fail. Even if we are successful in obtaining equity financing to fund our exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of our properties. If we do not continue to obtain additional financing, we will be forced to abandon our properties and our plan of operations

Future Financings

We anticipate continuing to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our exploration and development activities.

Since we are an exploration stage company, there is no assurance that commercially viable resources or reserves exist on any of our properties, and a great deal of further exploration will be required before a final evaluation as to the economic and legal feasibility for our future exploration is determined. To date, we have not discovered an economically viable resource or reserve on any of our properties, and there is no assurance that we will discover one.

Additional Disclosure of Outstanding Share Data

Common Stock

As of March 31, 2009, we had 83,463,333 shares of common stock issued and outstanding.

Warrants

As of March 31, 2009, we had 4,688,332 warrants issued and outstanding. The exercise prices of these warrants range from $0.20 to $3.00 per share and the weighted average exercise price of these warrants is $1.36. The expiration date of the warrants range from two to three years after the date of grant.

- 19 -

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain. Presented below is a description of the accounting policies that are most critical to an understanding of our financial statements.

Revenue recognition

We recognize revenue in accordance with Staff Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition in Financial Statements,” as revised by SAB No. 104. As such, we recognize revenue when persuasive evidence of an arrangement exists, title transfer has occurred, the price is fixed or readily determinable and collectibility is probable. Sales are recorded net of sales discounts.

Stock Based Compensation

We account for stock-based compensation under SFAS No. 123R, "Share- based Payment” and SFAS No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure--An amendment to SFAS No. 123." These standards define a fair value based method of accounting for stock-based compensation. In accordance with SFAS Nos. 123R and 148, the cost of stock-based employee compensation is measured at the grant date based on the value of the award and is recognized over the vesting period. The value of the stock-based award is determined using the Black-Scholes option-pricing model, whereby compensation cost is the excess of the fair value of the award as determined by the pricing model at the grant date or other measurement date over the amount an employee must pay to acquire the stock. The resulting amount is charged to expense on the straight-line basis over the period in which we expect to receive the benefit, which is generally the vesting period.

Issuance of Stock for Non-Cash Consideration

All issuances of our stock for non-cash consideration have been assigned a per share amount equaling either the market value of the shares issued or the value of consideration received, whichever is more readily determinable. The majority of the non-cash consideration received pertains to services rendered by consultants and others and has been valued at the market value of the shares on the dates issued.

Our accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of EITF 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees.” The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor's performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. In accordance with EITF 00-18, an asset acquired in exchange for the issuance of fully vested, nonforfeitable equity instruments should not be presented or classified as an offset to equity on the grantor's balance sheet once the equity instrument is granted for accounting purposes. Accordingly, we record the fair value of the fully vested non-forfeitable common stock issued for future consulting services as prepaid services in its consolidated balance sheet.

- 20 -

Loss per Share

We report earnings (loss) per share in accordance with SFAS No. 128, "Earnings per Share." Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares available. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted earnings (loss) per share as not been presented since the effect of the assumed conversion of warrants to purchase common shares would have an anti-dilutive effect. The only potential common shares as of September 30, 2008 were 4,688,332 warrants that have been excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive. If such shares were included in diluted EPS, they would have resulted in weighted-average common shares of 86,818,332 for the three months ended September 30, 2008.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, accounts payable, accrued expenses and notes payable, Pursuant to SFAS No. 107, “Disclosures About Fair Value of Financial Instruments,” we are required to estimate the fair value of all financial instruments at the balance sheet date. We consider the carrying values of our financial instruments in the financial statements to approximate their fair values.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

As required by paragraph (b) of Rules 13a-15 or 15d-15 under theSecurities Exchange Act of 1934, as amended, we are required to maintain, and our management is required to evaluate the effectiveness of our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Our management with the participation of our principal executive officer and principal financial officer evaluated the effectiveness our company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management determined that our company’s disclosure controls and procedures were effective as of March 31, 2009.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Exchange Act is accumulated and communicated to our principal executive officer and our principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during our last fiscal quarter that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

- 21 -

The term internal control over financial reporting is defined as a process designed by, or under the supervision of, our principal executive and principal financial officer, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

	1.	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

	2.	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and,

	3.	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Certifications

Certifications with respect to disclosure controls and procedures and internal control over financial reporting under Rules 13a-14(a) or 15d-14(a) of the Exchange Act are attached to this quarterly report on Form 10-Q.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We are not party to any legal proceedings.

ITEM 1A. RISK FACTORS

Shares of our common stock are speculative, especially since we are in the exploration-stage of our new business. We operate in a volatile sector of business that involves numerous risks and uncertainties. The risks and uncertainties described below are not the only ones we face. Other risks and uncertainties, including those that we do not currently consider material, may impair our business. If any of the risks discussed below actually occur, our business, financial condition, operating results or cash flows could be materially adversely affected. This could cause the trading price of our securities to decline, and you may lose all or part of your investment. Prospective investors should consider carefully the risk factors set out below.

Risks Related to our Business

As our properties are in the exploration stage there can be no assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few of the properties that are explored are ultimately developed into producing oil and/or gas wells. Our properties are in the exploration stage only and are without proven reserves of oil and gas. There can be no assurance that we will establish commercial discoveries on any of our properties.

The current global economic crisis could lead to an extended recession in the U.S. and around the world. A an extended slowdown in economic activity caused by a recession would reduce national and worldwide demand for oil and natural gas and result in lower commodity prices for long periods of time. Prices for oil and natural gas have already decreased significantly from highs in 2008. We have put our exploration programs on hold, which is having a material adverse impact on our business, financial condition and results of operations. and adverse If oil and gas prices do not increase before we can no longer afford to pay our debts as they come due, our exploration program will likely never become economically feasible, we will go out of business and investors will lose their entire investment in our company.

- 22 -

Since October 2008, oil prices have decreased by two thirds off their highest prices and natural gas prices have decreased in half or more during the same time period. Costs of exploration, development and production have not yet adjusted to current economic conditions or in proportion to the significant reduction in product prices. Prolonged, substantial decreases in oil and natural gas prices would likely have a material adverse effect on our business, financial condition and results of operations, could further limit our access to funds through the sale of our equity securities or through loans to satisfy our capital requirements.

Capital and credit markets have experienced unprecedented volatility and disruption during the last half of 2008 and continue to be unpredictable. Given the current levels of market volatility and disruption, the availability of funds from those markets has diminished substantially. Further, arising from concerns about the stability of financial markets generally and the solvency of borrowers specifically, the cost of accessing the credit markets has increased as many lenders have raised interest rates, enacted tighter lending standards or altogether ceased to provide funding to borrowers.

Due to these capital and credit market conditions, we cannot be certain that funding will be available to us in amounts or on terms that we believe are acceptable. We have decided to put our exploration program on hold until carrying them out becomes economically feasible. This hold on our exploration program is having a material adverse impact on our business, financial condition and results of operations. If oil and gas prices do not increase before we can no longer afford to pay our debts as they come due, our exploration program will likely never become economically feasible, we will go out of business and investors will lose their entire investment in our company.

The potential profitability of oil and gas ventures depends upon factors beyond the control of our company

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Additionally, due to world-wide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas which may be acquired or discovered will be affected by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. The extent of these factors cannot be accurately predicted but the combination of these factors may result in our company not receiving an adequate return on invested capital.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring interests in oil and gas properties.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs. Accordingly, there is a high degree of competition for desirable oil and gas properties for drilling operations and necessary drilling equipment, as well as for access to funds. There can be no assurance that the necessary funds can be raised or that any projected work will be completed.

- 23 -

The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. No assurance can be given that environmental standards imposed by federal or local authorities will not be changed or that any such changes would not have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages which we may elect not to insure against due to prohibitive premium costs and other reasons.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations.

In general, our exploration and production activities are subject to certain federal and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry. We believe that our operations comply, in all material respects, with all applicable environmental regulations.

Because some of our property interests are still registered under the names of other entities, our title to these property interests may be serious affected if formal assignments of these property interests are not registered to our name in due course.

Some of our property interests, such as our working interest in the Lokern lease and the Britlind Prospect leases were originally acquired under the name of third parties. Assignment of leasehold out of the third parties are to be made in due course. However, if formal assignments of these property interests are not registered under our name in due course, we face seriously risks to our title to these property interests and may even lose our title to these property interests.

- 24 -

Risks Associated with our Company

Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, we may have to cease our exploration activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will generate positive cash flow in the future. We will require additional financing in order to proceed beyond the first few months of our exploration program. We will also require additional financing for the fees we must pay to maintain our status in relation to the rights to our properties and to pay the fees and expenses necessary to become and operate as a public company. We will also need more funds if the costs of the exploration of our oil and gas properties are greater than we have anticipated. We will also require additional financing to sustain our business operations if we are not successful in earning revenues. We currently do not have any arrangements for further financing and we may not be able to obtain financing on commercially reasonable terms or terms that are acceptable to us when it is required. Our future is dependent upon our ability to obtain financing. If we do not obtain such financing, our business could fail and investors could lose their entire investment.

Because we may never earn revenues from our operations, our business may fail and then investors may lose all of their investment in our company.

We have only recently accrued revenues and have experienced losses since inception. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history and is in the exploration stage. The success of our company is significantly dependent on the uncertain events of the discovery and exploitation of oil and gas reserves on our properties or selling the rights to exploit those oil and gas reserves. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.

Prior to completion of our exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the exploration of our oil and gas properties in the future, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide no assurance that we will generate any revenues or ever achieve profitability. If we are unsuccessful in addressing these risks, our business will fail and investors may lose all of their investment in our company.

We have no employees other than our Chief Executive Officer, Lewis Dillman, and our sole director and Chief Financial Officer, George Drazenovic.

Our Chief Executive Officer, Lewis Dillman, and our Chief Financial Officer and director, George Drazenovic, will be the only persons responsible for our managerial responsibilities. As such, they will have ultimate authority with respect to our business decisions, our disclosure and our implementation of accounting controls and procedures. If Messrs. Dillman and Drazenovic are unable to properly institution such procedures and comply with reporting obligation requirements, our operations may be adversely impacted.

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.

- 25 -

Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 750,000,000 shares of common stock with a par value of $0.001. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control.

Our By-laws do not contain anti-takeover provisions which could result in a change of our management and directors if there is a take-over of our company.

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.

As a result of our officers and sole director being residents of countries other than the United States, investors may find it difficult to enforce, within the United States, any judgments obtained against our company or our officers and director.

We do not currently maintain a permanent place of business within the United States. In addition, our current officers and sole director are nationals and residents of a country other than the United States, and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our company or our officers and director, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

Risks Associated with our Common Stock

We do not intend to pay dividends on any investment in the shares of stock of our company.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in our company.

Our stock is a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standard risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to

- 26 -

effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Trading in our common stock on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

Shares of our common stock are currently quoted on the OTC Bulletin Board. The trading price of our common stock has been subject to wide fluctuations. Trading prices of our common stock may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common stock will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common stock, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

- 27 -

ITEM 6. EXHIBITS.

Exhibits required by Item 601 of Regulation S-K:

Number	Description
3.1	Articles of (Incorporation incorporated by reference to our registration statement on form SB-2 filed on July 11, 2005)
3.2	Bylaws (incorporated by reference to our registration statement on form SB-2 filed on July 11, 2005)
3.3	Articles of Merger (incorporated by reference to our current report on Form 8-K filed on November 7, 2006)
3.4	Certificate of Change (incorporated by reference to our current report on Form 8-K filed on November 7, 2006)
3.2	Bylaws (incorporated by reference to our registration statement on form SB-2 filed on July 11, 2005)
10.1	Mineral property purchase agreement dated April 26, 2005 (incorporated by reference to our registration statement on form SB-2 filed on July 11, 2005)
10.2	Share Exchange Agreement dated January 31, 2007 (incorporated by reference to our current report on Form 8-K filed on March 22, 2007)
10.3	Letter Agreement dated October 4, 2006 with Western Energy Capital, LLC for the acquisition of 45% working interest in the Lokern leases (incorporated by reference to our current report on Form 8-K filed on March 22, 2007)
10.3	Letter Agreement dated October 18, 2006 with TriMar Energy Partners, Inc. for the acquisition of 1.5% of 8/8th Overriding Royalty Interest in the Hobart Lease (incorporated by reference to our current report on Form 8-K filed on March 22, 2007)
10.4	Consulting Agreement dated May 1, 2007 (incorporated by reference to our current report on Form 8- K filed on May 7, 2007)
10.5	Letter Agreement dated April 19, 2007 with Western Energy Capital, LLC for the acquisition of 5% working interest in the Britlind Prospect Leases (incorporated by reference to our annual report on Form 10-KSB filed on October 15, 2007)
10.6	Purchase and Sale Agreement between our company and King Royalty Corporation for the acquisition of 5% interest in the Centurion property (incorporated by reference to our annual report on Form 10- KSB filed on October 15, 2007)
10.7	Purchase and Sale Agreement between our company and Desert Mining, Inc. for the acquisition of interests in the Jonah property (incorporated by reference to our annual report on Form 10-KSB filed on October 15, 2007)
14.1	Code of Ethics (incorporated by reference to our annual report on Form 10-KSB filed on October 15, 2007)
16.1	Letter re change in certifying accountant (incorporated by reference to our current report on Form 8- K filed on February 13, 2007)
21.1	Sun Cal Energy, Corp. a Nevada corporation, 100% wholly-owned subsidiary
21.2	Sun Cal Energy Canada Corp., a British Columbia corporation, 100% wholly-owned subsidiary
31.1*	Section 302 Certification of Chief Executive Officer
31.2*	Section 302 Certification of Chief Financial Officer
32.1*	Section 906 Certification of Chief Executive Officer
32.2*	Section 906 Certification of Chief Financial Officer

* Filed herewith.

- 28 -

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.

SUN CAL ENERGY, INC.

By:

/s/ Lewis Dillman
Lewis Dillman
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 20, 2009

By:

/s/ George Drazenovic
George Drazenovic
Chief Financial Officer, Secretary, Treasurer and Director
(Principal Financial Officer and Principal Accounting Officer)
Date: May 20, 2009

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. freshman Avg

Sun Cal Energy (SCEY) Inactive 10-Q2009 Q3 Quarterly report

Content analysis