Mail Stop 3561						February 24, 2006

David Nunn, President
Fortune Oil & Gas, Inc.
305-1657 Martin Drive White Rock, British Columbia
Canada V4A-6E7

	Re: 	Fortune Oil & Gas, Inc.
		Amendment No. 3 to Form 10-SB
		Filed February 8, 2006
		File No. 0-51484

Dear Mr. Nunn:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments.  If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
Please feel free to call us at the telephone numbers listed at the
end of this letter.

Amendment No. 3 to Form 10-SB

Item 2. Management`s Discussion of Analysis or Plan of Operation,
page 18

Liquidity and Capital Resources, page 28

1. Your current disclosure indicates that your cash and cash
equivalents, prepaid joint venture operating expenses, and the
anticipated sale of your buoy mooring system are sufficient to
meet
your cash call requirements in the near term.  Your response to
prior
comment 1 indicates that your cash requirements included your
substantial short-term obligations that existed as of December 31,
2004 and September 30, 2005.  Your response to prior comment 1
also
indicates that your plan is that prior liabilities, those in
existence at December 31, 2004, would be extinguished from your
portion of production once it is achieved.   Please state and
disclose definitively whether or not your liquidity and capital
resources, absent any proceeds from production, at December 31,
2004
and September 30, 2005 were sufficient to meet your substantial
short-term obligations including accounts payable and VAT taxes
due.
Our assumption is that if you had the
necessary liquidity and capital resources, as you have indicated,
you
would have paid the outstanding short-term obligations and avoided
the possibility of dilution of your interest in Bawean PSC.
Please
indicate how you determined that you had the necessary liquidity
at
September 30, 2005 to meet your short-term existing and ongoing
obligations.  For example, if you expected that the additional
financing from current investors and/or proceeds from the sale of
your buoy mooring system would provide the necessary liquidity,
please disclose these expectations.  In doing so, please provide
the
estimated expected financing and/or proceeds to be received from
each
source and disclose the related timeframe. Alternatively, if you
did
not have the necessary liquidity and capital resources to meet
your
substantial short-term obligations, absent potential proceeds from
production, please revise your current disclosure to indicate
such.
In either event, please provide relevant disclosure regarding your
plan to avoid the related dilution of your interest in Bawean PSC
and
disclose your sources of liquidity, absent proceeds from
production,
to repay CRC for their payment of your debts.
Part III Item 2.  Description of Exhibits, page F-34

2. Please file the dilution and carried interest agreement and the
notice of dilution from CRC as exhibits.

***

      As appropriate, please amend your registration statement in
response to these comments.  You may wish to provide us with
marked
copies of the amendment to expedite our review.  Please furnish a
letter with your amendment that keys your responses to our
comments
and provides any requested information.  Detailed letters greatly
facilitate our review.  Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.

		If you have any questions regarding these comments,
please
direct them to John Cannarella, Staff Accountant, at (202) 551-
3337.
Any other questions may be directed to me at (202) 551-3716.

Sincerely,



William Choi
Accounting Branch Chief

Cc:	Jennifer A. Post, Esq.
	Richardson & Patel LLP
	Fax:  (310) 208-1154



David Nunn, President
Fortune Oil & Gas, Inc.
February 24, 2006
Page 1