UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June~~December 3031, 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 000-53199

PRECISION PETROLEUM CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		71-1029846
State or other jurisdiction of		(I.R.S. Employer
incorporation or organization		Identification No.)

~~9250~~624 ~~75th~~W. ~~Street,~~Independence ~~Lexington~~Suite 101 A. Shawnee, OK ~~73051~~74804

(Address of principal executive offices)

None

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

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

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

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] (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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS

DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

SEC 1296 (02-08) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

APPLICABLE ONLY TO CORPORATE ISSUERS:

Number of shares outstanding of the registrant’s class of common stock as of ~~July~~January 31, ~~2009~~ 2010: 44,400,000

Precision Petroleum Corporation

INDEX TO THE FORM 10-Q

For the quarterly period ended ~~June~~December 3031, 2009

			PAGE
PART I	FINANCIAL INFORMATION		~~F-1~~
	ITEM 1.	FINANCIAL STATEMENTS	~~F-1~~
		Balance Sheets	F-21
		Statements of Operations and Comprehensive Income	F-32
		Statement of Stockholders’ Deficit	F-43
		Statements of Cash Flows	F-54
		Notes to the Financial Statements	F-75 to F-139
	ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
	ITEM 3. ITEM 4. ITEM 4T.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK CONTROLS AND PROCEDURES CONTROLS AND PROCEDURES	17 17 17
PART II	OTHER INFORMATION		17
	ITEM 1. ITEM 1A.	LEGAL PROCEEDINGS RISK FACTORS	18
	ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	18
	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	18
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	18
	ITEM 5.	OTHER INFORMATION	18
	ITEM 6.	EXHIBITS	18
		SIGNATURES	19

Precision Petroleum Corporation

PRECISION PETROLEUM CORPORATION
(A Production Stage Company)
BALANCE SHEETS

								December 31,		September 30,
								2009		2009
								(Unaudited)		(Audited)
							ASSETS

Current
		Cash and cash equivalents						$ 563		$ 12,944
		Accounts receivable, net						18,170		14,600
		Other receivables						11,561		10,028
		Participation deposits						57,500		46,000
					Total current assets			87,794		83,572

Oil and gas properties, - using full cost accounting								1,022,614		993,980
		Less accumulated depletion						(51,127)		(26,442)

		Oil and gas properites-Net						971,487		967,538

					Total assets			$ 1,059,281		$ 1,051,110

LIABILITIES

Current Liabilities
		Accounts payable and accrued liabilities						$ 81,760		$ 48,342
		Advances						77,500		67,500
		Short-term notes payable						993,980		993,980

		Total current liabilities						1,153,240		1,109,822


					Total liabilities			1,153,240		1,109,822

							STOCKHOLDERS' DEFICIT

Capital stock
		Authorized:
			200,000,000 common stock, $0.001 par value;
		Issued and outstanding:
			44,400,000 common shares (2008: 44,400,000)					44,400		44,400
Additional paid-in capital								82,691		82,691
Accumulated deficit during the exploration stage								(153,653)		(153,653)
Accumulated deficit								(67,397)		(32,150)

					Total stockholders' deficit			(93,959)		(58,712)

					Total liabilities and stockholders' deficit			$ 1,059,281		$ 1,051,110
F-1 PRECISION PETROLEUM CORPORATION
(A Production Stage Company)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)

						Three Months Ended
						December 31,
						2009			2008

Revenues
	Oil and gas sales					$ 63,011			$ -

				Total Revenues		63,011			-
Expenses
	Mineral claims expense					-			4,464
	Lease operating					5,474			-
	Production taxes					4,536			-
	Depreciation, depletion and amortization					24,685			-
	Interest expense					24,850			-
	Legal and accounting					12,695			9,479
	Management fees					3,000			-
	Rent expense					875			-
	General and administrative					22,143			-

				Total Expenses		98,258			13,943

Net loss						(35,247)			(13,943)

Other Comprehensive Income (loss)
	Foreign currency translation adjustment					-			1,787

Other comprehensive loss						$ (35,247)			$ (12,156)

Basic and diluted loss per share						$ (0.00)			$ (0.00)

Weighted average number of shares
	outstanding-basic and diluted					44,400,000			44,400,000

~~(An Exploration Stage Company)~~F-2

Interim Financial Statements

PRECISION PETROLEUM CORPORATION
(A Production Stage Company)
STATEMENTS OF STOCKHOLDERS' DEFICIT
(Unaudited)
							Accumulated
				Additional			Deficit	Other
		Common Shares		Paid-in	Stock	Accumulated	During Exploration	Comprehensive
		Number	Par Value	Capital	Payable	Deficit	Stage	Income	Total

Balance, as of September 30, 2008		44,400,000	44,400	67,635	-	-	(122,290)	297	(9,958)
	Payable paid by previous directors and
	officers	-	-	15,056	-	-	-	-	15,056
	Foreign currency gain (loss)	-	-	-	-	-	-	(297)	(297)
	Net loss for the year	-	-	-	-	(32,150)	(31,363)	-	(63,513)

Balance, as of September 30, 2009		44,400,000	$ 44,400	$ 82,691	$ -	$ (32,150)	$ (153,653)	$ -	$ (58,712)

Net loss for the three months						(35,247)	-		(35,247)

Balance as of December 31, 2009		44,400,000	$ 44,400	$ 82,691	$ -	$ (67,397)	$ (153,653)	$ -	$ (93,959)
					F-3

(Expressed in U.S. Dollars)

PRECISION PETROLEUM CORPORATION (A Production Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)

			Three months ended
			December 31

			2009	2008
Operating Activities
	Net loss		$ (35,247)	$ (13,943)
	Adjustments for items not effecting cash:
		Depletion, depreciation and amortization	24,685	-
		Mineral claim fee	-	4,464
	Change in non-cash working capital balances related to operations
		Accounts receivable	(3,570)	-
		Due from others	(1,533)	-
		Accounts payable and accrued liabilities	33,418	2,693

Cash used in operating activities			17,753	(6,786)

Investing Activities
	Acquisition of oil and gas properties		(28,634)	-
	Participation deposits		(11,500)	-

Cash used in investing activities			(40,134)	-

Financing Activities
	Advances		10,000	5,276

Cash provided by financing activities			10,000	5,276

Effect of foreign currency translation			-	1,784

Increase (decrease) in cash during the year			(12,381)	274

Cash, beginning of the year			12,944	(274)

Cash, end of the year			$ 563	$ -

Supplemental disclosure of cash flow information:
Cash paid during the year for income taxes			$ -	$ -
Cash paid during the year for interest			$ -	$ -

~~Precision Petroleum Corporation~~F-4

~~FKA:~~Note ~~Tidewater~~1 ~~Resources~~Interim ~~Inc.~~Reporting

~~(An~~The ~~Exploration~~accompanying ~~Stage~~financial ~~Company)~~statements of Precision Petroleum Corporation have not been audited by independent public accountants. In the opinion of management, the accompanying financial statements reflect all adjustments necessary to present fairly our financial position at December 31, 2009 and our income, stockholder’s deficit and cash flows for the three months ended December 31, 2009 and 2008. All such adjustments are of a normal recurring nature. In preparing the accompanying financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.

~~Balance~~Certain ~~Sheets~~disclosures have been condensed or omitted from these financial statements. Accordingly, these financial statements should be read with the financial statements included in our 2009 Annual Report on Form 10-K.

~~(Expressed~~Note in2 ~~U.S.~~Nature ~~Dollars)~~and Continuance of Operations

	As of June 30, 2009 (Unaudited)	As of September 30, 2008 (Audited)
Assets
Current Assets
Cash and cash equivalents	$ 1,316	$ -
Participation deposits	31,000	-
Total current assets	32,316	-
Mineral claims (Note 4)	-	4,464
Total assets	$ 32,316	$ 4,464
Liabilities and Stockholders’ Deficit
Current Liabilities
Bank overdraft	$ -	$ 274
Accounts payable and accrued liabilities	3,360	14,148
Advances	55,518	-
Total current liabilities	58,878	14,422
Total liabilities	58,878	14,422
Stockholders’ Deficit
Common stock, 200,000,000 shares authorized, $0.001 par value; 44,400,000 shares issued and outstanding	44,400	44,400
Additional paid in capital	82,691	67,635
Deficit accumulated during the exploration stage	(153,653)	(122,290)
	(26,562)	(10,255)
Other Comprehensive Income (Loss):
Foreign currency adjustment	-	297
Total stockholders’ deficit	(26,562)	(9,958)
Total liabilities and stockholders’ deficit	$ 32,316	$ 4,464

Precision Petroleum Corporation (the “Company”) was incorporated under the name of “Tidewater Resources, Inc.” under the laws of the State of Nevada on February 7, 2007. On October 27, 2008 the Company changed its name to Precision Petroleum Corporation. The Company has established its corporate offices in Shawnee, Oklahoma. The Company is engaged primarily in the acquisition, development, production, exploration for, and the sale of oil, gas and natural gas liquids. All business activities are conducted in Oklahoma and the Company sells its oil and gas to a limited number of domestic purchasers. The Company does not operate the leases they own a working and overriding royalty interest and are invoiced monthly for joint operating costs and receive revenues from third party purchasers of oil and gas chosen by the operators.

~~Precision~~These financial ~~Petroleum~~statements ~~Corporation~~have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classifications of assets and liabilities should the Company be unable to continue as a going concern. At December 31, 2009, the Company had not yet achieved profitable operations, has an aggregate accumulated deficit and deficit accumulated during development stage of $67,397 and $153,653, respectively, has a working capital deficiency of $1,065,446, and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has no formal plan in place to address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the outcome of this uncertainty.

~~Precision Petroleum Corporation~~F-5

~~FKA:~~Note ~~Tidewater~~3 ~~Resources~~Summary ~~Inc.~~of Significant Accounting Policies

~~(An~~The financial ~~Exploration~~statements ~~Stage~~of the Company) have been prepared in accordance with accounting principles generally accepted in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates.

~~Statements~~The financial statements have, in management’s opinion, been properly prepared within the framework of ~~Operations~~the ~~and~~significant ~~Comprehensive~~accounting ~~Income~~policies ~~(Loss)~~summarized below:

~~(Expressed~~Property inand ~~U.S. Dollars)~~equipment

~~(Unaudited)~~Equipment is recorded at cost. Depreciation is provided using the straight line method. As of December 31, 2009 the Company did not have any property or equipment.

	For the three months ended June 30		For the nine months ended June 30		From Inception (February 7, 2007) to June 30
	2002009	2008	200822009	2008	2009
	Un	Un	Un
	$ -d	$ -d	$ -d
Revenues	$ – -	$$ $ – -	$$$ – -	$ –	$ –
Expenses
Mineral claims expense (Note 4)	-	-	4,464	-	4,464
General and administrative	1,342	2,053	1,342	4,887	11,112
Legal and accounting	5,166	16,219	18,914	57,005	102,534
Management fees	5,500	3,600	5,500	10,800	25,900
Rent expense	-	1,500	-	4,500	8,500
Total expenses	12,008	23,372	30,220	77,192	152,510
Operating loss	(12,008)	(23,372)	(30,220)	(77,192)	(152,510)
Other income (expense)
Other expense	(1,143)	-	(1,143)	-	(1,143)
Total other income (expense)	(1,143)	-	(1,143)	-	(1,143)
Net loss	(13,151)	(23,372)	(31,363)	(77,192)	(153,653)
Other Comprehensive income (loss)
Foreign currency translation adjustment	936	(313)	(297)	(263)	-
Comprehensive loss	(12,215)	(23,685)	(31,660)	(77,455)	(153,653)
Net Loss Per Share – Basic and Diluted	(0)	(0)	(0)	(0)	(0)
Weighted Average Common Shares Outstanding	44,400,000	84,000,012	44,400,000	84,000012

Oil and Gas Properties

~~Precision~~The Company ~~Petroleum~~follows ~~Corporation~~the full cost method of accounting for oil and gas operations whereby all costs of exploring for and developing oil and gas reserves are initially capitalized on a country-by-country (cost center) basis. Such costs include land acquisition costs, geological and geophysical expenses, carrying charges on non-producing properties, costs of drilling and overhead charges directly related to acquisition and exploration activities.

~~FKA:~~Costs capitalized, ~~Tidewater~~together ~~resources~~with ~~Inc~~the costs of production equipment, are depleted and amortized on the unit-of-production method based on the estimated gross proved reserves. Petroleum products and reserves are converted to a common unit of measure, using 6 MCF of natural gas to one barrel of oil.

~~(An~~Costs ~~Exploration~~of acquiring ~~Stage~~and ~~Company)~~evaluating unproved properties are initially excluded from depletion calculations. These unevaluated properties are assessed annually to ascertain whether impairment has occurred. When proved reserves are assigned or the property is considered to be impaired, the cost of the property or the amount of the impairment is added to costs subject to depletion calculations.

~~Statement~~Future net cash flows from proved reserves using period-end, non-escalated prices and costs are discounted to present value and compared to the carrying value of ~~Stockholders Deficit~~oil and gas properties.

~~From~~Proceeds from ~~Inception~~a ~~(February~~sale 7of petroleum and natural gas properties are applied against capitalized costs, ~~2007)~~with tono ~~June~~gain 30or loss recognized, ~~2009~~unless such a sale would alter the rate of depletion by more than 25%.

~~(Expressed~~Assets Retirement ~~in U.S. Dollars)~~Obligations

~~(Unaudited)~~The Company recognizes the fair value of a liability for an assets retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made. The carrying amount of the related long-lived asset is increased by the same amount as the liability.

	Common Shares		Additional		Accumulated Deficit During	Other	Total stockholders
	Number	Par Value	Paid-in Capital	Stock Payable	Exploration Stage	Comprehensive Income	equity (deficit)
Balance February 7, 2007	12	$ -	$ -	$ -	$ -	$ -	$ -
Donated management services and rent	-	-	13,600	-	-	-	13,600
Stock Payable	-	-	-	83,135	-	-	83,135
Foreign currency gain (loss)	-	-	-	-	-	124	124
Net gain (loss)	-	-	-	-	(25,981)	-	(25,981)
Balance September 30, 2007	12	-	13,600	83,135	(25,981)	124	70,878
Issued stock for cash October 2007	36,000,000	36,000	(33,000)	(3,000)	-	-	-
Issued stock for cash October 2007	48,000,000	48,000	32,135	(80,135)	-	-	-
Donated management services and rent	-	-	15,300	-	-	-	15,300
Foreign currency gain (loss)	-	-	-	-	-	173	173
Retirement of shares	(39,600,012)	(39,600)	39,000	-	-	-	-
Net loss	-	-	-	-	(96,309)	-	(96,309)
Balance September 30, 2008	44,400,000	44,400	67,635	-	(122,290)	297	(9,958)
Contribution of capital for legal fees	-	-	15,056	-	-	-	15,056
Foreign currency gain (loss)	-	-	-	-	-	(297)	(297)
Net loss	-	-	-	-	(31,363)	-	(31,363)
Balance June 30, 2009	44,400,000	$ 44,400	$ 82,691	$ -	$ (153,653)	$ -	$ (26,652)

Changes in the liability for an asset retirement obligation due to the passage of time will be measured by applying an interest method of allocation. The amount will be recognized as an increase in the liability and an accretion expense in the statement of operations. Changes resulting from revisions to the timing or the amount of the original estimate of undiscounted cash flows are recognized as an increase or a decrease in the carrying amount of the liability for an asset retirement obligation and the related asset retirement cost capitalized as part of the carrying amount of the related long-lived asset. At December 31, 2009, the Company’s estimate of asset retirement obligation was not material.

~~The accompanying notes are an integral part of the financial statements.~~F-6

~~Precision~~Impairment of ~~Petroleum~~Long-Lived ~~Corporation~~Assets

~~FKA:~~The Company ~~Tidewater~~has ~~Resources~~adopted ~~Inc~~FASB Codification Topic 360-10 (“ASC 360-10”), “Property, Plant, and Equipment”, which requires that long-lived assets to be held and used be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Oil and gas properties accounted for using the full cost method of accounting, a method utilized by the Company, are excluded from this requirement, but will continue to be subject to the ceiling test limitations. At December 31, 2009, the depreciation, depletion and amortization charge included $0 related to the ceiling test limitations.

~~(An~~ Basic and ~~Exploration~~Diluted ~~Stage~~Loss ~~Company)~~Per Share

~~Statement~~Basic loss per share is computed using the weighted average number of ~~Cash~~shares outstanding ~~Flows~~defined by FASB Accounting Standards Codification Topic 260, “Earnings Per Share” during the period. Fully diluted earnings (loss) per share are computed similar to basic income (loss) per share except that the denominator is increased to include the number of common stock equivalents (primarily outstanding options and warrants). Common stock equivalents represent the dilutive effect of the assumed exercise of the outstanding stock options and warrants, using the treasury stock method, at either the beginning of the respective period presented or the date of issuance, whichever is later, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculated date. Diluted loss per share has not been provided as it would be anti-dilutive. As of December 31, 2009, the Company did not have any outstanding stock options or warrants.

~~(Expressed in U.S. Dollars)~~Financial Instruments

~~Unaudited~~The carrying value of cash, accounts receivable, other receivable, accounts payable and accrued liabilities, short-term notes payable and due to related party approximates their fair value because of the short maturity of these instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

	Nine months ended June 30, 2009	Nine months ended June 30, 2008	From Inception (February 7, 2007) to June 30, 2009
Cash Flows Used In Operating Activities:
Net income (loss)	$ (31,363)	$ (77,192)	$ (153,653)
Adjustments to reconcile net loss to net cash used in operating activities:
Mineral claim fee	4,464	-	4,464
Donated management fees and rent	-	15,300	28,900
Changes in operating assets and liabilities:
Accounts payable and accrued liabilities	(10,788)	28,397	3,360
Net cash used in operating activities	(37,687)	(33,495)	(116,929)
Cash Flows Used In Investing Activities:
Participation deposits	(31,000)	-	(31,000)
Purchase of mineral claims	-	-	(4,464)
Net cash used in investing activities	(31,000)	-	(35,464)
Cash Flows From Financing Activities:
Proceeds from common stock issuance	-	-	83,135
Contribution of capital	15,056	-	15,056
Advances	55,518	-	55,518
Net cash provided by financing activities	70,574	-	153,709
Effect of foreign currency translation	(297)	(263)	-
Increase (decrease) in cash and cash equivalents	1,590	(33,758)	1,316
Cash and cash equivalents, beginning of period	(274)	67,448	–
Cash and cash equivalents, end of period	$ 1,316	$ 33,690	$ 1,316
Supplemental Disclosures
Interest paid	$ -	$ -	$ –
Income of common stock payable	$ -	$ 83,135	$ 83,135

Revenue Recognition

~~Precision~~Revenue from ~~Petroleum~~the ~~Corporation~~sale of the oil and gas production is recognized when title passes from the operator of the oil and gas properties to purchasers.

~~(An~~Newly Issued ~~Exploration~~Accounting ~~Stage Company)~~Pronouncements

~~Notes~~In January 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-03 (ASU 2010-03), Extractive Activities—Oil and Gas (Topic 932): Oil and Gas Reserve Estimation and Disclosures. This amendment to Topic 932 has improved the reserve ~~interim~~estimation and disclosure requirements by (1) updating the reserve estimation requirements for changes in practice and technology that have occurred over the last several decades and (2) expanding the disclosure requirements for equity method investments. This is effective for annual reporting periods ending on or after December 31, 2009. However, an entity that becomes subject to the disclosures because of the change to the definition oil- and gas- producing activities may elect to provide those disclosures in annual periods beginning after December 31, 2009. Early adoption is not permitted. The Company does not expect the provisions of ASU 2010-03 to have a material effect on the financial ~~statements~~position, results of operations or cash flows of the Company.

~~June 30, 2009~~F-7

~~(Expressed~~Note in4 ~~U.S.~~Oil ~~Dollars)~~and Gas Properties

~~(Unaudited~~a) Effective July 1, 2009, the Company purchased various producing properties located in Garvin County, Pottawatomie County, Nowata County and Seminole County, Oklahoma. The Company utilized short-term financing to acquire these properties. The various net revenue acquired range from .2808% to a 67.97% net revenue interest. In October of 2009, the Company acquired additional working interest in two of the leases. In November of 2009, the Company acquired a 70.10153% working interest in the Thompson #2 well, located in Garvin County, Oklahoma. The Company paid $10,000 down on this well and signed an agreement to pay the balance within 30 days of the agreement. An additional $18,634 of liabilites were assumed by the Company as part of the total $28,634 purchase price.

1b) ~~Business~~On January 27, 2009, the Company entered into a Participation Agreement with Nitro Petroleum Incorporated (“Nitro”), pursuant to which the Company obtained from Nitro the right to participate in Phase One of Nitro’s Powder river Basin Project in Montana. Nitro acquired certain oil and ~~History~~gas leases in the Powder River Basin in Montana pursuant to a Memorandum of Understanding dated January 26, 2009 with REDS, LLC.

Precision Petroleum Corporation (the “Company”) was incorporated under the name “Tidewater Resources Inc.” under the laws of the State of Nevada on February 7, 2007. On October 27, 2008 the Company changed its name to Precision Petroleum Corporation. The Company is an Exploration Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No.7 “Accounting and Reporting by Development Stage Enterprises”. The Company’s principal business is the acquisition and exploration of mineral resources.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. As at June 30, 2009, the Company has a working capital deficit of $26,562 ($14,422 as of September 30, 2008) and has accumulated losses of $153,653 since inception. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

While the information in the accompanying interim nine-month financial statements is unaudited, it includes all adjustments which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim period presented. All adjustments are of a normal recurring nature. Except as disclosed below, these interim financial statements follow the same accounting policies and methods of their application as Precision Petroleum Corporation’s audited September 30, 2008 annual financial statements.

The results of operations for the nine month period ending June 30, 2009 are not necessarily indicative of the results to be expected for the year ending September 30, 2009.

These unaudited interim financial statements should be read in conjunction with the September 30, 2008 audited financial statements of the Company.

2) Summary of Significant Accounting Policies

The following is a summary of significant accounting policies used in the preparation of these financial statements.

a. Basis of Presentation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America applicable to exploration stage enterprises and are expressed in U.S. dollars.

b. Cash and Cash Equivalents

Cash and cash equivalents include highly liquid investments with original maturities of three months or less.

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

Precision Petroleum Corporation (An Exploration Stage Company) Notes to the interim financial statements June 30, 2009 (Expressed in U.S. Dollars) (Unaudited)

2) Summary of Significant Accounting Policies (continued)

c. Mineral Property Costs

The Company has been in the exploration stage since its formation on February 7, 2007 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-2 “Whether Mineral Rights Are Tangible or Intangible Assets”. The Company assesses the carrying costs for impairment under SFAS 144, “Accounting for Impairment or Disposal of Long Lived Assets” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

To date the Company has not established any proven or probable reserves on its mineral properties.

d. Long-Lived Assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

e. Foreign Currency Translation

The Company’s functional currency is in US dollars. The financial statements of the Company are translated to U.S. dollars in accordance with SFAS No. 52, “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

f. Environmental Expenditures

The operations of the Company have been, and may in the future, be affected from time to time, in varying degrees, by changes in environmental regulations, including those for future reclamation and site restoration costs. Both the likelihood of new regulations and their overall effect upon the Company vary greatly and are not predictable. The Company’s policy is to meet or, if possible, surpass standards set by relevant legislation, by application of technically proven and economically feasible measures.

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

Precision Petroleum Corporation (An Exploration Stage Company) Notes to the interim financial statements June 30, 2009 (Expressed in U.S. Dollars) (Unaudited)

2) Summary of Significant Accounting Policies (continued)

f. Environmental Expenditures – (continued)

Environmental expenditures that relate to ongoing environmental and reclamation programs are charged against earnings as incurred or capitalized and amortized depending on their future economic benefits. Estimated future reclamation and site restoration costs, when the ultimate liability is reasonably determinable, are charged against earnings over the estimated remaining life of the related business operation, net of expected recoveries.

g. Use of Estimates

The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts 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. The Company regularly evaluates estimates and assumptions related to donated expenses, and deferred income tax valuations. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

h. Stock-based Compensation

The Company records stock-based compensation in accordance with SFAS No. 123R “Share Based Payments”, using the fair value method. The Company has not issued any stock options since its inception.

i. Concentration of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed applicable government insurance limits. The Company’s management also routinely assesses the financial strength and credit worthiness of any parties to which it extends funds and as such, it believes that any associated credit risk exposures are limited.

j. Risks and Uncertainties

The Company operates in the resource exploration industry that is subject to significant risks and uncertainties, including financial, operational, technological, and other risks associated with operating a resource exploration business, including the potential risk of business failure.

k. Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, and accounts payable and accrued liabilities. The carrying value of the financial instruments is approximate fair value due to their short term to maturity. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risk arising from these financial instruments.

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

Precision Petroleum Corporation

(An Exploration Stage Company)

Notes to the interim financial statements

June 30, 2009

(Expressed in U.S. Dollars)

(Unaudited)

2) Summary of Significant Accounting Policies (continued)

l. Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109 “Accounting for Income Taxes” as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

m. Basic and Diluted Net Income (Loss) Per Share

The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share”. SFAS No. 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. At June 30, 2009, there are no dilutive potential common shares.

n. Comprehensive Loss

The Company follows Statement of Financial Accounting Standards (“SFAS”) 130, "Reporting Comprehensive Income". SFAS 130 establishes standards for the reporting and display of comprehensive income and its components in the financial statements

3) Recent Accounting Pronouncements

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles,” (“SFAS 168”). SFAS 168 replaces FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles”, and establishes the FASB Accounting Standards Codification (“Codification”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”). SFAS 168 is effective for interim and annual periods ending after September 15, 2009. The Company will begin to use the new Codification when referring to GAAP in its annual report on Form 10-K for the fiscal year ending September 30, 2010. This will not have an impact on the results of the Company.

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167, “Amendments to FASB Interpretation No. 46(R),” (“SFAS 167”). The amendments include: (1) the elimination of the exemption for qualifying special purpose entities, (2) a new approach for determining who should consolidate a variable-interest entity, and (3) changes to when it is necessary to reassess who should consolidate a variable-interest entity. SFAS 167 is effective for the first annual reporting period beginning after November 15, 2009 and for interim periods within that first annual reporting period. The Company will adopt SFAS 167 in fiscal 2010. The Company does not expect that the adoption of SFAS 167 will have a material impact on the financial statements.

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

Precision Petroleum Corporation (An Exploration Stage Company) Notes to the interim financial statements June 30, 2009 (Expressed in U.S. Dollars) (Unaudited)

3) Recent Accounting Pronouncements (continued)

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 166, “Accounting for Transfers of Financial Assets, an amendment to SFAS No. 140,” (“SFAS 166”). SFAS 166 eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets, and requires additional disclosures in order to enhance information reported to users of financial statements by providing greater transparency

about transfers of financial assets, including securitization transactions and an entity’s continuing involvement in and exposure to the risks related to transferred financial assets. SFAS 166 is effective for fiscal years beginning after November 15, 2009. The Company will adopt SFAS 166 in fiscal 2010. The Company does not expect that the adoption of SFAS 166 will have a material impact on the financial statements

In June 2009, the FASB issued Statement of Financial Accounting Standards No. 165, “Subsequent Events,” (“SFAS No. 165”). SFAS 165 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 applies to both interim financial statements and annual financial statements. SFAS 165 is effective for interim or annual financial periods ending after June 15, 2009. SFAS 165 does not have a material impact on our financial statements.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”. SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”. SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. 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. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

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

Precision Petroleum Corporation (An Exploration Stage Company) Notes to the interim financial statements June 30, 2009 (Expressed in U.S. Dollars) (Unaudited)

3) Recent Accounting Pronouncements (continued)

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements Liabilities –an Amendment of ARB No. 51”. This statement amends ARB 51 to establish accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's future reported financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this statement did not have a material effect on the Company's future reported financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement did not have a material effect on the Company's future reported financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141R, “Business Combinations”. This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement did not have a material effect on the Company's future reported financial position or results of operations.

4) Mineral Property

Pursuant to a mineral property staking and Net Smelter Returns Royalty agreement (the “Agreement”) dated April 19, 2007, the Company acquired a 50% undivided right, title and interest in a gold/silver/copper mineral claim unit of the Kammatika Claims (the “Claims”), located in the province of British Columbia, Canada for a cash payment of $4,464 (CDN$5,000). As of June 30, 2009, the Company’s claims have expired. Consequently, the Company expensed the claims during the nine months ended June 30, 2009.

5) Common Stock

The authorized number of common shares remains at 200,000,000 common shares with a par value of $0.001.

a. On November 17, 2008, the Company authorized a forward stock split of twelve for one (12:1) of our total issued and outstanding shares of common stock. All references in these financial statements and notes to the financial statements of common shares, number of shares, price per share and weighted average number of common shares outstanding prior to the forward stock split have been adjusted to reflect the split on a retroactive basis, unless otherwise noted

b. Upon incorporation on February 7, 2007, the Company issued twelve (12) post split shares of common stock to its founding officer and director for nominal consideration.

c. In October 2007, the Company issued 36,000,000 post split shares of common stock at $0.001 per share to directors of the Company for gross proceeds of $3,000.

d. In October 2007, the Company issued 48,000,000 post split shares of common stock at approximately $0.017 per share for gross proceeds of $80,135.

e. On September 2008, the Company’s officers and directors resigned from their positions with the Company. In connection with such resignations, such officers and directors surrendered all of their shares of the Company’s common stock, which totaled 39,600,012 post split shares, which were then cancelled and returned to treasury. No compensation was paid for the surrender of these shares.

f. During the second quarter, the former officer of the Company contributed $15,506 to pay off legal service fees.

6) Operations

The company obtains financing from a consultant with a balance of $20,518 and an advance from a third party of $35,000 as of June 30, 2009. The balances are due on demand and are not interest bearing.

On January 20, 2009, the President of the Company, Ms. Sharron Farris, resigned as President and Mr. Richard Porterfield was appointed as President and Treasurer of the Company. Ms. Sharon Farris remains as Secretary of the Company.

The Company has not entered into any transactions with Mr. Porterfield that would be regarded as related party transactions. Mr. Porterfield is not a director of any other publicly registered company.

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

Precision Petroleum Corporation (An Exploration Stage Company) Notes to the interim financial statements June 30, 2009 (Expressed in U.S. Dollars) (Unaudited)

7) Oil and Gas Participation

On January 27, 2009, the Company entered into a Participation Agreement with Nitro Petroleum Incorporated (“Nitro”), pursuant to which the Company obtained from Nitro the right to participate in Phase One of Nitro’s Powder River Basin Project in Montana. Nitro acquired certain oil and gas leases in the Powder River Basin in Montana pursuant to a Memorandum of Understanding dated January 26, 2009 with REDS, LLC.

Pursuant to the terms of the Participation Agreement, Nitro is being carried to the tanks with respect to a 25% working interest in Phase One of the Powder River Basin Project. The Company is acquiring a 37.5% working interest in Phase One of the Powder River Basin Project in exchange for an agreement to pay 50% of the expenses of Phase One of the Powder River Basin Project. Additionally, the Company shall have the right to purchase up to a 37.5% working interest in Phase Two and Phase Three of the Powder River Basin Project upon substantially the same terms as Phase One. Nitro will be the operator of all wells drilled during Phase One of the Powder River Basin Project.

~~During~~The Company ~~the~~has ~~third quarter the company~~ paid $3157,~~000~~500 towards the Participation Agreement with Nitro. The payments have been recorded in the financial statements as participation deposits.

F-8~~) Subsequent Events~~

On July 1, 2009, Precision has acquired proven reserves of oil and gas, depreciable oilfield equipment and ancillary field operating equipment. The vendors and Precision have agreed that upon finalization of the present values calculation of the 18 leases, that Precision will issue capital stock from its’ Treasury to the vendorsNote ~~based~~5 Notes onPayable ~~a per share value of forty cents (.40). The total number of shares to each vendor shall be determined as total present value of equipment~~ and ~~petroleum reserves tendered, to be divided by forty cents to equal the number of shares to be issued.~~Short-Term Financing

OnAt December ~~July 16~~31, 2009, the Company ~~received~~had ~~$20~~a short term note payable to Sierra Growth,~~000~~ Inc., an investment company located in ~~non~~Charlestown, Nevis. This note bears an interest rate of 10% per annum and is due onupon demand. If the ~~advances~~Holder ~~from~~makes a ~~third~~demand ~~party~~for repayment, the Company must repay the principal balance of this note and accrued and unpaid interest thereon within sixty (60) days. Interest has been accrued in the amount of $18,793 as of December 31, 2009 and has a principal balance of $751,714.

At December 31, 2009, the Company had a short term note payable to Global Energy, LLC an oil and gas company located in Shawnee, Oklahoma. This note bears an interest rate of 10% per annum and is payable upon demand. If the Holder makes a demand for repayment, the Company must repay the principal balance of this note and accrued and unpaid interest thereon within sixty (60) days. Interest has been accrued in the amount of $6,057 as of December 31, 2009 and has a principal balance of $242,266.

The company has also obtained financing from a consultant with a balance of $27,147 (2008, $5,276) and also has received advances of $77,500 (2008, $0) from unrelated third parties. The balances are due on demand and are not interest bearing.

Note 6 Related Party Transactions

During the three months ended December 31, 2009 and 2008, the Company incurred management fees charged by a director of the Company totaling $3,000 and $0.

Note 7 Common Stock

The Company’s capitalization is 200,000,000 common shares with par value of $.001 per share. On November 17, 2008, the Company authorized a forward stock split of twelve for one (12:1) of our total issued and outstanding shares of common stock and was effective January 8, 2009. All references in these financial statements to number of shares, price per share, and weighted average number of common shares outstanding prior to the 12:1 forward stock split have been adjusted to reflect the split on a retroactive basis unless otherwise noted.

a. Upon incorporation on February 7, 2007, the Company issued one (12) post split share of common stock to its founding officer and director for nominal consideration.

b. In October 2007, the Company issued 36,000,000 post split shares of common stock at $0.001 per share to directors of the Company for gross proceeds of $3,000.

c. In October 2007, the Company issued 48,000,000 post split shares of common stock at $0.02 per share for gross proceeds of $80,135.

d. In September 2008, the Company’s officers and directors resigned from their positions with the Company. In connection with such resignations, such officers and directors surrendered all of their shares of the Company’s common stock, totaling 39,600,012 post split shares, which were then cancelled and returned to treasury. No compensation was paid for the surrender of these shares.

Note 8 Subsequent Events

The Company has evaluated subsequent events through February 16, 2010, the date which the financials statements were available to be issued. The Company has determined that there were no such events that warrant disclosure or recognition in the financial statements.

F-9

Item 2. Management's Discussion and Analysis

As used in this ~~Quarterly~~Interim Report: (i) the terms "we", "us", "our" and the "Company" mean Precision Petroleum Corporation (ii) "SEC" refers to the Securities and Exchange Commission; (iii) "Exchange Act" refers to the United States Securities Exchange Act of 1934, as amended; and (iv) all dollar amounts refer to United States dollars unless otherwise indicated.

The following is a discussion of our plan of operations, results of operations and financial condition as atof and for the ~~nine~~ three months ended ~~June~~December 3031, 2009.

Overview

Incorporation and Organizational Activities

We were incorporated on February 7, 2007 under the laws of the State of Nevada. On October 27, 2008, we changed our name from Tidewater Resources Inc. to Precision Petroleum Corporation.

We were extra provincially registered under the laws of the Province of British Columbia, Canada, on March 9, 2007.

On January 20, 2009, Ms. Sharon Farris resigned as the president of the Company.

On January 20, 2009, Mr. Richard Porterfield was appointed President and Treasurer of the Company.

Liquidity and Capital Resources

AtThe Company ~~June~~had ~~30,~~a ~~2009,~~cash webalance ~~had~~of a$563 ~~working~~as ~~capital~~of ~~deficit~~December of31, ~~$26~~2009,~~562,~~ compared to acash balance ~~working capital deficit~~ of $1412,~~422,~~944 atas of September 30, ~~2008~~2009. The AtCompany ~~June~~had ~~30,~~a working ~~2009,~~capital ~~our~~deficiency ~~total~~of ~~assets were~~ $321,~~316~~065,446 ~~consisting~~as of ~~cash~~December ~~and~~31, ~~participation~~2009, ~~deposits~~ compared to working ~~total~~capital ~~assets~~deficiency ~~in the amount~~ of $41,~~464~~026,250 atas of September 30, ~~2008, consisting of mineral claims~~2009. ~~This increase in assets was due to advances received from financing activities and participation deposits.~~

AtThe Company ~~June~~will ~~30,~~continue ~~2009,~~to ~~our~~utilize ~~total~~the ~~current~~free ~~liabilities~~labor ~~increased~~of toits ~~$58,878~~directors and stockholder until such time as funding is sourced from ~~$14,422~~the atcapital ~~September~~markets. It ~~30,~~is anticipated ~~2008~~that funding for the next twelve months will be required to maintain the Company.

Our short and long term survival is dependent on funding from shareholder loans or outside sources.

Results of Operations

~~Revenues~~For the three months ended December 31, 2009, the Company had revenue of $63,011 from production of oil and gas, as compared to $0 for the three months ended December 31, 2008.

WeCost ~~have~~of continued ~~had~~operations nofor ~~operating~~the ~~revenues~~three ~~since~~months ~~our~~ended ~~inception~~December ~~on February 7~~31, ~~2007.~~2009 Wewas ~~anticipate~~$98,258, resulting ~~that~~in wea ~~will~~net ~~not~~loss ~~generate any revenues~~ for sothe ~~long~~period asof ~~we are an exploration stage company~~$35,247.

~~Expenses~~Cost ~~and~~of continued ~~Loss~~operations ~~from~~for ~~Operations~~the three months ended December 31, 2008 was $13,943, resulting in a net loss for the period of $13,943.

~~For~~The Company ~~the~~expects ~~three (3) months ended June 30, 2009, operating expenses were $13,151 compared~~ to ~~$23,372~~continue ~~for the three (3) months ended June 30, 2008. The decrease of $10,221 was due~~ to areceive ~~decrease~~revenues ~~mainly~~from inthe ~~legal~~properties ~~and~~on ~~accounting expenses. Operating expenses during~~ the Oklahoma ~~quarter~~properties ~~ended June 30, 2009 consisted of legal~~ and ~~accounting~~the ~~fees~~Company ofexpects ~~$5,166, general~~for ~~and~~these ~~administrative~~revenues ~~costs of $1,342, management fees of $5,500 and foreign exchange loss of $1,143~~to increase. Planned ~~This~~exploration ~~compares~~ventures ~~with~~should ~~expenses~~increase ~~during~~revenues for the ~~three~~fiscal ~~(3)~~year ~~months~~ending ~~ended~~September ~~June~~ 30, ~~2008, consisting of legal and accounting fees of $16,219, management fees of $3,600, general and administrative costs of $2,053 and rent expense of $1,500~~2010.

~~We recognized a gain of $936 on foreign exchange for the quarter ended June 30, 2009, compared with a loss of $313 on foreign exchange during the quarter from the prior year.~~Going Concern

WeThe Company ~~posted~~has anot ~~comprehensive~~attained ~~loss~~profitable ofoperations ~~$12,215~~and ~~for~~is ~~the~~dependent ~~quarter~~upon ~~ended~~obtaining financing ~~June~~to ~~30,~~pursue ~~2009,~~any ~~compared~~extensive toacquisitions aand ~~comprehensive~~exploration activities. For ~~loss~~these ~~of $23~~reasons,~~685~~ ~~for~~ the ~~same~~Company’s ~~period~~auditors ~~from~~stated ~~the~~in ~~previous~~their report ~~year.~~on ~~From~~the ~~inception~~Company’s ~~(February~~audited 7,financial ~~2007)~~statements tothat ~~June~~they ~~30, 2009, we~~ have ~~incurred a total comprehensive loss of $153,653. The principal components of losses were legal and accounting fees~~substantial ofdoubt ~~$102,534,~~the ~~management~~Company ~~fees~~will ofbe ~~$25,900,~~able ~~general~~to ~~and~~continue ~~administrative~~as ~~costs~~a ofgoing ~~$11,112,~~concern ~~mining~~without ~~claims expense of $4,464, foreign exchange loss of $1,143 and rent expense of $8,500~~further financing.

For the nine (9) months ended June 30, 2009, operating expenses were $30,220 compared to $77,192 for the nine (9) months ended June 30, 2008. The decrease of $46,972 was due to a decrease in legal and accounting expenses, management fees and rent expense. Operating expenses during the nine (9) months ended June 30, 2009 consisted solely ofOff-Balance ~~legal~~Sheet and accounting fees of $18,914, general and administrative costs of $1,342, management fees of $5,500, foreign exchange loss of $1,143 and mineral claims expense of $4,464. This compares with expenses during the nine (9) months ended June 30, 2008, consisting of legal and accounting fees of $57,005, management fees of $10,800, rent expense of $4,500 and general and administrative costs of $4,887.Arrangements

We recognized a loss of $297 on foreign exchange for the nine (9) months ended June 30, 2009, compared with a loss of $263 on foreign exchange during the same period from the prior year.

We posted a comprehensive loss of $31,660 for the nine (9) month period ended June 30, 2009, compared to a comprehensive loss of $77,455 for the same period from the previous year.

We believe our market risk exposures arise primarily from exposures to fluctuations in interest rates and exchange rates. We presently only transact business in Canadian and United States Dollars. We believe that the exchange rate risk surrounding our future transactions will not materially or adversely affect our future earnings. We do not use derivative financial instruments to manage risks or for speculative or trading purposes.

Subsequent Events

During the 3 preceding months, the Company has been actively searching to purchase potential oil and gas producing leases in Oklahoma State.

Richard Porterfield, President, is also a Petroleum Geologist. He has been instrumental in the assembly of 18 leases for acquisition.

The leases constitute various working interests and overriding royalty interests. Also included are various production facilities including depreciable wellhead, down hole and battery equipment. Included in some of the leases were salt water disposal wells, needed for injection of waste water recovered from oil and gas production.

Precision had requested a petroleum reserve calculation of recoverable oil and gas for the leases acquired. This reserve calculation was recently completed by Ramsey Consultants, a firm of petroleum engineers in Oklahoma City. These reserve calculations are necessary in order to determine the purchase price of each lease. Therefore, Precision has acquired proven reserves of oil and gas, depreciable oilfield equipment and ancillary field operating equipment.

The vendors of the leases comprise of three (3) private corporations:

1162489 Alberta Ltd, an Alberta, Canada private Corporation

Griffyn Financial Services Inc., a British Columbia, Canada, Private Corporation

Global Energy LLC, an Oklahoma State private corporation.

The vendors and Precision have agreed that upon finalization of the present values calculation of the 18 leases, that Precision will issue capital stock from its’ treasury to the vendors based on a per share value of forty cents ($0.40) The total number of shares to each vendor shall be determined as total present value of equipment and petroleum reserves tendered, to be divided by forty cents to equal the number of shares to be issued.

Note that all calculations and references are in USD currency.

The effective date of the purchase contract is July 1, 2009.

Upon finalization of the calculations, and regulatory approval, the corporate attorney will file with the regulatory authorities all requisites necessary.

It is to be noted that the three vendor parties were not related parties nor affiliated with Precision prior to the July 1st transaction. The Company believes that they will remain unrelated and non affiliated subsequent to the transaction.

The Board of Directors will meet in consultation with the corporate attorney to approve the acquisition and to record the transaction by Board resolution.

Off Balance Sheet Arrangements.

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes of financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Plan of Operation for the Next Twelve (12) Months

The following discussion of our plan of operation, financial condition, results of operations, cash flows and changes in financial position should be read in conjunction with our most recent financial statements and notes appearing elsewhere in this Form 10-Q quarterly report and our Form 10-K annual report filed February 16, 2010.

Our plan of operations for the current fiscal year is to maintain the current properties we have and recomplete some of the properties that we feel will generate more revenue.

During the twelve-month period following the date of our annual report, we anticipate that we will continue generate revenue from our oil leases. However, we anticipate that such revenue will not be sufficient to cover all of our expenses. Accordingly, we will be required to obtain additional financing in order to continue our plan of operations during and beyond the next twelve months. We anticipate that additional funding could be in the form of either debt or equity financing from the sale of our common stock. However, we do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding to fund our operations. In the absence of such financing, our business plan will fail. Even if we are successful in obtaining financing to fund our operations, there is no assurance that we will obtain the funding necessary to pursue any further exploration of our properties. If we do not obtain additional financing, we may be forced to dispose of operating oil and gas leases located in Oklahoma.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

See Item 4T.

ITEM 4T. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are ~~not~~ effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the current quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

As a smaller reporting company, we are not required to provide the information required by this Item.

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

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.

ITEM 6. EXHIBITS

(a) Pursuant to Rule 601 of Regulation S-B, the following exhibits are included herein or incorporated by reference.

Exhibit

Number Description

3.1 Articles of Incorporation, as Amended*

3.2 Bylaws*

31.1 Section 302 Certification – Chief Executive Officer

31.2 Section 302 Certification – Chief Financial Officer

32.1

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Executive Officer.

32.2

Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer.

*Incorporated by reference to our Form S-1 Registration Statement ~~declared~~filed ~~effective~~ on April 24, 2008, SEC File Number 333-149823.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this ~~5th~~16th day of ~~August~~February, ~~2009~~ 2010.

PRECISION PETROLEUM CORPORATION

Date: February ~~August 5~~16, ~~2009~~ 2010 By: /s/ Richard Porterfield

Name: Richard Porterfield

Title: President (principal executive officer)

By: /s/ James Kirby

Name: James ~~Sharon Farris~~Kirby

Title: Treasurer (principal financial officer and principal accounting officer)

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

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