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corresp

July 1, 2005

Ms. Jennifer Goeken

Division of Corporate Finance

Securities and Exchange Commission

450 Fifth Street N.W., Stop 04-05

Washington D.C. 20549

    Re:

    Oceanic Exploration Company

    Form 10-KSB for the Fiscal Year Ended December 31, 2004

    Form 10-QSB for the Fiscal Quarter Ended March 31, 2005

    File No. 1-08521

Dear Ms. Goeken:

This is our response to your letter of June 14, 2005. We have attached a proposed Form 10-KSB/A
for December 31, 2004 and a proposed Form 10-QSB/A for March 31, 2005 to this letter for your
review.

Form 10-KSB for the Fiscal Year Ended December 31, 2004

Description of Business

Discontinue Operations — Sale of Alliance Employment Services Division.

Question:

    1.

    We note that you sold the assets comprising the Alliance Staffing Division to Cordillera, a
related party, on June 30, 2003, and that you are reporting these operations as discontinued.
Please tell us how you have considered the guidance in paragraph 42(b) of SFAS 144 and EITF
03-13, which allows results of operations of a component of an entity to be classified as
discontinued provided you will not have any significant continuing involvement in the
operations of the component after the disposal transaction.

Response

1. Paragraph 42 of SFAS 144 states that classification as discontinued operations is appropriate
only if the following conditions are met:

    a.

    The operations and cash flows of the component have been (or will be)
eliminated from the ongoing operations of the entity as a result of the disposal
transaction and

    b.

    The entity will not have any significant continuing involvement in the
operations of the component after the disposal transaction.

Ms. Jennifer Goeken

July 1, 2005

Page 2

     We believe that we have correctly accounted for the sale of Alliance Employment Services
(Alliance) as a discontinued operation because there have been no direct or indirect cash
transactions between Alliance and Oceanic Exploration Company (Oceanic) since the sale transaction
was completed in 2003. The sales contract states that Cordillera Corporation is obligated to pay
additional amounts to Oceanic calculated as 25% of Alliance’s cumulative after-tax earnings through
the period ending June 30, 2005. No cash was ever due nor was any received as a result of this
clause.

     EITF 03-13 was not in effect on June 30, 2003 — at the time this transaction occurred. But
our review indicates EITF 03-13 does not provide specific guidance on continuing involvement with
respect to common elements of control as present in this specific transaction. Since Oceanic has
had absolutely no involvement in the operations or management of Alliance since the sale
was completed, we believe we are correct in accounting for the sale as a discontinued operation.
As disclosed in the 10-KSB and 10-QSB, Cordillera is a related company having some common elements
of control with Oceanic. That common element is Mr. James N. Blue who serves as President and a
director of NWO Resources, Inc., which owns approximately 84.2% of Oceanic common stock. Mr.
Blue’s adult son owns 100% of the voting, non-participatory shares of NWO Resources, Inc. Mr. Blue
is also Chairman of the Board of Directors, President and indirect beneficial owner of a majority
of the common stock of Cordillera, the major stockholder of the non-voting participatory shares of
NWO Resources Inc. Mr. Blue is not directly involved in the daily operations of Oceanic or
Alliance. In addition, while there are management contracts between Oceanic and Cordillera, Oceanic
did not provide any management services to Alliance after its sale to Cordillera.

Question

    2.

    We note your statement, with respect to your sale of Alliance Staffing Division, that “the
loss on the sale included costs from the transactions.” Please tell us how you accounted for
the sale and explain how you have considered the accounting guidance in paragraphs 11 and D11
through D18 of SFAS 141 for related parties under common control. In addition, please tell us
where you have recorded the loss associated with this sale in your Consolidated Statement of
Cash Flows.

Response

2. Paragraph 11 of SFAS 141 states “the term business combination ... excludes transfers of net
assets or exchanges of equity interested between entities under common control” and refers the
reader to paragraph D11 — D18 of the SFAS.

Additional detail in paragraph D11 provides examples of these types of transactions. These
examples do not apply to the sale of Alliance to Cordillera for the following reasons:

    •

    (D11a) A new entity was not formed to purchase Alliance.

    •

    (D11b) The assets of Alliance were not transferred to Oceanic, nor was Alliance liquidated.

    •

    (D11c) Alliance was wholly owned by Oceanic prior to the transaction. Alliance was sold to
Cordillera, which is not a wholly owned subsidiary of Oceanic.

Ms. Jennifer Goeken

July 1, 2005

Page 3

    •

    (D11d) Cordillera is a privately held company and the transaction was a cash sale. No
            shares of Cordillera were issued to Oceanic in relation to this transaction and Oceanic has no
ownership interest in Cordillera.

    •

    Paragraphs D13 through D18 do not apply to this transaction as Oceanic is the transferring
entity, not the receiving entity.

     The contract selling Alliance to Cordillera states “Purchaser will, in full payment thereof,
pay to Seller at the Closing a total purchase price equal to the book value of Alliance at the
close of business on June 30, 2003.” This is in accordance with SFAS 141, paragraph D12.

     The sale of Alliance to Cordillera occurred on June 30, 2003. There were $9,000 of legal and
accounting expenses paid by Oceanic that directly related to the sale of Alliance. These expenses
were treated as costs from the transaction and recorded as the only loss on the sale. Oceanic
received $513,721 in cash from Cordillera from the sale and then reduced this amount by the $9,000
paid for accounting and legal fees. The 2003 Form 10-KSB Consolidated Statements of Cash Flows
reported the net amount of $504,722 as “Net proceeds from sale of temporary employment division.”
We also reported in our Consolidated Statements of Cash Flows “Net Cash provided (used) from
discontinued operations” of $449,797, which was the total of the $504,722 net of ($54,925) reported
as “Net Cash Used for Operation of Temporary Employment Division.” In the December 31, 2004 10-KSB,
we reported only the net amount of $449,797 under the caption “Cash flows from discontinued
temporary employment divisions, net.” Since the details of the sales proceeds and operating cash
used for the discontinued operation were reported in 2003, we believe that the single line
presentation in 2004 would not reduce the reader’s understanding in any material respect.

Management’s Discussion and Analysis

Liquidity and Capital Resources

Question

    3.

    Please revise your liquidity and capital resources discussion to explain how you intend to
fund operations in both the short-term and long-term. Refer to Item 303(a)(1)(i)-(iii) of
Regulation S-B.

Response

3. We propose to add the following wording in our 10-KSB for the fiscal year ended December 31,
2004 to the existing paragraph of Liquidity and Capital Resources.

“Oceanic had working capital of $392,375 including $792,012 in cash and short-term investments at
December 31, 2004. This compares with working capital of $960,033 including $1,364,240 in cash and
cash equivalents at December 31, 2003. At this current level of cash expenditures, the Company will
need new sources of additional funding by June 2005. In March 2005, Oceanic executed a revolving
line of credit/promissory note with NWO in an amount not to exceed $2,000,000, at an interest rate
of 2% over prime rate with payment in full to be

Ms. Jennifer Goeken

July 1, 2005

Page 4

received within one year of the original loan date. In addition, the Company obtained a commitment
from NWO to provide additional financing up to an addition $2,000,000, under certain conditions.
The Company believes that together with cash on hand at December 31, 2004 plus cash generated from
2005 revenues and additional funding available from NWO, the proceeds from this line of credit will
be sufficient to fund operations beyond December 31, 2005. The Company is evaluating other
potential financing sources for long-term capital, including the potential of term debt financing
from NWO and the potential of raising additional equity capital from existing shareholders. The
Company has no firm plans or commitments for the provision of long-term capital. The status of
Oceanic’s current litigation may substantially affect our need for and ability to raise capital in
the long-term.”

Please refer to the proposed Form 10-KSB/A for December 31, 2004 attached.

Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Question

    4.

    With assistance from your independent auditor, please tell us how your auditor has considered
your ability to continue as a going concern, as required by AU Section 341.

Response

4. AU Section 341 states that, “The auditor has a responsibility to evaluate whether there is
substantial doubt about the entity’s ability to continue as a going concern for a reasonable period
of time, not to exceed one year beyond the date of the financial statements being audited.” In
performing this evaluation, a number of items are considered, including, but not limited to the
financial condition of the entity at the financial statement date, expectations with respect to the
entity’s ability to generate future cash flows, fund future obligations, and secure financing if
necessary.

     Our auditors have informed us that in performing their assessment of Oceanic’s ability to
continue as a going concern, they addressed the items listed above, considering Oceanic’s recent
results of operations, projected cash requirements and potential sources of financing. In
performing their evaluation, our auditors reviewed Oceanic’s cash flow projections, noting that
cash and liquid investments on hand at December 31, 2004 would be insufficient to fund operations
through December 31, 2005 without additional financing arrangements. We provided our auditors
copies of the $2 million line of credit agreement with NWO Resources, Inc. and a commitment from
NWO Resources, Inc. to provide up to $2 million of additional financing, under certain conditions.
Our auditors performed an assessment of NWO Resources, Inc.’s ability to meet the potential
obligations under the two agreements.

     Based upon the assessment of the factors noted above, we concluded and our auditors concurred
that as of December 31, 2004, there was not substantial doubt with respect to Oceanic’s ability to
continue as a going concern.

Ms. Jennifer Goeken

July 1, 2005

Page 5

Consolidated Balance Sheets

Question

    5.

    We note that you have fully reserved your restricted cash balance of $390,050 because you
expect that this cash will be forfeited to pay for legal expenses as part of the Australian
litigation. Please support your presentation of the reserve as a contra-cash or if you believe
these restricted funds represent a liability, as defined in paragraph 35 of FASB Statement of
Concepts 6, revise your presentation accordingly.

Response

5. We believe that the accounting treatment of this account is correct as presented on the 10-KSB
because we consider the contra-cash account to be a “valuation” account. FASB Statement of
Concepts 6, paragraph 34 discusses valuation accounts, stating, “a separate item that reduces or
increases the carrying amount of an asset is sometimes found in financial statements.” We believe
that paragraph 34 is more relevant to this account than paragraph 35. The FASB states “an estimate
of uncollectible amounts reduces receivables to the amount expected to be collected...Those
“valuation accounts” are part of the related assets and are neither assets in their own right nor
liabilities.” We believe that this reserve is a valuation account because these funds are held in
escrow by the ANZ Bank. Oceanic does not have custody of these funds nor can the Company move
these funds to another account or another bank. Oceanic’s Australian attorneys believe that we
will most likely forfeit all of these funds on deposit when the opposing party completes necessary
legal process.

Question

    6.

    We note that your presentation of the line items “Oil and gas property interests, full-cost
method of accounting” with a balance of $39 million and “Less accumulated amortization,
depreciation, impairment allowance” with a balance of $(39) million does not conform to
Article 4-10(c)(4)(ii) of Regulation S-X. In this regard, costs capitalized within a cost
center in excess of the cost center ceiling should be charged to expense. Please support your
inclusion of these line items in your consolidated balance sheets.

Response

6. We have reviewed your comments and the paragraphs that you referred to in Article 4-10(c)(4)(ii)
of Regulation S-X and we acknowledge your position. Oceanic no longer has any interest in the
Greek Prinos Oil Field itself. That interest was sold to Denison Mines Ltd in 1976, retaining a
15% net profits interest that ended in 1999. Oceanic still retains a “net profits” interest in
other exploration areas of the Aegean Sea. The balance has been fully depleted and netted to zero
since that date. Because there is no financial statement impact when the balances are removed, we
propose to remove the line items on a prospective basis in all future filings.

Ms. Jennifer Goeken

July 1, 2005

Page 6

Consolidated Statements of Stockholder’s Equity

Question

    7.

    Please provide detail in a separate column of the changes in the number of shares of common
stock. Refer to paragraph 10 of APB 12 and revise your presentation accordingly.

Response

7. Paragraph 10 of APB 12 states, “changes in the separate accounts comprising stockholders’ equity
(in addition to retained earnings) and of the changes in the number of shares of equity securities
during at least the most recent annual fiscal period and any subsequent interim period presented is
required to make the financial statements sufficiently informative. Disclosure of such changes may
take the form of separate statements or may be made in the basic financial statements or notes
thereto.” The only change in the number of shares in the 2004 10-KSB was from the 2004 rights
offering. This transaction, including the number of shares, was disclosed in footnote (3) in Item
7, Financial Statements. In addition, the number of shares is also noted on the Consolidated
Balance Sheets. Further disclosure was made in Item 6, Management Discussion and Analysis of
Financial Condition, Results of Operations in the second paragraph. We therefore believe that all
readers have been fully informed of the information required by paragraph 10 of APB 12.

Consolidated Statements of Cash Flows

Question

    8.

    We note that you have classified the purchase of short-term investments as an investing
activity. However, we also note that a portion of your short-term investment balance includes
mutual funds that are classified as trading securities. Confirm, if true, that you have
complied with paragraph 15 of SFAS 95, which states that “investing activities exclude
...securities that are classified as trading securities...” or revise your presentation, as
appropriate.

Response

8. We note that SFAS 115, paragraph 18 states that, “Cash flows from purchases, sales, and
maturities of trading securities shall be classified as cash flows from operating activities.”
Oceanic invested the excess cash balances in short-term securities to improve the interest
earned on them. The amount of cash invested in ban