SecProbe.io

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Mail Stop 3561						September 2, 2005

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

	Re: 	Fortune Oil & Gas, Inc.
		Form 10-SB
		Filed August 8, 2005
		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.  In some
of
our comments, we may ask you to provide us with  information so we
may
better understand your disclosure.  After reviewing this
information,
we may or may not raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects.  We welcome
any
questions you may have about our comments or on any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

General
1. Please be advised that your registration statement will
automatically become effective sixty days after filing.  Since you
initially filed on August 8, 2005, your filing will become
effective
on October 7, 2005.  Upon effectiveness, you will become subject
to
the reporting requirements of the Securities Exchange Act of 1934,
even if we have not cleared your comments.  If you do not wish to
incur those obligations until all of the following issues are
resolved, you may wish to consider withdrawing your registration
statement and resubmitting a new registration statement when you
have
revised your document.

Item 1.  Description of Business, page 2

Background; Acquisition of GFB Resources (Java) Ltd. ..., page 2
2. We note you were incorporated in January 1980 and acquired the
rights to extract and sell oil from the North Java Sea in May
2000.
Please briefly explain your activities during the interim.
3. Please explain "solution gas" in the third paragraph".  Also
explain other technical or industry terms in your document, such
as
"net feet of pay" in risk factor 10 on page 8.

Asset Purchase and Sale Agreement and Joint Venture ..., page 3
4. Please explain the basis of your belief that if required, you
could
identify and contract with a suitable replacement for CRC to
operate
the Camar field, or act as operators yourselves, without causing
an
adverse effect on your business, operations or revenues.

Operation of the Camar and Tuban Oil and Natural Gas Fields, page
4
5. Please revise your filing to include your plan with respect to
securing the use of a storage tanker at the Camar field by the end
of
September 2005.  In doing so, please update this disclosure for
any
progress made towards such goal.

Unused Oil and Natural Gas Reserves at the Camar Field..., page 5
6. We note that you presently have no plans to undertake studies,
explore the oil reserves nor develop the natural gas reserves at
the
Camar field or the Turban field.  Please discuss the
prerequisites,
financial and otherwise, for doing so.  Also discuss this under
Underdeveloped Oil and Natural Gas Reserves at the Tuban Field on
page
6.

Historical Oil Production at the Camar Field, page 5
7. We note that your 2004 oil production is almost five times
lower
than that for 2003.  Please explain to us why your 2004 production
costs on page F-4 are 35% higher than those in 2003.  Amend your
document if it is appropriate.

Employees, page 6
8. It does not appear you have filed your employment agreement
with
Mr. Yunianto as an exhibit.  Please advise or revise.
, Risk Factors Concerning our Business and Operations, page 6

Risk factor 3 "We are Dependant on the Services of Key Management
and
Employees"
9. As currently drafted, this risk factor could apply to any
company.
Please replace it with an appropriately captioned risk factor that
discloses, if true, that management has little or no practical
experience in the oil and gas industry.  Discuss the impact that
this
may have or has had on your operating results.

Item 2.  Management`s Discussion of Analysis or Plan of Operation,
page 12
10. We note that the Camar field has not performed as well as the
previous operators had predicted.  Please discuss this in further
detail and explain if this has affected your activities in any
way.
For example, if you are examining means to maximize current oil
production through the upgrading of systems and the employment of
enhanced recovery methods, please describe.
11. Briefly describe the production difficulties you encountered
in
2004 and what you have done to overcome them.
12. Please note that Item 303(b)(1) of Regulation S-B requires, as
applicable, a discussion of any known trends, events, or
uncertainties
that are reasonably likely to have a material effect on your net
sales
or revenues, income from continuing operations, profitability,
liquidity or capital resources, or that would otherwise cause
reported
financial information not necessarily to be indicative of future
operating results or financial condition.  For example, are there
any
trends that you anticipate will impact your revenues and do you
expect
your revenues to increase, decrease or stay the same?  Please
revise
accordingly.  For additional guidance, please refer to SEC
Releases
33-6835, 33-8056, and 33-8350.
13. Please discuss any seasonal aspects that had a material effect
on
your financial condition or results of operation.

Liquidity and Capital Resources, page 18
14. Please describe all internal and external sources of
liquidity, as
well as any material commitments for capital expenditures and the
expected sources of funds for such expenditures.
15. Please revise your filing to update liquidity and capital
resources to include a discussion and analysis of historical
cashflows
for all periods presented.
16. Please revise your filing to update your discussion and
analysis
of historical cashflows to ensure it is not merely a recitation of
changes evident from the financial statements.  For example, you
indicate that your operating cash flows for the three months ended
March 31, 2005 reflect your net profit of $11,519,588 and that you
had
negative working capital of $12,187,331.  Please provide analysis
explaining the underlying reasons for the fluctuations in the
working
capital accounts.  Also provide insight into whether you expect
your
historical cash flow performance to be indicative of future
performance.  Finally, we note that your disclosure of net profit
of
$11,519,588 for the three months ended March 31, 2005 is different
than the $11,295,718 of net income reflected on your consolidated
statement of operations for the same period.  Please revise or
advise.
17. We note your disclosure that cash used by financing activities
for
the three months ended March 31, 2005 consisted principally of the
payoff of short-term debt and related interest expenses of
$3,536,847.
Please revise your filing to comply with paragraph 23d of SFAS 95.
In
addition, it appears that your current disclosure includes a typo
such
that short-term debt is described as short-debt.
18. Please revise your filing to include disclosure that addresses
the
effect, if any, of the existence of a net working capital deficit
on
your ability to operate your business and meet your obligations as
they come due. Also, consider disclosure of material changes in
your
net working capital deficit, and the reasons for any such material
changes.  See Item 303 of Regulation S-B.

Item 6.  Executive Compensation, page 22
19. You state that during the 2004 fiscal year, none of your
executive
officers received compensation of at least $100,000 per year.
However, this does not appear to be correct in light of the
amounts
shown in your summary compensation table.  Please advise or
revise.

Consolidated Financial Statements, page F-1

General
20. Your financial statements as of and for the periods ended June
30,
2005 should be included when filing your amended registration
statement.
21. Please separately state, in a note to your financial
statements,
the names of the specific creditors and the amounts owed to each
with
respect to your accounts payable and accrued liabilities that
reconciles to the amounts recorded on the face of the balance
sheet
for all periods presented.  Please provide such information for
all
creditors who were owed 10% or more of the total accounts payable
and
accrued liabilities balance as of December 31, 2004.  In addition,
please revise your results of operations to include the creditors`
names whereby you recorded a gain on settlement of trade payables
at
less than book value and the status of any ongoing negotiations
with
such creditors.

Note 3. Summary of Significant Accounting Policies, page F-8
22. Please revise your filing to include the components of your
net
deferred tax asset and all related disclosures as required by
paragraphs 43-49 of SFAS 109.  In addition, please tell us and
disclose why you have not recorded current tax expense for the
quarter
ended March 31, 2005.  In doing so, please discuss the
implications of
capital gains and ordinary income/loss with respect to your
ability to
offset one against the other for income tax purposes.

Note 8 - Sale of Oil Rights, page F-15
23. We note your disclosure that under the terms of the Asset
Purchase
and Sale Agreement, you have deposited $4,500,000 in a trade debt
settlement account for settlement of outstanding debts with
creditors
of $9,826,622.  It appears that a portion or all of the gain
recognized should be deferred pending the outcome of your
settlement
negotiations with creditors.  Please provide us a detail of this
transaction which includes the cost basis of the properties sold,
the
total of all creditors` debts subject to negotiation included in
the
terms of sale agreement and the amount of such debts subsequently
settled including the amounts paid in final settlement.
Additionally,
explain to us why $1,000,000 of the sale proceeds was deposited in
a
joint operating account.

Note 9. Short Term Debt, page F-17
24. We note that you secured certain promissory notes due to
NOWMCO
with a vessel and 5 million shares of your common stock.  On July
11,
2002, NOWMCO assigned its rights under the Loan Agreement to
Enterprise Trading Limited.  On August 19, 2004, Enterprise
foreclosed
on the loan and exercised its rights under the Loan Agreement to
obtain possession of your vessel.  Please revise your filing to
clarify whether Enterprise retained ownership of the 5 million
shares
of your common stock that secured the promissory notes.  In doing
so,
please tell us how such common shares impacted your shares
outstanding
and any potential dilutive effect on earnings per share for all
periods presented. Please indicate the appropriate accounting
literature to support your position.

Note 10. Shareholders` Equity, page F-19
25. Please revise your filing to include a reconciliation of your
computation of earnings per diluted share.  Refer to paragraphs 40
and
41 of SFAS 128.  In doing so, please tell us the impact to your
diluted earnings per share calculation with respect to your
contracts
and stock-based compensation arrangements that may be settled in
stock
or cash.  In this regard, we note you have a history of issuing
stock
in payment of salaries, for services provided, and for settlement
of
debt.  Please refer to paragraphs 22 and 29 of SFAS 128.

Supplementary Financial Information on Oil and Natural Gas
Exploration, Development and Production Activities (Unaudited),
page
F-28

Costs Incurred, page F-28
26. You disclose acquisition costs incurred of $3.1 million in
2005
and $10.6 million in 2004 and in 2003.  Please amend your document
here and in the Description of Business section to describe the
properties acquired.

Oil and Natural Gas Reserves, page F-28
27. Please amend your document to disclose the standardized
measure of
discounted future net cash flows as required by Financial
Accounting
Standard 69, paragraphs 30-34.
28. Please furnish to us an itemization of the components of the
annual production costs you used in the standardized measure.
29. Please provide us with the reserve report by Petroleum Geo-
Services.

* * *

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  You may wish to provide us with marked copies of
the
amendment to expedite our review.  Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested information.  Detailed cover letters greatly
facilitate
our review.  Please understand that we may have additional
comments
after reviewing your amendment and responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information investors require for an informed
decision.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal
securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in our review of your filing or in response
to
our comments on your filing.

      You may contact John Cannarella , Staff Accountant, at 202-
551-
3337 or William Choi, Accounting Branch Chief, at (202) 551-3716
if
you have questions regarding comments on the financial statements
and
related matters.  Please contact Anita Karu, Attorney-Advisor, at
202-
551-3240, David Mittelman, Legal Branch, at (202) 551-3214, or me
at
202-551-3725 with any other questions.

      Sincerely,

      H. Christopher Owings
      Assistant Director

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

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David Nunn
Fortune Oil & Gas, Inc.
September 2, 2005
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