1

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

                                FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
     2005.

                                     OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE TRANSITION FROM _______ TO ________.

                      COMMISSION FILE NUMBER 000-31945

                   POWDER RIVER BASIN GAS CORP.          
           (Exact name of registrant as specified in its charter)

     COLORADO                                               84-1521645     
(State or other jurisdiction of                           (I.R.S. Employer 
 incorporation or organization)                         Identification No.)

                            104, 3208 8TH Ave NE
                            Calgary, AB T2A 7V8
                  (Address of principal executive offices)

                 Issuer's telephone number: (403) 263-5010

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 [ ]

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 

At September 30, 2005, there were outstanding 111,600,961 shares of the
Registrant's Common Stock, $.001 par value.

Transitional Small Business Disclosure Format: Yes [X]   No [ ]



 2

                       PART I  FINANCIAL INFORMATION

Item 1.   FINANCIAL STATEMENTS (UNAUDITED)


          TABLE OF CONTENTS
                                                                       Page
                                                                       ----

Part I    Financial Information

Item 1.   Financial Statements

          Consolidated Balance Sheets
          September 30, 2005 (Unaudited) and December 31, 2004 . . . . .3

          Consolidated Statements of Operations (Unaudited)
          For the three months and nine months 
          Ended September 30, 2005 and 2004. . . . . . . . . . . . . . .4

          Consolidated Statements of Cash Flows (Unaudited)
          For the nine months ended September 30, 2005 and 2004. . . . .5

          Notes to the Consolidated Financial Statements . . . . . . . .7

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations. . . . . . . . . . . . . 12

Item 3.   Controls and Procedures. . . . . . . . . . . . . . . . . . . 15

Part II   Other Information

Item 1.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . 16

Item 2.   Unregistered Sales of Equity Securities
          and Use of Proceeds. . . . . . . . . . . . . . . . . . . . . 16

Item 3.   Defaults by the Company on its Senior Securities . . . . . . 16

Item 4.   Submission of Matter to a Vote
          Of Security Holders. . . . . . . . . . . . . . . . . . . . . 16

Item 5.   Other Information. . . . . . . . . . . . . . . . . . . . . . 16

Item 6.   Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . 16

          Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 17
 3
                        POWDER RIVER BASIN GAS CORP
                        Consolidated Balance Sheets



                                   ASSETS
                                  -------
                                               September 30,   December 31,
                                                    2005           2004    
                                               -------------  -------------
                                                 (Unaudited)
                                                                  
CURRENT ASSETS
 Cash                                           $   436,504    $   168,539 
 Accounts receivable                              2,282,798      1,081,719 
 Prepaid expenses                                    21,706            -   
                                               -------------  -------------
   Total Current Assets                           2,741,008      1,250,258 
                                                                           
PROPERTY AND EQUIPMENT (Net)                         29,327         12,896 
                                               -------------  -------------
OIL AND GAS PROPERTIES USING
 FULL COST ACCOUNTING

 Properties not subject to amortization           2,304,815      1,669,114 
 Properties being amortized                       1,063,674      1,063,674 
 Accumulated amortization                           (10,430)        (5,630)
                                               -------------  -------------
   Net Oil and Gas Properties                     3,358,059      2,727,158 

OTHER ASSETS
 Deposits and other assets                          465,090         15,500 
                                               -------------  -------------
   Total Other Assets                               465,090         15,500 
                                               -------------  -------------
   TOTAL ASSETS                                $  6,593,484   $  4,005,812 
                                               =============  =============

                    LIABILITIES AND STOCKHOLDERS' EQUITY
                   -------------------------------------

CURRENT LIABILITIES
 Accounts payable                              $     19,458   $     23,094 
 Accrued expenses                                    10,990            -   
 Income taxes payable                               530,400            -   
 Note payable, related party                         60,250        137,226 
 Notes payable                                      753,700        354,700 
                                               -------------  -------------
   Total Current Liabilities                      1,374,798        515,020 
                                               -------------  -------------
   Total Liabilities                              1,374,798        515,020 
                                               -------------  -------------
STOCKHOLDERS' EQUITY
 Common stock, 200,000,000 shares authorized 
  of $0.001 par value, 111,600,961 and 
  104,050,961 shares issued and outstanding, 
  respectively                                      111,601        104,050 
 Capital in excess of par value                   7,542,461      6,115,479 
 Subscription receivable                            (50,000)           -   
 Other comprehensive income                           2,705          2,705 
 Accumulated deficit                             (2,388,081)    (2,731,442)
                                               -------------  -------------
   Total Stockholders' Equity                     5,218,686      3,490,792 
                                               -------------  -------------
   TOTAL LIABILITIES AND 
   STOCKHOLDERS' EQUITY                        $  6,593,484   $  4,005,812 
                                               =============  =============





 The accompanying notes are an integral part of these financial statements.
                                      
 4
                        POWDER RIVER BASIN GAS CORP
                   Consolidated Statements of Operations
                                (Unaudited)



                                        For the                    For the         
                                   Three Months Ended          Nine Months Ended    
                                      September 30,              September 30,     
                               --------------------------  --------------------------
                                   2005          2004          2005          2004    
                               ------------  ------------  ------------  ------------
                                                             
REVENUE

 Oil and gas sales                 130,955        66,000       519,415       154,829 
 Property and working 
  interest sales                   706,083       605,978     2,581,083       605,978 
                               ------------  ------------  ------------  ------------
   Total Revenue                   837,038       671,978     3,100,498       760,807 
                               ------------  ------------  ------------  ------------
EXPENSES

 Depreciation, depletion and 
  amortization                       3,206         3,800         8,408        10,793 
 General and administrative        309,004       227,229       795,154       260,763 
 Value of warrants granted 
  for marketing, legal and 
  consulting costs                 376,132           -         467,782           -   
 Stock compensation                656,750           -         656,750           -   
 Lease operating costs              85,244        36,172       197,469        53,325 
                               ------------  ------------  ------------  ------------
   Total Expenses                1,430,337       267,201     2,125,564       324,881 
                               ------------  ------------  ------------  ------------
NET OPERATING INCOME (LOSS)       (593,299)      404,777       974,934       435,926 

OTHER INCOME (EXPENSE)

 Litigation settlement (Note 5)        -             -         (90,000)          -   
 Gain on sale of assets                -             -           2,841           -   
 Interest expense                   (2,500)      (34,636)      (14,014)      (59,446)
                               ------------  ------------  ------------  ------------
   Total Other Income (Expense)     (2,500)      (34,636)     (101,173)      (59,446)
                               ------------  ------------  ------------  ------------
NET INCOME (LOSS) BEFORE 
INCOME TAXES                      (595,799)      370,141       873,761       376,480 

INCOME TAXES                           -             -        (530,400)          -   
                               ------------  ------------  ------------  ------------
NET INCOME (LOSS)              $  (595,799)  $   370,141   $   343,361   $   376,480 
                               ============  ============  ============  ============
BASIC INCOME (LOSS) PER 
COMMON SHARE                   $     (0.01)  $      0.00   $      0.00   $      0.00 
                               ============  ============  ============  ============
WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING     109,670,526    93,941,939   106,728,617    89,292,963 
                               ============  ============  ============  ============




 The accompanying notes are an integral part of these financial statements.
                                      
 5

                        POWDER RIVER BASIN GAS CORP
                   Consolidated Statements of Cash Flows
                                (Unaudited)


                                                           For the Nine Months Ended
                                                                September 30,     
                                                         ---------------------------
                                                              2005          2004    
                                                         ------------- -------------
                                                                           
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                             $    343,361  $    376,480 
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
     Depreciation, depletion and amortization                   8,408        10,793 
     Gain on sale of assets                                    (2,841)          -   
     Additional expense for granting of warrants              467,782           -   
     Common stock issued for services rendered                656,750        55,000 
  Changes in operating assets and liabilities:
   Increase in accounts receivable                         (1,201,079)     (673,742)
   Increase in deposits and other assets                     (446,295)      (60,100)
   Increase in taxes payable                                  530,400           -   
   Increase in accounts payable and accrued expenses            7,354        41,143 
                                                         ------------- -------------
   Net Cash Provided by (Used in) Operating Activities        363,840      (250,426)

CASH FLOWS FROM INVESTING ACTIVITIES:
  Expenditures for oil and gas property development          (349,618)      (40,670)
  Expenditures for property and equipment                     (17,198)          -   
  Proceeds from sale of interest in leases                    453,917       137,057 
                                                         ------------- -------------
   Net Cash Provided by (Used in) Investing Activities         87,101       (40,670)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from notes payable and long-term liabilities        90,000        76,617 
  Payments on notes payable and long-term liabilities        (332,976)      (41,000)
  Proceeds from issuance of common stock                       60,000       280,000 
                                                         ------------- -------------
   Net Cash Provided by (Used in) Financing Activities       (182,976)      315,617 
                                                         ------------- -------------
NET INCREASE IN CASH                                          267,965        24,521 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD              168,539           -   
                                                         ------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD               $    436,504  $     24,521 
                                                         ============= =============




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

 6
                        POWDER RIVER BASIN GAS CORP
                   Consolidated Statements of Cash Flows
                                (Unaudited)


                                                          For the Nine Months Ended
                                                                 September 30,     
                                                         ---------------------------
                                                              2005         2004    
                                                         ------------- -------------
                                                                           
SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR:

  Interest                                               $      5,252  $     15,000 
  Income taxes                                           $        -    $        -   

NON-CASH FINANCING ACTIVITIES

  Common stock issued for acquired oil and gas properties$    200,000  $        -   
  Oil and gas properties acquired through the issuance of 
   debt                                                  $    565,000  $        -   
  Common stock issued for retirement of payables         $        -    $     70,003 













 The accompanying notes are an integral part of these financial statements
                                      
 7
                        POWDER RIVER BASIN GAS CORP.
               Notes to the Consolidated Financial Statements
                  September 30, 2005 and December 31, 2004


NOTE 1 -  BASIS OF PRESENTATION

     The financial information included herein is unaudited and has been
     prepared consistent with generally accepted accounting principles for
     interim financial information and with the instructions to Form 10-QSB
     and Item 310(b) of Regulation S-B.  Accordingly, these financial
     statements do not include all information and footnotes required by
     generally accepted accounting principles for complete financial
     statements.  These statements should be read in conjunction with the
     audited financial statements and notes thereto included in the
     Company's annual report on Form 10-KSB for the year ended December 31,
     2004.  In the opinion of management, these financial statements
     contain all adjustments (consisting solely of normal recurring
     adjustments) which are, in the opinion of management, necessary for a
     fair statement of results for the interim period presented.

     The results of operations for the nine months ended September 30, 2005
     are not necessarily indicative of the results to be expected for the
     full year.

NOTE 2 -  DILUTED INCOME (LOSS) PER SHARE

     Following is a reconciliation of the diluted income (loss) per share
     for the three months and nine months ended September 30, 2005 and
     2004:



                                                          For the          
                                                     Three Months Ended    
                                                        September 30,      
                                                 --------------------------
                                                     2005          2004    
                                                 ------------  ------------
                                                                  
     Net income (loss) available to
      common shareholders                        $  (595,799)  $   370,141 
                                                 ============  ============
     Weighted average shares                     109,670,526    93,941,939 
      Effect of dilutive securities                         -             -
                                                 ------------  ------------
                                                 109,670,526    93,941,939 
                                                 ============  ============
     Basic income (loss) per share (based
      on weighted average shares)                $     (0.01)  $      0.00 
                                                 ============  ============


     Weighted average shares issuable upon the exercise of stock warrants
     (12,700,000 warrants) were not included in the foregoing calculation
     for the three months ended September 30, 2005 because they are
     antidilutive.





                                      
 8
                        POWDER RIVER BASIN GAS CORP.
               Notes to the Consolidated Financial Statements
                  September 30, 2005 and December 31, 2004
     
NOTE 2 -  DILUTED INCOME (LOSS) PER SHARE



                                                          For the          
                                                     Three Months Ended    
                                                        September 30,      
                                                 --------------------------
                                                     2005          2004    
                                                 ------------  ------------
                                                                  
     Net income available to
      common shareholders                        $   343,361   $   376,480 
                                                 ============  ============
     Weighted average shares                     106,728,617    89,292,963 
      Effect of dilutive securities                8,255,311             - 
                                                 ------------  ------------
                                                 114,983,928    89,292,963 
                                                 ============  ============
     Diluted income (loss) per share (based
      on weighted average shares)                $      0.00   $      0.00 
                                                 ============  ============
                                                                   
     The diluted income per share for the nine months ended September 30,
     2005 includes common stock equivalents, consisting of 12,700,000
     warrants.

NOTE 3 -  OIL AND GAS PROPERTIES

     The full cost method is used in accounting for oil and gas properties. 
     Accordingly, all costs associated with acquisition, exploration, and
     development of oil and gas reserves, including directly related
     overhead costs, are capitalized.  In addition, depreciation on
     property and equipment used in oil and gas exploration and interest
     costs incurred with respect to financing oil and gas acquisition,
     exploration and development activities are capitalized in accordance
     with full cost accounting.  Capitalized interest for the nine months
     ended September 30, 2005 and 2004 was $0.  All capitalized costs of
     proved oil and gas properties subject to amortization are being
     amortized on the unit-of-production method using estimates of proved
     reserves.  Investments in unproved properties and major development
     projects not subject to amortization are not amortized until proved
     reserves associated with the projects can be determined or until
     impairment occurs.  If the results of an assessment indicate that the
     properties are impaired, the amount of the impairment is added to the
     capitalized costs to be amortized.  As of September 30, 2005 and
     December 31, 2004, proved oil and gas reserves had been identified on
     certain of the Company's oil and gas properties.  During the nine
     months ended September 30, 2005 and 2004, the Company recorded
     depletion of $4,800 and $10,793 on its producing properties.  All
     other wells are incomplete as of September 30, 2005 and December 31,
     2004.







                                      
 9
                        POWDER RIVER BASIN GAS CORP.
               Notes to the Consolidated Financial Statements
                  September 30, 2005 and December 31, 2004

NOTE 4 -  SIGNIFICANT TRANSACTIONS

     During the nine months ended September 30, 2005, the Company purchased
     a 75% working interest in a producing property for a total of
     $800,000.  For the purchase price of $800,000, the Company paid
     $30,000 in cash, signed a promissory note for $570,000 payable by
     December 31, 2005 bearing no interest, and issued a total of 2,000,000
     shares of common stock valued at $0.10 per share (or $200,000).  The
     shares issued were valued at the market price of the common stock on
     the date that the agreement was entered into.

     On March 1, 2005, the Company sold 25% of the acquired working
     interest in the producing property as described above, to an unrelated
     party for a total of $2,500,000, less a commission of $425,000,
     resulting in a gain on the sale of $1,875,000.

     On August 22, 2005, the Company sold a working interest in a separate
     producing property to an unrelated party for a total of $1,200,000,
     less a commission of $240,000, resulting in a gain on the sale of
     $946,083.

     Also during the nine months ended September 30, 2005, the Company
     granted a total of 9,200,000 warrants to purchase common stock as
     follows:



                                                        Dates     
       Warrants         Exercise Price              of Expiration
    ---------------     ---------------          --------------------
                                           
          1,000,000     $          0.12              January 31, 2006
          1,000,000     $          0.18              January 31, 2007
          1,000,000     $          0.16              January 31, 2006
          1,000,000     $          0.24              January 31, 2007
            100,000     $          0.16                March 31, 2006
          4,000,000     $         0.185             December 31, 2007
                                                     (see note below)
            500,000     $          0.21             December 31, 2007
            100,000     $         0.185             December 31, 2006
            100,000     $          0.30             December 31, 2007
            200,000     $          0.20               August 31, 2006
            200,000     $          0.30               August 31, 2007


     The Company estimates the fair value of each stock award at the grant
     date by using the Black-Scholes option pricing model pursuant to FASB
     Statement 123, "Accounting for Stock-Based Compensation".  Under the
     provisions of SFAS 123, additional expense of $467,782 was recorded
     for the nine months ended September 30, 2005 under the Black-Scholes
     option pricing model for these warrants, which was calculated based
     upon the following assumptions:



                                         
         Risk free interest rate            2.89% - 3.25%
         Expected life                      1 to 2.42 years
         Expected volatility                126.40%
         Dividend yield                     0.00%



                                      

 10
                        POWDER RIVER BASIN GAS CORP.
               Notes to the Consolidated Financial Statements
                  September 30, 2005 and December 31, 2004

NOTE 4 -  SIGNIFICANT TRANSACTIONS (Continued)

     NOTE:  A total of 2,000,000 of these options were granted to an
     employee of the Company, were issued at the market price of the
     Company's common stock on the date of issue and are accounted for
     under APB 25, "Accounting for Stock Issued to Employees". As such, no
     compensation expense was recognized.  Had compensation cost for the
     issuance of the options been determined based on fair market value at
     the grant dates consistent with the method of FASB Statement 123,
     "Accounting for Stock Based Compensation," our net income (loss) and
     income (loss) per share would have changed, as noted with the pro
     forma amounts indicated below:



                                                          For the          
                                                    Three Months Ended    
                                                       September 30,      
                                                 --------------------------
                                                     2005          2004    
                                                 ------------  ------------
                                                                  
     Net income (loss) as reported               $  (595,799)  $    370,141
     Pro forma$                                     (849,535)  $    370,141

     Basis income (loss) per share
     As reported                                 $     (0.01)  $       0.00
     Pro forma                                   $     (0.01)  $       0.00


     On July 31, 2005, the Company issued 1,000,000 shares of common stock
     through the exercise of common stock warrants at $0.06 per share for
     total cash proceeds of $60,000.  In addition, on August 1, 2005, the
     Company issued an additional 1,000,000 shares of common stock through
     the exercise of common stock warrants at $0.05 per share for a
     subscription receivable totaling $50,000.

     On August 1, 2005, the Company issued a total of 3,550,000 shares of
     common stock at $0.185 per share to various employees and consultants
     for services rendered totaling $656,750.  The shares were valued based
     upon the market price of the shares on the date of issuance.  

NOTE 5 -  LITIGATION SETTLEMENT

     During the nine months ended September 30, 2005, the Company entered
     into a settlement agreement in connection with a lawsuit against the
     Company's predecessor company for alleged services rendered, totaling
     $90,000.  Terms of the settlement include payment of $5,000 per month,
     non-interest bearing, until paid.  

NOTE 6 -  SUBSEQUENT EVENT   RELATED PARTY TRANSACTION

     Subsequent to September 30, 2005, the Company acquired 100% of the
     outstanding common stock of Renco Energy, Inc. ("Renco"), a wholly-
     owned subsidiary of Renco Resources, Inc., a company in which the
     Company's President has an approximate 15% interest in, by issuing
     7,800,000 shares of the Company's outstanding common stock.  During
     July 2004, the Company had entered into a Purchase and Sale Agreement
     to purchase Renco, subject to an independent valuation of Renco's
     assets.  This independent valuation was not completed until recently.

                                      
 11
                        POWDER RIVER BASIN GAS CORP.
               Notes to the Consolidated Financial Statements
                  September 30, 2005 and December 31, 2004

NOTE 6 -  SUBSEQUENT EVENT   RELATED PARTY TRANSACTION (Continued)

     The Company expects to finalize the transaction on or about November
     15, 2005.  Condensed unaudited financial information for Renco as of
     September 30, 2005 is as follows:



                                                 
     Current assets                                  $     91,231
     Property, equipment and oil and
         gas properties                                   507,998
                                                     ------------
     Total Assets                                    $    599,229
                                                     ============

     Current liabilities                             $    708,337

     Stockholders' equity                               (109,108)
                                                     ------------
     Total Liabilities and Stockholders' Equity      $    599,229
                                                     ============

     Production revenue                              $    134,876

     Total expenses                                     (107,316)
                                                     ------------
     Net Income                                      $     27,560
                                                     ============



                                      

 12

ITEM 2    Management's Discussion and Analysis of Financial Condition and
          Results of Operations

Cautionary Statement Regarding Forward-looking Statements
---------------------------------------------------------
This report may contain "forward-looking" statements.  Examples of forward-
looking statements include, but are not limited to: (a) projections of
revenues, capital expenditures, growth, prospects, dividends, capital
structure and other financial matters; (b) statements of plans and
objectives of our management or Board of Directors; (c) statements of our
future economic performance; (d) statements of assumptions underlying other
statements and statements about us and our business relating to the future;
and (e) any statements using the words "anticipate," "expect," "may,"
"project," "intend" or similar expressions.

Plan of Operation
-----------------
The Company is an oil and gas exploration company that is engaged in the
evaluation and development of coalbed methane (CBM) reserves as well as
shallow oil reserves within the Powder River Basin in the State of Wyoming.

The Company's focus has been in obtaining leasehold interests in acreage
within the Powder River Basin, currently a most prolific coalbed methane
gas exploration play in the domestic United States.  Its attributes include
low cost, shallow depth drilling and completion; a proven play with major
operators and an existing and expanding infrastructure; greater and longer
production yields when comparing cost/benefit analyses to other basins and,
a very low exploration risk.

As of December 31, 2004, the Company owns a total of 11,878 acres in
thirteen different leases within Converse, Crook, Johnson, and Sheridan
counties.  The Company has a 100 percent working interest in most of their
leases to date. The Company's leases are adjacent to larger CBM developers
and operators such as Western Gas Resources, Williams Companies, Phillips
Petroleum, J.M. Huber and others. This close proximity to other operators
allows the Company to benefit from the established infrastructure of
gathering systems, pipelines, electricity sources, roads, etc.

As of September 30, 2005, the Company has drilled and completed two CBM
wells in their Zullig Lease, located just west of Clearmont, Wyoming in
Sheridan County.  The company expects to produce 300 Mcf per day from these
wells, which will extend yields and maintain production consistency.  In
addition, the Company drilled eleven other wells on the lease to a minimal
depth of ten percent of their total depth in order to meet certain state
requirements in reducing the well spacing from eighty acres to forty acres.

The Company has also completed a purchase of 960 acres in Arcadia Parish,
Louisiana.

During 2004, the Company also purchased a 25% working interest in a 9 well
re-work program in Oklahoma.  Five wells have been re-worked and were put
in production during 2004 with the remaining four to be completed in 2005.

The Company also purchased a 22 well re-work program in Louisiana in
November of 2004 and well re-work was started immediately with all wells to
be in production in 2005.


 13

During the nine months ended September 30, 2005, the Company purchased a
75% working interest in a producing property, and then subsequently sold
25% of this acquired working interest to an unrelated party.

A 25% working interest in a separate property was also sold during August
2005 to an unrelated party.

The Company's business strategy for the next twelve months includes focused
acquisitions and drilling operations which may be curtailed, delayed or
cancelled as a result of a variety of factors, including unexpected
drilling conditions, pressure or irregularities in formations, equipment
failures or accidents, weather conditions and shortages or delays in
equipment delivery.  The Company has drilled two gas wells that will
produce commercially viable gas resources once the appropriate
infrastructure (i.e., pipeline) is in place.  The Company also plans to
continue to increase production on its Louisiana and Oklahoma projects.

Results of Operations
---------------------
Three Months and Nine Months Ended September 30, 2005 compared with 2004
------------------------------------------------------------------------

Revenues:  During the three months ended September 30, 2005, the Company
reported an increase in oil and gas sales compared to the three months
ended September 30, 2004 of approximately $65,000 or 98%. During the nine
months ended September 30, 2005, the Company reported an increase in oil
and gas sales compared to the nine months ended September 30, 2004 of
approximately $365,000 or 235%.  The Company also reported revenues related
to property and working interest sales of $2,581,083 during the nine months
ended September 30, 2005.  The Company expects to continue to sell property
and working interests in its properties in the future as the properties are
developed and additional properties are acquired.  The Company is currently
working to raise development capital to increase production and anticipates
it will be successful in raising the funds necessary to complete work in
progress.

Expenses:  During the three months and nine months ended September 30,
2005, the Company reported a substantial increase in expenses of
approximately $1,163,000 and $1,800,000, respectively, compared to the
three months and nine months ended September 30, 2004, primarily due to the
increased production and lease operating costs, additional travel, and
administrative expenses.  The Company also reported expenses of $467,782
and $656,750 for the nine months ended September 30, 2005 as a result of
certain common stock warrants granted and common shares issued during the
period for payroll, marketing, managerial and legal services rendered.

Liquidity and Capital Resources
-------------------------------

On September 30, 2005, the Company had $1,374,798 in current liabilities,
which includes notes payable due within the next twelve months of $813,950,
and taxes payable totaling $530,400.  The current accounts payable include
payments to auditors, accounting and legal as well as start up costs. The
accrued expenses include accumulated interest on the outstanding notes owed
by the Company.








 12

The growth of the Company's business will require substantial capital on a
continuing basis, and there is no assurance that any such required
additional capital will be available on satisfactory terms and conditions,
if at all.  The Company may pursue, from time to time, opportunities to
acquire oil and natural gas properties and businesses that may utilize the
capital currently expected to be available for its present operations.  The
amount and timing of the Company's future capital requirements, if any, may
depend upon a number of factors, including drilling, transportation, and
equipment costs, marketing expenses, staffing levels, competitive
conditions, and purchases or dispositions of assets, many of which are not
in the Company's control.  In addition, the Company's pursuit of additional
capital could result in the incurrence of additional debt or potentially
dilutive issuances of equity securities.

The Company's ability to meet any future debt service will be dependant
upon the Company's future performance, which will be subject to oil and
natural gas prices, the Company's level of production, general economic
conditions and financial, business and other factors affecting the
operations of the Company, many of which are beyond its control.  There can
be no assurance that the Company's future performance will not be adversely
affected by such changes in oil and natural gas prices and / or production
nor by such economic conditions and / or financial, business and other
factors.  In addition, there can be no assurance that the Company's
business will generate sufficient cash flow from operations or that future
bank credit will be available in an amount to enable the Company to service
its indebtedness or make necessary expenditures.  In such event, the
Company would be required to obtain such financing from the sale of equity
securities or other debt financing.  There can be no assurance that any
such financing will be available on terms acceptable to the Company. Should
sufficient capital not be available, the Company may not be able to
continue to implement its business strategy.

Impact of Inflation
-------------------
At this time, we do not anticipate that inflation will have a material
impact on our current or future operations.

Critical Accounting Policies and Estimates
------------------------------------------
Except with regard to the estimated future cash flows of the capitalized
oil and gas properties, the Company does not employ any critical accounting
policies or estimates that are either selected from among available
alternatives or require the exercise of significant management judgment to
apply or that if changed are likely to materially affect future periods. 
Management reviews the carrying value of the capitalized oil and gas
properties annually for evidence of impairment and considers, based on its
current marketing activities, plans and expectations, and the perceived
effects of competitive factors, whether any write-downs should be taken or
whether the estimated reserves should be changed. 












 15

Recent Accounting Pronouncements
--------------------------------

In December, 2004, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123 (Revised 2004), SHARE-BASED PAYMENT (SFAS 123R). SFAS 123R
requires that compensation cost related to share-based employee
compensation  transactions be recognized in the financial statements.
Share-based employee compensation transactions within the scope of SFAS
123R include stock options, restricted stock plans, performance-based
awards, stock appreciation rights and employee share purchase plans. The
provisions of SFAS 123R are effective as of the first interim period that
begins after December 15, 2005. 

In December 2004, the FASB issued SFAS No. 153, EXCHANGES OF NONMONETARY
ASSETS, AN AMENDMENT OF APB OPINION NO. 29, ACCOUNTING FOR NONMONETARY
TRANSACTIONS.  The amendments made by SFAS 153 are based on the principle
that exchanges of nonmonetary assets should be measured based on the fair
value of the assets exchanged. Further, the amendments eliminate the narrow
exception in APB Opinion No. 29 for nonmonetary exchanges of similar
productive assets and replace it with a broader exception for exchanges of
nonmonetary assets that do not have commercial substance. The Statement is
effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after September 15, 2005. We do not expect to enter into any
transactions that would be affected by adopting SFAS 153.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, a Replacement of APB Opinion No. 20 and SFAS No. 3.  SFAS No.
154 replaces APB Opinion No. 20, Accounting Changes and SFAS No 3,
Reporting Accounting Changes in Interim Financial Statements and changes
the requirement for the accounting for and reporting of a change in
accounting principles.  SFAS No. 154 applies to all voluntary changes in
accounting principles.  It also applies to changes required by an
accounting pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions.  When a pronouncement
includes specific transition provisions, those provisions should be
followed.  The provisions of SFAS No. 154 will be effective for accounting
changes made in fiscal year beginning after December 15, 2005.  We do not
expect that the adoption of SFAS No. 154 will have a material impact on the
Company's financial condition or operations in future years.

ITEM 3.   CONTROLS AND PROCEDURES

Our principal executive and principal financial officer has participated
with management in the evaluation of effectiveness of the controls and
procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under
the Exchange Act as of the end of the period covered by this report.  Based
on that evaluation, our principal executive and principal financial officer
believes that our disclosure controls and procedures (as defined in Rule
13a-15(e) or Rule 15d-15(e) under the Exchange Act) are effective as of the
end of the period covered by the report.  There have been no changes in our
internal controls that have materially affected, or are reasonably likely
to materially affect, our internal controls over financial reporting during
the period covered by this report.








 16

PART II
                             OTHER INFORMATION
                         ITEM 1 - LEGAL PROCEEDINGS

The Company is not subject to any legal proceedings at September 30, 2005.

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

On July 31, 2005, the Company issued 1,000,000 shares of common stock
through the exercise of common stock warrants at $0.06 per share for total
cash proceeds of $60,000.  In addition, on August 1, 2005, the Company
issued an additional 1,000,000 shares of common stock through the exercise
of common stock warrants at $0.05 per share for a subscription receivable
totaling $50,000.

On August 1, 2005, the Company issued a total of 3,550,000 shares of common
stock at $0.185 per share to various employees and consultants for services
rendered totaling $656,750.  The shares were valued based upon the market
price of the shares on the date of issuance.  
     
The shares issued in the foregoing transactions were issued in reliance on
the exemption from registration and prospectus delivery requirements of the
Act set forth in Section 3(b) and/or Section 4(2) of the Securities Act and
the regulations promulgated thereunder.


ITEM 3 -  DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES

     None.

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

     None.

ITEM 5 -  OTHER INFORMATION 

     None.

ITEM 6 -  EXHIBITS

     Exhibit 31.1 - Certification of principal executive officer and
                    principal financial officer as adopted pursuant to
                    Section 302 of the Sarbanes-Oxley Act Of 2002

     Exhibit 32.1 - Certification of principal executive officer and
                    principal financial officer pursuant to 18 U.S.C.
                    Section 1350, as adopted pursuant to Section 906 of the
                    Sarbanes-Oxley Act of 2002



 17
                                 SIGNATURES



In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.  



                                   Powder River Basin Gas Corp.

Date: November 14, 2005            By: /s/ Brian Fox
                                   ---------------------------------------
                                           Brian Fox, President and Chief
                                           Financial Officer