U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

Commission File Number: 333-144504

Prairie West Oil & Gas, Ltd.

(Exact Name of Registrant as Specified in its Charter)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 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.

Large accelerated filer             .                   Accelerated filer                           .

Non-accelerated filer  

      .                   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 .

As of February 4, 2013, the issuer had 5,749,000 shares of common stock issued and outstanding.

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ITEM 1 FINANCIAL STATEMENTS

PRAIRIE WEST OIL & GAS, LTD.

(Formerly Kat Racing, Inc.)

(A Development Stage Company)

FINANCIAL STATEMENTS

December 31, 2012 (unaudited)

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C O N T E N T S

Balance Sheets as of December 31, 2012 (unaudited) and September 30, 2012 (audited)

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Statements of Operations for the three months ended

   December 31, 2012 and 2011 and for the period from

   inception (December 5, 2005) through December 31, 2012 (unaudited)

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Statements of Cash Flows for the three months ended

   December 31, 2012 and 2011 and for the period from

   inception (December 5, 2005) through December 31, 2012 (unaudited)

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Notes to the Financial Statements (unaudited)

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PRAIRIE WEST OIL & GAS, LTD.

(Formerly Kat Racing, Inc.)

(A Development Stage Company)

Notes to Consolidated Financial Statements

December 31, 2012

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at December 31, 2012, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2012 audited financial statements.  The results of operations for the period ended December 31, 2012 is not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with 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.  Actual results could differ from those estimates.

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PRAIRIE WEST OIL & GAS, LTD.

(Formerly Kat Racing, Inc.)

(A Development Stage Company)

Notes to Consolidated Financial Statements

December 31, 2012 (unaudited)

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In October 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2012-04, “Technical Corrections and Improvements” in Accounting Standards Update No. 2012-04. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update will be effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 is not expected to have a material impact on our financial position or results of operations.

In August 2012, the FASB issued ASU 2012-03, “Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-9250, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update)” in Accounting Standards Update No. 2012-03. This update amends various SEC paragraphs pursuant to the issuance of SAB No. 114. The adoption of ASU 2012-03 is not expected to have a material impact on our financial position or results of operations.

In July 2012, the FASB issued ASU 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” in Accounting Standards Update No. 2012-02. This update amends ASU 2011-08, Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment and permits an entity first to assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired as a basis for determining whether it is necessary to perform the quantitative impairment test in accordance with Subtopic 350-30, Intangibles - Goodwill and Other - General Intangibles Other than Goodwill. The amendments are effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted, including for annual and interim impairment tests performed as of a date before July 27, 2012, if a public entity’s financial statements for the most recent annual or interim period have not yet been issued or, for nonpublic entities, have not yet been made available for issuance. The adoption of ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income” in Accounting Standards Update No. 2011-05. This update defers the requirement to present items that are reclassified from accumulated other comprehensive income to net income in both the statement of income where net income is presented and the statement where other comprehensive income is presented. The adoption of ASU 2011-12 is not expected to have a material impact on our financial position or results of operations.

In December 2011, the FASB issued ASU No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the impact, if any, that the adoption of this pronouncement may have on its results of operations or financial position.

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PRAIRIE WEST OIL & GAS, LTD.

(Formerly Kat Racing, Inc.)

(A Development Stage Company)

Notes to Consolidated Financial Statements

December 31, 2012 (unaudited)

NOTE 4 - RELATED PARTY TRANSACTIONS

The Company had received $107,467 as of December 31, 2012 ($100,467 as of December 31, 2011) as an advance from related parties to fund ongoing operations. The related party payable is non interest bearing, unsecured and due upon demand. The Company has recorded imputed interest expense at 8% as additional paid in capital.

NOTE 5—SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that other than as below, there were no such events that warrant disclosure or recognition in the financial statements.

On January 4, 2013, the Articles of Incorporation of the Company were amended to change the name of the Company to Prairie West Oil & Gas, Ltd. and to increase the number of authorized shares of common stock to 300,000,000 shares with a par value of $0.001.

On January 22, 2013, Prairie West Oil & Gas, Ltd. (Nevada) (“Prairie Nevada”) entered into an exchange agreement to purchase 100% of the outstanding interests of Prairie West Oil & Gas, Ltd. (Canada) (“Prairie Canada”) in exchange for 5,000,000 common shares of Prairie Nevada stock.  Prairie Canada is now a wholly-owned subsidiary of Prairie Nevada and Prairie Nevada has acquired the business and operations of Prairie Canada. On the transaction closing date of January 22, 2013, the shares paid had a value of $13.0 million based on trading value. The purchase price allocation and pro forma financial statements are not disclosed as the initial accounting is incomplete as of the filing date.

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ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated by reference in this Form 10-Q which address activities, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); finding suitable merger or acquisition candidates; expansion and growth of the Company's business and operations; and other such matters are forward-looking statements.  These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation; and other factors, most of which are beyond the control of the Company.

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this Filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition.

Consequently, all of the forward-looking statements made in this Form 10-QSB are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

GENERAL DESCRIPTION OF BUSINESS

On January 22, 2013, Prairie West Oil & Gas, Ltd. (Nevada) (“Prairie Nevada”) entered into an exchange agreement to purchase 100% of the outstanding interests of Prairie West Oil & Gas, Ltd. (Canada)(“Prairie Canada”) in exchange for 5,000,000 common shares of Prairie Nevada stock.  Prairie Canada  is now a wholly-owned subsidiary of Prairie Nevada and Prairie Nevada has acquired the business and operations of Prairie Canada. The Exchange Agreement contains customary representations, warranties, and conditions.  The Exchange Agreement is attached hereto as Exhibit 99.  

Prairie West Oil & Gas is a producing energy company with both established production and assets within the center of Canada's highest reserve epicenters; the oil boom provinces of Alberta and now Saskatchewan.  The company believes that present conditions have never been better for a swift and innovative company such as Prairie West to thrive in today’s energy market.

By continuously adding value through low risk acquisition / development of both mature and immature properties, Prairie is setting the stage for long term growth while remaining focused on short term profitability and increasing net asset value.

Prairie operates under the notion that phase changes in commodity price cycles require different strategies and will identify opportunities for growth regardless of phase.  By utilizing a multi-discipline approach, the company has and will continue to unlock the upside potential of acquired properties leading to increased production and incremental reserves.

The experienced team at Prairie West has the expertise and proven execution required for success in today's rapidly changing energy sector. This has been clearly demonstrated with the Maidstone acquisition, the more recent eleven well expansion located in close proximity to current production and a new 27 well producing gas play in Saskatchewan Canada.

The company is currently focused on three projects:

1) The Maidstone Project (Heavy Oil - Producing)

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2) The Shackleton Project (Natural Gas - Producing)

3) The Twinning Project (Light Sweet Crude - Drilling completed August 1, 2012, currently working towards well completion.

An independent asset, reserve and resource evaluation (NI 51-101) done by Chapman Petroleum Engineering Ltd that has valued Prairie West's assets at $22,957,000 (CDN) undiscounted. This report conforms to industry standard and is an accepted primary means of asset evaluation.

The company is currently focused on three projects:

1) The Maidstone Project (Heavy Oil - Producing)

2) The Shackleton Project (Natural Gas - Producing)

3) The Twinning Project (Light Sweet Crude)

KEY POINTS:

Located in East-Central Alberta Canada within the prolific Western Canada Sedimentary Basin, Prairie West 's developmental project is strategically placed within the highly productive Twining area (Section 17-31-23W4.) and surrounded by major multinational oil / gas giants.

Prairie's property is immediately adjacent to the enormous Twining Rundle/Mannville Pool with Original Oil In Place of 1.013 billion barrels equivalent.

Prairie has identified a prospect in the prolific Devonian Nisku carbonate, with pool analogues in the immediate area having oil reserves approaching 60 mmbbls (OOIP).

Detailed geological and geophysical mapping of the Nisku reservoir under Prairie West 's land, demonstrates a potential accumulation of almost 300 acres, with a potential mean resource of 2.4 million barrels(OOIP). P10 resource however is closer to 4.0 mmbbls.

Proximal Nisku pools tend to be in the 40-42 API crude, and therefore receive some of the best netbacks in the basin. With success on Prairie's first well, an aggressive 40 acre pool development will be implemented, with the goal being to grow the property to the 1000 BOPD range within the first 2 to 3 years. Horizontal well application and selective acid fracture stimulation will also be evaluated which would ultimately increase productivity and recovery of the pool's reserves.

An engineering study of this prospect by Canadian Petroleum Engineering, Inc. found that at the then current price of a barrel of oil at $50 a barrel, that the prospect was a viable drilling target. With the recent uptick in oil prices the potential of this project for Prairie and its shareholders is huge.

The first well was successfully drilled on August 1st, 2012. Multiple zones that have tested positive and the company is presently working towards completing the wells to producing status.

Maidstone

Location:  Maidstone, Saskatchewan, CAN

Type of project:  Heavy Oil

Status:  Producing

Number of wells: 12

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KEY POINTS:

The Maidstone Project currently has production online and consists of eleven heavy oil wells plus one licensed horizontal water disposal well.

The economics of the most recent acquisition / expansion made perfect sense as management knows the area extremely well, had an existing footprint in close proximity and has rock solid relationships already in place. From an operational standpoint this translates into lower operating costs, the ability to act swiftly and higher profits.

Prairie West's operator David Forest is a heavy oil specialist and efficiency expert who in the past was able to take a company's production from 135 barrels a day to 800 barrels a day without drilling a well. This is important to note because a comprehensive nine well Maidstone work over program is in the works that is designed to utilize the latest technology to both maximize the output and efficiency of Prairie West's latest heavy oil play.

The licensed horizontal disposal well located within Prairie's Maidstone project is an excellent revenue source as most wells in the area make water and are required by law to dispose of it in a licensed water disposal unit. Not only does this well have the capacity to handle all of Prairie West's disposal needs but it is also fully equipped to act as a disposal solution for other companies in the area.

The desirability of investing in oil in Saskatchewan continues to get better all the time. The support for the industry starts at the premier level and is mirrored through all levels of government. This has resulted in a very favorable business climate in terms of simplified regulation and economic terms. The province has huge heavy oil resources, very good producing infrastructure and a highly skilled work force. For these reasons at this time Prairie West can think of no better place to do business and will be actively looking to further expand in this geographical area.

Shackleton

Location:  Shackleton, Saskatchewan, CAN

Type of project:  Natural Gas

Status:  Scheduled shut in for maintenance

Number of wells:  27

KEY POINTS:

The Shackleton project consists of a 99% interest in 27 wells situated on 15 sections (9600 Acres) of oil and gas property located in the prolific Shackleton area within an energy rich area of the Western Canadian Sedimentary basin.

The company is currently performing a strategic in-depth geological analysis for the full 9600 acres and has already identified multiple drilling targets that have a high probability of carrying a low risk, high reward profile.

From a viability standpoint, this project for Prairie West remains viable and profitable at current natural gas prices due to Prairie West's low operating costs in the area. If natural gas turns bullish as a result of new 'Fracking' regulations, the company has positioned itself for accelerated profits moving forward.

It is important to note that the recent additional 49% ownership increase in the Shackleton project has increased Prairie West's assets past the $22,957,000 (undiscounted) number contained in the NI 51-101 as the report was created before the acquisition took place.

At the end of May 2012, Prairie West began its scheduled summer overhaul of the company's Shackleton natural gas asset. The entire project is being revamped with the goal of producing higher revenues in the fall season through greater efficiency, lower operating costs and traditionally higher fall natural gas prices.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The Company has a limited operating history upon which an evaluation of the Company, its current business and its prospects can be based. The Company's prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies in their early stages of development. Such risks include inadequate funding the company's inability to anticipate and adapt to a developing market, the failure of the company's infrastructure, changes in laws that adversely affect the company's business, the ability of the Company to manage its operations, including the amount and timing of capital expenditures and other costs relating to the expansion of the company's operations, the introduction and development of different or more extensive communities by direct and indirect competitors of the Company, including those with greater financial, technical and marketing resources, the inability of the Company to attract, retain and motivate qualified personnel and general economic conditions.

The Company expects that its operating expenses will increase significantly, especially as it implements its business plan. To the extent that increases in its operating expenses precede or are not followed by commensurate increases in revenues, or that the Company is unable to adjust operating expense levels accordingly, the Company's business, results of operations and financial condition would be materially and adversely affected. There can be no assurances that the Company can achieve or sustain profitability or that the Company's operating losses will not increase in the future.

RESULTS OF OPERATIONS

The Company has achieved no significant revenue or profits to date, and the Company anticipates that it will continue to incur net losses for the foreseeable future. The Company incurred a net loss of approximately $8,527 for the three months ended Dec. 31, 2012, compared with a net loss of $5,837 for the three months ended Dec. 31, 2011.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception the Company has had limited operating capital, and has relied heavily on debt and equity financing.

The financial statements as of and for the period ended on Sept. 30, 2012 expressed their substantial doubt as to the Company's ability to continue as a going concern. Without additional capital, it is unlikely that the Company can continue as a going concern. The Company plans to raise operating capital via debt and equity offerings. However, there are no assurances that such offerings will be successful or sufficient to fund the operations of the Company. In the event the offerings are insufficient, the Company has not formulated a plan to continue as a going concern. Moreover, if such offerings are successful, they may result in substantial dilution to the existing shareholders.

CRITICAL ACCOUNTING POLICIES

In Financial Reporting release No. 60, "CAUTIONARY ADVICE REGARDING DISCLOSURE ABOUT CRITICAL ACCOUNTING POLICIES" ("FRR 60"), the Securities and Exchange Commission suggested that companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.  Based on this definition, our most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period and the valuation of shares and underlying mineral rights acquired with shares. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is not exposed to market risk related to interest rates or foreign currencies.

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CONTROLS AND PROCEDURES

ITEM 4.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 , as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president (also our principal executive officer) and our secretary, treasurer and chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

As of December 31, 2012 we carried out an evaluation, under the supervision and with the participation of our president (also our principal executive officer and our chief financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President and Chief Financial Officer concluded that our disclosure controls and procedures were not effective in providing reasonable assurance in the reliability of our corporate reporting as of the end of the period covered by this Quarterly Report due to certain deficiencies that existed in the design or operation of our internal controls over financial reporting and that may be considered to be material weaknesses.

CHANGES IN INTERNAL CONTROLS.

There was no change in our internal controls or in other factors that could affect these controls during our last fiscal 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

The Company is not a party to any legal proceedings.

ITEM 1A. RISK FACTORS

There are no material changes in the risk factors set forth in the Company’s Form 10K for the period ended Sept. 30, 2012.

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

There were no sales of unregistered equity securities during the covered time period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The following documents are included or incorporated by reference as exhibits to this report:

(b)   REPORTS ON FORM 8-K

None.

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SIGNATURES

In accordance with Section 13 or 15 (d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: February 19, 2013

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