Form 8-K for PACIFIC ASIA PETROLEUM INC

Regulation FD Disclosure, Financial Statements and Exhibits

ITEM 7.01 REGULATION FD DISCLOSURE
On October 5, 2009, Molopo Australia Ltd. ("Molopo") issued an S708A Compliance Notice and Disclosure under Section s708A of the Corporations Act 2001 of the Commonwealth of Australia (the "Molopo Announcement") wherein Molopo disclosed that it is in an advanced stage of negotiations with Pacific Asia Petroleum, Inc. (the "Company") in respect of the sale of Molopo's 26.1% gross interest in Fortune Liulin Gas Company Limited (the "FLG Interest"), which entity is a party to a production sharing contract covering the Liulin coal bed methane block (the "Liulin PSC") located in the Shanxi Province of the People's Republic of China. As consideration for the FLG Interest, the Company will issue approximately 2.7 million shares of Common Stock of the Company to Molopo and pay to Molopo a 2% royalty on future production revenue received from the FLG Interest by the Company. The sale remains subject to the finalization of negotiations and documentation, is subject to pre-emptive rights held by Fortune Oil Group, Molopo's partner in the Liulin PSC, and there is no certainty the transaction will proceed.
A copy of the Molopo Announcement, dated October 5, 2009, announcing these matters is furnished herewith as Exhibit 99.1.
The information contained in Item 7.01 to this current report on form 8-K and the exhibit attached hereto shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information or such exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth in this Item 7.01 or exhibit 99.1 to this form 8-K shall not be deemed an admission as to the materiality of any information in Item 7.01 to this report on form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.