Petrosearch Energy Corporation - Joint owners-billed, net of...

Petrosearch Energy Corporation - Recent Material Event

Item 1.	FINANCIAL STATEMENTS

ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

ITEM 3.	CONTROLS AND PROCEDURES

PART II - OTHER INFORMATION

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

ITEM 6.	EXHIBITS

SIGNATURES

Index

ITEM 1.

FINANCIAL STATEMENTS

PETROSEARCH ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

September 30, 2007 and December 31, 2006

ASSETS	September30, 2007 (Unaudited)			December 31, 2006 (See note)

Current assets:
Cash	$	3,187,341		$	3,715,618
Accounts receivable:
Joint owners-billed, net of allowance of $37,179 at September 30, 2007and $83,073 at December 31, 2006		172,946			421,081
Joint owners-unbilled					15,213
Oil and gas production sales		321,985			146,408
Prepaid expenses and other current assets		976,435			829,104
Total current assets		4,659,510			5,127,424

Property and equipment:
Oil and gas properties, full cost method of accounting:
Properties subject to amortization		29,270,852			23,462,639
Properties not subject to amortization		7,121,241			6,309,169
Other property and equipment		153,032			149,348
Total		36,545,125			29,921,156
Less accumulated depreciation, depletion and amortization		(2,953,008	)		(2,357,347	)
Total property and equipment, net		33,592,117			27,563,809

Prepaid oil and gas costs		14,507			14,507

Other assets		695,103			656,790

Total assets	$	38,961,237		$	33,362,530

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current portion of long-term debt	$	2,530,378		$	1,863,531
Current portion of long-term debt - Kallina		673,769			298,806
Trade note payable		42,724			409,819
Accounts payable		709,939			1,062,679
Accrued liabilities for Barnett property costs		332,719			607,013
Accrued liabilities		1,030,018			925,183
Warrant liability		427,551			317,752
Total current liabilities		5,747,098			5,484,783

Long-term debt, net of current portion		-			2,066,074
Long-term debt, net of current portion – Kallina		6,353,512			6,963,694
Convertible debt		5,986,518			-
Other long-term obligations		927,598			906,996
Total liabilities		19,014,726			15,421,547

Stockholders' equity:
Preferred stock, par value $1.00 per share, 20,000,000 shares authorized:
Series A 8% convertible preferred stock, 1,000,000 shares authorized; 483,416 shares issued and outstanding at September 30, 2007 and December 31, 2006		483,416			483,416
Series B convertible preferred stock, 100,000 shares authorized; 43,000 shares issued and outstanding at September 30, 2007 and December 31, 2006		43,000			43,000
Common stock, par value $0.001 per share, 100,000,000 shares Authorized; 39,556,789 and 37,927,070 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively		39,556			37,927
Additional paid-in capital		31,140,043			23,928,090
Un-issued common stock		222,062			771,429
Accumulated deficit		(11,981,566	)		(7,322,879	)
Total stockholders' equity		19,946,511			17,940,983

Total liabilities and stockholders' equity	$	38,961,237		$	33,362,530

Note: The balance sheet at December 31, 2006 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes to unaudited condensed consolidated financial statements.

Index

PETROSEARCH ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months and nine months ended September 30, 2007 and 2006

	Three Months Ended September 30				Nine Months Ended September 30
	2007		2006		2007		2006

Oil and gas production revenues	$	426,931	$	335,711	$	1,163,451	$	827,311

Operating costs and expenses:
Lease operating and production taxes		146,400